author: KAREN LeCRAFT HENDERSON, . Circuit Judge: ROGERS, Circuit Judge, EDWARDS, Senior Circuit Judge,

text:
    Donna Marie COBURN, on behalf of herself and all others similarly situated, Appellant v. EVERCORE TRUST COMPANY, N.A., Appellee
    No. 16-7029
    United States Court of Appeals, District of Columbia Circuit.
    Argued October 13, 2016
    Decided December 30, 2016

      Peter W. Overs, Jr., New York, NY, argued the cause for the appellant. Robert I. Harwood, New York, NY, was with him on brief, Daniel M. Cohen entered an appearance.
    Jonathan D. Hacker, Washington, DC, argued the cause for the appellee. Meagh-an VerGow, Washington, DC, was with him on brief. Jeffrey W. Kilduff, Washington, DC, entered an appearance.
    Before: HENDERSON and ROGERS, Circuit Judges, and EDWARDS, Senior Circuit Judge.
   Opinion concurring in the judgment filed by Circuit Judge ROGERS.

Concurring opinion filed by Senior. Circuit Judge EDWARDS.

KAREN LeCRAFT HENDERSON, . Circuit Judge:

Donna M. Coburn, on behalf of herself and all others similarly situated, appeals the district court’s dismissal of her complaint against Evercore Trust Company, N.A, (Evercore) pursuant to the Employee Retirement Income Security Act of 1974 (ERISA) §§ 409, 502(a)(2)-(8), 29 U.S.C. §§ 1109(a), 1132(a)(2)-(3). Coburn, a former J.C. Penney employee and investor in a J.C. Penney employee stock ownership plan (ESOP) managed by Evercore, claims that Evercore breached its fiduciary duties of prudence and loyalty when it failed to take preventative action as the value of J.C. Penney common stock tumbled between 2012 and 2013, thereby causing significant losses. Despite clear factual similarities, Coburn argues that the pleading requirements outlined in Fifth Third Bancorp v. Dudenhoeffer, — U.S. —, 134 S.Ct. 2459, 189 L.Ed.2d 457 (2014), are inapplicable to her allegations because she challenges Evercore’s failure to appreciate the riskiness of J.C. Penney stock rather than Evercore’s valuation of its price. We disagree and therefore affirm the district court’s judgment.

I, Background

While Coburn was employed by J.C. Penney, the large retailer offered its employees the opportunity to “save for. their retirement” by investing in the J.C. Penney Savings Profit-Sharing and Stock Ownership Plan (the Plan). Its defined contribution plan was an “employee pension benefit plan” within the meaning of ERISA § 3(2)(A), 29 U.S.C. § 1002(2)(A), and an eligible individual account plan within the meaning of ERISA § 407(d)(3), 29 U.S.C. § 1107(d)(3). Once an employee opted into the Plan, she could allocate her contribution among a variety of investment options. One of the options was the Penney Stock Fund, an ESOP that consisted largely of J.C. Penney common stock. This was the option Coburn selected.

On December 17, 2009, Evercore became the designated fiduciary and investment manager of the Penney Stock Fund. In this role, Evercore had the authority to restrict or limit the ability of Plan participants to purchase or hold J.C. Penney stock, including the power to “eliminate the [Penney Stock Fund] as an investment option under the Plan and to sell or otherwise dispose of all of the Company Stock held in the [Penney Stock Fund].” Ever-core did not manage any other investment option available, through, the Plan.

In 2011, J.C. Penney attempted to re-conceptualize its brand and hired former Apple, Inc. executive Ron Johnson as its chief executive officer. Distancing himself from J.C. Penney’s historic reliance on sales, coupons and rebates to boost sales, Johnson implemented a more straightforward pricing scheme, reasoning that a “fair and square” pricing policy would attract shoppers. Johnson also reworked both the Company logo and the traditional layout of its stores in an effort to modernize. Taken as a whole, Johnson sought to bring J.C. Penney up to speed with the fads and fashions of 2012, simplifying the business model in order to lower expenses and increase gross. profit margins. This strategy proved to be less than successful.

J.C. Penney’s 2012 first quarter earnings report showed a $163 million loss, or a $0.75 loss per share. Johnson’s poor start was only the beginning, as the, next twenty-one months—from the end of 2012’s first quarter to the end of 2013’s fourth quarter—saw J.C. Penney’s stock price fall from $36.72 to $5.92 per share. As market analysts became increasingly bearish regarding its stock, J.C. Penney cancelled dividends for only the second time since 2006. The disastrous performance led Johnson to a telling realization: the abandoned coupons “were a drug” that “really drove traffic.” Johnson’s tenure ended in April 2013.

Throughout the entire period that the value of J.C. Penney common stock dipped ever lower, Evercore stood resolute. Despite its authority to eliminate the Penney Stock Fund as an investment option in the Plan and its ability to sell shares currently in the Fund, Evercore exercised neither option. The shares in the Penney Stock Fund that Coburn and other investors owned took the full force of the hit. In 2015, Coburn sued on behalf of herself and all others similarly situated, alleging that Evercore was liable for $300 million in losses to the Plan for having breached its fiduciary duty under ERISA §§ 409, 502(a)(2)-(3), 29 U.S.C. §§ 1109(a), 1132(a)(2)—(3).

On February 17, 2016, the district court granted Evercore’s motion to dismiss the complaint for failure to state a claim. Primarily relying on the United States Supreme Court’s opinion in Dudenhoeffer, the district court held that Coburn’s allegations that Evercore should have recognized from publicly available information alone that continued investment in J.C. Penney common stock was “imprudent” were generally implausible absent “special circumstances” affecting the market. Because Coburn failed to plead special circumstances—indeed, Coburn expressly disclaimed any need to plead them—the district court held that Coburn’s complaint could not survive Evercore’s Rule 12(b)(6) challenge. The district court also rejected Coburn’s alternative argument that, pursuant to Tibble v. Edison International, — U.S. —, 135 S.Ct. 1823, 191 L.Ed.2d 795 (2015), Evercore violated its fiduciary “duty to monitor” investments and remove imprudent ones. The court reasoned that Tibbie did not affect the Dudenhoeffer holding and thus could not save Coburn’s complaint. Coburn timely filed her notice of appeal.

II. Analysis

We review de novo the dismissal of a complaint for failure to state a claim. Taylor v. Reilly, 685 F.3d 1110, 1113 (D.C. Cir. 2012). The familiar pair of Iqbal and Twombly guide the analysis of a Rule 12(b)(6) imotion to dismiss. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Under that precedent, a complaint must “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (internal quotation marks omitted) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). That is, the complaint must include factual allegations that, when taken as true, rise above a “speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. It is “a plaintiff’s obligation to provide the grounds of his entitle[ment] to relief [with] more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. (first alteration in original) (internal quotation marks omitted).

In Dudenhoeffer, the Supreme Court further refined pleading requirements regarding “allegations that a fiduciary should have recognized from publicly available information alone that the market was over- or undervaluing the stock.” See Dudenhoeffer, 134 S.Ct. at 2471; accord In re Lehman Bros. Sec. & ERISA Litig., 113 F.Supp.3d 745, 755 (S.D.N.Y. 2015) (noting that Dudenhoeffer “appears to have raised the bar for plaintiffs seeking to bring a claim based on a breach of the duty of prudence” (internal quotation marks omitted) (emphasis removed)), aff’d sub nom. Rinehart v. Lehman Bros. Holdings Inc., 817 F.3d 56, 66 (2d Cir. 2016). In Dudenhoeffer, a putative class of employees brought a claim against fiduciaries who oversaw an ESOP, alleging that they had violated the duties of loyalty and prudence imposed by ERISA §§ 409, 502(a)(2), 29 U.S.C. §§ 1109, 1132(a)(2). Dudenhoeffer, 134 S.Ct. at 2464. Specifically, the Dudenhoeffer plaintiffs alleged that the fiduciaries “knew or should have known that [the employer company’s] stock was overvalued and excessively risky,” in part because “publicly available information such as newspaper articles provided early warning signs” of the company’s financial troubles. See id. The Dudenhoeffer fiduciaries, however, “continued to hold and buy” the company’s stocks, a move that ultimately “eliminated a large part of the retirement savings that the participants had invested in the ESOP.” Id.

The Supreme Court affirmed the district court’s dismissal of the complaint, holding that “where a stock is publicly traded, allegations that a fiduciary should have recognized from publicly available information alone that -the market was over- or undervaluing the stock are implausible as a general rule, at least in the absence of special circumstances.” Id. at 2471. Driving the Dudenhoeffer opinion was the recognition that “investors ... have little hope of outperforming the market in the long run based solely on their analysis of publicly available information, and accordingly they rely on the security’s market price as an unbiased assessment of the security’s value in light of all public information.” Id. at 2471 (internal quotation marks omitted) (quoting Halliburton Co. v. Erica P. John Fund, Inc., — U.S. —, 134 S.Ct. 2398, 2411, 189 L.Ed.2d 339 (2014)). Dudenhoeffer was thus grounded in the efficient capital market theory—the “theory that security prices reflect all available information.” Yesha Yadav, How Algorithmic Trading Undermines Efficiency in Capital Markets, 68 Vand. L. Rev. 1607, 1632 (2015) (citing Eugene F. Fama, Efficient Capital Markets: A Review of Theory and Empirical Work, 25 J. Fin. 383, 384 (1970)); Appellee’s Br. 11-12. Indeed, according to the efficient capital market theory, a security price in an efficient market “represents the market’s most accurate estimate of the value of a particular security based on its riskiness and the future net income flows that investors holding that security are likely to receive.” Yadav, supra at 1633; accord Basic Inc. v. Levinson, 485 U.S. 224, 246, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988) (“[T]he market price of shares traded on well-developed markets reflects all publicly available information....”); “Where efficient markets . exist, traders cannot profit by using existing information available in the market, since this news should already be reflected in securities prices.” Yadav, supra at 1633. Instead, a security’s price fluctuates only on the “arrival of new information into the exchange.” Id. (emphasis added). Echoing this theory, Dudenhoeffer agreed that “[a] fiduciary’s ‘failure] to outsmart a presumptively efficient market ..." is ... not a sound basis for imposing liability.’ ” Id. at 2472 (quoting White v. Marshall & Ilsley Corp., 714 F.3d 980, 992 (7th Cir. 2013)).

Thus, because a stock price on an efficient market reflects all publicly available information, Dudenhoeffer requires additional allegations of “special circumstances” when a plaintiff brings a breach of the duty of prudence claim against a fiduciary based on that information. Special circumstances, the Court instructed, includes evidence questioning “the reliability of the market price as an unbiased assessment of the security’s value in light of all public information ... that would make reliance on the market’s valuation imprudent.” Id. (quoting Halliburton Co., 134 S.Ct. at 2411) (internal quotation marks omitted). This evidence may demonstrate that illicit forces (such as fraud, improper accounting, illegal conduct, etc.) were influencing the market, Smith v. Delta Air Lines Inc., 619 Fed.Appx, 874, 876 (11th Cir. 2015) (per curiam), or may otherwise suggest that the market was not efficient and therefore the market price of a security in that market was not necessarily indicative of its underlying, fundamental value. See id. Ultimately, “[Dudenhoeffer] suggested that the special circumstances might include something like available public information tending to suggest that the public market price did not reflect the true value of the shares.” Allen v. GreatBanc Tr. Co., 835 F.3d 670, 679 (7th Cir. 2016).

Applying Dudenhoeffer here, we believe Coburn’s claim falls far short. Despite the Supreme Court’s instruction that claims of imprudence based on publicly available information must be accompanied by allegations of “special circumstances,” Coburn acknowledges that she “did not allege the market on which J.C. Penney stock traded was inefficient....” Appellant’s Br. 21. Quite clearly, then, if Dudenhoeffer controls, Coburn’s complaint was properly dismissed, Dudenhoeffer, 134 S.Ct. at 2471.

Perhaps recognizing the inadequacy of her claim under Dudenhoeffer, Co-burn instead attempts to distinguish Dudenhoeffer, arguing that the additional pleading requirements set forth therein are inapplicable to her allegations. Appellant’s Br. 11-12, 19-20. Coburn insists that her claim is not that Evercore over- or undervalued J.C. Penney stock but instéad that Evercore exposed her to “outsized and unnecessary retirement savings risk” by failing to act as J.C. Penney stock value dipped ever lower. Id. at 11. This risk exposure, according to Coburn, was especially egregious given that the purpose of the Penney Stock. Fund, was to help employees like Coburn prepare for retirement—Evercore should have recognized its investors’ low risk tolerance. Id. at, 19-20. In a nutshell, then, Coburn argues that Evercore was imprudent for continuing to hold J.C. Penney common stock when it became increasingly and excessively risky—a claim that should fall under Iqbal/Twombly instead of Dudenhoeffer.

We disagree. For one, the plaintiffs in Dudmhoeffer itself made the same argument, specifically claiming that the fiduciaries there should have known that the company stock was both “overvalued and excessively risky.” Dudenhoeffer, 134 S.Ct. at 2464 (emphasis added). Without preamble, the Supreme Court disposed of the risk-based claims through its broad rule that “allegations that a fiduciary should have recognized from publicly available information alone that the market was over- or undervaluing the stock are implausible as a general rule.” Id. at 2471. If the Supreme Court had no difficulty in using its value-centric rule to dismiss a risk-based claim by plaintiffs with similar risk tolerance, we have no license to deviate therefrom here. See id.) Rinehart, 817 F.3d at 66 (“Although the language of [Dudenhoejfer] refers primarily to ‘over- or undervaluing’ stock, the ... Court applied [the heightened pleading] rule to the plaintiffs’ risk-based claims in that case,”).

Additionally, well-reasoned decisions by our sister circuits have also determined that risk-based claims must nonetheless meet Dudenhoeffer’s pleading requirement to survive a motion to dismiss. For example, in no uncertain terms, the Second Circuit held that “the purported distinction between' claims involving ‘excessive risk’ and claims involving ‘market value’ is illusory.” Rinehart, 817 F.3d at 66. The Rinehart court agreed that Dudenhoeffer “foreclose[d] breach of prudence claims based on public information irrespective of whether such claims are characterized as based on alleged overvaluation or alleged riskiness of a stock.” Id. (emphases and internal quotation marks omitted) (quoting In re Lehman Bros. Sec. & ERISA Litig., 113 F.Supp.3d at 756). The Sixth Circuit also followed this approach in Pfeil v. State Street. Bank and Trust Co., where it reiterated that the “excessively risky character of investing ESOP funds in stock of a company experiencing serious threats to its business ... is accounted for in the market price,' and the Supreme Court held that fiduciaries may rely on the market price, absent any special circumstances affecting the reliability of the market price.” 806 F.3d 377, 386 (6th Cir. 2015) (internal quotation marks omitted) (quoting In re Citigroup ERISA Litig., 104 F.Supp.3d 599, 615 (S.D.N.Y. 2015)); accord Smith, 619 Fed.Appx. at 876 (complaint must plead “special circumstances” whenever alleged breach stems from fiduciary’s failure to act on public information).

Rinehart and Pfeil—like Dudenhoeffer—are grounded- in the efficient capital market theory. See Rinehart, 817 F.3d at 65-66; Pfeil, 806 F.3d at 386. In fact, Rinehart declares that “viewing [Dudenhoeffer’s] rule as applicable to all allegations of imprudence based upon public information—regardless of whether the allegations are framed in terms of market value or excessive risk—is consistent with the efficient market hypothesis that risk is accounted for in the market price of a security.” Rinehart, 817 F.3d at 66; accord Pfeil, 806 F.3d at 386 (noting that related Modern Portfolio Theory “rests on the understanding that organized securities markets are so efficient at discounting securities prices that the current market price of a security is highly likely already to impound the information that is known or knowable about the future prospects of that security” (quoting John H. Langbein et al., Pension and Employee Benefit Law 634 (5th ed. 2010))); Yadav, supra at 1633 (in efficient market, market’s most accurate estimate of particular security’s value is based on its riskiness ' and future net income flows investors holding that security are likely to receive). We likewise reject Coburn’s claim that risk is attenuated, from price such that risk-based allegations are totally free from Dudenhoeffer’s constraints. See Dudenhoeffer, 134 S.Ct. at 2471. Because a stock price fluctuates, in part, to achieve “the same risk-adjusted expected return as the stocks of the strongest companies,” Cent. Nat’l Bank of Mattoon v. U.S. Dep’t of Treasury, 912 F.2d 897, 901 (7th Cir. 1990), arguing that a stock is too risky to hold at current market prices is part and parcel of the claim that that stock is overvalued, see Dudenhoeffer, 134 S.Ct. at 2471.

For the foregoing reasons, the judgment of the district court is affirmed.

So ordered.

ROGERS, Circuit Judge,

concurring in the judgment.

The Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., was designed “to protect ... the interests of participants in employee benefit plans and their beneficiaries.” Id. § 1001(b). Congress’ “massive undertaking,” Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 44, 107 S.Ct. 1549, 95 L.Ed.2d 89 (1987), followed “almost a decade of studying the Nation’s private pension plans,” and resulted in a complex and comprehensive statute, Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359, 361, 100 S.Ct. 1723, 64 L.Ed.2d 354 (1980), under which every employee benefit plan is to be managed by fiduciaries subject to common law duties of care and specific duties set forth in ERISA, 29 U.S.C. §§ 1102(a), 1104(a)(1). ERISA fiduciaries ordinarily have a duty to diversify investments in retirement plans “so as to minimize the risk of large losses.” Id. § 1104(a)(1)(C). But employee stock ownership plans (“ESOP”) are different. Such plans, which invest “primarily” in the stock of the employer’s company, id. § 1107(d)(6)(A), are exempt from the - diversification requirement, id. § 1104(a)(2), and serve multiple purposes, generally to protect employees’ retirement savings and also to provide capital growth funds, see Tax Reform Act of 1976, § 803(h), 90 Stat. 1590. Despite the risk of undiversified retirement investments acknowledged in ERISA, see 29 U.S.C. § 1104(a)(1)(C), Congress has cori-tinued to use tax incentives to encourage the creation of ESOPs, Fifth Third Bancorp v. Dudenhoeffer, — U.S. —, 134 5.Ct. 2459, 2469, 189 L.Ed.2d 457 (2014). Coburn’s purported class action complaint, on behalf of herself as a J.C. Penney ESOP participant and other current and former employees who participated in the J.C. Penney ESOP, alleged that Ever-core Trust Company, N.A. (“Evercore”), the J.C. Penney ESOP fiduciary, violated its duty of prudence by failing “to evaluate the merits of the [ESOP’s] investments on an ongoing basis and take all necessary steps to ensure that the [ESOP’s] assets were invested prudently.” Compl. ¶ 67 (Jan. 13, 2015). According to the complaint, given the results of new management initiatives beginning in 2012, Evercore “knew or should have known that [J.C. Penney] stock was not a suitable and appropriate investment for the [ESOP], but was, instead, a highly speculative and risky investment in light of [J.C. Penne/s] serious mismanagement and precarious financial condition.” Id. ¶ 69. Further, it alleged that a loyal and prudent fiduciary would “have in place a regular, systemic procedure for evaluating the prudence of investment in [J.C. Penney] stock.” Id. ¶ 70. More particularly, the complaint. alleged that Evercore should have ceased “to offer [J.C. Penney] stock as an investment option for participant contributions in .the [ESOP] when [Evercore] knew that [J.C. Penney] stock no longer was a prudent investment for participants’ retirement savings,” id. ¶ 77, and it “could not possibly have acted prudently when it continued to invest the [ESOP’s] assets” in J.C. Penney stock, id. ¶ 76.

Opposing Evercore’s motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), on the ground the complaint “is identical to the claim alleged” and rejected in Dudenhoeffer, Mem. in Supp. of Def. Evercore Trust Co. N.A.’s Mot. to Dismiss 6, Apr. 13, 2015 (“Def.’s Motion”), Coburn pointed to the Supreme Court’s May 18, 2015 decision in Tibble v. Edison International, — U.S. —, 135 S.Ct. 1823, 191 L.Ed.2d 795 (2015). She argued not only that Tibbie “reconfirmed [Evercore’s] fiduciary obligations under trust law and ERISA,” but that Dudenhoeffer “is only relevant in cases where the stock price is alleged to have been artificially inflated,” which “is not alleged here.” Pl.’s Opp. to Def.’s Mot. to Dismiss 1, 10, June 12, 2015 (“Pl,’s Opposition”). Absent a claim that J.C. Penney stock was either overvalued or undervalued, Coburn asserted she did not need to plead special circumstances in order to survive the motion to dismiss. Id. at 10-11. In Coburn’s view, Tibble “clarified that the duty of prudence under ERISA includes a duty to continually monitor the prudence of investments of plan assets.” Id. at 9. Evercore responded that Tibble “says nothing about whether Evercore breached the duty [to monitor] by failing to foresee the future decline in the price of J.C. Penney stock.... Dudenhoeffer already resolves this issue.” Reply Mem. in Support of Def. Evercore Mot. to Dismiss 2-3, July 13, 2015.

Surprisingly, Coburn does not raise a Tibbie contention on appeal. See Op.-970 n.2; Concurring Op. 976 (Edwards, J.). Consequently, the question before this court is whether Dudenhoeffer is dispositive. The Supreme Court has confirmed that the role of ESOP fiduciaries gives rise to the “tension” between the “general duty of prudence” required of ERISA fiduciaries and the authorization of non-diversified, high-risk ESOPs. Amgen Inc. v. Harris, — U.S. —, 136 S.Ct. 758, 759, 193 L.Ed.2d 696 (2016); see also Pfeil v. State St. Bank & Trust Co., 806 F.3d 377, 382-83 (6th Cir. 2015); Rinehart v. Lehman Bros. Holdings Inc., 817 F.3d 56, 63-65 (2d Cir. 2016); Gedek v. Perez, 66 F.Supp.3d 368, 372-74 (W.D.N.Y. 2014); Concurring Op. 977 (Edwards, J.). But neither the economic theory underlying the appropriate balancing of the duties owed by ESOP fiduciaries, nor the theory of ESOPs, nor the interaction between Tibbie and Dudenhoeffer were briefed on appeal; Tibbie itself is not mentioned in the briefs. Instead, Coburn places no reliance on economic theory. Her position on appeal is that “[c]ommon law concepts of fiduciary duty ... cannot be reconciled with [Evercore’s] tortured reading which ignores Dudenhoeffer’s distinguishable facts that made market efficiency a relevant topic there, but not here.” Reply Br. 1. She accepts that Evercore was an independent plan fiduciary with no inside information about J.C. Penney’s prospects, see Appellant’s Br. 11, and focuses on common law obligations where there is a “properly functioning efficient market,” Reply Br. 2.

Consequently it behooves the court not to endorse a’ particular economic theory that could have unforeseen and even unintended consequences in future ERISA litigation, much less in a class action, where the issues are squarely presented and a court must decide them, See Op. 969-70, 971-72. The economic theories underlying ERISA, and ESOPs specifically, have been the subject of much scholarship. Although some theories of stock valuation and ESOP fiduciary responsibilities were addressed in the district court, see, e.g., Def.’s Motion 11-13; Pl.’s Opposition 11-13, on appeal the parties’ economic analysis is limited to general principles of market efficiency. See Appellant’s Br. 18-21; Resp’t’s Br. 11-12, 16-18. Coburn rests her appeal on Dudenhoeffer’s “extensive teaching” with respect to the common law of trusts to which she asserts ESOP fiduciaries, no less than other ERISA fiduciaries, are held, Reply Br. 2 (citing Dudenhoeffer, 134 S.Ct. at 2465, 2467, 2470), and on the district court opinion in Gedek (which was not followed by the Second Circuit Court of Appeals in Rinehart, 817 F.3d at 66 n.3). Hence, it is unnecessary for this court to weigh in on the economic theory of ESOPs, much less elaborate upon the economic theory implied by Dudenhoeffer. In this complex, technical ERISA context, I would not venture further than is necessary to decide Coburn’s appeal, and, as she has presented it, Dudenhoeffer is controlling.

The legal theory in Coburn’s complaint is based nearly verbatim on the complaint filed in Dudenhoeffer. Compare Compl. ¶¶ 67-80 with Consol. Class Action Compl. for Violations of the Emp. Ret. Income Sec. Act ¶¶ 228-240, 246-48, Dudenhoeffer v. Fifth Third Bancorp, 757 F.Supp.2d 753 (S.D. Ohio 2010) (No. 08-cv-538) (“Dudenhoeffer Compl.”). Those theories from the Dudenhoeffer complaint were argued in the employees’ brief to the Supreme Court. See Br. For Resp’ts, Fifth Third Bancorp v. Dudenhoeffer, — U.S. —, 134 S.Ct. 2459, 189 L.Ed.2d 467 (2014) (No. 12-751). The employees urged the Court to conclude, where ESOP fiduciaries “ ‘continued to allow the Plan’s investment in Fifth Third Stock even during the time that the stock price was declining in value as a result of [the] collapse of the housing market’ ... that ‘[a] prudent fiduciary facing similar circumstances would not have stood idly by as the Plan’s assets were decimated.’” Dudenhoeffer, 134 S.Ct. at 2471 (quoting Dudenhoeffer Compl. at 53).

The Supreme Court in Dudenhoeffer was thus faced with virtually identical arguments to those Coburn brings to this court. That Court rejected as “implausible” the employees’ view that, based solely on publicly available information, a fiduciary’s failure to divest from an ESOP whose stock price is declining has violated the duty of prudence, “at least in the absence of special circumstances.” Id. Coburn urges this court to conclude that Dudenhoeffer is inapplicable because her claim is not based on the over- or undervaluation of J.C. Penney stock, but rather that class members’ “risk aversion as retirement investors must also be taken into account by a fiduciary when assessing the prudence of continued investment of retirement funds over the long term.” Appellant’s Br. 14. In her view, “Evercore should have discontinued investment in J.C. Penney stock precisely because the steady decline of the Company’s stock price ‘accurately tracked the company’s steadily worsening fortunes.’” Id. at 21-22 (quoting Gedek, 66 F.Supp.3d at 375). In this context, she concludes, no “special, circumstances” needed to be pleaded. Id. at 14.

Whatever merit there might be to Co-burn’s risk-aversion contention in the absence' of Dudenhoeffer—a contention that presumably would require examination of economic theory on types of information incorporated into a stock price, market efficiencies, and the extent of the duty of prudence in the context of ESOPs—Dudenhoeffer forecloses the need for such consideration here. Although the employees -in Dudenhoeffer also argued the employer’s stock was overvalued, and that fiduciaries had failed to act on the basis of non-public information, that does not undermine Dudenhoeffer’s rejection of arguments as “implausible” that are indistinguishable from those Coburn presents on appeal. 134 S.Ct. at 2471-72. And because Dudenhoeffer is dispositive, it is unnecessary to address Coburn’s challenge to the district court’s alternative holding on Gedek, much less to attempt to resolve the tension between Tibble and Dudenhoeffer or to expound on a possible economic theory of ESOPs.

EDWARDS, Senior Circuit Judge,

concurring:

I do not take issue with anything in the opinion for the court. I write only to emphasize what we do not decide today.

I agree that Coburn’s claim of “outsized and unnecessary retirement savings risk” is foreclosed by the Supreme Court’s decision in Fifth Third Bancorp v. Dudenhoeffer, — U.S. —, 134 S.Ct. 2459, 189 L.Ed.2d 457 (2014). I write separately to emphasize that, in affirming the judgment of the District Court, we do not mean to denigrate the viability of a separate “duty to monitor” claim under Tibble v. Edison International, — U.S. —, 135 S.Ct. 1823, 191 L.Ed.2d 795 (2015). Although Coburn raised a duty to monitor cause of action with the District Court, she failed to preserve the claim and raise it on appeal. It is therefore forfeited.

Coburn raised two separate theories in support of her complaint alleging that Ev-ercore breached its fiduciary duty. First, Coburn claimed that Evercore “knew or should have known that Company stock was not a suitable and appropriate investment for the Plan, but was, instead, a highly speculative and risky investment.” Complaint ¶ 69, reprinted in Joint Appendix (“J.A.”) 24. Second, Coburn claimed that “Evercore Trust failed to engage in proper monitoring of the Company Stock Fund.” Complaint ¶ 53, J.A. 20. Specifically, Coburn argued that Evercore “fail[ed] to have in place rudimentary trip wires that would have spurred a prudent fiduciary into action.” Complaint ¶ 54, J.A. 20.

Coburn cited facts indicating that J.C. Penne/s stock plummeted between 2012 and 2013 because of CEO Ron Johnson’s poor management. Johnson’s misguided approach, including changes to J.C. Penney’s pricing, the “store experience,” and the merchandise offered, cost the company stock plan approximately $300 million. See Complaint ¶¶ 19-20, 36-37, J.A. 11, 14-15. In the wake of Johnson’s firing, analysts described Johnson’s reign as “a tumultuous 17 months,” Stephanie Clifford, Chief’s Silicon Valley Stardom Quickly Clashed at J.C. Penney, N.Y. Times, Apr. 10, 2013, at Al; “a troubled stint,” Daisuke Wakabayashi, Corporate News: Apple Ex-Retail Chief Leads Startup, Wall St. J., Oct. 24, 2014, at B2; and an “abysmal tenure,” Sean Williams, The Motley Fool’s Worst CEO of the Year Is ..., Motley Fool (Dec. 12, 2013, 10:05 AM), http://www.fool. com/investing/general/2013/12/12/the-motley-fools-worst-ceo-of-the-year-is-2. aspx. Asked to describe Johnson’s performance, a prominent former CEO responded: “There is nothing good to say about what he’s done.” James Surowiecki, The Turnaround Trap, New Yorker, Mar. 25, 2013, at 44.

In light of these uncontested facts, Co-burn asserted that Evercore did “absolutely nothing,” even though its “sole responsibility was to evaluate and monitor the performance of a single equity.” Complaint ¶¶ 52, 53, J.A. 19-20. Given the facts and allegations pled, it is hard to comprehend how Coburn’s complaint could not survive a motion to dismiss under Tibbie.

The opinion for the court properly distinguishes, as Coburn did, distinct theories of a breach of fiduciary duty:

Whereas Dudenhoejfer primarily focuses on allegations of misvaluation in the marketplace, see 134 S.Ct. at 2471, Tibble focuses on the prudence of holding particular investments over time, requiring a fiduciary to “conduct a regular review of its investment with the nature and timing of the review contingent on the circumstances.” 135 S.Ct. at 1827-28.

Maj. Op. Part II n.2. These theories are fundamentally different: Dudenhoeffer addresses the “over- or undervaluing” of a stock, 134 S.Ct. at 2471; Tibbie, in turn, addresses the “failure] to properly monitor investments,” 135 S.Ct. at 1829. Broadly speaking, Dudenhoejfer involves the substance of investment decisions, while Tibbie has to do with a fiduciary’s obligation to monitor those decisions. These theories embrace distinct, albeit not mutually exclusive,, causes of action for violations of a fiduciary’s duty.

I recognize that the holding in Tibbie may be in tension with some of what the Court said in Dudenhoeffer. Nevertheless, Tibbie post-dates Dudenhoeffer, and it is quite clear in what it says:

Under trust law, a trustee has a continuing duty to monitor trust investments and remove imprudent ones. This continuing duty exists separate and apart from the trustee’s duty to exercise prudence in selecting investments at the outset. The Bogert treatise states that “[t]he trustee cannot assume that if investments are legal and proper for retention at the beginning of the trust, or when purchased, they will remain so indefinitely.” A. Hess, G. Bogert, & G. Bogert, Law of Trusts, and Trustees § 684, pp. 145-146 (3d ed. 2009) (Bogert 3d). Rather, the trustee must “systematically] conside[r] all the investments of the trust at regular intervals” to ensure that they are appropriate. Bogert 3d § 684, at 147-148.
In short, under trust law, a fiduciary normally has a continuing duty of some kind to monitor investments and remove imprudent ones. A plaintiff may allege that a fiduciary breached the duty of prudence by failing to properly monitor investments and remove imprudent ones.

135 S.Ct. at 1828-29 (alterations in original).

It seems plain to me that Appellant’s complaint and her árgument to the District Court stated a cause of action under Tibbie that easily should have survived a motion to dismiss. See Moreno v. Deutsche Bank Americas Holding Corp., 15 Civ. 9936, 2016 WL 5957307, at *5-7 (S.D.N.Y. Oct. 13, 2016) (citing Tibble, 135 S.Ct. at 1828-29) (denying motion to dismiss a failure to monitor claim); Northstar Fin. Advisors v. Schwab Invs., 135 F.Supp.3d 1059, 1075-76 (N.D. Cal. 2015) (quoting Tibble, 135 S.Ct. at 1828) (same). However, because it is not before us, we have no occasion to address the issue on appeal.

      . "An inefficient market, by definition, does not incorporate into its price all the available information about the value of a security.” ' Freeman v. Laventhol & Horwath, 915 F.2d 193, 198 (6th Cir. 1990). In an inefficient market, it is plausible that a fiduciary could act imprudently by not acting on publicly available information because there is less assurance that that information has already been' incorporated into the security price. Cf. Dudenhoeffer, 134 S.Ct. at 2471. "[M]arket efficiency is a matter of degree and accordingly .., a matter of proof.” Halliburton Co., 134 S.Ct. at 2410. The degree to which a market must be inefficient to meet the “special circumstances” bar need not be decided here—we leave that question for another day.

      . In district court, Cobum also argued that Evercore violated a continuing duty to monitor investments as set forth in Tibbie, 135 S.Ct. at 1828. Whereas Dudenhoeffer primarily focuses on allegations of misvaluation in the marketplace, see 134 S.Ct. at 2471, Tibbie focuses on the prudence of holding particular investments over time, requiring a fiduciary “to conduct a regular review of its investment with the nature and timing .of the review contingent on the circumstances.” 135 S.Ct. at 1827-28. It is conceivable, then, that publicly available information that is insufficient to allege a plausible claim against a fiduciary under Dudenhoeffer would nonetheless be sufficient to survive a motion to dismiss under Tibbie if the fiduciary failed to “conduct a regular review” of its investment in light of that publicly available information. See id. And indeed, Coburn’s allegations—that Ever-core "failed to engage in proper monitoring of the [Penney] Stock Fund,” Joint Appendix 20—would perhaps be sufficient to survive a motion to dismiss under Tibbie. Coburn failed, however, to make this argument on appeal—indeed, Coburn does not cite Tibbie once in her brief—and the argument is therefore forfeited. Am. Wildlands v. Kempthorne, 530 F.3d 991, 1001 (D.C. Cir. 2008) (issues not raised in opening brief are forfeited on appeal).

      . The factual premise on which Coburn’s argument rests is itself faulty, Although we have previously recognized as a central pillar of financial analysis that "past trend[s] can often be accepted as a dependable index of the future,” Am. Airlines, Inc. v. Civil Aeronautics Bd„ 192 F,2d 417, 421 (D.C. Cir. 1951), this acknowledgement is a far cry from the proposition that past market trends will always continue into the future. If the latter proposition were true, any investor with an elementary understanding of a put option would be exceedingly wealthy after having shorted J.C. Penney stock in 2012, the beginning of the ■ class period. Instead, at any given point, a security’s risk of loss is counterbalanced by the possibility of gain and a stock price re-fleets, inter alia, the market's equilibrium point between those competing forces. See Cent. Nat’l Bank of Mattoon v. 'U.S. Dep't of Treasury, 912 F.2d 897, 901 (7th Cir. 1990) ("The prices of the stocks of weak companies are bid down in the market until those stocks yield the same risk-adjusted expected return as the stocks of the strongest companies; otherwise no one would hold stock in a weak company—the prices of such stock would fall to zero.”). To the extent Coburn argues that Evercore knew that J.C. Penney stock was .certain to suffer future losses because of past poor performance, see Appellant’s Br.-8 ("Ev-ercore Saw It Coming”), we reject that claim as implausible.

      . Coburn herself provides ample evidence of the connection between risk and value as, throughout her brief, she argues the risky nature of J.C. Penney stock by highlighting past declines in the price of the security. Appellant’s Br. 18 ("Even with ever decreasing stock price value caused by the Company's continually bad financial performance, Ever-core stood on the deck of the sinking ship of J.C. Penney and did precisely nothing to protect the assets of the Plan and its partici-pants_" (emphasis added)); Appellant’s Br. 21-22 (“Evercore should have discontinued investment in J.C. Penney stock precisely because the steady decline of the Company's stock price 'accurately tracked the company’s steadily worsening fortunes.’ ” (emphasis added)).

      . Coburn's attempt to bypass this reality is unpersuasive. As noted above, stock prices fluctuate to achieve the same expected return as the stocks of the strongest companies in the market. Cent. Nat’l Bank of Mattoon, 912 F.2d at 901. This means that, inter alia, a "risk discount” is applied to stocks of weaker companies—when a stock becomes increasingly risky (and hence,- its potential for loss increases), its price falls so as to maintain the expected market rate of return. See id. Here, however, Coburn argues that Evercore could not rely on the market to apply an appropri-
      ate “risk discount” because Penney Stock Fund investors had a lower risk tolerance .than average market investors. See Appellant’s Br. 19-21. The investors therefore demanded a greater risk discount than the one applied by the market at large and Evercore should have recognized that the market price of J.C. Penney stock constituted an imprudent investment if this more conservative risk discount were applied. See id.

      Coburn's argument fails, however, because she mischaracterizes the risk tolerance of ESOP investors. "Congress, in seeking to permit and promote ESOPs, was pursuing pur- , poses other than the financial security of plan participants.” Dudenhoeffer, 134 S.Ct. at 2467-68. Although the alternative purposes are insufficient to create a presumption of prudence on the part of an ESOP fiduciary, id. at 2470-71, they nonetheless reflect a clear reality:
      Whatever evils [that exist in ESOPs] are endemic to the ESOP form established by Congress, A benefit of employees investing in their employer is that when the employer does well, the employees do well. A risk is that when the employer goes bankrupt, the employees do poorly.

        Pfeil, 806 F.3d at 387. Undiversified ESOPs are thus not fairly characterized as "low-risk” investments because of their direct relationship to the fortunes of a single company, Cf.
        Terrence R. Chorvat, Ambiguity and Income Taxation, 23 Cardozo L. Rev. 617, 630 (2002) (citing Richard A. Brealey & Stewart C. Myers, Principles of Corporate Finance 153-56 (1996)) (elementary principle of finance instructs "ceteris paribus, a diversified portfolio of investments has less risk than an undiversified portfolio of stocks”). We therefore reject the premise of Coburn’s claim that Evercore should have considered its investors as low risk (i.e., that Evercore should have applied an above-market risk discount) when assessing the prudence of continued investment in J.C, Penney common stock. This conclusion is in accord with Dudenhoeffer itself, which—as noted above—rejected the risk-based claims of ESOP investors with a similar risk tolerance. See supra at 971-72.

      . Because we conclude that Dudenhoeffer applies to Coburn’s claim, we need not reach the question whether, absent Dudenhoeffer, Coburn was nonetheless required to allege that J.C. Penney was “no longer viable” in order to survive dismissal. See Appellant's Br. 22-23.

      . For three different analytical approaches to ERISA, see, e.g., Catherine L. Fisk, Lochner Redux: The Renaissance of Laissez-Faire Contract in the Federal Common Law of Employee Benefits, 56 Onto St. L.J, 153 (1995); Sean M. Anderson, Risky Retirement. Business: How ESOPs Harm the Workers They are Supposed to Help, 41 Loy. U; Chi. L.J. 1 (2009); Brendan S. Maher & Peter K. Strís, ERISA & Uncertainty, 88 Wash. U. L. Rev. 433 (2010).


source: Caselaw Access Project

author: BENTON, Circuit Judge.

license: Public Domain

text:
    Sarah K. BROOKS; Michelle R. Bullock; Zoea A. Warnick; Francis Livingood; Paul G. Wolf; Jason Fett, Plaintiffs-Appellants Kris L. Olds, Plaintiff v. CITY OF DES MOINES, IOWA; Gatso USA, Inc., Defendants-Appellees
    No. 15-2781
    United States Court of Appeals, Eighth Circuit.
    Submitted: November 17, 2016
    Filed: December 1, 2016
    Counsel who represented the appellant was James C. Larew of Iowa City, IA.
    Counsel who represented the appellee were Thomas George Fisher, of Des Moines, IA, Douglas Paul Philiph, of Des Moines, IA, Paul David Burns, of Iowa City, IA, Laura M. Hyer of Cedar Rapids, IA.

      Before LOKEN, BEAM, and BENTON, Circuit Judges.
   BENTON, Circuit Judge.

Six drivers sued the City of Des Moines and Gatso USA, Inc., arguing that the Automatic Traffic Enforcement (ATE) system violates federal and state law. The district court dismissed the drivers’ claims. Having jurisdiction under 28 U.S.C. § 1291, this court affirms in part, reverses in part, and remands.

I.

In 2011, the City, by ordinance, authorized an ATE system. Des Moines, Iowa Mun. Code § 114-243. The City contracted with Gatso to install and operate the system. When a vehicle speeds or runs a red light, an ATE camera takes an image. Gatso then mails a Notice of Violation to the vehicle owner. The drivers sued in Iowa state court, arguing that the ATE system violates their right to procedural due process, their, fundamental right to travel, Iowa Code §§ 602.6101 and 364.22, and causes unjust enrichment for the City and Gatso. They removed the case to federal court and moved to dismiss.

The district court dismissed the drivers for failure to state a claim. On appeal, the drivers contend that the district court erred by failing to address their standing and by dismissing their complaint.

II.

The district court “passes the question whether plaintiffs here have standing to bring the claims.” To the contrary: “Lack of the jurisdiction of the subject matter of litigation cannot be waived by the parties or ignored by the court.” Hunter v. Underwood, 362 F.3d 468, 476 (8th Cir. 2004). “The appellate court must satisfy itself not only of its own jurisdiction but also that of the district court.” Id, at 476-77. Where a plaintiff lacks standing, the court has no subject matter jurisdiction. Young America Corp. v. Affiliated Comput. Servs., Inc., 424 F.3d 840, 843 (8th Cir. 2005).

To establish Article III standing, a plaintiff must show 1) an injury in fact, 2) a sufficient causal connection between the injury and the conduct complained of, and 3) a likelihood that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The party invoking federal jurisdiction has the burden to establish these elements. Id.

All drivers received a Notice of Violation, which is sufficient injury in fact. See Ariz. Right to Life Political Action Comm. v. Bayless, 320 F.3d 1002, 1006-07 (9th Cir. 2003) (holding that the plaintiff had standing to challenge a statute because the state had given no indication that the law would not be enforced and the plaintiff “faced a reasonable risk that it would be subject to civil penalties for violation of the statute”); Home v. U.S. Dept. of Agric., 750 F.3d 1128, 1136 (9th Cir. 2014), rev’d on other grounds, — U.S. —, 135 S.Ct. 2419, 192 L.Ed.2d 388 (2015) (“A monetary penalty is an actual, concrete and particularized injury-in-fact.”). The drivers’ alleged injury is directly traceable to the City and Gatso. If the court awards damages, their claims are redressed. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 174, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000). The drivers have standing.

III.

The drivers: argue that district court should not have relied on Hughes v. City of Cedar Rapids, 112 F.Supp.3d 817 (N.D. Iowa 2015), because the facts here are materially different. While the drivers correctly note that the Cedar Rapids’ ordinance is different, any difference is immaterial. Both Cedar Rapids and Des Moines offer access to the district court (before or after an optional administrative proceeding). Based on this court’s holding, the other differences that the drivers allege are irrelevant.

IV.

The drivers argue that the process established under the ordinance is preempted by Iowa Code §§ 602.6101, 364.22(4), and 364.22(6). “A local ordinance is not inconsistent with state law unless it is irreconcilable with the state law.” Goodell v. Humboldt Cty., 675 N.W.2d 486, 492 (Iowa 1998) (emphasis in original).

Section 602.6101 establishes the jurisdiction of the Iowa District Court as “exclusive, general, and original jurisdiction of all actions ... except in cases where exclusive or concurrent jurisdiction is conferred upon some other court, tribunal, or administrative body.” Article III of the Iowa Constitution provides home rule power, authorizing a municipality to determine local affairs and government so long as the municipality does not act inconsistently with state law. Iowa Const, art. Ill, § 38A. Further, section 364.22(2) states: “A city by ordinance may provide that a violation of an ordinance is a municipal infraction.”

Here, the home rule power and section 364.22(2) allow the City to create municipal infractions, and section 602.6101 allows for concurrent jurisdiction. The administrative body has concurrent jurisdiction with the Iowa District Court over ATE infractions. See State v. Stueve, 260 Iowa 1023, 150 N.W.2d 597, 602 (1967) (explaining that concurrent jurisdiction is “jurisdiction exercised by different courts, at the same time, over the same subject-matter, and within the same territory, and wherein litigants may, in the first instance, resort to either court indifferently”). Since concurrent jurisdiction for municipal infractions is not irreconcilable with Iowa state law, the drivers fail to state a.claim for a violation of section 602.6101.

Section 364.22(4) says, “An officer authorized by a city to enforce a city code or regulation may issue a civil citation to a person who commits a municipal infraction.” The drivers argue that the ordinance violates this provision because it improperly delegates power to Gatso. Based on Section V of this court’s decision in Hughes v. City of Cedar Rapids, 840 F.3d 987 (8th Cir. 2016), this claim is dismissed.

.Section 364.22(6) states, “In municipal infraction proceedings, the matter shall be tried before a magistrate, a district associate judge, or a district judge in the same manner as a small claim.” The drivers believe that the administrative proceeding is irreconcilable with section 364.22(6)’s instruction that municipal infraction proceedings “shall be tried” in a district court. The City and Gatso argue that the Iowa Supreme Court has already rejected similar claims in City of Sioux City v. Jacobs-ma, 862 N.W.2d 335, 340-54 (Iowa 2015).

The drivers mistakenly believe that the administrative hearing is required; it is optional. Notice of Violation, Gatso Mot. to Dismiss Ex. 1A. (“[Y]ou may request a civil infraction (lawsuit) in lieu of an administrative hearing.”). An optional administrative hearing—itself appealable de novo to the district court—is not irreconcilable with section 364.22(6).

V.

The drivers argue that the ATE system violates their federal rights to due process, equal protection, and privileges and immunities. These claims are dismissed for the reasons stated in Section III.B and Part IV of the Hughes opinion.

The drivers allege that the City’s' violation of IDOT rules states claims under the Iowa Constitution. Based on Section IV.C of Hughes, these claims should be dismissed without prejudice.

The drivers believe the City and Gatso have been unjustly enriched. Based on Part Y of Hughes, the drivers have not stated an unjust enrichment claim.

******

The judgment is affirmed in part and reversed in part. The drivers’ state law claims based on IDOT standards are remanded for dismissal without prejudice. The judgment is otherwise affirmed, and the case remanded.


author: RILEY, Chief Judge.

text:
    UNITED STATES of America Plaintiff-Appellee v. Chad Everett BEAR, Sr. Defendant-Appellant
    No. 15-3671
    United States Court of Appeals, Eighth Circuit.
    Submitted: October 19, 2016
    Filed: December 28, 2016
    Counsel who represented the appellant was Chad R. McCabe of Bismarck, ND.
    Counsel who represented the appellee was Rick Lee Volk, AUSA, of Bismarck, ND.
    Before RILEY, Chief Judge, WOLLMAN and BENTON, Circuit Judges.
   RILEY, Chief Judge.

Chad Bear, Sr., sexually abused a young child in and around New Town, North Dakota. He argues he should not have been tried and convicted in federal court because New Town is not “Indian country.” See 18 U.S.C. § 1153(a) (establishing federal criminal jurisdiction over “[a]ny Indian who commits [certain crimes] within the Indian country”); id. § 1151(a) (defining “Indian country” to include “all land within the limits of any Indian reservation under the jurisdiction of the United States Government”). Bear’s theory is that the land New Town sits on was carved out of the Fort Berthold Reservation, and thus came under the primary jurisdiction of the state of North Dakota when Congress opened it to homesteading in 1910. See Act of June 1, 1910, ch. 264, 36 Stat. 455, 455 (“authorizing] and directing]” the Secretary of the Interior “to sell and dispose of’ certain reservation land); see also Act of Mar. 3, 1891, ch. 543, § 23, 26 Stat. 989, 1032-35 (setting the reservation’s original boundaries). Bear is not the first to take this position.

Almost forty-five years ago, in City of New Town v. United States, we rejected an essentially identical argument and determined “the boundaries of the Fort Bert-hold Reservation are those specified in the Act of March 3,1891”—encompassing New Town—“and ... the Act of June 1, 1910, and subsequent Acts did not alter those boundaries.” City of New Town v. United States, 454 F.2d 121, 127 (8th Cir. 1972) (citation omitted). Bear insists we must reconsider the issue because a later decision from the Supreme Court, South Dakota v. Yankton Sioux Tribe, 522 U.S. 329, 118 S.Ct. 789, 139 L.Ed.2d 773 (1998), undermined our reasoning. See, e.g., Patterson v. Tenet Healthcare, Inc., 113 F.3d 832, 838 (8th Cir. 1997) (“Although one panel of this court ordinarily cannot overrule another panel, this rule does not apply when the earlier panel decision is cast into doubt by a decision of the Supreme Court.”). According to Bear, New Town rested exclusively on a “saving clause” in the 1910 statute and Yankton Sioux rejected such an analysis, so the entire holding of New Town collapses. He misreads both cases.

First, though we did treat the saving clause as significant in New Town, we also considered other parts of the statute, as well as its historical context, and did not give the saving provision controlling weight. See New Town, 454 F.2d at 125-26. And Yankton Sioux nowhere “flatly rejected this Court’s analysis regarding the saving clause .,. now at issue,” as Bear claims. Yankton Sioux reversed a decision of this court that cited New Town for the unremarkable point that a saving clause “should be given due weight” in determining the effect of a statute opening part of a different reservation. Yankton Sioux Tribe v. S. Mo. Waste Mgmt. Dist., 99 F.3d 1439, 1448 (8th Cir. 1996). The Supreme Court did not question that general proposition, just how the panel applied it. See Yankton Sioux, 522 U.S. at 345-49, 118 S.Ct. 789. In the Supreme Court’s view, because the statute’s operative provisions created “a ‘nearly conclusive,’ or ‘almost insurmountable,’ presumption of diminishment,” the saving clause did not justify “eviscerat[ing]” the rest of the law. Id. at 344, 346, 118 S.Ct. 789 (first quoting Hagen v. Utah, 510 U.S. 399, 411, 114 S.Ct. 958, 127 L.Ed.2d 252 (1994); and then quoting Solem v. Bartlett, 465 U.S. 463, 470, 104 S.Ct. 1161, 79 L.Ed.2d 443 (1984)). There is no suggestion in the Court’s context-specific holding that saving clauses can never be considered in deciding such issues, nor that they might not help tip the balance the other way when the rest of the statute is more equivocal.

Anyway, as the government points out, even if the Court’s discounting of the. saving clause in Yankton Sioux could be understood to cast a shadow on New Town’s reasoning, we reached the same conclusion in Duncan Energy Co. v. Three Affiliated Tribes of the Fort Berthold Reservation without ever mentioning the saving clause. See Duncan Energy Co. v. Three Affiliated Tribes of the Fort Berthold Reservation, 27 F.3d 1294, 1296-97 (8th Cir. 1994) (addressing challenges on the merits and concluding New Town was rightly decided). So regardless of whether New Town is still good law after Yankton Sioux, Duncan Energy unquestionably is.

In short, our law is clear: New Town was just as much part of the Fort Berthold Reservation when Bear committed his crimes as it was in 1891. Bear was therefore properly subject to federal prosecution and the district court was right to keep Bear’s case. See 18 U.S.C. § 3231 (federal criminal jurisdiction). We affirm Bear’s convictions and sentence. See 28 U.S.C. § 1291 (appellate jurisdiction).

      . Bear does not dispute he is an "Indian” for purposes of § 1153(a). And the crimes he was convicted of, namely aggravated sexual abuse of a child younger than twelve, see 18 U.S.C. § 2241(c), and abusive sexual contact with a child younger than twelve, see id. § 2244(a)(5), are covered by the statute because they are "felon[ies] under chapter 109A [of Title 18 of the U.S. Code].” Id. § 1153(a).

      . The'relevant language was: "nothing in this Act shall be construed to deprive said Indians’ of Fort Berthold Indian Reservation of any benefits to which they are entitled under existing treaties or agreement not inconsistent with the provisions of this Act.” Act of June 1, 1910, § 14, 36 Stat. at 459.

      . The key language in the statute at issue in Yankton Sioux was: " ‘The Yankton tribe of Dakota or Sioux Indians hereby cede, sell, relinquish, and convey to the United States all their claim, right, title, and interest in and to [the land],’" Yankton Sioux, 522 U.S. at 337 n.1, 118 S.Ct, 789 (quoting Act of Aug. 15, 1894, ch. 290, § 12, 28 Stat. 286, 314). By contrast, the analogous provision here is: "That the Secretary of the Interior be, and he is hereby, authorized and directed ... to sell and dispose of, as hereinafter provided, all the [land],” Act of June 1, 1910, 36 Stat. at 455. It is well established that while some such surplus land acts " ‘freed ... land of its reservation status and thereby diminished the reservation boundaries,’ " others “ ‘simply offered non-Indians the opportunity to purchase land within established reservation boundaries,’ ” Yankton Sioux, 522 U.S. at 343, 118 S.Ct, 789 (quoting Solem, 465 U.S. at 467, 470, 104 S.Ct. 1161).

      . Duncan Energy also forecloses Bear’s suggestion that New Town’s precedential value was already “eviscerated” by the Supreme Court’s decision in Rosebud Sioux Tribe v. Kneip, 430 U.S. 584, 97 S.Ct. 1361, 51 L.Ed.2d 660 (1977), long before Yankton Sioux. We specifically addressed that possibility and decided Rosebud Sioux, which dealt with another surplus land act, was “not ... instructive" on the interpretation of this particular statute. Duncan Energy, 27 F.3d at 1297; see also United States v. Standish, 3 F.3d 1207, 1209 (8th Cir. 1993) (rejecting an argument that “New Town is no longer controlling,” sixteen years after Rosebud Sioux).

      . The Honorable Daniel L. Hovland became Chief Judge of the United States District Court for the District of North Dakota on November 1, 2016. The Honorable Ralph R. Erickson, United States District Judge for the District of North Dakota, tried Bear's case and adopted Chief Judge Hovland’s earlier ruling,


author: SHEPHERD, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee v. Rahmad Lashad GEDDES, Defendant-Appellant United States of America, Plaintiff-Appellee v. Rahmad Lashad Geddes, Defendant-Appellant
    No. 15-3731, No. 16-3898
    United States Court of Appeals, Eighth Circuit.
    Submitted: October 21, 2016
    Filed: January 3, 2017

      Counsel who represented the appellant was Thomas C. Plunkett of Saint Paul, MN.
    Counsel who represented the appellee was David Genrich, AUSA, of Minneapolis, MN.
    Before MURPHY, GRUENDER, and SHEPHERD, Circuit Judges.
   SHEPHERD, Circuit Judge.

A jury convicted Rahmad Lashad Ged-des of one count of aiding and abetting sex trafficking by force, fraud, or coercion; one count of aiding and abetting transportation with intent to engage in prostitution; and one count of being an armed career criminal in possession of a firearm. Geddes appeals a number of pre-trial, trial, and post-trial motions on which the district court ruled in favor of the prosecution. We affirm.

I.

On January 6, 2014, Geddes traveled from Eau Claire, Wisconsin to Dujuth, Minnesota with a woman named . Grace Schreiner. Schreiner was under the impression that they were traveling to St. Paul, rather than Duluth, to sell drugs as they had done in the past. After a brief sojourn in St. Paul, they drove to Superior, Wisconsin where they checked into a motel and had sex. Thereafter, the pair drove to Duluth, and Geddes picked up cocaine from a supplier. Throughout the remainder of this trip, Geddes was actively involved in selling cocaine, and Schreiner witnessed Geddes meet another woman to exchange cocaine for two handguns.

On January 7, they drove to Rochester, Minnesota to pick up Geddes’s friend, Shannon Funk. On the return trip, Funk and Geddes proposed that Schreiner engage in prostitution upon arriving in Duluth. According to Schreiner’s trial testimony, she felt she had to comply because she would not be able to return home if she refused. They checked into another Duluth hotel, and Geddes began cutting the quantity of cocaine he purchased into distribution amounts. Geddes and Funk created an advertisement on a website called Backpage.com with pictures of Schreiner and a telephone number to call, and Funk gave Schreiner a cellular phone on which to receive calls. This process culminated in Schreiner completing two transactions. as a prostitute. In the first, she was paid to perform’ oral sex on one man-at the hotel. Although the recipient was told this act would'cost $120, he only left $20 on the table in the room. As a result of this discrepancy, Geddes slapped Schreiner four times in the face. The second act consisted of an encounter where a man came to the hotel and paid $20 but then left shortly' thereafter without any sexual activity occurring.

' Throughout the trip, Geddes refused Schreiner’s requests to return home. The two finally returned to Eau Claire on January 14, 2014. Once Geddes left, Schreiner told her pastor what had occurred, and he called the police. Geddes was indicted on three counts: (1) sex trafficking by force, fraud, or coercion in violation of 18 U.S.C. § 1591; (2) transportation to engage in prostitution in violation of 18 U.S.C. § 2421; and (3) being a felon in possession of a firearm in violation of 18 U.S.C. § 922(g)(1). A superseding indictment was later returned that was the same as to Counts 1 and 2, but Count 3 was changed to charge Géddes as an armed career criminal in possession of a firearm.

Before trial, Geddes filed three motions relevant to this appeal. First, he moved to sever the sex trafficking counts from the firearm count, arguing that the two instances arose from different facts and would depend on different witnesses. The district court denied this motion. Second, Geddes moved to exclude testimony from the victim of his earlier conviction for ter-roristic threats. The government sought to introduce this evidence as being relevant to show Geddes’s intent on' Count 1, and Geddes opposed its introduction as- merely being propensity evidence. The district court allowed the evidence to be presented subject to a number of limiting instructions. Finally, Geddes sought to exclude the government’s proposed expert witness on the basis that her testimony would not help the jury and would be overbroad. The district court also denied this motion, finding that Eighth Circuit .precedent allowed expert testimony on the operation of sex trafficking rings. Geddes renewed all of these motions during trial, and the district court overruled them.

After a three-day trial, the.jury found Geddes guilty of all three counts, and the district court sentenced him to 282 months imprisonment. He brought this appeal challenging all three of the above rulings and the sufficiency of the evidence to sustain a conviction on Counts I and 2.

II.

A.

The first issue on appeal is whether the district court erred in denying the motion to sever the sex trafficking counts from the firearm count. This Court reviews the denial of a motion to sever properly joined counts for an abuse of discretion. United States v. Erickson, 610 F.3d 1049, 1055 (8th Cir. 2010). Two or more offenses may be joined for trial “if the offenses charged—whether felonies or misdemeanors or both—are of the same or similar character, or are based on the same act or transaction, or are connected with or constitute parts of a common scheme or plan.” Fed, R. Crim. P. 8(a). “If the joinder of offenses ... or a consolidation for trial appears to prejudice a defendant or the government, the court may order separate trials of counts.... ” Fed. R. Crim. P. 14(a).

Given the district court’s discretion under Rule 14, “we will not reverse unless the defendant shows an abuse of discretion resulting in severe prejudice.” United States v. Steele, 550 F.3d 693, 702 (8th Cir. 2008). “Severe prejudice occurs when a defendant is deprived of an appreciable chance for an acquittal, a chance that [the defendant] would have had in a severed trial.” United States v. Scott, 732 F.3d 910, 916 (8th Cir. 2013) (alteration in original) (quoting United States v. Taken Alive, 513 F.3d 899, 902 (8th Cir. 2008)) (internal quotation marks omitted). “[A] defendant cannot show prejudice when evidence of the joined offense would be properly admissible in a separate trial for the other crime.” Erickson, 610 F.3d at 1055. The-evidence may be admissible-because it “completes the story of the crime, or as evidence of a prior bad act of a similar nature admissible under Rule 404(b) of the Federal Rules of Evidence.” United States v. Brown, 653 F.3d 656, 662 (8th Cir. 2011) (citation omitted); see also United States v. Orozco-Rodriguez, 220 F.3d 940, 942 (8th Cir. 2000) (allowing testimony “because it related to the background and circumstances of the charged crimes [and] complete[d] the story of' the crime or explained] the relationship of parties or the circumstances surrounding a particular event” (internal quotation marks omitted)).

We find no abuse of discretion in the denial of severance of the firearm possession charge from the sex trafficking charges. All three counts involved a series of events that occurred between January 6 and January 14, 2014. The sex trafficking charges asserted, in short, that Geddes forced Schreiner to engage in prostitution during a trip to Duluth taken during the above dates. The firearm charge focused on a transaction witnessed by Schreiner during that trip in which Geddes .exchanged cocaine for two handguns. Therefore, because Schreiner’s testimony provided evidence on the entirety of the trip, “it is virtually certain” that her testimony would be admissible “as evidence that completes the story of the crime.” See Brown, 653 F.3d at 662 (internal quotation marks omitted).

Geddes’s primary argument on this point is that the jury was , unable to compartmentalize the evidence' related to the different counts. Severe prejudice can also occur where defendants “demons-trat[e] that their defense is irreconcilable with a codefendant’s defense, or the jury will be unable to properly compartmentalize the evidence as it relates to the separate defendants.” United States v. Young, 753 F.3d 757, 777 (8th Cir. 2014), cert. denied sub nom. Mock v. United States, — U.S. —, 135 S.Ct. 1005, 190 L.Ed.2d 878 (2015). On the other hand, where “there [is] little possibility the jury was confused over which evidence related to which count,” no prejudice occurs to a defendant’s right to a fair trial. United States v. Wilkens, 742 F.3d 354, 359 (8th Cir. 2014). The facts in this case are relatively straightforward, and this was not a case presenting a multitude of different defendants and charges. Geddes has failed to meet his burden of showing severe prejudice.

B.

Geddes next argues the district court erred in allowing the testimony of Nicole Meyer, his former girlfriend. During the trial, the prosecution presented Meyer’s testimony concerning an incident in 2010 where Meyer confronted- Geddes about a text message on his cellular phone. According to her testimony, the argument escalated and Geddes physically assaulted and threatened to kill her. Prior to Meyer taking the stand, the district court instructed the jurors that they should consider the evidence only if they determine the testimony to be more likely true than not. Further, the jury was instructed that if it found that the evidence met that standard, the jury could consider the testimony only on the issue of whether Geddes intended to force or coerce Schreiner to engage in prostitution. Finally, the court explicitly told the jury that it may not use the testimony as evidence Geddes committed the crime charged in the present case.

“We review the district court’s admission of evidence of past crimes under Federal Rule of Evidence 404(b) for abuse of discretion, and we will not reverse unless the evidence clearly had no bearing on the case and was introduced solely to prove the defendant’s propensity to commit criminal acts.” United States v. Williams, 796 F.3d 951, 958 (8th Cir. 2015) (quoting United States v. Bassett, 762 F.3d 681, 687 (8th Cir. 2014)) (internal quotation marks omitted), cert. denied, — U.S. —, 136 S.Ct. 1450, 194 L.Ed.2d 556 (2016). Rule 404(b)(1) states that “[e]vidence of a crime, wrong, or other act is not admissible to prove a person’s character in order to show that on a particular occasion the person acted in accordance with the character.” However, “[t]his evidence may be admissible for another purpose, such as proving motive, ... intent, ... absence of mistake, or lack of accident.” Fed. R. Evid. 404(b)(2). This rule is one “of inclusion rather than exclusion* and admits evidence of other crimes or acts relevant to any issue in the trial, unless it tends to prove only criminal disposition.” United States v. Oaks, 606 F.3d 530, 538 (8th Cir. 2010) (quoting United States v. Simon, 767 F.2d 524, 526 (8th Cir. 1985)) (internal quotation marks omitted).

Our circuit “employ[s] a four-part test to determine whether a district court abused its discretion in admitting 404(b) evidence.” Williams, 796 F.3d at 958. Such evidence is admissible if “(1) it is relevant to a material issue; (2) it is similar in kind and not overly remote in time to the crime charged; (3) it is supported by sufficient evidence; and (4) its potential prejudice does not substantially outweigh its probative value,” Id. at 959 (quoting United States v. Robinson, 639 F.3d 489, 494 (8th Cir. 2011)) (internal quotation marks omitted). The Government sought tp introduce this testimony as evidence of Geddes’s intent to coerce or force Schreiner to engage in prostitution, and the district court allowed’ the brief testimony, subject to its limiting instructions.

Geddes contends that the testimony fails to meet the first, second, and fourth prongs from the test set out above. We disagree and address each factor in turn. To convict Geddes on Count 1, the prosecution was required to prove that Geddes acted “knowing[ly] or in reckless disregard of the fact that means of force, threats of force, fraud, coercion, or any combination of such means would be used to cause [Schreiner] to engage in a commercial sex act.” See United States v. Campbell, 764 F.3d 880, 889 (8th Cir. 2014) (internal quotation marks omitted), cert. denied, — U.S. —, 135 S.Ct. 1514, 191 L.Ed.2d 448 (2015); 18 U.S.C. § 1591(a)(1). On Count 2, the prosecution was tasked with proving that Geddes “knowingly transported] [Schreiner] in interstate or foreign commerce ... with intent that [she] engage in prostitution, or in any sexual activity for which any person can be charged with a criminal offense.” 18 U.S.C. § 2421(a). “Both his intent and his knowledge were thus called into question.” Campbell, 764 F.3d at 889 (quoting United States v. Jarrett, 956 F.2d 864, 867 (8th Cir. 1992)) (internal quotation marks omitted). Where knowledge and intent are material issues at trial, the prosecution is generally allowed to present- “evidence of other acts tending to establish [knowledge and intent].” United States v. Johnson, 934 F.2d 936, 939 (8th Cir. 1991) (quoting United States v. Miller, 725 F.2d 462, 466 (8th Cir. 1984)) (internal quotation marks omitted). Therefore, Meyer’s testimony about Geddes’s earlier use of force against her was relevant to the issue of Geddes’s intent, which was a material issue at trial. The first factor is satisfied.

-Next, the testimony was similar in kind and not overly remote in time to the crime charged. Meyer’s trial testimony concerned an event in 2010 where Geddes' physically abused and threatened her. “On the issue of similarity, our test merely requires that the prior acts are ‘sufficiently similar to support an inference of criminal intent.’ ” Williams, 796 F.3d at 959 (quoting United States v. Walker, 470 F.3d 1271, 1275 (8th Cir. 2006)). Here, the events described by Meyer were sufficiently similar in substance to Schreiner’s testimony about Geddes’s threatening and physically abusive actions to satisfy this test. As for the time between the prior bad act and the charged offenses, we conclude that the passage of four years was insufficient to diminish the probative value of the evidence. See id. at 959-60 (allowing evidence of prior bad acts that occurred more than ten years before the charged offense).

Finally, the probative value of Meyer’s testimony was not substantially outweighed by any prejudicial effect. “Though all Rule 404(b) evidence is inherently prejudicial, the test under Rule 403 is whether its probative value is substantially outweighed by the danger of unfair prejudice.” Id. at 960 (quoting United States v. Cook, 454 F.3d 938, 941 (8th Cir. 2006)) (internal quotation marks omitted). Meyer’s testimony on this issue is confined to twenty lines of the trial transcript, and she.spoke solely about the fact that Ged-des had threatened her and had been physically abusive. Trial Tr. vol. 4, 842:15-843:9, EOF No. 89. This testimony was probative on the issue of Geddes’s intent, and, given the extensive limiting instructions placed on the jury’s use of the testimony, we find the danger of unfair prejudice to be minimal. See United States v. Cockerham, 417 F.3d 919, 921 (8th Cir. 2005) (“[A] proper limiting instruction serves as a protection against unfair prejudice”).

The district court did not abuse its discretion in allowing Meyer’s testimony at trial.

C.

Geddes contends that the district court erred in allowing the prosecution to present expert testimony from Ann Quinn, a special agent with the Minnesota Bureau of Criminal Apprehension. Agent Quinn is a member of a human trafficking task force, and has done work in this area for roughly fourteen years. At trial, Agent Quinn testified from her training and experience on the operation of sex trafficking rings and the terms used therein. “We review the district court’s decision to admit expert testimony for abuse of discretion, according it substantial deference.” United States v. Bailey, 571 F.3d 791, 803 (8th Cir. 2009). “Federal Rule of Evidence 702 provides that an expert may testify if it ‘will assist the trier of fact to understand the evidence or determine a fact in issue.’ ” Id. (quoting Fed. R. Evid. 702). Under Supreme Court precedent, “the [district] judge is to act as a gatekeeper in determining whether the proposed expert’s testimony both is relevant and rests upon a rehable foundation.” United States v. Evans, 272 F.3d 1069, 1094 (8th Cir. 2001).

Geddes assigns two points of error to this issue, and we disagree with both. First, he argues that the district court’s decision not to hold a Daubert hearing was an abuse of discretion as a matter of law; however, as we have stated, “[tjhere is no requirement that the [district [cjourt always hold a Daubert hearing prior to qualifying an expert witness under Federal Rule of Evidence 702.” Id. Next, he contends that the testimony was both irrelevant and unreliable. In Evans, we dealt with a nearly identical issue and held that the district court did not abuse its discretion in allowing expert testimony “regarding the operation of a prostitution ring, including recruitment of prostitutes and the relationship between pimps and prostitutes, and regarding jargon used in such rings.” Id. In this case, Agent Quinn testified on the same subject matter we allowed in Evans, and she possessed adequate credentials and sufficient factual data on which to base this testimony. As a result, the district court did not abuse its discretion in allowing her testimony,

D.

Finally, Geddes attacks the sufficiency of the evidence to Sustain his conviction on Counts 1 and 2. Our standard of review-for challenging the sufficiency of the evidence has been well repeated:

We review de novo the sufficiency of the evidence to sustain a conviction, viewing the evidence in a light most favorable to the verdict and accepting all reasonable inferences supporting the verdict. Furthermore, [w]e will overturn [Geddes’s] conviction only if no reasonable jury could have found him guilty beyond a reasonable doubt. The standard of review for sufficiency-of-the-evidence challenges is strict. [W]e consider the same quantum of evidence that was presented at trial, even if some of the evidence was improperly admitted. Finally, a' victim’s testimony alone can be sufficient to prove the sex crime in question.

United States v. Bell, 761 F.3d 900, 906-07 (8th Cir. 2014) (first and third alterations in original) (citations and internal quotation marks omitted).

To convict Geddes on Count 1, “the jury had to find he acted knowing[ly] or in reckless disregard of the fact that means of force, threats of force, fraud, coercion, or any combination of such means would be used to cause [Schreiner] to engage in a commercial sex act.” Campbell, 764 F.3d at 889 (internal quotation marks omitted). Geddes’s entire argument on this point concerns whether the prosecution established the mens rea required by 18 U.S.C. § 1591. The jury convicted Geddes on Count 1 after being presented with conflicting testimony. In short, Schreiner testified that Geddes hit her in the face on two occasions and that she did not engage willingly in prostitution. Funk confirmed that Geddes hit Schreiner and further testified that Geddes was running the operation and receiving any and all money from the sex acts. Geddes, on the other hand, testified that Schreiner was a prostitute before the trip and that she participated in every act voluntarily. Given that “[c]redibility determinations are uniquely within the province of the trier of fact,” United States v. Alaboudi, 786 F.3d 1136, 1146 (8th Cir. 2015) (quoting United States v. Goodale, 738 F.3d 917, 923 (8th Cir. 2013)) (internal quotation marks omitted), the jury was entitled to afford more weight to the evidence presented by the prosecution. The evidence presented at trial was sufficient to sustain the conviction on Count 1.

To convict Geddes on Count 2, the jury had to find that he “knowingly transported] [Schreiner] in interstate or foreign commerce ... with intent that [she] engage in prostitution.” 18 U.S.C. § 2421(a). Geddes asserts that he and Schreiner formulated the plan to engage in prostitution after they entered the State of Minnesota and that both acts occurred while they were in that State. Therefore, according to Geddes, he never transported her across state lines for the purpose of engaging in prostitution. We disagree. In addition to trial testimony where Funk and Schreiner recount the group’s movements between Superior and Duluth, the prosecution presented expert testimony on the analysis of the records for cell phones possessed by Geddes and Schreiner. The expert witness, Special Agent Joseph Raschke, explained to the jury that cell phones are programmed to find and use the strongest signal, and that the location of the tower being used by a particular phone at a given time means that the phone itself is in close proximity to that tower. He testified that, on January 8, both phones pulled a signal from a tower in Duluth, Minnesota around 9:06 p.m. and then switched to a tower in Superior, Wisconsin around 9:45. Likewise, according to Agent Raschke’s testimony, a similar pattern occurred on January 12 when the phones switched from using towers in Duluth to towers in Superior. Thus, in Agent Raschke’s opinion, the phones were in Duluth when using Minnesota towers and in Superior when using Wisconsin towers. In his brief, Geddes asserts that “prostitution came up for the first time while driving from Rochester to Duluth” on January 7. Appellant’s Br. 34. Accepting all reasonable inferences supporting the guilty verdict on Count 2, the jury was entitled to believe that the interstate movements on January 8 and 12—both after the date on which, according to Geddes, the prostitution plan was first discussed—were made with the intent of engaging in prostitution.

The evidence was sufficient to support Geddes’s conviction on both counts.

III.

For the reasons stated herein, we affirm Geddes’s conviction.

      . The Honorable Donovan W. Frank, United States District Judge for the District of Minnesota.


author: MELLOY, Circuit Judge.

text:
    Eluid Harodi VILLATORO-OCHOA, Petitioner v. Loretta E. LYNCH, Attorney General of the United States, Respondent
    No. 15-3103
    United States Court of Appeals, Eighth Circuit.
    Submitted: September 20, 2016
    Filed: January 4, 2017

      Counsel who represented the petitioner was Allan Harvey Bell of Kansas City, MO.
    Counsel who represented the respondent was Ashley Young Martin, of Washington, DC.
    Before COLLOTON, MELLOY, and SHEPHERD, Circuit Judges.
   MELLOY, Circuit Judge.

After unsuccessfully seeking withholding of removal, Eluid Harodi Villatoro-Ochoa, a native and citizen of Guatemala, filed an untimely motion to reopen his removal proceedings. To excuse the untimeliness of his motion, Villatoro-Ochoa asserted changed country conditions in Guatemala. The BIA concluded that'Villatoro-Ochoa failed to establish changed country conditions and denied his motion to reopen. We affirm.

I. Background

Villatoro-Ochoa was a pastor with an evangelical Christian church in Guatemala. He contends that gangs in the area threatened, harassed, and extorted him because the gangs did not want him to influence gang members to leave the gang or deter new members from joining. Due to these threats, Villatoro-Ochoa left Guatemala and entered the United States without inspection in. March 1998.

Villatoro-Ochoa was issued a Notice to Appear on October 31, 2003. He admitted the Notice’s factual allegations and conceded removability. He filed an application for withholding of removal on April 2, 2007, based on threats and gang violence in Guatemala. The IJ denied the application for withholding of removal on October 15, 2009, finding that Villatoro-Ochoa was not credible and that, even if he were credible, he did not meet the burden for withholding of removal. Villatoro-Ochoa appealed to the BIA, and the BIA affirmed the IJ’s denial of relief on February 14, 2012.

On October 19, 2012, Villatoro-Ochoa filed a motion to reopen his removal proceedings, well past the 90-day filing deadline in 8 U.S.C. § 1229a(c)(7)(C)(i). The IJ dismissed the motion for lack of jurisdiction. Villatoro-Ochoa appealed to the BIA and filed a second, separate motion to reopen with the BIA on January 18, 2013. On August 21, 2015, the BIA dismissed the appeal and denied Villatoro-Ochoa’s second motion to reopen. The BIA concluded that because Villatoro-Ochoa’s motion to reopen was untimely, he was required to show changed country conditions after the IJ’s October 15, 2009 decision. The BIA found that he failed to establish changed country conditions. Villatoro-Ochoa timely appealed.

II. Discussion

“We review ‘the BIA’s denial of the motion to reopen for abuse of discretion.’ ” Martinez v. Lynch, 785 F.3d 1262, 1264 (8th Cir. 2015) (quoting Sidikhouya v. Gonzales, 407 F.3d 950, 951 (8th Cir. 2005) (per curiam)). The BIA has broad discretion on motions to reopen, and “[t]hese motions are ‘disfavored because they undermine the government’s legitimate interest in finality, which is heightened in removal proceedings where, as a general matter, every delay works to the advantage of the deportable alien who wishes merely to remain in the United States.’ ” Id. at 1264-65 (quoting Guled v. Mukasey, 515 F.3d 872, 882 (8th Cir. 2008)). The BIA abuses its discretion if it does not give a rational explanation for its decision or ignores or distorts evidence. Id. at 1265.

On February 14, 2012, the BIA affirmed the IJ’s underlying denial of relief and ordered Villatoro-Ochoa removed to Guatemala. He moved to reopen his removal proceedings on January 18, 2013. Under 8 U.S.C. § 1229a(c)(7)(C)(i), a motion to reopen must be filed within 90 days of the removal order. Villatoro-Ochoa’s motion to reopen was filed 11 months after the removal order and, thus, was untimely. The statute provides an exception to the 90-day filing deadline if an applicant seeks to apply for asylum or withholding of removal and he shows that his motion “is based on changed country conditions arising in the country of nationality or the country to which removal has been ordered, if such evidence is material and was not available and would not have been discovered or presented at the previous proceeding.” 8 U.S.C. § 1229a(c)(7)(C)(ii).

Where a motion to reopen in order to file a new application for relief is filed, the motion must include the new application and supporting documents. 8 C.F.R. §. 1003.2(c)(1). If the BIA determines that the applicant has not demonstrated changed country conditions based on previously unavailable evidence or that the applicant failed to establish prima facie eligibility for the relief sought, the BIA may deny the motion to reopen. Chen v. Holder, 751 F.3d 876, 878 (8th Cir. 2014).

We conclude that the BIA did not abuse its discretion in denying Villatoro-Ochoa’s motion to reopen. In his motion, Villatoro-Ochoa claimed that there was increased violence in Guatemala. He also claimed gangs killed several members of his family due to their refusal to sell drugs. Villatoro-Ochoa argued that he too would be persecuted based on his membership in his family.

In support of his motion, Villatoro-Ochoa submitted his new application for asylum, withholding of removal, and protection under the Convention Against Torture. He alleged that two family members. were “killed over drugs” in 2004 and 2005 and that two family members were “killed over drugs” in 2010 and 2011. Villatoro-Ochoa also submitted affidavits from his sister and sister-in-law stating that relatives were threatened and killed by gangs for refusing to sell drugs. Finally, Villatoro-Ochoa submitted documents describing conditions in Guatemala, including reports of gang violence.

The BIA concluded:

The. respondent’s sister-in-law’s affidavit indicates that the threat was made .in 2004. The deaths of two members of the respondent’s wife’s family in 2010 and 2011, although tragic, are not a material change in conditions. We have considered all of the documents that the respondent submitted with his motion and conclude that they are not sufficient to establish a material .change in country conditions in Guatemala that would warrant reopening.

We. agree with the BIA’s assessment. During his 2009 hearing, Villatoro-Ochoa testified that gang violence was common in Guatemala and that he had been threatened by gangs. While Villatoro-Ochoa submitted documents showing that gang violence continued in Guatemala, those documents do not demonstrate materially changed conditions. Further, while four of Villatoro-Ochoa’s relatives were killed by gangs, two of those deaths happened before the 2009 hearing. Thus, evidence of those deaths was available at the time of that hearing. Additionally, while the deaths of two other relatives occurred after Villatoro-Ochoa’s 2009 hearing, Villa-toro-Ochoa failed to demonstrate that those deaths were the result of changed country conditions. Rather,, as shown by the affidavits Villatoro-Ochoa submitted, the deaths of his relatives in 2010 and 2011 were the result of the same gang violence cited by Villatoro-Ochoa in 2009.

This Court considered a similar claim of changed circumstances in Martinez v. Lynch, 785 F.3d 1262 (8th Cir. 2015). In that case, the applicant argued that the death of a friend after an earlier hearing established changed country conditions.' Id. at 1265. The Court explained,, “Unfortunately, the type of violence suffered by Perez was occurring at the time of Martinez’s October 2012 hearing; and Martinez offered nothing to show that this particular death somehow reflected a change in country conditions in Guatemala.” Id. The Court concluded that the applicant did not meet the exception for his untimely motion to reopen because he did not demonstrate that the death of his friend was evidence of changed conditions. Id.

Because Villatoro-Ochoa did not demonstrate that his relatives’ deaths in 2010 and 2011 reflected changed country conditions, it was not an abuse of discretion for the BIA to deny Villatoro-Ochoa’s motion to reopen. The BIA considered all the record evidence in denying the motion and gave a rational explanation for its decision.

III. Conclusion

For the reasons above, we affirm the BIA’s decision on Villatoro-Ochoa’s motion to reopen.

      . Villatoro-Ochoa does not challenge the BIA’s dismissal of his appeal from the IJ’s denial - of his October 19, 2012 motion to reopen. As such, that part of the BIA’s decision is not at issue in this case.

      . Villatoro-Ochoa argues that the BIA violated his right to Due Process because it failed to consider all the evidence he submitted in support of his motion to reopen. This argument is unsupported by the record. See Hanan v. Mukasey, 519 F.3d 760, 764 (8th Cir. 2008).

      . The BIA also found that Villatoro-Ochoa did not establish prima facie eligibility for asylum, withholding of removal, or protection under the CAT. Villatoro-Ochoa challenges this finding on appeal. Because the above analysis provides an alternative basis to deny Villatoro-Ochoa’s petition, we need not address this issue.