1 

RECOMMENDED FOR FULL-TEXT PUBLICATION 

Pursuant to Sixth Circuit I.O.P. 32.1(b) 

File Name: 14a0156p.06 

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT 

_________________ 

COMMONWEALTH OF KENTUCKY, EDUCATION AND 

WORKFORCE DEVELOPMENT CABINET, OFFICE FOR 

THE BLIND, 

Plaintiff-Appellant, 

v. 

UNITED STATES OF AMERICA, by and through the 

Honorable Chuck Hagel, Secretary of Defense, and 

the Honorable John McHugh, Secretary of the 

Army, 

Defendant-Appellee. 

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No. 12-6610 

Appeal from the United States District Court 

for the Western District of Kentucky at Paducah 

No. 5:12-cv-00132—Thomas B. Russell, District Judge. 

Decided and Filed: July 21, 2014 

Before: MOORE, WHITE, and DONALD, Circuit Judges. 

_________________ 

COUNSEL 

ON BRIEF: Patrick B. Shirley, COMMONWEALTH OF KENTUCKY, Frankfort, Kentucky, 

for Appellant. Candace G. Hill, UNITED STATES ATTORNEY’S OFFICE, Louisville, 

Kentucky, for Appellee. 

_________________ 

OPINION

_________________ 

KAREN NELSON MOORE, Circuit Judge. The Randolph-Sheppard Act (“the Act”), 

ch. 638, 49 Stat. 1559 (1936) (codified at 20 U.S.C. §§ 107–107e), gives blind persons a priority 

in winning contracts to operate vending facilities on federal properties. One of these properties 

>
No. 12-6610 Commonwealth of Ky. v. United States Page 2

is Fort Campbell in Kentucky, which operates a cafeteria for its soldiers. For at least the last two 

decades, Kentucky’s Office for the Blind (“OFB”) has helped blind vendors apply for and win 

the base’s contracts for various services. In 2012, the United States Army (“the Army”), the 

federal entity that operates Fort Campbell, published a solicitation, asking for bids to provide 

dining-facility-attendant services. Rather than doing so under the Act, as it had before, the Army 

issued this solicitation as a set aside for Small Business Administration Historically 

Underutilized Business Zones (“HUBZones”). OFB disagreed with this change in classification 

and, representing its blind vendor, filed for arbitration under the Act. OFB also sought a 

temporary restraining order (“TRO”) and a preliminary injunction in the district court, requesting 

that the court stay the awarding of a new contract pending arbitration. The district court denied 

the requests, finding that it lacked jurisdiction to consider a request for a preliminary injunction. 

OFB appealed to this court. We now hold that OFB’s failure to seek and complete arbitration 

does not deprive the federal courts of jurisdiction. The district court erred to the extent that it 

found differently. Therefore, we VACATE the district court’s judgment and REMAND for 

reconsideration. 

I. BACKGROUND

A. Randolph-Sheppard Act

 In 1936, Congress passed the Randolph-Sheppard Act to “enlarge[e] the economic 

opportunities of the blind” by giving them priority in the bidding of contracts to operate vending 

facilities on federal properties. 20 U.S.C. § 107(a). “[V]ending facilit[ies]” include cafeterias 

and snack bars on military bases, such as Fort Campbell. § 107e(7). 

 When everything runs smoothly, the priority works as follows: the Secretary of 

Education (“the Secretary”) designates a “licensing agency” for each state. § 107a(a)(5). These 

state licensing agencies then provide the blind with training, equipment, certification, and—if 

necessary—legal representation. See §§ 107b(2), (6); 107d-4; 107a(b); 34 C.F.R. § 395.33. 

When a federal agency, such as the Army, solicits vending-facility services, it must invite the 

state licensing agency to bid on the contract. 34 C.F.R. § 395.33(b). The state licensing agency 

will then select a blind vendor and submit a bid if the vendor can “provide food service at 

comparable cost and of comparable high quality . . . .” Id. If the state licensing agency’s 
No. 12-6610 Commonwealth of Ky. v. United States Page 3

proposal, according to neutral, pre-published criteria, is within “a competitive range” and the 

Department of Education (“DOE”) agrees with the state licensing agency’s assessment of the 

vendor’s qualifications, the blind vendor will be awarded the contract. § 395.33(a), (b). When a 

vending-facility-services contract nears expiration, the federal agency may directly negotiate 

with the state licensing agency to renew the contract, or it can open bidding to the general public, 

triggering the same procedure outlined above. § 395.33(d). 

 In the event that disputes arise, the Act and DOE’s regulations provide for arbitration 

between the state licensing agency and the federal agency soliciting vending-facility services. 

See 20 U.S.C. § 107d-1; 34 C.F.R. §§ 395.33(b), 395.37. The DOE and the parties will select 

and convene an arbitration panel, which then conducts a hearing and issues a decision. 

20 U.S.C. § 107d-2(b); 34 C.F.R. § 395.37(b), (c), (f). The panel’s decision is considered to be 

the final agency action and to be binding upon the parties. 20 U.S.C. § 107d-1(b); 34 C.F.R. 

§ 395.37(b). If the federal agency is found to be non-compliant, the regulations provide that “the 

head of any such department, agency, or instrumentality . . . shall cause such acts or practices to 

be terminated promptly and shall take such other action as may be necessary to carry out the 

decision of the panel.” § 395.37(d). The regulations then provide for judicial review of the 

panel’s decision. Id.; see also 5 U.S.C. §§ 701–706. 

B. Facts and Procedural History 

 In Kentucky, OFB is the state licensing agency. In this role, it licenses and trains blind 

vendors. It also submits bids on their behalf for vending-facility-services contracts on federal 

properties. In 1995, the OFB appointed James E. Hardin as its blind licensed vendor and 

submitted a bid for the contract with the Army to perform full-food and dining-facility-attendant 

services1

 in Fort Campbell’s cafeteria. R. 1 at 5 (Compl. at ¶ 10) (Page ID #5). DOE and the 

Army adjudged OFB’s bid sufficiently competitive, and OFB received the contract. Id. Hardin 

formed a joint venture, First Choice Food Services (“First Choice”), and went about performing 

the contract. R. 1-1 at 3–4 (Pl. Mem. for TRO) (Page ID #21–22). 

 1

Dining-facility-attendant services include cleaning and janitorial services. Full-food services also include 

preparing and serving meals. See Appellant Br. at 4 n.1.
No. 12-6610 Commonwealth of Ky. v. United States Page 4

 In 2000, OFB contacted the Army regarding direct negotiations for the extension of the 

Fort Campbell contract. R. 1-5 at 5 (2002 Arbitration Decision) (Page ID #49). The Army 

declined the invitation and posted a new solicitation for dining-facility-attendant services. Id. at 

6 (Page ID #50). The Army eventually declared that “[t]he new solicitation [would be] 

administered as a SBA . . . set aside procurement and not as a Randolph-Shep[p]ard 

procurement.” Id. at 7 (Page ID #51). OFB filed for arbitration pursuant to 34 C.F.R. 

§ 395.33(b). The arbitration panel found in 2002 that the Act covers dining-facility-attendant 

services and ordered the Army to negotiate with the OFB regarding the continuation of the 

contract. R. 1-5 at 13 (Page ID #57). 

 In 2007, the Army solicited bids for the performance of full-food and dining-facilityattendant services. Again, DOE and the Army adjudged OFB’s bid competitive, and OFB 

received the contract. R. 1 at 5 (Compl. at ¶ 10) (Page ID #5). First Choice2 performed the 

contract. 

 In August 2012, the Army decided to rely once again upon its own cooks for meal 

preparation and service. See R. 1-4 at 1 (Brinly Letter) (Page ID #41). It also solicited bids for 

dining-facility-attendant services, a solicitation that the Army classified as a set aside for SBA 

HUBZones. See R. 1-2 at 1 (Solicitation) (Page ID #36). OFB objected to the SBA HUBZones 

classification. R. 1-4 at 1–3 (Brinly Letter) (Page ID #41–43). In a letter, OFB cited the 2002 

arbitration decision, which held that dining-facility-attendant services were covered by the Act. 

Id. at 2–3 (Page ID #42–43). The Army replied, stating that its “interpretation of the [Act] is that 

it applies only when contracting for the operation of military dining facilities,” meaning full-food 

services. R. 1-6 at 1 (Fletcher-Schiewe Letter) (Page ID #59). 

 As a result of being rebuffed, OFB demanded arbitration with the DOE on September 14, 

2012. R. 1-7 at 17 (Arbitration Compl.) (Page ID #78). The arbitration complaint asked DOE to 

convene an arbitration panel, to find the Army in violation of the Act, and to order the Army to 

comply with the terms of the Act. Id. at 16–17 (Page ID #77–78). Three days later, OFB filed a 

self-styled “Motion and Complaint for Temporary Restraining Order and Preliminary Injunction” 

 2

At some point between 2007 and 2012, Faye Autry replaced Hardin as the blind licensed vendor and 

continued to operate First Choice. See R. 1 at 5 n.1 (Compl. ¶ 10) (Page ID #5).
No. 12-6610 Commonwealth of Ky. v. United States Page 5

in federal district court. R. 1 at 1 (Compl.) (Page ID #1). This filing requested that the district 

court hold an expedited hearing and issue a TRO or preliminary injunction “prohibiting the 

Army from either conducting the procurement and/or making award to an offeror pursuant to 

[the solicitation] until such time as the arbitration proceeding required by 20 [U.S.C.] § 107d1(b) is concluded.” Id. at 14 (Page ID #14). The Army replied, arguing that OFB could not meet 

the standard for injunctive relief on the merits. R. 7 at 5–11 (Def. Resp. in Opp’n) (Page ID 

#109–15). In the alternative, the Army argued that the district court lacked jurisdiction to 

entertain the motion because OFB had not exhausted its administrative remedies, namely that 

OFB had not completed arbitration. Id. at 11–16 (Page ID #115–120). OFB disagreed. R. 8 at 

1–16 (Pl. Reply) (Page ID #374–389). 

 On October 9, 2012, the district court held a hearing on the preliminary injunction. It 

issued its decision two weeks later on October 23, denying the injunction and dismissing the 

action without prejudice. See R. 11 at 11 (D. Ct. Op.) (Page ID #420). The district court found 

that it lacked jurisdiction to consider OFB’s request because OFB had not exhausted its 

administrative remedies. Id. at 9–10 (Page ID #418–19). In the alternative, the district court 

stated that “even if [it] were to find it had jurisdiction to issue a preliminary injunction, [OFB] 

has not shown that such an ‘extraordinary remedy’ is warranted in this case. . . . [I]n light of the 

DOE’s evolving views on the applicability of the [Act] to [dining-facility-attendant]-only 

contracts, it is not clear that the [OFB] will prevail on the merits.” Id. at 11 (Page ID #420). The 

Army alerted the district court to the fact that the blind licensed vendor’s contract would expire 

on March 31, 2013 and that Federal Acquisition Regulation § 52.217-8 barred the Army from 

extending the contract further while arbitration was pending. R. 13 at 1 (Def. Mot. for 

Correction) (Page ID #422); see also R. 10 at 2 (Def. Supp. Resp.) (Page ID #406). The district 

court reaffirmed its finding that it lacked jurisdiction. R. 18 at 1 (D. Ct. Oct. 30, 2012 Order) 

(Page ID #437). 

 On November 2, 2012, OFB filed a Motion to Alter or Amend pursuant to Federal Rule 

of Civil Procedure 59. R. 19 at 1–11 (Pl. Mot. to Alter) (Page ID #438–448). OFB requested 

that the district court reconsider its finding that OFB had not shown that it would suffer 

irreparable harm absent a preliminary injunction because the Army alerted the district court that 
No. 12-6610 Commonwealth of Ky. v. United States Page 6

the solicitation would close on November 9, 2012 and that the blind licensed vendor’s contract 

would expire March 31, 2013. Id. at 1–2 (Page ID #438–39). The district court denied the 

motion. See R. 22 (D. Ct. Dec. 4, 2012 Order) (Page ID #463). The district court reaffirmed that 

it “denied OFB’s request for a preliminary injunction based on its finding that it lacked 

jurisdiction.” Id. at 2 (Page ID #464). It also stated that its “discussion of irreparable harm was 

limited to two sentences in the opinion’s final paragraph, which discussed in dicta that a 

preliminary injunction may not have been warranted ‘even if [the district court] were to find it 

had jurisdiction.’” Id. (quoting R. 11 at 11 (D. Ct. Op.) (Page ID #420)). 

 OFB appealed the district court’s rejection of its Rule 59 motion to this court on 

December 20, 2012. R. 23 at 1 (Notice of Appeal) (Page ID #467). While its appeal was 

pending, on January 31, 2013, OFB filed in this court a Motion for Injunction Pending Appeal 

pursuant to Federal Rule of Appellate Procedure 8. In its motion, OFB recited the arguments it 

raised in district court and requested that this court enjoin the Army from awarding the diningfacility-attendant contract until arbitration was completed. In response, the Army argued that 

this court had jurisdiction to consider only whether the district court erred in finding that it did 

not have jurisdiction to rule on the merits of OFB’s claims. Additionally, the Army filed a 

Motion to Dismiss Appeal, asserting that OFB’s appeal is moot because the Army had already 

awarded the contract. 

 We denied both motions on March 28, 2013. Kentucky Educ. & Workforce Dev. Cabinet 

Office for the Blind v. United States, No. 12-6610, at *3 (6th Cir. Mar. 28, 2013) (unpublished 

order) (“Office for the Blind”). We held that this situation was “‘capable of repetition, yet 

evading review’” and, thus, not moot. Id. at *2 (quoting In re Search of Fair Fin., 692 F.3d 424, 

428 (6th Cir. 2012)). Furthermore, we also held that “[t]he district court did not abuse its 

discretion in denying the preliminary injunction” and noted that “[n]umerous courts, including 

this court, have required exhaustion under similar circumstances.” Id. (citing Fillinger v. 

Cleveland Soc’y for the Blind, 587 F.2d 336, 338 (6th Cir. 1978) (“Fillinger I”)). Three days 

later, on March 31, the blind licensed vendor’s contract expired with the Army, and the next day, 

the winner of the solicitation started providing dining-facility-attendant services. 
No. 12-6610 Commonwealth of Ky. v. United States Page 7

 Arbitration continued between the Army and OFB, and on February 14, 2014, the 

arbitration panel issued a divided decision, siding with OFB. The arbitration panel concluded 

that the Act covers the dining-facility-attendant services at Fort Campbell and that the Army 

violated the Act by soliciting bids as a HUBZones set aside. Arb. Dec. at 26, 27. Accordingly, 

the panel ordered the Army to terminate its contract with its current vendor on March 31, 2014 

and to commence negotiations with OFB immediately for a new contract to take effect on April 

1, 2014. Id. at 28. OFB has continued its appeal, and we asked the parties to supply letter 

briefing regarding whether the appeal is now moot. 

II. ANALYSIS

 In its briefing before this court, OFB asks us to hold that the district court erred in finding 

that it lacked jurisdiction to issue a preliminary injunction, which could have stayed the awarding 

and implementation of the contract pending arbitration. At this point in time, the Army has 

already awarded the contract, arbitration has already been completed, and OFB has filed another 

suit in district court, seeking to enforce the arbitration panel’s decision. Therefore, two questions 

arise: (1) is OFB’s appeal moot; and (2) if not, did the district court err in its jurisdictional 

finding? We answer the first question in the negative and the second one in the affirmative. 

A. Mootness 

“Under Article III of the Constitution, federal courts may adjudicate only actual, ongoing 

cases or controversies.” Lewis v. Cont’l Bank Corp., 494 U.S. 472, 477 (1990) (citing Deakins v. 

Monaghan, 484 U.S. 193, 199 (1988); Preiser v. Newkirk, 422 U.S. 395, 401 (1975)). “When—

for whatever reason—the dispute discontinues or we are no longer able to grant meaningful relief 

to the prevailing party, the action is moot, and we must dismiss for lack of jurisdiction.” United 

States v. Blewett, 746 F.3d 647, 661 (6th Cir. 2013) (Moore, J., concurring) (citing Knox v. Serv. 

Emp. Int’l Union, 132 S. Ct. 2277, 2287 (2012)); accord Chafin v. Chafin, 133 S. Ct. 1017, 1023 

(2013). “‘[I]t is not enough that a dispute was very much alive when suit was filed.’” FEC v. 

Wisconsin Right to Life, Inc., 551 U.S. 449, 461 (2007) (quoting Lewis, 494 U.S. at 477). There 

must be a live controversy “at every stage of the litigation” for us to have Article III jurisdiction. 

Lawrence v. Blackwell, 430 F.3d 368, 370–71 (6th Cir. 2005). 
No. 12-6610 Commonwealth of Ky. v. United States Page 8

 This doctrine, however, is not without its exceptions. “[A] case will not be considered 

moot if the challenged activity is capable of repetition, yet evading review.” Id. at 371; see also 

Murphy v. Hunt, 455 U.S. 478, 482 (1982); Weinstein v. Bradford, 423 U.S 147, 149 (1975). 

“The exception applies where ‘(1) the challenged action is in its duration too short to be fully 

litigated prior to cessation or expiration, and (2) there is a reasonable expectation that the same 

complaining party will be subject to the same action again.’”3 Wisconsin Right to Life, 551 U.S. 

at 462 (quoting Spencer v. Kemna, 523 U.S. 1, 17 (1998)). In our March 28, 2013 order, we held 

that OFB’s suit challenging the Army’s solicitation of bids outside the Act’s requirements fit 

within this exception. The same is true today. 

 The time between when the Army publishes its solicitation of bids and when the new 

vendor’s contract goes into effect is exceptionally short. In this case, the Army posted its 

solicitation on August 28, 2012 and established a closing date of September 19, 2012. R. 1 at 7 

(Compl. at ¶¶ 15, 17) (Page ID #7). OFB’s contract was set to expire December 31, 2012, 

though the Army extended it three months. See R. 10 at 2 (Def. Supp. Resp.) (Page ID #406). 

However, the Army claims that regulations prevented it from extending it further. See Appellee 

Br. at 10 & n.4 (citing FAR § 52.217-8). The district court ruled quickly on October 23, 2012, 

R. 11 at 11 (D. Ct. Op.) (Page ID #420), but the case did not reach us until December 21, 2012, 

with the appellant’s brief not due until February 4, 2013. Absent an extension from the Army, 

 3

In several recent cases, the Supreme Court has reaffirmed that “a federal court’s obligation to hear and 

decide cases within its jurisdiction is virtually unflagging.” Susan B. Anthony List v. Driehaus, 134 S. Ct. 2334, 

2347 (2014) (internal quotation marks omitted); Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 

1377, 1386 (2014) (same). In doing so, the Court has placed the continuing vitality of the prudential aspects of 

standing and ripeness, doctrines that sound in Article III and are closely related to mootness, in doubt. See 

Driehaus, 134 S. Ct. at 2347 (ripeness); Lexmark, 134 S. Ct. at 1386–88 (standing). 

As with standing and ripeness, there are constitutional and prudential aspects to the mootness doctrine as 

well, Allen v. Wright, 468 U.S. 737, 750 (1984) (citing Vander Jagt v. O’Neill, 699 F.2d 1166, 1178–79 (D.C. Cir. 

1983) (Bork, J., concurring)), but it is not always easy to distinguish the constitutional aspects of mootness, 

grounded in Article III, from the prudential ones, grounded in policy, see, e.g., United States Parole 

Comm’n v. Geraghty, 445 U.S. 388, 420 n.15 (1980) (Powell, J., dissenting) (accusing the majority of conflating the 

two arms of the doctrine). The “capable of repetition yet evading review” exception itself straddles the 

constitutional/prudential divide. At least one member of the Court has interpreted “the probability of recurrence 

between the same parties” portion of the exception to be “essential to [federal-court] jurisdiction,” see Honig v. Doe, 484 U.S. 305, 341 (1988) (Scalia, J., dissenting); the same Justice, who recently penned Lexmark, also considers the 

“evading review” portion of the exception to be prudential, see Honig, 484 U.S. at 341. We interpret the exception’s 

test, as stated above and applied, to focus upon the constitutional aspects of mootness and to be grounded in Article 

III, as both prongs focus upon whether an actual controversy exists between the parties. See id. Therefore, although 

in the future the Supreme Court may reexamine the mootness doctrine, the doctrine as it exists today compels us to 

exercise jurisdiction over this claim if OFB can demonstrate that the “capable of repetition, yet evading review” 

exception applies. 
No. 12-6610 Commonwealth of Ky. v. United States Page 9

the case arguably could have been moot ten days after reaching us. Even with the extension, 

there would be little time for us to consider OFB’s reply brief, originally due March 24, 2013, 

before the new contract took effect. Accordingly, we hold that the facts of this case demonstrate 

that the controversy expires too quickly for OFB to litigate the matter before the contract goes 

into effect. See Turner v. Rogers, 131 S. Ct. 2507, 2515 (2011) (noting that 12-month, 18-

month, and two-year time periods qualified as too short in duration to be litigated sufficiently). 

 Additionally, the history of these parties demonstrates that this scenario will likely play 

out again between them in the future. At roughly five-year intervals, the Army solicits bids for 

dining-facility-attendant services. See R. 1 at 5–6 (Compl. at ¶¶ 10–12) (Page ID #5–6). On at 

least two prior occasions, OFB has challenged the Army’s decision that a solicitation is not 

governed by the Act. See R. 1-4 at 1–3 (Brinly Letter) (Page ID #41–43) (citing other cases and 

disputes); see also Kentucky, Educ. Cabinet, Dep’t for the Blind v. United States, 424 F.3d 1222 

(Fed. Cir. 2005) (“Dep’t for the Blind”); Kentucky v. United States, 62 Fed. Cl. 445 (2004). It 

does not appear likely that the Army will stop needing dining-facility-attendant services, nor 

does it appear likely that OFB will stop asserting that the Act applies to these contracts. Thus, 

there is a reasonable expectation that a district court, in the not so distant future, will face a 

request that it issue an injunction to stay the awarding of a contract pending arbitration involving 

these parties. Cf. Turner, 131 S. Ct. at 2515 (holding that a defendant’s frequent failure to make 

child-support payments in the past created a reasonable expectation that the dispute would arise 

again between the same parties). As a result of these two determinations, we hold that OFB’s 

appeal fits within “the capable of repetition, yet evading review” exception and is, therefore, not 

moot. 

B. Jurisdiction 

The district court denied OFB’s application for a preliminary injunction because OFB 

had not exhausted its administrative remedies, namely arbitration. In doing so, the district court 

found that it lacked jurisdiction to decide the case. In self-described “dicta,” see R. 22 at 2 

(D. Ct. Dec. 4, 2012 Order) (Page ID #464), the district court also found that OFB’s application 

lacked merit because “it [was] not clear that [OFB] [would] prevail on the merits,” R. 11 at 11 

(D. Ct. Op.) (Page ID #420). We stated, in our March 28, 2013 order, that “[t]he district court 
No. 12-6610 Commonwealth of Ky. v. United States Page 10

did not abuse its discretion in denying the preliminary injunction.” Office for the Blind, No. 12-

6610, at *2. The parties, however, do not read our order as disposing of their case, and 

admittedly, the order is not a model of clarity. As a result, we address the parties’ concerns 

below, and we hold that exhaustion is not a jurisdictional prerequisite and that OFB has 

demonstrated that it meets an exception to the Act’s statutory exhaustion requirements. 

 1. Completing Arbitration Is Not a Jurisdictional Prerequisite

 In recent years, the Supreme Court has recognized that jurisdiction ‘“is a word of many, 

too many, meanings’” used far too loosely by federal courts. Steel Co. v. Citizens for a Better 

Env’t, 523 U.S. 83, 90 (1998) (quoting United States v. Vanness, 85 F.3d 661, 663 n.2 (D.C. Cir. 

1996)). Too often, the Court has observed, federal courts “dismiss[] ‘for lack of jurisdiction’ 

when some threshold fact has not been established, without explicitly considering whether the 

dismissal should be for lack of subject matter jurisdiction or for failure to state a claim.” 

Arbaugh v. Y & H Corp., 546 U.S. 500, 511 (2006) (internal quotation marks omitted). The 

Court has acknowledged that “the distinction between jurisdictional conditions and claimprocessing rules can be confusing in practice.” Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 

161 (2010). However, in an effort to avoid “drive-by jurisdictional rulings,” Steel Co., 523 U.S. 

at 91, the Court has instituted a clear-statement rule requiring Congress to “state[] [clearly] that a 

threshold limitation on a statute’s scope shall count as jurisdictional . . . .” Arbaugh, 546 U.S. at 

515. 

 Under this rule, the Act’s exhaustion requirement is not jurisdictional. Section 107d-1(b) 

provides that 

Whenever any [s]tate licensing agency determines that any department, agency, or 

instrumentality of the United States that has control of the maintenance, 

operation, and protection of Federal property is failing to comply with the 

provisions of [the Act] or any regulations issued thereunder . . . such licensing 

agency may file a complaint with the Secretary who shall convene a panel to 

arbitrate the dispute pursuant to section 107d-2 of this title, and the decision of 

such panel shall be final and binding on the parties except as otherwise provided 

in this chapter. 

This language does not rise to the level of a clear statement. Section 107d-1 is simply not 

phrased in jurisdictional terms. Our decision in Allen v. Highlands Hospital Corp., 545 F.3d 387 
No. 12-6610 Commonwealth of Ky. v. United States Page 11

(6th Cir. 2008), is helpful here. In that case, we held that an exhaustion requirement in the Age 

Discrimination in Employment Act (“ADEA”), 29 U.S.C. §§ 621–634, did not meet Arbaugh’s 

stringent test. The ADEA provides that “[n]o civil action may be commenced by an individual 

under this section until 60 days after a charge alleging unlawful discrimination has been filed 

with the Equal Employment Opportunity Commission [(‘EEOC’)].” 29 U.S.C. § 626(d). In 

Allen, we found it important that this provision does not reference the jurisdiction of federal 

courts. Moreover, we said that § 626(d)’s language stating that “no civil action may be 

commenced” until an EEOC charge has been filed “does not suffice to show that Congress 

intended for the requirement to be jurisdictional in nature.” Allen, 545 F.3d at 402. Similarly, 

here § 107d-1 of the Act does not reference the jurisdiction of federal courts, nor does it contain 

language remotely close to 29 U.S.C. § 626(d)’s “no civil action” bar. Thus, given Allen’s 

treatment of the ADEA and Arbaugh’s caution against “drive-by jurisdictional rulings,” we hold 

that 20 U.S.C. § 107d-1 does not create a jurisdictional prerequisite. 

 The Army cites a variety of cases and argues that they hold otherwise. We are 

unconvinced. First, most of the cases predate the Supreme Court’s decisions in Arbaugh and 

Muchnick, which altered how we interpret exhaustion requirements. See, e.g., Emswiler v. CSX 

Transp., Inc., 691 F.3d 782, 789 (6th Cir. 2012) (collecting cases in which we revisited prior 

holdings after Arbaugh); Hoogerheide v. IRS, 637 F.3d 634, 636 (6th Cir. 2011) (same). Second, 

the Army appears to confuse a mandatory exhaustion requirement with a jurisdictional one. 

There is a subtle, but important, difference. The ADEA’s requirement that a plaintiff file a 

complaint with the EEOC before commencing a civil action in district court is certainly not 

optional. Allen, 545 F.3d at 401. Federal courts, however, can craft prudential exceptions to 

non-jurisdictional exhaustion requirements and grant relief in extraordinary cases, as explained 

below. See McCarthy v. Madigan, 503 U.S. 140, 146–49 (1992) (noting various exceptions to 

exhaustion requirements). On the other hand, if a jurisdictional requirement is not met, then a 

federal court must dismiss the suit, regardless of any special considerations or circumstances. 

See Bowles v. Russell, 551 U.S. 205, 213 (2007) (noting that forfeiture and waiver arguments 

could not cure failure to comply with jurisdictional time limitations). The bar for establishing a 

jurisdictional requirement is quite high and not to be inferred lightly. For the reasons stated 

above, we do not believe the Act contains statements sufficient to clear this hurdle and impose a 
No. 12-6610 Commonwealth of Ky. v. United States Page 12

limit on the jurisdiction of federal courts. Thus, we hold that the Act’s exhaustion requirement is 

not jurisdictional. 

2. OFB Meets an Exception to the Act’s Jurisprudential Exhaustion Requirement 

 Even though the Act’s exhaustion requirement is not jurisdictional, it has bite. See, e.g.,

Dep’t for the Blind, 424 F.3d at 1228; Randolph-Sheppard Vendors of Am. v. Weinberger, 

795 F.2d 90, 104 (D.C. Cir. 1986); Alabama Dep’t of Rehab. Servs. v. U.S. Dep’t of Veterans 

Affairs, 165 F. Supp. 2d 1262, 1270 (M.D. Ala. 2001). In most cases, a failure to exhaust 

administrative remedies is fatal to a suit in federal court. See, e.g., Hoogerheide, 637 F.3d at 634 

(collecting cases). Exhaustion requirements, like this one, “serve[] the twin purposes of 

protecting administrative agency authority and promoting judicial efficiency.” McCarthy, 

503 U.S. at 145. “[E]xhaustion principles apply with special force when ‘frequent and deliberate 

flouting of administrative processes’ could weaken an agency’s effectiveness by encouraging 

disregard of its procedures.” Id. (quoting McKart v. United States, 395 U.S. 185, 195 (1969)). 

That said, exhaustion is an area of law in which “sound judicial discretion governs” “where 

Congress has not clearly required exhaustion [as a jurisdictional matter].” Id. at 144 (citing 

McGee v. United States, 402 U.S. 479, 483, n.6 (1971)). In accordance with that discretion, the 

federal courts have recognized at least three prudential exceptions to exhaustion requirements. 

Exhaustion may be excused if a litigant can show: (1) that requiring exhaustion will result in 

irreparable harm; (2) that the administrative remedy is wholly inadequate; or (3) that the 

administrative body is biased, making recourse to the agency futile. Id. at 146–48; RandolphSheppard Vendors, 795 F.2d at 104–108. 

 In this case, we conclude that exhaustion should have been excused because requiring the 

completion of arbitration prior to filing in federal court for a preliminary injunction would likely 

result in irreparable harm. Under OFB’s conception of the Act and its accompanying 

regulations, the Army must negotiate exclusively with OFB for the successor dining-facilityattendant-services contract, see 34 C.F.R. § 395.33(d), or the Army must give OFB a priority in 

the bidding process, see § 395.33(a)–(b). Under either scenario, Ms. Autry and First Choice 

would continue to provide the dining-facility-attendant services so long as the cost and quality of 

the services remained competitive. See § 395.33(b). However, because the Army chose to issue 
No. 12-6610 Commonwealth of Ky. v. United States Page 13

the solicitation as a HUBZones set aside, the successor contract went to another firm, and Ms. 

Autry and First Choice were ousted as incumbents and had to close up shop. Although a mere 

loss of profits generally will not qualify as irreparable harm, see Manakee Prof’l Med. Transfer 

Serv., Inc. v. Shalala, 71 F.3d 574, 581 (6th Cir. 1995) (“[M]onetary damages do not generally 

constitute irreparable harm.”), here the public policy in favor of economic stability and 

opportunities for the blind was also implicated, and additionally, OFB and the Army agree that 

sovereign immunity bars the arbitration panel (or a federal court) from granting OFB damages in 

the event that the Army is found to have violated the Act, see Appellant Letter Br. at 7–9; 

Appellee Letter Br. at 9–10; see also Lane v. Pena, 518 U.S. 187, 192 (1996) (“A waiver of the 

Federal Government’s sovereign immunity must be unequivocally expressed in statutory text.”); 

but see Tennessee Dep’t of Human Servs. v. U.S. Dep’t of Educ., 979 F.2d 1162, 1167 (6th Cir. 

1992) (finding that a DOE arbitration panel’s award of damages against a state does not offend 

the Eleventh Amendment). As a result, we conclude that requiring OFB to complete arbitration 

before challenging the Army’s decision not to apply the Act would result in a loss for which 

there is no remedy, an irreparable harm. Therefore, OFB meets the irreparable-harm exception, 

and the district court could have—and should have—considered OFB’s claim. 

C. Merits and Remedy 

Having settled that the district court had jurisdiction to consider OFB’s request for an 

injunction, we turn to the district court’s alternative conclusion, denying the application on the 

merits. In reviewing a district court’s decision to deny a preliminary injunction, we evaluate the 

same four factors that the district court does: “(1) whether the movant has a strong likelihood of 

success on the merits; (2) whether the movant would suffer irreparable injury without the 

injunction; (3) whether issuance of the injunction would cause substantial harm to others; and 

(4) whether the public interest would be served by issuance of the injunction.” City of Pontiac 

Retired Emps. Ass’n v. Schimmel, 751 F.3d 427, 430 (6th Cir. 2014) (en banc) (internal quotation 

marks omitted). “Whether the movant is likely to succeed on the merits is a question of law we 

review de novo.” Id. (citing NAACP v. City of Mansfield, 866 F.2d 162, 169 (6th Cir. 1989)). 

“We review ‘for abuse of discretion, however, the district court’s ultimate determination as to 

whether the four preliminary injunction factors weigh in favor of granting or denying 
No. 12-6610 Commonwealth of Ky. v. United States Page 14

preliminary injunctive relief.’” Id. (quoting Tumblebus Inc. v. Cranmer, 399 F.3d 754, 760 (6th 

Cir. 2005)). “This standard is deferential, but [we] may reverse the district court if it improperly 

applied the governing law, used an erroneous legal standard, or relied upon clearly erroneous 

findings of fact.” Id. (citing NAACP, 866 F.2d at 166–67). In addition, we must remember that 

“[t]he party seeking a preliminary injunction bears a burden of justifying such relief, including 

showing irreparable harm and likelihood of success.” Michigan Catholic Conf. & Catholic 

Family Servs. v. Burwell, --- F.3d ---, 2014 WL 2596753, at *5 (6th Cir. 2014) (internal 

quotation marks omitted). 

 The district court denied OFB’s request for a preliminary injunction because it found—in 

two, rather conclusory sentences—that OFB had not shown that it was likely to succeed on the 

merits. R. 11 at 11 (D. Ct. Op.) (Page ID #420). Since the district court rendered its decision, 

however, a DOE arbitration panel has ruled that the Act applies to the dining-facility-attendantservices contract. Given this change in circumstances and the unusual posture of this case, we 

think it best to allow the district court to consider whether any injunctive relief is available or 

appropriate at this time. See City of Pontiac, 751 F.3d at 432–33. Therefore, we vacate the 

district court’s decision and remand for further proceedings consistent with this opinion. 

III. CONCLUSION

 In summary, OFB’s application for a preliminary injunction is not moot. Even though 

the contract it wished the district court to stay went into effect, the alleged wrong is capable of 

repetition, yet evading review, and thus meets an exception to the mootness doctrine. In 

addition, OFB’s failure to exhaust its administrative remedies did not deprive the district court of 

jurisdiction to hear this case. Given that the arbitration panel has rendered its decision and 

another suit between the parties has commenced since the district court’s decision, we VACATE 

the district court’s judgment and REMAND for reconsideration consistent with this opinion.