Premo v. Martin
| Citation | 119 F.3d 764 |
| Decision Date | 11 July 1997 |
| Docket Number | No. 96-55456,96-55456 |
| Parties | 97 Cal. Daily Op. Serv. 5496, 97 Daily Journal D.A.R. 8907 Brenda PREMO, Director of the Department of Rehabilitation, State of California, Plaintiff-Appellant, v. Jeana MARTIN; The United States Department of Education; Richard W. Riley, Secretary of the United States Department of Education, Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
James F. Ahern, Deputy Attorney General of the State of California, for plaintiff-appellant.
John F. Daly, Department of Justice, Washington, DC, for defendants-appellees the United States Department of Education and Secretary of Education Richard Riley.
Janice A. Jenkins, Yturbide & Jenkins, San Francisco, CA, for defendant-appellee Jeana Martin.
Appeal from the United States District Court for the Central District of California; John G. Davies, District Judge, Presiding. D.C. No. CV-95-00546-JGD.
Before: GOODWIN, D.W. NELSON, and TROTT, Circuit Judges.
Brenda Premo, in her official capacity as the Director of the California Department of Rehabilitation (the "State"), appeals the district court's grant of summary judgment to Jeana Martin, the United States Department of Education, and Secretary of Education Richard Riley. Martin, formerly a blind vendor licensed under the Randolph-Sheppard Vending Stand Act (the "Act"), 20 U.S.C. §§ 107-107f, invoked the arbitration provisions of the Act in order to resolve a dispute between herself and the Department of Rehabilitation. An arbitration panel convened by the United States Department of Education awarded Martin damages, injunctive relief, and attorney's fees. The State subsequently brought suit in federal district court, claiming that the Eleventh Amendment prohibits Randolph-Sheppard arbitration panels from awarding compensatory relief. In the alternative, the State argued that the arbitration proceedings violated due process. Martin counterclaimed, seeking judicial enforcement of the award. The State responded that the Eleventh Amendment bars the enforcement of such awards in federal court. The district court granted Martin's motion for summary judgment. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
The Randolph-Sheppard Vending Stand Act, 20 U.S.C. §§ 107-107f, establishes a cooperative federal-state program that provides employment opportunities for the blind. The Act grants priority to blind persons who desire to operate vending facilities on federal property. 20 U.S.C. § 107(b). At the federal level, the Secretary of Education is charged with the overall responsibility for administering the Act. 20 U.S.C. §§ 107(b), 107a(a).
At the state level, state licensing agencies ("SLAs") designated by the Secretary of Education make application to the Secretary and agree--
implement the program. 20 U.S.C. § 107a(a)(5). State participation in the program is voluntary, and a state agency seeking to be designated as a Randolph-Sheppard SLA must apply to the Secretary of Education and agree to a number of conditions. For example, the Act requires SLAs to give preferences to blind persons in need of employment, 20 U.S.C. § 107a(b), to negotiate with federal agencies for the operation of vending facilities on federal sites, 20 U.S.C. § 107a(c), and to equip the facilities, 20 U.S.C. § 107b(2). In addition, the state agency must:
....
(6) 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 agree to submit the grievances of any blind licensee not otherwise resolved by such hearing to arbitration as provided in section 107d-1 of this title.
20 U.S.C. § 107b(6).
The facts relevant to this case are not in dispute. In 1985, the California Department of Rehabilitation, the designated SLA for the State of California, issued a license to Jeana Martin. The license permitted her to operate a snack bar and lunch room at the General Mail Facility of the United States Post Office in Santa Ana, California. Martin left the position in 1991 when she experienced financial losses and other difficulties. Although she relocated to other sites, her financial condition worsened, and the State revoked her license in 1992.
During this period, Martin twice requested a state hearing. In 1990, she filed a complaint alleging that the State had violated the Act by failing to take adequate steps to ensure compliance by the Postal Service. In 1992, she challenged the State's termination of her vendor's license. In both cases, Martin was denied relief.
To contest these decisions, Martin invoked her right to arbitration by a panel convened by the Secretary of Education under 20 U.S.C. §§ 107d-1, 107d-2. Pursuant to the terms of the statute, Martin selected one panel member, the State selected another, and the panel members designated by Martin and the State agreed to a third person who chaired the panel.
During the course of the proceedings, the panel refused a number of the State's requests. First, the panel declined to grant a continuance to the State's attorney. When the State objected to Martin's selection of Robert Humphreys as a panel member because Humphreys previously had expressed a view about one of the legal issues affecting Martin, the panel chair overruled the objection. During the hearing, the panel admitted, over the State's objection, the testimony of Durward McDaniel, an attorney who had previously advised Martin.
In August of 1994, the panel ruled in favor of Martin. The panel determined that the State had violated the Act by refusing to secure the renovation of the vending facilities at Santa Ana, by failing to insist on assignment of income from competing vending machines to Martin, and by declining to take effective steps to prevent the Postal Service from renewing a contract with another vendor. Reasoning that these lapses were the cause of Martin's financial difficulties, the panel also concluded that the State had improperly terminated her license. In December 1994 the panel awarded Martin $379,025.05 in lost income and $70,898.65 in attorney's fees and costs. The panel also ordered the State to reinstate Martin's license, to restore her to a comparable vending facility, and to pay her at a rate of $5,731.94 per month until she is restored.
The State then filed this federal action, naming the Secretary of Education, the United States Department of Education ("federal defendants"), and Martin as defendants. The State claimed that the Eleventh Amendment prohibits Randolph-Sheppard arbitration panels from awarding compensatory relief and bars the enforcement of such awards in federal court. In the alternative, the State alleged that the denial of the continuance, Humphreys' participation as a panel member, and the admission of McDaniel's testimony amounted to a violation of due process. Martin counterclaimed, seeking enforcement The district court granted summary judgment to Martin, concluding that the State had waived its sovereign immunity. The court further concluded that no violation of due process had occurred because the State is not a "person" within the meaning of the Fifth Amendment, and that the award was not arbitrary and capricious. Following this decision, the State filed a motion to amend its complaint, which the district court denied. This timely appeal followed.
of the arbitral award. Both the State and Martin filed motions for summary judgment. The federal defendants did not oppose the State's motion for summary judgment on Eleventh Amendment grounds but filed a motion for partial summary judgment on all other issues.
The question of Eleventh Amendment immunity is a purely legal issue that we review de novo. Micomonaco v. Washington, 45 F.3d 316, 319 (9th Cir.1995).
An arbitral award under the Randolph-Sheppard Act is reviewed as an agency action under the standards set forth in the Administrative Procedure Act ("APA"), 5 U.S.C. § 706. See 20 U.S.C. § 107d-2. Under the APA, agency action may be set aside only if "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A); In re Transcon Lines, 89 F.3d 559, 563 (9th Cir.1996).
We review a district court's denial of a motion to amend a complaint for an abuse of discretion. Janicki Logging Co. v. Mateer, 42 F.3d 561, 563 (9th Cir.1994).
The Eleventh Amendment provides:
The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
U.S. Const. amend. XI. Although the Amendment does not explicitly prohibit an action against a state by one of the state's own citizens, the Supreme Court has construed the Amendment as barring such suits. See Welch v. Texas Dept. of Highways & Pub. Transp., 483 U.S. 468, 472, 107 S.Ct. 2941, 2945, 97 L.Ed.2d 389 (1987) (citing Hans v. Louisiana, 134 U.S. 1, 10, 10 S.Ct. 504, 505, 33 L.Ed. 842 (1890)). Even when a state is not a named party, as is the case here, the Eleventh Amendment may bar a suit by private parties seeking to impose a liability which must be paid from public funds in the state treasury. Edelman v. Jordan, 415 U.S. 651, 663, 94 S.Ct. 1347, 1355-56, 39 L.Ed.2d 662 (1974). However, there are two well-recognized exceptions to the Eleventh Amendment protection from suits for damages. Congress can abrogate a state's Eleventh Amendment sovereign immunity without the consent of the state in certain instances, or a state can waive its immunity by consenting to suit in federal court. See Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 238, 105 S.Ct. 3142, 3145, 87 L.Ed.2d 171 (1985).
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