JONES v. DENOTARIS, ET AL
AMENDED MEMORANDUM AND/OR OPINION SETTING FORTH THE REASONS WHY THE COURT IS GRANTING DEFENDANTS' PARTIAL MOTION TO DISMISS PLAINTIFF'S AMENDED COMPLAINT (DOCKET NO. 8). AN APPROPRIATE ORDER FOLLOWS. SIGNED BY HONORABLE GENE E.K. PRATTER ON 1/16/15. 1/16/15 ENTERED AND COPIES E-MAILED.(rab, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
DAVID J. DENOTARIS et al.,
JANUARY 16, 2015
This case presents novel questions of law in the Third Circuit: first, whether a plaintiff
alleging violations of the Randolph-Sheppard Act (“RSA”), 20 U.S.C. § 107 et seq., may
proceed directly against a state licensing agency and its officials under 42 U.S.C. § 1983, and,
second, whether he may proceed without “exhausting” the procedures explicitly provided for by
the RSA. For the reasons that follow, the Court answers both questions in the negative.
THE RANDOLPH-SHEPPARD ACT
“For 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,” the Randolph-Sheppard Act authorizes licensed blind persons
“to operate vending facilities on any Federal property,” 20 U.S.C. § 107(a), and, further, requires
the federal government and cooperating state licensing agencies to give priority to licensed blind
in “the operation of [these] vending facilities,” id. § 107(b). Blind licensees operating vending
facilities on federal property earn the income the machines generate. Id. § 107d-3(a).
The RSA creates partnerships between the federal government and states that choose to
participate. On the federal side, the RSA assigns to the United States Secretary of Education
rulemaking, information-gathering, and oversight responsibilities. See generally id. § 107a(a).
One such responsibility is the “designat[ion of] the State agency for the blind in each State . . . to
issue licenses to blind persons . . . for the operating of vending facilities on Federal . . .
property.” Id. § 107a(a)(5). State licensing agencies, in turn, are “authorized, with the approval
of the [federal authority] in control of” federal property, “to select a location for [a vending]
facility and the type of facility to be provided.” Id. § 107a(c). State licensing agencies then select
the operators of these facilities, and they must “give preference to blind persons who are in need
of employment.” Id. § 107a(b). Each participating state must establish an elected Committee of
Blind Vendors, which is “fully representative of all blind licensees in the State program,” id.
§ 107b-1(2), and which participates in “receiving [such] grievances of blind licensees and
serving as advocates for such licensees,” id. § 107b-1(3)(B).
The RSA specifically provides a grievance procedure for “dissatisfied” blind vendors:
state licensing agencies participating in the program must agree “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, further, “to submit the grievances of any blind
licensee not otherwise resolved by such hearing to arbitration as provided in section 107d-1.” Id.
§ 107b(6). Section 107d-1, in turn, lays out the hearing and arbitration procedure to be followed
by “[a]ny blind licensee who is dissatisfied with any action arising from the operation or
administration of the vending facility program.” Id. § 107d-1(a). 1 The state licensing agency,
The RSA also lays out a similar procedure, inapplicable here, to govern situations in which
“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 [the RSA].” 20 U.S.C. § 107d-1(b).
upon a blind licensee’s “request,” must provide “a full evidentiary hearing,” id.—and, of course,
one that is also “fair,” id. § 107b(6).
[i]f 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.
Id. § 107d-1(a). Section 107d-2 requires the Secretary of Education to “convene an ad hoc
arbitration panel” when he receives such a complaint, delineates how such panels are to be
constituted, and requires the panel to “give notice, conduct a hearing, and render its decision.” Id.
Although the RSA nowhere creates a private cause of action, § 107d-2 also subjects the
panel’s decision “to appeal and review as a final agency action for purposes of chapter 7 of such
Title 5”—that is, to judicial review in accordance with the Administrative Procedure Act
(“APA”), 5 U.S.C. § 500 et seq., and, specifically, 5 U.S.C. § 706.
FACTUAL AND PROCEDURAL BACKGROUND 2
Michael Jones has sued David J. DeNotaris, Director of the Pennsylvania Bureau of
Blindness and Visual Services (“BBVS”), Office of Vocational Rehabilitation (“OVR”), as well
as several other officials in that Commonwealth agency. Mr. Jones, who is African-American,
has been a licensed blind operator in BBVS’s Business Enterprises Program for a number of
years. Mr. Jones alleges that because of the OVR’s racial prejudice, “it took [him] three (3) years
The Court assumes the following factual background to be true for the purposes of
adjudicating the Motion to Dismiss. See Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); infra Part
III (Standard of Review).
to get into the BEP when it typically takes only 16 weeks.” Compl. ¶ 14. In the ensuing years,
Mr. Jones alleges, the discriminatory treatment continued. In 2005, for instance, the OVR
awarded a facility to a white blind vendor with three years’ less seniority than him, “despite the
fact that bids are required to be awarded based on seniority.” Compl. ¶ 15.
In May 2011, Mr. Jones was awarded Vending Facility 805 (“VF 805”), but he “and his
staff [soon] began to experience . . . racial harassment and his vending machines were vandalized
[with] racial slurs.” Compl. ¶ 19. When Mr. Jones complained to the OVR officials he has named
in this suit, they “ignored his complaints and did nothing to remedy the situation”; they did not
even “acknowledge Jones’s complaints” until he complained to the Postal Inspector General.
Compl. ¶ 20. This type of treatment, Mr. Jones alleges, is similar to that experienced by another
black blind vendor at the same site. Compl. ¶ 25.
In August 4, 2011, the Postal Service locked Mr. Jones out of VF 805 with, he alleges,
the OVR’s acquiescence, in order to permit a nonblack, sighted contractor to operate VF 805.
Only when Mr. Jones “agreed to utilize a non-Black, sighted vending contractor, West Dairy,
Inc., to operate the location,” was he allowed back to operate VF 805, on September 5, 2011.
Compl. ¶ 22. The OVR, Mr. Jones alleges, took these actions because, with West Dairy
operating VF 805, the “OVR”—presumably as opposed to him or another blind licensee—
“received a percentage of the revenue generated there.” Compl. ¶ 23.
When the OVR decided to rebid VF 805 in August 2012, it denied Mr. Jones’s bid
because it “had already entered into a contract with a sighted vendor.” Compl. ¶ 26. And when
the OVR again “decided to re-bid the contract” in October 2012, after the Defendants had
“improperly placed Jones on probation allegedly for failing to pay set-aside fees and submit
monthly reports,” the OVR denied Mr. Jones’s rebid out of discriminatory animus rather than
these stated reasons, which were, Mr. Jones alleges, purely pretextual. Id.
Mr. Jones appealed the denial. On February 29, 2012, the state hearing officer granted
Mr. Jones partial relief, but no damages for lost income. Mr. Jones again appealed, this time to
the Secretary of Education, 3 as provided for by §§ 107d-1 and 107d-2 of the RSA. On November
1, 2012, Mr. Jones also filed an appeal to the OVR for the decision of the individual Defendants
“to place him on probation allegedly for failing to pay set-aside fees and submit monthly
reports,” Compl. ¶ 28. He also filed, through 2012 and 2013, several other appeals to the OVR
for what he alleges were the agency and its employees’ “discriminatory and retaliatory” actions.
Compl. ¶¶ 23–32.
In his Amended Complaint (Docket No. 6), Mr. Jones presents two counts: Count I, for
the Defendants’ alleged violation of 42 U.S.C. § 1983 by their violation of the RandolphSheppard Act, and Count II, for the Defendants’ alleged violation of the Americans with
Disabilities Act (“ADA”), 42 U.S.C. §§ 12131–12134. The Defendants have moved to dismiss
certain components of both claims (Docket No. 8), as set out in the margin. 4
Mr. Jones’s Complaint does not state that the appeal was to the Secretary of Education, but,
rather, that “[t]he appeal is docketed at R-S/11-04.” Compl. ¶ 27. Given the statutory scheme
discussed above, the appeal must have been to the Secretary of Education; further, the Court may
consider a “document integral to or explicitly relied upon in the complaint,” In re Burlington
Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (citation omitted), and Defendants
have attached just such a document here: a letter from the United States Department of
Education “acknowledg[ing] receipt of a complaint filed by Mr. Michael Jones against the
Pennsylvania Office of Vocational Rehabilitation Bureau of Blindness and Visual Services,”
docketed at “R-S/11-04,” Mot. Dismiss Ex. A (Docket No. 8-1).
In addition to challenging Mr. Jones’s RSA claim, the Defendants also moved to dismiss (a)
Mr. Jones’s § 1983 claims against them in their official capacities as barred by the Eleventh
Amendment and (b) Mr. Jones’s ADA claims against the Defendants in their individual
capacities. Mr. Jones agrees that the Motion to Dismiss should be granted on these grounds, and
The only issues currently before the Court—as the Court characterizes the parties’
dispute over “exhaustion”—are whether a plaintiff pursuing alleged violations of the RandolphSheppard Act may proceed directly against a state agency under 42 U.S.C. § 1983, as Mr. Jones
purports to do, and, further, whether any individual purporting to sue for violation of the RSA
may proceed at all (under § 1983 or directly) without first “exhausting” the procedures explicitly
provided for by the RSA.
Mr. Jones alleges that he “was not required to exhaust administrative remedies with
respect to any of [his] appeals” because, given the “numerous and continuous discriminatory and
retaliatory actions of the Defendants,” pursuing such remedies “would have been futile because
of the certainty of an adverse decision.” Compl. ¶ 35. “Moreover,” he asserts, “there is no
requirement that [he] exhaust any administrative remedies” before bringing an action under
§ 1983. Compl. ¶ 36.
The Defendants, by contrast, citing case law from the Courts of Appeals for the D.C. and
Sixth Circuits, argue that “exhaustion of the administrative remedies is required before a party
seeks recourse through the federal court system,” Mot. Dismiss 10, and that Mr. Jones has not
made any showing to justify application of the narrow futility exception. In response, Mr. Jones
contends that the Defendants “have admitted” that “no cases in the Eastern District [of
Pennsylvania] or the Third Circuit have held that exhaustion of administrative remedies is
required before a party seeks to enforce the Randolph-Sheppard Act through the federal court
system,” and that that lack of precedent “alone” warrants denial of Defendants’ Motion to
Dismiss. Resp. 3 (Docket No. 11-2). But regardless, he asserts, he should have the opportunity to
prove that exhaustion, as he has alleged, would have been futile.
so it will be (arguably, these claims are straw men, as Mr. Jones does not seem to raise them—
for instance, the Amended Complaint refers to the Defendants’ “official capacities” in Count II).
STANDARD OF REVIEW
A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint. Although Rule 8
of the Federal Rules of Civil Procedure requires only “a short and plain statement of the claim
showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), “in order to ‘give the
defendant fair notice of what the . . . claim is and the grounds upon which it rests,’” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted) (alteration in original), the
plaintiff must provide “more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do,” id.
To survive a motion to dismiss, the plaintiff’s complaint must plead “factual content that
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Specifically, “[f]actual allegations must be
enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The
question is not whether the claimant “will ultimately prevail . . . but whether his complaint [is]
sufficient to cross the federal court’s threshold.” Skinner v. Switzer, 131 S. Ct. 1289, 1296 (2011)
(citation and internal quotation marks omitted). Thus, assessment of the sufficiency of a
complaint is “a context-dependent exercise” because “[s]ome claims require more factual
explication than others to state a plausible claim for relief.” W. Penn Allegheny Health Sys., Inc.
v. UPMC, 627 F.3d 85, 98 (3d Cir. 2010).
In evaluating the sufficiency of a complaint, the Court adheres to certain well-recognized
parameters. For one, the Court “must consider only those facts alleged in the complaint and
accept all of the allegations as true.” ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994);
see also Twombly, 550 U.S. at 555 (stating that courts must “assum[e] that all the allegations in
the complaint are true (even if doubtful in fact)”); Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir.
2010) (“[A] court must consider only the complaint, exhibits attached to the complaint, matters
of public record, as well as undisputedly authentic documents if the complainant’s claims are
based upon these documents.”). The Court must also accept as true all reasonable inferences
emanating from the allegations and view those facts and inferences in the light most favorable to
the nonmoving party. Rocks v. City of Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989); see also
Revell v. Port Auth., 598 F.3d 128, 134 (3d Cir. 2010). But that admonition does not demand that
the Court ignore or discount reality. The Court “need not accept as true unsupported conclusions
and unwarranted inferences,” Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173, 18384 (3d Cir. 2000) (citations and internal quotation marks omitted), and “the tenet that a court
must accept as true all of the allegations contained in a complaint is inapplicable to legal
conclusions. Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice,” Ashcroft, 556 U.S. at 678; see also Morse v. Lower
Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (explaining that a court need not accept a
plaintiff’s “bald assertions” or “legal conclusions” (citations omitted)). Finally, “if a [claim] is
vulnerable to 12(b)(6) dismissal, a district court must permit a curative amendment, unless an
amendment would be inequitable or futile.” Phillips v. County of Allegheny, 515 F.3d 224, 236
(3d Cir. 2008).
The parties’ dispute over “exhaustion” in fact raises several interrelated and more
nuanced questions. The first concerns Mr. Jones’s contention that he need not exhaust remedies
under § 1983. The second is whether pleading futility alone is sufficient to bypass whatever
exhaustion requirement may apply. 5
Mr. Jones § 1983 Randolph-Sheppard Act Claim
The Third Circuit Court of Appeals recently explained in Hildebrand v. Allegheny
County, 757 F.3d 99 (3d Cir. 2014), that because § 1983 is a vehicle for vindicating rights
conferred elsewhere by federal law, a plaintiff cannot bring a claim under § 1983 “where
Congress has evinced an intent to preclude such claims through other legislation.” Id. at 104
(quoting Ahlmeyer v. Nev. Sys. of Higher Educ., 555 F.3d 1051, 1055 (9th Cir. 2009); citing
Albright v. Oliver, 510 U.S. 266, 271 (1994)). Such suit preclusion need not be explicit, id.:
“When the remedial devices provided in a particular Act are sufficiently comprehensive, they
may suffice to demonstrate congressional intent to preclude the remedy of suits under § 1983.”
Middlesex Cnty. Sewerage Auth. v. Nat’l Sea Clammers Ass’n, 453 U.S. 1, 20 (1981); see
Hildebrand, 757 F.3d at 104-07 (discussing controlling Supreme Court case law and reasoning).
In this preclusion inquiry, the Supreme Court has explained, courts “place primary
emphasis on the nature and extent of that statute’s remedial scheme.” Fitzgerald v. Barnstable
Sch. Comm., 555 U.S. 246, 253 (2009). Accordingly, for instance, the Court has held that Title
IX of the Education Amendments Act of 1972, 20 U.S.C. § 1681(a), does not preclude § 1983
claims of sex discrimination under the Equal Protection Clause because Title IX’s only
“remedies—withdrawal of federal funds and an implied cause of action—stand in stark contrast
to the ‘unusually elaborate,’ ‘carefully tailored,’ and ‘restrictive’ enforcement schemes of the
As a threshold matter, Mr. Jones’s contention that the lack of binding precedent entitles him
to proceed on his RSA claim is unwarranted. Such a contention would prevent courts from
defining the boundaries of novel issues and need be entertained no further.
statutes at issue in” Middlesex County Sewerage Authority v. National Sea Clammers
Association, 453 U.S. 1, 20 (Federal Water Pollution Control Act and Marine Protection,
Research, and Sanctuaries Act), Smith v. Robinson, 468 U.S. 992 (1984) (Education of the
Handicapped Act), and City of Rancho Palos Verdes v. Abrams, 544 U.S. 113 (2005)
(Telecommunications Act)—statutes which have, unlike Title IX, “administrative exhaustion
requirement[s and] notice provisions,” as opposed to Title IX’s “implied private right of action”
allowing plaintiffs to “obtain the full range of remedies.” Fitzgerald, 555 U.S. at 255-56.
In Rancho Palos Verdes, by contrast, the Supreme Court held that the
Telecommunications Act, “which adds no remedies to those available under § 1983, and limits
relief in ways that § 1983 does not,” 544 U.S. at 122, could not be enforced through § 1983,
because such enforcement “would distort the scheme of expedited judicial review and limited
remedies created by” the Telecommunications Act, id. at 127. The Court explained that “[t]he
provision of an express, private means of redress in the statute itself is ordinarily an indication
that Congress did not intend to leave open a more expansive remedy under § 1983.” Id. at 121
(citing Alexander v. Sandoval, 532 U.S. 275, 290 (2001)). In short, as the Court has recently
reiterated, “the existence of a more restrictive private remedy for statutory violations has been
the dividing line between those cases in which we have held that an action would lie under
§ 1983 and those in which we have held that it would not.” Id. at 121; accord Fitzgerald, 555
U.S. at 256.
Accordingly, in Hildebrand, the Third Circuit Court of Appeals held, in agreement with a
number of “sister Courts of Appeals . . . that the [Age Discrimination in Employment Act]
precludes § 1983 claims of age discrimination,” 757 F.3d at 107, because § 1983 suits “would
severely undermine . . . the enforcement mechanism created by Congress under the ADEA” by
providing plaintiffs with “direct and immediate access to the federal courts,” id. at 107,(citations
omitted). Further, the Court of Appeals reasoned, “we do not believe that the rights and
protections of the ADEA and the Equal Protection Clause differ in such significant ways as to
demonstrate congressional intent to allow parallel § 1983 claims alleging age discrimination.” Id.
These well-established principles make clear that the Randolph-Sheppard Act is
incompatible with § 1983 to the extent that a plaintiff seeks to use § 1983 to remedy alleged
violations of the RSA, because the RSA provides its own remedial framework. Although the
RSA “is silent as to the type of relief that a vendor-triggered arbitration panel may grant,” Sauer
v. U.S. Dep’t of Educ., 668 F.3d 644, 648 (9th Cir. 2012); accord New Hampshire v. Ramsey,
366 F.3d 1, 7 (1st Cir. 2004); Ga. Dep’t of Human Res. v. Nash, 915 F.2d 1482, 1488 (11th Cir.
1990), as described above, the RSA has been interpreted to allow a blind licensee “dissatisfied
with any action arising from the operation or administration of the vending facility program” to
submit a grievance to the appropriate state licensing agency. 20 U.S.C. § 107d-1(a).
The RSA’s procedural provisions for a dissatisfied vendor are narrow: he may 6 file a
grievance and then request a full, fair hearing with the state licensing agency, and then, if
dissatisfied with that result, he may appeal to the United States Secretary of Education to
convene a panel to render an arbitration decision that “shall be final and binding on the parties,”
except by resort to the judicial review provisions of the Administrative Procedure Act. 20 U.S.C.
§ 107d-1(a). The relevant provision of the APA, of course, provides that federal “agency action”
On the use of the word “may” and the related provision governing arbitration between a
state licensing agency and the federal government (20 U.S.C. § 107d-1(b)), see, for example,
Kentucky, Education Cabinet, Department for the Blind v. United States, 424 F.3d 1222, 122729 (Fed. Cir. 2005), and Sauer v. U.S. Department of Education, 668 F.3d at 651.
may be set aside if it is, among other things, “arbitrary, capricious, [i]n abuse of discretion, or
otherwise not in accordance with law,” 5 U.S.C. § 706(2)(A). 7 To permit him instead to file a
§ 1983 action would be to permit an end run on this careful scheme Congress has crafted. As the
Sixth Circuit Court of Appeals stated more than 30 years ago,
Congress’ decision to provide administrative and arbitration remedies for
aggrieved blind vendors clearly evidences a policy judgment that the federal
courts should not be the tribunal of first resort for the resolution of such
grievances. Rather congressional policy as reflected in the 1974 amendments is
that blind vendors must exhaust their administrative and arbitration remedies
before seeking review in the district courts.
Fillinger v. Cleveland Soc. for the Blind, 587 F.2d 336, 338 (6th Cir. 1978). Other courts have
agreed, as noted in the discussion below.
In this respect, of course, the Randolph-Sheppard Act presents an even stronger case for
the preclusion of a § 1983 cause of action than does the Age Discrimination in Employment Act
(“ADEA”) in Hildebrand. Under the ADEA, a plaintiff can proceed in federal court so long as he
attempts to exhaust, even if the Equal Employment Opportunity Commission (“EEOC”) takes no
action, whether because it thinks the suit unmeritorious or otherwise. See Hildebrand, 757 F.3d
at 109 (“Unless the EEOC elects to file suit to enforce the employee’s claim, an employee may
commence suit sixty days after filing a charge.”). The RSA, by contrast, in relatively explicit
terms, limits judicial review to review of federal agency action under the Administrative
Procedure Act. 8
Of course, APA review is based on something of “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 [judicial] deference.” Sauer, 668 F.3d at 650-51.
But cf. supra note 7. It also bears recalling here that the RSA regulates operation of vending
facilities on federal property, even if that scheme is operated, in many instances, by state
The Court recognizes that there is some uncertainty as to whether the Eleventh
Amendment permits RSA awards of retrospective money damages against state licensing
agencies. Two decades ago, it was “widely recognized that th[e] language [of § 107d-1(a)]
permits arbitration panels to award compensatory relief.” Premo v. Martin, 119 F.3d 764, 769
(9th Cir. 1997); see also, e.g., Tenn. Dep’t of Human Servs. v. U.S. Dep’t of Educ., 979 F.2d
1162, 1165 (6th Cir. 1992) (“The natural reading of these provisions is that the arbitration panel
may consider and resolve any complaint of a vendor arising out of the program, including a
complaint that the state agency has taken money to which the vendor is entitled.”). In fact, “[i]n
drawing this conclusion, courts have emphasized that the prevailing conception at the time the
Act was passed was that arbitral resolution of disputes involved awards of back pay and other
forms of compensatory relief.” Premo, 119 F.3d at 770. The Third Circuit Court of Appeals
made such observations when it determined that “the statutory language is unambiguous” that
RSA arbitrators are “authorized to award compensatory damages.” Del. Dep’t of Health & Soc.
Servs. v. U.S. Dep’t of Educ., 772 F.2d 1123, 1137 (3d Cir. 1985). Recently, however, in
response to intervening Supreme Court case law, several courts have cast doubt on the
conclusion that an RSA arbitration panel can, in fact, award retrospective money damages
against a state because the waiver of sovereign immunity may not be explicit enough, even
though a state’s participation in the RSA is voluntary, because the RSA’s statutory provisions
themselves are, as noted earlier, silent on the relief available. See, e.g., Wis. Dep’t of Workforce
Dev. v. U.S. Dep’t of Educ., 667 F. Supp. 2d 1007, 1013-14 (W.D. Wis. 2009); cf. also Tenn.
Dep’t of Human Servs., 979 F.2d at 1168-69 (holding that the Eleventh Amendment bars a
federal court from enforcing any damages award against a state licensing agency); New
Hampshire v. Ramsey, 366 F.3d 1, 9-23 (discussing waiver of Eleventh Amendment immunity).
But whether or not compensatory damages are available in (the federal component of)
arbitration against the state licensing agency (or its employees)—presumably because a state
agency could award compensatory damages against itself, without any sovereign immunity
problem—an issue the Court need not and does not decide today—detracts not at all from the
fact that the RSA is a narrow remedial scheme that must be read as the mandatory alternative
Congress has specified to suit under § 1983. For one, what recent case law there is suggests that
if retrospective damages are not available in arbitration before a panel convened by the Secretary
because of the Eleventh Amendment, nor will they be available in federal court against the state
licensing agency, under § 1983 or otherwise. On the other hand, one might submit, under § 1983,
a plaintiff could circumvent state sovereign immunity by suing individual employees of a state
licensing agency, as Mr. Jones has here, whereas if he cannot sue directly under RSA, he may
not be able to. In judicial review of arbitration convened by the Secretary of Education, of
course, the defendant will be the United States Department of Education, whereas before the
Secretary’s arbitration panel the parties adverse to the blind vendor are, presumably, the state
licensing agency and, perhaps, its individual officials. Even if these premises are sound,
however, they do not change the conclusion that the RSA’s more specific scheme displaces the
reach of § 1983. Any such differences in defendants amenable to suit or remedies available are
merely the result of what Congress, in designing the RSA’s review vehicle, intended.
Indeed, in Hildebrand, the Third Circuit Court of Appeals explained that the fact that “the
potential defendants are different under the ADEA and § 1983” is not “significant enough to
demonstrate congressional intent to permit both claims.” Hildebrand, 757 F.3d at 109-10; see id.
at 109 n.1 (“Under the ADEA, a plaintiff may sue his employer, an employment agency, or a
labor organization. 29 U.S.C. § 623. In contrast, a § 1983 plaintiff can sue an individual whose
actions caused a deprivation of his constitutional rights.”). Nor is it here. Even if, for instance,
state licensing agencies have immunity from retrospective money damages under the RSA, they
would, too, under § 1983, and the fact that § 1983 might otherwise allow an aggrieved blind
vendor to sue the licensing agency’s officials in their individual capacities is not, in this Court’s
view, enough to suggest that Congress intended the § 1983 route to remain open.
“[T]o permit a direct, private right of action by a vendor against the federal agency would
wholly frustrate the Randolph-Sheppard Act’s dual procedure of administrative and arbitration
remedies for resolving disputes.” Middendorf v. U.S. Gen. Servs. Admin., 92 F.3d 1193, at *1
(9th Cir. 1996) (table opinion). The reasoning of the Court of Appeals for the D.C. Circuit in the
RSA “exhaustion” context, addressed further below, is just as relevant and compelling with
regard to preclusion of suit under § 1983: “It is unlikely, after establishing a specific dispute
resolution system and conditioning judicial review on a final agency action, that Congress
contemplated that an aggrieved party could, whenever it chose, circumvent the system and seek
de novo determination in federal court.” Randolph-Sheppard Vendors of Am. v. Weinberger, 795
F.2d 90, 103 (D.C. Cir. 1986).
To be clear, however, the Court does not hold that Mr. Jones cannot bring another type of
claim under § 1983, such as a claim for violation of the Equal Protection Clause. More precisely,
the Court need not decide today whether a § 1983 claim for race discrimination based on
Defendants’ allegedly discriminatory treatment of Mr. Jones in vending machine contracting is
precluded by the Randolph-Sheppard Act’s more specific grievance and arbitration provisions.
The two questions are different, although surely capable of being related. Cf., e.g., Smith, 468
U.S. at 1008-09 & n. 11 (1984) (“As petitioners emphasize, their § 1983 claims were not based
on alleged violations of the EHA, but on independent claims of constitutional deprivations. . . .”
Thus, for instance, while the ADEA precludes age discrimination suits, the ADEA’s
subject matter is, in fact, age discrimination. As the Third Circuit Court of Appeals recently
explained in Hildebrand,
The ADEA is intended to “promote employment of older persons based on their
ability rather than age; to prohibit arbitrary age discrimination in employment;
[and] to help employers and workers find ways of meeting problems arising from
the impact of age on employment.” 29 U.S.C. § 621(b). Under the Equal
Protection Clause, age classifications receive only rational basis review. Kimel v.
Florida Bd. of Regents, 528 U.S. 62, 83 (2000) (“States may discriminate on the
basis of age without offending the Fourteenth Amendment if the age classification
in question is rationally related to a legitimate state interest.”). By prohibiting
“arbitrary age discrimination,” the ADEA encompasses the protections afforded
by the Fourteenth Amendment, while significantly expanding prohibitions on age
Hildebrand, 757 F.3d at 109.
The Randolph-Sheppard Act, by contrast, requires state licensing agencies and the federal
government to prefer blind to sighted vending machine operators. Thus, to the extent Mr. Jones’s
claim is that the OVR discriminated against him because he is blind (and this does not seem to be
his claim), a § 1983 claim with the same predicate would be precluded. But the fact that a blind
vendor is “dissatisfied with any action arising from the operation or administration of the
vending facility program,” 20 U.S.C. § 107d-1(a) (emphasis added), does not necessarily mean
that he is precluded from bringing a complaint against the OVR based on its violation, as a state
actor, of another federal law. Rather, the point here is that Mr. Jones cannot bring a § 1983
action predicated on the OVR’s violation of the RSA. If the OVR’s conduct violates another
federal law, the Court would be faced with a different question, with, possibly, a different
answer. A holding that the RSA precludes suit under § 1983 in these situations would produce an
anomalous result: because the RSA’s specific grievance and arbitration provisions apply, by their
terms, only to “[a]ny blind licensee,” 20 U.S.C. § 107d-1(a), then either (a) a sighted vendor
could never bring a race discrimination claim (if the RSA precludes all § 1983 suits) or (b) a
blind vendor would be faced with a more restrictive remedial scheme than a sighted vendor
(because a sighted vendor is not limited by § 107d-1(a)’s terms)—a result Congress could not
These observations are consistent with the Sixth Circuit Court of Appeals’ approach. In
Fillinger v. Cleveland Society for the Blind, 587 F.2d 336, the Sixth Circuit Court of Appeals
noted that the vendors also raised § 1983 claims. Id. at 338. When the “defendants ask[ed the
court] to clarify the effect of [its] order on plaintiffs’” § 1983 claim, the Court explained that
[t]he fact dispute underlying plaintiffs’ § 1983 claim is closely related factually to
their claims under the Randolph-Sheppard Act and is subject to arbitration. It is
likely that any arbitration decision will include the dispute on which the § 1983
claim is based. Our order reversed the dismissal order of the district court and
directed that the proceedings on the § 1983 claim are to be stayed pending the
outcome of the administrative and arbitration process.
Fillinger v. Cleveland Soc. for the Blind, 591 F.2d 378, 380 (6th Cir. 1979).
Exhaustion Under the Randolph-Sheppard Act
The foregoing analysis regarding § 1983 also suggests several of the reasons why courts
have held that an RSA plaintiff must first “exhaust.” But, in fact, exhaustion here is more than
what exhaustion usually means, in the sense of first having to file a grievance before a federal
agency and then wait a certain time before filing suit in federal court, usually upon receipt of a
right-to-sue letter. Here, the procedures specified delimit the breadth of the very right of action—
judicial review, pursuant to the Administrative Procedure Act, of the decision of the Secretary of
Education’s arbitration panel. This is less exhaustion, as the term of art is commonly used in the
doctrine, and more a type of narrow appellate review. See 20 U.S.C. § 107d-2(a) (“[The panel’s]
decision . . . shall be subject to appeal and review as a final agency action . . . .” (emphasis
added)). In fact, the RSA does not provide for any type of judicial recourse—and certainly not
suit in the first instance—outside of review of arbitration decisions under the APA. Cf. generally
Del. Dep’t of Health & Social Servs., 772 F.2d 1123 (3d Cir. 1985). Thus, although the Court
might differ with other courts’ use of the word “exhaustion,” it agrees with their operative
As the Court of Appeals for the D.C. Circuit has explained,
It is a “long settled rule of judicial administration that no one is entitled to judicial
relief for a supposed or threatened injury until the prescribed administrative
remedy has been exhausted.” Myers [v. Bethlehem Shipbldg. Corp.], 303 U.S.
See Weinberger, 795 F.2d 90 at 102-04; Comm. of Blind Vendors v. District of Columbia,
28 F.3d 130, 135 (D.C. Cir. 1994); Kentucky, Educ. Cabinet, Dep’t for the Blind v. United States,
424 F.3d 1222, 1228-29 (Fed. Cir. 2005) (“Other circuits have agreed that the arbitration of RSA
complaints is mandatory. . . . Those decisions and the reasoning underlying them support our
conclusion that arbitration is mandatory for claims arising from the RSA.”); Middendorf, 92 F.3d
1193, at *1 (“Judicial review of a vendor’s claim may only occur after the decision of an
arbitration panel convened by the Secretary.”); Morris v. Maryland, 908 F.2d 967, at *4 (4th Cir.
1990) (table opinion) (“[T]he Randolph-Sheppard Act mandates the exhaustion of the
administrative remedies prior to instituting an action in the federal courts.”); Fillinger, 587 F.2d
at 338; Altstatt v. Oklahoma ex rel. Bus. Enter. Program, No. 14-0401, 2014 WL 2589318, at *2
(W.D. Okla. June 10, 2014) (“[C]ourts have consistently held that exhaustion of the RSA’s
dispute resolution procedure is mandatory.”); Kentucky ex rel. Cabinet for Workforce Dev. v.
United States, No. 12-0132, 2012 WL 5289659, at *3-6 (W.D. Ky. Oct. 23, 2012); Ala. Dep’t of
Rehab. Servs. v. U.S. Dep’t of Veterans Affairs, 165 F. Supp. 2d 1262, 1269 (M.D. Ala. 2001)
(“The Randolph–Sheppard Act’s plain language does not expressly require exhaustion, but
courts have construed the act’s administrative framework to be mandatory.”); New York v. U.S.
Postal Serv., 690 F. Supp. 1346, 1348-51 (S.D.N.Y. 1988); Mass. Elected Comm. of Blind
Vendors v. Matava, 482 F. Supp. 1186, 1189 (D. Mass. 1980); cf. Tamashiro v. Dep’t of Human
Servs., 146 P.3d 103, 126 (Haw. 2006) (“[B]ased on our examination of the overall scheme of
the federal RSA and its relationship to the Hawai’i RSA, as well as federal case law, we hold
that, inasmuch as the federal adjudication path applies to disputes arising from the Hawai’i RSA,
the circuit court lacks subject matter jurisdiction to decide the merits of the instant case.”).
For this reason, further, the principle that conditions precedent need not be pleaded with the
particularity required by Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007), and Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009), see Hildebrand, 757 F.3d at 111-12, does not apply here.
Arbitration before the Secretary’s panel is not a condition precedent so much as a step required
to produce a decision that a federal district court can review.
[41,] 50-51 [(1938)] (footnote omitted); see McKart [v. United States], 395 U.S.
[185,] 193 [(1969)]. Moreover, the policy of exhaustion “is particularly viable
where an established scheme of decision making might be undermined by
permitting circumvention of administrative procedures.” Wallace v. Lynn, 507
F.2d 1186, 1190 (D.C. Cir. 1974). Here, the Act establishes a statutory scheme for
enforcing statutory rights. The “long settled rule of judicial administration,”
Myers, supra, 303 U.S. at 50, should therefore apply. Absent a cognizable
rationale for failing to pursue arbitration under the Act, appellants’ action must be
dismissed for failure to exhaust their administrative remedies.
Weinberger, 795 F.2d 90 at 104. This Court agrees, and will not permit Mr. Jones to circumvent
the procedures Congress has carefully specified. And while Mr. Jones is correct that the Third
Circuit Court of Appeals has not held that an RSA plaintiff must “exhaust,” he has not cited a
single decision to the contrary to the Court’s conclusion. 10
Mr. Jones’s final argument is that proper exhaustion of his RSA claims would have been
“futile,” so that his claims should be excepted from the exhaustion requirement. The Court
observes that futility of exhaustion, as generally understood, comes with a high bar: an adverse
decision by the tribunal must be certain, such as where an administrative agency “believes itself
to lack jurisdiction to act upon the dispute” or “an agency has articulated a very clear position
on the issue which it has demonstrated it would be unwilling to reconsider.” Weinberger, 795
F.2d at 105-06; accord, e.g., Morris, 908 F.2d 967, at *5; see also, e.g., Altstatt, 2014 WL
2589318, at *2. But “[a]n administrative process is not ‘futile’ simply because a defendant
disputes a claim raised against it and submitted to the process for resolution.” Ala. Dep’t of
Rehab. Servs. v. U.S. Dep’t of Veterans Affairs, 165 F. Supp. 2d 1262, 1271 (M.D. Ala. 2001). In
To be sure, there is at least one decision to the contrary (from the former United States
Claims Court), but not only has the Court of Appeals for the D.C. Circuit persuasively shown its
error, see Weinberger, 295 F.2d at 103-04 & n.21, but it no longer appears to be good law, as it
has necessarily been overruled by the decision cited above from the Court of Appeals for the
Federal Circuit. See also, e.g., New York v. U.S. Postal Serv., 690 F. Supp. 1346, 1351 (S.D.N.Y.
fact, as the Fourth Circuit Court of Appeals has explained, albeit in a nonprecedential opinion,
even when a would-be RSA plaintiff seeks “to nullify the State’s prior action” before
“defendants [who] are [themselves] the decision-makers,” such that “there can be no doubt as to
the outcome,” exhaustion is not necessarily futile. Morris, 908 F.2d 967, at *5. “If [that]
argument were accepted to relieve the requirement of exhaustion, the doctrine of requiring the
exhaustion of administrative remedies would be eviscerated.” Id.
Even assuming that the futility exception properly applies to the exhaustion doctrine
here—that is, that the exhaustion doctrine described above is applicable to what, as this Court
has suggested above, is an even narrower statutory scheme than those permitting suit after
technical exhaustion—the Court finds that Mr. Jones has not adequately alleged that exhaustion
is futile in his situation. Although his own allegations establish that the OVR has not always
ruled against him, the more important, and, indeed, per se sufficient point, is that his argument
“fails to take into account the entire remedial scheme set forth in the statute,” Ala. Dep’t of
Rehab. Servs., 165 F. Supp. 2d at 1274: final review is before the United States Secretary of
Education’s arbitration panel, not an OVR decisionmaker. Thus, regardless of what the OVR
does, the Secretary’s panel will—and must be permitted—to have the final say. Thus, to the
extent that Mr. Jones seeks to rely on the fact that he has suffered “substantial economic
damage,” Compl. ¶ 34, for which he must be compensated with money damages (or otherwise),
he must first seek that relief before the OVR and then the Secretary’s arbitration panel. 11
Again, the Court need not decide the Eleventh Amendment question at this juncture. Cf.
Comm. of Blind Vendors, 28 F.3d at 135 (“As the jurisdictional issue is dispositive, we do not
reach either of these challenges.”).
Further, the Court expects the OVR not to needlessly delay processing Mr. Jones’s
grievances, and especially not in an attempt to frustrate judicial review by preventing a panel
convened by the Secretary of Education from reviewing the OVR’s decision(s). Evidence of such
The Court will therefore dismiss Count I of Mr. Jones’s Amended Complaint with
prejudice as to Mr. Jones’s § 1983 claim predicated on the Randolph-Sheppard Act, and it will
stay the remainder of Count I as to Mr. Jones’s request for direct review of his RSA claims. 12
For the foregoing reasons, the Court will dismiss Count I in part, with prejudice as to
bringing a claim under 42 U.S.C. § 1983 for violation of the Randolph-Sheppard Act, but
without prejudice as to timely bringing a § 1983 claim for any alleged violation of another
federal right. Further, it will stay Count I in part, with respect to Mr. Jones’s direct RandolphSheppard Act claims, until he secures a decision from an arbitration panel convened by the
Secretary of Education, assuming that he elects to pursue this claim.
Further, the Court will dismiss as unopposed any § 1983 claims against the Defendants in
their official capacities, as well as any ADA claims against the Defendants in their individual
An Order consistent with this Memorandum follows.
BY THE COURT:
S/Gene E.K. Pratter
GENE E.K. PRATTER
United States District Judge
dilatory behavior would, quite likely, suffice to satisfy any futility requirement and, moreover,
serve as circumstantial evidence of retaliatory behavior that might otherwise be cognizable under
a § 1983 claim for, for instance, race discrimination or First Amendment retaliation.
Although Mr. Jones did not request a stay, other courts have stayed RSA actions pending
exhaustion of the RSA’s grievance and arbitration procedures. See, e.g., Fillinger, 587 F.2d at
338 (“[W]e believe that the fairest disposition of the case on appeal is to reverse the final order
of the district court dismissing the complaint and remand the case to the district court with
instructions to retain jurisdiction of the case and to stay all further proceedings until plaintiffs
have had an opportunity to exhaust their administrative and arbitration remedies.”); Mass.
Elected Comm. of Blind Vendors v. Matava, 482 F. Supp. 1186, 1189 (D. Mass. 1980).
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?