-
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
Document Info
Docket Number： 93-1988
Filed Date： 5/26/1994
Precedential Status： Precedential
Modified Date： 9/21/2015