Source: https://law.justia.com/cases/federal/appellate-courts/F3/28/130/580805/
Timestamp: 2019-09-17 17:11:28
Document Index: 75102366

Matched Legal Cases: ['§ 107', '§ 107', '§ 107', '§ 107', '§ 107', '§ 107', '§ 107', '§ 107', '§ 107', '§ 107', '§ 107', '§ 107', '§ 702', '§ 107', '§ 107', '§ 107', '§ 107']

Committee of Blind Vendors of the District of Columbia, Etal., Appellees, v. District of Columbia, et al., Appellants, 28 F.3d 130 (D.C. Cir. 1994) :: Justia
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Committee of Blind Vendors of the District of Columbia, Etal., Appellees, v. District of Columbia, et al., Appellants, 28 F.3d 130 (D.C. Cir. 1994)
US Court of Appeals for the District of Columbia Circuit - 28 F.3d 130 (D.C. Cir. 1994)
Argued Sept. 14, 1993. Decided July 5, 1994. Rehearing and Suggestion for RehearingIn Banc Denied Sept. 15, 1994. *
The District of Columbia (District) appeals the district court's decision awarding the plaintiff class compensatory damages and attorney's fees for the District's alleged violations of the Randolph-Sheppard Act (Act), 20 U.S.C. §§ 107 et seq. The District argues that the district court was without jurisdiction because the class failed to exhaust its administrative remedies and exhaustion would not have been futile. The District also challenges the damages and attorney's fees awards. For the reasons set forth below, we reverse the judgment below and remand with instructions to dismiss the action.
Congress enacted the Act in order to provide the blind with employment, to increase their economic opportunities and to encourage their economic self-sufficiency. 20 U.S.C. § 107(a). The Act achieves these goals by authorizing blind persons to operate vending facilities on federal property and by granting blind vendors licensed under the Act priority in the operation of the facilities. 20 U.S.C. §§ 107(a)-(b). The Act further benefits blind vendors by entitling them to a percentage of all income generated by vending machines operating on federal property whether or not the machines are operated by program participants. 20 U.S.C. § 107d-3.
State and federal agencies share responsibility for administering the statutory program. On the federal level, the Secretary of the United States Department of Education (Secretary) is responsible for interpreting and enforcing the Act's provisions. In addition, the Secretary designates a state licensing agency (SLA) to administer the Act within each state. 20 U.S.C. § 107a(a) (5).
Blind persons interested in participating in the program must apply to their SLA for a license to operate as a blind vendor. 20 U.S.C. § 107a(b). The SLA then applies to the federal government seeking to place the licensee on federal property. 20 U.S.C. § 107a(c). When the SLA and the federal government have agreed on a suitable location for the vending facility, the SLA equips the facility and furnishes the initial stock and inventory. 20 U.S.C. § 107b(2). From this point forward, the blind vendor operates as the sole proprietor of the vending facility. He is entitled to its profits and presumably absorbs its losses. See 20 U.S.C. § 107d-3 (income from licensee's vending machine accrues to licensee).
The Act sets forth a grievance procedure for blind vendors. "Any blind licensee who is dissatisfied with any action arising from the operation or administration of the vending facility program" can request a full evidentiary hearing before his SLA. 20 U.S.C. § 107d-1(a). If he is dissatisfied with the results of the hearing, he can file a complaint with the Secretary who then convenes an ad hoc arbitration panel to address the grievance. Id. The arbitration panel's decision is binding and subject to judicial review as final agency action under the Administrative Procedure Act (APA). 20 U.S.C. § 107d-2(a). The Act further protects the vendors by requiring each SLA to establish a Committee of Blind Vendors (CBV), elected biennially by all vendors and responsible for representing them, addressing their grievances and acting as their advocate. 20 U.S.C. § 107b-1.
The SLA for the District of Columbia1 is the District of Columbia Rehabilitation Services Administration (DCRSA), a subdivision of the District's Department of Human Services. On October 23, 1985, CBV and several individual blind vendors filed a grievance with DCRSA complaining of the District's mismanagement of the Randolph-Sheppard program. DCRSA requested that the District of Columbia Office of Fair Hearings (OFH)2 conduct an evidentiary hearing on the vendors' grievance. Committee of Blind Vendors v. District of Columbia, 695 F. Supp. 1234, 1237 (D.D.C. 1988). The OFH scheduled the hearing for September 2, 1987.3
(reproduced in Committee of Blind Vendors, 695 F. Supp. at 1234).
The District moved to dismiss the plaintiff class's action or, in the alternative, for summary judgment. The District argued, inter alia, that the court was without jurisdiction because the plaintiff class had not exhausted its administrative remedies. The court rejected the District's exhaustion argument, stating that " [t]he Court finds this to be a compelling case for invoking the futility exception to the exhaustion doctrine because resort to administrative remedies would be useless." Committee of Blind Vendors v. District of Columbia, 695 F. Supp. 1234 (D.D.C. 1988).
After a five-day bench trial, the court awarded the plaintiff class both compensatory damages and attorney's fees. Committee of Blind Vendors v. District of Columbia, 736 F. Supp. 292, 310-11, 317 (1990). The court denied the requested mandamus relief. Id. at 317. Subsequently, the District moved to alter or amend the judgment and the district court denied the motion.
We first address the exhaustion issue because of its jurisdictional nature. See Bell v. Hood, 327 U.S. 678, 682, 66 S. Ct. 773, 776, 90 L. Ed. 939 (1946). The premise of the exhaustion doctrine is "that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted." Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S. Ct. 459, 463, 82 L. Ed. 638 (1938). The doctrine benefits administrative agencies by: (1) affording them the opportunity to apply their expertise and exercise their discretion; (2) giving them the opportunity to correct their own errors without judicial intervention; and (3) discouraging "frequent and deliberate flouting of administrative processes." See McKart v. United States, 395 U.S. 185, 194-95, 89 S. Ct. 1657, 1663, 23 L. Ed. 2d 194 (1969). Likewise, the doctrine benefits the courts. Requiring exhaustion can preserve judicial resources by obviating the need for judicial review. As the Supreme Court explained in McKart, "A complaining party may be successful in vindicating his rights in the administrative process. If he is required to pursue his administrative remedies, the courts may never have to intervene." Id. at 195, 89 S. Ct. at 1663. Even if the court eventually reviews the agency's decision, requiring exhaustion simplifies the court's task by providing it with a factual record developed by the agency. Id. at 194, 89 S. Ct. at 1663.
At the outset, it is important to note that this case is not governed by the APA. The APA would have governed the case if the plaintiff class had challenged the decision of either DCRSA or the Secretary's arbitration panel. Instead, the plaintiff class seeks relief based on DCRSA's alleged misadministration of the Randolph-Sheppard program. But the APA does not apply to common-law causes of action against an agency. By its terms, the APA grants a person aggrieved by agency action the right to judicial review thereof. 5 U.S.C. § 702. Here the APA is inapplicable because no agency proceeding took place for the court to review. Because this case is not governed by the APA (or any other statute requiring exhaustion), the exhaustion doctrine applies only "as a matter of judicial discretion." Darby v. Cisneros, --- U.S. ----, ----, 113 S. Ct. 2539, 2548, 125 L. Ed. 2d 113 (1993).6 Although the question is a close one, as it usually is when we review a district court's exercise of discretion, the circumstances presented to the district court, together with the unmistakable intent of Congress that the precise administrative machinery it put in place be used, combine to lead us to conclude that the district court abused its discretion in not requiring the plaintiff class to exhaust its administrative remedies once properly promulgated procedures were in place.
Furthermore, the district court's decision to proceed with the trial denied DCRSA its intended role in resolving vendor grievances. As we have already held, the text of the Act manifests Congress's intent that aggrieved vendors pursue their administrative remedies before resorting to Article III adjudication. Randolph-Sheppard Vendors of America v. Weinberger, 795 F.2d 90, 101-04 (D.C. Cir. 1986). The inclusion of a detailed grievance procedure to resolve vendor disputes, 20 U.S.C. § 107d-1(a),7 is the strongest evidence of Congressional intent on the subject. As we explained in Weinberger, " [i]t seems unlikely, after establishing a specific dispute resolution system and conditioning judicial review on a final agency action, that Congress contemplated that an aggrieved party could ... circumvent the system and seek de novo determination in federal court." Weinberger, 795 F.2d at 103.
The District promptly moved to dismiss the complaint, citing plaintiffs' failure to exhaust their nonexistent administrative remedies. On September 28, 1988, the district court denied the motion, invoking the futility exception to the exhaustion doctrine. Committee of Blind Vendors v. Dist. of Columbia, 695 F. Supp. 1234, 1241 (D.D.C. 1988). The court noted that the District had published proposed regulations in the D.C. Register on August 19, 1988, and that the DCRSA "estimat [ed] that final regulations will be issued on approximately October 14, 1988." Id. at 1239 n. 3. Nonetheless, the court stated that it would
Under the circumstances, I cannot find that the district court abused its discretion in deciding that the District had dragged its feet too long and that the vendors were entitled to a resolution of their grievance. To be sure, exhaustion of administrative remedies serves important purposes: It allows administrative agencies to exercise their discretion and expertise, it enables them to correct their own errors without judicial intervention, and it promotes judicial economy. McKart v. United States, 395 U.S. 185, 194-95, 89 S. Ct. 1657, 1663, 23 L. Ed. 2d 194 (1969); see also Randolph-Sheppard Vendors of America v. Weinberger, 795 F.2d 90 (D.C. Cir. 1986). I agree that Congress expected the agency's expertise to be invoked before this kind of a grievance would reach a court, Weinberger, 795 F.2d at 101-04; but it surely assumed that it would take the agency less than fourteen years to adopt the necessary procedures.
Under the Act, the District of Columbia is treated as a state. 20 U.S.C. § 107e(6)
The OFH delayed the hearing for two years, awaiting the completion of audits of the program. Committee of Blind Vendors v. District of Columbia, 695 F. Supp. 1234, 1237 (D.D.C. 1988)
The Secretary promulgated regulations in 1977 requiring that " [t]he State licensing agency shall specify in writing and maintain procedures whereby such agency affords an opportunity for a full evidentiary hearing" to aggrieved blind vendors. 34 C.F.R. Sec. 395.13. The District of Columbia Administrative Procedure Act, D.C.Code Secs. 1-1501 et seq., sets forth rulemaking procedures for its agencies, which procedures DCRSA had to follow to comply with 34 C.F.R. Sec. 395.13. In 1982, DCRSA published emergency procedures to govern evidentiary hearings under the Act. The procedures expired 120 days later. Schlank v. Williams, slip op. at 8. Five years later, when the D.C. Superior Court decided Schlank v. Williams, DCRSA had yet to promulgate procedures for Randolph-Sheppard Act hearings
We have excused a plaintiff's failure to exhaust if "the reasons supporting the doctrine are found inapplicable." Committee for GI Rights v. Callaway, 518 F.2d 466, 474 (D.C. Cir. 1975). Because the purposes undergirding the doctrine are not furthered when "following the administrative remedy would be futile because of the certainty of an adverse decision," we have made an exception to its application upon a showing of futility. Randolph-Sheppard Vendors of America v. Weinberger, 795 F.2d 90 (D.C. Cir. 1986). The futility exception is, however, quite restricted. See id. at 106 (futility exception applicable only if administrative remedies are "clearly useless"); Peter Kiewit Sons' Co. v. United States Army Corps. of Eng'rs, 714 F.2d 163, 168-69 (D.C. Cir. 1983) (exhaustion requirement waived in "only the most exceptional circumstances")
The plaintiff class argues that the Supreme Court's decision in Darby renders exhaustion under the Act unnecessary. We disagree. In Darby, the Supreme Court held that a federal court cannot require a plaintiff to exhaust his administrative remedies before seeking judicial review under the APA unless the statute at issue or agency rules issued thereunder specifically require exhaustion as a prerequisite to judicial review. --- U.S. at ----, 113 S. Ct. at 2548. The Court limited its holding, however, by stating that " [o]f course, the exhaustion doctrine continues to apply as a matter of judicial discretion in cases not governed by the APA." Id. This case is not governed by the APA so the plaintiff class cannot rely on Darby to support its argument that exhaustion is unnecessary
20 U.S.C. § 107d-1(a) provides:
The grievance procedure set forth in the Act manifests Congress's intent that the SLA first apply its expertise in interpreting the Act. As discussed earlier, the procedure requires that an aggrieved vendor submit his initial grievance to the SLA. The procedure also provides an SLA dissatisfied with the federal government's compliance with the Act a mechanism to enforce its interpretation. See 20 U.S.C. § 107d-1(b) (" [W]henever any State 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 this chapter or any regulations issued thereunder ... such licensing agency may file a complaint with the Secretary who shall convene a panel to arbitrate the dispute.")