United States Court of Appeals

FOR THE EIGHTH CIRCUIT

_____________

No. 96-2477MN

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Minnesota Department of *

Economic Security, State *

Services for the Blind and *

Visually Handicapped; *

*

Plaintiff-Appellee, *

*

Dennis Groshel, *

*

Intervenor Plaintiff- * Appeal from the United States

Appellee, * District Court for the District

* of Minnesota.

v. * 

* 

Richard Riley, United States *

Secretary of Education; *

United States Department of *

Veterans Affairs; James B. *

Donahoe, in his official *

capacity as Director, Veterans *

Canteen Service, *

*

Defendants-Appellants.*

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Submitted: October 23, 1996

 Filed: February 26, 1997

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Before FAGG, BOWMAN, and HANSEN, Circuit Judges.

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FAGG, Circuit Judge.

The Randolph-Sheppard Vending Stand Act, 20 U.S.C. §§ 107-107f

(1994) (the Act), gives blind persons licensed by a state licensing

agency priority to operate vending facilities on federal property.

This dispute began more than ten years ago, when Minnesota's

licensing agency, the Minnesota Department of Economic Security

(formerly the Minnesota Department of Jobs and Training)
(Minnesota), applied under the Act and its corresponding

regulations for a vending permit for the Veterans Affairs Medical

Center in St. Cloud, Minnesota (VA Medical Center). Minnesota's

application was rejected by the Department of Veterans Affairs and

the Veterans' Canteen Service (collectively VCS), which claimed to

be exempt from the Act. Minnesota sought arbitration, as the Act

provides. See 20 U.S.C. § 107d-1(b). The arbitration panel (the

Panel) held the VCS was subject to the Act. The VCS and Minnesota

then jointly submitted five disputed issues for the Panel to

resolve. Only two are relevant to this appeal. The Panel decided

Minnesota's licensed blind vendor Dennis Groshel should pay the VCS

a commission on vending sales, and the VCS does not have the "right

to install and operate its own vending machines" at the VA Medical

Center.

Minnesota sought judicial review in the district court, which

decided commission payments violate the Act. The VCS appealed to

this court, and we affirmed. See Minnesota Dep't of Jobs &

Training v. Riley, 18 F.3d 606, 608 (8th Cir. 1994). We held the

Act applies to the VCS. See id. at 608-09. We also held that

commission payments, like any limitation on a blind vendor's

operation, are unlawful unless approved by the Secretary of

Education. See id. at 609; 20 U.S.C. § 107(b). Although Riley

paved the way for Minnesota to receive its vending permit, the VCS

continued and continues to stonewall Minnesota and its blind

licensee. Ignoring the Act, the Panel's decision, and our opinion

in Riley, the VCS offered Minnesota a permit, but only if Minnesota

agrees the VCS can install competing vending machines at the VA

Medical Center. Minnesota returned to the district court, which

granted Minnesota's motion to enforce the Panel's decision. In

doing so, the district court recognized that "installation of

vending machines by the VCS is undoubtedly an attempt to limit the

income of the blind vendor[] which must be approved [by] the

Secretary of the [Department of Education] prior to

implementation." Although the district court characterized its

enforcement order as a preliminary injunction, we agree with the
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VCS that, for the purpose of review, we should treat the order as

a permanent injunction because Minnesota and the VCS disagree only

about the law, and nothing remains for the district court to

resolve. Likewise, we agree with the VCS that we review the

disputed questions of law de novo. See International Ass'n of

Machinists & Aerospace Workers, Dist. Lodge No. 19 v. Soo Line R.R.

Co., 850 F.2d 368, 374 (8th Cir. 1988) (en banc). On appeal, the

VCS once again claims exemption from the Act. Our earlier opinion

in Riley forecloses this claim.

Echoing its argument in Riley, the VCS contends it need not

comply with § 107(b), which prohibits any limitation on a blind

vendor's operation unless approved by the Secretary of Education,

because the Veterans' Canteen Service Act independently authorizes

the VCS to operate vending machines at the VA Medical Center. See

38 U.S.C. § 7802. Further, the VCS asserts that when it operates

within the parameters of § 7802, neither an arbitration panel

convened under 20 U.S.C. § 107d-1(b) nor the district court can

hold the VCS answerable for violations of the Act. In Riley,

however, we held the VCS must comply with every provision of the

Act, and that includes §§ 107(b) and 107d-1(b). See 18 F.3d at

608-09. We have never questioned the VCS's authority to operate

canteens, install vending machines, or do anything else the VCS's

enabling legislation empowers it to do. But in Riley, we held the

Act precludes the VCS's exercise of its statutory authority when

that exercise would limit a blind vendor's operation, unless the

Secretary approves the limitation. See id. at 609-10. Here, the

VCS does not challenge the district court's finding that "competing

vending machines will . . . undermine or . . . destroy [the] blind

vendor's ability to obtain what is already a small income." No

less than commission payments, competing machines would limit the

blind vendor's operation. Riley rules out both, unless the

Secretary decides otherwise.

In truth, the VCS has done far more than merely limit the
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blind vendor's operation at the VA Medical Center. Congress

assumed federal agencies would respect a blind person's vending

enterprise and willingly comply with the Act. See 20 U.S.C.

§ 107d-2(b)(2). Instead, the VCS has tried to drive the blind

vendor out of its domain. Testifying before the Panel in 1988, a

VCS official said:

Basically as long as this dispute lasts the guy who

is going to suffer over it is going to be [the

blind vendor] because prices are going to continue

to go up, and we are going to continue to hold

until this is resolved. The longer it goes on the

less money he is going to make.

Nine years later, the VCS is still at it, demanding the right to

install machines that would, as the district court found, destroy

the blind vendor's livelihood. It is time for the VCS's scorchedearth campaign to end. Although Minnesota, in securing a permit,

must work within the Act's regulatory scheme, Riley makes clear--

and we hold today--that unless the VCS gets the Secretary's

approval, the VCS may not insist Minnesota accept the presence of

VCS vending machines at the VA Medical Center as the price of

Minnesota's permit.

Finally, the VCS raises two other issues. First, the VCS

contends arbitration panels convened under § 107d-1(b) have no

authority to order remedies for violations of the Act. See

Maryland State Dep't of Educ. v. United States Dep't of Veterans

Affairs, 98 F.3d 165, 169-71 (4th Cir. 1996); Georgia Dep't of

Human Resources v. Nash, 915 F.2d 1482, 1491-92 (11th Cir. 1990).

The VCS's argument is misplaced. The Panel never ordered the VCS

to take any remedial action, but simply decided competing VCS

vending machines at the VA Medical Center would violate the Act.

The Panel did exactly what the statute authorizes. See 20 U.S.C.

§ 107d-2(b)(2); Maryland State Dep't of Educ., 98 F.3d at 169-71;

Nash, 915 F.2d at 1491-92. Indeed, by insisting on a permit

condition at odds with the Panel's decision, it is the VCS that

ignores its statutory responsibility to bring itself into
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compliance with the Act. See Maryland State Dep't of Educ., 98

F.3d at 171. Second, the VCS questions whether the Panel's no-VCSmachines decision continues in force because the Panel's reasoning

interweaves that decision with its overturned ruling on commission

payments. If the two decisions were as mutually dependent as the

VCS now claims, it is surprising the VCS did not say so when the

commissions issue was before us in Riley. Nevertheless, the

argument is without merit. The VCS itself, together with

Minnesota, asked the Panel to resolve two separate disputed issues,

commission payments and competing machines. In deciding against

the VCS's vending machines, the Panel took into consideration that

the VCS would receive commissions. The Panel never said, however,

that if Minnesota pays no commissions, the VCS may then go ahead

and install its machines. Rather, the Panel said yes to

commissions and no to competing VCS vending machines. The Panel's

decision was the final word on what the VCS must do to comply with

the Act. See § 107d-1(b).

The VCS is no different from any other steward of federal

property. If the VCS wants to impose limitations on a blind

vendor's operation, it must get permission from the Secretary of

Education. Of course, if the Secretary approves installation of

the VCS's vending machines, the VCS need not share its income with

the blind vendor. See § 107d-3(d). We affirm the decision of the

district court.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.