Court Opinion

ID: 2684910
Source: CourtListenerOpinion
Date Created: 2014-07-21 15:00:32.461143+00
Date Added: 2024-06-11T13:14:37.568691
License: Public Domain

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,                                              │
                                                         │       No. 12-6610
                         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.         │
                                                         ┘
                          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

                                                1
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-facility-
attendant 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.] § 107d-
1(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 dining-
facility-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 claim-
processing 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; Randolph-
Sheppard 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-facility-
attendant-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-attendant-
services 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.