Chapman v. NYS Division for Youth ( 2008 )


Menu:
  •      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