1 09-3837-cv Smugglers Notch Homeowners’ Ass’n, Inc. et al. v. Smugglers’ Notch Mgmt. Co., Ltd. et al. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT 

### SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCALRULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for the Second Circuit, held at the 1 Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York, 2 on the 15 thday of March, two thousand eleven. 3 4 PRESENT: 5 6 JOHN M. WALKER, J R ., 7 BARRINGTON D. PARKER, 8 DEBRA ANN LIVINGSTON, 9 10 Circuit Judges

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______________________________________________________ 12 13 SMUGGLERS NOTCH HOMEOWNERS’ ASSOCIATION, INC., 14 GERALD SUNDERLAND, THOMAS GANGI, FLORRIE PAGE, 15 JOHN MOONEY, LAURENCE GEE, HERBERT LEWIS, ERIC 16 KOTCH, ROBERT OEHRLEIN, STEPHEN HOEY, JONATHAN 17 DONAHUE, CRAIG GREENE, AND KEVIN ROHRBACHER, 18 19 Plaintiffs-Appellants , 20 21 v. No. 09-3837-cv 22 23 SMUGGLERS’ NOTCH MANAGEMENT COMPANY, LTD. 24 AND SMUGGLERS’ NOTCH WATER COMPANY, 25 26 Defendants-Appellees

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______________________________________________________ 28 29 301 Gerald Sunderland, Thomas Gangi, Florrie Paige, John Mooney, Laurence Gee, Herbert Lewis, Eric Kotch, Robert Oehrlein, Stephen Ho ey, Jonathan Donahue, Craig Greene, and Kevin Rohrbacher. 2 RICHARD T. C ASSIDY , Hoff Curtis, Burlington, Vermont, 1 for Plaintiffs-Appellants

. 2 3 C ARL H. LISMAN , Lisman, Webster and Leckerling, P.C., 4 Burlington, Vermont, for Defendants-Appellees. 5 Brian K. McCalmon and J. Timothy Hobbs, K&L Gates 6 LLP, Washington, D.C., for Defendants-Appellees. 7
UPON DUE CONSIDERATION, it is hereby ORDERED, ADJUDGED, and DECREED 8 that the judgment of the district court be AFFIRMED. 9 Plaintiffs-Appellants Smugglers Notch Homeowners’ Association, Inc. and twelve of its 10 members 1 (collectively “Homeowners”) appeal from a judgment of the United States District Court 11 for the District of Vermont (Murtha, J. ) dismissing their federal claims with prejudice and 12 dismissing their state law claims without prej udice. Homeowners brought this action against 13 Defendants-Appellees Smugglers’ Notch Management Company, Ltd. and Smugglers’ Notch Water 14 Company (collectively “Smugglers’ Notch”) for alleged violations of section 1 of the Sherman 15 Antitrust Act, 15 U.S.C. § 1. Appellants also alleged various state law claims. On October 23, 16 2008, Smugglers’ Notch moved to dismiss Homeowners’ complaint for failure to state a claim 17 pursuant to Fed. R. Civ. P. 12(b)(6). Homeowners filed an amended complaint on December 3, 18 2008. The district court construed Smugglers’ Notch’s motion as requesting dismissal of the 19 amended complaint, and granted the motion on May 29, 2009. 20 Judgment was entered on June 2, 2009. Homeowners filed a motion for reconsideration on 21 June 12, 2009, requesting that the court reconsider its dismissal of their federal antitrust claims with 223 prejudice. The district court denied the mo tion on August 11, 2009. Homeowners timely appealed 1 to this Court on September 10, 2009. We assume the parties’ familiarity with the underlying facts 2 and procedural history. 3 On appeal, Homeowners primarily argue that the district court erred in granting Smugglers’ 4 Notch’s motion to dismiss because Homeowners sufficiently alleged relevant product and 5 geographic markets for their illegal tying claims. Homeowners further submit that they should have 6 been granted leave to amend their complaint a second time. 7 We review a district court’s dismissal of a co mplaint for failure to state a claim pursuant to 8 Fed. R. Civ. P. 12(b)(6) de novo

. See Nicholas v. Goord, 430 F.3d 652, 657 (2d Cir. 2005). In 9 addition, “we review a district court’s denial of leave to file an amended complaint for abuse of 10 discretion.” Bellikoff v. Eaton Vance Corp. , 481 F.3d 110, 118 (2d Cir. 2007). To survive a Rule 11 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to 12 ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal , 129 S. Ct. 1937, 1949 (2009) 13 (citing Bell Atl. v. Twombly , 550 U.S. 544, 570 (2007)). A claim is facially plausible only “when 14 the plaintiff pleads factual content that allows the court to draw the reasonable inference that the 15 defendant is liable for the misconduct alleged.” Id. at 1949-50. We must accept Homeowners’ 16 factual allegations as true and draw all reasonable inferences in their favor. See Iqbal , 129 S.Ct. at 17 1949. 18 Section 1 of the Sherman Antitrust Act prohibits “[e]very contract, combination in the form 19 of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or 20 with foreign nations.” 15 U.S.C. § 1. A tying arrangement is “anagreement by a party to sell one 21 product but only on the condition that the buyer also purchases a different (or tied) product, or at 224 least agrees that he will not purchase that product from any other supplier.” Eastman Kodak Co. v. 1 Image Tech. Servs., Inc. , 504 U.S. 451, 464 (1992) (internal quot ation marks omitte d). “Such an 2 arrangement violates Section 1 of the Sherman Act if the seller has ‘appreciable economic power’ 3 in the tying product market and if the arrangement affects a substantial volume of commerce in the 4 tied market.” Id. (quoting Fortner Enters., Inc. v. U.S. Steel Corp. , 394 U.S. 495, 503 (1969) 5 (“ Fortner I ”)). “The essential characteristic of an invalid tying arrangeme nt lies in the seller’s 6 exploitation of its control over the tying product to force the buyer into the purchase of a tied 7 product that the buyer either did not want at all, or might have preferred to purchase elsewhere on 8 different terms.” Hack v. President & Fellows of Yale Coll. , 237 F.3d 81, 85 (2d Cir. 2000). 9 To state a tying claim, a plaintiff must suffi ciently allege: 1) “a tying and a tied product”; 2) 10 “evidence of actual coercion by the seller that forced the buyer to accept the tied product”; 11 3) “sufficient economic power in the tying product market to coerce purchaser acceptance of the tied 12 product”; 4) “anticompetitive effects in the tied market”; and 5) “the involvement of a not 13 insubstantial amount of interstate commerce in the tied market.” E&L Consulting , 472 F.3d at 31 14 (internal quotation marks omitted); see also Yentsch v. Texaco, Inc. , 630 F.2d 46, 56-57 (2d Cir. 15 1980). Homeowners’ challenge to the district court’s decision primarily rests on the third element. 16 A. Homeowners’ Proposed Relevant Markets 17 Homeowners argue that the district court erre d in concluding that th ey did not sufficiently 18 allege relevant markets within which Smugglers’ Notch purportedly held economic power. 19 Homeowners contend that they adequately pl eaded markets for vacation properties in “the 20 immediate vicinity” of the Village at Smugglers’ Notch (“Village”) and for recreational facilities 21 located in counties easily accessible from the Village. For the following reasons, we disagree. 225 When evaluating the extent to which a defendant exercises power in the alleged relevant 1 market, that market must be properly defined. See AD/SAT v. Assoc. Press , 181 F.3d 216, 226 (2d 2 Cir. 1999); Brokerage Concepts, Inc. v. U.S. Healthcare, Inc. , 140 F.3d 494, 513 (3d Cir. 1998). 3 A relevant market has two components, product and geographic. See AD/SAT , 181 F.3d at 226; 4 Brokerage Concepts , 140 F.3d 513 (citing Brown Shoe Co. v. United States , 370 U.S. 294, 325-28 5 (1962)). “Because market definition is a deeply fact-intensive inquiry, courts hesitate to grant 6 motions to dismiss for failure to plead a relevant product market.” Todd v. Exxon Corp. , 275 F.3d 7 191, 199-200 (2d Cir. 2001). “There is, however, no abso lute rule against the dismissal of antitrust 8 claims for failure to allege a relevant product market.” Id. at 200 (citing Queen City Pizza, Inc. v. 9 Domino’s Pizza, Inc. , 124 F.3d 430, 436 (3d Cir. 1997)). 10 “For a monopoly claim to survive a Rule 12(b)(6) motion to dismiss, an alleged product 11 market must bear a rational relation to the methodology courts prescribe to define a market for 12 antitrust purposes – analysis of the interchangeabilityof use or the cross-elasticity of demand, and 13 it must be plausible.” Chapman v. N.Y. State Div. for Youth , 546 F.3d 230, 237 (2d Cir. 2008); see 14 also Todd, 275 F.3d at 200. “‘Where the plaintiff fails todefine its proposed relevant market with 15 reference to the rule of reasonable interchangeab ility and cross-elasticity of demand, or alleges a 16 proposed relevant market that clearly does not encompass all interchangeable substitute products 17 even when all factual inferencesare granted in plaintiff’s favor, the relevant market is legally 18 insufficient and a motion to dismiss may be granted.’” Id. at 238 (quoting Queen City Pizza , 124 19 F.3d at 436) (alteration omitted); see also Todd, 275 F.3d at 200. 20 1. Market for “Vacation Properties” 21 In their first amended complaint, Homeowners proposed a product market for vacation 226 properties and defined “vacation property” as “residential properties located within or in close 1 proximity to a recreational resort facility.” They further confined the geographic scope of this 2 market to “the immediate vicinity of the Villag e” itself. Homeowners argue on appeal that this 3 proposed market was sufficient to state a tying cl aim because vacation properties at the Village are 4 unique and not interchangeable with other ski resort vacation property. 5 We are not persuaded that th e alleged uniqueness of vacation properties at the Village is 6 sufficient to establish a relevant product market . We have acknowledged that “the uniqueness of 7 a product can trigger a tying arrangement claim.” Hack , 237 F.3d at 86 (citing U.S. Steel Corp. v. 8 Fortner Enters., Inc. , 429 U.S. 610, 620-21 (1977) (“ Fortner II ”)). Such uniqueness “can provide 9 sufficient market power to co mpel a buyer to purchase a produc t he would not purchase in a 10 competitive market.” Id. (citing Jefferson Parish Hosp. Dist. No. 2 v. Hyde , 466 U.S. 2, 16-17 11 (1984), abrogated on other grounds by Swierkiewicz v. Sorema N.A. , 534 U.S. 506 (2002)). 12 Not all forms of “uniqueness” sustain a tying claim, however. The relevant inquiry is 13 “‘whether the seller has some advantage not shared by his competitors in the market for the tying 14 product.’” Yentsch , 630 F.2d at 58 (quoting Fortner II, 429 U.S. at 620); see also Hack , 237 F.3d 15 at 86-87. Further, the alleged uniqueness must be “plausible.” Hack , 237 F.3d at 86. In Hack , we 16 found that the alleged relevant product market, a Yale education, was implausible. Id. Although 17 we agreed that a Yale education was “unique” in a collegiate sense, we emphasized that there were 18 “many institutions of higher learning providing superb educational opportunities,” and that such 19 opportunities were not inherently local. Id. We further reasoned that if plaintiffs were dissatisfied 20 with Yale’s policies, they could matriculate elsewhere, id. at 87, and thus declined to recognize the 21 plaintiffs’ proposed relevant market. Id. 227 Here, Homeowners limited the relevant product market to “the immediate vicinity of the 1 Village” itself, on the grounds that the “unique geographic qualities of ski areas” tended to give 2 vacation properties at the Village “sufficient product differentiation,” and therefore “limited 3 substitutability,” with properties at other ski or resort areas. Homeowners allege that the geography 4 of the market affects the uniqueness of the product

. See Christy Sports, LLC v. Deer Valley Resort 5 Co., Ltd. , 555 F.3d 1188, 1193-94 (10th Cir. 2009) (“In [such] cases, the two are difficult to 6 disentangle because the product . . . is intimately related to the locati on. Consumers . . . do not 7 travel to Yale to live in an Eero Saarinen-desi gned dormitory.”) Nevertheless, as the district court 8 noted, there are undoubtedly many other vacation properties located within or in close proximity to 9 ski areas. Moreover, as in Hack , nothing suggests that such properties are inherently local to one’s 10 permanent residence and must be within the immedi ate vicinity of the Village. In fact, Homeowners 11 are comprised of residents from outside Vermont , including Massachusetts, New York, New Jersey, 12 Connecticut, and even Florida. If they were dissatisfied with Smugglers’ Notch’s policies and rules, 13 they could have sought to purchase a residential property located near a different ski area. The 14 district court therefore did not err in concluding th at Homeowners failed to state a plausible relevant 15 market for vacation properties. 16 2. Market for “Recreational Facilities” 17 Homeowners also proposed a market for “recreational facilities,” which they defined as 18 “facilities necessary to provide recreational services complementary to a vacation at a ski resort.” 19 They limited its geographic scope to several near by counties that offered “the requisite proximity 20 and access throughout the year,” since “facilities outside the range of easy, year-round access from 21 Smugglers’ Notch Village are poor substitutes for facilities located at the Village.” Homeowners 228 argue on appeal that the market for recreational f acilities is in fact an aftermarket created by the 1 purchase of vacation properties at the Village, and thus inherently local. 2 We disagree. We observed in Hack that the plaintiff’s “focus [was] upon a contractually 3 created class of consumers.” 237 F.3d at 85. We then held that “[e]conomic power derived from 4 contractual arrangements affecting a distinct cla ss of consumers” could not serve as a relevant 5 market for antitrust purposes. Id. Similarly, in Queen City Pizza , on which we relied in Hack , see 6 237 F.3d at 85, the court held that “where the defendant’s ‘power’ to ‘force’ plaintiffs to purchase 7 the alleged tying product stems not from the market but from plaintiffs’ contractual agreement to 8 purchase the tying product, no claim will lie.” Queen City Pizza , 124 F.3d at 443. The court 9 reasoned that “a court making a relevant market determination looks not to the contractual restraints 10 assumed by a particular plaintiff when determini ng whether a product is interchangeable, but to the 11 uses to which the product is put by consumers in general.” Id. at 438; see also United States v. E.I. 12 du Pont de Nemours & Co. , 351 U.S. 377, 395 (1956). Thus, “the particular contractual restraints 13 assumed by a plaintiff are not sufficient by them selves to render interchangeable commodities non14 interchangeable for purposes of relevant market definition.” Queen City Pizza , 124 F.3d at 443. 15 Homeowners contend that this case is more closely analogous to the Supreme Court’s 16 decision in Eastman Kodak , 504 U.S. at 482. However, both cases from our Circuit and others have 17 clarified the reach of Eastman Kodak . A primary distinction has been whether the restraints in the 18 alleged relevant aftermarket were foreseeable. In Hack , we recognized that concerns under Eastman 19 Kodak could arise where a plaintiff was “locked in” by his investment in housing which he could 20 no longer use “because of an abrupt change in policy.” Hack , 237 F.3d at 87 (emphasis added). By 21 contrast, where policies were “fully disclosed long before” entering into an agreement, a plaintiff 229 has no “lock-in” costs, and Eastman Kodak does not apply. Hack , 237 F.3d at 87; see also Queen 1 City Pizza , 124 F.3d at 440. 2 Here, Homeowners were fully aware of Smuggl ers’ Notch’s policies and voluntarily signed 3 purchase and sale agreements that expressly required purchasers to enter into one of three service 4 contracts with Smugglers’ Notch. Homeowners entered into these contracts, which expressly 5 provided that they could be terminated with notice by any party, and that Homeowners would not 6 be entitled to use facilities or services at the Villagewithout another services contract in place. As 7 a result, Homeowners knew that Smugglers’ Notc h retained significant power over their access to 8 recreational facilities, both through the duration and upon termination of the service contracts. 9 Homeowners’ argument is therefore without merit. 10 B. Leave to Replead 11 Homeowners also argue that they should have been granted leave to amend their complaint 12 for a second time. “When a motion to dismiss is granted, the usual practice is to grant leave to 13 amend the complaint.” Bellikoff , 481 F.3d at 118 (quoting Ronzani v. Sanofi S.A. , 899 F.2d 195, 198 14 (2d Cir. 1990)) (internal quotation marks omitted); see also Fed. R. Civ. P. 15(a) (“[L]eave to amend 15 shall be freely given when justice so requires.”). However, where the plai ntiff “offers no plausible 16 argument as to how the failure to plead a relevant market could be rectified through an amended 17 complaint,” denial of leave to amend and dismissal of the antitrust claims with prejudice is 18 appropriate. Chapman , 546 F.3d at 239 & n.3; see also Hayden v. Cnty. of Nassau , 180 F.3d 42, 53- 19 54 (2d Cir. 1999) (“[W]here the plai ntiff is unable to demonstrate that he would be able to amend 20 his complaint in a manner that would survive dismissal, opportunity to replead is rightfully 21 denied.”). 2210 Here, Homeowners have not demonstrated that their failure to plead relevant markets could 1 be rectified through a second amended complaint. Instead, they merely offer to provide additional 2 details regarding facts they have already alleged. Moreover, as the district court rightly noted, 3 Homeowners received an opportunity to amend th eir complaint after Smugglers’ Notch filed its 4 memorandum of law delineating inadequacies in Ho meowners’ original complaint, yet still failed 5 to state a claim. Under such circumstances, we decline to find that the district court abused its 6 discretion in denying Homeowners leave to replead. 7 C. Conclusion 8 We have reviewed the parties’ remaining arguments and find them to be moot, waived, or 9 without merit. See In re Nortel Networks Secs. Litig. , 539 F.3d 129, 132 (2d Cir. 2008) (noting the 10 “‘well-established general rule that an appellate c ourt will not consider an i ssue raised for the first 11 time on appeal’” (quoting Bogle-Assegai v. Conn. , 470 F.3d 498, 504 (2d Cir. 2006))); Allianz Ins. 12
Co. v. Lerner, 416 F.3d 109, 114 (2d Cir. 2005). The judgment of the district court is therefore 13
AFFIRMED. 14

FOR THE COURT: 15 Catherine O’Hagan Wolfe, Clerk 16

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