author: SEYMOUR, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Jeremy GILMORE, Defendant-Appellant.
    No. 15-3114
    United States Court of Appeals, Tenth Circuit.
    Filed November 15, 2016

      Branden A. Bell, Assistant Federal Public Defender (Melody Brannon, Federal Public Defender, with him on the briefs), Topeka, Kansas, for Defendant-Appellant.
    James A. Brown, Assistant United States Attorney (Barry R. Grissom, United States Attorney, with him on the brief), Topeka, Kansas, for Plaintiff-Appellee.
    Before HOLMES, SEYMOUR, and PHILLIPS, Circuit Judges.
   SEYMOUR, Circuit Judge.

The district court denied Jeremy Gilmore’s motion to reduce his sentence in accordance with a retroactive sentencing amendment because his tern of imprisonment was not “based on” a guidelines sentencing range, as is required by 18 U.S.C. § 3582(c)(2). Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

I

In May 2009, Mr. Gilmore was convicted of conspiracy to distribute and possess with intent to distribute methamphetamine. Due to his two prior drug felonies, the district court sentenced him to a mandatory life sentence. After we affirmed his conviction, Mr. Gilmore filed a motion to vacate under 28 U.S.C. § 2255, claiming his trial counsel was ineffective. The district court granted Mr. Gilmore’s motion, but instead of setting aside the conviction it ordered the parties to meet and confer regarding an appropriate remedy. At a status conference, the two sides informed the court they had agreed that a sentence reduction to 168 months would be fair. Mr. Gilmore’s attorney gave the following explanation for how the two sides reached this total:

And the way that we got there, at least I got there, was that Mr. Gilmore’s original base offense level was 34; he was then given a two-point enhancement for obstruction and another two-point enhancement for a firearm enhancement. I think if Mr. Gilmore had had appropriate counsel that those enhancements would not have stayed on the presen-tence report, and I think the Court was well aware of the type of representation Mr. Gilmore had at his sentencing.
... Which would have left him at a base level of 34. I think that had Mr. Gilmore had competent representation that an attorney would have walked him in to cooperate with the government very early in the process, so I think that he would have gotten another two-level reduction for acceptance — [T]he government agrees that we don’t know that that third point would necessarily have been available, or it might just be a bridge too far for us. That would leave us at a Base Offense Level 32 and a Criminal History Category IV, which puts us at a guideline range of 168 to 210 months, the low end of that range being 168 months. And that’s where at least I reached the conclusion that that was an adequate remedy for the lack of competent counsel that Mr. Gilmore had in this case.

Aplt. App. at 44-45.

The two parties reduced their agreement to writing and submitted it to the district court for its approval. The agreement was intended “to achieve a result that may have- occurred had the defendant not received ineffective assistance of counsel.” Id. at 51. The sentencing agreement provided that Mr. Gilmore would admit to knowingly committing one count of conspiracy—the crime for which he was initially convicted—in exchange for the government’s agreement, among other things, not to file any additional charges against Mr. Gilmore and its proposal of 168 months as the appropriate disposition of the case. While the sentencing agreement recognized that it “d[id] not offend the now advisory guidelines,” it did not expressly reference any particular guidelines range. Id. at 51. The court accepted the parties’ agreement, agreed to be bound by it, and resentenced Mr. Gilmore to 168 months of imprisonment.

In July 2014, almost two years later, Mr. Gilmore filed a motion, pursuant to 18 U.S.C. § 3582(c)(2), to reduce his sentence in accordance with Amendment 782. Amendment 782 was an amendment to the sentencing guidelines that was made retroactive by the Sentencing Commission in 2014. It reduced by two levels the offense levels .assigned to the quantities that trigger the statutory mandatory minimum penalties in U.S.S.G. § 2D1.1. Sentencing Guidelines for the United States Courts, 79 Fed. Reg. 44,973 (Aug. 1, 2014). When the government and Mr. Gilmore recalculated his sentence, they had used § 2D1.1 to determine his base offense level to be 32. Mr. Gilmore was therefore seeking a reduction to a base offense level of 30. The drop in his base offense level would have reduced his guideline sentencing range from .168-210 months to 135-168 months. Accordingly, Mr. Gilmore sought a reduction in his sentence from. 168 months to 135 months, the low end of the guideline range.

To be afforded a sentencing reduction under § 3582(c)(2), a defendant must show that his term of imprisonment was “based on a sentencing range that has subsequently been lowered by the Sentencing Commission.” Mr. Gilmore argued that his 168 month sentence mirrored the low end of a guideline sentence corresponding to a total offense level of 32 and a criminal history category of IV, and was thus “based on” a guidelines sentencing range. The district court, relying on Freeman v. United States, 564 U.S. 522, 131 S.Ct. 2685, 180 L.Ed.2d 519 (2011), dismissed Mr, Gilmore’s motion, concluding it lacked jurisdiction to reduce his sentence. It reasoned that it was not authorized to reduce Mr.' Gilmore’s sentence because it was based on the parties’ stipulation and not on “‘a sentencing range that [had] subsequently been lowered’ by the Sentencing Commission.” Aplt. App. at 109 (quoting 18 U.S.C. § 3582(c)(2)). This appeal followed.

II

Mr. Gilmore contends the district court erred in concluding that it lacked authority to reduce his sentence. As a general rule, a district court “may not modify a term of imprisonment once it has been imposed.” 18 U.S.C. § 3582(c). “However, Congress has established a few narrow exceptions to this rule of finality,” United States v. Williams, 575 F.3d 1075, 1077 (10th Cir. 2009), including the one at issue here. “We review de novo the scope of a district court’s authority in a proceeding under § 3582(c)....” Id. at 1076.

“To ask whether a particular term of imprisonment is ‘based on’ a Guidelines sentencing range is to ask whether that range serves as the basis or foundation for the term of imprisonment.” Freeman, 564 U.S. at 535, 131 S.Ct. 2685 (Sotomayor, J., concurring). In United States v. Graham, 704 F.3d 1275, 1277-78 (10th Cir. 2013), we explained the divided nature of the Court in Freeman with respect to this issue. Then, applying the rule from Marks v. United States, 430 U.S. 188, 193, 97 S.Ct. 990, 51 L.Ed.2d 260 (1977) (“When a fragmented Court decides a casé and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those [mjembers who concurred in the judgment on the narrowest grounds.”), we held that “Justice Sotomayor’s concurrence is the narrowest grounds of decision and represents the Court’s holding.”' Graham, 704 F.3d at 1278. We stated:

Justice Sotomayor’s concurrence charted a middle ground between the plurality and the dissent. She observed Rule 11(c)(1)(C) permits the parties to “agree that a specific sentencing range is the appropriate disposition of the case.” Id. at 2696-97 (Sotomayor, J., concurring). If the parties do so, she reasoned, the imposed sentence is “‘based on’ the agreed-upon sentencing range.” Id. Accordingly, when the Rule 11(c)(1)(C) plea is based on a Guideline sentencing range that is retroactively amended, the defendant is entitled to the amendment. Id. at 2697-99. But, when the plea deal does not “use” or “employ” a Guideline sentencing range, the defendant is not entitled to the benefit of the amendment. See id.

Id. at 1277-78.

Justice Sotomayor’s reasoning is applicable here. In her view, “the term of imprisonment imposed by a district court pursuant to [a (C) agreement] is ‘based on’ the agreement itself, not on the judge’s calculation of the Sentencing Guidelines.” Freeman, 564 U.S. at 534, 131 S.Ct. 2685 (Sotomayor, J., concurring). She explained that a court can say a (C) agreement was “based on” a sentencing range when it “call[s] for the defendant to be sentenced within a particular Guidelines sentencing range,” id. at 538, 131 S.Ct. 2685, or when the agreement makes “clear that the basis for the specified term is a Guidelines sentencing range applicable to the offense to which the defendant pleaded guilty.” Id. at 539, 131 S.Ct. 2685. Thus, if a plea agreement does not itself use or employ a guideline sentencing range, she concluded, then the defendant is not entitled to the benefit of a retroactive Sentencing Guideline Amendment.

Mr. Gilmore disputes the applicability of Freeman, contending that the sentencing agreement in this case is fundamentally different than a (C) agreement. In Freeman, he says, Justice Sotomayor’s concurrence was contingent oh the fact that a (C) agreement binds the court to a specific sentence, and the sentence it imposes is therefore automatically “based on” the agreement. But here, Mr. Gilmore maintains, the sentencing agreement did not bind the court. Instead, it stated that “[i]t is solely within the Court’s discretion whether to accept the proposed agreement and sentence as an appropriate disposition of the case.” Aplt. App. ' at 51.

But context matters. The agreement in this case was produced after the district court held in a § 2255 proceeding that Mr. Gilmore had received constitutionally deficient representation in his initial trial. The court ordered the parties to meet and confer about an appropriate remedy. The two sides agreed on a remedy—Mr. Gilmore would admit to knowingly committing the crime for which he had already been convicted in exchange for a term of imprisonment he would have received from a plea agreement had his counsel been constitutionally adequate. While the parties did discuss the guidelines in their negotiations, a “term of imprisonment imposed by the district court ... is not ‘based on’ ... background negotiations.” Freeman, 564 U.S. at 538, 131 S.Ct. 2685 (Sotdma-yor, J., concurring). The written sentencing agreement neither called for Mr. Gilmore to be sentenced within a sentencing range nor made clear that a guideline sentencing range was the basis for the parties’ stipulation that a 168 month term of imprisonment was appropriate. The only discernable difference between the written agreement in this case and a (C) agreement is that the two parties labeled it a sentencing agreement instead of a plea agreement. Just like a (C) agreement, Mr, Gilmore admitted guilt in exchange for the government “agreeing] that a specific sentence [was] the appropriate disposition.” Fed. R. Crim. P. 11(c)(1)(C).

Mr. Gilmore overstates the importance of the section in the agreement acknowledging that the district court was under “no obligation to accept the proposed agreement and sentence;” Aplt. App. at 51. This fact does not distinguish the sentencing agreement from a (C) agreement. When the government and a defendant enter into a (C) agreement, a district court is always free to either “accept the agreement, reject it, or defer a decision until the court has reviewed the presentence report.” Fed. R. Crim. P. 11(c)(3)(A). Thus, the parties in this case merely made explicit what is true of every (C) agreement, that a court is always free to reject it. The sentencing agreement’s overt recognition of this fact thus does not differentiate it from a (C) agreement, but instead likens it to one.

In Freeman, Justice Sotomayor noted that because a court is bound to give effect to the parties’ agreed upon term of imprisonment once it accepts a (C) agreement, the term of imprisonment imposed pursuant to a (C) agreement is, for purposes of § 3582(c)(2), “based on” the agreement itself. 564 U.S. at 536-36, 131 S.Ct. 2685. It was this fact—that a court is bound to enter the (C) agreement’s term of imprisonment once it accepts the agreement— that was dispositive for Justice Sotomayor. In this case, during the resentencing hearing, the district court stated, “[T]he Court is prepared to and does hereby accept that sentencing agreement and agree to be bound to sentence.in accordance with it.” Aplt. App. at 65. Just as in the context of a (C) agreement, the district court was bound to sentence Mr. Gilmore according to the terms of the sentencing agreement once it decided to accept the agreement as the appropriate remedy in the habeas case. In sum, we see no meaningful difference between the sentencing agreement here and the (C) agreement analyzed in Freeman.

For the foregoing reasons, we hold that Mr. Gilmore’s term of imprisonment was not “based on” a guidelines sentencing range. We AFFIRM.

      . Mr. Gilmore does not contend the district court erred in dismissing his motion for lack of jurisdiction rather than denying it on the merits for failure to state a claim, and the government is silent on this question. Cf. United States v. Taylor, 778 F.3d 667, 669-71 (7th Cir. 2015) (discussing an intra-circuit split and concluding that "a district court has subject-matter jurisdiction to consider a motion for relief under 18 U.S.C. § 3582(c)(2) regardless of whether the moving defendant is actually eligible for such discretionary relief”). Our resolution of this appeal in no way turns on the answer to this question, which we do not address.

      . We note that the propbsed remedy was entirely consistent with the purpose of the Sixth Amendment. See Lafler v. Cooper, — U.S. -, 132 S.Ct. 1376, 1388-89, 182 L.Ed.2d 398 (2012) (explaining that a Sixth Amendment remedy "must ‘neutralize the taint’ of a constitutional violation ... while at the same time not grant a windfall to the defendant or needlessly squander the considerable resources the State properly invested in the criminal prosecution.” (quoting United States v. Morrison, 449 U.S. 361, 365, 101 S.Ct. 665, 66 L.Ed.2d 564 (1981))).


source: Caselaw Access Project

author: JILL PRYOR, Circuit Judge:

license: Public Domain

text:
    Hsi CHANG, a.k.a. Mark Chang, Plaintiff-Appellant, v. JPMORGAN CHASE BANK, N.A., Defendant-Appellee.
    Nos. 15-13636; 15-14529
    United States Court of Appeals, Eleventh Circuit.
    (November 8, 2016)

      Brenda Marie Nelson, Carl Francis Schoeppl, Jr., Schoeppl Law, PA, BOCA RATON, FL, for Plaintiff-Appellant.
    Andrew R. Herron, Herron Jacobs Ortiz, PA, MIAMI, FL, Brian Lechich, Her-ron Ortiz, CORAL GABLES, FL, for Defendant-Appellee.
    Before ROSENBAUM and JILL PRYOR, Circuit Judges, and UNGARO, District Judge.

       Honorable Ursula Ungaro, United States District Judge for the Southern District of Florida, sitting by designation.

   JILL PRYOR, Circuit Judge:

Plaintiff Hsi Chang appeals the district court’s denial of his motion for reconsideration of its earlier order denying on futility grounds Chang’s motion for leave to amend his complaint. The district court denied the motion for reconsideration because, even considering the proposed allegations set forth in the motion, Chang would not be able to state a legally sufficient claim for negligence, gross negligence, or aiding and abetting fraud or conversion against Defendant JPMorgan Chase Bank, N.A. (the “Bank”). We disagree that the amendment would be futile.

Chang asserted in his motion that he had developed facts in discovery which showed that (1) a Bank employee knew that Charles Gordon, the chief executive officer of OPT Title and Escrow, Inc., had assisted Gordon in opening a bank account called an “escrow account” into which funds were to be wired by third parties with the expectation that the funds would be held in escrow by OPT Title; (2) the Bank employee knew that Gordon was stealing from the account; (3), the Bank employee assisted Gordon in committing the fraud; and (4) the Bank received at least a short-term financial, benefit from allowing Gordon to use OPT Title’s account as a vehicle for his fraud.

Although Chang was not a Bank customer, these facts, if proven, are sufficient to establish that the Bank owed Chang a duty of care and, therefore, the Bank may be held liable under negligence theories. Additionally, these facts are sufficient to state a claim for aiding and abetting fraud or conversion by the Bank because Chang plausibly claims that the Bank rendered substantial assistance to Gordon in the commission of the fraud and misappropriation. Thus, after careful consideration and with the benefit of oral argument, we hold that the district court erred in denying Chang’s motion for reconsideration on the basis that even considering his new allegations set forth in his motion for reconsideration, he failed to state claims for relief. Accordingly, we reverse the district court’s denial of the motion for reconsideration, reverse the judgment dismissing Chang’s claims with prejudice, and remand the ease for further proceedings.

I. BACKGROUND

A. The Fraudulent Scheme

This case arises out of a scheme in which Charles Gordon stole $750,000 from Chang. Gordon owned and served as the chief executive officer of OPT Title, a Florida corporation, and Ziggurat (Panama), S.A., a Panamanian corporation. Ziggurat’s purported business was to secure for its clients multi-million dollar loans from global banking institutions and underwriters, Gordon told Ziggurat’s clients that because the financial institutions required proof of their liquidity to obtain financing, the clients needed to deposit a percentage of the total amount to be financed in an escrow account OPT Title maintained with the Bank. Gordon had clients transfer the escrow funds into an account at the Bank titled “OPT Title & Escrow Inc Escrow Account” (the “OPT Escrow Account”). Instead, of holding the funds in escrow, how-evér, Gordon diverted the money to pay Ziggurat’s operating expenses and his personal expenses. Under this scheme, Gordon diverted more than $3,000,000.

. In January 2010, Chang was approached by Chris Lim about advancing $750,000 to fund an escrow deposit for a Ziggurat client who was attempting to obtain financing to build a Caribbean resort. Chang was told that if the financing did not close within 90 days,-his deposit would be refunded. In February 2010, Chang wired $750,000 to the OPT Escrow Account, believing OPT Title would hold the money in escrow. But once Chang’s funds were deposited in the OPT Escrow Account, Gordon immediately transferred them to another account with the Bank where they were commingled with other funds. Believing that his money was still in the OPT Escrow Account, when the loan failed to close within 90 days, Chang agreed to extend the escrow period.

Several escrow , extensions later, and more than two years after Chang initially transferred the money to the OPT Escrow Account, the Bank was asked whether OPT Title had enough money in its accounts to cover the $750,000 owed to Chang and whether there was a lis pen-dens on the' OPT Escrow Account. The Bank responded that there was no lis pen-dens on the account but failed to address whether the , balance in OPT Title’s accounts was sufficient to cover the amount owed to Chang,

Subsequently, Gordon’s fraud was uncovered. He was indicted on a federal wire-fraud charge and pled guilty. To date, Chang has not recovered his $750,000.

B. Chang’s Claims Against the Bank

Chang filed this lawsuit against the Bank in federal district court based on diversity jurisdiction. He amended his complaint once as a matter of right. Before the Bank responded to Chang’s. First Amended Complaint, the district court eii-tered an order setting the case for trial and requiring the parties to complete discovery 70 days prior to trial. ..

1. Chang’s Proposed Second Amended Complaint.

The Bank then moved to dismiss the First Amended Complaint with prejudice for failure to state a claim. Chang opposed the motion to dismiss and also filed a motion seeking leave to file a Second Amended Complaint. In the proposed Second Amended Complaint, Chang set forth additional allegations that a Bank employee had assisted Gordon in the fraud. Chang alleged that Olga Padgett-Perdo-mo, the Bank’s vice president who prepared the paperwork to open OPT Title’s accounts, permitted Gordon to name the OPT Escrow Account as an escrow account even though OPT Title had not complied with the Bank’s procedures for opening an escrow account. Chang alleged that several months after opening the account, Pad-gett-Perdomo wrote a letter on’ the Bank’s letterhead (the “Seven-digit Letter”) representing that- OPT -Title’s “[ejscrow account” had “deposits in a business checking and savings account in the seven digit amounts” when in fact, the total balance in all OPT Title’s accounts with the Bank at that time was less than $100,000. Second Am. Compl. at ¶ 35 (Doc. 29-Í).

Chang’s allegations also suggested Gordon paid off Padgett-Perdomo for supporting his fraudulent acts. Chang alleged that Gordon told an associate that he had loaned a Bank employee $100,000 and that Gordon paid Padgett-Perdomo $100,000 several months after she opened OPT Title’s accounts. Gordon did not pay Pad-gett-Perdomo directly; instead, OPT Title transferred $100,000 from an account with the Bank to the bank account of an entity Padgett-Perdomo controlled.

In his proposed Second Amended Complaint, Chang asserted causes of action against the Bank for negligence, gross negligence, aiding and abetting fraud, and aiding and abetting conversion. The Bank opposed Chang’s motion for leave tó file a Second Amended Complaint, arguing that the allegations were insufficient to establish that the Batik or Padgett-Perdomo knew about the fraudulent scheme or provided substantial assistance to Gordon.

While the motions to dismiss and for leave to amend were pending, Chang zealously pursued discovery. After the parties had engaged in substantial discovery, the district court granted the Bank’s motion to dismiss,. dismissing the First Amended Complaint with prejudice; denied as futile Chang’s motion for leave to file the proposed Second Amended Complaint; and instructed the clerk of court to close the case. As to the proposed Second Amended Complaint, the court concluded that Chang failed to state a claim for any of the causes of action because his allegations were insufficient to show that the Bank or Pad-gett-Perdomo knew about Gordon’s fraud or that they had substantially assisted the fraud. Even though the court credited Chang’s allegations that Gordon illicitly loaned Padgett-Perdomo $100,000, it concluded that Chang “fail[edj to allege any connection between the secret loan and Gordon’s misappropriation, for example, an illicit quid pro quo arrangement whereby Gordon secretly loaned the employee money in exchange- for her concealing his fraud.” Chang v. JPMorgan Chase Bank, N.A, No. 14-cv-20368, 2014 WL 7564668, at *11 (S.D. Fla. Dec. 8, 2014).

2. Chang’s Rule 59(e) Motion and Proposed New Allegations

Chang filed a motion under Federal Rule of Civil Procedure 59(e) asking the district court to reconsider its decision and alter or amend its order dismissing his claims with prejudice and denying him leave to amend his complaint. In his motion, Chang set forth additional allegations based on facts- he learned through discovery to support his contentions that (1) Padgett-Perdomo knew that OPT Title was supposed to be holding Chang’s money in escrow; (2) Padgett-Perdomo assisted Gordon in the fraudulent scheme; and (3) Gordon paid Padgett-Perdomo $100,000 in exchange for her assistance. Below we address how Chang’s new allegations support each of these inferences.

a. Allegations That Padgett-Perdomo Knew that OPT Title Agreed to Hold Chang’s Money in Escrow

First, Chang’s allegations support an inference that Padgett-Perdomo knew OPT Title was supposed to be holding Chang’s money in escrow even before Chang transferred the money. He alleged that a week before he wired money to OPT Title, Pad-gett-Perdomo met with Chris Lim and William Lin, who were conducting due diligence, at her office at the Bank. At the meeting, Padgett-Perdomo assured them that OPT Title had an excellent relationship with the Bank. Lim and Lin showed Padgett-Perdomo a copy of the escrow agreement between Chang and OPT Title, which described the nature of the financing arrangement and reflected that OPT Title would be holding Chang’s money in escrow. When Lim and Lin discussed that OPT Title was supposed to hold Chang’s money in escrow, Padgett-Perdomo reassured them that Chang’s funds would be held safely in an escrow account with the Bank.

b. Allegations That Padgett-Perdomo Knew about and Assisted Gordon with the Fraud

Second, Chang’s more detailed allegations support an inference that Padgetb-Perdomo knew about and assisted Gordon with the fraudulent, scheme. He alleged that after he sent his money to the Bank, Lim and Lin spoke with Padgett-Perdomo several times on his behalf. In these conversations, Padgett-Perdomo again represented to them that Chang’s money was in the OPT Escrow Account, even though Gordon had immediately moved Chang’s money out of the account. An inference can be drawn from these allegations that Pad-gett-Perdomo lied to Lim and Lin to cover up Gordon’s theft.

Chang also set forth other allegations about Padgett-Perdomo’s role with respect to the OPT Escrow Account that support the conclusion that she knew about and was assisting Gordon with the fraud. He alleged that Padgett-Perdomo, in her role as Bank vice president, prepared the paperwork to open OPT Title’s and Ziggu-rat’s accounts with the Bank. She added the words “Escrow Account” to the name of the OPT Escrow Account, even though the account was not an authorized escrow account with the Bank. Moreover, almost immediately after OPT Title opened its accounts at the Bank, Padgett-Perdomo provided tetters vouching for OPT Title. Just five days after opening the accounts, Padgett-Perdomo wrote a tetter to a Cayman Islands bank stating that OPT Title had a banking relationship with the Bank and had “maintained excellent relationships.” Mot. to Alter or Amend at 8 (Doc. 59). One week later, Padgett-Perdomo prepared another vouching tetter on behalf of OPT Title, again affirming that OPT Title had “maintained excellent relationships.” Id. Chang alleged that when Pad-gett-Perdomo wrote these tetters, suspicious activity had already occurred in OPT Title’s accounts. For example, when OPT Title opened its accounts with the Bank, it made a single deposit into each account. Also, in one account, OPT Title tried to deposit a $1,000 check, but the deposit was rejected because the check was written on a closed account.

Chang further alleged that Padgett-Per-domo tried to keep other Bank employees from reviewing OPT Title’s accounts. A Bank branch employee became suspicious about OPT Title after a potential OPT Title client brought a copy of the Seven-digit Letter to a Bank branch and requested proof that OPT Title was a stable business that was accustomed to handling large transactions. When the employee reviewed OPT Title’s accounts, she saw that OPT Title’s accounts had much less than $1,000,000 deposited in them and contacted Padgetb-Perdomo about the accounts. Although the letter had a recent date, Pad-getb-Perdomo told the employee that she wrote the Seven-digit Letter “several years ago” and that OPT Title no longer kept seven digit balances with the Bank. Id. at 11. Padgetb-Perdomo also told the employee that the letter could be a forgery. She insisted that the employee allow her to handle the matter. When the Bank first investigated the Seven-digit Letter, Padgetb-Perdomo stated that she had written it in 2009, but later denied writing the letter at all. Chang’s allegations reflect that Padgetb-Perdomo changed her story and support an inference that she originally claimed to have written the letter to keep the Bank from investigating OPT Title’s accounts more closely.

c. Allegations that Gordon Paid Off Padgett-Perdomo

Third, Chang’s new allegations support an inference that Gordon paid off Padgetb-Perdomo for her support in the fraudulent scheme. According to Chang’s allegations, Gordon surreptitiously paid Padgetb-Per-domo $100,000. Gordon wired $100,000 from an OPT Title account at the Bank to Infinit Management LLC, an .entity controlled by Padgetb-Perdomo. One day later, Padgett-Perdomo transferred more than $90,000 from Inifinit’s bank account to Colombia. Although Padgetb-Perdomo testified that Gordon loaned her the $100,000, she conceded under oath that there was no written -loan agreement, Gordon and Padgetb-Perdomo never agreed on repayment terms, and Padgett-Perdo-mo has never repaid any money to Gordon. These allegations certainly support an inference that there was no loan.

Chang also alleged facts suggesting that Padgetb-Perdomo created Infinit to surreptitiously receive money from Gordon. She created Infinit just two months after opening OPT Title’s accounts at the Bank, and Infinit never performed any services. Although Bank policies required Padgett-Perdomo to inform the Bank about any outside business, she never told the Bank about Infinit.

The district court denied Chang’s Rule 59(e) motion, determining that even considering these new allegations, Chang failed to establish that the Bank or Pad-getb-Perdomo knew of, or substantially assisted, Gordon’s fraud and thus failed to state claims for relief. Chang timely appealed the district court’s orders granting the Bank’s motion to dismiss and denying his motion to amend as well as denying his motion to alter or amend the judgment.

After the district court dismissed Chang’s claims with prejudice, the Bank moved to recover its attorney’s fees from Chang under Florida’s offer-of-judgment statute. See Fla. Stat. § 786.79. The district court granted the Bank’s motion and awarded it $48,702.80 in attorney’s fees. Chang timely appealed this order as well. Chang’s consolidated appeals are now before the Court.

II. STANDARD OF REVIEW

We review the district court’s denial of Chang’s motion to. alter or amend the judgment under Federal Rules of Civil Procedure 59(e) for abuse of discretion. Drago v. Jenne, 453 F.3d 1301, 1305 (11th Cir. 2006). When, as here, the plaintiff sought through a Rule 59(e) motion leave to amend his complaint and the district court denied the motion on the basis that the amendment would be futile, to determine whether the district court abused its discretion in denying the Rule 59(e) motion we must ask “whether the proposed complaint indeed failed to state a claim for relief.” Spanish Broad. Sys. of Fla., Inc. v. Clear Channel Commc’ns, Inc., 376 F.3d 1065, 1077 (11th Cir. 2004).

To state a claim for relief, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The plausibility standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. In other words, the allegations in the complaint “must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 550 U.S. at- 679, 127 S.Ct. 2162.

III. DISCUSSION

The primary issue before us is whether the district court erred in denying Chang’s Rule 59(e) motion on the basis that even considering his new allegations, he failed to state a claim for reliéf. Because Chang set forth sufficient allegations to state a plausible claim for relief with respect to each cause of action asserted, we conclude that the district court erred in denying Chang’s Rule 59(e) motion and should have permitted him to amend his complaint.'

A. Negligence Claim

We begin by reviewing the district court’s conclusion that even considering the additional allegations Chang set forth in his Rule 59(e) motion, he failed to state a claim for negligence. Under Florida law, “[t]o maintain an action for negligence, a plaintiff must establish that the defendant owed a duty, that the defendant breached that duty, and that this breach caused the plaintiff damages.” Fla. Dep’t of Corr. v. Abril, 969 So.2d 201, 204 (Fla. 2007). To determine whether Chang stated a claim for relief, we must decide whether his allegations were sufficient to establish that the Bank owed a duty to Chang, a noncustomer.

Florida, like other jurisdictions, recognizes that as a general matter, “a bank does not owe a duty of care to a noncustomer with whom the bank has no direct relationship.” Eisenberg v. Wachovia Bank, N.A., 301 F.3d 220, 225 (4th Cir. 2002); see Conder v. Union Planters Bank, N.A. 384 F.3d 397, 399 (7th Cir. 2004) (discussing “the many cases that refuse .,. to impose on banks a general duty of care towards persons who are not their customers and to whom therefore they have no contractual obligations”); Sroka v. Compass Bank, No, 2006-CA-1117, 2006 WL 2535656, at *1 (Fla. Cir. Ct. Áug 31, 2006) (“As a matter of law, a bank does not owe a duty to non-customers regarding the opening and maintenance of its accounts”). But there is an exception to this rule: a bank may be liable to a noncustomer for its customer’s misappropriation when a fiduciary relationship exists between the customer and the noncustomer, the bank knows or ought to know of the fiduciary relationship, and the bank has actual knowledge of its customer’s misappropriation. See Chaney v. Dreyfus Serv. Corp., 595 F.3d 219, 232 (5th Cir. 2010) (applying New York law); Atlanta & St. A.B. Ry. Co. v. Barnes, 95 F.2d 273, 276 (5th Cir. 1938) (recognizing that a bank may be held liable for misappropriation under Florida law “when the bank knows that an actual misappropriation is intended or is in progress”). We conclude that Chang’s allegations are sufficient to establish that the Bank owed a duty to Chang because (1) OPT Title owed a fiduciary duty to Chang; (2) the Bank, through Padgett-Perdomo, was aware of this fiduciary relationship; and (3) the .Bank, through Padgett-Perdo-mo, knew that Gordon was misappropriating money from the account.

1. Existence of a Fiduciary Relationship Between Chang and OPT Title

First, we readily conclude that Chang’s additional allegations sufficiently established that OPT Title owed a fiduciary duty to Chang, Chang alleged that he and OPT Title agreed in writing that OPT Title would hold his money in escrow and return it intact to him regardless of whether Ziggurat ultimately obtained' financing for the underlying development project. Because OPT Title held Chang’s funds in escrow under that agreement, it owed Chang a fiduciary duty under Florida law. See Watkins v. NCNB Nat’l Bank of Fla., N.A., 622 So.2d 1063, 1064 (Fla. Dist. Ct. App. 1993) (“[E]scrow holders have á fiduciary duty to exercise reasonable skill and ordinary diligence.”).

2. The Bank’s Knowledge of the Fiduciary Relationship

Second, Chang sufficiently alleged that the Bank knew or should have known of the fiduciary relationship between OPT Title and Chang. We. can infer from Chang’s allegations that the Bank, through its employee Olga Padgett-Perdomo, knew that OPT Title was acting as a fiduciary to Chang.

Chang’s allegations reflect that Padgett-Perdomo knew about the fiduciary relationship even before Chang sent his money to the OPT Title Escrow account. As part of due diligence, Lim and Lin met with Padgett-Perdomo at her office at the Bank, showed her a copy of the escrow agreement between Chang and OPT Title, and told her that OPT Title would be holding Chang’s money in escrow. These allegations are more than sufficient to establish that Padgett-Perdomo knew about the fiduciary relationship between Chang and OPT Title.

The Bank argues that even if Padgett-Perdomo knew about the fiduciary relationship, her knowledge should not be imputed to the Bank. We disagree. Under Florida law, knowledge an agent or employee acquires within the scope of her authority generally may be imputed to her principal or employer. See Beck v. Deloitte & Touche, 144 F.3d 732, 736 (11th Cir. 1998) (recognizing that under Florida law knowledge of officer is generally imputed to corporation); see also Bank of China, N.Y. Branch v. NBM LLC, 359 F.3d 171, 179 (2d Cir. 2004) (recognizing that bank employee’s knowledge may be imputed to bank). However, under Florida law “an exception to the imputation rule exists where an individual is acting adversely to the corporation. In that situation, [her] knowledge and conduct are not imputed to the corporation.” Beck, 144 F.3d at 736 (internal quotation marks omitted); Restatement (Third) of Agency § 5.04 (2006) (explaining that an agent’s knowledge will not be imputed to the principal when “the agent acts adversely to the principal in a transaction or matter, intending to act solely for the agent’s own purposes or those of another person”). Stated another way, an agent’s knowledge will be imputed to the principal unless the agent’s interest is “entirely adverse” to the principal’s interest, meaning “his actions must neither be intended to benefit the corporation nor actually cause short- or long-term benefit to the corporation.” Beck, 144 F.3d at 736 (citing Seidman & Seidman v. Gee, 625 So.2d 1, 3 (Fla. Dist. Ct. App. 1992)). Thus, imputation is permitted when an agent’s actions were “designed to turn the corporation into an ‘engine of theft’ against outsiders,” as opposed to when an agent took actions that diminished the assets of the corporation itself. Gee, 625 So.2d at 3.

Accepting as true Chang’s allegations, we conclude that Padgett-Perdomo’s knowledge can be imputed to the Bank because her interests were not entirely adverse to the Bank’s. She learned about OPT Title’s fiduciary relationship while performing her job at the Bank. We acknowledge that under Chang’s allegations, Padgett-Perdomo learned about the fiduciary relationship while working to further Gordon’s fraudulent scheme to use the OPT Escrow Account to steal money deposited as escrow funds. Certainly, at this time Padgett-Perdomo was working to further her own and Gordon’s interests. But we cannot say her interests were entirely adverse to the Bank’s interests because her actions brought the Bank some short-term benefit. See Beck, 144 F.3d at 736. After all, OPT Title entered into a banking relationship with the Bank that involved very substantial deposits. In addition to the deposits, Chang alleged—and the documents attached to his First and proposed Second Amended Complaints reflect—that the Bank collected wire and service fees from OPT Title. These allegations support .the inference that Padgett-Perdomo used the Bank as an engine for Gordon’s scheme by allowing him to set up an escrow account to collect funds that he would then misappropriate. At least at the motion to dismiss stage, we may impute Padgett-Perdomo’s knowledge to the Bank; thus, we conclude that Chang’s allegations were sufficient to establish that the Bank knew that OPT Title was acting as Chang’s fiduciary.

3. The Bank’s Knowledge of Gordon’s Misappropriations

Third, Chang adequately alleged in his Rule 59(e) motion that the Bank knew Gordon was misappropriating money held in the OPT Escrow Account. His allegations are sufficient to establish that Pad-gett-Perdomo knew about the misappropriation and, for the reasons set forth above, her knowledge may be imputed to the Bank.

The plausible allegations in Chang’s Rule 59(e) motion support the inference that Padgett-Perdomo actually knew that Gordon was misappropriating money from the account and used her position as vice president at the Bank to assist him in carrying out the fraud. These allegations include that Padgett-Perdomo (1) allowed OPT Title to label its account as an escrow account, even though she and OPT Title had not complied with the Bank’s procer dures for opening an authorized escrow account; (2) assured Lim and.Lin before Chang wired money to the Bank that OPT Title would hold his money in the OPT Escrow Account with the Bank; (3) continued to tell Lim and Lin that Chang’s money was being held in the OPT Escrow Account even though Gordon had taken the money; (4) tried to prevent a Bank employee from investigating the OPT Escrow Account in connection with the Seven-digit Letter; and (5) surreptitiously received $100,000 from Gordon. Because we can infer- that Padgett-Perdomo was assisting Gordon in his fraudulent scheme, we can also conclude that Padgett-Perdo-mo knew that Gordon was misappropriating money from the OPT Escrow Account.

The Bank argues that we cannot draw any inference that Padgett-Perdomo knew about or assisted Gordon in the fraudulent scheme based on the $100,000 payment because Gordon paid Padgett-Perdomo four months after he misappropriated Chang’s funds. But Chang’s allegations support the inference that Gordon paid Padgett-Perdomo for her ongoing assistance in and cover up of his fraudulent scheme. Chang alleged that Padgett—Per-domo assisted Gordon both before and after Chang’s money was stolen. He alleged that before the theft occurred, Padgett-Perdomo labeled OPT Title’s account as an escrow account and met with Lim and Lin. And Chang alleged that after the theft occurred Padgett-Perdomo repeatedly assured Lim and Lin that Chang’s money was still in the OPT Escrow Account and tried to keep other Bank employees from investigating the Seven-digit Letter and the OPT Escrow Account.

The district court rejected Chang’s allegations as insufficient because it concluded the allegations showed nothing more than that the Bank and Padgett-Perdomo engaged in routine banking services. We cannot agree. Even if Chang has no explicit allegation that Padgett-Perdomo knew about Gordon’s fraud, such a direct allegation was unnecessary ' because Chang’s allegations supported an inference that Padgett-Perdomo knew that Gordon was misappropriating money. See Avenue CLO Fund, Ltd. v. Bank of Am., N.A., 723 F.3d 1287, 1297 (11th Cir. 2013) (recognizing that actual knowledge may be established through inference).

Furthermore, Padgett-Perdomo’s knowledge that Gordon had misappropriated the money can be imputed to the Bank. As we explained in Section III.A.2 above, under Florida law we may impute Pad-gett-Perdomo’s knowledge to the Bank because her interests were not entirely adverse to those of the Bank, which gained some benefit from her conduct.

Although banks generally owe no duty to noncustomers, Chang’s allegations as set forth in his Rule 59(e) motion were sufficient to establish that the Bank owed him a duty, and thus he stated a claim for négligence. The district court erred when it denied his Rule 59(e) motion; instead, it should have permitted him to amend his complaint.

B. Aiding and Abetting Fraud

' We now turn to whether the district court erred in denying Chang’s Rule 59(e) motion on the basis that he failed to state a claim for aiding and abetting fraud. We conclude that Chang stated á claim for relief with respect to this cause of action as well.

Although no Florida court has explicitly recognized a cause of action for aiding and abetting fraud, Florida courts have assumed that the cause of action exists, ZP No. 54 Ltd. P’ship v. Fid. & Deposit Co. of Md., 917 So.2d 368, 371-72 (Fla. Dist. Ct. App. 2005)’ (explaining that aiding and abetting fraud “may well be a valid cause of action in Florida”). Florida courts have presumed that a tort claim for aiding and abetting fraud has three elements; (1) the existence of “an underlying fraud”; (2) that “[t]he defendant had knowledge of the fraud”; and (3) that the defendant “provided substantial assistance to advance the commission of the fraud.” Id. We have already explained above why Chang’s allegations are sufficient to establish that the existence of an underlying fraud and the Bank’s knowledge of the fraud.

Regarding the third element, we conclude Chang plausibly alleged that the Bank provided substantial assistance to advance the commission of the fraud. “Substantial assistance occurs when a defendant affirmatively assists, helps conceal or fails to act when required to do so, thereby enabling the breach to occur.” Lerner v. Fleet Bank, N.A., 459 F.3d 273, 295 (2d Cir. 2006) (internal quotation marks omitted). Mere inaction “constitutes substantial assistance only if the defendant owes a fiduciary duty directly to the plaintiff.” Id. (internal quotation marks omitted). Because “banks do have a duty to safeguard trust funds deposited with them when confronted with clear evidence indicating that those funds are being mishandled,” a bank’s inaction—that is, its failure to stop the theft of such trust funds—can constitute substantial assistance. Id.; see In re First Alliance Mortg. Co., 471 F.3d 977, 995 (9th Cir. 2006) (explaining that a bank’s performance of ordinary business transactions for a customer “can satisfy the substantial assistance element of an aiding and abetting claim if the bank actually knew those transactions were assisting the customer in committing a specific tort” (internal quotation marks omitted)). Put another way, to establish that a bank substantially assisted a fraudulent scheme to steal trust funds, knowledge of the underlying fraud “is the crucial element.” In re First Alliance Mortg. Co., 471 F.3d at 995 (internal quotation marks omitted).

Here, Chang’s allegations are sufficient to establish that the Bank provided substantial assistance through its inaction. Chang’s allegations, establish that the Bank (through Padgett-Perdomo) knew that OPT Title was holding the funds in escrow and also knew about Gordon’s ongoing fraud. Thus, the bank had a fiduciary duty to Chang. Under these particular circumstances, the. Bank’s failure to warn Chang or stop Gordon’s fraud is sufficient to constitute substantial assistance. See Lerner, 459 F.3d at 295.

Considering the allegations in his Rule 59(e) motion, Chang stated a claim for aiding and abetting fraud, and the district court erred as a matter of law when it denied thé Rule 59(e) motion on the basis that he failed to state a claim for relief. Instead, the district Court should have granted his motion and 'allowed Chang to amend his complaint. Because Chang stated claims-for negligence, gross negligence, aiding and abetting fraud, and aiding and abetting conversion, we hold that the district court abused its discretion when it denied his Rule 59(e) motion. Upon remand, the district court should permit Chang to file an amended complaint reflecting the allegations that he set forth in the motion.

IV. CONCLUSION

For the reasons set forth above, we reverse the district court’s order denying Chang’s Rule 59(e) motion to alter or amend the judgment and remand the case for further proceedings consistent with this opinion. Because we reverse the judgment in favor of the Bank, we vacate the district court’s award of attorney’s fees to the Bank based on Florida’s offer of judgment statute.

REVERSED IN PART, VACATED IN PART, AND REMANDED.

      . After dismissing Chang’s claims with prejudice,' the district court awarded attorney’s fees to the Bank. Because we reverse the underlying judgment, we also vacate the award of fees.

      . For purposes of determining whether Chang stated a claim for relief, we accept his well-pled allegations as true and construe them in the light most favorable to Chang. See Chaparro v. Carnival Corp., 693 F.3d 1333, 1335 (11th Cir. 2012).

      . In fact, at the time of the inquiry, OPT Title’s accounts with the Bank had a negative balance.

      . Citations to "Doc.” refer to docket entries in the district court record in this case;

      . Padgett-Perdomo’s claim that she wrote the letter several years ago is suspect because at that time OPT Title had only had a relationship with the Bank for just over a year.

      . Chang has abandoned any argument that the district court erred when it concluded that his First Amended Complaint, which included no allegations about Gordon's payment to Padgett-Perdomo, failed'to state a claim because he does not challenge this determination on appeal. See Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 680 (11th Cir. 2014). And because we conclude that the district court erred, when it denied Chang’s Rule 59(e) motion on the basis that he had failed to state a claim for relief and instead should have permitted him to file an amended complaint, we need not address whether the district court erred in denying his motion for leave to file his- Second Amended Complaint.

      . Decisions of the former Fifth Circuit rendered prior to close of business on September 30, 1981, are binding on this Court. See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (enbanc).

      . We acknowledge that in a decision issued before Beck an intermediate appellate Florida court used a different standard to determine whether an agent’s knowledge should be imputed to the principal. See Joel Strickland Enters., Inc. v. Atl. Discount Co., 137 So.2d 627, 629 (Fla. Dist. Ct. App. 1962) (recognizing exception to imputation rule when the agent was "in reality acting in his own business or for his own personal interest and adversely to tire principal” without considering whether some benefit flowed to the principal). But under our prior precedent rule, we must adhere to the formulation of the adverse interest exception recognized in Beck and consider whether Padgett-Perdomo’s interests were entirely adverse to the Bank's. See LeFrere v. Quezeada, 582 F.3d 1260, 1265 (11th Cir. 2009) ("Our prior panel precedent rules applies to decisions ... that address state law issues.”).

      . For the same reasons, we conclude that the district court erred by refusing to allow Chang to amend Iris gross negligence claim. Notably, the Bank relies solely on its argument about why Chang failed to state a claim for negligence to support its argument about gross negligence.

      . We note that Chang’s allegations certainly are sufficient to establish that Padgett-Perdo-mo substantially assisted Gordon’s fraud through her affirmative actions including adding "escrow” to the name of the OPT Escrow Account, sending vouching letters on behalf of OPT Title, misrepresenting that Chang’s money was still in the OPT Escrow Account after it had been withdrawn, and trying to keep other Bank personnel from investing the OPT Escrow'Account, A more difficult question is whether Padgett-Perdomo's actions may be imputed to the Bank such that we can say the Bank actively assisted Gordon with the fraud. After all, the imputation cases discussed above address only when an agent’s knowledge may be imputed to her employer. See Section III.A.2 above. We need not answer whether Chang’s allegations aré sufficient to impute Padgett-Perdomo’s actions to the Bank, however, because, as explained above, Chang’s allegations are sufficient to establish that the Bank provided substantial assistance through its inaction.

      . For the same reasons, we also conclude that Chang- stated a claim for aiding and abetting conversion and the district court erred in denying him leave to amend. The parties implicitly concede that Chang’s aiding-and-abetting-conversion claim rises or falls with his.aiding-and-abetting-fraud claim.


author: ROYCE C. LAMBERTH, District Judge:

text:
    UNITED STATES of America EX REL., Chester SALDIVAR, Petitioner-Appellant, v. FRESENIUS MEDICAL CARE HOLDINGS, INC., d/b/a Fresenius Medical Care North America, Respondent-Appellee.
    No. 15-15497
    United States Court of Appeals, Eleventh Circuit.
    Date Filed: 11/08/2016

      Nathan M. Peak, Landover, MD, Christopher Vincent Tisi, Washington, DC, Ash-craft & Gerel, LLP, Julie Keeton Bracker, Jason Marcus, Bracker Marcus Law Firm, Marietta, GA, Andrea S. Hirsch, Herman Gerel, LLP, Atlanta, GA, for Plaintiff-Appellant.
    James F. Bennett, Edward L. Dowd, Jr., Megan S. Heinsz, James G. Martin, Dowd Bennett, LLP, Saint Louis, MO, Juanita Rose Brooks, Fish & Richardson, PC, San Diego, CA, J. Matthew Maguire, Jr., Parks Chesin & Walbert, PC, Atlanta, GA, Respondent-Appellee.
    Before ED CARNES, Chief Judge, JORDAN, Circuit Judge, and LAMBERTH, District Judge.

       Honorable Royce C. Lamberth, United States District Judge for the District of Columbia, sitting by designation.

   ROYCE C. LAMBERTH, District Judge:

Relator Chester Saldivar appeals the district court’s order granting summary judgment to defendant Fresenius Medical Care Holdings, Inc. (Fresenius). This case is a qui tam action arising under the False Claims Act (FCA), 31 U.S.C. §§ 3729-3733. This is an appeal of a final judgment pursuant to 28 U.S.C. § 1291. Whether or not jurisdiction ultimately exists in this case is the focus of this opinion.

I.

Fresenius is a provider of End Stage Renal Disease (ESRD) outpatient services. As part of these services, Fresenius administers the drugs Epogen and Zemplar, both of which are distributed in vials. These vials contain slightly more of the drug than is indicated on the packaging, referred to as “overfill.” In the course of providing its services, Fresenius administered this overfill to patients, and sought and received reimbursement for such overfill from the Centers for Medicare and Medicaid Services (CMS).

Relator, Chester Saldivar, filed the instant qui t'cm action claiming Fresenius violated the FCA by billing the government for overfill that it received for no cost—allegedly a violation of the statutes governing CMS billing. See U.S. ex rel. Saldivar v. Fresenius Med. Care Holdings, Inc., 972 F.Supp.2d 1339, 1348 (N.D. Ga. 2013) (Saldivar T). Saldivar filed suit in the United States District Court for the Northern District of Georgia in 2010. In March 2011, the Government declined to intervene in this case, its right under the FCA. 31 U.S.C. § 3730(b).'

Fresenius maintained that the action should be dismissed for lack of subject matter jurisdiction due to the Public Disclosure Bar in the FCA, an argument they raised—unsuccessfully—twice. U.S. ex rel. Saldivar v. Fresenius Med. Care Holdings, Inc., 157 F.Supp.3d 1311, 1313 (N.D. Ga. 2015). The Public Disclosure Bar prevents qui tam actions if the allegations in question were publicly disclosed. 31 U.S.C. § 3730(e)(4). In determining there was jurisdiction under § 3730(e)(4), the district court concluded that while Saldivar’s allegations of overfill billing were publicly disclosed and the disclosed information was the basis of Saldivar’s suit, Saldivar was an “original source” under § 3730(e)(4)(B) and was thus not barred from bringing this action. 157 F.Supp.3d at 1317-1325.

Specifically,' Saldivar alleged improper billing for overfill based on his personal experience tracking the use of overfill along with conversations he had with other Fresenius employees and: his knowledge of corporate policies. The district court found that Saldivar’s allegations—that Fresenius was not just using, but billing, for overfill—had been disclosed to the government through several communications between Fresenius and CMS as well as publicly disclosed through a complaint in another case. Id. at 1318-1321. Moreover, the district court held that given our precedent on the issue, the disclosed information was the basis of Saldivar’s suit. Id. at 1321-1323. However, the district court found that Saldivar was an original source based on (a) his experience ordering and otherwise managing inventory for Zemplar and Epogen, (b) discussions with supervisors and coworkers about overfill use and billing, and (c) his familiarity with Fresenius corporate policies and clinic rankings that factored in the use of overfill. Id. at 1323-1326.

The proceedings \vere bifurcated and the parties filed motions for summary judgment on multiple distinct issues. The parties first filed' motions for summary judgment on the questions of (a) if submission of claims for free overfill violated the Medicare Act and (b) if it was thus a false claim. The district court found that the submissions did violate the Medicare Act and were, as a result, false claims. Saldi-var I. Next, the parties filed motions for summary judgment on the question of whether Fresenius’s actions met the intent requirement under the FCA: that the party “knowingly” take an action. 31 U.S.C. § 3729; U.S. ex rel. Saldivar v. Fresenius Med. Care Holdings, Inc., 145 F.Supp.3d 1220 (N.D. Ga. 2015) (Saldivar II). The court found that Fresenius’s actions did not meet the intent requirement and thus granted its motion for summary judgment. Saldivar II. Saldivar appeals that decision to this Court and, in its briefing, Fresenius argues again that there is no jurisdiction due to the public disclosure bar.

II.

In 2007, Saldivar started working at Fresenius as an equipment technician for two clinics, where he later became the chief technician. As an equipment technician, Saldivar repaired dialysis machines and completed other tasks as directed, including placing orders for Epogen and Zemplar. In addition to ordering the drugs, Saldivar was asked to report the “Zemplar analysis” which included an inventory form. Saldivar would input the vial count at the beginning and end of the month as well as the dosages administered, The form then automatically calculated and displayed the amount of overfill utilized throughout the month. In 2009, Saldivar began inventorying .Epogen as well, though he was only responsible for inputting the vial counts—others entered the doses administered throughout the month.

With respect-to these inventory forms, Saldivar was told the forms were of particular importance because they were the basis for billing medicare. Indeed, conversations about overfill and billing seem to have been fairly common. Saldivar stated that Fresenius employees talked about the company’s overfill policy in meetings, in one-on-one conversations with managers, and in monthly as well as quarterly reports. ■

Despite being told about overfill billing and the relationship between his inventory forms and billing, Saldivar was not himself directly involved in billing. At his deposition, when asked if the inventory forms he filled out were provided to the government for billing purposes, he responded, “I have no idea. I’m pretty sure’ they filled out a different form for reimbursement.” When asked if he had any facts, other than what he was told by managers, to suggest, the inventory forms were used as the basis for billing he responded, “No. I just go by what my managers told me.” At multiple points when asked about billing practices he responded that he “was not in the billing department.”

Starting before Saldivar was ever hired, overfill was the subject of much discussion. Indeed, a July 2008 BNA article in “Pharmaceutical Law & Industry Report” stated that the use of overfill was “certainly not a secret,” that Fresenius had publicly acknowledged its utilization—including in a disclosure to the Securities and Exchange Commission (SEC), and that overfill had been discussed in two Office of the Inspector General (OIG) reports. Fresenius was also in communication with the OIG about its overfill practices due to a “corporate integrity agreement” between Fresenius and the OIG which was in place from 2000 to 2008. During a deposition with an official from CMS, Fresenius asked specifically about CMS’s knowledge of Fresenius’ overfill practices. Specifically, Fresenius asked, “throughout the time period of 2000 to 2010 CMS was aware that outpatient dialysis facilities were administering and billing for overfill for Epogen and Zemp-lar, right?” to which the CMS official responded “Yes.” Fresenius later asked “there’s simply no question that Fresenius fully disclosed to you that it was using and billing for Zemplar and Epo overfill, right?”'Response: “they did disclose that to me, yes.” That same official later stated he “wasn’t aware of any CMS policy that prohibited the use of billing overfill,” that he was under the impression Fresenius had been and still was billing for overfill as of March 2007, and that Fresenius “disclosed] to [him] that they were using and billing for overfill Epogen and Zemplar.”

Complicating the facts of this case is the 2003 passage of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). MMA, Pub. L. 108-173, 117 Stat. 2066 (codified in scattered sections of 42 U.S.C. and 26 U.S.C.). As part of this act, Zemplar and Epogen reimbursement were calculated by the “Average Sales Price” (ASP) beginning in 2006. In 2010, CMS announced a proposed rule, to be effective January 1, 2011, which “clarified” that billing for ESRD overfill drugs was improper under ASP. Saldivar thus argues that the operative question is Fresenius’s behavior and disclosures after ASP reimbursement went into effect in 2006.

III.

We review a district court order granting summary judgment de novo, viewing the evidence and all reasonable inferences drawn from it in the light most favorable to the nonmoving party. Battle v. Bd. of Regents for Ga., 468 F.3d 755, 759 (11th Cir. 2006). However, “to survive summary judgment, the nonmoving party must offer more than a mere scintilla of evidence for its position; indeed, the non-moving party must make a showing sufficient to permit the jury to reasonably find on its behalf.” Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039, 1050 (11th Cir. 2015). Additionally, “[a]s courts of limited jurisdiction, we are obliged to ‘scrupulously confine [our] own jurisdiction to the precise limits which the statute has defined.’ ” Underwriters at Lloyd’s, London v. Osting-Schwinn, 613 F.3d 1079, 1086 (11th Cir. 2010) (quoting Healy v. Ratta, 292 U.S. 263, 270, 54 S.Ct. 700, 78 L.Ed. 1248 (1934)). As with summary judgment, we review a district court’s ruling on questions of jurisdiction de novo, Holston Investments, Inc. B.V.I. v. LanLogistics Corp., 677 F.3d 1068, 1070 (11th Cir. 2012), with the burden of establishing jurisdiction being on the party bringing the claim, Sweet Pea Marine, Ltd. v. APJ Marine, Inc., 411 F.3d 1242, 1247 (11th Cir. 2005).

At the time of the underlying events in this case, the FCA read, in pertinent part:

(A) No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative healing, in a congressional, administrative, or Government Accounting Office report, hearing,' audit, or investigation, or from the news media, unless the action is brought by the Attorney General dr the person bringing the action is an original source of the information.
(B) For purposes of this paragraph, “original source” means an individual who has direct and independent knowledge of the informatioh on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information. ■

31 U.S.C. § 3730(e)(4)(A)-(B) (2006). This Court uses a three-part inquiry to determine if jurisdiction exists under 31 U.S.C. § 3730(e): “(1) have the allegations made by the plaintiff been publicly disclosed; (2) if so, is the disclosed information the basis of the plaintiffs suit; (3) if yes, is the plaintiff an ‘original source’ of that information.” Cooper v. Blue Cross & Blue Shield of Fla., Inc., 19 F.3d 562, 565 n. 4 (11th Cir.1994).

As jurisdiction is a necessary prerequisite to addressing the merits, Capron v. Van Noorden, 6 U.S. (2 Cranch) 126, 2 L.Ed. 229 (1804), the Court must begin its inquiry by analyzing each part of the Cooper framework.

a. Have the allegations made by the plaintiff been publicly disclosed?

The district court correctly held that the allegations made had been publicly disclosed. Fresenius maintains that its practices were publicly disclosed in á number of different forums including articles, litigation, and directly to the government through the “corporate integrity agreement.” As the district court properly noted and as highlighted in deposition excerpts above, it is clear from the record below that OIG was aware that Fresenius was billing for overfill. OIG affirmed that they were aware of the practice generally and that Fresenius specifically was billing for overfill. Indeed, OIG noted that Fresenius disclosed overfill billing for both Zemplar and Epogen, the two drugs at issue in this case. This information, albeit in a more limited form, made its way into public reports. For example, the 2004 OIG report on Medicare Reimbursement for Existing End-Stage Renal Disease Drugs stated “providers reported that they are able to lower actual acquisition costs through the utilization of overfill.” Moreover, Fresenius was identified in the previously mentioned July 2008 BNA article that discussed the use and profitability of overfill. Geoffrey R. Kaiser, Overfill: A Drug Sample in Sheep’s Clothing, Pharmaceutical Law & Industry Repokt, July 2008. Fresenius has also noted that information was disclosed through an SEC filing and through prior litigation.

While it is true the law changed with the passage of the MMA., Fresenius’ overfill billing was nonetheless disclosed through the avenues discussed above. The fact that the 2011 rule “clarified” the billing procedure does not change this. While sympathetic to the idea that a disclosure could grow stale due to an intervening change in law, there were repeated disclosures in this case, both before and after the passage of the MMA. Moreover, the statute has no requirement that information be repeatedly or regularly disclosed. Finally, the fact that a new rule was required to clarify ASP billing practices belies the argument Fresenius should have offered some further disclosure. Accordingly, we agree with the district court that the use and billing of overfill was publicly disclosed and decline to analyse each instance of possible public disclosure.

b. Is the disclosed information the basis of the plaintiffs suit?

The district court was likewise correct in holding that the disclosed information is the basis of Saldivar’s suit. We have explained that the language .of the FCA “is most naturally read to preclude suits based in any part on publicly disclosed information,” Cooper, 19 F.3d at 567, and that this second prong of the inquiry is a “quick trigger to get to the more exacting original source inquiry,” id. at 568 n. 10. Here, the claim is based on Fresenius billing Medicare for overfill it received at no cost. The public disclosures reveal it was “no secret” Fresenius was using and billing for overfill. Accordingly, the disclosed information is the basis of the plaintiffs suit.

c. Is plaintiff an original source of the information?

The third prong of the inquiry is whether plaintiff is an “original source,” allowing for jurisdiction to exist even when the information has been disclosed. The statute defines an original source as one who has “direct and independent knowledge of the information on which the allegations are based.” 31 U.S.C. § 3730(e)(4)(B) (2006). Here, our holding differs from that of the district court, which held that Saldivar was an original source of the information.

Two of our prior cases help guide our thinking. In Osherojf there was á public disclosure that clinics were providing certain free services. U.S. ex rel. Osheroff v. Humana Inc., 776 F.3d 805 (11th Cir. 2015). Relator, who was not an employee of one of clinics in question, conducted his own investigation into the value of the services being. provided. Id. at 808. We held plaintiff was not an original source as “background information that helps one understand or contextualize a public disclosure is insufficient to grant original source status.” Id. at 815.

Conversely, in Cooper there was widespread disclosure of fraud associated with Medicare Secondary Provider (MSP) laws though none against the specific defendant in question. 19 F.3d at 566. Relator filed suit after repeatedly informing defendant of the regulations and then being sent back his claims with instructions stating Medicare must pay first—a violation of MSP. Id. at 564. In holding relator was an original source we cited with approval “it is not necessary for a relator to have all the relevant information in order to qualify as ‘independent.’ ” Id. at 568 (citing and quoting U.S. ex rel. Stinson, Lyons, Gerlin & Bustamante, P.A. v. Prudential Ins. Co., 944 F.2d 1149, 1160 (3d Cir. 1991)).

In this case, Saldivar alleges that Fre-senius improperly billed for Zemplar and Epogen overfill. Saldivar was directly responsible for inventory sheets for Zemplar and Epogen. He tracked beginning and end of month inventory, and in the case of Zemplar, included the total dosage administered on his form. There is no dispute that he had direct and independent knowledge of the administration of overfill, as his inventory' sheet automatically populated the overflow numbers. Saldivar was also responsible for placing orders for Zemplar and Epogen as inventory ran low. However, he stated he was not privy to price-related contracts between Fresenius and the drug distributors, and his only firsthand interaction with ¡pricing appears to be seeing per-box' prices on packing slips. With respect to billing the' government, both Saldivar and the district court highlight that Saldivar-was told that the “forms are the basis of billing Medicare.” Moreover, Saldivar had discussions with- coworkers about the use of overfill and was aware of corporate policies and reports that rewarded clinics using overfill efficiently. Fresenius.claims Saldivar is not an original source because Saldivar’s knowledge of the allegation—improper billing— was not direct and independent.

In order to show that a fraud has occurred, one generally must present a submitted statement or claim (X) and the true set of facts (Y), which. shows that X is untrue. These two things together allow the conclusion (Z) that fraud has occurred. See U.S. ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645, 654 (D.C. Cir. 1994). In this instance the false claim was the bill to the government.. However, the alleged true set of facts was not that overfill was administered, but rather that Fre-senius was obtaining drugs at no cost to themselves yet nonetheless billing the government for those same drugs. Given that Saldivar’s firsthand knowledge related to inventory and administration of overfill not costs and billing, we now approach a question we have not explicitly addressed previously: whether Saldivar’s secondhand knowledge is sufficient to make him an original source.

Several of our sister circuits have addressed this issue. The Tenth Circuit has held that secondhand information is insufficient. In re Nat. Gas Royalties, 562 F.3d 1032, 1045-46 (10th Cir. 2009) (“We conclude that this secondhand knowledge ... does not constitute ‘direct and independent’ knowledge.”). It has further explained that “to be independent, the relator’s knowledge must not be derivative of the information of others, even if those others may qualify as original sources.” U.S. ex rel. Fine v. Advanced Scis., Inc., 99 F.3d 1000, 1007 (10th Cir. 1996). Likewise, the Eighth Circuit has held “a person who obtains secondhand information from an individual who has direct knowledge of the alleged fraud does not himself possess direct knowledge and therefore is not an original source under the Act.” U.S. ex rel. Barth v. Ridgedale Elec., Inc., 44 F.3d 699, 703 (8th Cir. 1995). The Eighth Circuit also took note of the False Claims Act legislative history, which explained original sources as. those who were “either close observers or otherwise involved in the fraudulent activity,” Id. (citing S. Rep. No. 845, 99th Cong., 2d Sess. 4 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5269.).

Similarly, the Third Circuit has stated that relators must have direct and independent knowledge of the “most critical” elements of their claim and that “[w]hile it is not necessary for a relator to have all the relevant information in order to qualify as ‘independent,’ a relator cannot be said to have direct and independent knowledge of the information on which [its fraud] allegations are based if the relator has no direct and independent knowledge of the allegedly fraudulent statements.” U.S. ex rel Mistick PBT v. Hous. Auth. of City of Pittsburgh, 186 F.3d 376, 389 (3d Cir. 1999) (internal citations omitted).

Finally, in Glaser v. Wound Care Consultants, Inc., plaintiff was a patient who was treated several times by a physician’s assistant. 570 F.3d 907 (7th Cir. 2009). She filed an FCA claim alleging that defendant was overbilling Medicare by having the physician’s assistants bill at the rate for doctors. Id. at 911. While the case was extreme in that plaintiff had no knowledge at all of defendant’s billing practices until contacted by a lawyer, the Seventh Circuit’s holding—that plaintiff needed to have direct and independent knowledge of the billing, not just the treatment, id at 921, is persuasive.

We find the reasoning of our sister circuits persuasive when reading the statute. The phrase “direct and independent” is most naturally read as creating an ex-tréme limit on secondhand knowledge that is sufficient to qualify as an “original source.” Being told what another department is doing is almost necessarily not direct knowledge of that department’s behavior. In this case, Saldivar was told that inventory spreadsheets were used for billing purposes. This is not direct knowledge of the alleged improper billing. Indeed, it is on its face indirect; he was told by another that his work product was used, and it appears he had no direct knowledge of how billing occurred or even how his inventory was factored into the billing.

In addition to being told his inventory was used • for billing purposes, Saldivar heard about overfill billing practices from others. This likewise is indirect. Saldivar was the chief technician for two clinics, and while he appears to have had a number of different tasks he stated multiple times that he was not in the billing department and thus could not speak to many billing related practices. As he himself attested, he went “by what [his] managers told [him].” This too is. attenuated, rather than direct, knowledge.

Finally, Saldivar saw various reports that ranked or scored clinics, including by their efficiency in utilizing overfill. The Court does not doubt that one could easily infer from these, particularly when combined with what was being said by managers and publicly disclosed, that Fresenius was charging for overfill. However, to hold that merely reading a company’s quarterly reports grants direct knowledge to the underlying activity would be to create a large aperture, rendering the word “direct” in the statute near meaningless.

The FCA requires the Attorney General to investigate alleged violations. 31 U.S.C. § 3730(a). That is, the mere act of a relator filing under the FCA triggers government action. To open the meaning of “direct” into something broader would thus not- only run contrary to the “cardinal” canon of construction that the legislature “means in a statute what it says there,” Con. Nat. Bank v. Germain, 503 U.S. 249, 253-254, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992), but potentially upset the Congres-sionally determined balance between in-centivizing qui tarn suits on the one hand and flooding the Department of Justice with required investigations on the other.

While Saldivar had independent knowledge of the administration of overfill, his knowledge of the critical component—the alleged billing for drugs Fresenius received at no cost—was derived from secondhand sources. To the extent Saldivar’s information is not secondhand, it appears to be more akin to Osherojf & background information, e.g., what inventory forms looked like or how they were filled out, than the direct knowledge in Cooper. Saldi-var thus fails to meet an essential element of the original source requirement, that he have “direct and independent knowledge of the information on which the allegations are based.” 31 U.S.C. § 3730(e)(4)(B) (2006) (emphasis added).

IV.

As we find that the allegations that are the basis of this complaint were publicly disclosed and that Saldivar is not an original source, the Court lacks jurisdiction to hear this case. We do not reach the merits of the motion for summary judgment granted by the court below.

The district court’s grant of summary judgment on the merits is REVERSED and the case is remanded for entry of an order dismissing the case for lack of subject matter jurisdiction.

REVERSED AND REMANDED

      . This section was amended in 2010. The district court found that the old version of the statute applied in this case, citing Graham Cty. Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280, 283, 130 S.Ct. 1396, 176 L.Ed.2d 225 (2010), Neither party has challenged that ruling. But because the pre-2010 version of the public disclosure bar was jurisdictional and subject matter jurisdiction cannot be created by waiver or forfeiture, we must determine for ourselves whether the district court was correct. See In re Bayou Shores

        SNF, LLC, 828 F.3d 1297, 1328 (11th Cir. 2016) ("When the lower court lacks jurisdiction, we have jurisdiction on appeal, not of the merits but merely for the purpose of correcting the error of the lower court in enters taining the suit.”) (internal quotation marks omitted).
      "United States Supreme Court decisions. ... clearly indicate] that statutes that affect substantive, vested rights—even when framed in jurisdictional terms—are still presumed to apply only prospectively.” Johnson v. Conner, 754 F.3d 918, 921 (11th Cir. 2014). The 2010 amendments to the public disclosure bar changed the scope of the public disclosure defense available to Fresenius under the prior version of the False Claims Act. See United States ex rel. May v. Purdue Pharma L.P., 737 F.3d 908, 914-19 (4th Cir. 2013). For that reason, we conclude that it is not retroactive and that Fresenius' conduct should be evaluated under the law as it existed at the time Fresenius submitted its allegedly false claims, As a result, we agree with the district court that the old version of the statute applies to the portion of Saldivar’s claims arising from Fresenius’ billing before the March 23, 2010 effective date of the 2010 amendments. See ex rel. May, 737 F.3d at 914-19. We do not imply any view about whether the issues would be decided differently under the new version of the statute, except to the extent stated in the next paragraph, below.
      We need not decide what version of the statute applies to Fresenius’ post-March 23, 2010 conduct, because Saldivar does not have any viable claims arising from it. Saldivar was terminated on December 18, 2009, so any knowledge he had about Fresenius’ billing after that date must have been obtained secondhand or from public disclosures. And his independent knowledge does not materially add to what was already in the public domain. As a result, Saldivar is not an original source as to any of Fresenius' post-March 23, 2010 conduct under either version of the statute.

      . Both Fresenius and the District Court note that CMS officials knew—due to the OIG investigation—that Fresenius was billing for overfill between 2000 and 2010. We néed not reach the question of whether that alone is sufficient, see United States v. Chattanooga-Hamilton Cty. Hosp. Auth., 782 F.3d 260 (6th Cir. 2015), given that there were a number of public disclosures in this case.

      . For example, in his Statement of the Case Saldivar wrote: "In this False Claims Act (FCA) case, the 'Relator Chester Sáldivar, standing in the shoes of the United States, alleged that Fresenius violated the FCA by billing the government for the overfill of in-jectable drugs it received from manufacturers at no cost." Saldivar’s brief does not argue that the use of overfill was fraudulent.