Opinion ID: 544933
Heading Depth: 1
Heading Rank: 1

Heading: Does the Act Require Exhaustion?

Text: 11 The Randolph-Sheppard Act provides as follows: 12 Any blind licensee who is dissatisfied with any action arising from the operation or administration of the vending facility program may submit to a State licensing agency a request for a full evidentiary hearing, which shall be provided by such agency in accordance with section 107b(6) of this title. If such blind licensee is dissatisfied with any action taken or decision rendered as a result of such hearing, he 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. 13 20 U.S.C. Sec. 107d-1(a) (emphasis added). Section 107d-2 provides that the arbitration panel's decision shall be subject to appeal and review as a final agency action. 20 U.S.C. Sec. 107d-2(a). 14 The vendors maintain that the Randolph-Sheppard Act does not require the exhaustion of administrative remedies prior to filing suit. They contend that the use of the word may rather than the word shall evinces congressional intent to make the administrative hearing optional. The State, of course, contends that the administrative procedure is mandatory prior to filing suit in federal court. 15 Both parties cite cases that have been decided by other courts in support of their positions. The State offers Randolph-Sheppard Vendors of Am. v. Weinberger, 795 F.2d 90, 104 (D.C.Cir.1986); Fillinger v. Cleveland Soc'y for the Blind, 587 F.2d 336, 338 (6th Cir.1978); Massachusetts Elected Comm. of Blind Vendors v. Matava, 482 F.Supp. 1186, 1189 (D.Mass.1980); and New York v. United States Postal Serv., 690 F.Supp. 1346, 1351 (S.D.N.Y.1988), as decisions holding that exhaustion under the Act is mandatory. On the other hand, the vendors point to Texas State Comm'n for the Blind v. United States, 6 Cl.Ct. 730, 735 n. 12 (1984), rev'd on other grounds, 796 F.2d 400 (Fed.Cir.1986), cert. denied, 479 U.S. 1030 (1987); and Oklahoma v. Weinberger, 582 F.Supp. 293, 294 n. 2 (W.D.Okla.1982), aff'd, 741 F.2d 290 (10th Cir.1983), as instances where courts have decided that the administrative procedures under the Act are only discretionary. 16 The D.C. Circuit's approach makes the most sense. Rather than hinge the determination solely on the use of the word may, in Randolph-Sheppard Vendors, the D.C. Circuit took a holistic approach by analyzing the statute as a whole. Because (1) the Randolph-Sheppard Act establishes a clear and explicit administrative scheme for the resolution of disputes arising under the Act, and (2) the procedural scheme parallels the pattern of authority under the statute, an inference should be drawn that Congress intended the mechanism to be mandatory. 795 F.2d at 101-03. Furthermore, because the Act states that the arbitration panel's decision shall be subject to appeal and review as a final agency action, in which case such review is limited and not de novo, 5 U.S.C. Sec. 706 (1982), the D.C. Circuit held that Congress should not be deemed also to have provided for initial de novo review in the federal courts. 795 F.2d at 102-03. The D.C. Circuit's reasoning is much more persuasive than the mere inference that the word may means that the procedure is optional. 17 Indeed, inserting the word shall into the statute, if that were necessary to signal an exhaustion requirement, would be quite awkward, since it would then state that aggrieved vendors must arbitrate disputes, even if they did not intend to litigate at all. Accepting the vendors' statutory argument would also imply that, if a vendor does submit to a state hearing and does not like the result, instead of filing a complaint with the Secretary to arbitrate the matter, he or she could take the matter to the federal courts, since the second sentence of the relevant section states that if a vendor is dissatisfied with the hearing, he may file a complaint with the Secretary. 20 U.S.C. Sec. 107d-1(a). Obviously, may should not be read as creating the alternative of a federal court suit in either situation or a vendor could go in and out of the administrative procedure as he or she wished. 18 A reading of the statute demonstrates that the Randolph-Sheppard Act mandates the exhaustion of the administrative remedies prior to instituting an action in the federal courts. See Fillinger, 587 F.2d at 338 (congressional policy is that federal courts are not tribunals of first resort for grievances under the Randolph-Sheppard Act). 19