Tex. Workforce Comm'n v. U.S. Dep't of Educ.

• Decision Date: 31 August 2020
• Docket Number: No. 19-50283,19-50283
• Citation: 973 F.3d 383
• Parties: TEXAS WORKFORCE COMMISSION, Plaintiff - Appellee v. UNITED STATES DEPARTMENT OF EDUCATION, Rehabilitation Services Administration, Defendant - Appellant
• Court: U.S. Court of Appeals — Fifth Circuit

973 F.3d 383

TEXAS WORKFORCE COMMISSION, Plaintiff - Appellee

v.UNITED STATES DEPARTMENT OF EDUCATION, Rehabilitation Services Administration, Defendant - Appellant

No. 19-50283

United States Court of Appeals, Fifth Circuit.

FILED August 31, 2020

Peter Andrew Nolan, Litigation Counsel, Andrew J. Schumacher, Winstead, P.C., Austin, TX, for Plaintiff - Appellee.

Laura Myron, U.S. Department of Justice, Washington, DC, Weili Justin Shaw, U.S. Department of Justice, Civil Division, Appellate Section, Washington, DC, Eduardo R. Castillo, Assistant U.S. Attorney, U.S. Attorney's Office, Western District of Texas, El Paso, TX, for Defendant - Appellant.

Before CLEMENT, HIGGINSON, and ENGELHARDT, Circuit Judges.

KURT D. ENGELHARDT, Circuit Judge:

Plaintiff-Appellee Texas Workforce Commission (the Commission) alleges that the Army¹ violated the Randolph-Sheppard Act, 20 U.S.C. § 107 et seq ., by failing to give priority to blind vendors in the bidding process for a vending facility services contract at an Army base cafeteria. An arbitration panel found in favor of the Army. The Commission appealed the panel's decision to the district court. The district court granted summary judgment in favor of the Commission and set aside the panel's decision. We AFFIRM.

I.

Congress established the Randolph-Sheppard Act (the Act) "[f]or the purposes of providing blind persons with remunerative employment, enlarging the economic opportunities of the blind, and stimulating the blind to greater efforts in striving to make themselves self-supporting ...." 20 U.S.C. § 107(a). To that end, the Act gives blind persons priority in the bidding process for contracts to operate vending facilities on federal property. Id. at § 107(b). The Secretary of Education (the Secretary) administers the Act and prescribes its implementing regulations. See id. at § 107a; 34 C.F.R. § 395 et seq . For these vending facility contracts, designated state agencies, called State Licensing Agencies (SLAs), contract with the federal government on behalf of blind vendors. 34 C.F.R. § 395.33(b).

Here, the Texas Workforce Commission is the SLA which sought to bid on vending facility services contracts for cafeterias at Fort Bliss, a U.S. Army base in Texas. The Army has two types of contracts for its cafeterias: Full Food Services (FFS) and Dining Facility Attendant (DFA) services. FFS contracts cover activities that comprise the full operation of an Army dining facility, such as requisitioning, receiving, storing, preparing, and serving of food. DFA contracts cover activities required to perform janitorial and custodial duties, such as sweeping, mopping, pot and pan cleaning, and other sanitation-related functions.

From 2003 to 2014, six cafeterias at Fort Bliss fell under one contract held by one blind vendor. But in late 2014 following the contract's expiration, the Army split the work into two separate contracts: one for FFS services and one for DFA services. Although the Commission continued to receive bidding priority for the FFS contract, the Army set aside the DFA contract for bidding only by small businesses, effectively excluding the Commission from the bidding process for the DFA contract. Herein arises the dispute on appeal.

The Commission sought arbitration to challenge the Army's solicitation of bids for this DFA contract without applying the provisions of the Act to the selection process.² The Army contends that the DFA contract is not for the "operation" of a cafeteria; therefore, the Act does not apply, and blind vendors need not receive priority in the bidding process. The Commission, by contrast, asserts that the Act applies to all contracts pertaining to the operation of cafeterias on federal property, such that the Army violated the Act when it failed to give the Commission priority in bidding on the DFA contract. The arbitration panel majority concluded that because "military personnel retain[ed] responsibility for performing management operations, headcount and cashier services, cooking, and menu planning and serving food at those facilities," the Army was not required to comply with the Act when soliciting bids for DFA contracts.³

The Commission subsequently sought judicial review of the arbitration panel's decision. The district court, concluding that the DFA contract at issue is subject to the Act, granted summary judgment for the Commission and set aside the arbitration panel's decision. This appeal followed.

II.

Under the Act, an arbitration panel's decision is subject to review as a final agency action under the Administrative Procedure Act. 5 U.S.C. § 706(2). A court must set aside that action if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. § 706(2)(A). We review de novo the district court's grant of summary judgment. Bridges v. Empire Scaffold, L.L.C. , 875 F.3d 222, 225 (5th Cir. 2017) ; see FED. R. CIV. P. 56(a).

III.

The pivotal question here is whether the DFA contract at issue is subject to the Act; the answer turns on the meaning of "operate"⁴ as it is used in the Act. The Act authorizes "blind persons ... to operate vending facilities on any Federal property," and states that "[i]n authorizing the operation of vending facilities on Federal property, priority shall be given to blind persons licensed by a State agency." 20 U.S.C. § 107(a) – (b) (emphasis added).

The Army contends that "operate" means to direct or manage, implicating a level of executive authority, and because the DFA contract here is only for janitorial and custodial-support services, the contract is not for the "operation" of the cafeteria and does not fall under the Act. The Commission, by contrast, contends that the services covered by the DFA contract are integral to the operation of the cafeteria; therefore, the Act applies, and the Commission should have received priority in bidding on the contract. Because neither the statute nor its implementing regulations make a distinction between the Act's applicability to FFS versus DFA contracts, see 20 U.S.C. § 107(a) – (b) ; 34 C.F.R. § 395.33, in order to determine the reach of the Act, we must first determine what it means to "operate" a vending facility.

A.

We begin our statutory interpretation by inquiring whether the meaning of the term "operate" is ambiguous. "When the words of a statute are unambiguous ... judicial inquiry is complete." Conn. Nat'l Bank v. Germain , 503 U.S. 249, 254, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992) (internal quotation marks and citation omitted). The Act does not define "operate" or "operation," see 20 U.S.C. § 107e, and we do not find that the term's plain meaning is resolved after reviewing multiple dictionary definitions.⁵ Nevertheless, the Department contends that the "ordinary or natural meaning" of "operate" is unambiguous based on the Supreme Court's and our court's interpretation of the term in Bestfoods and Nature's Way Marine . See United States v. Bestfoods , 524 U.S. 51, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998) ; United States v. Nature's Way Marine, L.L.C. , 904 F.3d 416 (5th Cir. 2018). We, however, are hesitant to rely on Bestfoods and Nature's Way Marine for the ordinary and natural meaning of "operate" given the contextual differences between those cases and the instant case.

In Nature's Way Marine , our court followed the Supreme Court's interpretation of "operate" in Bestfoods and held that "an ‘operator’ of a vessel under the [statute] would include someone who directs, manages, or conducts the affairs of the vessel." Nature's Way Marine , 904 F.3d at 420–21. Importantly, Judge Elrod, writing for the court, noted that the statutes in Bestfoods and Nature's Way Marine "have common purposes and a shared history" and the "parallel language between the two statutes is significant." Id. at 420. Indeed, the statute in Bestfoods "define[d] ... ‘operator’ with the exact same language" as the statute at issue in Nature's Way Marine , id. , so it is unsurprising that the court in Nature's Way Marine adopted the Bestfoods court's ordinary and natural meaning of the word. See United States v. Meade , 175 F.3d 215, 220 (1st Cir. 1999) (noting that the use of parallel language or construction in different statutes may inform judicial interpretation).

However, no such commonality exists between the Act in the instant case and either of those statutes. The shared purpose of the Bestfoods and Nature's Way Marine statutes centers on liability and compensation for environmental pollution. See generally 33 U.S.C. §§ 2701 – 2762 ; 42 U.S.C. §§ 9601 – 9675. Given that context, it would be fair to say the ordinary and natural meaning of "operator" is a person who "directs, manages, or conducts" the affairs of the facility or vessel because a level of control or responsibility is implicated when liability is involved. But no liability is implicated by the Act here. Quite the opposite, the Randolph-Sheppard Act was enacted to benefit blind persons by providing them with greater employment and economic opportunities. The Act has a "distinct, focused, and singular purpose" that is not covered by the Bestfoods or Nature's Way Marine statutes. See Meade , 175 F.3d at 221.

Furthermore, the word the Bestfoods and Nature's Way Marine courts analyzed was "operator," but the whole term as listed in the definitions section of both statutes is "owner or operator." So, it is also unsurprising that the courts interpreted "operator" to mean a person with some sort of executive control or authority because "operator" was defined in tandem with "owner." By contrast, in the instant case, the Army "owns" the cafeteria, whereas the third party managing the services contract "operates" the vending facility. Unlike the statutes in Bestfoods and Nature's Way Marine , under the Act here, the party who "operates" the vending facility cannot and should not be defined in the same way as the "owner."

Because of the significant contextual distinctions, we cannot unequivocally...