795 F.2d 90 (D.C. Cir. 1986), 85-5149, Randolph-Sheppard Vendors of America v. Weinberger

Docket Nº:85-5149, 85-5150.
Citation:795 F.2d 90
Party Name:RANDOLPH-SHEPPARD VENDORS OF AMERICA, et al., Appellants, v. Caspar W. WEINBERGER, et al., Appellees. NATIONAL COUNCIL OF STATE AGENCIES FOR THE BLIND, et al., Appellants, v. Caspar W. WEINBERGER, et al., Appellees.
Case Date:June 13, 1986
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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Page 90

795 F.2d 90 (D.C. Cir. 1986)

RANDOLPH-SHEPPARD VENDORS OF AMERICA, et al., Appellants,

v.

Caspar W. WEINBERGER, et al., Appellees.

NATIONAL COUNCIL OF STATE AGENCIES FOR THE BLIND, et al., Appellants,

v.

Caspar W. WEINBERGER, et al., Appellees.

Nos. 85-5149, 85-5150.

United States Court of Appeals, District of Columbia Circuit

June 13, 1986

Argued Jan. 22, 1986.

As Amended July 30, 1986.

Page 91

Appeal from the United States District Court for the District of Columbia (Civil Action No. 84-3211, 84-3489).

Robert R. Humphreys, Clinton, Ky., for appellants.

Joseph E. DiGenova, U.S.Atty., with whom Royce C. Lamberth, R. Craig Lawrence, and Rebecca L. Ross, Asst. U.S. Attys., Washington, D.C., were on brief, for federal appellees.

Stephen N. Shulman, with whom Barry S. Spector and E. Charles Rowan, Jr., Washington, D.C., were on brief, for appellee, McDonald's Corp.

Morgan D. Hodgson with whom Frank B. Stilwell III, Washington, D.C., was on brief, for amici curiae Association for the Education and Rehabilitation of the Blind and Visually Impaired and the Affiliated Leadership League of and for the Blind of America.

William C. Gleisner, III, with whom David L. Nichols and David E. Sunby, Milwaukee, Wis., were on brief, for amicus curiae National Federation of the Blind.

Before MIKVA and BORK, Circuit Judges, and OBERDORFER, District Judge. [*]

Opinion for the Court filed by District Judge OBERDORFER.

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OBERDORFER, District Judge:

This appeal involves the proper interpretation of the Randolph-Sheppard Act (the Act), 20 U.S.C. Secs. 107-107f (1982), which requires that blind persons licensed by state agencies be given priority to operate vending facilities on federal property. Some of the appellants are organizations which represent blind vendors. Specifically these organizations are the Randolph-Sheppard Vendors of America, the National Council of State Agencies for the Blind, the American Council of the Blind, and Blinded Veterans Association, Inc. Another appellant is the National Council of State Agencies for the Blind (National Council). In contrast to the associations with blind vendors as members, the National Council's membership consists of state agencies which license blind vendors to operate facilities on federal property. Finally, there are two individual appellants. These individuals are Paul Verner, a blind vendor and the President of Randolph-Sheppard Vendors of America, and Jennings Randolph, a retired United States Senator and the primary sponsor of the Act. 1 Appellants challenge two contracts awarded by the Secretary of Defense on the grounds that they were not made in accordance with the provisions of the Act. The first contract is to Burger King Corporation (Burger King) for the construction and operation of fast-food facilities on Army and Air Force bases. The second involves a similar contract award to McDonald's Corporation (McDonald's) for fast-food service on Naval bases. The challenges were originally separate actions, which were later consolidated by the District Court. Appellants brought suit against the Secretary of Defense, the Secretaries of the Army and Air Force, and certain Army and Air Force officials regarding the award of the Burger King contract, and against the Secretary of Defense, the Secretary of the Navy, and other Navy officials, regarding the award of the McDonald's contract. The Justice Department, acting as a neutral arbiter to resolve the differing stances of the Departments of Education and Defense, adopted the position of the Defense Department and opposed the complaints in the District Court and represents these individual appellees in this appeal. 2 McDonald's was a defendant-intervenor in the District Court. It has filed a brief as appellee in this appeal.

Appellants appeal from the Memorandum Opinion and Order of the United States District Court for the District of Columbia, which granted summary judgment to defendants. Randolph-Sheppard Vendors of America v. Weinberger, 602 F.Supp. 1007 (D.D.C.1985) (Parker, J.). As to jurisdictional and jurisprudential concerns raised by the government, the District Court found that the associational plaintiffs with blind vendors, 3 or state licensing agencies, 4 as members had standing to bring the action, and that these plaintiffs were not required to pursue and

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exhaust their administrative remedies under the Act. Reaching the merits, the District Court granted summary judgment to defendants, concluding that:

[w]hile the Defense Department's apparent insensitivity to the plight of the blind vendors is deplored and there remain troublesome and vexing questions as to whether or not the Department has complied with the spirit of the law, the Court finds that the procurements complied with the minimum requirements of the letter of the Randolph-Sheppard Act.

602 F.Supp. at 1009.

For the reasons discussed below, we do not reach the merits because we conclude that while appellants had standing to sue, they failed to pursue and exhaust the mandatory administrative remedies. Accordingly, we vacate the judgment below and remand the case to the District Court with instructions to dismiss the action.

I.

A.

The Randolph-Sheppard Act was first enacted in 1936, and was amended twice, in 1954 and 1974. The purpose of the Act is to provide employment opportunities on federal property to blind vendors. S.Rep. No. 937, 93d Cong., 2d Sess. 5 (Sen. Report) (1974). The Act delegates to the Secretary of Education responsibility for interpreting and enforcing its provisions. The Commissioner of the Rehabilitative Services Administration, a subdivision of the Department of Education, is responsible for overseeing the detailed operation of the program. Id. at 3. The Act gives the Secretary responsibility for promulgating regulations to implement the Act. 20 U.S.C. Sec. 107(b). Specifically, the Act directs the Secretary to prescribe regulations to assure that:

(1) priority ... is given to ... licensed blind persons ..., and

(2) wherever feasible, one or more [blind] 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. Sec. 107(b)(2).

The Secretary also administers the two-tiered system whereby blind vendors may apply to operate a vending facility on Federal property. Under this system, the Secretary designates state licensing agencies. The state licensing agencies then license blind vendors. 20 U.S.C. Sec. 107a(a)(5); 34 C.F.R. Sec. 395.7. State licensing agencies apply to federal agencies for permits to establish sites for their licensed blind vendors on federal property. 20 U.S.C. Sec. 107a(c); 34 C.F.R. Secs. 395.16, 395.35.

A dispute resolution system established by the Act is similarly two-tiered, and operates under the auspices of the Secretary. This system provides, as to blind vendors and state licensing agencies, respectively:

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, ... 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 ..., and the decision of such panel shall be final and binding on the parties except as otherwise provided in this chapter.

...

Whenever any State 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 this chapter or any regulations issued thereunder (including a limitation on the placement or operation of a vending facility ... and the Secretary's determination thereon) such licensing agency may file a complaint with the Secretary who shall convene a panel to arbitrate the dispute ..., and the decision of such panel shall be final and binding on the parties except as otherwise provided in this chapter.

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20 U.S.C. Sec. 107d-1(a), (b). State licensing agencies thus have responsibility for enforcing the substantive provisions of the Act. The Secretary's responsibility is then to oversee arbitration which interprets and applies the Act and the regulations promulgated thereunder. Specifically, it is the Secretary's responsibility upon the filing of a complaint by a blind vendor or state licensing agency to:

convene an ad hoc arbitration panel ... [which] shall ... give notice, conduct a hearing, and render its decision which shall be subject to appeal and review as a final agency action.

20 U.S.C. Sec. 107d-2(a).

The substantive provisions of the Act place a number of obligations on federal agencies which maintain and control federal property. First, the Act provides:

Any limitation on the placement or operation of a [blind] vending facility based on a finding that such placement or operation would adversely affect the interests of the United States shall be fully justified in writing to the Secretary [of Education], who shall determine whether such limitation is justified.

20 U.S.C. Sec. 107(b). The Act defines "vending facility" as:

automatic vending machines, cafeterias, snack bars, cart services, shelters, [and] counters.

20 U.S.C. Sec. 107e(7).

Second, the Act requires that a newly acquired government building contain a satisfactory site for a blind vendor's facility or, if the new building is to be constructed or substantially altered, the plans for the construction or alteration...

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