Court Opinion

ID: 4765674
Source: CourtListenerOpinion
Date Created: 2021-08-13 15:01:20.849902+00
Date Added: 2024-06-11T08:09:12.816933
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 23, 2020             Decided August 13, 2021

                         No. 19-7074

                   DERWIN PATTEN, ET AL.,
                       APPELLANTS

                              v.

                   DISTRICT OF COLUMBIA,
                         APPELLEE

        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:18-cv-00732)

     Thomas T. Ruffin Jr. argued the cause and filed the briefs
for appellant.

    Carl J. Schifferle, Deputy Solicitor General, Office of the
Attorney General for the District of Columbia, argued the cause
for appellee. With him on the brief were Karl A. Racine,
Attorney General, Loren L. AliKhan, Solicitor General, and
Caroline S. Van Zile, Deputy Solicitor General.

    Before: ROGERS, KATSAS, and RAO, Circuit Judges.

    Opinion for the Court filed by Circuit Judge KATSAS.
                               2
     KATSAS, Circuit Judge: The Randolph-Sheppard Act
creates state-administered programs for blind individuals to
operate vending facilities on federal property. The Act also
creates a grievance scheme for vendors to challenge a state’s
operation of its program. This case presents the question
whether a vendor may bypass that scheme when challenging
the operation of a Randolph-Sheppard program under other
statutes that prohibit discrimination based on disability.

                                I

                               A

     The Randolph-Sheppard Act (RSA) gives licensed blind
individuals a priority to operate vending facilities on federal
property. 20 U.S.C. § 107(b). State and federal agencies share
responsibility for administering the RSA. On the federal level,
the Secretary of Education promulgates implementing
regulations and designates a state agency to administer the
program within each state and the District of Columbia. Id.
§ 107a(a). The designated state agency licenses eligible
vendors, seeks appropriate placements for them, promulgates
further regulations, and monitors vendors for compliance. Id.
§ 107a(b), (c). The state agency must give vendors training
materials and access to financial data regarding its operation of
the program. 34 C.F.R. §§ 395.11–.12.

     The RSA sets forth a grievance scheme for vendors to
challenge a state’s operation of its Randolph-Sheppard
program. The statute provides that “[a]ny 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.”
20 U.S.C. § 107d-1(a); see also id. § 107b(6) (state licensing
agency must provide “an opportunity for a fair hearing”). A
licensee dissatisfied with the results of that hearing may seek
                               3
further review before the Secretary, who must “convene a panel
to arbitrate the dispute.” Id. § 107d-1(a). The panel consists
of two arbitrators designated by the licensee and the state
agency respectively, and a third arbitrator jointly designated by
the other two. Id. § 107d-2(b). The panel’s decision is subject
to judicial review as final agency action under the
Administrative Procedure Act. Id. § 107d-2(a).

     In the District of Columbia, the designated licensing
agency is the Rehabilitation Services Administration, a
component of the District’s Department on Disability Services.
Its implementing regulations set forth both substantive rules
and grievance procedures. The Administration must enter into
an operating agreement with each licensed vendor, which must
set forth both the duties of the vendor and the responsibilities
of the Administration to provide various forms of assistance.
29 D.C. Mun. Reg. (DCMR) § 206. Regulations elaborate on
how the Agency must train vendors, id. § 210, and what
financial information it must make available to them, id. § 216.
In addition, the Administration must give vendors various
documents about the program’s operation, id. § 217.1; must
consult with a blind vendors’ committee about program
operations, id. § 211.1; and must equip and initially stock each
covered vending facility, id. § 202.1. As to grievance
procedures, a vendor “dissatisfied with any licensing agency
action arising from the operation or administration of the
Program” may seek either an informal meeting with an
appropriate agency official or a hearing before the D.C. Office
of Administrative Hearings (OAH). Id. § 218.2(b). The
vendor may appeal an adverse OAH order either to the D.C.
Court of Appeals, as permitted by D.C. law, or to the Secretary,
as provided by the RSA. Id. § 218.2(c).
                                4
                                B

     The plaintiffs are current and former vendors in the
District’s Randolph-Sheppard program. They claim that the
District has discriminated against them, based on their
blindness, in its administration of the program. As relevant
here, they contend that the District conducts discriminatory
inspections of vending facilities and that it fails to provide aids
such as human or electronic readers. The plaintiffs did not
challenge these alleged practices through the Randolph-
Sheppard grievance procedure. Instead, they filed a lawsuit in
federal district court, which alleged disability-based
discrimination in violation of Title II of the Americans with
Disabilities Act (ADA), section 504 of the Rehabilitation Act,
and the District of Columbia Human Rights Act (DCHRA).

     The district court dismissed the case for failure to exhaust
administrative remedies under the RSA. The court reasoned
that exhaustion was required because the claims challenged the
District’s operation or administration of its Randolph-
Sheppard program, even if the claims also arose under the anti-
discrimination statutes. Brooks v. District of Columbia, 375 F.
Supp. 3d 41, 44–48 (D.D.C. 2019). The court further rejected
the plaintiffs’ argument that exhaustion would be futile because
the OAH assertedly lacks jurisdiction to hear claims under the
RSA. Id. at 48–49.

     After the plaintiffs appealed the dismissal, they moved for
relief from judgment under Federal Rule of Civil Procedure
60(b)(3). The district court denied the motion, and the
plaintiffs did not separately appeal that denial.

                                II

    The principal question on appeal is whether the vendors
were required to exhaust administrative remedies under the
                                5
RSA before filing their discrimination claims in federal court.
That is a legal question, which we review de novo. Artis v.
Bernanke, 630 F.3d 1031, 1034 (D.C. Cir. 2011).

    We first consider the RSA grievance scheme, and we then
address how it interacts with the anti-discrimination statutes.

                                A

     We begin with the RSA scheme. One of our cases
described exhaustion under the RSA as a “jurisdictional”
requirement for judicial review. Comm. of Blind Vendors of
D.C. v. District of Columbia, 28 F.3d 130, 133 (D.C. Cir.
1994). But later Supreme Court decisions have clarified that
an exhaustion requirement is jurisdictional only if Congress
“clearly states” as much. Arbaugh v. Y&H Corp., 546 U.S.
500, 515–16 (2006). Section 107d-1(a) contains no such clear
statement, so it is not jurisdictional.

     Nonetheless, exhaustion under the RSA scheme is
mandatory, as this Court held in Randolph-Sheppard Vendors
of America v. Weinberger, 795 F.2d 90, 101–04 (D.C. Cir.
1986). As noted above, the RSA provides that “[a]ny 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.” 20 U.S.C. § 107d-1(a). Although the
word “‘may’ is ordinarily … permissive,” we held that
structural and contextual considerations “defeat[] any
inference” that the grievance scheme is optional. Weinberger,
795 F.2d at 102 n.19. In particular, the RSA “establishes a
clear and explicit system for resolution of disputes,” it
“specifically conditions resort to the Secretary on initial action
by the state licensing agency,” and it makes an arbitration
decision judicially reviewable as final agency action. See id. at
102–03. We found it “unlikely” that “an aggrieved party could,
                                 6
whenever it chose, circumvent the system and seek de novo
determination in federal court.” Id. at 103. Thus, we held that
the RSA exhaustion provision is mandatory for claims to which
it applies. Id. at 104.

                                 B

     The RSA grievance scheme squarely covers the claims in
this case. Again, the scheme extends to “[a]ny blind licensee
who is dissatisfied with any action arising from the operation
or administration of the vending facility program.” 20 U.S.C.
§ 107d-1(a). The double use of the word “any” signifies
breadth. See Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 219
(2008). And we have previously interpreted the phrase “arising
from” to mean “originate or stem from.” N. Am. Butterfly Ass’n
v. Wolf, 977 F.3d 1244, 1260 (D.C. Cir. 2020) (cleaned up).
The exhaustion requirement thus applies so long as the
aggrieved parties are licensees and the challenged actions
involve operation or administration of the program. The
plaintiffs here are current or former licensees, and they
challenge actions that involve program administration.

     Counts 1 through 3 of the complaint have evolved during
this litigation. Initially, the plaintiffs alleged that the District
inspected their facilities through poorly trained Administration
monitors instead of through the Department of Health. But the
District proved that the Department did perform inspections.
Then, the plaintiffs complained of having to endure inspections
from both the Administration and the Department, whereas
sighted proprietors were inspected only by the Department.
Either way, these claims challenge the program’s monitoring
procedures or the quality of its monitors, which go directly to
program operation or administration. Under the RSA, a state
licensing agency must monitor compliance with program rules
and regulations. 20 U.S.C. § 107a(b). And like all vendors,
                               7
the plaintiffs entered into operating agreements specifically
setting forth how the Administration would supervise them. 29
DCMR § 206.2(b). Monitoring and inspection procedures
clearly involve operation and administration of the program.

     Counts 4 through 6 of the complaint challenge the
Administration’s alleged failure to provide auxiliary aids, such
as human readers and automated reading machines, so that
vendors can read program documents. The plaintiffs argue that
the Randolph-Sheppard program gives them no right to
auxiliary aids, and thus does not cover their claims. But
whether the program entitles vendors to auxiliary aids is beside
the point, for the decision not to provide them involves
program operation and administration regardless. Moreover,
the Randolph-Sheppard program does give blind vendors
affirmative rights to “effective” training programs covering
“all aspects of vending facility operation for blind persons,” 34
C.F.R. § 395.11, as well as access to financial information
about the state licensing agency’s operation of the program, id.
§ 395.12. And the D.C. implementing regulations further
require the Administration not only to give blind vendors
copies of all “documents relating to the operation of the
Program,” but also to “explai[n]” to them the “content of the
documents.” 29 DCMR § 217. In seeking aids to read program
documents, the vendors necessarily invoke access rights under
these provisions. The claims for auxiliary aids thus also
involve program operation and administration.

    Because the RSA grievance scheme is mandatory and
covers the plaintiffs’ claims, the RSA required the plaintiffs to
                               8
exhaust their administrative and arbitral remedies before
seeking judicial review.

                               C

     The plaintiffs seek to avoid the RSA grievance scheme by
raising claims only under anti-discrimination statutes. They
further argue that exhaustion would have been futile because
the OAH does not have jurisdiction over RSA claims. We
reject both contentions.

                               1

    The vendors argue that exhaustion was not required
because they seek to pursue claims only under the ADA, the
Rehabilitation Act, and the DCHRA. But even if the claims
here fall within those anti-discrimination statutes as well as
within the RSA, we conclude that the RSA grievance scheme
nonetheless applies.

     In seeking to harmonize the RSA with the anti-
discrimination statutes, we must engage in the “classic judicial
task of reconciling many laws enacted over time, and getting
them to ‘make sense’ in combination.” United States v. Fausto,
484 U.S. 439, 453 (1988). We are guided by the “old and
familiar rule” that “the specific governs the general,” which is
“particularly true” where “Congress has enacted a
comprehensive scheme and has deliberately targeted specific
problems with specific solutions.” RadLAX Gateway Hotel,
LLC v. Amalgamated Bank, 566 U.S. 639, 645–46 (2012)
(cleaned up). These principles control this case: The RSA
imposes a comprehensive, two-level system of administrative
and arbitral review for challenges to the operation or
administration of a Randolph-Sheppard program. And the
                               9
RSA is far more specific than any of the three anti-
discrimination statutes.

     Thunder Basin Coal Company v. Reich, 510 U.S. 200
(1994), confirms this analysis. There, the Supreme Court
articulated a two-part test to determine whether parties must
channel claims through an available administrative scheme in
order to seek judicial review. First, we consider whether the
text and structure of the governing statutes make it “fairly
discernible” that Congress “intended to preclude initial judicial
review” prior to exhaustion. Id. at 207 (cleaned up). If so, we
then consider whether the claims at issue are “of the type” that
must first be exhausted. Id. at 212. In Thunder Basin, the Court
applied this framework to require mining companies to exhaust
available administrative remedies under the Federal Mine
Safety and Health Amendments Act of 1977 before seeking
judicial review of a claim that the mining regulation at issue
violated the National Labor Relations Act. See id. at 207–16.
Likewise, in Elgin v. Department of the Treasury, 567 U.S. 1
(2012), the Court applied Thunder Basin to require disciplined
federal employees to exhaust available administrative remedies
under the Civil Service Reform Act before seeking judicial
review of a claim that the statute under which they were
disciplined was facially unconstitutional. See id. at 10–23.

     The Thunder Basin test is satisfied here. To begin, the
detailed, precise, and comprehensive nature of an
administrative-review scheme counts against immediate resort
to federal district court. See, e.g., Elgin, 567 U.S. at 10–12;
Thunder Basin, 510 U.S. at 207–09; Am. Fed’n of Gov’t Emps.,
AFL-CIO v. Trump, 929 F.3d 748, 755 (D.C. Cir. 2019); Arch
Coal, Inc. v. Acosta, 888 F.3d 493, 499–500 (D.C. Cir. 2018).
As we explained in Weinberger, the RSA establishes just such
a scheme, which prompted us to describe it as “exclusive.” See
795 F.2d at 103–04. Given the “painstaking detail” with which
                                10
the RSA sets forth an administrative and arbitral scheme to
resolve vendor grievances, the intent to make the scheme
exclusive is “fairly discernible.” See Elgin, 567 U.S. at 11–12.

     To decide whether a specific-review scheme covers the
claims at issue, we must consider whether the claims are
“wholly collateral” to the scheme, whether application of the
scheme would “foreclose all meaningful judicial review,” and
whether the claims are “outside the agency’s expertise.” See,
e.g., Elgin, 567 U.S. at 15; Thunder Basin, 510 U.S. at 212–13.
As shown above, the disputed claims here are not wholly
collateral to the scheme, but instead challenge core aspects of
the “operation or administration of the vending facility
program” of the District. 20 U.S.C. § 107d-1(a). The clarity
with which the statute covers these claims would likely be
dispositive, but we note that the other Thunder Basin
considerations point in the same direction.

     The RSA provides that any final arbitral determination is
subject to judicial review through the Administrative
Procedure Act, see 20 U.S.C. § 107d-2(a), so requiring
exhaustion would merely postpone—rather than preclude—a
judicial assessment of the plaintiffs’ claims. In this respect, the
case for exclusivity here is even stronger than it was in Thunder
Basin and Elgin. In those cases, the administrative scheme led
to final agency action reviewable only in a court of appeals,
thereby precluding district-court jurisdiction altogether. See
Elgin, 567 U.S. at 10; Thunder Basin, 510 U.S. at 208. The
plaintiffs there argued that they could receive no meaningful
review because the agency lacked the authority to decide their
constitutional claims, and the court of appeals lacked the ability
to develop the factual record needed to resolve them. The
Supreme Court nonetheless concluded that court-of-appeals
review was good enough. See Elgin, 567 U.S. at 16–21;
Thunder Basin, 510 U.S. at 215. But here, the RSA grievance
                               11
scheme channels claims into the district court. So once the
administrative process has run its course, a vendor then may
pursue discrimination claims there.

     As for agency expertise, the claims here plainly implicate
the Administration’s authority and expertise as the state agency
administering a program to assist blind vendors. The plaintiffs
briefly suggest that the OAH lacks authority to resolve their
discrimination claims. But even if that were true, one part of
the available administrative process involves meeting with the
Administration’s Chief of its Division of Services for the Blind,
who clearly has relevant expertise. 29 DCMR § 218.2(b)(1).
Another part involves review before an arbitral panel that,
because it is appointed directly or indirectly by the affected
parties, presumably also has relevant expertise. 20 U.S.C.
§ 107d-2(b)(1). As to the OAH itself, even if it did not directly
resolve claims of disability-based discrimination, its expertise
could still “be brought to bear on” those issues. Thunder Basin,
510 U.S. at 214–215; see Elgin, 567 U.S. at 22–23. For
example, administrative expertise on what counts as
“effective” training programs for blind vendors under the RSA,
see 34 C.F.R. § 395.11, might be highly informative for a judge
considering what constitutes a reasonable accommodation for
blind vendors under the ADA.

     The RSA scheme is not only comprehensive, but also far
narrower than the anti-discrimination statutes invoked by the
plaintiffs. The RSA applies only in one narrow context—the
operation of vending facilities on federal property. And it
benefits only one category of disabled individuals—the blind.
In contrast, Title II of the ADA forbids any public entity from
discriminating based on any type of disability, 42 U.S.C.
§ 12132; section 504 of the Rehabilitation Act forbids any
federally funded program or activity from discriminating based
on any type of disability, 29 U.S.C. § 794(a); and the DCHRA
                                12
prohibits all types of disability-based discrimination by any
District agency, D.C. Code § 2-1402.73. These statutes cover
many more programs and many more categories of disability
than does the RSA.

     Allowing challengers to proceed through a more general
statute is particularly inappropriate when doing so would
eviscerate specific requirements of the narrower scheme. See,
e.g., EC Term of Years Tr. v. United States, 550 U.S. 429, 433
(2007); Brown v. GSA, 425 U.S. 820, 834 (1976). Here, the
anti-discrimination statutes define a state agency’s failure to
make reasonable accommodations as a form of disability-based
discrimination. See, e.g., Tennessee v. Lane, 541 U.S. 509,
531–33 (2004) (ADA); Alexander v. Choate, 469 U.S. 287,
300–01 (1985) (Rehabilitation Act); Whitbeck v. Vital Signs,
Inc., 116 F.3d 588, 591–93 (D.C. Cir. 1997) (DCHRA). Thus,
almost any RSA claim by blind vendors—that a state licensing
agency has improperly administered or operated a program
designed to afford them a preference—could be recast as a
claim that the agency has not reasonably accommodated their
disability. Under the plaintiffs’ theory, the RSA’s grievance
scheme, which we have specifically held to be mandatory,
would become optional in most if not all cases to which it
applies. That is not a sensible reading of the statutes at issue,
which we must interpret “as a harmonious whole rather than at
war with one another.” Epic Sys. Corp. v. Lewis, 138 S. Ct.
1612, 1619 (2018).

     For these reasons, we hold that the plaintiffs had to
proceed through the RSA grievance procedure before pursuing
their discrimination claims in court.

                                2

    Alternatively, the plaintiffs ask us to excuse their failure to
exhaust on futility grounds. We have previously considered
                               13
whether the RSA exhaustion requirement permits exceptions
for futility. See Weinberger, 795 F.2d at 106–07. In Ross v.
Blake, 136 S. Ct. 1850 (2016), the Supreme Court subsequently
held that courts may not impose judge-made exceptions on
statutory exhaustion requirements, though they may continue
to impose exceptions on judge-made exhaustion requirements.
See id. at 1856–57. We need not decide whether Ross
forecloses any futility exception to the RSA exhaustion
requirement, which we inferred from the comprehensiveness of
the grievance scheme, see Weinberger, 795 F.2d at 100–04.
Assuming that a futility exception still exists, we conclude that
it does not apply here.

     Any futility exception would apply, if at all, “in only the
most exceptional circumstances.” Weinberger, 795 F.2d at 106
(cleaned up). Thus, “resort to arbitration must appear clearly
useless, either because the agency charged with arbitration has
indicated that it does not have jurisdiction over the dispute, or
because it has evidenced a strong stand on the issue in question
and an unwillingness to reconsider the issue.” Id. at 105–06
(cleaned up). The plaintiffs do not argue that the OAH has ever
disclaimed jurisdiction over RSA claims. By contrast, the
District cites many RSA cases heard by the OAH, including
some brought by the plaintiffs. And the OAH’s website
explains that “[a] blind vendor who objects to any DDS/RSA
decision may appeal to the [OAH].” Department on Disability
Services,      DC.gov,       https://oah.dc.gov/page/department-
disability-services (last visited August 4, 2021).

     The parties dispute whether the OAH may properly hear
RSA claims. In affirming a recent OAH decision involving one
of the plaintiffs here, the D.C. Court of Appeals reserved this
issue. Patten v. D.C. Dep’t on Disability Servs., 248 A.3d 116,
slip op. at 7 (D.C. 2021) (unpublished table decision). But in
doing so, the court stressed that the OAH continues to decide
                                14
RSA cases, and it expressly refused to “upend” that “practice.”
Id. at 8. In other words, the plaintiffs raise an objection that the
Court of Appeals has declined to adopt and that runs counter to
longstanding OAH practice in RSA cases. The plaintiffs thus
have not shown that the OAH would “certainly, or even
probably,” have refused to consider their claims. Weinberger,
795 F.2d at 106–07. No futility exception could apply here.

                                III

    Finally, the plaintiffs seek to challenge the district court’s
denial of their Rule 60(b)(3) motion for relief from judgment.
But although the plaintiffs timely appealed the district court’s
order dismissing this case for failure to exhaust, they did not
appeal that court’s later denial of their Rule 60(b)(3) motion.

     Our jurisdiction extends to appeals from “final decisions,”
28 U.S.C. § 1291, that are appealed within 30 days, see id.
§ 2107. A denial of a Rule 60(b) motion is final and thus
appealable. Browder v. Dir., Dep’t of Corr., 434 U.S. 257, 263
n.7 (1978). Yet, the plaintiffs failed to appeal the denial in this
case. And the denial of a post-judgment motion under Rule 60
does not merge into an earlier final-judgment appeal. See Fed.
R. App. P. 4(a)(4)(B)(ii) (to “challenge an order disposing of
any motion” under Rule 60, a party must timely file a new or
amended notice of appeal); United States v. Cunningham, 145
F.3d 1385, 1393 (D.C. Cir. 1998) (rejecting “the proposition
that a timely-filed notice of appeal automatically includes
appeal of a subsequently-denied post-trial motion”). Because
the plaintiffs failed to file a timely notice of appeal from the
denial of their Rule 60(b)(3) motion, as required under section
2107, we lack jurisdiction to review the denial. See Hamer v.
Neighborhood Hous. Servs. of Chi., 138 S. Ct. 13, 20–21
(2017).
                              15
                              IV

    We affirm the dismissal of the complaint for failure to
exhaust, and we dismiss the challenge to the denial of the Rule
60(b)(3) motion for lack of appellate jurisdiction.

                                                   So ordered.