Anthony Sauer v. U.S. Dept. of Education, etc.

Filing

FILED OPINION (JOHN T. NOONAN, RONALD M. GOULD and SANDRA S. IKUTA) REVERSED. Judge: SSI Authoring. FILED AND ENTERED JUDGMENT. [8055418] [10-55642, 10-55877]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ANTHONY P. SAUER, Director of the
California Department of
Rehabilitation,
Plaintiff-Appellant,
v.
UNITED STATES DEPARTMENT OF
EDUCATION, REHABILITATION
SERVICES ADMINISTRATION,
Defendant-Appellee,
DAVID ZELICKSON,
Intervenor-Appellee.

ANTHONY P. SAUER, Director of the
California Department of
Rehabilitation,
Plaintiff-Appellee,
v.
UNITED STATES DEPARTMENT OF
EDUCATION, REHABILITATION
SERVICES ADMINISTRATION,
Defendant-Appellant,
and
DAVID ZELICKSON,
Intervenor.





No. 10-55642
D.C. No.
2:09-cv-01161AHM-PLA






No. 10-55877
D.C. No.
2:09-cv-01161AHM-PLA
OPINION



Appeal from the United States District Court
for the Central District of California
A. Howard Matz, District Judge, Presiding
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SAUER v. U.S. DEPARTMENT OF EDUCATION

Argued December 6, 2011
Submitted January 26, 2012
Pasadena, California
Filed February 3, 2012
Before: John T. Noonan, Ronald M. Gould, and
Sandra S. Ikuta, Circuit Judges.
Opinion by Judge Ikuta

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SAUER v. U.S. DEPARTMENT OF EDUCATION

COUNSEL
Ismael A. Castro (argued), Supervising Deputy Attorney General, and Julie Weng-Gutierrez (argued), Supervising Deputy
Attorney General, Sacramento, California, for plaintiff, appellant, and cross-appellee Anthony P. Sauer, Director of the
California Department of Rehabilitation.
Jeffrica J. Lee (argued), DOJ, Washington, D.C., for
defendant-appellee and cross-appellant United States Department of Education, Rehabilitation Services Administration.
George Langendorf, Esq. (argued), Arnold & Porter LLP, San
Francisco, California, for intervenor-appellee David Zelickson.

OPINION
IKUTA, Circuit Judge:
The California Department of Rehabilitation (DOR) and
the United States Department of Education appeal from the
district court’s decision enforcing a 2008 arbitration award
issued pursuant to 20 U.S.C. § 107d-1(a) of the RandolphSheppard Vending Stand Act (the Act). We have jurisdiction
pursuant to 28 U.S.C. § 1291, and we reverse.

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I
Some familiarity with the structure of the RandolphSheppard Act and the manner in which it provides for resolution of disputes is necessary to understand the sequence of
events in this case. We briefly provide the relevant background.
A
The Randolph-Sheppard Act establishes a cooperative program between the federal government and the states to assist
blind persons who wish to operate vending facilities on federal property. See 20 U.S.C. § 107. The stated purposes of the
Act are “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.” § 107(a). The Rehabilitation Services Administration within the Department of Education
administers the Act with the help of state agencies designated
by the Secretary of Education. §§ 107(b), 107a(a), 107b. In
participating states, these state agencies (referred to as “state
licensing agencies”) issue licenses to blind persons that make
them eligible to operate vending facilities on federal properties within that state. § 107a(b). In order to establish a vending site, a state licensing agency must seek authorization in
the form of a permit from the federal agency in control of the
property on which the site is to be located. § 107a(c); 34
C.F.R. § 395.16.
State participation in the Randolph-Sheppard program is
voluntary. See 20 U.S.C. § 107b. A state agency that wishes
to participate must apply to the Secretary for designation as
a state licensing agency and agree to “cooperate with the Secretary in carrying out the purpose” of the Act, § 107b(1), as
well as comply with a number of more specific requirements,
see, e.g., § 107b(2)-(6). For example, a state licensing agency
must “give preference to blind persons who are in need of

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employment” when issuing licenses, § 107a(b); provide each
licensed blind vendor with “such vending facility equipment,
and adequate initial stock of suitable articles to be vended
therefrom, as may be necessary,” § 107b(2); make periodic
reports to the Secretary of Education, § 107b(4); provide
licensed blind vendors with relevant financial data, § 107b-1;
conduct a biennial election of a Committee of Blind Vendors
to represent all blind licensees in the state program, § 107b1(2); cooperate with the Committee in the training of blind
licensees, § 107b-1(3); disburse vending machine income to
licensed blind vendors according to a particular formula,
§ 107d-3; 34 C.F.R. § 395.8(a)-(b); and use any remaining
vending machine income to establish retirement and other
benefits plans for the blind and to purchase, maintain, and
replace vending equipment, 20 U.S.C. § 107d-3(c); 34 C.F.R.
§ 395.8(c).
B
The Act also provides for proceedings to resolve two types
of disputes: (1) disputes between the licensed blind vendor
and the state licensing agency, on the one hand, and (2) disputes between the state licensing agency and the federal
agency in control of the property on which the vending site
is located, on the other.
The first type of dispute, between the blind licensee and the
state licensing agency, is governed by the procedures set forth
in §§ 107b(6), 107d-1(a), 107d-2(a), and 107d-2(b)(1) of the
Act. At the request of any blind licensee who is dissatisfied
with the operation of the program, the state licensing agency
must give the blind licensee a full evidentiary hearing. 20
U.S.C. §§ 107b(6); 107d-1(a). If the blind licensee’s grievances are not resolved by such a hearing, the blind licensee
“may file a complaint with the Secretary who shall convene
a panel to arbitrate the dispute.” § 107d-1(a).1
1

Section 107d-1(a) provides, in full:
(a) Hearing and arbitration

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The second type of dispute, between a state licensing
agency and the federal entity in control of the property on
which a vending site is located, is governed by §§ 107d-1(b),
107d-2(a), and 107d-2(b)(2) of the Act. If a state licensing
agency determines that the federal entity in control of the
property on which a vending site is located is failing to comply with the Act, the state agency “may file a complaint with
the Secretary who shall convene a panel to arbitrate the dispute.” § 107d-1(b).2
If a blind licensee triggers an arbitration proceeding, it is
governed by § 107d-2(b)(1) of the Act.3 In these circumAny 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, which shall be provided by such agency in
accordance with section 107b(6) of this title. 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 pursuant
to section 107d-2 of this title, and the decision of such panel shall
be final and binding on the parties except as otherwise provided
in this chapter.
2
Section 107d-1(b) provides, in full:
(b) Noncompliance by Federal departments and agencies; complaints by State licensing agencies; arbitration
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 described in section 107(b) of this title 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 pursuant to section 107d-2 of this title, and the decision of such panel shall be
final and binding on the parties except as otherwise provided in
this chapter.
3
Section 107d-2(b)(1) provides, in full:
The arbitration panel convened by the Secretary to hear griev-

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stances, the arbitration panel is composed of one member chosen by the blind licensee, one member chosen by the state
licensing agency, and one member jointly designated by the
other two members. § 107d-2(b)(1). If a state licensing
agency triggers an arbitration proceeding, it is governed by
§ 107d-2(b)(2) of the Act.4 In this case, the panel is composed
ances of blind licensees shall be composed of three members
appointed as follows:
(A) one individual designated by the State licensing agency;
(B) one individual designated by the blind licensee; and
(C) one individual, not employed by the State licensing
agency or, where appropriate, its parent agency, who shall
serve as chairman, jointly designated by the members
appointed under subparagraphs (A) and (B).
If any party fails to designate a member under subparagraph
(1)(A), (B), or (C), the Secretary shall designate a member on
behalf of such party.
4
Section 107d-2(b)(2) provides, in full:
The arbitration panel convened by the Secretary to hear complaints filed by a State licensing agency shall be composed of
three members appointed as follows:
(A) one individual, designated by the State licensing agency;
(B) one individual, designated by the head of the Federal
department, agency, or instrumentality controlling the Federal property over which the dispute arose; and
(C) one individual, not employed by the Federal department,
agency, or instrumentality controlling the Federal property
over which the dispute arose, who shall serve as chairman,
jointly designated by the members appointed under subparagraphs (A) and (B).
If any party fails to designate a member under subparagraph
(2)(A), (B), or (C), the Secretary shall designate such member on
behalf of such party. If the panel appointed pursuant to paragraph
(2) finds that the acts or practices of any such department,
agency, or instrumentality are in violation of this chapter, or any
regulation issued thereunder, the head of any such department,
agency, or instrumentality shall cause such acts or practices to be
terminated promptly and shall take such other action as may be
necessary to carry out the decision of the panel.

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of one member chosen by the state-licensing agency, one
member chosen by the federal agency, and one member
jointly designated by the other two members. § 107d-2(b)(2).
Decisions by both types of panels are “final and binding on
the parties,” §§ 107d-1(a), 107d-1(b), except that each is
“subject to appeal and review as a final agency action for purposes of chapter 7 of [the Administrative Procedure Act],”
§ 107d-2(a).
The Act treats vendor-triggered arbitrations differently than
state-triggered arbitrations in one significant respect. Whereas
§ 107d-2(b)(1) is silent as to the type of relief that a vendortriggered arbitration panel may grant, the Act provides that if
a state licensing agency triggers arbitration, and the arbitration panel determines that the federal agency is in violation of
the Act, the head of the federal agency “shall cause such acts
or practices to be terminated promptly and shall take such
other action as may be necessary to carry out the decision of
the panel.” § 107d-2(b)(2).
II
We now turn to the facts of this case. The California DOR
is the state licensing agency designated by the Secretary to
administer the Act in California. In 1993, the federal General
Services Administration (GSA), which manages the Roybal
Federal Building in downtown Los Angeles, granted DOR a
permit to establish a vending facility in the building.5 The
DOR contracted with David Zelickson, a blind vendor
licensed under the Act, to operate a snack shop in the building.
5

The GSA is the department responsible for managing the majority of
federal properties nationwide, and manages 762 properties in California.
See General Services Administration (GSA) Inventory of Owned and
Leased Properties: California (Jan. 20, 2012, 5:32 PM), http://
www.iolp.gsa.gov/iolp/BuildingsList.asp?sID=6&pOrd=c.

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In 1997, GSA notified DOR that it intended to terminate
Zelickson’s employment at the Roybal Building because of
allegedly unprofessional behavior. The DOR opposed Zelickson’s termination, arguing that GSA had not established
“good cause” for Zelickson’s removal as required by state
laws governing the operation of the Randolph-Sheppard Act
program, and that DOR, and not GSA, was in charge of vendor licensing and selection under the Act. Despite DOR’s
efforts, GSA suspended DOR’s permit to operate a vending
facility at the Roybal Building and issued a revocable license
to another party.
In October 1998, DOR filed an administrative complaint
against GSA with the Secretary and requested arbitration pursuant to § 107d-1(b) of the Act. On December 26, 2000, the
arbitration panel ruled that GSA had violated the Act by
expelling Zelickson without going through California’s hearing process, and concluded that GSA had to reinstate Zelickson. Nonetheless, the panel determined that GSA should have
an opportunity to litigate Zelickson’s qualifications, and
therefore directed DOR to provide GSA with a forum in
which to do so. The arbitration panel held that “[i]f GSA does
not exercise its options to litigate the question of Mr. Zelickson’s qualifications within [30 days from the date of decision], then it must pay Mr. Zelickson the damages to which
he is entitled, namely the difference between what he has
been able to earn and what [the interim vendor] earned . . .
plus interest on those amounts of money.”
When GSA failed to reinstate Zelickson or take any steps
to litigate Zelickson’s qualifications within the 30-day period,
DOR made numerous unsuccessful attempts to secure GSA’s
compliance with the 2000 arbitration award. In March 2001,
DOR sent a letter to GSA insisting that GSA terminate its
contract with the new vendor and reinstate Zelickson. The following month, DOR sent GSA a letter demanding GSA’s
compliance with the panel’s decision. DOR and GSA then
met with a Department of Education official who attempted

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to mediate their dispute. The Department of Education mediator informed DOR that his only role was to “facilitate dialogue” between the two agencies and that “despite the fact
that [the Department of Education] is DOR’s federal oversight
agency, [the Department of Education] is not in a position to
exert pressure on GSA to comply with the Award.” Mediation
was ultimately unsuccessful because GSA maintained its
position that “the arbitration panel lacked the authority to
award either the vendor or [DOR] damages from the Federal
government, and . . . in any event, the United States has not
waived its sovereign immunity with regard to RandolphSheppard ‘damages.’ ” DOR later sought help from the California Attorney General’s Office, which sent a letter to GSA
in December 2002 suggesting that the state might file suit if
GSA did not comply with the award or reach some other resolution with DOR. This threat, too, was to no avail.
In addition to attempting to bring GSA into compliance
with the 2000 arbitration award, DOR repeatedly encouraged
Zelickson to consider competing for other vending locations,
and advised him he was unlikely to recover damages from
GSA. Although DOR assured Zelickson that taking a job at
another vending facility would not jeopardize his chances of
returning to the Roybal Building, Zelickson did not apply
elsewhere. DOR allowed Zelickson to operate a facility at a
Los Angeles traffic court location under an “interim” permit
until at least 2008, much longer than the usual six months’
duration for such a permit.
In 2006, Zelickson notified DOR that he was requesting an
evidentiary hearing under § 107d-1(a) regarding DOR’s failure to compel GSA to reinstate him at the Roybal Building.
DOR refused this request as untimely. Zelickson then filed a
complaint with the Department of Education under § 107d1(a) requesting arbitration of his dispute with DOR. The
Department of Education convened a second arbitration panel
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DOR had breached an obligation to enforce the 2000 arbitration award between DOR and GSA.
The second arbitration panel determined that DOR had
breached its obligation to Zelickson. According to the panel,
because GSA did not comply with the 2000 arbitration award
“despite the best efforts of DOR to secure compliance short
of a lawsuit,” DOR had a duty to seek enforcement of the
arbitration award in federal court. The panel reasoned that
“[t]here is no statutory or judicial prohibition against the
enforcement of an arbitration decision, and a lawsuit is the
only way [a state licensing agency] can protect its interest in
a facility it establishes, as well as protecting the blind vendor’s interest,” because “[t]he blind vendor has no right to
enforce a favorable arbitration award on his own.” “Even
assuming that DOR has discretion whether or not to bring
lawsuits against violating federal agencies,” the panel held
that in this case the DOR abused its discretion by failing to
sue GSA given that “[t]here was no other way” to enforce
Zelickson’s rights.
Having concluded that DOR breached its obligation to Zelickson by failing to file a lawsuit against GSA, the panel ruled
that because of this failure, “DOR became liable for the damages that were afforded to [Zelickson]” under the 2000 arbitration award. Accordingly, the panel ordered DOR to pay
Zelickson $140,000 in damages, which amounted to $2,500
per month of lost earnings for the 56 months between Zelickson’s improper removal on December 1, 1997, and the date on
which DOR advised Zelickson “to make application for
another permanent facility without waiving his rights to return
to Roybal.” The panel also ordered DOR to pay Zelickson
$2,500 per month until it succeeded in reinstating him at
either the Roybal Federal Building or a comparable facility.
DOR protested this ruling, and in November 2008, DOR
filed suit against the Department of Education in federal district court, seeking review of the 2008 arbitration award. Zel-

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ickson later intervened to defend the panel’s decision. The
district court affirmed the award, and both DOR and the
Department of Education appeal.6
III
This appeal raises a single question: whether the 2008 arbitration panel exceeded its authority under the Act when it
ruled that DOR had a statutory obligation to sue GSA for its
failure to comply with the 2000 arbitration award, and therefore was liable for damages in favor of Zelickson when it
failed to do so.
A
An arbitration decision under the Act is “subject to appeal
and review as a final agency action” under the standards set
forth in the Administrative Procedure Act (APA). See 20
U.S.C. § 107d-2(a). The APA requires a reviewing court to
“decide all relevant questions of law [and] interpret constitutional and statutory provisions.” 5 U.S.C. § 706. In addition,
the reviewing court must “hold unlawful and set aside agency
action, findings, and conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law,” § 706(2)(A), or are “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right,” id.
§ 706(2)(C).
We review de novo the questions of law at issue in this
case, and must set aside the 2008 arbitration award if it is “not
in accordance with law.” § 706(2)(A); see also Del. Dep’t of
Health & Soc. Servs. v. U.S. Dep’t of Educ., 772 F.2d 1123,
1139 (3d Cir. 1985) (“[U]nder 20 U.S.C. § 107d-2(a) and 5
6

Although nominally on opposing sides, DOR and the Department of
Education agree that the arbitration panel exceeded its authority in issuing
the award against DOR; only Zelickson, as the real party in interest,
defends the arbitration panel’s award.

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U.S.C. § 706(2)(A) our decision on legal questions is plenary.”). In deciding the legal question whether the Act requires
a state licensing agency to sue a noncomplying federal
agency, we do not give any special deference to the arbitration panel’s interpretation of the Act. C.f. Chevron, U.S.A.
Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-45
(1984) (holding that courts should give considerable weight to
an executive agency’s construction of a statutory scheme that
it is entrusted to administer). Chevron deference “is warranted
only ‘when it appears that Congress delegated authority to the
agency generally to make rules carrying the force of law, and
that the agency interpretation claiming deference was promulgated in the exercise of that authority.’ ” Gonzales v. Oregon,
546 U.S. 243, 255-56 (2006) (quoting United States v. Mead
Corp., 533 U.S. 218, 226-27 (2001)). Deference is inapplicable here because the Act does not delegate interpretive authority to the arbitration panel; instead, it gives the Secretary of
Education the responsibility of administering the Act and
issuing interpretive regulations. See 20 U.S.C. § 107(b).
Although an arbitration panel’s decision is considered a final
action of the Secretary for purposes of appeal, see § 107d2(a), this is a legal fiction: an arbitration panel is composed
of members appointed by the parties to the arbitration, not of
Department of Education officials whose expertise merits our
deference. Mead Corp., 533 U.S. at 228. Indeed, in this case,
DOE opposes the arbitration panel’s interpretation of the Act.
B
[1] In addressing the legal question at issue, we begin with
the plain language of the Act. “Statutory interpretation
focuses on ‘the language itself, the specific context in which
that language is used, and the broader context of the statute
as a whole.’ ” United States v. Havelock, ___ F.3d ___, 2012
WL 29347 (9th Cir. Jan. 6, 2012) (quoting Robinson v. Shell
Oil Co., 519 U.S. 337, 341 (1997)). “If the text of the statute
is clear, this court looks no further in determining the statute’s
meaning.” K & N Eng’g, Inc. v. Bulat, 510 F.3d 1079, 1081

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(9th Cir. 2007) (quoting United States v. Mendoza, 244 F.3d
1037, 1042 (9th Cir. 2001)) (internal quotation marks omitted). By its terms, the Act does not require a state licensing
agency to sue a federal agency that refuses to comply with a
§ 107d-1(b) arbitration award. While a state agency that elects
to participate in the Randolph-Sheppard program agrees to a
number of detailed requirements and duties, see supra at
1095-96, there is no provision in the Act even mentioning
judicial enforcement of arbitration awards, let alone requiring
a state licensing agency to bring a judicial enforcement action
against a federal agency that refuses to comply with the Act.
[2] Nor is there any such implicit requirement in the Act.
To the contrary, the text of the statute weighs against an inference that Congress intended to require a state licensing
agency to bring an enforcement action against a federal
agency. First, the Act provides that when a state licensing
agency determines that a federal entity is violating the Act,
the state licensing agency “may file a complaint with the Secretary who shall convene a panel to arbitrate the dispute.” 20
U.S.C § 107d-1(b) (emphasis added). As the Supreme Court
has explained, “[t]he word ‘may,’ when used in a statute, usually implies some degree of discretion,” United States v. Rodgers, 461 U.S. 677, 706 (1983), especially “when the same
[provision] uses both ‘may’ and ‘shall,’ ” in which case, “the
normal inference is that each is used in its usual sense—the
one act being permissive, the other mandatory,” Anderson v.
Yungkau, 329 U.S. 482, 485 (1947). Here, Congress’s use of
“may” and “shall” makes clear that it has given the state
licensing agency the discretion (not the obligation) to trigger
an arbitration proceeding with a noncompliant federal agency
while imposing a mandatory obligation on the Secretary to
convene an arbitration panel upon the state’s request. Because
Congress gave the state licensing agency the option whether
or not to pursue arbitration with a noncompliant federal
agency, we can infer that Congress did not intend to impose
a statutory duty on a state licensing agency to bring a judicial

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enforcement action against the federal agency if it refuses to
comply with an arbitration decision.
There is a second textual indication that Congress did not
intend to impose such an obligation on a state licensing
agency: the Act provides that “[t]he Secretary shall pay all
reasonable costs of arbitration,” 20 U.S.C. § 107d-2(d), but
there is no requirement that the Secretary pay the costs of an
enforcement action. There would be little incentive for a state
licensing agency to file a complaint with the Secretary if the
consequence of a successful arbitration would be that the state
would have to bear either the cost of an enforcement action
in federal court or, as here, the cost of remedying the federal
agency’s violations.
Third, the structure of the Act weighs against interpreting
it as imposing a requirement on a state licensing agency to sue
any noncompliant federal agency, as such an interpretation
would be at odds with the Act’s emphasis on cooperation
between the states and the federal government. See § 107b
(requiring a state licensing agency “to cooperate with the Secretary in carrying out the purpose of this chapter”); § 107a(c)
(requiring a state licensing agency to seek authorization from
a federal agency before establishing a vending site on federal
property); 34 C.F.R. § 395.37(a) (giving a state licensing
agency authority to initiate arbitration against a federal
agency only when the SLA determines that the federal agency
is failing to comply with the Act “and all informal attempts
to resolve the issues have been unsuccessful” (emphasis
added)). A state agency could reasonably decide not to pursue
a lawsuit against GSA given its ongoing relationship with
GSA in connection with other GSA-managed buildings.
[3] Therefore, the plain language of the statute weighs
against interpreting the Act as imposing a duty on state licensing agencies to sue federal agencies, and holding them liable
for damages if they fail to do so.

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C
[4] This interpretation of the text is supported by other
principles of statutory construction. First, the Supreme Court
“has recognized on several occasions over many years that an
agency’s decision not to prosecute or enforce, whether
through civil or criminal process, is a decision generally committed to an agency’s absolute discretion.” Heckler v. Chaney,
470 U.S. 821, 831 (1985) (citing United States v. Batchelder,
442 U.S. 114, 123-24 (1979); United States v. Nixon, 418
U.S. 683, 693 (1974); Vaca v. Sipes, 386 U.S. 171, 182
(1967); Confiscation Cases, 7 Wall. 454 (1869)).7 Although
this presumption “may be rebutted where the substantive statute has provided guidelines for the agency to follow in exercising its enforcement powers,” id. at 832-33, there is no
language in the Act that provides such enforcement guidelines
to a state licensing agency; as explained above, the Act does
not expressly give state licensing agencies the right, let alone
the duty, to bring an action to enforce an arbitration award. In
the absence of any express statement in the Act, we conclude
that Congress has not varied from the general rule giving state
agencies absolute discretion on this issue.
[5] Second, while Congress may impose requirements on
states as a condition of participating in a federally funded program, it “must do so unambiguously . . . , enabl[ing] the
States to exercise their choice knowingly, cognizant of the
consequences of their participation.” South Dakota v. Dole,
483 U.S. 203, 207 (1987) (alterations in original) (quoting
Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 17
(1981)). A state’s acceptance of its statutory obligations is not
“knowing” if the state “is unaware of the conditions or is
unable to ascertain what is expected of it.” Pennhurst, 451
7

Although these cases consider the discretion of a federal agency (not
a state agency), principles of federalism and comity direct us to apply the
same interpretative approach when considering the discretion of a state
agency to prosecute or bring an enforcement action.

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U.S. at 17. If legislation compels a state to participate in a
federal program without its knowing agreement to the conditions of participation, it may conflict with the Tenth Amendment principle that Congress may not directly commandeer
the states “to administer or enforce a federal regulatory program.” Printz v. United States, 521 U.S. 898, 935 (1997).
Here, the Act does not clearly require participating states to
sue federal agencies that refuse to comply with an arbitration
award, and therefore we cannot say that a state licensing
agency participating in the Randolph-Sheppard program has
accepted such an obligation knowingly. In the absence of a
clear congressional intent to the contrary, the canon of constitutional avoidance counsels us to interpret the Act as not
imposing such a condition on the states’ participation in the
vendor program. See, e.g., Edward J. DeBartolo Corp. v. Fl.
Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568,
575 (1988).
[6] We also note that two of our sister circuits have held
that an arbitration panel convened under § 107d-1(b) lacks
authority to order a federal agency to take remedial action;
under this interpretation of the Act, a state licensing agency
would not have the ability (let alone the obligation) to enforce
a § 107d-1(b) arbitration decision against the federal government. See Md. State Dep’t of Educ. v. U.S. Dep’t of Veterans
Affairs, 98 F.3d 165, 169-70 (4th Cir. 1996); Ga. Dep’t of
Human Res. v. Nash, 915 F.2d 1482, 1492 (11th Cir. 1990).
As we previously noted, under the provision governing arbitrations triggered by a state licensing agency, § 107d-2(b)(2),
if the arbitration panel determines that a federal agency is
engaging in acts or practices that violate the Act, “the head of
[the federal agency] shall cause such acts or practices to be
terminated promptly and shall take such other action as may
be necessary to carry out the decision of the panel.” The
Fourth and Eleventh Circuits have interpreted this language as
indicating a congressional intent to make the federal agency
solely responsible for remedying its own violations and thus
to preclude an arbitration panel convened under § 107d-1(b)

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from ordering the federal government to take any type of
remedial action. See Md. State Dep’t of Educ., 98 F.3d at
169-70 (“[T]he statute places the responsibility for ending the
violation on the head of the federal entity and does not authorize a § 107d-1(b) arbitration panel to order the federal entity
to take specific remedial action.”); Nash, 915 F.2d at 1492
(“[A]lthough the panel may determine that a violation is
occurring and may identify the discrete acts that are in violation, the statute does not authorize the arbitration panel to
order the federal entity to take any remedial action.”). Under
this interpretation, a state licensing agency would not be able
to enforce an arbitration decision, because there would be no
remedial award in the decision to enforce. We do not need to
reach this issue here, but note that our sister circuits’ opinions
further weigh against interpreting the Act as requiring a state
licensing agency to enforce the arbitration panel’s remedial
orders, given that under their interpretation of the Act, such
suits would not be possible.
D
Zelickson’s argument to the contrary relies primarily on our
decision in Premo v. Martin, 119 F.3d 764 (9th Cir. 1997). In
Premo, a state licensing agency appealed an arbitration award
ruling that the state licensing agency had violated the Act by
“refusing to secure the renovation of [a blind vendor’s] facilities . . . , by failing to insist on assignment of income from
competing vending machines to [the vendor], and by declining to take effective steps to prevent the [United States] Postal
Service from renewing a contract with another vendor.” Id. at
767. The arbitration panel had ordered the state licensing
agency to reinstate the vendor and pay her compensatory
damages in the form of lost income and attorney’s fees and
costs. See id. Premo affirmed the district court’s decision
upholding the award. Id. at 771-72. Zelickson argues that
under Premo, a state licensing agency has a statutory obligation to protect a blind vendor from the federal government’s
violations of the Act, and an arbitration panel could properly

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award compensatory damages against the state licensing
agency for failing to do so.
We disagree. In Premo, the state licensing agency did not
contest the arbitration panel’s ruling that it had violated the
Act. Instead, it challenged the award only on the grounds that
the Eleventh Amendment barred the award of compensatory
relief against a state, and that the Department of Education
had violated the state licensing agency’s due process rights by
empaneling a biased arbitrator and refusing to admit certain
testimony. See id. at 766. Our ruling was limited to these
claims. Specifically, we held that the state licensing agency
had waived its sovereign immunity by agreeing to participate
in the Randolph-Sheppard program and that the arbitration
panel was authorized to award compensatory damages. Id. at
768-70. We also rejected the state’s due process argument. Id.
at 771-72. We did not hold that a state licensing agency has
a general statutory obligation to protect blind vendors from
the federal government’s violations of the Act. Indeed, we did
not address the question whether the state licensing agency
had violated the Act in the first place, because the issue was
not raised. Accordingly, Premo does not shed light on the
central question before us, namely, whether a state licensing
agency has a duty to bring an enforcement action against a
federal agency to enforce an arbitration award issued pursuant
to 20 U.S.C. § 107d-1(b).
We also reject Zelickson’s argument that we must read the
Act as compelling a state licensing agency to sue a federal
agency that refuses to comply with a § 107d-1(b) arbitration
award because otherwise a blind vendor would have no way
to protect his rights under the Act. The Act provides blind
vendors with a detailed dispute resolution procedure, including a process for arbitrating grievances. It also imposes a duty
on the head of the relevant federal agency to comply with the
arbitration panel’s ruling when a state licensing agency prevails in an arbitration proceeding. See § 107d-2(b)(2). But
Congress did not see fit to require the state licensing agency

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to sue the federal agency in control of the property on which
the vending site is located to enforce the arbitration panel’s
award. We cannot rewrite the statute based on our own view
of how best to carry out the purposes of the Act. Furthermore,
a blind vendor may be able to obtain relief through other avenues, such as by a mandamus action under 28 U.S.C. § 1361,
or an action to “compel agency action unlawfully withheld or
unreasonably delayed” under 5 U.S.C. § 706(1). We take no
position on whether such an action would be successful.
IV
[7] Accordingly, based on the plain language of the Act
and other guides to statutory construction, we conclude that
the Act does not impose a statutory obligation on a state
licensing agency to sue a federal agency for its failure to comply with a Randolph-Sheppard arbitration award. The 2008
arbitration panel therefore committed a legal error when it
interpreted the Act as requiring DOR to bring an action
against GSA, and that DOR’s failure to do so made it liable
for compensatory damages. Because DOR had no statutory
obligation to sue GSA to enforce the 2000 Arbitration Award,
the 2008 arbitration panel’s ruling that DOR became liable for
the damages against GSA by failing to bring such an enforcement action was “not in accordance with law” and must be set
aside. See 5 U.S.C. § 706(2).
REVERSED.