position taken by the defendant or respondent as well as the trial court there are a couple of loose sentences that are dicta that have been cited for the proposition that a common law fraud claim in the state of california requires what is in essence the lost cause it lost causation element of a statutory securities fraud claim that is not the law nor could it be the law because if it were the law then someone could simply avoid liability for the most egregious of common law fraud in the securities context by simply closing the door and preventing there from being a market effect someone could close the door and in a direct conversation without disclosing they were a paid shill for the publicly traded company represent that the company was successful that its expected its stock would increase in price that they were in fact trading alongside the consequence of your argument counsel is that is that no expert is required to prove a loss so that is central point it is it both it is and as well as simply just that we have stated and proven at least for summary judgment purposes the element of a common law fraud claim the dearth pharmaceuticals case that cited by the defendant does not hold for the defendant the language in dura pharmaceuticals is that while the common law fraud tort resembles quote unquote resembles the ten b five claim it is not identical and the difference is that there is no loss causation element for the common law fraud tort but there is a reliance element which is  statutory securities claim making that claim easier on causation you simply have to prove proximate cause ation or for c ability not a market effect but in turn you have to prove actual in justifiable reliance which presumed in the context of a ten be five statutory securities claim in contrast to ten b five plain you have to prove the market effect that market effect i will concede typically require some sort of an expert but you do not have to prove that the the reliance you have to prove market effect causation damages loss causation but not the reliance elements that you would in the common law fraud grant cassettes phone market so so right there are two different claims and i think the concern is accepted judge storm's result that a motion to dismiss made us in the case of certain stocks go back and replete in the case of certain stocks denied the motion to dismiss we played additional facts and the defendant in fact did not even move to move move to dismiss the first amended complaint that complaint only included a subset of the facts that we would argue support the common law  complaint you include copies of the emails that were sent in the newsletter that talked about the various stocks and investment did end the newsletters are are in that sort of middle of the venn diagram if you will they both support a market claim and they support a direct misrepresentation claim because they were sent directly to mr mouser but on the purely direct fraud side and mind you there are pages and pages of these allegations in the complaint it's pages five through i believe twenty two or twenty three of the first amended complaint the operative complaint is the facts section on direct fraud there is lea a market based claim we played that initially that's pages three through five of the complaints so the idea so at least to me that the common law fraud cause of action snuck up on us and was first argued in the motion for summary judgment is is a bit of fraudulent to me given it's the emphasis of the complaint is there anything between the complaint and the response to the motion for summary judgment that addresses the common law claims discovery or anything else there is your honor it mind you that we did not obviously draft the discovery so there's no discovery that tries to get at the distinction between the third cause of action and the first two there is a special iraq atory number two propounded by i believe defendant larry isaac and that victoria that i supplemented from the train ride back to los angeles from san diego the day we were finally permitted mr arise and deposition on the last day of discovery that skin your arbitrary response initially mind you that in iraq the tory asks for all the direct misrepresentations that we relied upon in buying the stock it is necessarily a common law fraud directed in atory because it asks about the very elements of a common law fraud claim that doesn't exist in the context of a statutory securities fraud claim we answered that in iraq dettori based upon the facts we then knew or surmised the same that are stated in the complaint that mr eyes and the other defendants had promised they were investing alongside of us in these stocks while selling them off to make a quick buck that he was in fact a page filled by these companies without disclosing fact brokered a deal for us without disclosing he had had his securities license revoked about seventeen years earlier what we learned on february twenty sixth twenty first two thousand and fourteen the day we were permitted mr eisenberg deposition is that there was a lot more frankly he's a bad guy that he had been convicted thrice for securities fraud that he was pleading out for a pump and dump at the very time he was making these direct misrepresentations to my client evidence that your client knew that before february twenty first when you supplemented the response to the erotic tory there is evidence there's counterevidence so it's not in my view the type of issue that would be resolved on summary judgment and i understand that  representation here to us was that you just learned about it on that date and it sure seemed like there is some evidence that that that had been known prior to that time and could have been known prior to that time a significant number of the matters that we learned on february twenty one two thousand and fourteen were not known previous ground in china looking into these companies so that he knew them firsthand because you predominantly recommended chinese and he stops no one not a single person on the ground in china or frankly on the ground in any continent he represented that he had a team of editors who were poring over his recommendations before they were made no editors he worked in an office the size of the typical walk in closet and had absolutely no employees it was him and mr barr basically shilling companies that they were given stock and all of that we learned on february twenty first two thousand and four teen we also learned the full magnitude of his securities s e c infractions on feb twenty first for two thousand and fourteen did we know the tip of the fraudulent iceberg absolutely did we know about all that was under the water not at all on february twenty first two thousand and fourteen i had learned that by about one thirty in the afternoon taking mr eisenstadt position in san diego and literally from the train ride back we supplemented the iraq atory number two which asked for the direct misrepresentations to identify all the additional information that we had learned previously so what we knew we disclosed in the complaint what we learned on february twenty second two thousand and fourteen we disclose that very day by me calling a colleague and having a colleague draft the supplemental response to the mind you i think there's a burden on the defendant to do a little discovery in this regard as well i think it's plain on the face of the first amended complaint that there is a common law fraud claim that it pleads direct misrepresentation that he pleads reliance on those misrepresentations i think there's a few things that simply the district court got wrong that are necessary to its ruling for example the district court said during the hearing on the motion for reconsideration that we did not plead a reliance element that's plainly and correct the district court and the defendant suggested that i what i believe to be the critical cases veiga person strebel which are the california state law decisions that suggest that we are right and the district court is wrong as a state law common law proposition those cases were not cited in opposition to the summary judgment motion of course they were there was a whole section of pages twenty and twenty one of our opposition brief and so my suggestion would be this is a matter completely inappropriate for summary judgment that the district cour decision i think is founded on some misunderstandings as to what we pled what we'd supplement it the district court cited pohlmann for the proposition this court's decision and coleman for the proposition that it must be pleaded in the complaint or else it cannot be raised on summary judgment that two is incorrect coleman suggests that either it has to be pleaded or identified in the discovery responses which we did at the first moment available what we knew we were going to fight or really what we learned on february twenty first through two thousand and so the only reason you're in federal court on the common law pride claims to the benefit of the court and both parties to simplify the case shorten the trial say that's for cost because frankly the evidence of direct fraud we thought was phenomenal and as any market based claim that's always a little tough i mean you have to have an expert affected district court correctly found that this has been a pump and dump scheme based on the fraud on the market since it began and the appellant should not be now allowed after losing a summary judgment motion to reshape what they claim has been the claim since the beginning when the plain facts in the complaint clearly show otherwise second argue that even where the court to consider this new fraudulent inducement theory plaintiffs or appellant still cannot prevail because they it certainly could your honor if it was alleged that way in the complaint and if the finance were given notice of that and several now discovered responses when i was reading the complaint there seemed to be a cause of action talking about so it's under a heading the says defendant made false statements directly to plaintiff and intended to induce plaintiff's reliance on these statements however if you look at the actual allegations in that portion of the complaint i think it's helpful to go through each of three companies which are still issue august two thousand and seven to october two thousand and seven was caused by defendants misrepresentations to plaintiffs and other potential investors regarding signal life that's a pump and then paragraph thirty seven plaintiff understands that defend dumped their shares of signal i think subsequent to plaintiff's investment contributing to its decline and yes and paragraph twenty seven which is the opening paragraph talks about misrepresentation to the public which would support your theory as well the paragraph twenty nine refers to a telephone conversation that the plaintiff and bar had and a telephone conversation is very would be very different from something that was a fraud on the market so if you have been to individualized conversations that that suggests a common law fraud theory rather than rather than the fraud on the market scheme doesn't it it's difficult to say why is that why is it difficult to say certainly it could read in isolation but that kind of an allegation wouldn't support a fraud on the market theory right it would your honor and neither would the allegations that are under the for the on the market portion of the claim if you look simply under the fraud on the market words defendant affected pump and dump stock manipulations paragraph fifteen references and it's making false misleading representations directly to plaintive we've got to guard so the looks like we've sort of blended some things here certainly ok so you might you might look at the one says well this was supposed to be a pump and dump how come how come you're alleging that we talked to you in the journal making allegations about personalized conversations and then when they have a section that the deals with false statements may develop directly to them you certainly have some evidence of my support the pump and dump but that doesn't but these allegations were all in a section called facts common to all causes and it looks like it was just is just an effort more to give an overview of the of the of the schemes and the complaints about each of the companies because they then have four causes of action which which just say were just we just repeat you know paragraph one of those one through ninety nine and the first ones the ten b five number three is a common cause of action how could you not be on notice that they were alleging common law fraud when they have a heading called common law identified in your response relating to each of the various companies based on your reliance on a statement made by market by if so please identify the statement and subsection an ask to state the reasons why the statement was induced to enter into into the transaction if we look at this responses to the tappan your company appellant states they entered into the transaction after referencing several of the alleged misstatements quote because they exaggerated the strength of tap munich's business is its future profitability and the gains that could be realized by purchasing shares of the company that's a pump it continues in the days leading up to this o t c journal newsletter market but sold seventy thousand shares of tap immune stock that's a dump the the same thing can be said for the china energy stocks and the signal lives that let's go back to trying to energy and look at paragraph forty seven so asked why it was misleading it says a patent was respondent exaggerated the strength of the company's current businesses future profitability and the gains that could have been realized by purchasing the company that's a pump that's where well all the what why why thank you thank if you're on the right we asked you in a special interactive for them to put us on notice of all of the reasons why any individual i stated was misleading the only reasons we were ever second you know you file these complaints and you ledge for causes of action and then you conduct discovery and then as you proceed in does conducting discovery you realize some claims are better than other claims there might be more triable and it's just sitting inside the motions for summary judgment ultimately you get to a point where you have your pretrial conference report and you prepare and it says these are the issues are going to be tried playing with you know it banned and sees two claims are only going to try these kinds and then they're held to that and this case hasn't gotten to that point yet right we had gotten to the discovery cutoff point we had not gotten to the pretrial and at the end of the discovery kind up point it's quite apparent that given the fact that they hadn't come up with the expert which was required for the doesn't really address all four claims it really just focuses on their own claims and i maybe because the case was originally played that way that case is to develop and that's why you get to the point where you decide ok this is what's in the case and this is what's not in the case you're on i understand that and i think if we can look at the expert situation even were this only t and then they're in the complaint they still argue that once they purchased the security is that a statement by respondents increase the cost of the shares and then once they saw they decrease respondents sold at the at the peak the market and dumped essentially so even if appellant now only claims that they wouldn't have bought the shares they're still only entitled to recover from the respondants damages which respondents actually cost here there's we're dealing with investments were made in one of the worst financial markets that the country seen in quite some time and without an expert they're unable to separate market fluctuations from damages actually caused by the respondents for instance if they had bought the shares even with the same omissions the same as alleged misstatements held on to the shares but were in a great financial have could have gone up then there's no damages but here where there's a bad financial economy they hold the stocks for period time they go down there's still have to prove what caused the specific damages the cases relied on by appellant the person case the struggle case in the bega case don't actually support the fact that they don't need an expert to prove their opinion the person an important distinction there is it was a ownership of a closely held corporation not subject to market fluctuations we're dealing with a transaction between two fifty percent shareholders and a closely held corporation there at page one one six six of the person case the court states that the non disclosing shareholder was quote correct in pointing out that if damages do not flow from the concealment but rather from some other extrinsic factor is that when when inducing him to sell he said and i'm with you on this investment and you need affirmative i am not going to sell and then he sold and that had to be based on some information that he had that muslim or didn't have and in this situation we also have unfortunately it's seems rather complicated that back to the pump and dump claim a little bit i think here it's still appellants burden to show that my client has cost him any damages without an expert he can't show that any any of the losses were caused by my client and not caused by the their the court quoting save goes states it is conceded appellant might be able to show that but for respondents negligence he would have been able to sell his house earlier for more than he can now tain the rule for recovery in tort has never rested solely on but for causation but has also been based on proximate cause the court goes on to say superseding cause utterly unrelated to the defendant's negligence breaks the chain of proximate quickly very superficially unfortunate because that appellant had no ability to establish the losses actually but the district court proceeded on the presumption that a that an expert was required now and that seemed to be derived from the ten b five claim to which the district court gave a great deal of attention and the district court gave that great deal of attention because all of the claims that to that point had been reliant on that fraud on the market  person cases where the damages component in those cases was established with an expert person in particular i mean they did use an expert there to the court course you had to have one or the your case would have failed they did not but there hasn't been a claim or there the court said you don't need an your honour's with regard to the damages claim i think panels already made a couple the points that i desired to which is that it's a defense burden to prove intervening or some other cause because actually the defense who would have to submit an expert on the collapse of the  market california civil code three three four three the prevailing case instruction the cases that we've cited suggest that one measure of damages is simply mr mouser is out of pocket loss if we buy a car for twenty thousand dollars and we're knowingly sold a lemon  we have an obligation not to also sell a lemon unknowingly to the next person but a duty to mitigate we buy the car for twenty sell the car for four or damages or sixteen thousand dollars no expert is required we don't need an auto industry expert and we certainly don't need to know in effect on the prevailing used car market to claim those damages out of pocket a simple there are zero cases cited by the district court or the defendant after proving a summary judgment motion and motion for reconsideration and this appeal that have held that a common law fraud claim requires that sort of an expert with regard to pump and dump i made confessions of the district court level and they were held against me i'm going to try it here if the argument is that we alleged a pump and dump and you can pick certain paragraphs out of the first amended complaint regarding pump and dump guilty as charged we claim that we pleaded it we tried to support it but not every claim and in fact most of the claims don't involve a pump and dump with regard to signal life paragraph thirty eight is an email paragraph thirty one of the direct power point provided to my client paragraph thirty two was an i bar started the conversation in person in the morning at ten am handed that off to mr aizen and the only uncertainty in my client's mind is he couldn't recall if it was one or two telephone that occurred in the afternoon october first two thousand and seven but he knows he got a phone call and that he was told about the stock that it was directly promoted by mr eyes and because that's what caused him to invest in the stock in fact his testimony his declaration was that he trusted eyes and more because eyes and held himself out as a market expert whereas barr didn't make such a grand proclamations about his experiences in securities or his knowledge of these particular stocks but that's that's quite detail years later proposition that precludes us from continuing with this case that would likely apply if we for example can't prove our damages in the common law fraud context and we've abandoned our statutory claims that would assist mr barr whether he was present or not but he didn't actually move for