Committee of Blind Vendors v. District of Columbia, Civ. A. No. 88-0142-OG.

Decision Date17 April 1990
Docket NumberCiv. A. No. 88-0142-OG.
Citation736 F. Supp. 292
PartiesCOMMITTEE OF BLIND VENDORS OF THE DISTRICT OF COLUMBIA, et al., Plaintiffs, v. DISTRICT OF COLUMBIA, et al., Defendants.
CourtU.S. District Court — District of Columbia

COPYRIGHT MATERIAL OMITTED

Robert R. Humphreys, Humphreys & Mitchell, Washington, D.C., for plaintiffs and the class.

Domenique Kirchner and Greg Lewis, Asst. Corp. Counsel, Herbert O. Reid, Sr., Corp. Counsel, Martin L. Grossman, Deputy Corp. Counsel, and Cary Pollack, Chief, General Litigation III, Corp. Counsel's Office, on the briefs, for defendants.

MEMORANDUM

GASCH, Senior District Judge.

This is a class action lawsuit brought by blind vendors and their representatives against the District of Columbia Rehabilitation Services Administration and other District of Columbia agencies. Plaintiffs claim that defendants have mismanaged the District's Randolph-Sheppard program to the detriment of plaintiffs and the class. Plaintiffs seek a writ of mandamus to compel defendants to adhere to the Randolph-Sheppard Act, and damages of more than $800,000 for breach of contract.1

On October 7, 1988, the Court denied defendants' motion to dismiss or, in the alternative, for summary judgment. The Court rejected defendants' arguments, holding that plaintiffs had standing and were not barred from seeking relief in a judicial forum for failure to exhaust their administrative remedies. Committee of Blind Vendors v. District of Columbia, 695 F.Supp. 1234, 1237-40 (D.D.C.1988). The Court also held that monetary damages were available to aggrieved vendors under the Randolph-Sheppard Act, and rejected defendants' argument that plaintiffs' claims were improper since the named agencies had the sole discretion to allocate agency resources. Id. at 1240-42. Finally, the Court concluded that this action met the requirements of Federal Rule of Civil Procedure 23(b)(3) and that a class action was appropriate. Id. at 1242-44.

Following an allowance of time for discovery and other pretrial matters, the Court held a five-day bench trial from December 18 to December 22, 1989. Approximately 175 exhibits comprising many hundreds of pages were received into evidence. The most significant exhibits consisted of financial audits, program compliance reviews, and correspondence between the blind vendors and the agencies. On February 8, 1990, the parties submitted their proposed findings of fact and conclusions of law. Upon consideration of the testimony of the witnesses at trial, the exhibits filed with the Court, and the entire record herein, the Court has now made its findings of fact and conclusions of law. Before elaborating these findings, however, it is necessary first to outline in broad contours the relevant provisions of the Randolph-Sheppard Act and the nature of plaintiffs' claims.

I. THE STATUTORY FRAMEWORK

The Randolph-Sheppard Vending Stand Act, 20 U.S.C. §§ 107-107f ("the Act"), was first enacted in 1936. Its purpose was to provide employment opportunities on federal property to blind vendors, to afford them self sufficiency, and to further federal rehabilitative efforts on their behalf. 20 U.S.C. § 107(a); H.R.Rep. No. 1094, 74th Cong., 1st Sess. 2 (1936); S.Rep. No. 937, 93d Cong., 2d Sess. 5 (1974). The Act was twice amended, in 1954 and 1974. As several courts have chronicled, Congress intended through these amendments to strengthen the Act in several important respects and to confer on the blind vendors legally enforceable rights. Texas State Comm'n for the Blind v. United States, 796 F.2d 400, 402-03 (Fed.Cir.1986), cert. denied, 479 U.S. 1030, 107 S.Ct. 874, 93 L.Ed.2d 828 (1987); Delaware Dep't of Health and Social Servs. v. United States Dep't of Educ., 772 F.2d 1123, 1126-31 (3rd Cir.1985).

For the purposes of this lawsuit, several broad aspects of the Randolph-Sheppard program are relevant. First, the Act authorizes blind persons to operate vending facilities on federal property, and requires that blind vendors licensed under the Act be given priority to operate such facilities. 20 U.S.C. § 107(b). In the District of Columbia, vending stands are located on both federal and District government property. Once a vendor becomes licensed to operate a facility, the vendor is assigned a vending stand to operate as a sole proprietor. The vendor is given an initial stock of inventory and a petty cash fund. 20 U.S.C. § 107b(2). Thereafter, the vendor is entitled to profits and responsible for losses. The vendor is also responsible for other operating expenses, including the replacement of inventory and the payment of sales tax. Management services, such as the maintenance and repair of vending equipment, are paid for through an administrative levy assessed on the net proceeds of each vendor. 34 C.F.R. § 395.9 (1988). Should the vendor choose to leave the stand or transfer to another, the vendor is required to return the start-up inventory and petty cash.

Another aspect of the program relevant to this lawsuit concerns the collection and distribution of vending machine income. The Act requires that a percentage of vending machine income obtained from machines located on federal or District property be turned over for the benefit of the blind vendors. 20 U.S.C. 107d-3.2 This requirement was added to the Act in 1954, following congressional dissatisfaction with the limited expansion of the blind vendor program which stemmed in part from the competition presented by automatic vending machines. See Texas State Comm'n for the Blind v. United States, 6 Cl.Ct. 730, 732-34 (Ct.Cl.1984) (reviewing legislative history of the Act), rev'd on other grounds, 796 F.2d 400 (Fed.Cir.1986). If the vending machine directly competes with a vending facility, the blind licensee who operates that facility is entitled to 100% of the vending machine income. 20 U.S.C. § 107d-3(a). If the vending machine does not directly compete with a vending facility, the vendors are entitled to either 30% or 50% of the income, depending on the nature and use of the property. Id. § 107d-3(b). When no licensee is operating a facility on the property, the vending machine income is deemed "unassigned" and accrues to the blind vendors' pension fund. Id. § 107d-3(c). See also 34 C.F.R. § 395.32.

At the federal level, the Act delegates to the Secretary of Education ("Secretary") the responsibility for interpreting and enforcing its provisions. In turn, the Secretary is authorized to designate state licensing agencies ("SLA's") to operate the program at the state and local levels. The SLA's are designated following an application and approval process through which they agree to adhere to the requirements of federal law. The SLA's are directly responsible for licensing the blind vendors. 20 U.S.C. §§ 107a(a)(5), 107b; 34 C.F.R. §§ 395.5, 395.7. With respect to obtaining a vending stand, the statutory scheme is two-tiered. A prospective vendor must first apply for a license from an SLA; the SLA in turn applies to a federal agency for placement of the licensee on federal property. Randolph-Sheppard Vendors of America v. Weinberger, 795 F.2d 90, 93, 102 (D.C.Cir.1986); see 20 U.S.C. § 107a(a)(5), (c); 34 C.F.R. §§ 395.7, 395.16, 395.35.

Finally, the Secretary is required to ensure, through appropriate regulations, that licensed vendors receive uniform and adequate training, including on-the-job training. The regulations delegate to the SLA's the responsibility to provide uniform and adequate training of the vendors. See 34 C.F.R. § 395.11. The SLA's are further required to provide upward mobility training and follow-up services to ensure that each vendor's "maximum vocational potential is achieved." 20 U.S.C. § 107d-4.

In the District of Columbia, the SLA approved by the Secretary is the District of Columbia Rehabilitation Services Administration ("DCRSA"), a subdivision of the District's Department of Human Services. In this lawsuit, plaintiffs allege that DCRSA has mismanaged the Randolph-Sheppard program in a number of ways. Specifically, plaintiffs allege that DCRSA has been remiss in its duty to identify and satisfactorily account for all sources of vending machine income, thus depriving the blind vendors of substantial revenues; that DCRSA and other District agencies have failed to identify satisfactory sites for vending facilities; that DCRSA violated the Act by contracting for management services with a for-profit entity, the DAC Corporation; that the DAC Corporation failed to provide adequate vendor services and wrongfully expended monies with no resulting benefit to the vendors; that DCRSA violated the Act by failing to distribute the surplus from a levy collected from the blind vendors in 1984; that DCRSA violated the Act by failing to reduce the percentage of the levy by three percent between fiscal years 1986 and 1987; that DCRSA violated the Act by failing to enunciate or implement a training and upward mobility program as required by the Act; and that DCRSA violated the Act by excluding the blind vendors from any meaningful participation in major decisions affecting the vending facility program.

II. FINDINGS OF FACT
The Parties

1. Plaintiff the Committee of Blind Vendors (Blind Vendors Committee, or "BVC") is an organization established by the District of Columbia government in Mayor's Order No. 77-131 (Aug. 8, 1977) pursuant to 20 U.S.C. § 107b-1(3). The BVC is comprised entirely of licensed blind vendors and represents the interests of such vendors under the Randolph-Sheppard Act. Plaintiff Randolph-Sheppard Vendors Association of the District of Columbia, Inc. ("Vendors Association"), is a not-for-profit corporation comprised of licensed blind vendors in the District of Columbia.

2. Plaintiff Gale Conard is a blind vendor licensed in the District of Columbia. He operates a vending facility at 601 D Street, N.W., Washington, D.C., is president of the Vendors Association, and is a member of the BVC. Plaintiff Veronica...

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