     05-7010-cv
     Chapman v. NYS Division for Youth



 1                          UNITED STATES COURT OF APPEALS
 2
 3                               FOR THE SECOND CIRCUIT
 4
 5                                   August Term 2007
 6
 7    (Argued: October 25, 2007                   Decided: October 14, 2008)
 8
 9                                Docket No. 05-7010-cv
10
11   -----------------------------------------------------x
12
13   BRUCE CHAPMAN AND HANDLE WITH CARE BEHAVIOR
14   MANAGEMENT SYSTEM, INC.,
15
16                Plaintiffs-Appellants,
17
18                             -- v. --
19
20   NEW YORK STATE DIVISION FOR YOUTH, NEW YORK STATE
21   OFFICE OF CHILDREN & FAMILY SERVICE, NEW YORK STATE
22   DEPARTMENT OF SOCIAL SERVICES, JOHN JOHNSON,
23   Commissioner of New York State Office of Children and
24   Family Services, and former Commissioner of the New
25   York State Division for Youth, in his official and
26   individual capacity, MARGARET DAVIS, former Director
27   of Training for the New York State Division for
28   Youth, and former Director of Training for New York
29   State Office of Children and Family Services, in her
30   official and individual capacity, PATSY MURRAY,
31   former Associate Training Technician for the New York
32   State Division for Youth, and current position as
33   Trainer for New York State Office of Children and
34   Family Services, in her official and individual
35   capacity, CORNELL UNIVERSITY, JEFFREY LEHMAN,
36   President of Cornell University, in his official and
37   individual capacity, DOCTOR HUNTER RAWLINGS, III,
38   former President of Cornell University, in his
39   official and individual capacity, NEW YORK STATE
40   COLLEGE OF HUMAN ECOLOGY, FAMILY LIFE DEVELOPMENT
41   CENTER, RESIDENTIAL CHILD CARE PROJECT, THERAPEUTIC
42   CRISIS INTERVENTION, MARTHA HOLDEN, Project Director
43   of the Residential Child Care Project and Therapeutic
44   Crisis Intervention Trainer and Coordinator, in her


                                         1
 1   official and individual capacity, MICHAEL NUNNO,
 2   Project Director of the Residential Child Care
 3   Project and Therapeutic Crisis Intervention Trainer
 4   and Coordinator, in his official and individual
 5   capacity, HILLSIDE CHILDREN’S CENTER, DENNIS
 6   RICHARDSON, President and CEO of Hillside Children’s
 7   Center, in his official and individual capacity,
 8   DOUGLAS BIDLEMAN, Employee of Hillside Children’s
 9   Center and Therapeutic Crisis Intervention Trainer,
10   in his official and individual capacity,
11
12
13             Defendants-Cross-Defendants-Appellees.
14
15   -----------------------------------------------------x
16
17   B e f o r e :   WALKER, STRAUB, and POOLER, Circuit Judges.
18

19        Plaintiffs-appellants seek review of an order of the United

20   States District Court for the Northern District of New York

21   (David N. Hurd, Judge) dismissing their copyright and antitrust

22   claims pursuant to Fed. R. Civ. P. 12(b) and (c) and declining to

23   exercise supplemental jurisdiction over their state law claims.

24   The district court dismissed plaintiffs’ copyright claims on the

25   basis that a contract unambiguously granted the defendants a

26   perpetual license to copy plaintiffs’ materials. We conclude that

27   the contract is ambiguous, and remand the case for further fact-

28   finding on this issue.   With regard to plaintiffs’ antitrust

29   claims, we agree with the district court that plaintiffs have

30   failed to allege a plausible antitrust market.   We therefore

31   affirm the district court’s order dismissing plaintiffs’

32   antitrust claims with prejudice.

33        AFFIRMED in part; VACATED and REMANDED in part.

                                        2
 1                                 GUY L. HEINEMANN, Guy L. Heinemann,
 2                                 P.C. (Irene M. Vavulitsky, Guy L.
 3                                 Heinemann, P.C., and Hilary Adler,
 4                                 Law Offices of Hilary Adler,
 5                                 Gardiner, N.Y., on the brief), New
 6                                 York, N.Y., for Plaintiffs-
 7                                 Appellants.
 8
 9                                 ANDREA OSER, Assistant Solicitor
10                                 General (Daniel Smirlock, Deputy
11                                 Solicitor General, on the brief),
12                                 for Eliot Spitzer, Attorney General
13                                 of the State of New York, Albany,
14                                 N.Y., for Defendants-Appellees, New
15                                 York State Division for Youth, New
16                                 York State Department of Social
17                                 Services; New York State Office of
18                                 Children & Family Services, John
19                                 Johnson; Margaret Davis, and Patsy
20                                 Murray.
21
22                                 NELSON E. ROTH (Valerie L. Cross
23                                 and Norma W. Schwab, on the brief)
24                                 Office of the University Counsel,
25                                 Ithaca, N.Y., for Defendants-
26                                 Appellees, Cornell University,
27                                 Jeffrey Lehman, Hunter Rawlings,
28                                 III, New York State College of
29                                 Human Ecology, Family Life
30                                 Development Center, Residential
31                                 Child Care Project, Therapeutic
32                                 Crisis Intervention, Martha Holden,
33                                 and Michael Nunno.
34
35                                 DAVID H. WALSH, Petrone & Petrone,
36                                 P.C., Syracuse, N.Y., for
37                                 Defendants-Appellees, Hillside
38                                 Children’s Center, Dennis
39                                 Richardson, and Douglas Bidleman.
40
41   JOHN M. WALKER, JR., Circuit Judge:

42        Plaintiffs-appellants Bruce Chapman and Handle With Care

43   Behavior Management System, Inc., (collectively “HWC”) market a

44   training program (“Handle With Care”) that teaches individuals a


                                     3
1    safe technique for physically restraining others.   HWC sued three

2    groups of defendants alleging generally that they had infringed

3    HWC’s copyright and adversely affected the market for such

4    restraint services in violation of the antitrust laws.

5         Specifically, HWC sued various New York state agencies and

6    their officers and agents (collectively “the state defendants”).

7    The state defendants include: the New York State Office of

8    Children and Family Services (“OCFS”), which in 1998 succeeded

9    the New York State Division for Youth (“DFY”) and the New York

10   State Department of Social Services (“DSS”) also named as

11   defendants; John Johnson, the former Commissioner of DFY and the

12   current Commissioner of OCFS; Margaret Davis, the former Director

13   of Training for DFY and the current Director of Training for

14   OCFS; and Patsy Murray, a former Associate Training Technician

15   for DFY and current Trainer for OCFS.

16        HWC also sued Cornell University and the New York State

17   College of Human Ecology (the “College”) and related persons and

18   entities (collectively “the Cornell defendants”).   The Cornell

19   defendants include: Cornell University; Jeffrey Lehman, Cornell’s

20   then-current president; Hunter Rawlings III, Cornell’s former

21   president; the College and subsidiaries the Family Life

22   Development Center, the Residential Child Care Project, and

23   Therapeutic Crisis Intervention (“TCI”); and Project Directors of

24   the Residential Child Care Project and TCI Trainers and


                                     4
1    Coordinators, Martha Holden and Michael Nunno.

2         Finally, HWC sued Hillside Children’s Center (“HCC”), a

3    private childcare provider and residential treatment center, and

4    two of its officers, Dennis Richardson, HCC’s president, and

5    Douglas Bidleman, HCC’s Coordinator for Sociotherapy

6    (collectively “the Hillside defendants”).

7         The state and Cornell defendants moved to dismiss the

8    complaint pursuant to Fed. R. Civ. P. 12(b)(6), and the Hillside

9    defendants moved to dismiss the complaint pursuant to Fed. R.

10   Civ. P. 12(c).    The district court granted both motions as to all

11   of plaintiffs’ federal claims and declined to exercise

12   supplemental jurisdiction over the remaining state law claims.

13   The federal claims dismissed were: (1) copyright infringement

14   against the state defendants; and (2) conspiracy to monopolize

15   and restrain trade, together with monopoly, restraint of trade,

16   and unfair competition, against all defendants.

17        The district court dismissed plaintiffs’ copyright claim on

18   the basis that the contract at issue unambiguously granted the

19   state defendants the right to copy plaintiffs’ materials

20   indefinitely.    We disagree with that conclusion, find the

21   contract ambiguous, and remand the case to the district court to

22   determine the duration of the license to copy plaintiffs’

23   materials granted under the contract.

24        With regard to the antitrust claims, the district court held


                                       5
1    that the plaintiffs failed to offer a plausible relevant market

2    in which the defendants monopolized the trade for restraint

3    services or engaged in restraint of trade or unfair competition

4    with respect thereto.   We agree that the plaintiffs have failed

5    to define a plausible market and conclude that the plaintiffs

6    cannot establish that the defendants have substantial market

7    power in the market for restraint services properly defined.

8    Accordingly, we affirm the district court’s dismissal of

9    plaintiffs’ antitrust claims and vacate the district court’s

10   dismissal of the copyright claim against the state defendants.

11

12                             BACKGROUND

13        For purposes of reviewing a motion to dismiss, we assume the

14   accuracy of the plaintiffs’ allegations in their complaint.

15   Patane v. Clark, 508 F.3d 106, 111 (2d Cir. 2007) (per curiam).

16   “[O]ur review is limited to undisputed documents, such as a

17   written contract attached to, or incorporated by reference in,

18   the complaint.”   Official Comm. Of Unsecured Creditors of Color

19   Tile, Inc. v. Coopers & Lybrand, L.L.P., 322 F.3d 147, 160 n.7

20   (2d Cir. 2003) (citing Cortec Indus., Inc. v. Sum Holding, L.P.,

21   949 F.2d 42, 47 (2d Cir. 1991)).

22        OCFS (previously DFY and DSS) operates juvenile facilities

23   and monitors child care providers in the state of New York.    The

24   New York legislature mandated that OCFS:


                                        6
 1        promulgate regulations concerning standards for the
 2        protection of children in residential facilities and
 3        programs operated or certified by the division, from abuse
 4        and maltreatment. . . Such standards shall . . . establish
 5        as a priority that: . . . administrators, employees,
 6        volunteers and consultants receive training in . . .: the
 7        characteristics of children in care and techniques of group
 8        and child management including crisis intervention.
 9
10   N.Y. Exec. Law § 501(12); see also N.Y. Soc. Serv. Law §

11   462(1)(c).    To that end, state regulations require that each

12   supervised child care facility “submit[] its restraint policy to

13   [OCFS]” and prohibit the use of “any method of restraint unless

14   it has . . . been approved in writing by [OCFS].”    18 N.Y. Comp.

15   Codes R. & Regs. § 441.17(c).

16        In 1987, New York State purchased HWC’s method for use in

17   its own facilities.    That year, DFY contracted with HWC to

18   provide training in HWC’s methods to its staff (the “1987

19   contract”).    The 1987 contract provided that HWC would train 120

20   DFY staff members over fifteen days in HWC’s methods.      It further

21   provided that HWC would furnish DFY with one “copy of Handle With

22   Care (copyrighted) which [DFY] may reproduce in whole or in part

23   as required by [DFY]” and “a videomaster of the restraint program

24   to be used by [DFY’s] master trainers in conducting training

25   programs for facility staff.”    Finally, the contract stated that

26   “[t]his agreement shall commence January 1, 1988 and end March

27   31, 1988.”    There is no dispute that HWC fulfilled its

28   obligations under the 1987 contract and trained 120 DFY staff,



                                       7
1    some of whom were master trainers, during the relevant three-

2    month term.   In 1997, however, after two incidents at DFY

3    facilities in which children were harmed by the use of improper

4    restraint techniques, DFY requested that HWC provide retraining

5    to its staff.

6         The resulting contract (the “1997 contract”) provided that

7    HWC would “update and recertify existing [DFY] Crisis

8    Management/Physical Restraint trainers in the techniques

9    encompassed in the Handle With Care program;”   that it would

10   “deliver twelve (12) days of training to approximately one

11   hundred twenty (120) existing [DFY] trainers;” and that DFY had

12   “the right to reproduce all training materials.”1   The contract

13   provided that the “agreement shall commence May 1, 1997 and end

14   August 31, 1997.”    Additionally, HWC required DFY staff members

15   to sign individual contracts acknowledging that their

16   certification to train in HWC’s methods terminated after one

17   year.

18        HWC furnished the training and materials in conformity with

19   the 1997 contract.   Thereafter, there is no dispute that DFY

20   master trainers, using HWC’s materials, trained the rest of DFY’s

21   staff in the HWC method.   A year later, DFY merged into OCFS and

22   the latter continued to use HWC’s materials to train its staff.


     1
1         We note that, as defendants acknowledge on appeal, the
2    district court was mistaken in its view that the contract was
3    “drafted by Chapman.”

                                       8
1         HWC faced competition in the restraint method and training

2    business.    Cornell, in partnership with the State of New York,

3    developed and marketed its own restraint method and training

4    services called Therapeutic Crisis Intervention (“TCI”).    HWC and

5    TCI competed in providing restraint training services to various

6    agencies, organizations, and businesses.

7         Sometime after DFY merged with OCFS in 1998, OCFS began to

8    withhold its approval of each facility’s restraint method unless

9    the TCI method was used.    After learning of the alleged policy

10   change at OCFS, HWC filed the instant action challenging the

11   policy, claiming that OCFS, Cornell, and HCC conspired to

12   monopolize the market for restraint services in violation of the

13   antitrust laws.    HWC also claimed that OCFS infringed HWC’s

14   copyright by reproducing HWC’s materials in 1998 and by

15   continuing to use them and made various state law claims.    After

16   the district court dismissed these claims, HWC appealed.

17

18                              DISCUSSION

19   I.   Legal Standard

20        We review de novo the dismissal of a complaint for failure

21   to state a claim, and accept all well-pleaded facts as true and

22   consider those facts in the light most favorable to the

23   plaintiff.    Patane v. Clark, 508 F.3d 106, 111 (2d Cir. 2007)

24   (per curiam).


                                       9
1      To survive dismissal, the plaintiff must provide the grounds
2      upon which his claim rests through factual allegations
3      sufficient ‘to raise a right to relief above the speculative
4      level.’ Once a claim has been adequately stated, it may be
5      supported by showing any set of facts consistent with the
6      allegations in the complaint.
7
8    ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir.

9    2007) (quoting Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1965

10   (2007)).

11

12   II.   The Copyright Claim

13         HWC’s copyright claim against the state defendants is

14   dependent upon the terms of the 1997 contract.    There is no

15   dispute that DFY copied HWC’s materials; the only question is

16   whether DFY had the right to do so.    See Graham v. James, 144

17   F.3d 229, 236 (2d Cir. 1998) (“A copyright owner who grants a

18   nonexclusive license to use his copyrighted material waives his

19   right to sue the licensee for copyright infringement.”).     “In

20   interpreting a contract, the intent of the parties governs.     A

21   contract should be construed so as to give full meaning and

22   effect to all of its provisions.”    Am. Express Bank Ltd. v.

23   Uniroyal, Inc., 562 N.Y.S.2d 613, 614 (N.Y. App. Div. 1990)

24   (citations omitted).   The question of whether a provision in an

25   agreement is ambiguous is a question of law.    Collins v.

26   Harrison-Bode, 303 F.3d 429, 433 (2d Cir. 2002).    Under New York

27   law, the presence or absence of ambiguity is determined by

28   looking within the four corners of the document, without

                                     10
1    reference to extrinsic evidence.      Kass v. Kass, 696 N.E.2d 174,

2    180 (N.Y. 1998).    “[A]n ambiguity exists where a contract term

3    could suggest more than one meaning when viewed objectively by a

4    reasonably intelligent person who has examined the context of the

5    entire integrated agreement and who is cognizant of the customs,

6    practices, usages and terminology as generally understood in the

7    particular trade or business.”    World Trade Ctr. Props., L.L.C.

8    v. Hartford Fire Ins. Co., 345 F.3d 154, 184 (2d Cir. 2003)

9    (internal quotation marks and citation omitted).

10        We must decide whether the 1997 contract is ambiguous as to

11   the duration of the license granted to copy HWC’s materials.

12   Although both parties contend that the 1997 agreement is

13   unambiguous on its face, they draw different conclusions as to

14   the duration of the license.    HWC claims that, according to the

15   1997 contract’s “Term of Agreement” provision, DFY’s right to

16   copy its materials ended on August 31, 1997 (120 days after the

17   agreement commenced).    The state defendants, however, contend

18   that the 1997 contract unambiguously grants DFY a perpetual right

19   to copy HWC’s materials.    The district court agreed with the

20   state defendants.    We disagree and conclude that the contract on

21   its face is ambiguous.

22        The purpose of the 1997 contract is not disputed: HWC agreed

23   to “update and recertify existing [DFY] Crisis

                                      11
1    Management/Physical Restraint trainers in the techniques

2    encompassed in the Handle With Care program.”   To that end, the

3    agreement provided that HWC would perform twelve days of training

4    to DFY trainers.   The DFY trainers would then train the rest of

5    DFY’s staff in HWC’s methods.   Contemplating that the DFY

6    trainers would need to utilize HWC’s materials in training the

7    rest of the Division staff, the 1997 contract acknowledged that

8    “[DFY] has the right to reproduce all training materials.”

9         HWC’s argument that the license to copy its materials

10   expired after 120 days conflicts with the agreement’s purpose.

11   While the 1997 contract states that the “agreement shall commence

12   May 1, 1997 and end August 31, 1997,” there is nothing in the

13   contract that expressly indicates that this provision governs the

14   duration of the license to copy HWC’s materials.   Indeed, from

15   the four corners of the agreement, it is not at all certain that

16   the parties intended that DFY’s rights to copy HWC’s materials

17   terminate so quickly.   HWC plainly knew that it was training

18   trainers who, if they were to train the rest of DFY’s staff,

19   would need to copy HWC’s materials.   The provision allowing use

20   of HWC’s materials is unclear on its face as to whether it was

21   meant to end with the agreement, or whether it was meant to

22   continue for a reasonable period of time after the agreement

                                     12
1    ended to allow for further training of DFY staff.

2          We are equally unpersuaded that the 1997 contract granted a

3    perpetual license.   There is no indication from the contract that

4    the license to copy HWC’s materials was meant to be perpetual.

5    And under New York law, “[c]ontracts which are vague as to their

6    duration generally will not be construed to provide for perpetual

7    performance.”   Ketcham v. Hall Syndicate, Inc., 236 N.Y.S.2d 206,

8    214 (N.Y. Sup. Ct. 1962).    In the absence of a clear provision,

9    courts are reluctant to declare a perpetual license as a matter

10   of law.   See Warner-Lambert Pharm. Co. v. John J. Reynolds, Inc.,

11   178 F. Supp. 655, 661 (S.D.N.Y. 1959), aff’d, 280 F.2d 197 (2d

12   Cir. 1960) (per curiam).    Because the contract here does not

13   explicitly grant a perpetual license, we do not find that it did

14   so.

15         After rejecting both parties’ arguments and finding no

16   plausible alternative within the four corners of the document, we

17   conclude that the 1997 contract is ambiguous as to the duration

18   of the license.   This leaves us two choices.   “We may resolve

19   [the] ambiguity . . . if there is no extrinsic evidence to

20   support one party’s interpretation of the ambiguous language or

21   if the extrinsic evidence is so one-sided that no reasonable

22   factfinder could decide contrary to one party’s interpretation.

                                      13
1    Or, we may remand for the trial court to consider and weigh

2    extrinsic evidence to determine what the parties intended.”

3    Collins, 303 F.3d at 433 (internal quotation marks and citation

4    omitted).   We choose the latter.

5         The extrinsic evidence presently in the record does not

6    answer the question.   HWC points out that when it provided

7    retraining in 1997, it required each Division trainer to sign a

8    contract acknowledging that his/her certification expired after

9    one year.   This evidence would support a finding that the license

10   granted under the 1997 contract was of a more limited duration.

11   The evidentiary record, however, is incomplete.   Because further

12   fact-finding is necessary, we remand the copyright claim to the

13   district court for further proceedings consistent with this

14   opinion.2

15

16   III. Plaintiffs Have Failed to Define the Proper Market for
17        Antitrust Purposes
18
19        HWC claims that OCFS, in cooperation with Cornell, has

20   conspired to create a monopoly in the market for “training


     2
1         Because the district court did not have occasion to reach
2    the state defendants’ Eleventh Amendment immunity defenses, and
3    because the Eleventh Amendment would not, in any event, bar suit
4    against OCFS officials and employees sued in their official
5    capacity for injunctive relief, Henriettta D. v. Bloomberg, 331
6    F.3d 261, 287 (2d Cir. 2003), we do not need to reach this issue.

                                     14
1    services to private child care providers located within the State

2    of New York” by withholding approval of supervised facilities

3    that do not use the TCI method.    HWC alleges that HCC was

4    complicit in this arrangement because, after HWC trained HCC’s

5    staff in 2001, HWC discovered that one of HCC’s training

6    coordinators “appeared in TCI’s training manual and video

7    illustrating” HWC’s proprietary methods.

8         For a monopoly claim “[t]o survive a Rule 12(b)(6) motion to

9    dismiss, an alleged product market must bear a rational relation

10   to the methodology courts prescribe to define a market for

11   antitrust purposes –- analysis of the interchangeability of use

12   or the cross-elasticity of demand, and it must be plausible.”

13   Todd v. Exxon Corp., 275 F.3d 191, 200 (2d Cir. 2001) (internal

14   quotation marks and citation omitted).    “[T]he reasonable

15   interchangeability of use or the cross-elasticity of demand

16   between the product itself and substitutes for it” determine

17   “[t]he outer boundaries of a product market.”    Brown Shoe Co. v.

18   United States, 370 U.S. 294, 325 (1962).    Though “market

19   definition is a deeply fact-intensive inquiry [and] courts

20   [therefore] hesitate to grant motions to dismiss for failure to

21   plead a relevant product market,” Todd, 275 F.3d at 199-200,

22   “[w]here the plaintiff fails to define its proposed relevant



                                       15
1    market with reference to the rule of reasonable

2    interchangeability and cross-elasticity of demand, or alleges a

3    proposed relevant market that clearly does not encompass all

4    interchangeable substitute products even when all factual

5    inferences are granted in plaintiff’s favor, the relevant market

6    is legally insufficient and a motion to dismiss may be granted,”

7    Queen City Pizza, Inc. v. Domino’s Pizza, Inc., 124 F.3d 430, 436

8    (3d Cir. 1997).   Here we find that plaintiffs’ proposed relevant

9    market does not encompass all interchangeable substitute

10   products.   We therefore affirm the district court’s dismissal of

11   the antitrust claims.

12        HWC contends that the relevant market for our analysis here

13   is the market for “restraint training services to private child

14   care providers located within the State of New York.”   This

15   definition is too narrow.   HWC has failed to show how the market

16   for restraint training services to child care providers is any

17   different from the larger market for restraint training services

18   to other businesses, agencies, and organizations.

19   “Interchangeability implies that one product is roughly

20   equivalent to another for the use to which it is put. . . .”

21   Queen City, 124 F.3d at 437 (internal quotation marks and

22   citation omitted).   Plaintiffs do not contest that Handle With

                                     16
1    Care is marketed to and utilized by various organizations,

2    institutions, and agencies that are not child care providers.

3    Indeed, plaintiffs readily admit in their complaint that they

4    compete for such contracts on a “national and international”

5    basis.   The unifying characteristic of this market is that each

6    purchaser needs to restrain individuals, not just children.

7         Because “the reasonable interchangeability of use . . .

8    between the product itself and substitutes for it” determines

9    “[t]he outer boundaries of a product market,” it is apparent that

10   the proper market here is the larger market for restraint

11   training services to businesses, agencies, and organizations with

12   the need to safely restrain individuals of all ages, not the more

13   limited market for child restraint services.   Brown Shoe, 370

14   U.S. at 325.   As the district court noted, the larger market

15   includes social service agencies, law enforcement agencies,

16   correctional facilities, educational facilities, and even

17   airlines.

18        Furthermore, we reject HWC’s argument that because private

19   child care providers in New York must have OCFS approval in order

20   to operate, and thus that the market is specialized, it stated a

21   plausible discrete relevant market.   The relevant inquiry is not

22   whether a private child care provider may reasonably use both

                                     17
1    approved and non-approved OCFS methods interchangeably, but

2    whether private child care providers in general might use such

3    products interchangeably.     See Queen City, 124 F.3d at 438.

4    HWC’s proposed relevant market “clearly does not encompass all

5    interchangeable substitute products even when all factual

6    inferences are granted in plaintiff’s favor.”     Id. at 436.    We

7    thus agree with the district court that the “Plaintiffs have not

8    offered any theoretically reasonable explanation for restricting

9    the product market to child care providers that require OCFS

10   approval, or provided a sufficient factual predicate to support

11   an inference that OCFS enjoys any substantial market power in the

12   broader market for restraint services.”     Plaintiffs’ proposed

13   market is therefore legally insufficient and dismissal of the

14   antitrust claims was appropriate.3

15

16                                 CONCLUSION

17       For the foregoing reasons, the judgment below is AFFIRMED as to



     3
1         HWC argues that the district court exceeded its allowable
2    discretion in dismissing their antitrust claims with prejudice,
3    as opposed to allowing HWC to amend their complaint. Given the
4    nature of the claims, repleading would be futile; HWC offers no
5    plausible argument as to how the failure to plead a relevant
6    market could be rectified through an amended complaint. See
7    Patane v. Clark, 508 F.3d 106, 113 n.6 (2d Cir. 2007) (per
8    curiam).

                                       18
1   the antitrust claims and VACATED as to the copyright claim and

2       the case is REMANDED to the district court for further

3             proceedings consistent with this opinion.




                                  19
