New Hampshire v. Ramsey

• Decision Date: 29 April 2004
• Docket Number: No. 03-1920.,03-1920.
• Citation: 366 F.3d 1
• Parties: State of NEW HAMPSHIRE, Plaintiff, Appellant, New Hampshire Department of Administrative Services; State of New Hampshire Department of Transportation; New Hampshire State Treasurer; State of New Hampshire Department of Education, Plaintiffs, v. David RAMSEY, John Loveday, John Toomey, Melinda Conrad, Wayne Aldrich, Norman Jitras, Michael Rossi, John Scarlotto, and Martha York, as members of the N.H. Committee of Blind Vendors; New Hampshire Committee of Blind Vendors; United States Department of Education, Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 1

366 F.3d 1

State of NEW HAMPSHIRE, Plaintiff, Appellant, New Hampshire Department of Administrative Services; State of New Hampshire Department of Transportation; New Hampshire State Treasurer; State of New Hampshire Department of Education, Plaintiffs, v. David RAMSEY, John Loveday, John Toomey, Melinda Conrad, Wayne Aldrich, Norman Jitras, Michael Rossi, John Scarlotto, and Martha York, as members of the N.H. Committee of Blind Vendors; New Hampshire Committee of Blind Vendors; United States Department of Education, Defendants, Appellees.

No. 03-1920.

United States Court of Appeals, First Circuit.

Heard February 3, 2004.

Decided April 29, 2004.

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Nancy J. Smith, Senior Assistant Attorney General, with whom Peter W. Heed, Attorney General, was on brief, for appellant.

Jack B. Middleton, with whom Andrea L. Daly, Laura B. Dodge, and McLane, Graf, Raulerson & Middleton were on brief, for appellee New Hampshire Committee of Blind Vendors.

Mark B. Stern, Attorney, Appellate Staff, Civil Division, with whom Alisa B. Klein, Attorney, Appellate Staff, Civil Division, Peter D. Keisler, Assistant Attorney General, and Thomas P. Colantuono, United States Attorney, were on brief, for appellee United States Department of Education.

Robert R. Humphreys on brief for Randolph-Sheppard Vendors of America, American Council of the Blind, and National Educational and Legal Defense Services for the Blind, amici curiae.

Before LYNCH, Circuit Judge, STAHL, Senior Circuit Judge, and LIPEZ, Circuit Judge.

LYNCH, Circuit Judge.

The district court entered judgment for the New Hampshire Committee of Blind Vendors and nine of its individual members (collectively, the Blind Vendors) and the United States Department of Education (USDOE), largely affirming a federal arbitration panel award against New Hampshire of compensatory damages of approximately $900,000 as well as prospective equitable relief. The Blind Vendors' claim is that New Hampshire did not give proper "priority" to blind vendors, as required by federal law, in running lucrative vending machine operations in rest areas along federally funded interstate highways. New Hampshire gave others those concessions by contract in exchange for a percentage of the proceeds, which the state put into the state treasury. The district court characterized the state's actions as "stealing from the blind."

Several major issues are presented in this complex and difficult case. The threshold issue is whether New Hampshire, in light of its Eleventh Amendment immunity, may be subject to either the compensatory damages award or prospective equitable relief in a federal forum. The district court found the state waived any immunity it may have had by its litigation conduct. We hold that the district court had jurisdiction to affirm an award of prospective equitable relief because the state waived any immunity to such relief in a federal forum (a) by its litigation conduct and (b) by judicial estoppel and its participation in the program established by the Randolph-Sheppard Act (R-S Act), 20 U.S.C. § 107 et seq. Having determined that Eleventh Amendment immunity presents no bar to prospective equitable relief here, we affirm such relief on the merits, finding that the state has not given proper "priority" to blind vendors as required by federal law and that a conflicting state statute is preempted.

Our view of the state's Eleventh Amendment immunity from damages is different. We hold that the state has not waived immunity from damages by its litigation conduct; we also conclude that § 111(b) of the Surface Transportation Assistance Act (STA Act),¹ 23 U.S.C. §§ 101 et seq., under which the Blind Vendors seek relief, does not clearly evidence an intent to subject states to such damages. We vacate the damages award and order dismissal of those claims.

I.

This case is shaped by two federal statutes. The first is the Randolph-Sheppard Act, under which the federal government, in partnership with consenting states, seeks to provide economic opportunities to the blind by granting priority to licensed blind vendors in contracts to operate vending facilities on federal property. 20 U.S.C. § 107(a)-(b). The Act, which was first enacted in 1936, Pub.L. No. 74-732, 49 Stat. 1559 (1936), provides that:

In authorizing the operation of vending facilities on Federal property, priority shall be given to blind persons licensed by a State agency as provided in this chapter; and the Secretary, through the Commissioner, shall, after consultation with the Administrator of General Services and other heads of departments, agencies, or instrumentalities of the United States in control of the maintenance, operation, and protection of Federal property, prescribe regulations designed to assure that —

(1) the priority under this subsection is given to such licensed blind persons (including assignment of vending machine income pursuant to section 107d-3 of this title to achieve and protect such priority), and

(2) wherever feasible, one or more vending facilities are established on all Federal property to the extent that any such facility or facilities would not adversely affect the interests of the United States.

20 U.S.C. § 107(b).

Under the R-S Act, participating states, such as New Hampshire, can gain access to federal property to benefit their own blind vendors by having state agencies apply to the United States Department of Education to participate in and administer the program. 20 U.S.C. § 107b. In their applications, those state agencies must agree to set up licensing programs for blind vendors, match them with available contracts for vending facilities on federal property, and provide them with equipment and stock. Id. Once approved, those agencies are known as "state licensing agencies" (SLAs). New Hampshire's SLA is the New Hampshire Department of Education, Division of Vocational Rehabilitation, Bureau of Blind Services.

We quote a succinct description of the operation of the R-S Act set forth by a sister circuit:

The Randolph-Sheppard Act was enacted in order to provide employment opportunities for the blind. The Act grants priority to those blind persons who desire to operate vending facilities on federal property. 20 U.S.C. § 107(b). The Act divides responsibility for the blind vendor program between the state and federal agencies. The Secretary of Education is responsible for interpreting and enforcing the Act's provisions, and more specifically, for designating state licensing agencies. 20 U.S.C. §§ 107a(a)(5), 107b; 34 C.F.R. §§ 395.5, 395.8. A person seeking a position as a blind vendor applies to the designated state agency and is licensed by that agency. The state agency in turn applies to the federal government for the placement of the licensee on federal property. 20 U.S.C. § 107b. Once the state and the federal government have agreed on an appropriate location for the vending facility, the state licensing agency is responsible for equipping the facility and furnishing the initial stock and inventory. 20 U.S.C. § 107b(2). The blind vendor thereafter operates as a sole proprietor who is entitled to the profits of the vending facility and who is responsible for the facility's losses.

The Act requires that if the state licensing agency operates vending machines that directly compete with a vending facility operated by a blind vendor, then a percentage of the income from such competing machines must be given to the blind vendor licensed to do business on that property. 20 U.S.C. § 107d-3. If no licensee is operating a facility on the property, the income from state-operated vending machines is used for a variety of purposes that benefit all blind vendors in the state program. 20 U.S.C. 107d-3(c).

Tenn. Dep't of Human Servs. v. United States Dep't of Educ., 979 F.2d 1162, 1163-64 (6th Cir.1992).

States' participation in the program is voluntary. States choose whether they wish to have their agencies apply to administer the program under the R-S Act and take on the corresponding obligations. See 20 U.S.C. § 107b. The principal benefit that a state receives for participating in the program is an opportunity to improve the lot of its blind population. A participating state also receives funds. For example, even if no blind vendor operates vending facilities on a particular federal property, the relevant SLA receives income from vending machines on that property; these proceeds can be used to fund retirement, health insurance, sick leave, and vacation time for blind vendors and to defray various costs associated with running the program. 20 U.S.C. §§ 107d-3(a), (c).

SLAs also agree to a three-step process ("R-S grievance procedures") for dealing with blind licensees who are dissatisfied with the operation of the vending program: first, a hearing at the state level before the SLA; then, an opportunity to appeal in an arbitration before a USDOE panel; and finally, judicial review of the arbitration panel's decision in the federal courts under the Administrative Procedure Act (APA), 5 U.S.C. § 701.² At the first stage, the SLA agrees:

to provide to any blind licensee dissatisfied with any action arising from the operation or administration of the vending facility program an opportunity for a fair hearing, and ... to submit the grievances of any blind licensee not otherwise resolved by such hearing to arbitration [before the USDOE].

20 U.S.C. § 107b(6). After the hearing before the SLA, a dissatisfied blind licensee may go to arbitration before a panel convened by the federal Secretary of Education, under 20 U.S.C. § 107d-2(b)(1). The procedures used by the panel are governed by the APA, 5 U.S.C. § 551 et seq. 20 U.S.C. § 107d-2(a). The decision of the panel is "subject to appeal and review as a final agency action" under the APA, 5 U.S.C. § 701, in a federal district court. 20 U.S.C. § 107d-2(a).

The R-S Act says nothing about what...