case is about c enter the question is whether or not plaintiffs have alleged a strong in france the defendants actually knew that their statements were false when they went to the market on april twelfth and said that their second quarter revenues were going to match the record revenues that they had achieved in the first quarter which had been four hundred twenty percent better than the same quarter in the prior year and when they repeated the same forecast on may seventeenth there are six groups of facts in the complaint that when considered in their totality which the court failed to do so the defendants actually knew their statements were false when they made them there the witness reports that the slowdown was not just happening to internal documents with content satisfying this court's requirement silicon graphics and witnesses explaining them showing that the defendants knew exactly how bad this bad business was there are hard numbers regarding the l sales from that failed and one sixty product their hard numbers regarding poland's from the second quarter that had been brought to the first quarter to achieve the record revenues fifth there the insider well time sales of forty three million dollars within a week of their april twelfth forecast and six is the ultimate enormous mists of one hundred million dollars in revenues and ultimately one hundred fifty percent off the earnings projection when those s groups of facts are considered together the complaint raises a strong and prints the defendants actually knew that their projections were false when made i'd like to start with the witness reports c w twenty nine explain juniper started going to hell his words in the fourth quarter of two thousand and continued into the first quarter of two thousand and one and the second quarter of two thousand and two he was the former juniper global former juniper global operations manager defendant numbers but we also have quantified numbers in the complaint because the m one sixty product had accounted for forty percent of junipers revenues since its introduction in two thousand and that product was supposed to be  it's a router it's supposed to carry information through a network it was dropping information packets and the complaint alleges eighty million dollars worth of lost sales attributable to the m one sixty product problem the whole nest was one hundred million dollars so that's a hard number that accounts for a substantial amount of what we're talking about here and what's what's important there in terms of c enter is defendants never had mid the m one sixty product problem until a full year later when they had a different product that they thought would fix it so they have this route were stealing all this business from juniper we were winning contracts we got eighty million dollars worth of business that would have gone to juniper and we got it instead because they have this faulty router so rumors start to circulate in the industry that maybe juniper has a problem with the  and in november director of production management brian brown said we basically don't have any problems with the o c one hundred two cards which is the card inside that router i'm not sure where that's coming from they were asked again in december on december fifth juniper said there's nothing wrong with the o c one hundred two cards it has not impacted customer buying decisions and so yes i am suggesting that when the complaint is considered  the defendants were willing to lie about the m one sixty product even and on june eighth when they ultimately admitted one hundred million dollar mess and they eventually in july have to have to come forward with one hundred fifty percent less in earnings than what they had projected they still never admitted it was related to her and not one sixty product problem even at that point they said well it looks like the market got to us it seems to be affecting all of the customers there's a little bit you know sales are down a little bit from everybody even though they had said the slowdown is affecting the market the jennifer is a strong as we've ever been but when they fed made it that that slowdown was affecting juniper they still deny that it had anything to do with the m one sixty product problem until april of two thousand two a full year later when they had a different product they had the t six forty router at that point they said now we have a new product it doesn't drop the information and that's critical it's critical that a router be able to function without dropping information products so yes i am suggesting that the fact that they were willing to lie about the m one sixty product and deny there was a problem when they knew that they were losing eighty million dollars worth of sales because that is part of the sea entered consideration to be considered with twenty two witness reports and the internal documents the internal documents for example one of the the best internal documents this june eleventh memo so the way juniper worked didn't say that but they also didn't say what they should have said which is we have a product that we believe in it works in these situations we are experiencing problems with it in these other situations we are confident we can fix those problems and there may be a slight reduction in sales temporarily until we think that would have been the truth and that's not what they said what they said is we don't know what you're talking about there is no problem they and they made ask the max about revenues and going to match the record revenues we achieved in the last quarter and we are as strong as we've ever been that last quarter was four hundred twenty percent better than the same quarter the prior year was an extraordinary quarter for them so saying that they were going to be flat with that was great news which is reflected in the markets response which judge easterbrook a national versus baxter says you consider as part of understanding the statement that was made to the market the market responded by bumping the stock up over sixty percent in please the court my name is nicky locker and i represent juniper networks and queens nonny wexler and hanley council is correct there is one question on this appeal and that is whether  it is not enough for the plaintiffs to merely allege that juniper was facing a slowdown that the comfort that there was a slowdown in the company's sales here at the start of the class period juniper told the market that it business was slowing down when it reduced its fiscal year guidance after meeting its and the analyst expectations for the first quarter when it told the market it was reducing the fiscal year guidance because customers had trimmed spending when it told the market that visibility was limited and when they told the market that it would be harder than ever to give deliver positive competitors we are as strong as we've ever been the complaint doesn't have a single allegation regarding juniper's competitors and how they were faring whether it's  juniper's am class of internet routers that's their series the m classes and ten twenty m one c m forty and so on attracted such widespread acceptance among i s p's internet service providers and web hosting companies that the company where more than thirty three percent market share of the internet backbone router market basically the whole round of market with much of the gains coming at the expense  particulars facts giving rise to a strong inference that the defendant knowingly gave false revenue and earnings and what the ninth circuit has said he says is the strong inference standard under the reform act it actually raises the pleading bar so they also but it's one inquiry i understood the district judge to rule that they didn't plead falsity with that that the statements made were in fact false when made the judge also found not only lack of falsely but lack of science or right back then i would agree with that and the basic thrust is that in the case where the defendant told the market we're facing a slowdown what the plaintiffs have to do is show more than simply a slowdown and there while their confidential witnesses speak to reduced forecasts or reduced orders and perhaps one last deal in the first quarter but basically rejection and forecast by customers in february and march that does not that is not information that's necessarily inconsistent with a forecast for flat or possibly declining revenue in light of a reduced guidance and indeed not one confidential will identify any information that was known to him or her much less  data and that is that paragraph seventy four seventy six and seventy complaint two they actually allege in their own complaint that it was a rare condition and that only her occurred under specified conditions and that the paragraph seventy seven seventy eight and three they actually allege that the m one sixty product notwithstanding the fact that it had this reordering problem drove junipers financial success in the year two thousand i know how you reconcile the fact that it counted for forty percent of the company's revenue in year two thousand and that's a year in which revenue grew five hundred fifty percent it grew the success but somehow defendants should know for lost in sales to this so the allegation is one allegation in this appears at paragraph ninety six that's what they cite paragraph ninety six for the proposition that juniper lost fifty million dollars in m one just product and then early two thousand and one the quote and you will purchase a product product purchased shelves at ten million that's what that paragraph says that does not show a lost sale of and one sixt it doesn't even show it was a lost sale and it certainly doesn't show a lost sale to a v g because of a reorder problem that's paragraph ninety six fifty million of the eighty million let's book by the way they own their own complaints and this is at record one forty nine says that a year after the class period the chief had had only two customers and its entire existence neither one of which was level three february before the company reduced its guidance so that's what the hard numbers are that scientists councils referring to i'd like to if i may make one of the points about plaintiff's argument to this court and it relates inferences in plaintiff's favor and with respect to allegations that plaintiffs actually identify themselves as their key allegations what the plaintiffs asked the court to do is actually in for a fa i like to i don't point the court to two witnesses and one document c w twenty nine he said that based on the weekly reports he knew that defendants who also saw the same weekly reports knew that they couldn't make the second quarter forecasts c w fifteen said that even after juniper adjusted the forecast downward the annual forecast jennifer still failed to adequately disclose the true slowdown taking place  and the third item i'd like the court to consider is the june eleventh email which shows that ten weeks into a thirteen week quarter juniper was at forty three percent of their sales goals he and weston everybody who looked at that afterward said there and look at the page following conclusi reason for this will we actually have to read the beliefs and you are doing your clients a favor by was filmed you were doing the stories and let them know that i'm disappointed that he allowed i believe to stand in our court with his name appears that you present a brief with your own law firm's name misspelled on of her that you joke with opposing counsel is something that you should have been embarrassed about and done whatever possible to c