source: Caselaw Access Project

author: MARCUS, Circuit Judge:

license: Public Domain

text:
    PROCAPS S.A., a Colombian sociedad anonima, Plaintiff-Appellant, v. PATHEON, INC., a Canadian corporation, Defendant-Appellee, Sobel USA, Inc., a Delaware corporation, et al., Defendants.
    No. 15-15326
    United States Court of Appeals, Eleventh Circuit.
    Filed: 12/30/2016

      Chris S. Coutroulis, Donald R. Schmidt, David Matthew Allen, Kathryn Harrigan Christian, Carlton Fields Jorden Burt, PA, Tampa, FL, Alan Rosenthal, Natalie J. Carlos, Avi Robert Kaufman, David Lanier Luck, Gary M. Pappas, Charles Woodward Throckmorton, Carlton Fields Jorden Burt, PA, Miami, FL, Robert Pass, Carlton Fields Jorden Burt, PA, Tallahassee, FL, Karen L. Hagberg, Michael B. Miller, Morrison & Foerster, LLP, New York, NY, for Plaintiff-Appellant.
    Michael J. Klisch, Deepti Bansal, Michael Howard Morse, Marc Schildkraut, Joshua S. Siegel, Meredith M. Snyder, Cooley, LLP, Washington, DC, Mazda K. Antia, Mary Kathryn Kelley, Cooley, LLP, San Diego, CA, Robert T. Cahill, Douglas P. Lobel, David A. Vogel, Cooley, LLP, Reston, VA, Lori R. Mason, Cooley, LLP, Palo Alto, CA, Robert M. Brochin, Morgan Lewis & Bockius, LLP, Miami, FL, Derek E. Leon, Leon Cosgrove, LLC, Coral Gables, FL, for Defendant-Appellee.
    Before MARCUS and DUBINA, Circuit Judges, and GOLDBERG, Judge.

       Honorable Richard W. Goldberg, Judge for the United States Court of International Trade, sitting by designation.

   MARCUS, Circuit Judge:

In this Sherman Act, 15 U.S.C. § 1, antitrust case, Procaps S.A. (“Procaps”) sued its former joint venture partner, Pa-theon, Inc. (“Patheon”). Both Procaps and Patheon are involved in the market for softgel services, i.e., the business of designing and manufacturing gel capsule delivery mechanisms for medications. In January 2012, Procaps and Patheon entered into an agreement (the “Collaboration Agreement”) to combine forces and create a more effective competitor in the United States softgel market. This Collaboration Agreement allocated some aspects of the business to Procaps and others to Patheon; both parties agree that the Collaboration enhanced competition at the outset.

Less than one year into the Collaboration, Patheon acquired Banner Pharma-caps (“Banner”), still another player in the business of designing and manufacturing softgels. Once it learned about the Banner acquisition, Procaps refused to participate in the Collaboration any further, because, it concluded, the Banner acquisition transformed the once-lawful Collaboration Agreement into a horizontal market allocation in restraint of trade. Instead, Procaps filed suit in the United States District Court for the Southern District of Florida alleging that Patheon’s conduct violated Section 1 of the Sherman Act. The district court ultimately granted summary judgment to Patheon, holding that Procaps had failed to adduce evidence of “actual anti-competitive effects” sufficient to survive summary judgment.

On appeal, Procaps argues that the trial court should have applied the per se rule, rather than rule of reason analysis, in order to determine whether Patheon had violated Section 1 of the Sherman Act, but that even when measured against the rule of reason, Procaps had presented sufficient evidence of anticompetitive effects to survive summary judgment. After thorough review and having the benefit of oral argument, we conclude that Patheon was entitled to summary judgment both because Procaps has failed to establish the foundational requirement of concerted action necessary to maintain a Section 1 claim under the Sherman Act, and because Procaps also failed to show any actual anticompeti-tive effects. Accordingly, we affirm.

I.

A.

The essential (and undisputed) facts drawn from an extensive summary judgment record are these. Both Procaps and Patheon are in the business of providing softgel sendees to pharmaceutical companies. Softgels are gelatin capsules that serve as oral delivery mechanisms for medications. There are two major steps necessary to provide softgel services: first, the softgel services provider must design the softgel to accommodate the specific medication it is designed to deliver, and then, the softgel services provider must devise a process for creating that softgel-medication combination on a commercially viable scale. In the industry, the first step generally is referred to as product development services (“PDS”) and the second as contract manufacturing operations (“CMO”).

The relevant market is further segmented based on the kind of medication provided: prescription medications, over the counter medications (“OTC”), or nutritional supplements. Obtaining a contract to provide services for prescription or OTC softgels is significantly more difficult than obtaining a contract to provide services for nutritional supplements, due in substantial measure to the overlay of FDA regulations. Moreover, it is difficult to develop the expertise needed to break into the prescription and OTC markets without significant hands-on experience developing softgels, and so new entrants often begin by targeting customers seeking services for nutritional supplements. Many never make it past this initial step.

In the softgel services market, pharmaceutical companies solicit bids from softgel services providers. Providers compete not only on the basis of price but also on a series of key contractual terms including initial pricing, pricing escalation, capital investment obligations, exclusivity provisions, limitations on liability, take-or-pay provisions, and agreements to reserve capacity. Pharmaceutical companies value softgel services providers with a global presence, and particularly favor those suppliers with substantial American or European manufacturing capacity. All other things being equal, those firms enjoy a competitive advantage.

Before the parties here entered into the Collaboration Agreement, Procaps and Pa-theon had each made an effort to break into the American softgel services market without much success. While both companies had their strengths, each was hamstrung by significant flaws. Procaps boasted a substantial manufacturing capability and valuable intellectual property, but its aspirations were stymied by its lack of marketing operations in the United States and a stigma attached as being a Colombian company. Patheon, in contrast, had little in the way of softgel-related intellectual property or manufacturing capacity, but it did have longstanding relationships with American pharmaceutical companies and an impressive marketing operation. Thus, in January 2012, Procaps and Patheon decided to pool their complementary attributes to create a new, more effective competitor in the American softgel market. On January 10, 2012, the two companies executed the Collaboration Agreement to market their combined softgel development and manufacturing services under the “P-Gels” brand. Under the Collaboration Agreement, Patheon would market the brand using its connections in the American market, manufacturing opportunities would be allocated exclusively to Procaps, and product development opportunities would be allocated between the parties as they arose by mutual agreement. Both parties were prohibited from competing with the Collaboration in the market covered by the Collaboration Agreement.

The Collaboration Agreement also contained express provisions to deal with the contingency that Procaps or Patheon could acquire a company that might infringe on the exclusivity provisions:

If during the Term a Party or any of its Affiliates acquires an entity by a Change of Control of a Third Party that would cause such Party or its Affiliates to be in breach of Sections 10.2 or 10.3 at the closing of such acquisition, then the acquiring party shall give advance notice to the other Party or make a public announcement of such acquisition, and the acquiring party must within six (6) months of such acquisition either (i) divest such portion of the acquired business that would be restricted by Sections 10.2 or 10.3 to a Third Party, or (b) include under this Agreement such portion of the acquired business solely with respect to any business or intellectual property activities conducted by the acquiring Party following the date of such acquisition.

The Collaboration Agreement also set forth specific dispute resolution procedures to govern conflicts “arising out of, relating to or in connection with” the Collaboration Agreement. Antitrust claims and certain intellectual property claims were expressly excluded from these dispute resolution procedures.

Originally, the Collaboration Agreement covered prescription softgels only, but the parties later expanded its scope to cover OTC products and services for ten enumerated customers. By August 2012, the Collaboration had submitted forty-three proposals but won only two contracts, valued at a total of $123,003.

During early to mid-2012, without Pro-caps’s knowledge, Patheon was involved in negotiations to acquire Banner. Unlike Pa-theon, Banner had substantial manufacturing capabilities. Patheon informed Procaps of the planned acquisition on October 22, 2012, and proposed several ideas — at a high level of generality — for incorporating the Banner assets into the Collaboration. Procaps, however, independently determined that going forward with the Collaboration would violate antitrust law. Pro-caps immediately “put everything on standby,” communicated to Patheon that it would not continue to participate in the allocation of customers contemplated by the Collaboration, and filed the instant lawsuit seeking damages and equitable relief based on alleged violations of Section 1 of the Sherman Act, 15 U.S.C. § 1, and the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), Fla. Stat. § 501.201 et seq. After receiving a copy of the Complaint, Patheon offered to terminate the Collaboration, but Procaps refused.

On December 14, 2012, Patheon closed on the Banner acquisition. To facilitate compliance with the Collaboration Agreement, Patheon appointed David Hamby to serve as a gatekeeper. Relying on the terms of the Collaboration Agreement, Hamby would determine whether any particular manufacturing opportunity fell within the ambit of the Collaboration. If it did, the opportunity would be sent to Pro-caps; if not, the opportunity would go to Banner or would not be pursued. Because Procaps had “suspended its performance,” Procaps refused to accept any opportunities allocated in this manner. Patheon continued to operate in this way until July 18, 2013, when Patheon terminated the Collaboration due to what it viewed as Procaps’s noncompliance. Patheon then began pursuing opportunities within the scope of the Collaboration Agreement using Banner assets.

B.

In its complaint, among other things, Procaps specifically alleged that the Banner acquisition placed Patheon in direct competition with Procaps, thus transforming the parties’ legitimate joint venture into a per se illegal horizontal restraint in violation of Section 1 of the Sherman Act.

Patheon moved to dismiss the complaint, arguing that Procaps had alleged only a per se claim, whereas the Collaboration Agreement should be evaluated under the rule of reason because of its potential for procompetitive efficiencies. Citing Palmer v. BRG of Georgia, Inc., 498 U.S. 46, 111 S.Ct. 401, 112 L.Ed.2d 349 (1990), the district court concluded that Procaps’s per se Section 1 claim survived dismissal because Procaps had sufficiently alleged a horizontal market allocation agreement.

Soon thereafter, the parties consented to jurisdiction before a magistrate judge, and filed cross motions for summary judgment. Among others, Patheon argued that there was no concerted action because Procaps never agreed with anyone to restrain trade, that rule of reason analysis applied rather than the per se rule, and, finally, that because Procaps was only pursuing a per se theory, Patheon was entitled to summary judgment. For its part, Procaps continued to urge that the once-lawful Collaboration Agreement was transformed into an illegal horizontal market allocation that was subject to per se rule analysis and, therefore, that there was no need to proceed to a full rule of reason analysis.

The magistrate judge denied both motions in large part. It rejected Patheon’s arguments regarding the lack of concerted action, reasoning that the Collaboration Agreement standing alone was sufficient to meet the concerted action requirement of Section 1 of the Sherman Act. The court did, however, agree with Patheon that the per se rule did not apply and determined that Procaps could pursue a rule of reason theory. After additional discovery, Patheon moved once again for summary judgment, which the trial court granted in a thoughtful and detailed analysis on the ground that Procaps had failed to establish any actual detrimental effects on competition.

Procaps timely appealed from the entry of final summary judgment for Patheon.

II.

We review a grant of summary judgment de novo, applying the same standard as the district court. Nat’l Parks Conservation Ass’n v. Norton, 324 F.3d 1229, 1236 (11th Cir. 2003). In conducting this analysis, we “view all of the evidence in a light most favorable to the nonmoving party and draw all reasonable inferences in that party’s favor.” Liese v. Indian River Cnty. Hosp. Dist., 701 F.3d 334, 342 (11th Cir. 2012) (quotation omitted). Summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The movant bears the burden of presenting “ ‘pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any” that establish the absence of any genuine, material factual dispute.” Focus on the Family v, Pinellas Suncoast Transit Auth., 344 F.3d 1263, 1272 (11th Cir. 2003) (quoting Fed. R. Civ. P. 56(c)).

Section 1 of the Sherman Act broadly declares illegal “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States....” 15 U.S.C. § 1. “A contract is a compact between two or more parties.” McGuire v. Sadler, 337 F.2d 902, 905 (5th Cir. 1964) (quotation omitted). Similarly, “[i]n any conspiracy, two or more entities that previously pursued their own interests separately are combining to act as one for their common benefit.” Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 769, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984); see also McAndrew v. Lockheed Martin Corp., 206 F.3d 1031, 1036 (11th Cir. 2000) (“[A] conspiracy requires a meeting of the minds between two or more persons to accomplish a common and unlawful plan.”). And like a contract or a conspiracy, a “combination” also “mean[s] ... an agreement between two or more persons.” Gorham & Johnson, Inc, v. Chrysler Corp., 308 F.2d 462, 468 (5th Cir. 1962). “Despite the different terminology, there is no magic unique to each term. Courts use the words ‘contract,’ ‘combination,’ and ‘conspiracy’ interchangeably.” Tidmore Oil Co., Inc, v. BP Oil Co./Gulf Prod. Div., a Div. of BP Oil Co., 932 F.2d 1384, 1388 (11th Cir. 1991). The common element to a “contract, combination ..., or conspiracy” is a requirement of concerted action. Copperweld, 467 U.S. at 767-68, 104 S.Ct. 2731. Therefore, to establish a Section 1 violation, the plaintiff must first show that there was concerted action between two or more persons — a “conscious commitment to a common scheme designed to achieve an unlawful objective” — in restraint of trade. Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 768,104 S.Ct. 1464, 79 L.Ed.2d 775 (1984).

In essence, Procaps argues that the Collaboration Agreement — although lawful at inception — was transformed into an illegal restraint of trade by Patheon’s acquisition of Banner. But, because Procaps has wholly failed to establish concerted action in restraint of trade, this argument fails.

Notably, the parties agree that the Collaboration Agreement was lawful at its inception. After all, the Collaboration Agreement created a legitimate joint venture that the parties hoped would be a more effective competitor in the American softgels market. The Agreement allocated the marketing responsibilities to Patheon and the manufacturing opportunities to Procaps. Like most joint venture agreements, the Collaboration Agreement provided that the two parties would not compete with each other within the scope of the Agreement. As part of these exclusivity provisions, Patheon agreed not to use its assets to pursue manufacturing opportunities within the United States. The Collaboration Agreement also provided that if Procaps or Patheon acquired an entity that put either party in breach of the exclusivity provisions, the acquiring party had two options: it could either divest any assets that violated the exclusivity provisions or figure out a way to include those assets within the Collaboration Agreement.

Procaps nonetheless argues that the Banner acquisition later transformed the Agreement into an illegal market allocation because the Agreement required Pa-theon to remove any Banner assets from the market. But the Collaboration Agreement required no such thing. The Agreement did not provide for the Banner acquisition, nor did it expressly require the removal of the Banner assets. Patheon chose to remove the Banner assets from the market, but Procaps never agreed to that. In fact, Procaps adamantly refused to participate in the Collaboration Agreement from the minute it learned of the Banner acquisition. Indeed, Procaps’s executives declared that Procaps “w[as] not going to participate in [the post-acquisition Collaboration Agreement].” “[W]e said... absolutely no, we have never done any illegal things, we’re not going to start doing illegal things and it was clear from day one.” We also note that although Procaps refused to participate in the post-acquisition Agreement, Procaps also refused to terminate the Collaboration, despite many offers from Patheon to do so. Regardless, because Procaps never made a “conscious commitment to a common scheme” to illegally restrain trade, the Collaboration Agreement cannot form the basis for a Section 1 claim. See Monsanto Co., 465 U.S. at 768,104 S.Ct. 1464.

We cannot accept Procaps’s argument that the simple existence of the contract — the Collaboration Agreement— standing alone, is enough to satisfy the concerted action requirement. While all contracts restrain trade to some extent, the Supreme Court has read “in restraint of trade” as used in Section 1 to prohibit only those contracts that unreasonably restrain trade. See, e.g., Nat’l Collegiate Athletic Ass’n v. Bd. of Regents of Univ. of Oklahoma, 468 U.S. 85, 98, 104 S.Ct. 2948, 82 L.Ed.2d 70 (1984). Therefore, although Section 1 specifically references contracts, we have held that a contract.can serve as the basis for a Section. 1 claim only if it embodies an agreement to unlawfully restrain trade. Tidmore Oil Co., 932 F.2d at 1388. Were this not the case, contractual partners would potentially be on the hook for any future conduct the other party engages in under. color of the contract. Such a rule could dissuade firms from pursuing joint ventures in the first place— collaborations that we have recognized often provide “otherwise unattainable pro-competitive benefits.” See, e.g., Nat’l Bancard Corp. (NaBanco) v. VISA U.S,A., Inc., .779 F.2d 592, 601 (11th Cir. 1986). It only takes a slight variation on the facts of this case to illustrate the problem with Procaps’s argument. Thus, for example, assume that, rather than Procaps suing Patheon, a pharmaceutical company had sued both Procaps and Patheon. On Pro-caps’s reasoning, Procaps would be liable for treble damages despite the fact that it had nothing to do with the removal of the Banner assets. This is not the law. Because there was never any concerted action between Procaps and Patheon to unlawfully restrain trade, Proeaps cannot make out a Section 1 claim based on the Collaboration Agreement. The Collaboration Agreement was lawful, at the outset (as all of the parties concede) and it was never transformed into an illegal arrangement between two or more parties.

To the extent that Procaps seeks to find the requisite duality or concerted activity between Patheon and Banner, that effort is also unavailing. At one time, this argument may have been viable under the in-tra-enterprise conspiracy doctrine, but the Supreme Court has long since rejected the doctrine. Copperweld, 467 U.S. at 777, 104 S.Ct. 2731. In Copperweld, the Supreme Court explained that Section 1 draws a distinction between concerted and independent action because the former “inherently is fraught with anticompetitive risk.” Id. at 768-69, 104 S.Ct. 2731. Concerted action “deprives the marketplace of the independent centers of decisionmaking that competition assumes and demands.” Id. at 769, 104 S.Ct. 2731. However, coordination between a corporation and its wholly owned subsidiary does not present the same risk because these entities already share a singular economic interest. Id. at 769-70, 104 S.Ct. 2731. And so, the Supreme Court held that such coordination is not concerted action for purposes of the Sherman Act. Id. at 777,104 S.Ct. 2731.

Following Copperweld, it is now basic hornbook law that a company and its wholly owned subsidiary are legally incapable of conspiring for purposes of a Section 1 claim. Id. Accordingly, in Section 1 antitrust cases where the defendant has undergone a merger during or around the time of the challenged conduct, courts have been careful to distinguish between pre- and post-merger conduct. See, e.g., Lantec, Inc, v. Novell, Inc., 306 F.3d 1003, 1029 (10th Cir. 2002) (rejecting the plaintiffs Section 1 claim because “Novell’s post-mei’ger actions taken alone are just as consistent with permissible competition agreed to after the merger as they are with an illegal conspiracy agreed to before the merger”) (quotation omitted); Sterling Merch., Inc. v. Nestle, S.A., 724 F.Supp.2d 245, 273 (D.P.R. 2010), aff'd, 656 F.3d 112 (1st Cir. 2011) (“Sterling’s allegations that Nestlé and Payco have illegally conspired to monopolize the ice cream distribution market necessarily fail as to all post-merger acts, because the coordinated acts of parent companies and their subsidiaries cannot constitute a Sherman Act claim for conspiracy.”). Again, Procaps has not challenged the merger itself as anticompeti-tive, and because it does not challenge any pre-merger conduct between Banner and Patheon, all that remains is Patheon and Banner’s post-merger conduct; therefore, any claim that Banner was Patheon’s co-conspirator is dead in the water. See Copperweld, 467 U.S. at 777, 104 S.Ct. 2731.

Section 1 targets concerted action, not independent action. Am. Needle, Inc, v. Nat’l Football League, 560 U.S. 183, 190, 130 S.Ct. 2201, 176 L.Ed.2d 947 (2010). Here, all of the alleged anticompeti-tive effects arose from Patheon’s unilateral decision to remove the Banner assets from the market, to which Procaps never acquiesced. Under Copperweld, Patheon’s post-merger coordination with Banner is insufficient as a matter of law to support a Section 1 claim. And there is simply no other basis for finding any concerted action between two or more parties required for a Section 1 claim. Having failed to establish concerted action, Procaps cannot establish an illegal agreement or conspiracy in restraint of trade.

III.

The magistrate judge granted summary judgment to Patheon on the alternative ground that Procaps had failed to establish that the restraint had anticompetitive effects. We agree with this conclusion, which offers a wholly independent basis for granting summary judgment to Patheon. Before we turn to the issue, however, we are required to first address Procaps’s suggestion that the magistrate judge should have applied the per se rule and presumed anticompetitive effects rather than the more commonly applied rule of reason.

We start with the general assumption that the rule of reason applies. Texaco Inc. v. Dagher, 547 U.S. 1, 5, 126 S.Ct. 1276, 164 L.Ed.2d 1 (2006); Seagood Trading Corp. v. Jerrico, Inc., 924 F.2d 1555, 1567 (11th Cir. 1991). The per se rule is reserved only for those agreements that are “so plainly anticompetitive that no elaborate study of the industry is needed to establish their illegality,” Nat’l Soc. of Prof'l Eng’rs v. United States, 435 U.S. 679, 692, 98 S.Ct. 1355, 55 L.Ed.2d 637 (1978), or that are “naked restraints] of trade with no purpose except stifling of competition,” Broad. Music, Inc, v. Columbia Broad. Sys., Inc., 441 U.S. 1, 20, 99 S.Ct. 1551, 60 L.Ed.2d 1 (1979) (quotation omitted). Put differently, the per se rule applies “only when history and analysis have shown that in sufficiently similar circumstances the rule of reason unequivocally results in a finding of liability.” Levine v. Cent. Fla. Med. Affiliates, Inc., 72 F.3d 1538,1549 (11th Cir. 1996) (quotation omitted). Indeed, a panel of this Court has observed that “the per se label should be applied infrequently and with caution.” Seagood Trading Corp., 924 F.2d at 1567.

Procaps argues, nevertheless, that simply because the post-acquisition agreement was a horizontal market allocation agreement between competitors, we are required to apply the per se rule. See Palmer v. BRG of Georgia, Inc., 498 U.S. 46, 111 S.Ct. 401, 112 L.Ed.2d 349 (1990). We remain unpersuaded. Palmer did not involve allegations that a lawful, procom-petitive joint venture was somehow transmuted into an unlawful horizontal market allocation by the unilateral conduct of one of the parties; rather, it presented a simpler case of two competitors agreeing to not compete in particular markets, uncoupled from any legitimate joint venture. Id. at 49-50, 111 S.Ct. 401. In Palmer, BRG and HB J, the two primary bar review providers in Georgia, entered into an agreement that gave BRG the exclusive right to use HBJ’s material in Georgia and required BRG to forgo pursuing business outside of Georgia. Id. at 46-47, 111 S.Ct. 401. “The revenue-sharing formula in the 1980 agreement between BRG and HBJ, coupled with the price increase that took place immediately after the parties agreed to cease competing with each other in 1980, indicates that this agreement was formed for the purpose and with the effect of raising the price of the bar review course.” Id. at 49, 111 S.Ct. 401 (quotation omitted). Because this agreement served no purpose other than to allocate territories and thus raise the price of bar review courses, the per se rule applied. Id. at 49-50, 111 S.Ct. 401.

Our precedent makes clear that just because an agreement is capable of being characterized as a market allocation agreement does not mean that the per se rule applies. See, e.g., Valley Drug Co. v. Geneva Pharmaceuticals, Inc., 344 F.3d 1294 (11th Cir. 2003). Thus, for example, Valley Drug involved what could reasonably be described as a series of market allocation agreements: pursuant to a series of settlement agreements, a patent holder paid fees to its potential competitors, and those competitors agreed not to enter the market, allocating the entire market to the patent holder. Id. at 1304. But because the agreements raised the issue in a new factual context with which we did not have a great deal of experience, this Court held that the per se rule should not apply. Id.; see also Broad. Music, Inc., 441 U.S. at 23, 99 S.Ct. 1551 (“Not all arrangements among actual or potential competitors that have an impact on price are per se violations of the Sherman Act or even unreasonable restraints.”); In re Sulfuric Acid Antitrust Litig., 703 F.3d 1004, 1008-14 (7th Cir. 2012) (applying the rule of reason because the output restricting agreements arose in a novel factual context).

Like Valley Drug, we do not have a great deal of experience with the kind of case at issue here. Neither party could point to a case in which a legitimate, procompetitive joint venture was transformed into an anticompetitive market allocation as a result of the unilateral conduct of one of the parties. Moreover, both parties have pointed to some procompeti-tive efficiencies that might flow from the Collaboration Agreement, even post-acquisition. For example, a Patheon executive offered that some Banner products might be cheaper to produce in Procaps’s Colombian facilities than in Banner’s American facilities. And a Procaps executive theorized that the addition of Banner’s FDA-approved American facilities could make the joint venture more competitive in the OTC market sector. In this context, the application of the per se rule is inappropriate. We are not prepared to condemn the Collaboration Agreement out of hand. Accordingly, we agree with the magistrate judge’s decision to apply the rule of reason.

Applying the rule of reason, we ask whether Procaps has shown that the alleged restraint has had an anticompeti-tive effect on the market. To do so, it may establish either (1) that the restraint had an “actual detrimental effect” on competition, or (2) that the restraint had the potential for genuine anticompetitive effects and that the conspirators had market power in the relevant market. Levine, 72 F.3d at 1551 (quoting FTC v. Indiana Fed’n of Dentists, 476 U.S. 447, 460-61, 106 S.Ct. 2009, 90 L.Ed.2d 445 (1986)); see also Doctor’s Hosp. of Jefferson, Inc, v. Se. Med. All., Inc., 123 F.3d 301, 311 n.20 (5th Cir. 1997) (“To the extent that DHJ relies on proof of the tendency of the defendants’ actions to have anticompetitive effects, as opposed to actual anticompetitive effects, DHJ must also establish market power in the relevant market in order to recover under Section 1.”). By the time of the second summary judgment briefing, Pro-caps had bound itself to proceed only on the first theory — that there were actual detrimental effects on competition.

Under our precedent, “[a]ctual anticompetitive effects include, but are not limited to, reduction of output, increase in price, or deterioration in quality.” Jacobs v. Tempur-Pedie Int’l, Inc., 626 F.3d 1327, 1339 (11th Cir. 2010). Significantly, a plaintiff may not meet its burden of showing actual anticompetitive effects with mere conclusory assertions; rather, we have repeatedly required a plaintiff to point to specific facts demonstrating harm to competition. See, e.g., id. (“The plaintiff has the burden of demonstrating damage to competition with specific factual allegations.”) (quotation omitted); Spanish Broad. Sys. of Fla., Inc, v. Clear Channel Commc’ns, Inc., 376 F.3d 1065, 1072-73 (11th Cir. 2004) (“Although damage to a critical competitor may also damage competition in general, [the plaintiff] bears the burden of drawing that implication with specific factual allegations.”). Proeaps has failed to point to any actual detrimental effects. It has presented no evidence of an actual reduction in output, or increase in price, or deterioration in quality.

Procaps argues, however, that it has met the burden of establishing actual anticom-petitive effects by presenting expert testimony, a series of emails demonstrating that potential customers were precluded from receiving bids from the Banner assets after they were removed, and internal Patheon documents that say that the Banner assets were removed from “a large share of the target market.” None of this evidence, however, comes close to establishing actual effects.

For starters, Procaps’s expert economist, Dr. Roger Blair, opined that “[t]he effect of removing the Banner assets from the relevant markets is to raise price, reduce quantity, and reduce consumer welfare” because “[tjhese are the predictable anticompetitive consequences of a horizontal market sharing agreement.” (emphasis added). However, Dr. Blair based his predictive opinion not on any specific examples of such effects, but on hypothetical supply and demand curves that one might expect to find in any first-year economics textbook. In the section of his report entitled “Actual Anticompetitive Effects of Pa-theon’s Market Division,” he simply restated that the removal of a competitor is “necessarily anticompetitive.” Procaps’s other expert, David Heyens — a former executive of Catalent Pharma Solutions, which was the dominant player in the American prescription and OTC softgels market — opined similarly that the removal of Banner would have resulted in worse outcomes for consumers. But he too relied only on inferences drawn from his abstract understanding of market conditions rather than from pointing to any particular data. Notably, at his deposition, Heyens acknowledged that his report did not observe that prices were actually higher or that quality was actually worse, or finally that output was actually decreased. And, although his report said that removal of the Banner assets would likely have an impact on the contracts that would be negotiated, he admitted that he did not determine any actual impact on those contract provisions. More tellingly, when questioned about his own experience as a Catalent executive, he admitted that Catalent neither raised prices, nor changed any contract terms when the Banner assets were removed because Catalent was not aware that the assets had been withdrawn.

Expert testimony of the kind Procaps offered regarding the likely effect of removing a competitor cannot take the place of presenting specific and concrete facts. We made that point clear in Spanish Broadcasting: “Although damage to a critical competitor may also damage competition in general, [the plaintiff] bears the burden of drawing that implication with specific factual allegations.” 376 F.3d at 1072-73. Were theoretical effects stated only at the highest level of abstraction enough, a plaintiff could trot out these same basic principles any time conduct resulted in harm to a competitor. The Sherman Act requires more.

Moreover, the emails and Pa-theon’s internal documents, whether reviewed alone or in concert, are not enough to establish actual anticompetitive effects. These documents tell us nothing more than that the Banner assets were removed. We have held that this is not sufficient — on its own — to establish harm to competition. See Spanish Broadcasting, 376 F.3d at 1072-73. And we are not alone in holding that more than harm to an individual competitor is required. See, e.g., Doctor’s Hosp. of Jefferson, Inc, v. Se. Med. All., Inc., 123 F.3d 301, 311 (5th Cir. 1997) (concluding that alleged injury to a competitor alone was insufficient to establish harm to competition); Capital Imaging Assocs., P.C. v. Mohawk Valley Med. Assocs., Inc., 996 F.2d 537, 543 (2d Cir. 1993) (explaining that the “plaintiff bears the initial burden of showing that the challenged action has had an actual adverse effect on competition as a whole in the relevant market; to prove it has been harmed as an individual competitor will not suffice”); Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1414 (9th Cir. 1991) (proof “that one nurse anesthetist no longer works at one hospital ... is not enough to demonstrate actual detrimental effects on competition”); Prod. Liab. Ins. Agency, Inc. v. Crum & Forster Ins. Cos., 682 F.2d 660, 663 (7th Cir. 1982) (“Now there is a sense in which eliminating even a single competitor reduces competition. But it is not the sense that is relevant in deciding whether the antitrust laws have been violated.”).

Procaps urges us to relax the actual effects standard based on isolated snippets from the Supreme Court’s decision in FTC v. Indiana Fed’n of Dentists, 476 U.S. 447, 106 S.Ct. 2009, 90 L.Ed.2d 445 (1986) (“IFD”). Again, we are unpersuaded. In IFD, the Supreme Court concluded that a dental association’s concerted refusal to supply x rays to insurers was illegal. Id. at 465-66, 106 S.Ct. 2009. As part of its reasoning, the Court observed:

A concerted and effective effort to withhold (or make more costly) information desired by consumers for the purpose of determining whether a particular purchase is cost justified is likely enough to disrupt the proper functioning of the price-setting mechanism of the market that it may be condemned even absent proof that it resulted in higher prices or, as here, the purchase of higher priced services, than would occur in its absence.

Id. at 461-62, 106 S.Ct. 2009. Procaps insists that this “likely enough” language entitles it to prove actual effects with predictive notions.

But IFD cannot be read to compel a general relaxation of the actual effects standard. Indeed, as we’ve observed, both this Court and our sister circuits have continued to require some empirical evidence of actual effects following IFD. See, e.g., United States v. Am. Express Co., 838 F.3d 179, 205-06 (2d Cir. 2016) (explaining that “Plaintiffs might have met their initial burden under the rule of reason by showing either that cardholders engaged in fewer credit-card transactions (i.e., reduced output), that card services were worse than they might otherwise have been (i.e., decreased quality), or that Amex’s pricing was set above competitive levels -within the credit-card industry (i.e., supracompetitive pricing),” but their claim failed because they offered no evidence to prove such adverse effects); Tops Markets, Inc, v. Quality Markets, Inc., 142 F.3d 90, 96 (2d Cir. 1998) (an affidavit “which discussed Quality’s high market share and the competitive advantages that could have resulted in potentially higher prices, but significantly did not allege that prices were actually higher in the Jamestown market” was insufficient to establish actual effects); Flegel v. Christian Hosp., Ne.-Nw., 4 F.3d 682, 688-89 (8th Cir. 1993) (affidavits from referring physicians asserting that the excluded urologists provided higher quality care were insufficient to establish evidence of actual effects); Capital Imaging Assocs., P.C. v. Mohawk Valley Med. Assocs., Inc., 996 F.2d 537, 546 (2d Cir. 1993) (plaintiff radiologists’ assertion that their exclusion from health maintenance organization (“HMO”) would result in increased prices and reduced quality to the HMO’s patients was insufficient to establish actual effects in the absence of any demonstrable change in price or quality); Military Servs. Realty, Inc. v. Realty Consultants of Va., Ltd., 823 F.2d 829, 832 (4th Cir. 1987) (rejecting expert testimony that asserted harm to competition based “on general economic theory” rather than “market surveys or other studies of the relevant market”).

Moreover, IFD is distinguishable for at least two significant reasons. First, IFD was primarily a quick look case. See California Dental, 526 U.S. at 770, 119 S.Ct. 1604 (characterizing IFD as the basis for quick look). Second, the evidence in that case showed that the restraint was actually very successful, rendering insurers entirely unable to obtain x rays in some locales — i.e., it actually affected the market in a concrete and palpable way. IFD, 476 U.S. at 460-61,106 S.Ct. 2009. Here, there is no evidence — none—that the alleged restraint had a market-wide effect on anything.

In one last effort, Procaps argues that being required to prove actual effects would have required that it proceed in concert with Patheon until there was sufficient “blood on the floor” to make the requisite showing. Procaps says that requiring the establishment of actual effects essentially penalizes it for not continuing to participate in Patheon’s illegal scheme. However, Procaps cites no authority for the assertion that the difficulty of making such a showing excuses it from doing so. That actual effects are sometimes difficult to establish does not relieve Procaps of its burden. See, e.g., Orson, Inc, v. Miramax Film Corp., 79 F.3d 1358, 1367 (3d Cir. 1996) (noting that proof of actual effects “is often impossible to make”); United States v. Brown Univ., 5 F.3d 658, 668 (3d Cir. 1993) (same). Simply put, because Procaps presented no specific and concrete factual evidence of actual effects, it has failed to meet its burden.

At bottom, this is essentially a breach of contract case — and so Procaps’s failure to support an antitrust theory is not all that surprising. As the First Circuit has observed, “[s]ome antitrust cases are intrinsically hopeless because ... they merely dress up in antitrust garb what is, at best, a business tort or contract violation.” Stop & Shop Supermarket Co. v. Blue Cross & Blue Shield of R.I., 373 F.3d 57, 69 (1st Cir. 2004). This is such a case. Because Procaps cannot establish concerted action, it cannot maintain a Section 1 claim. And because Procaps failed to adduce concrete evidence of actual anticom-petitive effects, it cannot establish that any claimed restraint was unreasonable. Either reason is sufficient to sustain the magistrate judge’s grant of final summary judgment in favor of Patheon. Accordingly, we affirm.

AFFIRMED.

      . Decisions of the Fifth Circuit, issued prior to the close of business on September 30, 1981 are binding precedent in this Circuit. Bonner v, City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc).

      . Patheon argued in district court that the doctrine of "unclean hands” independently barred Procaps's lawsuit. Our prior opinions have not been clear as to whether this theory is viable in the antitrust arena. Thus, for example, relying on Perma Life Mufflers, Inc, v, Int'l Parts Corp., 392 U.S. 134, 88 S.Ct. 1981, 20 L.Ed.2d 982 (1968), a panel of this Court observed in dicta that "because the Supreme Court has rejected the application of the doctrine of in pari delicto in antitrust actions, an agreement may be challenged even by one of the parties who has acquiesced in the unlawful agreement,” Tidmore Oil Co., 932 F.2d at 1388. But later, also in dicta, another panel clarified that "Perma Life Mufflers explicitly left open the possibility that a defense of active involvement could bar a complaint about an antitrust conspiracy.” Official Comm. of Unsecured Creditors of PSA, Inc, v. Edwards, 437 F.3d 1145, 1156 (11th Cir. 2006). It would be odd indeed to allow Procaps to challenge the very agreement it had consummated on the grounds that it was an unlawful one, but because Procaps has not established that the Collaboration Agreement was an unlawful agreement in the first place, we need not resolve the matter today.

      . These same reasons confirm that the quick look doctrine would also be inapplicable. The quick look doctrine falls somewhere between the conclusive presumption of the per se rule and the more searching rule of reason analysis. It applies where "an observer with even a rudimentary understanding of economics could conclude that the arrangements in question would have an anticompetitive effect on customers and markets.” See California Dental Ass'n v. FTC, 526 U.S. 756, 770, 119 S.Ct. 1604, 143 L.Ed,2d 935 (1999). The effects of the arrangements in this case are far from readily apparent.


author: JILL PRYOR, Circuit Judge:

text:
    Hsi CHANG, a.k.a. Mark Chang, Plaintiff-Appellant, v. JPMORGAN CHASE BANK, N.A., Defendant-Appellee.
    Nos. 15-13636; 15-14529
    United States Court of Appeals, Eleventh Circuit.
    Date Filed: 01/06/2017

      Brenda Marie Nelson, Carl Francis Schoeppl, Jr., Schoeppl Law, PA, Boca Raton, FL, for Plaintiff-Appellant.
    Andrew R. Herron, Herron Jacobs Ortiz, PA, Miami, FL, Brian Lechich, Herron Ortiz, Coral Gables, FL, for Defendant-Appellee.
    Before ROSENBAUM and JILL PRYOR, Circuit Judges, and UNGARO, District Judge.

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

   JILL PRYOR, Circuit Judge:

Defendant JPMorgan Chase Bank, N.A. (the “Bank”) moved for panel rehearing and rehearing en banc of an opinion originally filed on November 8, 2016. We grant the motion for panel rehearing, vacate our prior opinion, and substitute for it the following opinion.

Plaintiff Hsi Chang appeals the district court’s denial of his motion for leave to file a proposed Second Amended Complaint. The district court denied the motion because the allegations set forth in the proposed Second Amended Complaint failed to state claims for negligence, gross negligence, or aiding and abetting fraud or conversion against the Bank. We disagree that the amendment would be futile.

The allegations in Chang’s proposed Second Amended Complaint reflect that Olga Padgett-Perdomo, a Bank vice president, knowingly assisted Charles Gordon in stealing money that Gordon’s company, OPT Title and Escrow, Inc., had agreed hold in escrow in an account with the Bank. More specifically, Chang alleged that Padgett-Perdomo (1) opened at the Bank an account for OPT Title that was labeled as an escrow account, even though OPT Title had not complied with the Bank’s procedures for opening an escrow account; (2) wrote a letter overstating the balance in the escrow account after Gordon had stolen Chang’s money from the account; and (3) surreptitiously received $100,000 from Gordon.

Although Chang was not a Bank customer, these allegations, if proven, are sufficient to establish that the Bank owed Chang a duty of care and, therefore, the Bank may be held liable under negligence theories. Additionally, these facts are sufficient to state claims against the Bank for aiding and abetting fraud and conversion because Chang plausibly claims that the Bank rendered substantial assistance to Gordon in the commission of the fraud and misappropriation. Thus, after careful consideration and with the benefit of oral argument, we hold that the district court erred in denying Chang’s motion seeking leave to file the proposed Second Amended Complaint. Accordingly, we reverse the district court’s denial of the motion as well as the judgment dismissing Chang’s claims with prejudice, and remand the case for further proceedings.

I. BACKGROUND

A. The Fraudulent Scheme

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

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

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

B. Chang’s Claims Against the Bank

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

The Bank then moved to dismiss the First Amended Complaint with prejudice for failure to state a claim. Chang opposed the motion to dismiss and also filed a motion seeking leave to file a Second Amended Complaint. In the proposed Second Amended Complaint, Chang alleged that Padgett-Perdomo assisted Gordon in carrying out his scheme. Chang alleged that she prepared the paperwork to open OPT Title’s accounts and permitted Gordon to name the OPT Escrow Account as an escrow account even though OPT Title had not complied with the Bank’s procedures for opening an escrow account. He also alleged that Padgett-Perdomo wrote a letter on Bank letterhead representing that OPT Title’s “[ejscrow account” had “deposits in a business checking and savings account in the seven digit amounts” when in fact the total balance in all OPT Title’s accounts with the Bank was less than $100,000 (the “Seven-digit Letter”). Second Am. Compl. at ¶ 35 (Doc. 29-1). In exchange, Chang alleged, Gordon paid $100,000 to an entity Padgett-Perdomo controlled several months after she opened OPT Title’s accounts.

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

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

After the district court dismissed Chang’s claims with prejudice, the Bank moved to recover its attorney’s fees from Chang under Florida’s offer-of-judgment statute. See Fla. Stat. § 768.79. The district court granted the Bank’s motion and awarded it $48,702.80 in attorney’s fees. Chang timely appealed this order as well. Chang’s consolidated appeals are now before the Court.

II. STANDARD OF REVIEW

We review a district court’s denial of a motion to amend a complaint for abuse of discretion. See Harris v. Ivax Corp., 182 F.3d 799, 802-03 (11th Cir. 1999). But we review de novo “the underlying legal conclusion of whether a particular amendment to the complaint would be futile.” Id. Under the Federal Rules of Civil Procedure, a district court “should freely give leave” to amend a complaint “when justice so requires.” Fed. R. Civ. P. 15(a)(2). But “a district court may properly deny leave to amend the complaint under Rule 15(a) when such amendment would be futile,” such as “when the complaint as amended is still subject to dismissal” because, for example, it fails to state a claim for relief. Hall v. United Ins. Co. of Am., 367 F.3d 1255, 1262-63 (11th Cir. 2004) (internal quotation marks omitted).

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

III. DISCUSSION

The primary issue before us is whether the district court erred in denying Chang leave to file the proposed Second Amended Complaint on the ground that the amendment was futile because Chang failed to state a claim. Because Chang’s proposed Second Amended Complaint stated plausible claims for relief with respect to each cause of action asserted, we conclude that the district court erred in denying Chang leave to amend.

A. The Negligence Claim

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

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

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

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

2. The Bank’s Knowledge of the Fiduciary Relationship

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

Accepting Chang’s allegations as true, they support the conclusion that Padgett-Perdomo knew OPT Title owed a fiduciary duty to those, like Chang, who deposited money in the OPT Escrow Account. Because Chang alleged that Padgett-Perdo-mo permitted the OPT Title account to be labeled an “escrow account,” we can infer that she knew or should have known OPT Title was supposed to hold money deposited in that account in escrow and thus that OPT Title owed a fiduciary duty to those who sent the escrow money.

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

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

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

Third, Chang adequately alleged in his proposed Second Amended Complaint that the Bank knew Gordon was misappropriating money held in the OPT Escrow Account. We can infer from Chang’s allegations that Padgett-Perdomo knew about and assisted in Gordon’s scheme to steal the escrow money. More specifically, Chang alleged that Padgett-Perdomo labeled OPT Title’s account as an escrow account even though OPT Title had failed to comply with the Bank’s procedures for opening escrow accounts, falsely represented the balance in the OPT Escrow Account in the Seven-digit Letter, and secretly received $100,000 from Gordon paid to an entity she controlled.

The Bank argues that we cannot infer that Padgett-Perdomo knew about Gordon’s fraudulent scheme from the $100,000 payment because Gordon paid Padgett-Perdomo four months after he misappropriated Chang’s funds. But Chang’s allegations support the inference that Gordon paid Padgett-Perdomo for her ongoing assistance in and cover up of his fraudulent scheme. Chang alleged that Padgett-Per-domo assisted Gordon both before and after Chang’s money was stolen. He alleged that before the theft occurred, Padgett-Perdomo assisted Gordon by allowing him to name the account an escrow account. And Chang alleged that after the theft occurred Padgett-Perdomo authored the Seven-digit Letter misrepresenting and overstating the balance in the OPT Escrow Account.

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

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

Although banks generally owe no duty to noncustomers, Chang’s allegations as set forth in his proposed amended complaint were sufficient to establish that the Bank owed him a duty, and thus he stated a claim for negligence. The district court erred when it denied him leave to amend.

B. The Aiding and Abetting Fraud Claim

We now turn to whether the district court erred in denying Chang’s motion for leave to amend on the basis that he failed in his proposed amended complaint to state a claim for aiding and abetting fraud. We conclude that Chang stated a claim for relief with respect to this cause of action as well.

Although no Florida court has explicitly recognized a cause of action for aiding and abetting fraud, Florida courts have assumed that the cause of action exists. ZP No. 54 Ltd. P’ship v. Fid & Deposit Co. of Md, 917 So.2d 368, 371-72 (Fla. Dist. Ct. App. 2005) (explaining that aiding and abetting fraud “may well be a valid cause of action in Florida”). Florida courts have presumed that a tort claim for aiding and abetting fraud has three elements: (1) the existence of “an underlying fraud”; (2) that “[t]he defendant had knowledge of the fraud”; and (3) that “[t]he defendant provided substantial assistance to advance the commission of the fraud.” Id. at 372. We have already explained above why Chang’s allegations are sufficient to establish that the existence of an underlying fraud and the Bank’s knowledge of the fraud.

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

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

Considering the allegations in the proposed Second Amended Complaint, Chang stated a claim for aiding and abetting fraud, and the district court erred when it concluded that the amendment would have been futile. Because Chang stated claims for negligence, gross negligence, aiding and abetting fraud, and aiding and abetting conversion, we hold that the district court erred when it refused to allow him to amend his complaint. Upon remand, the district court should permit Chang to file his proposed Second Amended Complaint.

IV. CONCLUSION

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

REVERSED IN PART, VACATED IN PART, AND REMANDED.

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

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

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

      . After the district court dismissed the complaint, Chang filed a motion under Federal Rule of Civil Procedure 59(e) asking the district court to alter or amend its order dismissing his claims with prejudice and denying him leave to amend his complaint. The district court denied Chang's motion, concluding that even considering the new allegations Chang set forth in his Rule 59(e) motion, he failed to establish that the Bank or Padgett-Perdomo knew of, or substantially assisted, Gordon's fraud and thus failed to state claims for relief. Chang timely appealed the denial of his motion to alter or amend the judgment. Because we conclude that the district court erred in denying his motion for leave to amend, we need not address whether the district court erred in denying the Rule 59(e) motion.

      .Chang has abandoned any argument that the district court erred when it concluded that his First Amended Complaint, which included no allegations about Gordon’s payment to Padgett-Perdomo, failed to state a claim because he does not challenge this determination on appeal. See Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 680 (11th Cir. 2014).

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

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

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

      . We note that Chang’s allegations certainly are sufficient to establish that Padgett-Perdo-mo substantially assisted Gordon’s fraud through her affirmative actions including adding "escrow" to the name of the OPT Escrow Account and authoring the Seven-digit Letter as well as her receipt of $100,000 from Gordon. A more difficult question is whether Pad-gett-Perdomo’s actions may be imputed to the Bank such that we can say the Bank actively assisted Gordon with the fraud. After all, the imputation cases discussed above address only when an agent's knowledge may be imputed to her employer. See Section III.A.2 above. We need not answer whether Chang’s allegations are sufficient to impute Padgett-Perdomo’s actions to the Bank, however, because, as explained above, Chang's allegations are sufficient to establish that the Bank provided substantial assistance through its inaction.

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