Court Opinion

ID: 8966046
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:04:48.11485+00
Date Added: 2024-06-11T17:10:19.059722
License: Public Domain

FAGG, Circuit Judge,
concurring and dissenting.
Congress in enacting the Randolph-Sheppard Act (the Act) has not conditioned the states’ participation in the blind licensee program on their accepting responsibility for the payment of monetary relief later deemed appropriate to make a wronged licensee whole. Thus, I disagree with Chief Judge Lay that “the Act authorizes arbitration panels to assess compensatory *686damage awards against state agencies.” Ante at 684. I also disagree with Judge Doty to the extent he joins Judge Lay in holding the Act permits an arbitration panel to award prospective damages against the states “for the time that elapses after an award until the [licensee] is actually in place.” Post at 687; see also ante at 684.
Without question, states like Arkansas that choose to participate in this cooperative federal-state program have “agree[d] to submit the grievances of any blind licensee * * * to arbitration.” 20 U.S.C. § 107b(6). Further, Congress undoubtedly has the authority to condition involvement in the program on a state’s acceptance of an exposure to monetary consequences arising from participation. See, e.g., Pennhurst State School & Hosp. v. Halderman, 451 U.S. 1, 17, 101 S.Ct. 1531, 1539, 67 L.Ed.2d 694 (1981) (Pennhurst). The critical question in this case is whether participating states knowingly accept that risk when they agree to “arbitration” as the mechanism for resolving grievances with dissatisfied licensees. I think not.
The type of obligation sought to be imposed on the State of Arkansas in this case is permitted only if the Act clearly informs States considering participation that if they choose to enter the program, liability for money damages may result. See id. at 16-17, 101 S.Ct. at 1539-40. In my view, the Act does not offer the states an informed choice — that is, by its terms the Act does not adequately alert states to the risk of encountering monetary consequences at the hands of an arbitration panel convened by the Secretary if they join the program.
Nowhere in the Act is there express reference to monetary remedies affecting participating states. In addition, the Act’s legislative history is conspicuously silent on whether Congress intended arbitration panels to make monetary damage awards against participating states. The court and the Third Circuit nevertheless find the prerequisite disclosure in the Act’s general provision for arbitration. See ante at 684; Delaware Dep’t of Health & Social Servs. v. United States Dep’t of Educ., 772 F.2d 1123, 1136 (3d Cir.1985) (Delaware). Under their theory, legislation that provides for arbitration necessarily implies Congress intended to include monetary damage awards because those awards have long been legitimate weapons in an arbitrator’s arsenal. In essence, the argument goes: because damages may traditionally be awarded by arbitrators, damages must be part of the package bargained for when a state elects to enter a program calling for arbitration. See Delaware, 772 F.2d at 1136-37. I disagree. A state’s informed choice to accept an obligation to pay money damages cannot rest on an implied statutory authorization, see Pennhurst, 451 U.S. at 17, 25, 101 S.Ct. at 1539, 1544 and, in my view, certainly not on one as fragile as the court contends exists in this case.
I have no reason to disagree with the Delaware court’s loosely couched characterizations that at the time the Act was revised to provide for arbitration, the term arbitration had a “well-recognized” meaning, and that arbitral awards of damages were “commonplace.” Delaware, 772 F.2d at 1136. Nor do I have any reason to challenge Chief Judge Lay’s assertion that “ ‘Congress was surely aware * * * arbitrators * * * as a matter of course awarded retrospective compensatory relief in appropriate cases.’ ” Ante at 684 (quoting Delaware, 772 F.2d at 1136). Such a description of Congress’ perception may indeed be accurate, including the speculation that Congress anticipated “awards of compensatory relief [would be entered] against states.” Id.
Significantly, none of these unstructured characterizations takes account of the essential litmus test for determining the remedies available against a state under the Act. They focus entirely on assumptions about Congress’ unspoken understanding of the ultimate consequences of its legislative package. The Supreme Court, however, “insist[s] that Congress speak with a clear voice.” Pennhurst, 451 U.S. at 17, 101 S.Ct. at 1540; see also id. (“[W]e may assume that Congress will not implicitly attempt to impose massive financial obligations on the [s]tates.”). In light of the Supreme Court’s insistance on articulated *687statutory conditions, I believe the Delaware court is skating on thin ice when it concludes the term “arbitration,” standing alone, is “unambiguous.” Delaware, 772 F.2d at 1137.
By authorizing money damages under the Act, the court and the Third Circuit have required states unwittingly to expose themselves to potentially sizeable financial obligations. They do so on the strength of an oblique reference to a dispute resolution mechanism that encompasses multiple remedies, including many with nonmonetary characteristics. See Committee of Blind Vendors v. District of Columbia, 695 F.Supp. 1234, 1236 (D.D.C.1988) (action seeking approximately $1,166,000 in damages). This exposure is entirely at odds with the principle that the congressional power to impose conditions on participating states rests on the indispensable requirement that its conditions are “expressly articulated.” Pennhurst, 451 U.S. at 16, 101 S.Ct. at 1539. Neither Congress, nor a court interpreting the Act, is permitted to “surpris[e] participating [s]tates with pos-tacceptance * * * conditions.” Id. at 25, 101 S.Ct. at 1544.
Ironically, the Delaware court’s and this court’s willingness to award prospective damages, ante at 684, create a powerful incentive for states to steer clear of laudable state-federal programs for fear of incurring hidden, but nevertheless significant, financial liability. Thus, the very people the program was designed to benefit— the blind licensees — may ultimately be the losers. I would hold the Act does not authorize any awards of money damages against the states and reverse the district court.
Finally, with regard to attorney fees, the arbitration panel may determine that attorney fees should be paid by the Secretary of Education rather than by the State of Arkansas. See 20 U.S.C. § 107d-2(d). If that occurs, my concerns about monetary awards against states would not be implicated. Thus, I agree with Chief Judge Lay that “the question whether the arbitration panel has the authority to award attorney’s fees * * * is a question more properly decided in the first instance by the arbitration panel when it reconvenes.” Ante at 685.