author: SHADID, District Judge.

text:
    Donna GEIGER, Plaintiff-Appellant, v. AETNA LIFE INSURANCE , COMPANY, Defendant-Appellee.
    No. 16-2790
    United States Court of Appeals, Seventh Circuit.
    Argued December 5, 2016
    Decided January 6, 2017

      Mark D. DeBofsky, Attorney, DeBofsky & Associates, P.C., Chicago, IL, for Plaintiff-Appellant.
    Moyenda Mutharika Knapp, Attorney, MWH Law Group LLP, Chicago, IL, for Defendant-Appellee.
    Before WOOD, Chief Judge, EASTERBROOK, Circuit Judge, and SHADID, District Judge.

       Of the Central District of Illinois, sitting by designation.

   SHADID, District Judge.

Plaintiff-appellant Donna Geiger’s long term disability insurance benefits were terminated after Aetna Life Insurance Company (“Aetna”), the insurer and administrator of her employee welfare benefit plan (“the Plan”), found that she no longer met the Plan’s definition of total disability from any gainful occupation. After unsuccessfully appealing the termination decision, Geiger brought an action seeking reinstatement of her benefits in the United States District Court for the Northern District of Illinois. The district court denied Geiger’s request to conduct limited discovery and ultimately granted summary judgment in favor of Aetna and against Geiger, holding that Aetna’s decision was not arbitrary and capricious or a product of a conflict of interest warranting discovery. We affirm.

I. Background

Geiger was an account executive for Sprint Nextel (“Sprint”) from 2001 to 2009. As a Sprint employee, she received group long term disability insurance coverage under the Plan issued and underwritten by Aetna. On October 6, 2009, Geiger stopped working at Sprint and claimed short term disability precipitated by lumbar back pain and an L5-S1 discectomy from 2007, as well as bilateral ankle pain caused by avas-cular necrosis of the talar bones. Sprint approved Geiger’s disability claim later that same month.

Geiger had surgery on both ankles in January 2010 and underwent a left ankle arthroscopy and full ankle replacement in December 2010. During that time, Aetna determined that Geiger was disabled from her occupation as an account executive under the Plan and approved her claim for long term disability benefits. Aetna reasoned that Geiger was disabled from her own occupation “due to bilateral avascular necrosis in ankles, which caused [Geiger] severe pain,” and “she is unable to perform occupational duties as an account executive because [she] is unable to do the required walking and driving for this occupation.” Geiger received benefits in the amount of $4,012 per month, equal to 50% of her predisability earnings. Upon her approval for Social Security disability benefits, this amount was reduced to $784.

The Plan provided Geiger with benefits for up to 24 months if she continued to be disabled from her own occupation. After 24 months, the Plan requires a claimant to be unable to work at any reasonable occupation, which the Plan defines as “any gainful occupation for which you are, or may reasonably become, fitted by: education; training; or experience; and which results in; or can be expected to result in; an income of more than 60% of your adjusted predisa-bility earnings.”

Aetna reviewed Geiger’s claim as the end of the initial 24-month period approached and investigated whether she met the more stringent “any reasonable occupation” definition of disability. As part of the investigation, Aetna invoked its right under the Plan to have Geiger examined by a physician of its choice, and on May 31, 2012, Dr. White examined Geiger and found her capable of performing sedentary work with minimal walking or standing. Aetna also placed Geiger under surveillance on two occasions in May 2012, where she was observed driving and visiting multiple stores. On August 20, 2012, Aetna informed Geiger that she no longer met the Plan’s definition of disability and terminated her benefits.

Geiger appealed Aetna’s determination in February 2013. As part of the review, Aetna obtained peer reviews from two independent physicians, Drs. McPhee and Cirincione. Dr. McPhee concluded that Geiger’s ankle condition would not preclude her from sedentary work. Dr. McPhee also consulted Geiger’s anesthesiologist, Dr. Bukhalo, who agreed that Geiger was capable of sedentary work. Dr. Cirincione reached the opposite conclusion, finding that Geiger could not perform sedentary work.

On May 1, 2013, Aetna reinstated Geiger’s benefits, finding “sufficient medical evidence to support a functional impairment which precluded the employee from performing the material duties of her own occupation,” and concluding that Geiger met the more stringent standard of “being totally disabled from any gainful occupation” necessary to continue benefits beyond the 24 month period.

Because the Plan required proof of continued disability, Aetna began a subsequent review of Geiger’s disability claim in December of 2013 and January of 2014 by conducting physical activity surveillance on four occasions. The surveillance videos showed Geiger climbing into and driving an SUV, shopping at multiple stores, and carrying a bag. Aetna also requested an “Attending Physician Statement” (“APS”) from four of Geiger’s physicians, but only Dr. Roy responded. On January 17, 2014, Dr. Roy completed the APS, confirmed Geiger’s diagnoses, and opined that she was unable to work.

Aetna considered Dr. Roy’s evaluation in conjunction with the previous peer review reports it received from Drs. White, McPhee, and Cirincione, and informed Geiger that it had submitted her medical file claim report for a comprehensive clinical review on April 7, 2014. Aetna first obtained a clinical review from an in-house nurse, Ms. Judy Tierney. Ms. Tierney concluded that the record supported Dr. McPhee’s assessment that Geiger was capable of sedentary work.

On April 24, 2014, Aetna’s in-house vocation consultant, Janet Clifton, conducted a “Transferrable Skills Assessment” (“TSA”) to determine whether reasonable sedentary occupations existed for Geiger. The TSA included occupations within a 100 mile radius with a mean wage greater than $30.16 per hour that matched Geiger’s training, education, and work history. The TSA limited results to jobs with sedentary work for an 8 hour day, lifting or carrying 10 pounds occasionally, and standing, walking, or crouching occasionally. Based on the above criteria, the OASYS software produced two “fair” matches: Job Development Specialist and Commission Agent. Ms. Clifton’s TSA concluded that these two occupations matched Geiger’s capabilities, skills, and reasonable wage, and that a viable labor market existed.

On May 28, 2014, Aetna informed Geiger that it had again decided to terminate her long term disability benefits. Included in the letter was a summary of the surveillance, Dr. Roy’s APS and the prior independent peer reviews, the comprehensive clinical review, and the TSA. Geiger appealed her termination of benefits on November 21, 2014. In support of her appeal, Geiger submitted witness statements, medical records, and physician reports, including reports from Dr. Feldmann, a pain specialist, Dr. Roy, her primary care physician, and Dr. Foroohar, a neurosurgeon. Dr. Feldmann declined to opine on Geiger’s functional capacity but noted that Geiger reported improvements in her physical functioning. Dr. Foroohar reported that Geiger suffered from cervical spon-dylosis but did not restrict her from working.

Aetna retained Dr. Gutierrez, a board certified neurosurgeon, to conduct an independent physician peer review of Geiger’s claim. On January 20, 2016, Dr. Gutierrez issued an initial peer review report. As part of his review, Dr. Gutierrez attempted to contact Drs. Roy, Feldmann, and Foroo-har multiple times, but was unable to reach them. Dr. Gutierrez’s review considered Geiger’s prior medical history relating to her ankle and spine, video surveillance, reported physical exam findings and diagnostic testing results. He concluded that Geiger “does not have any profound functional impairments that are conclusively shown” and that “the medical documentation supports the claimant could sit, stand, use hands/arms/fingers to function consistently for 8-hour day.”

On January 21, 2015, Aetna sent Drs. Roy, Feldmann, and Foroohar the peer review report by Dr. Gutierrez and the surveillance videos and asked them to respond with any points of disagreement or commentary. Dr. Feldmann provided the sole response, which stated that Geiger’s activity in the surveillance video was the result of substantial amounts of pain medication, her restrictions on standing and walking should be more severe, and the impact of Geiger’s recent cervical radiculo-pathy was not addressed in the report.

On February 16, 2015, Dr. Gutierrez completed another physician review report noting the concerns expressed by Dr. Feldmann. Dr. Gutierrez unsuccessfully attempted to contact Dr. Feldmann twice in February 2015. His second report reached the same conclusion as the first. On February 24, 2015, Aetna informed Geiger that after reviewing her appeal it agreed with the original decision to terminate Geiger’s benefits.

On April 30, 2015, Geiger brought an action in the United States District Court for the Northern District of Illinois seeking reinstatement of her long term disability benefits. Geiger asserted that Aetna’s decision was arbitrary and capricious because: (1) her benefits were terminated in the absence of medical improvement and did not give consideration to her worsening medical condition when she challenged the benefit denial; (2) Aetna disregarded the impact of her severe pain on her ability to work; and (3) Aetna improperly relied on inconclusive surveillance evidence. After Plaintiffs request to conduct limited discovery was denied, the parties cross-moved for summary judgment.

Judge St. Eve denied summary judgment for Geiger and granted summary judgment for Aetna, finding that Aetna’s decision was not arbitrary and capricious. Specifically, the court found that Aetna: (1) minimized any conflict of interest stemming from its role as both administrator and insurer; (2) presented sufficient evidence supporting its decision to terminate benefits; (3) properly considered Geiger’s cervical impairment and pain; and (4) properly considered the surveillance video as part of its decision.

II. Discussion

Geiger presents two main issues on appeal: (1) whether Aetna’s termination and later refusal to reinstate Geiger’s benefits following her appeal was arbitrary and capricious; and (2) whether the district court abused its discretion in denying Geiger’s request for discovery.

A. The Arbitrary and Capricious Standard

“Absent special circumstances such as fraud or bad faith,” ERISA plans that vest the administrator with discretionary authority to construe the plan’s terms or determine benefit eligibility are reviewed under the arbitrary and capricious standard. Semien v. Life Ins. Co. of N. Am., 436 F.3d 805, 812 (7th Cir. 2006). A plan administrator’s decision “may not be deemed arbitrary and capricious so long as it is possible to offer a reasoned explanation, based on the evidence, for that decision.” Id. (quoting Trombetta v. Cragin Fed. Bank for Sav. Emp. Stock Ownership Plan, 102 F.3d 1435, 1438 (7th Cir. 1996)). In other words, “the reviewing court must ensure only that a plan administrator’s decision has rational support in the record.” Edwards v. Briggs & Stratton Ret. Plan, 639 F.3d 355, 360 (7th Cir. 2011).

i. The Occupational Assessment and TSA

Geiger first argues that Ms. Tier-ney’s occupational assessment was arbitrary and capricious because it ignored Dr. Cirincione’s evaluation and relied on Dr. McPhee’s evaluation. Ms. Tierney reviewed Geiger’s entire file, including the surveillance, and she acknowledged that Dr. Cirincione’s report conflicted with Dr. McPhee’s. However, Dr. Cirincione’s report relied on Geiger’s characterization of her ankle as “non-weightbearing or at least partial weightbearing with cane or assistive devices.” Surveillance indicated that Geiger did not use an assistive device and was able to enter and exit an SUV, shop at multiple locations for extended periods of time, and carry a shopping bag and purse. Ms. Tierney’s occupational assessment ultimately found that Geiger’s file and medical history “would not support impairment greater than the reviews provided by Dr. McPhee and ... Dr. Bukhalo on 4/12/13.” The new surveillance evidence partially corroborated Dr. McPhee’s report, and refuted Dr. Cirincione’s report. Thus, Ms. Tierney’s decision to credit Dr. McPhee’s findings had rational support in the record.

Second, Geiger asserts that Ms. Clifton’s TSA did not consider the differing medical opinions and identified jobs that were inconsistent with Geiger’s education, training and experience. The TSA found at least two sedentary jobs, including Job Development Specialist and Commission Agent, consistent with Geiger’s skills and functional abilities and exceeded her wage criteria of $30.16 per hour. The Plan defines “reasonable occupation” as “any gainful occupation for which you are, or may reasonably become, fitted by: education; training; or experience; and which results in; or can be expected to result in-, an income of more than 60% of your adjusted predisability earnings.” (emphasis added).

Geiger argues that the occupational assessment improperly identified two qualifying occupations because she only had experience as an account manager at Sprint. However, the italicized language in the previous paragraph requires only that one “may reasonably become” fitted by education, training, or experience. Geiger also argues that as an employee with no prior experience as a job development specialist or commission agent she would likely earn less than the median income identified for those jobs. Again, the italicized language, “can be expected to result in,” appears to contemplate that an employee’s income would increase as he or she gains experience. Ms. Clifton’s TSA had rational support in the record.

ii. Geiger’s Termination of Benefits and Appeal

Geiger argues that Aetna’s termination of Geiger’s benefits was arbitrary and capricious because Aetna relied on the same evidence it had previously considered when it reinstated her benefits, yet reached the opposite conclusion. Geiger claims that the only new evidence, the December 2013 video surveillance, showed her engaging in the same activities as in the prior surveillance. In support, Geiger states that, under this Court’s decision in Leger v. Tribune Co. Long Term Disability Benefit Plan, “the Plan should not be allowed to re-litigate what it already decided utilizing previously discredited evidence.” 557 F.3d 823 (7th Cir. 2009).

As discussed above, the new surveillance evidence supported Dr. McPhee’s report and refuted Dr. Cirincione’s report. As the plan administrator, Aetna was “entitled to seek and consider new information and, in appropriate cases, to change its mind.” Holmstrom v. Metro. Life Ins, Co., 615 F.3d 758, 767 (7th Cir. 2010). Leger did not hold that a plan administrator’s prior determination in favor (or against) a claimant “operates forever as an estoppel so that an insurer can never change its mind.” Leger, 557 F.3d at 832 (quoting McOsker v. Paul Revere Life Ins. Co., 279 F.3d 586, 589 (8th Cir. 2002)). Indeed, “ERISA does not prohibit a plan administrator from performing a periodic review of a beneficiary’s disability status.” Holmstrom, 615 F.3d at 767.

Geiger also takes issue with Aet-na’s appeal review, claiming that Dr. Gutierrez failed to specifically address her cervical spine impairment. As the district court correctly noted, Dr. Gutierrez’s initial report detailed Dr. Feldmann’s physical exam, radiographs, MRI, and electro-diagnostic studies of Geiger’s cervical spine, and explained that Geiger was “recommended for further surgery for multilevel radiculopathy” and had “a good prognosis for further functional improvement.” He concluded that Geiger “does not have any profound functional impairments that are conclusively shown” and that “the medical documentation supports the claimant could sit, stand, use hands/arms/fingers to function consistently for 8-hour day.” Moreover, Dr. Gutierrez sent his initial peer review report to Geiger’s physicians and asked them to respond with any points of disagreement or commentary. Dr. Feldmann provided the sole response, which stated that Geiger’s activity in the surveillance video was the result of substantial amounts of pain medication, her restrictions on standing and walking should be more severe, and the impact of Geiger’s recent cervical radiculopathy was not addressed in the report. Dr. Gutierrez completed another physician review report, which noted the concerns expressed by Dr. Feldmann. His second report reached the same conclusion as the first.

The district court correctly noted that Dr. Gutierrez acknowledged, rather than ignored, Geiger’s pain from her cervical spine condition, but concluded that it would not prevent her from performing sedentary work during an eight hour workday. Dr. Gutierrez even anticipated further pain and provided additional limitations to avoid it. In sum, Aetna’s termination and appeal review articulated “specific reasons for denial” and afforded Geiger “an opportunity for full and fair review by the administrator.” Holmstrom, 615 F.3d at 766 (quoting Tate v. Long Term Disability Plan for Salaried Emps. of Champion Int’l Corp. No. 506, 545 F.3d 555, 559 (7th Cir. 2008)). Because Aetna’s decision “has rational support in the record,” its decision was not arbitrary and capricious. Edwards, 639 F.3d at 360.

B. Geiger’s Request for Discovery

Geiger also argues the district court abused its discretion in denying Geiger’s request for discovery to depose Dr. Gutierrez and vocational consultant Clifton. Geiger claims that allegations in her complaint raised legitimate doubt as to whether Aet-na was acting as a neutral fiduciary and if Aetna’s medical and vocational consultants presented valid, objective opinions based on the entire claim record. In her complaint, Geiger alleged the following demonstrated a conflict of interest sufficient to allow discovery: Aetna’s repeated termination of her benefits, the termination of benefits on the eve of losing Social Security dependent benefits, the “deliberate” and “intentionally biased” review by the vocational consultant, and Dr. Gutierrez’s deliberate disregard of her cervical spine impairment.

A conflict of interest exists when, “as in this case, a plan administrator has both the discretionary authority to determine eligibility for benefits and the obligation to pay benefits when due.” Edwards, 639 F.3d at 364 (quoting Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 108, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008)). In Semien, this Court held “that discovery in a case challenging the benefits determination of plan administrators is permissible only in ‘exceptional’ circumstances ... in which the claimant can ‘identify a specific conflict of interest or instance of misconduct’ and ‘make a prima facie showing that there is good cause to believe limited discovery will reveal a procedural defect.’” Dennison v. MONY Life Ret. Income Sec. Plan for Emps., 710 F.3d 741, 746 (7th Cir. 2013) (quoting Semien, 436 F.3d at 816). However, following the Supreme Court’s decision in Glenn, we recognized “a softening, but not a rejection, of the standard announced in Semien.” Dennison, 710 F.3d at 747. “[Conflicts are but one factor among many that a reviewing judge must take into account.” Glenn, 554 U.S. at 116, 128 S.Ct. 2343. “It is thus not the existence of a conflict of interest — which is a given in almost all ERISA cases — but the gravity of the conflict, as inferred from the circumstances, that is critical.” Marrs v. Motorola, Inc., 577 F.3d 783, 789 (7th Cir. 2009). Conflicts “carry less weight when the insurer took active steps to reduce potential bias and to promote accuracy.” Raybourne v. Cigna Life Ins. Co. of New York, 700 F.3d 1076,1082 (7th Cir. 2012).

Here, the district court found that Aetna minimized any conflict of interest by implementing multiple safeguards. First, Aetna obtained numerous independent physician peer reviews. Second, Aetna and the independent physicians reached out to Geiger’s own physicians and addressed their concerns. Third, Aetna sent the surveillance video to Geiger’s physicians to ensure the video was assessed objectively. Finally, Aetna previously reversed its own decision and reinstated her benefits. The district court found that Aetna’s procedures were reasonable and sufficiently safeguarded against a detrimental conflict of interest, and denied Geiger’s request to conduct discovery. “[T]rial courts retain broad discretion to limit and manage discovery under Rule 26 of the civil rules.” Dennison, 710 F.3d at 747. We agree with the district court’s conflict analysis, and thus find that the district court did not abuse its discretion in denying Geiger’s request for discovery.

In sum, we find that Aetna’s decision to terminate Geiger’s long term disability benefits was not arbitrary and capricious, and the district court did not abuse its discretion in denying Geiger'S’ request for discovery. We therefore affirm the judgment of the district court.

Affirmed

      . A discectomy is a surgical procedure to remove a herniated intervertebral disc. Avas-cular necrosis of the talus is the death of bone tissue in the back of the foot caused by a lack of blood supply.


source: Caselaw Access Project

author: SMITH, Circuit Judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee v. Cynthia Louise HOBBS, Defendant-Appellant
    No. 16-1956
    United States Court of Appeals, Eighth Circuit.
    Submitted: September 21, 2016
    Filed: December 14, 2016

      Counsel who presented argument on behalf of the appellant was Heather Quick, AFPD, of Cedar Rapids, IA.
    Counsel who presented argument on behalf of the appellee was Andrew H. Kahl, AUSA, of Des Moines, IA.
    Before RILEY, Chief Judge, MURPHY and SMITH, Circuit Judges.
   SMITH, Circuit Judge.

A special condition of Cynthia Hobbs’s supervised release prohibits her from “direct, indirect, or electronic contact” with her husband. Because the record does not support this sweeping restriction on her important constitutional right of marriage, we vacate and remand for resentencing.

I. Background

In 2009, Hobbs and her husband were charged with aggravated identity theft and conspiring to commit bank fraud; They pleaded guilty. Hobbs was sentenced to 56 months’ imprisonment and 5 years’ supervised release. Her husband was sentenced to 80 months’ imprisonment and 5 years’ supervised release. They were ordered jointly to pay approximately $18,000 in restitution.

Hobbs entered supervision in November 2014. At first she did well. Then, in January 2016, probation moved to revoke her supervised release, alleging four violations of her release conditions. First, Hobbs moved from her registered address without telling her probation officer. Second, she failed to submit to a required urinalysis. Third, she left her job at McDonald’s without telling her probation officer. (These first three violations happened in January 2016.) And fourth, Hobbs stopped making restitution payments in August 2015, the month her husband was released.

In April 2016, Hobbs appeared before the court and admitted the violations. Noting Hobbs’s cooperation, the government asked that her release be modified rather than revoked. The government also asked the court to impose a condition of “no contact with her husband.”

The hearing focused on the no-contact issue. The court expressed concern that Hobbs’s violations, were connected to her husband’s release. “My understanding from speaking with the probation officer and reviewing the record,” said the court, “is that Ms. Hobbs was doing very well on supervision when she was living independently and Mr. Hobbs was still incarcerated.” “And then,” the court went- on, “this contact occurs with her spouse, and those positive steps forward cease and, in fact, she absconds from supervision. That time line seems to the court to be instructive.” A probation officer established Mr. Hobbs’s release date but did not establish that Hobbs had had any contact with her husband since his release.

The court then outlined its revocation sentence: 30 days’ imprisonment and no marital contact. The court emphasized the coincidence of Hobbs’s noncompliance and her husband’s release: “The court finds that the time line related to the release of her co-defendant and the introduction, reintroduction of her spouse, Jack Hobbs, into her home and her life .:. was one factor that appears to have contributed to the violations that occurred here.” The court acknowledged the constitutional implications of substantially restraining Hobbs’s marital liberties, but it considered the restrictions reasonably necessary for the remaining three-and-a-half years of her supervision.

The court entered an order modifying Hobbs’s supervised release to include this condition:

The defendant shall have no direct, indirect, or electronic contact with codefen-dant and husband, Jack Hobbs, during her term of supervised release.

Hobbs asks us to vacate the condition.

II. Discussion

“A sentencing judge is afforded wide discretion when imposing terms of supervised release, and we review a decision to impose special terms of supervised release for abuse of that discretion.” United States v. Crume, 422 F.3d 728, 732 (8th Cir. 2005) (citation omitted). Sentencing discretion is cabined by statute. 18 U.S.C. § 3583(d). The applicable statute requires, as relevant here, two things. First, special supervised-release conditions must reasonably relate to the nature and circumstances of the offense, the defendant’s history and characteristics, deterring criminal conduct, protecting the public, and promoting the defendant’s correctional needs. 18 U.S.C. §§ 3583(d)(1), 3553(a)(1), (2)(B)-(D); Crume, 422 F.3d at 733. And second, the conditions must not constrain the defendant’s liberty more than reasonably necessary to deter criminal conduct, protect the public, and promote her correctional needs. 18 U.S.C. §§ 3583(d)(2), 3553(a)(2)(B)-(C); Crume, 422 F.3d at 733.

The sentencing court’s wide discretion notwithstanding, “we are particularly reluctant to uphold sweeping restrictions on important constitutional rights.” Crume, 422 F.3d at 733. Currently, most sweeping restrictions seem to involve the Internet. See, e.g., United States v. West, 829 F.3d 1013,1020-21 (8th Cir. 2016) (ban on creating websites overbroad); Crume, 422 F.3d at 733 (ban on Internet access overbroad). Others involve library access and the parent-child relationship. See, e.g., United States v. Bender, 566 F.3d 748, 753 (8th Cir. 2009) (library access); United States v. Davis, 452 F.3d 991, 995 (8th Cir. 2006) (parent-child relationship). The sweeping restriction in this case involves another important constitutional right— marriage. Loving v. Virginia, 388 U.S. 1, 12, 87 S.Ct. 1817, 18 L.Ed.2d 1010 (1967).

Because of the important constitutional interest at stake, Hobbs urges de novo review, citing United States v. Kelly, 625 F.3d 516, 520 (8th Cir. 2010). Kelly states that we review the constitutionality of a supervised-release condition de novo. Id. Some cases have cited Kelly for this point. See, e.g., United States v. Schaefer, 675 F.3d 1122, 1125 (8th Cir. 2012). Other cases, though, have addressed sweeping restrictions under the abuse-of-discretion standard. See, e.g., Crume, 422 F.3d at 732-33. Because the condition here is an abuse of discretion, we do not decide whether the stricter de novo standard might apply.

Hobbs asks us to vacate the no-contact condition because it is unconstitutional and because it violates the special-conditions statute, 18 U.S.C. § 3583(d), in two ways: (1) it is not reasonably related to the sentencing goals, and (2) it deprives her of more liberty than necessary to advance those goals. The government acknowledges that a no-contact order between spouses is a sweeping restriction on an important constitutional right, but it argues that this record supports one. Upon review, we conclude that this record does not support one.

The district court based its decision on “the time line related to the release of [Hobbs’s] co-defendant and the introduction, reintroduction of her spouse, Jack Hobbs, into her home and her life.” The hearing transcript is the only explanation of the court’s decision. And the only record facts at the hearing were Hobbs’s admitted violations and her husband’s release date, August 3, 2015. On that day, Hobbs made her last restitution payment. Five months later, she moved, left her job, and failed to provide a urinalysis, all without telling probation. But nothing in the record shows that Hobbs’s husband influenced her to defy her release conditions. Her lawyer attributed her failings to a tax-lien and holiday-induced drug relapse. He did mention that the Hobbses were co-defendants in a pending state case, but he did not tell the district court anything else about that case.

On this record, then, the timeline-based decision was “pure speculation or assumption ].” Schaefer, 675 F.3d at 1124 (quoting United States v. Fenner, 600 F.3d 1014, 1027 (8th Cir. 2010)). The evidence did not justify effectively divorcing Hobbs from her husband during supervision to achieve any valid sentencing purpose. 18 U.S.C. § 3583(d)(2). United States v. Smith, on which the district court relied, is not' to the contrary. 436 F.3d 307 (1st Cir. 2006). Smith upheld a special condition separating the defendant from his daughter after his efforts to contact her “produced both a state court restraining order and a trespass notice.” Id. at 312. The rationale was public protection. Id. That rationale simply does not apply here.

Nor are the government's legal authorities controlling or persuasive. United States v. Rodriguez upheld a special condition prohibiting the defendant from contacting her husband without probation’s approval (a notably less restrictive condition than a blanket no-contact order). 178 Fed.Appx. 152,159 (3d Cir. 2006). She had committed her crimes — lying in a gun purchase — at her husband’s behest. Id. at 158. The rationale was reducing recidivism and protecting the public. Id. But nothing here suggests that Hobbs’s husband induced her crimes. The presentence report declares them “equally culpable.” The government’s other main case, State v. Tanner, is closer. 229 W.Va. 138, 727 S.E.2d 814 (2012). Tanner upheld a parole condition separating a couple who made and used methamphetamine together. Id. at 816. The rationale was reducing recidivism. Id. at 821. Certainly the Hobbses were criminals in concert. But the condition here was unrelated to the underlying offense, and the record does not connect Hobbs’s violations to her husband’s release, apart from the timing of her August 2015 violation. The evidence, then, is insufficient to support the restriction.

“[T]he state is inserting itself into [Hobbs’s] marital relationship in an overly broad way, and the condition thus involves a greater deprivation of liberty than is reasonably necessary.” United States v. Chong, 217 Fed.Appx. 637, 639 (9th Cir. 2007); see also United States v. Napulou, 593 F.3d 1041, 1046-47 (9th Cir. 2010) (vacating a condition barring contact with the defendant’s “life partner”). There is no suggestion, either, that the district court considered more narrowly tailored alternatives. It therefore abused its discretion. Because we vacate the condition under § 3583(d)(2), we do not consider whether it violates § 3583(d)(1) or is per se unconstitutional.

Hobbs asks us to remand with a closed record. When the government has had a full and fair opportunity to present its' evidence, we follow “ ‘the traditional path’ of limiting [it] to one bite at the apple.” United States v. Thomas, 630 F.3d 1055, 1057 (8th Cir. 2011) (quoting United States v. King, 598 F.3d 1043, 1050 (8th Cir. 2010)). The legal issue here was clear, and the government’s failure of proof is inexcusable. United States v. Johnson, 710 F.3d 784, 790 (8th Cir. 2013). It moved to revoke Hobbs’s release in late January 2016. The hearing was in early April. The government had ample opportunity to build its case. The transcript indicates that the parties knew the no-contact issue was coming. The district court had even researched it. “Because the government knew of its obligation and inexcusably failed to meet it, this case is remanded without the opportunity to expand the record.” Id.

III. Conclusion

Accordingly, we vacate the no-contact condition and remand for resentencing.

      . Hobbs does not challenge her imprisonment.


author: BEAM, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee v. Randy Scott SKARDA, Defendant-Appellant
    No. 15-3889
    United States Court of Appeals, Eighth Circuit.
    Submitted: November 14, 2016
    Filed: December 22, 2016

      Counsel who presented argument on behalf of the appellant and appeared on the brief was Kevin Joseph Chapman, of Willi-ston, ND.
    Counsel who presented argument on behalf of the appellee and appeared on the brief was Rick Lee Volk, AUSA, of Bismarck, ND.
    Before COLLOTON, BEAM, and GRUENDER, Circuit Judges.
   BEAM, Circuit Judge.

Randy Scott Skarda appeals his convictions for distribution of methamphetamine, conspiracy to distribute methamphetamine, distribution of cocaine, and possession of a firearm by a drug user, arguing that the district court erred in denying his motion to suppress and his motion for a new trial. For the reasons discussed below, we affirm.

I. BACKGROUND

Lynn Starr was arrested at her home in Ryder, North Dakota, on October 7, 2013, for drug trafficking offenses. During a search of her home, police found marijuana, methamphetamine, scales, plastic bags, and a cell phone. FBI Special Agent Coulter interviewed Starr and reviewed the list of contacts in her cell phone. Starr identified Skarda, who was listed in her cell phone, as one of her long-time methamphetamine suppliers. She was unable to provide Skarda’s address but gave a description of the property. She described Skarda’s residence as a farmstead or homestead with multiple buildings, a large, metal quonset-type building next to the residence, and equipment on the property. The residence was a one bedroom metal structure with water and electricity. She also noted that the home was undergoing construction. Specifically, Skarda had poured a foundation, built walls, and was beginning to insulate the walls and complete woodwork. Starr acknowledged that the property was possibly Skarda’s parents’ homestead.

Based on Starr’s testimony, Coulter applied for a search warrant for property in Keene, North Dakota, associated with Skarda. The warrant application listed the premises as “10952 32nd Street Northwest, Keene, North Dakota” (the 10952 address). The physical address came from North Dakota Department of Transportation records, which listed the 10952 address as Skarda’s residence. The affidavit accompanying the application also contained testimony from a confidential source (CS-5), who stated that he or she purchased methamphetamine from both Skarda and Starr. CS-5 purchased methamphetamine from Skarda at Skarda’s home, where he kept the methamphetamine in a quonset on his property. Magistrate Judge Klein signed the search warrant for the 10952 address at 4:15 p.m. on October 7,2013.

Before executing the warrant, police officers gathered to brief the operation. McKenzie County Deputy Sheriff Johan-sen, who lived near Skarda’s residence and knew the area, noticed that the address on the search warrant was not Skarda’s residence and notified Coulter. Johansen then contacted the McKenzie County dispatch and retrieved the correct address for Skar-da, which was 10841 28th Street Northwest, Keene, North Dakota (the 10841 address). Johansen and FBI Special Agent Bennett then went to the 10841 address to ensure the property matched Starr’s description. Bennett identified a metal structure, equipment on the property, and a residence under construction. Bureau of Indian Affairs Special Agent White viewed the 10841 address on Google Earth, noting a residence under construction and a quon-set, which also confirmed that Starr’s testimony was describing the 10841 address. Following this verification, at 6:02 p.m. on October 7, 2013, Coulter called the law clerk for another magistrate judge who was able to connect him to Magistrate Judge Klein at approximately 6:16 p.m. After Magistrate Judge Klein placed Coulter under oath, Coulter explained that the address on the search warrant was incorrect and told her that the correct address was 10841 28th Street Northwest. He explained that the 10952 address came from public records that he mistakenly believed to be correct when he submitted the warrant application. However, local police officers familiar with Keene noticed the mistake. Magistrate Judge Klein instructed Coulter to write in the correct address and initial the changes.

Police officers executed the search warrant at the 10841 address at 6:58 p.m. on October 7, 2013. They found drugs, drug-related items, cash, and firearms. In the quonset they found a firearm, ammunition, 138 grams of marijuana, small amounts of cocaine and methamphetamine, a glass smoking device, hypodermic needles and syringes, and plastic bags. In the house they found numerous firearms, $85,000 in cash, and a red bag containing methamphetamine and a glass smoking device that belonged to Skarda’s girlfriend, Tana Boots. While the search was ongoing, Skarda and Boots arrived at the residence. Shots were fired, and Skarda was injured. Law enforcement then searched Skarda’s vehicle and found a firearm, approximately $21,000 in cash, and Boots’ cellular phone. A copy of the search warrant with Coulter’s handwritten and initialed changes was left at the residence.

On October 10, 2013, Magistrate Judge Klein issued a supplemental search warrant reciting the events that occurred on October 7 regarding the incorrect address and handwritten changes on the search warrant. However, she inadvertently stated that the change request was made on October 8. On October 25, 2013, the government filed a Rule 36 motion to correct the supplemental search warrant so that it correctly noted the date Coulter requested the change. Magistrate Judge Klein granted the motion. On March 27, 2014, Skarda was charged with distribution of methamphetamine, conspiracy to distribute methamphetamine, distribution of cocaine, possession of a short-barreled rifle, and possession of a firearm by a drug user. Prior to trial, Skarda filed a motion to suppress, arguing that the search of his property on October 7, 2013, was illegal because the warrant was not supported by probable cause. Skarda also objected to Magistrate Judge Klein’s failure to record the telephone conversation with Coulter, arguing that it violated Rules 41 arid 4.1 of the Federal Rules of Criminal Procedure. The district court denied the motion holding that “the premises to be searched were described with sufficient particularity and adequate probable cause existed to support the issuance of the search warrant.” The district court further held that although Magistrate Judge Klein violated Rule 41, suppression was not the appropriate remedy. Finally, the district court held that “even if probable cause did not exist to issue the warrant in this case, the ‘good faith exception’ to the exclusionary rule ... would save the evidence seized from being suppressed.”

At trial, Starr testified that she had been purchasing methamphetamine weekly from Skarda for nine to ten months prior to her arrest. Several purchases occurred at Skarda’s home, and the three ounces of methamphetamine found when she was arrested in October 2013 came from Skarda. Shelly Suelzle, who was arrested in October 2013 for possession of methamphetamine, cocaine, and marijuana, testified that she obtained methamphetamine and cocaine from Skarda at her home in North Dakota. Frank Black testified that he purchased methamphetamine from Skarda at Skarda’s residence from 2012 to 2014. He also stated that a week before trial, while gambling at a casino in North Dakota, Skarda sat down next to him, cursed at him, and told him that he should have kept his “F’ing mouth shut.” As Black was leaving the casino, Skarda remarked, “You better go home.” The district court allowed Black’s testimony regarding the casino encounter as evidence of conscious guilt, despite Skarda’s objection. Starr’s sons, Anthony and Blue Sky Starr, also participated in the distribution of methamphetamine. Blue Sky went with Starr to meet Skarda at Skarda’s residence on at least two occasions. Thus, Blue Sky was able to identify Skarda’s residence from photographs admitted at trial.

The jury found Skarda guilty of all counts except possession of a short-barreled rifle. Skarda then filed a motion for judgment of acquittal or new trial on the basis that the district court erred by admitting Black’s testimony about the casino encounter. The motion was denied, and Skarda was sentenced to 120 months for each count, with the sentences running concurrently. Skarda now appeals, arguing that the district court erred in denying his motion to suppress because (1) changing the address on the search warrant violated Rule 41 and Rule 4.1 of the Federal Rules of Criminal Procedure; (2) the warrant was not based on any particularized probable cause; and (3) the good faith exception did not save the illegal search. Skarda also argues that the district court erred in denying his motion for a new trial because allowing Black’s testimony was an abuse of discretion.

II. DISCUSSION

A. Motion to Suppress

“When reviewing a district court’s denial of a suppression motion, we review for clear error the district court’s factual findings and review de novo whether the Fourth Amendment was violated.” United States v. Welch, 811 F.3d 275, 279 (8th Cir.) (quoting United States v. Bell, 480 F.3d 860, 863 (8th Cir. 2007)), cert. denied, — U.S. —, 136 S.Ct. 2476, 195 L.Ed.2d 811 (2016).

1. Rule 41 and Rule 4.1 of the Federal Rules of Criminal Procedure

Skarda argues that changing the address on the search warrant violated Rule 41 and Rule 4.1 of the Federal Rule's of Criminal Procedure and further invalidated the search warrant. Rule 41(d)(3) states, “In accordance .with Rule 4.1, a magistrate judge may issue a warrant based on information communicated by telephone or other reliable electronic means.” Rule 4.1(b) lists the procedures for issuing a warrant by telephone or other electronic means. “The judge must place under oath — and may examine — the applicant and. any person on whose testimony the application is based.” Fed. R. Crim. P. 4.1(b)(1). Where the applicant only verifies information contained in an affidavit, the judge need only “acknowledge the attestation in writing on the affidavit.” Id. 4.1(b)(2)(A). However, where the judge allows additional testimony or exhibits, he or she must:

(i) have the testimony recorded verbatim by an electronic recording device, by a court reporter, or in writing; (ii) have any recording or reporter’s notes transcribed, have the transcription certified as accurate, and file it; (iii) sign any other written record, certify its accuracy, and file it; and (iv) make sure that the exhibits are filed.

Id. 4.1(b)(2)(B).

Because the phone conversation between Coulter and Magistrate Judge Klein was not recorded, it violated Rule 4.1. However, as the district court correctly held, suppressing the evidence was not the correct remedy. A violation of Rule 41 warrants exclusion only when (1) the violation is of constitutional magnitude; (2) the defendant is prejudiced in that the search would not have taken place or would not have been as intrusive; or (3) there is evidence of an intentional and deliberate or reckless disregard for the rule. United States v. Freeman, 897 F.2d 346, 350 (8th Cir. 1990).

First, the violation was not one of constitutional magnitude. “The Warrant Clause of the Fourth Amendment requires that warrants (1) be issued by a neutral and detached magistrate, (2) contain a ‘particular ] description of] the place to be searched, and the persons or things to be seized,’ and (3) be based ‘upon probable cause, supported by Oath or affirmation.’ ” United States v. Clyburn, 24 F.3d 613, 617 (4th Cir. 1994) (quoting U.S. Const. amend. IV). There is no requirement that oral testimony in support of the warrant be recorded. Id. Similarly, “the Fourth Amendment does not require the issuing judge to record sworn supplementary oral testimony.” United States v. Cote, 569 F.3d 391, 392-93 (8th Cir. 2009). Magistrate Judge Klein, a neutral magistrate, placed Coulter under oath before he provided information about the incorrect address on the search warrant. The constitutional requirements for the search warrant were met, and thus, there was no violation of constitutional magnitude.

Second, Skarda was not prejudiced by the violation. Skarda claims that he was prejudiced because due to the lack of recording, there is no opportunity for meaningful review. However, there was meaningful review at the suppression hearing, and the entire record gives ample information for review by this court. Moreover, evidence will not be suppressed for a violation of Rule 41 unless the search would not have taken place or would have been less intrusive had the rule been followed. Freeman, 897 F.2d at 350. Here* there is no evidence that the search would not have occurred or would have been conducted differently had the phone call been recorded.

Third, there is no evidence of an intentional and deliberate or reckless disregard for the rule. As the district court noted, “recording the conversation would have been very difficult under the circumstances.” The phone call occurred after normal court hours, and both parties were using cell phones. Thus, the failure to record the conversation appears to have been inadvertent, not intentional. Additionally, “the exclusionary rule is designed to deter police misconduct rather than to punish the errors of judges and magistrates.” United States v. Leon, 468 U.S. 897, 916, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984). According to Rule 4.1, any oversight in recording the telephone conversation is attributed to Magistrate Judge Klein, not Coulter. It was her duty to record the conversation. Fed. R. Crim. P. 4.1. Thus, “on the facts of this case, exclusion is an inapt remedy.” United States v. Chaar, 137 F.3d 359, 362 (6th Cir. 1998). As such, even though the telephone call between Coulter and Magistrate Judge Klein and the resulting change in address on the search warrant violated Rule 41 and Rule 4.1, the violation does not warrant suppression of the evidence.

2. Probable Cause

Skarda also argues that the search warrant was invalid and the search illegal because the warrant was not based on particularized probable cause. According to Skarda, even after the warrant was corrected following the telephone call to Magistrate Judge Klein, there was only probable cause to search the property at the 10952 address, not the 10841 address. We review the probable cause determination de novo. United States v. Gonzalez, 781 F.3d 422, 427 (8th Cir.), cert, denied, — U.S. —, 136 S.Ct. 139, 193 L.Ed.2d 105 (2015). However, we grant “great deference” to the initial determination that there was probable cause for the search. United States v. Smith, 581 F.3d 692, 694 (8th Cir. 2009). We will affirm the district court’s denial of a motion to suppress “unless the decision is unsupported by substantial evidence, is based on an erroneous view of the applicable law, or in light of the entire record, we are left with a firm and definite conviction that a mistake has been made.” United States v. Puckett, 466 F.3d 626, 629 (8th Cir. 2006) (quoting United States v. Vanhorn, 296 F.3d 713, 717 (8th Cir. 2002)).

A magistrate judge may issue a search warrant “upon a showing of probable cause to believe that the legitimate object of a search is located in a particular place.” Steagald v. United States, 451 U.S. 204, 213, 101 S.Ct. 1642, 68 L.Ed.2d 38 (1981). A showing of probable cause requires “evidence of a nexus between the contraband and the place to be searched.” United States v. Tellez, 217 F.3d 547, 550 (8th Cir. 2000). The court must make a “common-sense decision” based on the totality of the circumstances set forth in the affidavit as to whether “there is a fair probability that contraband or evidence of a crime will be found in a particular place.” Illinois v. Gates, 462 U.S. 213, 238, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983).

Here, law enforcement found methamphetamine on Starr that she purchased from Skarda. Starr also had Skarda’s phone number in her cell phone. CS-5 corroborated Starr’s testimony about Skarda’s drug dealing and stated that he or she had also purchased methamphetamine from Skarda. Starr gave a physical description of Skarda’s residence, noting that it might possibly be Skarda’s parents’ homestead but emphasizing that Skarda lived there. She stated that the residence was a one-bedroom metal structure with water and electricity running to it that was currently under construction. She also noted that there was a large quonset metal structure next to the home, as well as equipment on the property. CS-5 substantiated Starr’s physical description of Skar-da’s residence, noting that Skarda kept methamphetamine in the quonset on his farm property. The original address on the warrant was incorrect because the Department of Transportation records for Skarda were incorrect. The mistake was realized prior to the execution of the warrant, Jo-hansen obtained the correct address from dispatch, the new address was verified, and the warrant was corrected. Thus, the affidavit established a clear nexus between drug dealing and Skarda’s residence, such that the mere address change had no effect on the validity of the warrant.

Skarda further argues that the change in address interfered with the sufficiency of the description of the place to be searched.

The test for determining the sufficiency of the description of the place to be searched is whether the place to be searched is described with sufficient particularity as to enable the executing officer to locate and identify the premises with reasonable effort, and whether there is any reasonable probability that another premise might be mistakenly searched.

United States v. Gitcho, 601 F.2d 369, 371 (8th Cir. 1979). As discussed above, the physical description provided by Starr and CS-5 sufficiently described the 10841 address so that officers could locate Skarda’s residence. After learning of the incorrect address, Johansen and Bennett visited the property and were able to confirm that the 10841 address was the correct address based on the descriptions given by Starr and CS-5. White was also able to identify the 10841 address via Google Earth and confirm that it matched the description previously provided. Thus, the first prong of the test is met. Skarda next argues that Starr’s description is insufficient because it would fit 99.99% of all rural farmsteads in North Dakota and thus fails .the second prong of the test. This argument disregards Starr’s testimony that Skarda’s residence was under construction. Specifically, she testified that a foundation had been poured, new walls had been constructed, and insulation and woodwork were beginning. This distinguishes Skarda’s residence from most other rural farmsteads in North Dakota. The second prong is met. Thus, the description was sufficient, and the district court properly determined that probable cause existed to search the property located at the 10841 address.

B. Motion for a New Trial

Skarda’s motion for a new trial was based on the district court’s decision to allow evidence that Skarda sought to and did intimidate witness Black as seemingly evidenced by Black’s early exit from the casino. At trial, Black testified that a week before trial Skarda approached him at a casino, cursed at him, and made threatening statements. The district court held that Skarda’s encounter with Black at the casino was “indicative of some consciousness of guilt.” The district court then conducted an analysis under Rule 403 of the Federal Rules of Evidence and held that the probative value of the evidence was not outweighed by unfair prejudice. Skarda argues that this was in error.

We review the district court’s admission of evidence of witness intimidation for an abuse of discretion. United States v. Zierke, 618 F.3d 755, 759 (8th Cir. 2010). It is well established in the Eighth Circuit that threats against witnesses are “generally admissible against a criminal defendant to show consciousness of guilt of the crime charged.” Id. (quoting United States v. DeAngelo, 13 F.3d 1228, 1232 (8th Cir. 1994)). Moreover, the evidence “is considered ‘direct evidence of the crime charged’ and is not subject to a Rule 404(b) analysis.” United States v. Castleman, 795 F.3d 904, 915 (8th Cir. 2015) (quoting Zierke, 618 F.3d at 759), cert. denied, — U.S.—, 136 S.Ct. 912, 193 L.Ed.2d 802 (2016).

Skarda relied on United States v. Weir, 575 F.2d 668 (8th Cir. 1978), where the district court erred by allowing evidence that the defendant attempted to kill an informant and threatened to kill a witness and FBI agent. Id. at 669. The testimony was admitted at trial to explain how the witness identified the defendant. Id. at 670. This court reversed, holding that identification testimony “could have been offered into evidence, by appropriate questions, without going into the objectionable ‘other crimes’ [or attempted murder] evidence.” Id. at 671. The court reversed the conviction, held that the evidence “was substantially outweighed by the danger of unfair prejudice,” and noted “that it should have been excluded under Fed. R. Evid. 403.” Id. at 670. Weir, however, is easily distinguished. In Weir the district court admitted the disputed testimony as evidence of “other crimes” to show the identity of the defendant under Rule 404(b). Here, the testimony was admitted as evidence of Skarda’s consciousness of his own guilt.

Moreover, since Weir, this court has consistently held that evidence of threats against witnesses are generally admissible, even if prejudicial. See Castleman, 795 F.3d at 915; Zierke, 618 F.3d at 759; DeAngelo, 13 F.3d at 1232. Rule 403 of the Federal Rules of Evidence only excludes evidence that is “unfairly] prejudicial].” “[E]vidence is not unfairly prejudicial merely because it tends to prove a defendant’s guilt.” Zierke, 618 F.3d at 759 (quoting United States v. Boesen, 541 F.3d 838, 849 (8th Cir. 2008)). Contrary to Skar-da’s argument, the government did not argue or imply that the jury should convict Skarda because of his bad character. Rather, Black’s testimony was used to show Skarda was guilty of the charged crime. Additionally, the testimony was not excessively emotional or inflammatory. Thus, the district court did not abuse its discretion by admitting the testimony.

III. CONCLUSION

The judgment of the district court is affirmed.

      . The Honorable Daniel L. Hovland, United States District Judge for the District of North Dakota.

      . Although the good faith exception to the exclusionary rule would likely save the evidence from being suppressed, because we hold that adequate probable cause existed and the search warrant sufficiently described the property to be searched, we need not address this argument.


text:
    NATIONWIDE PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff-Appellee v. Donald R. FAIRCLOTH, Jr., Defendant-Appellant Robert Jones; Carolyn Jones; Randall Cohea, Defendants
    No. 15-3378
    United States Court of Appeals, Eighth Circuit.
    Submitted: September 22, 2016
    Filed: December 28, 2016

      Counsel who appeared on the brief and presented argument on behalf of the appellant was Lawrence W. Jackson, of Marion, AR.
    Counsel who presented argument on behalf of the appellee was Mark D. Wankum, of Little Rock, AR. The following attorney(s) appeared on the appellee brief; Randy P. Murphy, of Little Rock, AR., Mark D. Wankum, of Little Rock, AR.
    Before RILEY, Chief Judge, MURPHY and SMITH, Circuit Judges.
   SMITH, Circuit Judge.

Donald Faircloth purchased an automobile insurance policy online from Nationwide Property and Casualty Insurance Company (“Nationwide”). Faircloth •wrecked his car, and Nationwide rescinded the policy. Before the district court, Nationwide sought declaratory judgment that it had no duty to indemnify or defend Faircloth Under the policy’s coverage because Faircloth made material misrepresentations in his online insurance application. The district court granted summary judgment to Nationwide, concluding that Nationwide was entitled to rescind the policy because Faircloth misrepresented the “primary use” of his vehicle. We affirm.

I. Background

In May 2013, Donald Faircloth applied online for an automobile insurance policy from Nationwide. The application asked Faircloth to identify the “primary use” of the vehicle from a multiple choice list. According to Nationwide’s reproduction of the online application, Faircloth had three choices:. “Work/School (commute to/from, errands)”; “Pleasure (recreational driving)”; and “Business (deliveries, sales calls, taxi).” Faircloth answered “Work.” Nationwide approved Faircloth’s application and issued a policy.

On June 30, 2013, Faircloth hydroplaned, lost control of his vehicle, and crashed. On July 18, 2013, Nationwide decided to rescind Faircloth’s policy because Faircloth’s online application represented that Faircloth would maintain continuous insurance coverage until the Nationwide policy took effect, but Faircloth’s former insurance policy allegedly lapsed before the Nationwide policy took effect.

On November 4, 2013, Nationwide filed an action seeking declaratory judgment that it had no duty to indemnify or defend Faircloth -under the policy’s coverage because Faircloth made material misrepresentations in his application. Nationwide subsequently notified Faircloth that it was rescinding his policy and tendered his premiums to him; Faircloth did not accept or deposit the tender. On September 8, 2014, Nationwide deposed Faircloth and discovered that Faircloth used the vehicle to make business-related deliveries, putting over 1,200 miles a week on the vehicle for such deliveries. Nationwide contends that these facts establish that Faircloth also misrepresented his “primary use” of the vehicle as “work” instead of “business.” Faircloth and Nationwide filed competing motions for summary judgment.

The district court granted Nationwide’s motion for summary judgment and denied Faircloth’s motion as moot. Although Fair-cloth “kind-of dispute[d] whether the online application he filled out included the parentheticals” that explain the three primary-use choices, the court determined that Faircloth failed to raise a material question of fact about how the primary-use choices appeared. Thus, “[a] reasonable fact finder could come to only one conclusion: the parentheticals were there.” Therefore, the court held that Faircloth misrepresented his primary use of the vehicle because “[a] reasonable person in Faircloth’s position — a person putting 1,200 miles a week on his ear delivering things — would have chosen business as the primary use.”

II. Discussion'

Faircloth argues that the district court erred in granting Nationwide’s motion for summary judgment. First, he argues that the district court failed to address the “materiality” of the purported misrepresentation. Second, Faircloth argues that even if the misrepresentation was material, the application was ambiguous and Nationwide “cannot rescind the policy based on misrepresentations that it caused or induced.” Additionally, Faircloth argues that Nationwide failed to properly effectuate rescission under Arkansas law, Nationwide is estopped from rescinding the policy, and his third-party-liability coverage claim is not moot.

“We review de novo the district court’s grant of summary judgment and may affirm the judgment on any basis supported by the record.” Hohn v. BNSF Ry. Co., 707 F.3d 995, 1000 (8th Cir. 2013). Considering the facts in the light most favorable to the nonmovant, “[w]e will affirm the district court’s grant of summary judgment if ‘there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’ ” Chew v. Am. Greetings Corp., 754 F.3d 632, 635 (8th Cir. 2014) (quoting Fed. R. Civ. P. 56(a)). “Although the burden of demonstrating the absence of any genuine issue of material fact rests on the movant, a nonmovant may not rest upon mere denials or allegations, but must instead set forth specific facts sufficient to raise a genuine issue for trial.” Rohr v. Reliance Bank, 826 F.3d 1046, 1052 (8th Cir. 2016) (quoting Wingate v. Gage Cty. Sch. Dist., No. 34, 528 F.3d 1074, 1078-79 (8th Cir. 2008)).

“The burden of proof is particularly relevant when the party with the burden of proof moves for summary judgment and the opposing party presents evidence contesting the veracity of the mov-ant’s evidence.” United States v. 3234 Washington Ave. N., 480 F.3d 841, 845 (8th Cir. 2007). “In this situation, if the testimony of a witness ... is necessary to carry the movant’s burden of proof, we look carefully at whether the witness is unbiased and competent, and whether his testimony is positive, internally consistent, unequivocal, and in full accord with the documentary exhibits.” U.S. Commodity Futures Trading Comm’n v. Kratville, 796 F.3d 873, 890 (8th Cir. 2015) (quoting 3234 Washington Ave. N., 480 F.3d at 845). “If the movant makes this showing, then the opposing party cannot force a trial merely to cross-examine the witness or in the hope ‘that something might turn up at the trial.’ ” 3234 Washington Ave. N., 480 F.3d at 845 (quoting Lundeen v. Cordner, 354 F.2d 401, 408 (8th Cir. 1966)). However, summary judgment is improper when “ ‘specific facts are alleged that if proven would call the credibility of the moving party’s witness into doubt,’ ... especially when the challenged testimony ‘is an essential element of the plaintiffs case.’ ” Id. (quoting Lodge Hall Music, Inc. v. Waco Wrangler Club, Inc., 831 F.2d 77, 81 (5th Cir. 1987)). “Indeed, if the credibility of a critical interested witness is even partially undermined in a material way by the non-moving party’s evidence, summary judgment in favor of the party with the burden of proof should be denied.” Id.

As a federal court sitting in diversity, we apply the substantive law of the forum state — Arkansas. See Chew, 754 F.3d at 635. Under Arkansas law, an insurer may rescind an insurance policy for any misrepi*esentation that is “material,” even if such misrepresentation is not related to the loss sustained. See S. Farm Bureau Life Ins. Co. v. Cowger, 295 Ark. 250, 748 S.W.2d 332, 336 (1988). The insurer bears the burden of showing that had it known of the misrepresented facts, “the circumstances were such that it would not have issued the present coverage.” Brooks v. Town & Country Mut. Ins. Co., 294 Ark. 173, 741 S.W.2d 264, 265 (1987). Notably, “[t]he materiality to the risk of a fact misrepresented, omitted or concealed is a question of fact so long as the matter is debatable. It is a question of law only when so obvious that a contrary inference is not permissible.” Old Republic Ins. Co. v. Alexander, 245 Ark. 1029, 436 S.W.2d 829, 833 (1969).

Although the district court did not expressly address whether Faircloth’s misrepresentation was material, we “may affirm the judgment on any basis supported by the record.” Holm, 707 F.3d at 1000. Here, the record shows that Nationwide met its burden of establishing that it would not have issued the same coverage had Faircloth chosen “business” as his primary use. Nationwide presented the affidavit of Richard A. Yuill, an underwriter for Nationwide, which stated:

Had Nationwide known of Mr. Fair-cloth’s use of his vehicle as a delivery service in connection with his employment, including his full-time use [of] the vehicle as a delivery driver, he would not have been issued this policy over the online application. The policy purchased would not have been available, and he would have[,] [i]nstead, been referred to the Nationwide Call Center in order to purchase a business automobile insurance policy for the vehicle.

Because “[t]he policy purchased would not have been available” and Fair-cloth would have been referred to the call center “to purchase a business automobile insurance policy,” we conclude that had Nationwide known Faircloth’s primary use was “business,” it would not have issued the same policy. Faircloth argues that the district court overlooked “the admission by Yuill that ‘work’ and ‘business’ have the same colloquial meaning”; “the testimony by Yuill that there is no real criteria by which Nationwide determines the ‘primary use’ of a multi-use vehicle or the ‘materiality’ of a purported misrepresentation”; and ‘Yuill’s testimony that he ... did not know how any of the bases for rescission affected either the price or risk of the Policy.” However, none of these assertions, if proved, “would call the credibility of the moving party’s witness into doubt” as to “an essential element of the [Nationwide’s] case,” 3234 Washington Ave. N., 480 F.3d at 845, because none of these assertions contradict Yuill’s statement that Faircloth would have been referred to the Nationwide Call Center had he chosen “business” as his primary use. Thus, even assuming Yuill qualifies as an “interested witness,” his credibility was not “partially undermined in a material way by [Faircloth’s] evidence.” See id. Except for a general assertion that “materiality” is a fact question, Faircloth failed to present any contrary evidence indicating that Nationwide would have issued the same policy had he selected “business” as his primary use. Therefore, Faircloth failed to raise a genuine question of material fact as to the materiality of the misrepresentation. And even viewing the facts in the light most favorable to Faircloth, “a contrary inference is not permissible” as to the materiality of the primary-use selection. See Alexander, 436 S.W.2d at 833.

Alternatively, Faircloth argues that any misrepresentation (material or not) as to primary use was caused by ambiguities in the application and, therefore, Nationwide “cannot rescind the policy based on misrepresentations that it caused or induced.” We disagree. The district court correctly determined that Faircloth failed to raise a fact issue about how the application screen appeared. Therefore, the court presumes that the online application contained the parentheticals, which are not ambiguous as a matter of law. See Smith v. Prudential Prop. & Cas. Ins. Co., 340 Ark. 335, 10 S.W.3d 846, 850 (2000) (noting that the existence of an ambiguity is a question of law).

III. Conclusion

Accordingly, we affirm the judgment of the district court.

      . The Honorable D.P. Marshall Jr., United States District Judge for the Eastern District of Arkansas.

      . It is somewhat disputed whether Faircloth answered “worh/school’' or "work.” Faircloth contends that he answered "work,” and Nationwide contends that he answered "work/ school.” Although the district court used “work/school,” the distinction is immaterial for the purposes of our analysis.

      . Because we "may affirm the judgment on any basis supported by the record,” Holm, 707 F.3d at 1000, we decline to address either party's alternative arguments. To the extent those arguments could provide independent grounds for reversal, we have considered those arguments and find them to be without merit.


author: GRUENDER, Circuit Judge.

text:
    WEST VIRGINIA PIPE TRADES HEALTH & WELFARE FUND; Employees’ Retirement System of the State of Hawaii; Union Asset Management Holding AG, Plaintiffs-Appellants v. MEDTRONIC, INC.; William A. Hawkins; Gary L. Ellis; Richard E, Kuntz; Julie Bearcroft; Richard W. Treharne; Martin Yahiro, Defendants-Appellees Thomas A. Zdeblick; J. Kenneth Burkus; Scott D. Boden, Defendants
    No. 15-3468
    United States Court of Appeals, Eighth Circuit.
    Submitted: October 19, 2016
    Filed: December 28, 2016

      Counsel who presented argument on behalf of the appellant was Susan Katina Alexander, of San Francisco, CA. The following attorneys also appeared on the appellant brief; Andrew Love, of San Francisco, CA, Carolyn Glass Anderson, of Minneapolis, MN, Shawn A. Williams, of San Francisco, CA, Arthur C. Leahy, of San Diego, CA, Anne T. Regan, of Minneapolis, MN, Brian C. Gudmundson, of Minneapolis, MN, Danielle S. Myers, of San Diego, CA, Christopher M. Wood, of Nashville, TN, Christopher F. Moriarty, of Mount Pleasant, SC, David P. Abel, of Mount Pleasant, SC, James M. Hughes, of Mount Pleasant, SC, Susannah R. Conn, of San Diego, CA.
    Counsel who presented argument on behalf of the appellee was Linda T. Coberly, of Chicago, IL. The following attorneys also appeared on the appellee brief; James Kevin Langdon, II, of Minneapolis, MN, Theresa Marie Bevilacqua, of Minneapolis, MN, Kristin Kate Zinsmaster, of Minneapolis, MN, Benjamin L. Ellison, of Minneapolis, MN, Alexandra J. Schaller of Chicago, IL, and Andrew C Nichols of Washington, DC.
    Before GRUENDER, BEAM, and SHEPHERD, Circuit Judges.
   GRUENDER, Circuit Judge.

West Virginia Pipe Trades Health and Welfare Fund, Employees’ Retirement System of the State of Hawaii, and Union Asset Management Holding AG (collectively, “Appellants”) appeal the grant of summary judgment to Medtronic, Inc. in their securities fraud class action. The district court granted summary judgment to Med-tronic after determining that Appellants’ claims are time-barred. For the reasons discussed below, we vacate the summary judgment order and remand for further proceedings.

I.

Appellants are retirement and investment funds who brought a consolidated class action for securities fraud against Medtronic and several of its officers and senior managers for actions related to Medtronic’s INFUSE product. INFUSE is the trade name of rhBMP-2, a bone mor-phogenetic protein that causes the body to develop new bone tissue. Medtronic developed INFUSE as an alternative to bone grafting procedures, and the FDA approved it for use in lower back spinal fusion surgeries in 2002. In a traditional autograft spinal fusion procedure, the vertebrae are fused using a bone graft taken from the patient’s hip bone. In the INFUSE procedure, the vertebrae are fused using a thimble-shaped titanium cage containing an INFUSE-soaked collagen sponge. INFUSE is a key component of Medtronic’s multi-billion dollar spinal segment.

Medtronic sponsored the FDA clinical trials, and all thirteen of the resulting articles included authoring physicians who had financial interests in INFUSE. Pharmaceutical companies frequently sponsor the medical research of their products. However, the FDA specifically considered conflicts of interest during the INFUSE approval process. The FDA approved INFUSE only for use in lumbar spinal fusion surgeries, some dental surgeries, and for treating certain shin fractures. However, up to eighty-five percent of INFUSE use was off-label. In 2008, the FDA issued a public health notification associating off-label uses of INFUSE with life-threatening throat and neck swelling. In 2008, an unrelated party brought a class action against Medtronic alleging that it violated securities laws by promoting off-label use of INFUSE, See Minneapolis Firefighters’ Relief Ass’n v. Medtronic, Inc., 278 F.R.D. 454, 456 (D. Minn. Dec. 12, 2011). In 2011, the FDA refused to approve AMPLIFY, a high-strength version of INFUSE, because of concerns it may cause cancer.

In 2010, articles in the Milwaukee Journal Sentinel expressed concern that the doctors authoring the Medtronic-spon-sored INFUSE clinical studies had significant financial ties to Medtronic and reported test results twice as favorable as those of independent studies. Letters to the editor of the Journal of Bone and Joint Surgery raised questions about the link between INFUSE and retrograde ejaculation (a condition that causes male sterility). One of the physicians who authored the INFUSE clinical studies, Dr. Kenneth Burkus, penned a response denying any link. On May 25, 2011, the Milwaukee Journal Sentinel published an article stating that Medtronic and doctors with financial ties to Medtronic were aware of the risk of retrograde ejaculation but did not disclose it.

On the same day, Dr. Eugene Carragee, an independent doctor from the Stanford University School of Medicine, published a clinical study in The Spine Journal linking INFUSE with a risk of sterility in men. A commentary on Dr. Carragee’s study by Dr. James Kang of the University of Pittsburgh School of Medicine noted that the original Medtronic-sponsored publications did not report any adverse events despite the incidence of retrograde ejaculation, and Dr. Kang concluded that the conflict of interest was the only explanation for the difference between the studies. The New York Times summarized Dr. Carragee’s study and incorporated a l-esponse from one of the authors of a Medtronic-spon-sored study, Dr. Thomas Zdeblick, who implied that the Carragee study was misleading.

On June 22, 2011, the Senate Finance Committee issued a press release announcing an investigation into Medtronic and INFUSE. The press release expressed concern over Medtronic’s undisclosed financial ties with doctors. The next day, the Wall Street Journal summarized the Committee press release and reported the amount of royalties Dr. Burkus and Dr. Zdeblick had received. On June 28, 2011, The Spine Journal devoted its entire issue to articles concerning INFUSE and included an article authored by Dr. Carra-gee that extensively analyzed the Med-tronic-sponsored clinical studies. Dr. Car-ragee explained that the studies employed significantly flawed methodologies and failed to report adverse events. However, Dr. Carragee specifically refrained from drawing any conclusion about the doctors’ motives.

In October 2012, the Senate Finance Committee released its investigation report on INFUSE. The Committee found that Medtronic “was heavily involved in drafting, editing, and shaping the content of medical journal articles authored by its physician consultants who received significant amounts of money through royalties and consulting fees from Medtronic.” The Committee also found that Medtronic employees added language designed to exaggerate the disadvantages of standard spinal fusion techniques and recommended against publishing a complete list of adverse events associated with INFUSE. Finally, the committee found that Medtronic had attempted to adopt weaker safety rules for its clinical trials.

Appellants filed suit on June 27, 2013 against Medtronic, its officers and senior managers, and the doctors who authored the Medtronic-sponsored clinical studies. Appellants alleged a number of securities laws violations, including making false statements and employing a scheme to defraud the market. The district court initially dismissed Appellants’ scheme liability claims against the physician-authors and dismissed some of the false statement claims against Medtronic. However, the district court did not dismiss one false statement claim, the scheme liability claim, or the control liability claim against Med-tronic. The litigation proceeded, and Med-tronic eventually moved for summary judgment on all claims. The district court granted the motion, holding that the two-year statute of limitations barred all claims. Appellants only appeal the grant of summary judgment on their scheme liability claim. In addition to the statute of limitations, Medtronic argues alternatively that Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135,131 S.Ct. 2296, 180 L.Ed.2d 166 (2011), and Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148, 128 S.Ct. 761, 169 L.Ed.2d 627 (2008), bar Appellants’ scheme liability claim as a matter of law because it attempts to hold Medtronic secondarily liable for the fraudulent statements of others.

II.

A. Statute of Limitations

The court reviews a grant of summary judgment de novo, viewing the facts in the light most favorable to the nonmovant. Harris v. Mortg. Prof'ls, Inc., 781 F.3d 946, 948 (8th Cir. 2015). Summary judgment is appropriate when “the movant is entitled to judgment as a matter of law.” Id. (quoting Fed. R. Civ. P. 56(a)). “We review the district court’s determination of statute-of-limitations de novo.” In re ADC Telecomms., Inc. Sec. Litig., 409 F.3d 974, 976 (8th Cir. 2005).

Section 10b of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), makes illegal the use of a manipulative or deceptive device in connection with the sale or purchase of a security by any instrumentality of interstate commerce. 17 C.F.R. § 240.10b-5 implements § 10b, see Pub. Pension Fund Grp. v. KV Pharm. Co., 679 F.3d 972, 980 (8th Cir. 2012), and establishes two kinds of liability: false statement liability (17 C.F.R. § 240.10b-5(b)) and scheme liability (17 C.F.R. § 240.10b-5(a), (c)). Scheme liability concerns the use of “any device, scheme, or artifice to defraud” and “any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.” 17 C.F.R. § 240.10b-5(a), (c). 28 U.S.C. § 1658(b) establishes the relevant statute of limitations:

[A] private right of action that involves a claim of fraud, deceit, manipulation, or contrivance in contravention of a regulatory requirement concerning the securities laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), may be brought not later than the earlier of—
(1) 2 years after the discovery of the facts constituting the violation; or
(2) 5 years after such violation.

“ ‘[Discovery’ as used in this statute encompasses not only those facts the plaintiff actually knew, but also those facts a reasonably diligent plaintiff would have known.” Merck & Co., Inc. v. Reynolds, 559 U.S. 633, 648, 130 S.Ct. 1784, 176 L.Ed.2d 582 (2010). However, mere inquiry notice is not sufficient. See id. at 651, 130 S.Ct. 1784. The following elements comprise a scheme liability claim under 17 C.F.R. § 240.10b-5(a) and (c): “the defendant (1) committed a deceptive act (2) with scienter, (3) that the act affected the market for securities or was otherwise in connection with their purchase or sale, and (4) that defendants’ actions caused the plaintiffs’ injuries.” In re Parmalat Sec. Litig., 414 F.Supp.2d 428, 432 (S.D.N.Y. 2006). Although the law is unsettled as to whether all of the scheme liability elements are “facts constituting the violation” within the meaning of § 1658(b)(1), at a minimum the commission of a deceptive act and scienter are “facts constituting the violation.” See Merck, 559 U.S. at 648-49, 130 S.Ct. 1784 (quoting 28 U.S.C. § 1658(b)(1)). Accordingly, if Appellants did not discover or with reasonable diligence would not have discovered the particular facts constituting the deceptive act and the facts showing scienter prior to June 27, 2011, the statute of limitations does not bar Appellants’ claim.

While Appellants may have had reason to be suspicious of Medtronic’s conduct concerning INFUSE prior to June 27, 2011, we conclude that a reasonably diligent plaintiff would not have discovered facts sufficient to plead scienter based on public information existing prior to June 27, 2011. To plead scienter adequately, “plaintiffs must ‘state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.’ ” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) (quoting 15 U.S.C. § 78u-4(b)(2)). “To qualify as ‘strong’ within the intendment of § 21D(b)(2) [of the PSLRA, 15 U.S.C. § 78u-4(b)(2)],... an inference of scienter must be more than merely plausible or reasonable — it must be cogent and at least as compelling as any opposing inference of nonfraudulent intent.” Id. The Milwaukee Journal Sentinel articles in late 2010 described in detail the significant financial ties between Medtronic and the physician-authors. These articles also explained that Medtronic-sponsored studies produced test results twice as favorable as independent studies and noted that independent doctors attributed INFUSE’s success largely to the positive findings of Medtronic-affiliated surgeons. However, the December 26, 2010 article explained that “[t]here is no evidence any of the surgeons who have published articles on BMP-2 received royalties they did not deserve.”

Additionally, Dr. Kang’s commentary on May 25, 2011 characterized the problem as industry-wide, emphasizing that favorable reported results are a natural consequence of corporate-sponsored research generally. However, he emphasized that corporate-sponsored research is “absolutely needed to help advance innovation and patient care,” but independent studies must check corporate-sponsored research’s tendency toward bias. Other articles in The Spine Journal and the Milwaukee Journal Sentinel also discussed the concerns with INFUSE as exemplifying broader problems in the pharmaceutical industry and the FDA approval process. As a result, on May 25, 2011, one could reasonably infer that the problems with Medtronic’s studies were not due to fraud but due to the nature of corporate-sponsored research. Thus, the available information did not create the strong inference that Medtronic intended to employ a scheme to defraud the market by manipulating the clinical studies. That scienter did not become apparent until October 2012 when the Senate Finance Committee released its findings that Medtronic had intentionally edited the studies to omit unfavorable results.

In finding to the contrary, the district court emphasized three conclusions: (1) Dr. Carragee’s May 25, 2011 Spine Journal article and the subsequent news reports were sufficient to demonstrate scienter because they “showcase[d] early revelations of Medtronic’s drive to dominate the marketplace with INFUSE;” (2) the Minneapolis Firefighters litigation provided facts sufficient to plead scienter; and (3) the October 2012 Committee report fell outside the class period and was not tied to a drop in Medtronic stock, so it does not bear on the statute of limitations. We disagree. First, a desire to dominate the marketplace does not constitute scienter to perpetrate fraud on the market. Rather, it is a mainstream corporate goal companies regularly achieve by legitimate means. That some companies may use fraudulent means to accomplish that goal does not provide a strong inference that Medtronic intended to defraud the market. Second, none of the allegations in the Minneapolis Firefighters litigation would provide sufficient information to plead scienter in this case. Minneapolis Firefighters concerned Medtronic’s alleged promotion of off-label INFUSE use. It did not provide relevant information that would have allowed Appellants to assert a claim that Medtronic intentionally perpetrated a scheme to defraud the market by paying doctors to conceal INFUSE’s on-label use risks. See Minneapolis Firefighters’ Relief Ass’n, 278 F.R.D. at 456. Finally, whether the Committee report caused any market reaction concerns the element of loss causation, not scienter. Accordingly, the content of the report remains relevant to establishing when Appellants could have first pleaded scienter.

As a result, because Appellants could not have discovered with reasonable diligence sufficient information to plead scien-ter with the particularity necessary to survive a motion to dismiss prior to June 27, 2011, Appellants brought their complaint within the two-year statute of limitations. The district court did not reach the five-year statute of repose, and we decline to reach it now in the first instance.

B. Secondary Liability

In the alternative, Medtronic argues that Appellants’ scheme liability claim is barred as a matter of law by Janus Capital Group, Inc., 564 U.S. 135, 131 S.Ct. 2296, 180 L.Ed.2d 166 (2011), and Stoneridge Investment Partners, LLC, 552 U.S. 148, 128 S.Ct. 761, 169 L.Ed.2d 627 (2008). Medtronic initially raised this question in a motion to dismiss. The district court denied the motion as to this issue and allowed the scheme liability claim to proceed. The summary judgment proceedings did not address this argument. We review the questions of law de novo, taking the Appellants’ pleadings as true for this purpose. See Schmidt v. Des Moines Pub. Sch., 655 F.3d 811, 815 (8th Cir. 2011); Frey v. City of Herculaneum, 44 F.3d 667, 671 (8th Cir. 1995).

As a threshold matter, Appellants contend that the law of the case doctrine prevents this court from considering this argument. Appellants’ law of the case argument is incorrect. While the district court rejected Medtronic’s Janus and Stoneridge arguments at the motion to dismiss stage, this court is not bound by the district court’s determination. “The law of the case doctrine prevents the relitigation of a settled issue in a case and requires courts to adhere to decisions made in earlier proceedings.... ” United States v. Bartsh, 69 F.3d 864, 866 (8th Cir. 1995). However, the law of the case doctrine provides that once an appellate court has decided an issue in a case, the district court cannot revisit that determination on remand. See In re Raynor, 617 F.3d 1065, 1068 (8th Cir. 2010). It does not stand for the reverse proposition “that superior courts are bound by the decisions of inferi- or courts.” Id. It is well established that this court may affirm on any basis the record supports. Christiansen v. W. Branch Cmty. Sch. Dist., 674 F.3d 927, 934 (8th Cir. 2012).

Medtronic’s argument involves two related but distinct questions. The first involves a line of precedent rejecting implied private causes of action for aiding and abetting a violation of § 10b. In Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., the Supreme Court refused to extend the text of § 10b to encompass a private cause of action against actors that aid and abet other actors’ violations of § 10b. 511 U.S. 164, 191, 114 S.Ct. 1439, 128 L.Ed.2d 119 (1994). After Central Bank, Congress passed the Private Securities Litigation Reform Act, which declined to create a private cause of action for aiding and abetting and instead placed the authority to prosecute claims against aiders and abetters with the Securities and Exchange Commission. Stoneridge, 552 U.S. at 158,128 S.Ct. 761. Janus followed, and the Supreme Court reinforced Central Bank’s, rejection of aiding and abetting liability by holding that a private claim brought under Rule 10b-5 for making false statements may only be brought against the “person or entity with ultimate authority over the statement, including its content and whether and how to communicate it.” 564 U.S. at 142,131 S.Ct. 2296. The Court explained: “Such suits— against entities that contribute ‘substantial assistance’ to the making of a statement but do not actually make it — may be brought by the SEC but not by private parties.” Id. at 143,131 S.Ct. 2296 (citation omitted).

The broader scope of scheme liability under Rule 10b-5(a) and (c) potentially offers plaintiffs a means to circumvent Janus — a situation we encountered in Public Pension Fund Group v. KV Pharmaceutical Co., 679 F.3d 972 (8th Cir. 2012). In that case, investors asserted false statement claims against a pharmaceutical company for misrepresenting its compliance with FDA regulations in its SEC filings. The investors also attempted to assert a scheme liability claim against two of the pharmaceutical company’s officers, alleging only that the officers had knowledge of the company’s misrepresentations. We rejected the scheme liability claim, emphasizing that “a scheme liability claim must be based on conduct beyond misrepresentations or omissions actionable under Rule 10b-5(b).” Id, at 987. Otherwise, plaintiffs could simply recast false statement claims barred under Janus as scheme liability claims. See id. Without alleging that the officers engaged in conduct beyond misrepresentations, allegations that the officers simply knew about the company’s misrepresentations were insufficient to support a scheme liability claim. Id. Accordingly, a plaintiff cannot support a scheme liability claim by simply repackaging a fraudulent misrepresentation as a scheme to defraud. Rather, a plaintiff must allege some deceptive act other than the fraudulent misrepresentation.

In coming to this conclusion, this court relied on two cases from our sister circuits. KV Pharm. Co., 679 F.3d at 987. These cases provide good examples of the kinds of scheme liability claims that do not allege separate deceptive conduct. In WPP Luxembourg Gamma Three Sari v. Spot Runner, Inc., the Ninth Circuit explained that the plaintiff had not alleged facts separate from those of its Rule 10b-5(b) omission claim because “[t]he fraudulent scheme allegedly involved the Defendant-Appellees planning together to not disclose the Founders’ sale of securities in the secondary offering, and then not disclosing those sales; fundamentally, this is an omission claim.” 655 F.3d 1039, 1058 (9th Cir. 2011). The Ninth Circuit distinguished a Massachusetts case where the defendant allegedly worked to boost the company’s market price through activities other than omissions in investor reports. Id. (citing Swack v. Credit Suisse First Boston, 383 F.Supp.2d 223, 237 (D. Mass. 2004)). Likewise, in Lentell v. Merrill Lynch & Co., the Second Circuit rejected a scheme liability claim where the only market-manipulating conduct alleged was making a number of misrepresentations. 396 F.3d 161, 177 (2d Cir. 2005). District courts relying on KV Pharmaceutical have likewise adhered to this distinction in evaluating scheme liability claims. See, e.g., Cotter v. Gwyn, 2016 WL 4479510 at *7-8 (E.D. La. Aug. 25, 2016) (sustaining a scheme liability claim where plaintiff alleged that defendant company approved and facilitated self-interested transactions in addition to failing to report them); In re Smith Barney Transfer Agent Litig., 884 F.Supp.2d 152, 161 (S.D.N.Y. 2012) (sustaining a scheme liability claim where plaintiff alleged that defendants not only misleadingly disclosed fees but also channeled cost savings away from the mutual fund to which they properly belonged); William L. Thorp Revocable Trust v. Ameritas Inv. Corp., 57 F.Supp.3d 508, 527 (E.D.N.C. 2014) (rejecting a scheme liability claim where the only alleged deceptive acts were the oral misrepresentations of an investment agent to his client).

Here, Appellants allege conduct beyond mere misrepresentations or omissions actionable under Rule 10b-5(b). Appellants’ scheme liability claim alleges that Medtronic shaped the content of medical journals by “pa[ying] physicians ... to induce their complicity in concealing adverse events and side effects associated with the use of INFUSE and overstating the disadvantages of alternative bone graft procedures.” Although the scheme liability claim also includes allegations that Med-tronic edited language in the clinical studies that the physicians ultimately published, the act of paying physicians to induce their complicity is the allegation at the heart of the scheme liability claim. Paying someone else to make a misrepresentation is not itself a misrepresentation. Thus, Appellants do not merely repackage allegations of misrepresentation as allegations of a scheme. Janus and KV Pharmaceuticals require some conduct other than a misrepresentation to support a scheme liability claim. They do not hold that the alleged scheme can never involve any misrepresentation in order for the scheme liability claim to survive. See, e.g., In re Smith Barney, 884 F.Supp.2d at 161 (sustaining scheme liability claim where alleged conduct included but was not limited to misleadingly disclosing fees). Accordingly, because Medtronic’s alleged deceptive conduct goes beyond mere misrepresentations or omissions, Janus does not bar Appellants’ scheme liability claim.

The second part of Medtronic’s argument concerns whether Appellants have sufficiently pleaded that the market relied on Medtronic’s conduct as a matter of law. In Stoneridge, Charter Communications and its suppliers engaged in sham transactions designed to enable Charter to falsify its financial statements. 552 U.S. at 152-55, 128 S.Ct. 761. Investors sued the suppliers, asserting both a false statement claim and a scheme liability claim. While the investors argued that the suppliers’ participation in the sham transactions enabled Charter to falsify its statements, the Supreme Court held that the investors could not demonstrate that they relied on the suppliers’ conduct. Id. at 159, 128 S.Ct. 761. “Reliance by the plaintiff upon the defendant’s deceptive acts is an essential element of the § 10(b) private cause of action. It ensures that, for liability to arise, the ‘requisite causal connection between a defendant’s misrepresentation and a plaintiffs injury exists as a predicate for liability.” Id. (quoting Basic Inc. v. Levinson, 485 U.S. 224, 243, 108 S.Ct. 978, 99 L.Ed,2d 194 (1988)). The Court rejected the false statements claim, concluding that the causal connection between the suppliers and the falsified financial statements was too attenuated to support a finding of market reliance where the suppliers’ conduct did not satisfy any presumption of reliance and the investing public did not have knowledge of the suppliers’ deceptive acts. Id.

The Court also rejected the scheme liability claim, emphasizing that “this [scheme liability] approach does not answer the objection that petitioner did not in fact rely upon respondents’ own deceptive conduct.” Id. at 160, 128 S.Ct. 761. Since Charter filed the fraudulent financial statements, the suppliers did not make a misrepresentation that the public l-elied on. The suppliers’ participation in sham transactions did not reach the public and “nothing respondents did made it necessary or inevitable for Charter to record the transactions as it did.” Id. As a result, the causal link between the false financial statements and the suppliers’ conduct was too remote to demonstrate reliance. Id. at 161, 128 S.Ct. 761. Instead, the Court determined that allowing the scheme liability claim against the suppliers would “revive in substance the implied cause of action against all aiders and abettors except those who committed no deceptive act in the process of facilitating the fraud.” Id. at 162-63, 128 S.Ct. 761. As a result, under Stonendge, a plaintiff asserting a scheme liability claim must demonstrate that the causal connection between the defendants’ alleged deceptive act and the information on which the market relied is not too remote to support a finding of reliance.

Unlike the conduct at issue in Stonendge, the causal connection between Medtronic’s alleged deceptive conduct and the information on which the market relied is not too remote to support a finding of reliance. Medtronic’s alleged deceptive conduct consists of manipulating the clinical trials by paying the physician-authors to conceal adverse effects and to overstate the disadvantages of alternative procedures. Appellants alleged in their complaint that investors directly relied on the resulting favorable clinical trials. Indeed, according to the Appellants’ amended complaint, in speaking with potential investors, Medtronic’s CEO specifically emphasized that the company’s products’ strong clinical trial performance undergirded Med-tronic’s competitiveness and sustainability. As a result, taking the allegations as true, Medtronic’s deceptive conduct directly caused the production of the information on which the market relied. Unlike the suppliers’ conduct in Stonendge, Medtronic’s purported conduct would not merely assist or enable the physician-authors to deceive the market. Rather, Medtronic’s alleged conduct would deceive the market with the assistance of the physician-authors. A company cannot instruct individuals to take a certain action, pay to induce them to do it, and then claim any causal connection is too remote when they follow through. In this way, Medtronic’s alleged manipulative conduct directly caused the biased clinical trial results that the market relied upon. This alleged causal connection is sufficient to support a finding of reliance. Thus, Stonendge’s concern about resurrecting private aiding and abetting claims does not arise here. Accordingly, we decline to adopt Medtronic’s alternate ground for affirmance.

III.

For the reasons discussed above, we vacate summary judgment and remand for proceedings not inconsistent with this opinion.

      . In Merck & Co., Inc. v. Reynolds, the Supreme Court specifically left unresolved whether facts concerning a plaintiffs reliance, loss, and loss causation are among the facts constituting the violation that must be discovered in order for the statute of limitations to begin to run. 559 U.S. at 649, 130 S.Ct. 1784.

      . Accordingly, we need not resolve whether any elements other than the commission of a deceptive act and scienter are facts constituting the violation.

      . Notably, the Appellants did not assert a false statement claim based on the clinical trials.