judge misconstrued the standard for determining implied certification and held that the plaintiff had waived express certification in the intervening time since the district court issued its decision the supreme court of course issued its escobar decision which held most importantly that you need not show plaintiff relator need not show that there was a statute which expressly conditioned payment of the contract on compliance with that  regulation so clearly the district court in holding that was was wrong and committed an error of law and at the very least should the court flying that the complaint is in any way deficient here should allow us to go back and plead in accordance strictly with the despite of its actual knowledge that's or no requirements were violated that strong evidence that those requirements are not material and contrarily they said well is there evidence that the government consistency consistently refuses to pay claims in the in this case of course the government told d c when they learned of the violations by microcephaly to hold the plug literally pulled the plug and micro semi only made their ported disclosure after d s s told them of a what they believed to be a violation so the government's actions here clearly felt that this was clearly an important issue the fact that the government allowed payments to continue on the contracts after learning of it is not determinat it's evidence and so what is the evidence that in the mind run of cases the government will not be in this situation in the record well we we have several factors that show that the government fuses the material in the material first of all parties who violate these regulations are subject to department their subject is there evidence of the record of the mine run of cases of this sort yes where there was potential access but no evidence of deliberate  the information that the government has those people yes in fact there's actually and we can provide it your honor the department of justice issued a summary of criminal prosecutions involving this and they actually criminally prosecuted an individual carried a a computer outside the united states without evidence of having a foreign national viewing it and of course so that so with regard to materiality it's clear that this is e says the regulation has to be central to the statutory scheme and not technical or insubstantial clearly compliance with the national security laws is central integrity to the procurement of defense department to all the products that are affected here are extremely sensitive government for example g p s guidance for missiles electronics that allow an individual who's behind enemy lines to be located by the united states army the air force all these tech now technologies were open to thousands of people in eighteen countries including china because micro semi decided they wanted to use one server which was accessible to the entire company  specific allegations in the first amended complaint that support your client's inclusion that compliance with expert control laws was material to payment what were the allegations in the first  suspend payment in this particular case certainly the government could have done that and there's no evidence they did because micro certainly as we allege in the complaint lied to the government about what had happened they they claim to the government that it was a short term thing they claimed only three people were intentionally exposed they claim none of the three people actually viewed it and they concluded that and they said they would they solve the problem after a very short period of time so there was no there was no suspension but clearly the government by virtue of the clearly the regulations require in the complaint specifically alleges that first of all it has to be in the contract the diff d f a our regulations specifically provide that a contract for these products has to have w it that you will comply with these i taurani our regulations second we know that the contracts they did have and we gave examples of the raytheon contracts did have terms in it third we know that the purchase orders from r specifically said and there are attached as exhibits to the complaint that you have to acknowledge by by by sending us the products and invoicing us that you've complied with those conditions and fourth the actual invoices from w e d c specifically say are controlled and i know this is how you should be allowed to amend your complaint what would you what amendments would you make your complaint well we would specifically state because we believe we can we can a certain good faith also if you could address that's the other place i'm having difficulty based on opposing counsel's argument that the language of the regulation is ambiguous and the government has interpreted it in different ways well there's no evidence the government's interpreted in different ways clearly the government is interpreted it and the recent brief filed by the u s government very in the cases we cite in the brief say we have always and longstanding terp interpreted to being to mean that giving access is enough to have committed an export and the regulation clearly says the regulation by its very terms clearly says that export includes sending or taking a defense article an article includes data out of the united states in any manner and disclosing or transferring technical data to a foreign press i understand that disclosing is the word that  questioned or focused on that could mean you know i guess the opposing counsel is argument is in the context indicates active some act as opposed to the fact that was potentially accessible for the period of time well discloses not to find in the statute but by definition disclose means giving access to and clearly that was done here there's no the allegations are quite clear that by putting it on the server accessible to all the users in eighteen different countries you were in fact disclosing it and they cite they can cite a no export it requires a foreign person to view or access technical data as a result of being provided physical access that's what they pointed to in the briefs if you if you actually look at the regulation and we cited in our reply brief and we trace the whole development of that that's talking about encrypt giving access to encrypted data without giving the key to the encryption and if you parse through the regulations even in two thousand and sixteen which of course are after the fact here it's quite clear that no reasonable information on the internet i thought it was just that it was accessible to people in the company for an unauthorized foreign nationals and we would submit it doesn't make any difference whether it's one person or a million people what you did is exactly equivalent to putting it on the internet because you gave it given access to foreign nationals who are not allowed to see it and their argument is their argument is we couldn't have see enter we could have see  because we read the regulation as if it's not a violation till someone sees it ok is that a good faith justification for putting it up so someone can see it and you don't know whether they're going to see it or not the whole arguments absurd and as this court pointed out you have to have you have to have if you're going to argue that the that the regulation isn't reasonable you have to have a good faith belief and the and the complaint sets out in chapter and verse in over several paragraphs that they were told by the relator and several other people time and time and time again that they were violating i taryn e a r and they ignored it they didn't ignore it because it's a disagreement in the regulations or interpretation they ignored it because it was to their benefit as they pointed out it was cheaper to do have one server and we don't want to as one said we don't want to delay the production of products because of your concern because you're quote being paranoid so they don't they don't have the good faith belief and i would cite us or so and oliver versus parsons and us speech and all of which are told that you have to have a good faith belief that your interpretation is correct and the complaint clearly sets forth and where the motion to dismiss stage clearly sets forth that they did not have a good faith belief that they intentionally violated violated the tar i would like to also point out that the that the the court below interpreted all the facts in favor of micro semi because the court made the error of saying because the complaint had referenced two letters from my course and me and criticize them as being inaccurate the district court said i take the letters as true well the case law is very clearly the opposite in this in this circuit you don't take is true or take you will notice of something referred in the complaint if it's contested by the plaintiff you take the plaintiff's allegations is true i see that my time has expired i reserve three minutes thank you your honor thank you thank you your honor may have please the court theodore olson on behalf of the respondents micro semi and white the plaintiff's complaint is deficient as a matter of law in virtually every aspect of what is required to plead a violation of the valse claims act it is he is not put pleaded properly pleaded a false claim a specific standard my to reality or or the allegations in fact that are in the complaint defeat the claim itself and it would be futile to permit any further amendment to this complaint the complaint repeatedly the courts have held that the complaint was played plausibly and with specificity and to overcome the burden that the plaintiff has got to set forth with respect to pleading false claims act here there is no specific allegation and deal with the question of materiality let me go to that case first that was the escobar case that's khobar case specifically requires a specific representation about the goods or services we don't have that here what we do have that's purports to pastor that is the are the words i to are controlled in the that those are not allegations of the allegations of the complaint don't suggest that that was the specific representation upon which this claim is based that comes up only on appeal what do those words mean i tire controlled it's not clear at all in the obvious and common sense interpretation of the words i to are controlled which by the way are not in the invoice they are in the packing slip of the view you can see from the record on a field there on the packing slips not an invoice is the common sense interpretation of that is that when you receive these products and you see in the packing slip it says i to our control it's like the word has mack on the back of hazmat on the back of a truck be careful these are products that you need to controlled it is not a specific representation with respect to compliance of with i to are there is no regulation that specifically says that compliance with  respect to d as a contractor dealing with a prime contractor but the with who is also dealing with who is then dealing with the government it must comply with i to are in order to get paid indeed the government regulations set out a meticulous regime with respect to what the government does the government encourages voluntary compliance because i tar is a complicated subject it is something that is dealt with with many many different products or services the government receives voluntary submissions all of the time and what the government does if they're serious yes they can debar a contract or they didn't de bar anybody here they can suspend the contract or they did not do that here they can they can have the power to suspend payments they did not do that sort of posing councils as had the government know the extent of the  disclosure they would have disbarred this contractor and that they can amend their complaint to say that that the disclosure that the information that was given by microcephaly to the government was incomplete they said only where how when and why that was required for pleading a false claims act they can say we would've alleged this or we would have alleged that there the government was actually involved in the conversations it's alleged in the complaint there was a lot of back and forth between the government the relator here and the and the individuals of michael sami which you're disagreeing with the interpretation of the contract and under safeco first place that judgment by the district court and the district court's forty page decision shows all meticulous she examined the evidence and the pleadings and she specifically concluded it would be futile to amend the of these other things this is not something that was on the internet i don't even know where that comes from it comes it wasn in the in the in the pleadings below it is there is no evidence to support that there's no plausible allegations that that happened this was servers between affiliated companies and there is no evidence and the government was aware of what was happening the government severed the contact with the servers because the government was involved so what escobar says is the materiality standard is rigorous it's very important it has to be pleaded particularly and it is and the and the fact that the government was aware because of the voluntary submissions which were pleaded i of what was going on and did not inhibit the payment of these invoices which did not contain the words i to our control is not what what the what the supreme court said in a unanimous decision and escobar is that that is very strong evidence of the lack of materiality that's a very significant thing and then serco which this court decided shortly after the escobar case it basically said it's a matter of law and as  essential a of pretty close to saying as a matter of law where that occurs but the main thing here is that there is no evidence that there was any support any significant impact on the government's decision to pay the invoices about the the business with respect to ites are it's not a condition of payment although that is under escobar that is not excessive and express condition of payment is not required it's certainly relevant that there wasn't so to distinguish that claims were actually submitted that would be sufficient yes and i think that in the first place of this complaint doesn't compel live up to the standards set by that case secondly escobar and  comes along after that and there's also the element of because there's no evidence here that it would be it would have been a factor by the government with respect to paying these claims the government has this regime it's important for contractors to be able to work with the government with respect to these things because there may be ambiguities and here i don't think there's any ambiguity what the what they what the the prohibition is is export  all the plane i was able to allege here is access or exposure that opposing counsel says that and with respect to see enter that it was the government's consistent interpretation that those if the that it mentions that two particular cases where that is you know governor there's something like that nothing like this of course is in the government's brief it was never accepted by either of those two cases the stag case which comes  recently from the second circuit was subject to a twenty eight j letter and we responded that the court in the second circuit didn't in the remotest adopt that position but it's it's it's like this it's not in the regulations it says x and n and the court below looked at this very carefully she said export it would be to a foreign person just making something tool available to somebody  assessable to protected people within the company is not an access or exposure or export to a foreign person there is nothing in a regulation that says describes it that way it's not in the allegations of the complaint all that's all it said is x i tarpon trolled it doesn't say we complied with i talk because it's ike compliance with i tars a very complicated thing and there can be technical violations or can be ambiguities but the but the my opponent says this is the government's consistent position it's not in a regulation it's not in the statute it's never been held to be the case by a court and if you look at that as we respectfully ask you to do is look at the safeco decision where the court was looking at allegations that were confusing was what rich risk which was what was required as a matter of law the course specifically says that does not amount to the type of  it what you what this court says in the hopper case and the hey good case is that when we're talking about willfulness recklessness we're talking about something that approaches an intentional palpable lie not differences in interpretation of a statute and not a dispute with respect to a legal issue and the allegations of the complaint make it very clear that the micro semi people did not agree with the interpretation of mr mcgrath with respect to what i car i tar required the government then came in and became somewhat of an arbiter here severed the connection between the servers did not cut off the payments did not suspend anyone  did not the bar anybody there's no language of any sort with respect to that and you ask about amending the complaint in the first place as well as what the what you said the court said in your circle decision which is a decision of this year kelly does not adana fly the additional evidence of the district court failed to consider nor does he explain why failing to consider such evidence resulted in error we have noted previously that we will not consider matters on appeal that are not specifically and distinctly argued in appellants opening brief this was not only not before the district court but it was not in appellants opening brief so all of for all of these reasons the complaint does not aleisha a regulation there's the plaintiff's argument and the plaintiff says well we may when they decide to allege all kinds of different things but that does not pass that the test for particular pleading required by nine most that you have here is that the plaintiff's after the fact and not in the district court argument that i tar controlled means compliance with and you can't overcome the fact that compliance or not compliance with i tar is not necessarily something that was a condition of payment by the government not raytheon in the latest brief in the rebuttal brief the relator makes the argument that it may have had something to do with raytheon's payment or not that's a prime contractor that's not the test it must be a false submission to the government the government mean the government of the united states but even but even wasn't false with respect raytheon they did that entire case s is built upon this phrase i tar control which is an afterthought it was not the argument presented to the district court in the in the form of a complaint or arguments to the district court the district court was very very careful here i i don't still don't think you see that very often she meticulously went through all of the allegations she meticulously thought about whether or not  decided in the ritchie case isn't entirely appropriate looked at all of the allegations determined that the standards were not met in any respect with respect to this and she didn't have before any express particular clear plausible allegations that would have been added to the complaint a lot of this so even to the extent that there's arguments about it come along in the briefs in the court of appeals not before the district court but there is not th  there is a nuff on the record for you to know that there wasn't science or under the standards of escobar orse serco or the safeco decision in the united states supreme court or hopper or hey good so that  that doesn't meet that test it does not remotely meet the materiality test if it's very strong evidence that there is not a material while ation when the when the government is aware of the facts which they were under the voluntary submissions and went ahead and paid the claim but there isn't an allegation of a of a violation of i to are which is clear in any event so i could go on and on and i know that my time will not permit it but there is no aspect of the federal false claims act that has been adequately inappropriate pleaded pleaded here and this report was completely correct in dismissing and not permitting  your honor the defendant says that in the complaint below and in the briefing below the controlled issue was not made a biggish well it's attached to the complaint and escobar hadn't been decided which is why we should be allowed to amend escobar now says that at least where there an express representation and we say that is an express representation defendant argues facts and says that are controlled isn't a representation well we should be able to prove through discovery that it is a representation and that's why we should be allowed to and to comply with  bar we will allege that it is material to payment because of all the conditions and all the contracts and all the regulations that say you have to do this secondly we have the excluded parent agreement which is alleged in the complaint where my course and me said they were they told the government expressly that they would wall off the president because he lied to the defense department in order to get these contracts i think in the record was the parent agreement in the record because it wasn't clear to me what what how how it was relevant it is it's alleged in the complaint brief cites the specific paragraph i don't have it in my mind right now but there but it is it is in our brief and it is alleged in the complaint it's reference specifically me either in your brief or in the argument is that it was a fraudulent represent inducement claim because unless they had the excluded pair in agreement microsoft he could not do these contracts w e d c had these contracts they were brought by marcos se micro semi could not continue to sell these products to the government without excluding my course in the executives from the i to our n e a our information they specifically signed an agreement that they would not give to the president and they did and it's alleged expressly in the complaint that they ignored it it's also what contract was entered into on the strength of all the contracts and we and there's a disk that contracts because they were the contract i don't think is is we are going to need discovery to find the actual date but we know that we know that they shipped in we know that they sold products to raytheon that had the information and we know that during the period of time when all those products were sold to raytheon and other other main contractors they had been violating the agreement if i could make one more point your honor my adversary says that there's no evidence of c n through their several paragraphs that recount in detail to see answer these yes one is a lying on the excluded parent but also they specifically lied to the to the relator they said oh yes the israeli domain administrator he should have gotten it he should've gotten the information he's been turned off relator went back and fifteen minutes later they had turned it back on they were lying the entire period of time we can demonstrate that if you give us a chance to amend our complaint will articulate even better but clearly there is enough evidence in this complaint to get the discovery to show michael said he had no