
USCA1 Opinion

	




          May 25, 1994      UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT          No. 93-1988                                  TONY LEE, ET AL.,                               Plaintiffs, Appellants,                                          v.                     THE LIFE INSURANCE COMPANY OF NORTH AMERICA,                                Defendants, Appellees.                                                                                      ____________________                                     ERRATA SHEET               The opinion of this Court issued on May 4, 1994, is  amended          as follows:          Cover sheet:          ___________               Jay S. Goodman for The University of Rhode Island, et al.               ______________               William P.  Devereaux and  McGovern, Noel  & Benik,  Inc. on               _____________________      ______________________________               brief for The Life Insurance Company of North America.               Phillip A. Proger, with whom Gregory A. Castanias and Jones,               _________________            ____________________     ______               Day, Reavis &  Pogue were  on brief for  The Life  Insurance               ____________________               Company of North America, and for all appellees on antitrust               issues.                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                                                                      ____________________          No. 93-1988                                  TONY LEE, ET AL.,                               Plaintiffs, Appellants,                                          v.                 THE LIFE INSURANCE COMPANY OF NORTH AMERICA, ET AL.,                                Defendants, Appellees.                                                                                      ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF RHODE ISLAND                [Hon. Raymond J. Pettine, Senior U.S. District Judge]                                          __________________________                                                                                      ____________________                                        Before                              Torruella, Circuit Judge,                                         _____________                            Aldrich, Senior Circuit Judge,                                     ____________________                               and Cyr, Circuit Judge.                                        _____________                                                                                      ____________________               Jay S. Goodman for The University of Rhode Island, et al.               ______________               William P.  Devereaux and  McGovern, Noel  & Benik, Inc.  on               _____________________      _____________________________               brief for The Life Insurance Company of North America.               Phillip A. Proger, with whom Gregory A. Castanias and Jones,               _________________            ____________________     ______               Day, Reavis &  Pogue were  on brief for  The Life  Insurance               ____________________               Company of North America, and for all appellees on antitrust               issues.                                                                                      ____________________                                     May 4, 1994                                                                                      ____________________                    CYR, Circuit  Judge.  Three University  of Rhode Island                    CYR, Circuit  Judge.                         ______________          ("URI") students  appeal from  a district court  order dismissing          their federal antitrust, equal protection, and due process claims          against  URI, its Board  of Governors,  three URI  officials, and          URI's student-health  insurer, Life  Insurance  Company of  North          America ("LINA").  Finding no error, we affirm the district court          judgment.                                          I                                          I                                      BACKGROUND                                      BACKGROUND                                      __________                    As a  precondition to reregistering each  semester, URI          requires  all full-time undergraduate students to pay a fixed fee          for the  right to  use URI's  on-campus, walk-in  medical clinic,          University Health Services  ("UHS").1  All  students who pay  the          UHS  clinic fee  must  also carry  supplemental health  insurance          coverage for certain medical services, such as x-rays,  lab tests          and gynecological  tests, that  are available  through UHS.   Two          supplemental insurance options are available.  First, the student          may obtain supplemental insurance  through LINA, a private health          care  underwriter which  URI sponsors  as its  "default" insurer.          LINA  purportedly "dovetails" its  supplemental coverage  so that          the insured student pays an  annual premium that minimizes dupli-          cative  coverage;  that is,  it lessens  the  risk that  the LINA                                          _______          premium and  the UHS clinic  fee will reflect  redundant coverage                                        ____________________               1Graduate students are  not required to  pay the UHS  clinic          fee,  provided they  have  health insurance  coverage that  meets          URI's requirements.          for the same medical  procedures.2  As a second  option, students                  ____          may  secure "comparable  [supplemental]  coverage"  from an  off-          campus  health care insurer of their choice, except that URI does          not consider either Rhode Island Blue Cross or Rhode Island-based          HMOs "comparable coverage."   Students who do not opt  out of the          LINA "default" coverage by a specified deadline are automatically          billed for the annual LINA premium, and cannot reregister for the          following semester until  the LINA  premium has been  paid.   The          automatic "default" scheme notwithstanding, only about 40% of the          students who pay the UHS clinic fee insure through LINA.                    Appellants  initiated  this  class  action  in  federal          district court against URI and LINA in January 1992.  The amended          complaint alleges  that the  practice  of conditioning  continued          matriculation at URI on payment of the UHS  clinic fee and/or the          LINA supplemental  insurance premium  violates the  Sherman Anti-          trust Act, 15 U.S.C.   1 (1993),  as well as the equal protection          and due process guarantees  under the United States Constitution.          Following  minimal  discovery,  URI  and LINA  moved  to  dismiss          pursuant to Fed.  R. Civ.  P. 12(b)(6),3 and  the district  court          dismissed all claims.  Lee v. Life Ins. Co. of N.A., 829 F. Supp.                                 ___    _____________________                                        ____________________               2LINA coverage requires the student to present for treatment          at UHS in  the first  instance, pending possible  referral to  an                         _____          outside health care provider.               3Appellants'  motion  for  class  certification  was  stayed          pending disposition of appellees' motions to dismiss.                                          4          529 (D.R.I. 1993).4                                          II                                          II                                      DISCUSSION                                      DISCUSSION                                      __________          A.  The Antitrust "Tying" Claim          A.  The Antitrust "Tying" Claim              ___________________________                    Appellants  challenge the dismissal of their claim that          the URI health care-insurance  scheme is an impermissible "tying"          arrangement in violation of the Sherman Act, 15 U.S.C.   1 (1993)          ("Every contract . . . in restraint of trade or commerce . . . is          hereby declared to be illegal.").  See Eastman Kodak Co. v. Image                                             ___ _________________    _____          Technical  Servs., Inc.,  112 S.Ct.  2072 (1992)  ("Kodak").   "A          _______________________                             _____          tying arrangement is 'an agreement by a party to sell one product          but only on the condition that the buyer also purchases a differ-          ent (or  tied)  product, or  at  least agrees  that he  will  not          purchase that product  from any  other supplier.'"   Id. at  2079                                                               ___          (quoting Northern Pac. Ry. Co. v.  United States, 356 U.S. 1, 5-6                   _____________________     _____________          (1958)).  Generally speaking, an impermissible "tie-in" occurs if          a seller  (viz., URI)  enjoys either  a monopoly  or "appreciable                     ____          economic  power"  ("AEP") in  the  "tying"  product (or  service)          market, and uses  its considerable market leverage  to "coerce" a          buyer     already intent on purchasing the tying product from the          seller    into  buying a  second, "tied" product  that the  buyer          would not have bought based solely on the quality or price of the          tied  product itself.  See Fortner Enters., Inc. v. United States                                 ___ _____________________    _____________                                        ____________________               4At  the same time, the district  court declined to exercise          jurisdiction over several pendent state-law claims, see 28 U.S.C.                                                              ___            1367(c)(3) (1993).  Cf. infra note 11.                                ___ _____                                          5          Steel Corp., 394  U.S. 495, 503  (1969); see generally  Grappone,          ___________                              ___ _________  _________          Inc. v. Subaru of  New England, Inc., 858  F.2d 792, 794-96  (1st          ____    ____________________________          Cir. 1988) (describing  procompetitive policy interests animating          per  se  tying analysis).5   Since  many  product "ties"  may not          ___  __          prove anti-competitive, notwithstanding their somewhat misleading          epithet, "per  se" tie-ins may require a "fairly subtle antitrust                    ___  __          analysis" of  "market power,"  a fact-intensive inquiry  aimed at          winnowing out  only  those ties  most  likely to  threaten  anti-          competitive harm.  Id. at 795.                               ___                    Appellants claim three "product" tie-ins:   (1) between          a  university  education  (URI)  and  health  insurance  coverage          (LINA); (2) between health care services (UHS) and  health insur-          ance  coverage (LINA);  and  (3) between  a university  education          (URI) and health care services (UHS).6       We  agree  with  the                                        ____________________               5The tie-in  must also affect  a substantial volume  of com-          merce in the tied market, see Kodak, 112 S. Ct. at 2079, a factor                                    ___ _____          not at issue in this case.  Further, we assume, without deciding,                                                          _______ ________          that  URI is a participant  in the insurance  "market," for anti-          trust  purposes,  simply  because  it  receives  a  one-time  $10          processing fee for each LINA policy sold to a URI student.               6Notwithstanding  certain  misgivings,  we  further  assume,          without deciding,  that the  amended complaint  adequately pleads          _______ ________          two other  essential "tying"  claim elements.   These assumptions          merely facilitate clearer focus on the  core deficiency in appel-          lants' antitrust claim.   First, we presume that the  products at          issue are distinct, i.e., that each is distinguishable by consum-                              ____          ers  in the relevant market,  and that there  would be sufficient          consumer demand  for each individual  product, and not  merely as                                    __________          part  of an integrated  product "package."   See Jefferson Parish                                                       ___ ________________          Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 21-22 (1984).  But see id.          _________________    ____                             ___ ___ ___          at 39 (O'Connor, J., concurring) (noting obvious policy limits of          "two product"  rule, since almost  every product could  be broken          down into smaller constituent parts that  might be sold separate-          ly); Lee, 829 F. Supp. at  537 ("I do not believe plaintiffs have               ___          adequately alleged  that this arrangement  involved two  separate          products.").    Second,  we accept,  arguendo,  the  questionable                                               ________                                          6          district  court however,  that  appellants failed  to allege  any                                                                        ___          "tie-in" claim upon which  relief could be granted.   In particu-          lar,  appellants failed  to advance  a colorable  claim as  to an          indispensable  element:  that URI  had AEP in  the relevant tying          _____________          markets (university education and health care services).   AEP or          "market  power" is the demonstrated ability of a seller "to force          a purchaser to do something that he would not do in a competitive          market."  Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2,                    __________________________________    ____          14  (1984); see  also Grappone,  858  F.2d at  794.   AEP may  be                      ___  ____ ________          demonstrated,  for example, if the seller holds a monopoly in the          tying product (e.g.,  a patented product), controls  a very large                         ____          share of sales  in the tying product market, see  id. at 796 (AEP                                                       ___  ___          "means significant market power" over an "'appreciable' number of                 ___________          buyers") (emphasis in original) (citation omitted), or produces a          "unique"  tying  product,  and  therefore  faces  no  significant          competition from  functionally similar products or  services, see                                                                        ___          Jefferson  Parish, 466 U.S.  at 37-38 n.7  (O'Connor, J., concur-          _________________          ring) (market must be defined  to include "all reasonable substi-          tutes  for the  product");  Grappone,  858  F.2d at  796  (market                                      ________          encompasses all "readily available substitutes").                    Appellants can assert no colorable claim that URI holds          AEP either in the "tying" market for a university education or in              ______                                                  __          the  "tying" market for health  care services.   URI competes for          new undergraduate and graduate students on a regional and nation-                                        ____________________          contention  that  URI  students are  "coerced"  financially  into          buying LINA coverage because only LINA insurance "dovetails" with          UHS clinic fee services.                                          7          al  level with  dozens of universities  and colleges.7   Although          URI obviously  is a "unique"  institution in a  colloquial sense,          appellants cannot claim that  other institutions of higher educa-          tion do not or  cannot provide "functionally similar" educational          offerings to potential  URI applicants.   Cf. id.  at 798  (brand                                                    ___ ___          name alone does not  establish product "uniqueness" necessary for          AEP).  And,  of course,  absent AEP  in the  university-education          market  it is a  virtual given that  URI cannot enjoy  AEP in the          student health care business.                    Appellants attempt to circumvent URI's  evident lack of          AEP in the two  relevant tying markets by contriving  a so-called          Kodak  "lock-in."    Kodak  involved distinct  products:    Kodak          _____                _____          copiers (the "lock-in"  product), Kodak copier  replacement parts          (the tying product), and Kodak  copier servicing and repair  (the          tied  product).  In 1985,  Kodak began to  confine sales of Kodak          copier  parts to Kodak copier owners who contracted to have their          copiers  serviced  by Kodak,  rather  than  by Kodak's  servicing                   ________          competitors ("ISOs").  Kodak, 112 S.Ct. at 2077-78.  Significant-                                 _____          ly, only  Kodak parts would fit Kodak copiers.  Id. at 2077.  The                                                          ___          ISOs initiated an antitrust action  against Kodak under section 1          of  the Sherman  Act.   After  truncated discovery,  the district          court granted summary  judgment for  Kodak.   Id. at  2078.   The                                                        ___          Ninth Circuit reversed, Kodak, 903 F.2d 612, 617 (9th Cir. 1990),                                  _____          and the Supreme Court affirmed, Kodak, 112 S. Ct. at 2092.                                          _____                                        ____________________               7As of  1991, for example, Rhode  Island residents comprised          only 56% of the URI student body.                                          8                    By reason of Kodak's very small market share in  copier          sales, the parties had  stipulated that Kodak had  no AEP in  the          copier  market (assuming copier sales to  be the relevant "tying"                          ________          market),  and hence, no unlawful  "tie" could exist between Kodak          copiers  and Kodak  parts-servicing.   Id.  at  2081 n.10.    The                                                 ___          Supreme Court  accordingly focused on whether  an unlawful tie-in          nonetheless existed between Kodak parts and Kodak servicing.  Id.                                            _____           _________   ___          Kodak  argued for  the view  that, either  presumptively or  as a          matter of  law, vigorous competition  in the copier  market would          prevent  Kodak  from raising  its  parts  and servicing  contract          prices above competitive levels, because any such price increases          in these "derivative aftermarkets"  would become known to copier-          equipment consumers, and eventually cause Kodak to lose ground to                                                             ____          its competitors in copier sales.  Id. at 2081-82, 2083.                                            ___                    The Court rejected Kodak's  per se "cross-elasticity of                                                ___ __          demand" theory, identifying two different fact patterns which, if                                      ___          borne out by  the evidence, might support a  reasonable inference          that  parts  and servicing  contract  price  increases would  not          necessarily  cause Kodak to lose  copier sales.   Under the first          scenario, the  evidence  might  demonstrate  that  a  substantial          number  of consumers, at the  time of their  original copier pur-          chases, would not enjoy  cost-efficient8 access to the difficult-          to-acquire  pricing  information  needed to  evaluate  the  total                                        ____________________               8The Court noted that  even assuming readily available price          information, consumers rationally might decide not to investigate          life-cycle costs  if investigation  would prove more  costly than          the potential savings.  Id. at 2086.                                  ___                                          9          "life-cycle" cost of  the entire Kodak  "package"    namely,  the          price  of  the copier,  likely  replacement  parts, and  product-          lifetime  servicing.  Id. at 2085-87.  Under the second scenario,                                ___          the  Court postulated that, in a market for complex durable goods          like  copiers, current  Kodak-copier  owners might  tolerate even                         _______          uncompetitive  price increases  in Kodak  parts and  servicing as          long  as the  increases did  not exceed  the costs  of abandoning          their  original investment in the Kodak copier and switching, for          example, to  a Canon  or Xerox  copier.  Id.  at 2087-88.   Since                                                   ___          Kodak's servicing competitors had produced some evidence of "very          high" switching costs  for Kodak copier owners,  the Court opined          that such "lock-ins"     attendant  as they are  to the  original          copier purchase    could conceivably enable the plaintiff ISOs to          establish Kodak's  AEP in the derivative  "tying" aftermarket for          Kodak parts.  The  Court accordingly concluded that the  undeter-          mined  "information  costs"  and  "switching  costs"  represented          material  issues of fact, and  if in genuine  dispute, would pre-                                               _______  _______          clude  summary judgment,  even  though Kodak  lacked  AEP in  the          "lock-in" product market for copiers.  Id. at 2086-87.                                                 ___                    Appellants  attempt to shoehorn  their allegations into          this  Kodak  "derivative  aftermarket"  mold,  by  proposing  the                _____          following comparative model:  first-semester matriculation at URI                                        _____ ________          serves  as the "lock-in" product, as did the Kodak copier; subse-          quent  semesters at URI serve as the  tying product, as did Kodak          replacement parts;  and health clinic services  and health insur-          ance  coverage represent the tied products.  Of course, URI, like                                          10          Kodak, might contend, on  summary judgment or at trial,  that its          lack  of AEP in the  locked-in product market  ("sales" of first-          semester  university education)  creates  a "cross-elasticity  of          demand," which would  prevent health clinic fees and LINA supple-          mental insurance  premiums from being  increased to uncompetitive          levels.  Nevertheless, because Kodak was a summary judgment case,                                         _____       _______ ________          rather  than a Rule 12(b)(6) case, appellants argue that they did          enough  to withstand URI's  motion to dismiss  simply by alleging          the existence of unspecified "information" and "switching" costs,                           ___________          which must be credited  for Rule 12(b)(6) purposes.   See Rumford                                                                ___ _______          Pharmacy, Inc. v. City of East Providence, 970 F.2d 996, 997 (1st          ______________    _______________________          Cir. 1992) (review of Rule 12(b)(6) dismissal is de novo, credit-                                                           __ ____          ing  all allegations in the  complaint and drawing all reasonable          inferences favorable to plaintiff).                    Appellants  challenge the  district  court ruling  that          their "information cost" allegations  were insufficient to defeat          the motion to dismiss.   First, appellants argue that  URI cannot          posit  a  "cross-elasticity of  demand"  in  the present  context          because the prices charged for health clinic services and  insur-          ance premiums  are too insignificant  in relation to  tuition and          other university-education  costs to  be considered a  meaningful          factor in determining whether  potential applicants for admission          will attend URI or some other university.   Alternatively, appel-          lants argue that URI would bear the burden of proof on this issue          at  trial, and that  on appeal it  has not  pointed to supportive          evidence of consumer "sophistication."                                          11                    Appellants  exaggerate  the role  that summary-judgment          burden  shifting played  in  the Kodak  analysis.   Kodak  simply                                           _____              _____          pointed out that summary judgment was not yet in order on Kodak's                                                    ___          "cross-elasticity of demand" theory (1) in light of the plaintiff          ISOs' proffer  on "information costs"     i.e., readily inferable                                                    ____  _______ _________          expenses  associated  with  accumulating   technical  information          relating to the costs of equipment, parts, and servicing over the          lifetime  of a  "complex  durable goods"  item,  and (2)  in  the                                                           ___          absence of any conclusive evidence  from Kodak that a substantial          number of purchasers  actually make accurate prepurchase  assess-                                ________          ments of the  life-cycle "package" price of  their Kodak copiers.          Thus, the Court neither discussed any reallocation of  burdens of          proof  at trial, nor in any way  intimated a shift in the eviden-                                                       _____          tiary burden  of  proof on  the  factual issues  of  "information          costs" and "lock-in."   See, e.g., Jefferson Parish, 466  U.S. at                                  ___  ____  ________________          13-14  (assuming burden of proof rests with plaintiff to show AEP          in tying-product  market); Town  Sound and Custom  Tops, Inc.  v.                                     __________________________________          Chrysler Motors Corp., 959  F.2d 468, 479 n.12 (3d  Cir.) (plain-          _____________________          tiff bears burden  of proof on  "tying market" definition),  cert                                                                       ____          denied, 113  S. Ct.  196  (1992).   In order  to withstand  URI's          ______          motion to dismiss for failure to state a claim, therefore, it was          appellants'  burden (absent any colorable  claim that URI had AEP          in  the locked-in  product markets  for university  education and          student  health  services) to  allege  "information  costs" which                                         ______          would prevent a substantial number of URI students from accurate-          ly assessing the total costs of a URI education, including health                                          12          clinic  fees and  insurance premiums,  in determining  whether to          matriculate at URI.                    Second,  appellants  argue  that  it is  impossible  to          allege  "information  costs"  because  potential  URI  applicants          cannot  know or predict their  future URI health  clinic fees and          LINA insurance  premiums with any  precision, since URI  and LINA          reserve  the  right to  increase these  charges  each year.   But          appellants  mistake the focus  of the Court's  concerns about the          "information costs" in Kodak.                                 _____                    In  Kodak,  the information  required  by  the customer                        _____          pertained to the life-cycle pricing  of a Kodak copier "package,"          information so patently "difficult and costly" to come by that it          spontaneously gave  rise to  a reasonable inference  that unsoph-          isticated  consumers would  not  have the  information needed  to          evaluate  their options at the  time they made  their decision to          purchase a  Kodak copier.  Kodak, 112  S. Ct. at 2085.9   By con-                                     _____                                        ____________________               9The Kodak Court elaborated on the complexity of the "infor-                    _____          mation" needed to make an informed investment:               In  order to  arrive at an  accurate price,  a consumer               must  acquire  a substantial  amount  of  raw data  and               undertake sophisticated analysis.  The necessary infor-               mation would include data on price, quality, and avail-               ability  of  products  needed to  operate,  upgrade, or               enhance the  initial equipment, as well  as service and               repair costs, including estimates of breakdown frequen-               cy,  nature of  repairs,  price of  service and  parts,               length of  "down-time" and  losses incurred  from down-               time.                      Much of  this information is difficult     some of               it is  impossible      to acquire  at the time  of pur-               chase.  During  the life  of a  product, companies  may               change the service and  parts prices, and develop prod-               ucts with more advanced  features, a decreased need for               repair, or  new warranties.  In  addition, the informa-                                          13          trast,  before signing up for  their first semester  at URI, stu-          dents are informed  that their continued matriculation  at URI is          conditioned,  inter alia,  on their  "purchase" of  health clinic                        _____ ____          services at a stated annual fee, subject to historically predict-          able  annual increases,  and  on their  purchase of  supplemental          insurance coverage.10   See  Philip E.  Areeda  & Herbert  Hoven-                                  ___          kamp,  Antitrust Law   1709.2,  at 1174 (Supp.  1993) (Kodak does                 _____________                                   _____          not focus on  potential exploitation of the "irrational  or fool-          ish" purchaser, but the purchaser who makes the rational decision          that comparative-shopping costs would outweigh any savings from a          fully  informed purchase;  "the [Kodak]  context was  confined to                                           _____          hard-to-obtain information")  (emphasis added); cf.  id. at  1174          ______________                                  ___  ___          ("[R]elevant  information  need  not  be so  comprehensive  as  a          binding future price schedule . . . .");  see also supra note  8.                                                    ___ ____ _____                                        ____________________               tion is likely to be customer specific; lifecycle costs               will vary  from customer to  customer with the  type of               equipment, degrees of equipment use, and costs of down-               time.          Kodak, 112 S.Ct. at 2085-86.          _____               10Considering  the recent  hyperinflationary  trends in  the          health care industry as  a whole, UHS clinic fees  have increased          at  fairly  predictable increments  since  1987:  1987-88 ($179);          1988-89  ($188);  1989-90   ($200.50);  1990-91  ($227);  1991-92          ($248); 1992-93 ($312).   LINA premiums have increased comparably          over the same  period, from $158 in  1987-88 to $369 in  1992-93.          The record  contains no evidence that  prospective URI applicants          would have  great difficulty  gaining access to  this information          from  any  number  of  reliable sources  (e.g.,  URI  application                                                    ____          materials,  URI admissions  officials, past  or current  URI stu-          dents, college entrance source books).  Nor do appellants suggest          that  URI had any  incentive to conceal  the scope  of past price          increases.  On  the billing  invoices it mails  to students,  URI          routinely  individualizes its charges  for registration, tuition,          UHS fees, LINA premiums, and taxes.                                          14          Appellants  have made no allegations sufficient to give rise to a          reasonable  inference  that  the  health-care  and insurance-cost          information needed to make an informed decision whether to accept          the  preconditions to  continued matriculation  at URI  is either                                                                     ______          difficult or expensive to obtain or correlate.          _________ __ _________ __ ______ __ _________                    The district court further ruled that appellants failed          to state an actionable claim that they were "locked in"; that is,          they  failed to plead actual costs associated with switching from          URI after their  first semester.  Although  appellants now assert          that  they can  amend their  complaint to  allege such  costs, we          conclude that  further  amendment to  allege specific  "switching          costs" would be  futile.  See University of  Rhode Island v. A.W.                                    ___ ___________________________    ____          Chesterton Co., 2 F.3d 1200, 1219 n. 20 (1993).          ______________                    First, there  is an important distinction between Kodak                                                                      _____          and  the present case.  Kodak was a "derivative aftermarket" case                                  _____          involving "complex durable  goods."  Unlike  the copier parts  in          Kodak, subsequent URI semesters are  not "derivative aftermarket"          _____          components  upon which the  buyer's initial investment absolutely          depends.  As the  Supreme Court noted, Kodak copiers  are "expen-          sive when new," incompatible with replacement parts used in other          copiers,  and  retain  "little resale  value"  presumably because          complex durable goods depreciate so rapidly.  Kodak, 112 S.Ct. at                                                        _____          2077.  The "lock-in" would occur provided it could be shown  that          Kodak copier  owners must either purchase  replacement parts from          Kodak or  abandon their initial, unamortized  investment in their                                           ___________  __________          Kodak copier.  In contrast, a completed first semester at univer-                                          15          sity is discretely priced    students do not pay for their entire          four-year stint in advance      and the "college credit" value of          the first semester is neither nontransferable nor without econom-          ic  or educational value in  the future even  if the student does          not  remain at URI.   Thus, appellants' attempt  to extend Kodak,                                                                     _____          beyond  the "derivative  aftermarket" context to  the educational          context, is problematic at best.                    Second, the timing  of the "lock-in" at issue  in Kodak                                ______                                _____          was  central to  the Supreme  Court's decision.   Unsophisticated          Kodak copier  owners were destined for "lock-in"  from the moment                                                            ____ ___ ______          they  purchased their Kodak copiers.   At the  time current Kodak          ____  _________ _____ _____ _______          copier owners bought their copiers, Kodak had not yet conditioned          its sale of replacement parts on the purchase of Kodak servicing,          and its later-announced policy to that effect was made applicable          both  to  prospective  and existing  Kodak  copier  owners.   Had                                 ___ ________          previous customers known,  at the  time they  bought their  Kodak          copiers, that Kodak would implement its restrictive parts-servic-          ing policy,  Kodak's "market power," i.e., its leverage to induce                                               ____          customers to purchase  Kodak servicing, could  only have been  as          significant as its AEP in the copier market, which was stipulated                                        ______ ______          to  be inconsequential or nonexistent.   See Kodak,  112 S.Ct. at                                                   ___ _____          2095-96  (Scalia, J.,  dissenting)  (noting that  even the  Kodak                                                                      _____          majority  probably would have  found no  "lock-in" had  Kodak an-          nounced its parts-service "tie" at the time of its market entry);          see  generally  Philip E.  Areeda,  supra,    1709.2,  at 1164-68          ___  _________                      _____          (same).  In the instant case, however, students know before their                                          16          matriculation that they are buying a URI "package" that  includes          at least two  "tied" products     a URI  education and  on-campus          health  care services  and  insurance.   As appellants  failed to          assert a colorable claim that URI had AEP in the primary (univer-          sity  education)  market,  no  Kodak-type  "lock-in"  could  have                                         _____          occurred  in subsequent  semesters,  and even  the most  detailed          allegations of "switching costs" would be wholly unavailing.                                          17          B.   The "Due Process" and "Equal Protection" Claims          B.   The "Due Process" and "Equal Protection" Claims               _______________________________________________                    Appellants attempt  to  raise two  vaguely  articulated          constitutional  challenges to  the URI  health services-insurance          scheme.   First, they argue  that URI's conditioning of continued          matriculation on  the  payment of  a health  clinic fee  violates          their constitutional right to  procedural due process, by depriv-          ing  them of  a  property interest  (fees  and premiums),  and  a          liberty-privacy interest (the alleged right to retain a physician          of  one's  choice).    Unsurprisingly, appellants  cite  no  case          authority  for  either  contention,  nor  have  we  found  any.11          Appellants purchased  a  "product"-"service" from  URI with  full          knowledge from the outset that health care fees  and supplemental                                        ____________________               11The  district court  interpreted appellants'  complaint as          alleging claims based on substantive due process and the right to          contract.   Appellants concede  that their  "cumbersome briefing"          contributed to  this understanding, yet  did not move  for recon-          sideration.  See Vanhaaren v. State Farm Mut. Auto. Ins. Co., 989                       ___ _________    ______________________________          F.2d 1, 4-5 (1st Cir. 1993)  (issues raised for the first time on          appeal  are deemed  waived).   Unfortunately, the  procedural due          process claim asserted on appeal is no less unwieldy.               Inexplicably, appellants continue to urge that  Rhode Island          law disempowered URI from entering the "business"  of health care          and insurance, and that the LINA  policies were merely a fraud or          sham  affording  students no  actual  coverage.   Although  these          allegations might  be material  to appellants' ultra  vires claim                                                         _____  _____          under  state  law, which  the  district  court dismissed  without          prejudice, cf. Boston Envtl.  Sanitation Inspectors Ass'n v. City                     ___ __________________________________________    ____          of Boston,  794 F.2d 12,  13 (1st  Cir. 1986) (noting  that state          _________          actor's "[m]ere  violation of  state statutory  requirements does          not offend  federal constitutional due  process"), or conceivably          may have served  as a basis for some  sort of consumer protection          claim,  appellants do  not  explain  how  URI's mere  refusal  to          continue  selling  them   a  service   (i.e.,  education)   would                                                  ____          constitute an actionable "deprivation" of their "property rights"          for  federal  due process  purposes.   Cf.  id. (noting  that "an                                                 ___  ___          alleged breach of contract [by a state actor] does not  amount to          a  deprivation  of property  without  due  process"); Jimenez  v.                                                                _______          Almodovar, 650 F.2d 363, 370 (1st Cir. 1981) (same).          _________                                          18          insurance premiums were  a required  component of the  cost.   We          perceive no procedural infirmity.                    Second,  appellants  argue that  the URI  "package" in-          fringes  their constitutional  right to  equal protection  of the          laws because male and female  students matriculating at URI  must          pay the same health care fees, even though male students will not          utilize the UHS gynecological services.  The district court aptly          found  that appellants  failed to  allege  that URI  imposed this          unitary  scheme  with any  discriminatory  animus  aimed at  male          students.  See Nieves v. University  of Puerto Rico, 7 F.3d  270,                     ___ ______    __________________________          276 (1993) (plaintiff contesting  classification-neutral statutes          on equal  protection grounds must  proffer not  only evidence  of          disparate effect, but  evidence that enactment  resulted "because          of," rather than "in spite of," classification) (citing Personnel                                                                  _________          Adm'r of Massachusetts v.  Feeney, 442 U.S. 256, 278-80  (1979));          ______________________     ______          Lipsett v. University of Puerto Rico, 864 F.2d 881, 896 (1st Cir.          _______    _________________________          1988).  Appellants advance  no curative allegations for relieving          this infirmity.                    Affirmed.                    Affirmed.                    ________                                          19
