morning your honour's johnston whitman on behalf of the appellant's may please the court the core issue before your honor's in this appeal is whether the district court erred in determining that it was immaterial to reasonable investors that bridge r secretly agreed at the beginning of two thousand and sixteen to no longer deliver oil under the monroe t l a and to take steps to disable itself from being able to make deliveries for the indefinite future by abandoning its separate contract with edd stone the trans loading facility defendants consistently represented that the monroe t l a was the company's most important and largest revenue generating contract and for that very reason the first question asked during the june  sixteen conference call by securities analysts was about the amount of oil currently being delivered to monroe and the prospects the outlook for future deliveries to monroe in response to this analysts question defense defendant rios misleadingly represented that bridger was continuing to deliver oil to monroe but he declined to specify an amount but the way the deals were set up as i understand them and please correct me or or strengthen me you need there were payments essentially coming into the system through our counterparts the way the contract was set up was that bridger would be eligible to receive payments from the jack the counter party which was jam x but our argument is that and the district court thought the payments were an adequate substitute for disclosure of non delivery of the oil work our agreement is that bridger's cessation of all oil oil deliveries under its most important contract is an independent in the material fact that bears directly upon the company's future that would have allowed reasonable investors to make a more informed assessment of their investment decision was there are a turn to file the  yes your honor there was a well it's an interesting question so did the one sentence in the ten q appears a r sorry j a two eighty one and what it says is that jan mexico dredger nineteen point four million dollars as of april thirtieth and sixteen now again it was filed in june so it doesn't speak to the present and and it doesn't it also may not have the financial resources sufficient to satisfy its payment obligations it did say that about about  back to the first question if i may that single line if it had adequately informed investors that bridger and was no longer delivering oil the very first question by a sophisticated r b c analyst on that call would not have b l just don't ask me about it any more of the mean place but but in any event they said jan next may not be able to two things fulfill its financial obligations to bridger and we allege that by that time  says its so called full work its mainstay against a downturn in oil prices had they knew they had inadequate financial resources to make those payments and the statement your honor in june in the  the june ten q was made just one month before the company disclosed the jamb acts couldn't meet those obligations and we argue under your honour's m f global decision and also the gene pool sold their decision that it's reasonable to infer from circumstances were in adequate just that one month earlier but we don't rely solely upon that because what defendants have absolutely no adequate explanation for here is the fire sale of b t s which is the bridge or subsidiary the contract did with eddystone to offload oil from rail cars onto a barge to be shipped down river to monroe when the oil prices changed and bridger in a fire sale sold off b t s for ten dollars so so they no longer had the means to transport oil to monroe even if monroe wanted the oil they broke the supply chain by doing that and why did they do that they did that because the bore didn't have adequate resources to pay its own deficiency payments to bridger and how do we know that if we look at page thirty seven of defendants brief it says if  adequate resources to make its efficiency payments to bridger those would have offset bt ss deficiency payments to eddystone well why would you rate a subsidiary of a publicly traded company for ten dollars but for the inability to have those deficiency payments offset by jan next we also allege other other circumstantial evidence i think one of the problems we had with the courts the district as to gen x is financial condition is he seemed to demand the proverbial smoking gun that tellabs says it's not required he said you don't create any evidence document or email but under this court's two thousand and one decision  scholastic it was made clear that c enter allegations under the p s l array do not require detailed pleading of evidence so that is a long winded answer to a question about jam x s financial circumstances but i want to say that jam access financial circumstances other than that one representation your honor in the q that you pointed to only matter if you accept the notion that an oil delivery companies failure to deliver  under its most important contract is immaterial to investors what are the specific allegations as to sign on to the next who is filling the specific allegations other than the ones that i just mentioned are  doing that could you just sort of quickly marshal one two three four yes i'm very interested right so temporally one well first of all at the time of the acquisition defendant rios in balance who ran jam acts were longstanding in the complaint that they didn't have adequate resources to fund the deficiency payments to bridger three we talked about the fire sale of b t s and how you can infer from that bed when bridger looked to its bowl work for financial realized it couldn't make deficiency payments to bridger so they offloaded b t s so that b t s wouldn't over three point four million dollars a month two eddystone that would not be offset by jan max's deficiency payments but let me suggest that jam x his financial circumstances only matter again if you assume that the non delivery of oil by an oil delivery company under its most important contract is immaterial because defendant's statements good morning honors me and please the court to start with your honor's question the critical flaw in plaintiff's case and it's the one that the district court pointed out time and again and what became a montra in this case is that their allegations do rest on the assertion that jam x was unable to meet its sufficiency payments and that defendants knew of that fact but you can search the complaint in vain to find a single fact in the complaint to support that assertion there is no facts in the complaint that show that they were unable to make the deficiency payments at any relevant point in time much less any facts to show that the defendants knew they were unable to make those payments and i think it's important to look at the timing here to jump to the disclosures i n june the barrel gas told the market first of all jam is about one thousand million dollars in deficiency payment that's in the ten q told the market that they may not be able to make those payments told the market that they may not be able to fulfill their obligations under the coast that they were in the process by which i was in the process of trying to negotiate alternative can actual arrangements and that all didn't work out that act back and have a materially adverse effect on bridger so this is all disclosed the market on june eighth at the very same time the statements are made during the conference call now what playing us want this court to infer is that the market despite all of those disclosures thought in response to what was said during a conference call that short haired still delivering a ton of oil everything is all fine and well that's not the rosy picture that they painted in june and the market knew that they weren't delivering a lot of oil because again they disclosed the fact that there were nineteen million dollars in outstanding deficiency payments as of the end of april thirtieth in the briefs that points out that i think it's fourteen point two million dollars are the deficiency payments that are owed it is zero oil is being delivered so the fact that ninety million dollars was owed told the market that either no well is being delivered or very very little oil was being delivered at that time and that's what the market understood if you look in the joint appendix the r b c analyst report which is on the very last page of the joint appendix it's page three hundred eighteen he said based on everything we know it looks interesting true it was true if you understand what what what they meant by it so dependent on commodity prices is a language that gets repeated throughout throughout the class period from the beginning the class period until the end and what that man is it was describing their business model  company that doesn't take commodity rest unlike other midstream companies and so if you look all the way going back to the beginning of the class period when they say that they explain what they mean by it they're in the middle of the supply chain they have these fee based contract which means they get statements they only raise it on appeal if you look at some of the ones they drop they explain exactly that to the market for example you go back to june first two thousand and fifteen and look at statement one and this is then if you look at the district court's opinion that special appendix three to four is where these are coming from so if you look at statement number one it explains what they mean by not dependent on commodity prices if you look another one is statement six and that's on september two thousand and fifteen it explains much the same thing you go to december two thousand and fifteen  this is statement number nine it explains that this is because they are fee based contracts and because these are take or pay contracts and so throughout the class period they're telling the market the same thing they're describing the type of midstream company that they are that unlike their counter parts who clearly do take commodity risk that they don't so again it all ends up circling back to jam x s ability to pay and unlike the cases that plaintiffs rely on we're not talking about information that is within the company itself within bridge or we're talking about the financial condition of a different company of a contractual counterparty and i i think in listing the different bases for cyan ter that my colleague pointed to i think he said something about  defendants are having knowledge that jack somehow told bridger that it was not going to be able to make the deficiency payments i don't know what paragraph in the complaint that is but it's not one that i have seen as the again as the district cour found as judge belvin explained you can look throughout the complaint finding a factual allegations showing that the defendants knew the financial condition of another company at any given point in time is completely missing and  well exactly except there's no allegations that rios or womble knew that they weren't making any payments at any given point in time and there's really only three time periods that are now relevant based on this statement so there's december one of the statements statement eight is in december that's before this close it was suspended that was before any of the side letters were entered into the oil still flowing there's no allegations that deficiency payments were owed or not made at a time then all the june ones that we were talking about at that point they told the market exactly that we hadn't been paid one thousand million dollars we don't know if it's going to get paid in the future and then the only other statement that falls in between those two dates is the march statement and that was made on march tenth that was about a month and a little over a week after the sayd letters went into effect after the oil stopped flowing so what deficiency payments exactly were owed at that point whether they were made how much was made and especially what that meant for the long term ability to pay and whether any of the defendants knew of those facts at the time is completely absent from the complaint that's what the district court says at page sixteen of the special appendix with respect to the march statements in particular and so i think if you look at the  it said i think it in quite a few places that not a single deficiency payment was made i followed the citations and what stated at all those different statements around i can't find the paragraph in the complaint that actually alleges that let alone alleges that with the facts underlying it and finally the b t s sale which is obviously a huge focal point of plaintiff's argument i think it misunderstands a couple of different things number one and we point this out in our brief their initial argument in their brief was that you know this was a big deal because it was going to bridger out three point four one million dollars even if jam x made its payments as we pointed out in our response that's not at all true any r c wasn't transporting the oil for free so under the contract they were paying them to transport the oil or we were paying them the deficiency payment it wasn't you know it wasn't an additional cost to bridge or so so that is sort of off the table at this point the idea that it blows it up so there can't be any long term oil transportation also doesn't work jam acts as a related counterparty are contractual counterparty and so if the oil prices go back to where they were and oil starts being shipped again there still is this relationship with the r c it's under corporate family instead of feral gases corporate family but it's in the same family everything can go back to business as usual and so i think that doesn't work as well and the third point with respect to the b t s l is well that just you know i guess made it harder for jack's to make the deficiency payments or show showed some how we knew they were going to make the deficiency payments but that kind of gets us all back to where we started it's all about jam x s inability to pay and what the defendants knew with respect to that and when they knew that and that's what's missing from this complaint we've asked the court to affirm reserved some time from thank your honour's this case is not all about jam axis financial condition and that the first statement that i began discussing on june eighth where defendant rios misrepresented that bridger was delivering oil that has nothing to do with jan x s financial condition his statements that bridger was operating within its contracts with monroe he said three times during the same conference call in response to the same analysts question asking about oil deliveries on the day the ten q was filed that supposedly told everybody they weren't delivering oil do not depend upon jan x s financial condition the statement in the ten q on june eighth jan max may not be able to fill th that's crude oil volume sourcing commitments doesn't depend on jan x s financial condition and it's absolutely false because at the time of that statement jack's had no sourcing commitments pursuant to the side letters so i urge that we do not focus so much on jam x s financial condition and looking at whether these statements were appropriately dismissed because the basis for them was that apparently it's not material that an oil delivery company is in delivering oil under its most important contract that flies in the face of a stablished law in this circuit about why it is a material fact in judge droney you were on a panel that issued than a murder in which said materiality cast a sufficiently wide net to encompass every fact that would significantly alter the total mix of available information if an oil deliveries company failure to deliver oil under its most important contract to which it dedicated thirteen hundred ninety four railcars is within that net it's hard to imagine precisely what is with regard to my colleagues inability to spot certain allegations about when jan next approached bridger with finance and problems that's in paragraph ninety six and one forty two of the complaint and finally the materiality on delivery of oil again is established not only by the first analysts question but also by the twenty nine percent decline in the price of federal