Opinion

STATE OF NORTH CAROLINA DIVISION OF SERVICES FOR THE BLIND V. UNITED STATES DEPARTMENT OF EDUCATION REHABILITATION SERVICES ADMINISTRATION

Court: District Court, M.D. North Carolina
Filed: Aug 23, 2019
Cited by: 0 cases
Authority: More cited than 24.7%

explaining that “courts generally will not address new arguments raised in a reply brief because it would be unfair to the [other party] and would risk an improvident or ill-advised opinion on the legal issues raised”

How later courts described this case

explaining that “courts generally will not address new arguments raised in a reply brief because it would be unfair to the [other party] and would risk an improvident or ill-advised opinion on the legal issues raised”
explaining that courts can defer only to an agency’s “authoritative, expertise-based, fair[, and] considered judgment” (internal quotation marks omitted)
“An arbitration decision under the [RSA] is ‘subject to appeal and review as a final agency action’ under the standards set forth in the [APA].” (quoting 20 U.S.C. § 107d-2(a))
rejecting argument that American Rule applies to RSA arbitrations

Written by the judges who cited it.

The opinion

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

STATE OF NORTH CAROLINA DIVISION )

OF SERVICES FOR THE BLIND, )

)

Plaintiff, )

)

v. ) 1:17cv1058

)

UNITED STATES DEPARTMENT OF )

EDUCATION, REHABILITATION )

SERVICES ADMINISTRATION, and )

LLOYD CHADWICK HOOKS, )

)

Defendants. )

MEMORANDUM OPINION AND RECOMMENDATION

OF UNITED STATES MAGISTRATE JUDGE

Moving pursuant to the Randolph-Sheppard Act, 20 U.S.C.

§§ 107-107f (the “RSA”), and the Administrative Procedure Act, see

5 U.S.C. §§ 701-706, the State of North Carolina Division of

Services for The Blind (the “Plaintiff” or “NCDSB”) seeks judicial

review of an “Opinion and Award” dated September 26, 2017 (the

“Arbitration Award”). (See Docket Entry 1 (the

“Complaint/Petition”) at 1.)1 In response, Lloyd Chadwick Hooks

(the “Defendant”), a blind vendor under the RSA, seeks confirmation

of both the Arbitration Award and a supplemental arbitration award

dated January 2, 2018 (the “Supplemental Award”). (See Docket

Entry 14 at 8.) For the reasons that follow, the Court should

1 Citations herein to Docket Entry pages use the CM/ECF

footer’s pagination.

affirm in part and vacate in part the Arbitration Award and affirm

the Supplemental Award as specified herein.

BACKGROUND

This dispute arises from the procedures used to award a

vending contract at a federal rest area along Interstate 85 in

Davidson County, North Carolina (the “I-85 Rest Stop”).

(See Docket Entry 1-1 at 1-5 (detailing procedural background in

Arbitration Award); Docket Entry 19-1 at 10-13 (summarizing same

matters in Plaintiff’s opening memorandum); see also Docket Entry

20 at 8 (setting forth Defendant’s agreement that Plaintiff’s

opening memorandum adequately summarized procedural history).)

Prior to the underlying arbitration, Plaintiff and Defendant

“stipulated to the following facts” (A.R. 341)2 of relevance to

this proceeding:

“[Plaintiff] is the State Licensing Agency [(the “SLA”)]

responsible for administering the [RSA] and for implementing

related regulations.” (Id.) “[Defendant] is a licensed operator

in [Plaintiff’s] Business Enterprises Program” (the “BEP”). (Id.)

“Around August 2014, [BEP] operators were notified of an opening at

the I-85 [Rest Stop].” (A.R. 342.) Defendant and other operators

“submitted their application[s] to be considered for the I-85 [Rest

2 Citations to the “A.R.” refer to the Administrative Record

that Plaintiff and Defendant jointly filed in this matter.

(See Docket Entry 17 at 1, 2; see also Docket Entries 17-1 to 17-7

(containing the Administrative Record).)

Stop].” (Id.) “An interview panel comprised of Clay Pope ([BEP]

Chief), Steve Noble (Location Counselor), and Ron Eller (Vice-Chair

of the Elected Committee of Blind Vendors) conducted all interviews

oe ee (Id.) “As part of the established interview process,

discretionary points were awarded to all interviewees.” (Id.)

“Panel members Pope, Noble and Eller scored [Defendant] 8, 6, and

5 respectively on discretionary points.” (Id. “Panel members

Pope, Noble and Eller scored the prevailing candidate 8, 6, and 8

respectively on discretionary points.” (Id.)

“[Defendant] filed a written appeal to the Operator Relations

Committee [(the “ORC”)], which is a required step for an appeal in

the [BEP].” (Id.) “[The ORC] entered a decision denying

[Defendant’s] appeal.” (Id.) Next, “the [NCDSB] Director[]

entered a decision upholding the ORC’s determination.” (Id.)

“[Defendant] requested a Full Evidentiary hearing and one was held

before [a] Hearing Officer... .” (A.R. 343.) “At the hearing,

[Defendant] contended the established interview procedures were not

followed and challenged the award of discretionary points by Mr.

Eller.” (Id.) “The hearing officer . . . den[ied Defendant’s]

appeal.” (Id.) Thereafter, “[Defendant] filed a complaint with

the United States Department of Education” (the “DOE”). (Id.)

The DOE convened an arbitration panel to adjudicate

Defendant’s complaint. (A.R. 327.) Defendant “submitted

transcripts of the interviews conducted by the interview panel, ORC

hearing, and the transcript of the Full Evidentiary hearing to the

Arbitration Panel.” (A.R. 343.) A three-person arbitration panel3

conducted a hearing on Defendant’s complaint, at which counsel for

Plaintiff and Defendant appeared and Defendant testified as a

witness. (See A.R. 368-70.) After the hearing, a divided panel

issued the Arbitration Award.

As relevant to this matter, the Arbitration Award found that

“the SLA failed to conduct a give and take interview as a basis for

awarding discretionary points [in] violat[ion of] 10A [North

Carolina Administrative Code] § 63C.0204(d)(5)(F).” (A.R. 1161.)

As a result, it ordered (i) that “[a]ll of the discretionary points

awarded for filling the I-85 [Rest Stop] under subsection (5)(F)

shall be deleted from the scoring records of all applicants;”

(ii) that “[Plaintiff] shall reconstitute the original interview

panel with the same members, interview all of the original eight

applicants, record and transcribe all interviews as well as award

points in accordance with subsection (5)(F) and its 5 + 5

practice;” and (iii) that “[Plaintiff] conduct the reconstituted

interview within sixty (60) days following its receipt of th[e

Arbitration Award].” (Id.) It further ordered (i) Plaintiff to

“provide licensees with access to all relevant financial data

3 Pursuant to the RSA, Defendant selected one arbitrator,

Plaintiff selected one arbitrator, and those two arbitrators

jointly selected a third neutral chair. See 20 U.S.C. § 107d-

2(b)(1).

including, but not limited to, gross sales, gross profit, costs of

goods sold, overhead expenses and net profit for the I-85 [Rest

Stop] in accordance with 20 U.S.C. § 107b-1;” and (ii) the DOE and

Plaintiff to “set aside all regulations prohibiting or restricting

licensee access to relevant financial data under 20 U.S.C.

§ 107b-1.” (Id.)

Finally, the arbitration panel ordered that, “[i]n the event

[Defendant] has the highest point total after points are awarded by

the reconstituted interview panel, he shall be assigned the I-85

[Rest Stop] and recover compensatory damages from [Plaintiff];” and

that, “[a]s the prevailing party in his section (5)(F) claim,

[Defendant] shall recover attorney fees,” in an amount to be

determined after further briefing. (A.R. 1162.) The Supplemental

Award subsequently directed “the SLA [to] pay [Defendant’s]

attorney fees, expenses and costs in the amount of $52,965.02.”

(Docket Entry 14-1 at 24.)

DISCUSSION

I. Relevant Standards

Under the RSA, “[a]ny blind licensee who is dissatisfied with

any action arising from the operation or administration of the

vending facility program may submit to a[n SLA] a request for a

full evidentiary hearing.” 20 U.S.C. § 107d-1. “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 [DOE]

who shall convene a panel to arbitrate the dispute ... .” Id.

“[T]he decision of such panel shall be final and binding on the

parties except,” id., that the decision “shall be subject to appeal

and review as a final agency action for purposes of chapter 7 of

such Title 5,” 20 U.S.C. § 107d-2(a), “that is, to judicial review

in accordance with the Administrative Procedure Act ([the] ‘APA’),

5 U.S.C. § 500 et seg., and, specifically, 5 U.S.C. § 706,” Jones

v. DeNotaris, 80 F. Supp. 3d 588, 591 (E.D. Pa. 2015). See

also Sauer v. United States Dep’t of Educ., 668 F.3d 644, 650 (9th

Cir. 2012) (“An arbitration decision under the [RSA] is ‘subject to

appeal and review as a final agency action’ under the standards set

forth in the [APA].” (quoting 20 U.S.C. § 107d-2(a))); Browder v.

United States Dep’t of Educ., No. 99-2290, 238 F.3d 410 (table),

2000 WL 1724027, at *2 (4th Cir. Nov. 20, 2000) (“The underlying

arbitration panel decision we review today is deemed a final agency

action under the [APA].”).*

4 In the Supplemental Award, the panel majority asserted that

the Federal Arbitration Act (the “FAA”) governs judicial review of

RSA arbitration awards. (See Docket Entry 14-1 at 4-10.) In

moving to confirm, Defendant likewise maintained that “[t]he [FAA]

applies to the [Arbitration] Award and the Supplemental Award.”

(Docket Entry 14 at 9.) In subsequent briefing, however, Defendant

argued for confirmation solely pursuant to the APA (see, e.g.,

Docket Entry 20 at 43-44, 48), thereby abandoning his FAA argument.

Regardless, any contention that the FAA applies lacks merit. See,

e.g., Maryland State Dep’t of Educ., Div. of Rehab. Servs. v.

United States Dep’t of Educ., Rehab. Servs. Admin., No. CV 17-1383,

2018 WL 4604305, at *6-7 (D. Md. Sept. 25, 2018) (analyzing and

rejecting argument that either the FAA or a hybrid FAA/APA standard

governs appeal of RSA arbitration award).

The APA provides that, “[t]o the extent necessary to decision

and when presented, the reviewing court shall decide all relevant

questions of law, interpret constitutional and statutory

provisions, and determine the meaning or applicability of the terms

of an agency action.” 5 U.S.C. § 706. As relevant here, the

reviewing Court shall also

hold unlawful and set aside agency action, findings, and

conclusions found to be —

(A) arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law;

(B) contrary to constitutional right, power,

privilege, or immunity;

or limitations, or short of statutory right;

(D) without observance of procedure required by

law;

(E) unsupported by substantial evidence . . .; or

(F) unwarranted by the facts to the extent that the

facts are subject to trial de novo by the reviewing

court.

5 U.S.C. § 706(2). “In making [such] determinations, the [C]ourt

shall review the whole record or those parts of it cited by a

party, and due account shall be taken of the rule of prejudicial

error.” 5 U.S.C. § 706.

In other words, as the United States Court of Appeals for the

Fourth Circuit has explained, the Court “must uphold [an RSA

arbitration panel] decision if it is supported by ‘substantial

evidence,’ and is not ‘arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.’” Browder,

2000 WL 1724027, at *2 (quoting 5 U.S.C. § 706(2) (A), (E)}).

Further, “[i]Jn determining whether final agency action,” such as an

RSA arbitration award, “violates [S]lection 706(2) (A) of the APA,

*‘[the Court] perform[s] only the limited, albeit important, task of

reviewing agency action to determine whether the agency conformed

with controlling statutes, and whether the agency has committed a

clear error of judgment.’” Id. (some internal quotation marks

omitted) (quoting Maryland Dep’t of Human Res. v. United States

Dep’t_ of Agric., 976 F.2d 1462, 1475 (4th Cir. 1992)).

II. Sovereign Immunity Challenge

In its first assignment of error, Plaintiff asserts that the

arbitration panel erred in awarding compensatory damages to

Defendant if he wins the I-85 Rest Stop after the reconvened

interview, arguing that “[t]he Eleventh Amendment of the United

States Constitution prohibits th[e a]rbitration [planel from

awarding compensatory relief and bars enforcement of such awards in

federal court.” (Docket Entry 1 at 9; see also id. at 8.)>°

Plaintiff makes the same contention regarding the award of

attorney’s fees. (See id. at 9.) In Plaintiff’s view, “[t]he

5 Plaintiff concedes that the arbitration panel could

properly afford Defendant injunctive relief. (See, e.g., Docket

Entry 19-1 at 7 (“[A] state cannot implicitly waive its sovereign

immunity for compensatory damages by participating in a federal

program. Prospective equitable relief, however, is an appropriate

remedy for parties due to state action in a federal program.”).)

[a]rbitration [p]anel’s decision to award attorneys’ fees and

compensatory damages violates the State of North Carolina’s

sovereign immunity.” (Docket Entry 19-1 at 16.) Conversely,

Defendant maintains that, “[a]s several Circuit courts have held,

the [arbitration p]anel’s award of compensatory damages and

attorneys’ fees is enforceable because North Carolina waived its

Eleventh Amendment immunity when it voluntarily agreed to be an SLA

under the RSA.” (Docket Entry 20 at 9-10.)6

A. RSA Background

Congress enacted the RSA in 1936 “‘for the purpose 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.’”

Delaware Dep’t of Health & Soc. Servs., Div. for Visually Impaired

v. United States Dep’t of Educ., 772 F.2d 1123, 1125 (3d Cir. 1985)

(quoting Pub. L. No. 74–732, ch. 638, 49 Stat. 1559, 1560 (1936)

(codified as amended at 20 U.S.C. §§ 107-107f)). To accomplish

these objectives, the RSA (as originally enacted) authorized “blind

persons licensed under the provisions of this Act . . . to operate

vending stands in” certain “Federal and other buildings in [each

participating] State.” Id. (internal quotation marks omitted).

6 Defendant does not dispute the applicability of the

Eleventh Amendment to RSA arbitration proceedings. (See id. at 10

(“The Eleventh Amendment applies to this arbitration

proceeding.”).)

Section 3 of the original RSA envisioned the participation of

States in the program through SLAs, by providing that “[a] State

commission for the blind or other State agency desiring to be

designated as the agency for licensing blind persons for the

operation of vending stands as provided in this Act shall, with the

approval of the governor of the State, make application to the

Commissioner of Education and agree” to certain specified

requirements. Id. at 1125-26. “Thus, as first enacted, the [RSA]

contemplated a contractual relationship between participating

states and the federal government.” Id. at 1126.

In 1954, Congress “substantially” amended the RSA. Id. As

part of this amendment, Congress increased the requirements for

designation as an SLA. See id. As amended, Section 3 of the RSA

mandated that “‘[a] State commission for the blind or other State

agency desiring to be designated as the licensing agency shall,

with the approval of the chief executive of the State, make

application to the Secretary and agree,’” inter alia, “‘(6) to

provide to any blind licensee dissatisfied with any action arising

from the operation or administration of the vending stand program

an opportunity for a fair hearing.’” Id. at 1126-27 (quoting

Vocational Rehabilitation Amendments of 1954, Pub. L. No. 83–565,

ch. 655, 68 Stat. 663, 664).

As the United States Court of Appeals for the Third Circuit

has explained:

The 1954 amendment thus carried forward the contractual

relationship feature of the original Act and added [a]

requirement that the state agree that blind vendors have

certain property interests in the businesses established

pursuant to the [RSA]. The blind vendors became, in

effect, third party beneficiaries of the agreements

between the participating states and the federal

government. Moreover the states applying to participate

in the program undertook in [S]ection 3(6) to provide for

blind licensees dissatisfied with the operation of the

program “an opportunity for a fair hearing.” The 1954

amendment did not, however, specify the nature of the

hearing or the relief which should be afforded as a

result of such a hearing. Nevertheless, it is clear that

by authorizing the federal government to contract with

the states on the terms specified in [S]ection 3,

Congress intended to confer legally enforceable rights on

the blind beneficiaries of the program. The term “fair

hearing” cannot otherwise be understood than as an

expression of the intention to require participating

states to provide a mechanism of dispute resolution to

effectively enforce those rights. States participating

in the program after 1954 are so bound. In consideration

of the states’ undertakings, the federal government

grants to state agencies the right to license federal

sites to blind vendors.

Id. at 1127.

Twenty years later, Congress found, “[a]fter review of the

operation of the blind vending stand program authorized under the

[RSA], that the program has not developed, and has not been

sustained, in the manner and spirit in which the Congress intended

at the time of its enactment, and that, in fact, the growth of the

program has been inhibited by a number of external forces.”

Rehabilitation Act Amendments of 1974, Pub. L. No. 93-516, 88 Stat

1617, 1617 (all-cap font omitted). Congress further found “that at

a minimum [certain] actions must be taken to insure the continued

vitality and expansion of the Randolph-Sheppard Program,” including

“establish[ing] administrative and judicial procedures under which

fair treatment of blind vendors, state licensing agencies, and the

federal government is assured.” Id. (all-cap font omitted). To

that end, Congress added arbitration provisions to “provid[e] a

means by which aggrieved vendors and State agencies may obtain a

final and satisfactory resolution of disputes under the RSA.”

Kentucky, Educ. Cabinet, Dep’t for the Blind v. United States, 424

F.3d 1222, 1226 (Fed. Cir. 2005) (internal quotation marks omitted)

(observing that, “prior to the [1974] amendment[,] blind vendors

and state licensing agencies had no neutral forum in which to press

claims of violations of the RSA that did not involve violations of

contract rights or federal procurement provisions”).

Accordingly, Congress revised Section 3(6) to require

agreement

to provide to any blind licensee dissatisfied with any

action arising from the operation or administration of

the vending facility program an opportunity for a fair

hearing, and to agree to submit the grievances of any

blind licensee not otherwise resolved by such hearing to

arbitration as provided in section 5 of this Act [20

U.S.C. § 107d–1].

Delaware Dep’t of Health, 772 F.2d at 1127 (emphasis and brackets

in original). In other words, Congress retained the Section 3

mandate that “states desiring to participate must ‘make application

to the Secretary and agree—’” to specified requirements, “add[ing]

to [S]ection (3)(6) the requirement that participating states

‘agree to submit the grievance of any blind licensee not otherwise

resolved in a fair hearing to arbitration’ as provided in a new

section of the [RSA].” Id. at 1128 (internal brackets omitted).

Notably, “[wlhen Congress in 1974 provided that states

desiring to gain access to blind vendor locations in federal

facilities must agree to submit to arbitration their disputes with

blind vendors, the term arbitration had a well-recognized meaning.”

Id. at 1136; see also id. (observing that, “[s]ince contract

arbitration was in 1974 a legal concept with a well-settled

content, there is no ambiguity in [Congress’s] choice of the

term”). More specifically, by 1974, “arbitrators proceeding under

the authority of the [FAA] or under the authority of the Uniform

Arbitration Act, as a matter of course[,] awarded retrospective

compensatory relief in appropriate cases.” Id. In addition,

“awards of back pay in arbitrations under collective bargaining

agreements were, by then, commonplace.” Id.

B. Compensatory Damages Challenge

Against this backdrop, Defendant urges the Court to find that

“North Carolina waived its sovereign immunity regarding

[compensatory damages] when it voluntarily agreed to be an SLA.”

(Docket Entry 20 at 10.)’ In turn, Plaintiff maintains that “the

7 “[TA] State may waive its immunity by voluntarily

participating in a federal spending program provided that Congress

has expressed a clear intent to condition participation ...ona

State’s consent to waive its constitutional immunity.” Madison v.

Virginia, 474 F.3d 118, 129 (4th Cir. 2006) (internal quotation

marks omitted) (ellipsis in original); accord New Hampshire v.

(continued...)

Eleventh Amendment bars compensatory damages .. . against a state

in a Randolph-Sheppard Arbitration.” (Docket Entry 19-1 at 20.)°

Both positions find support in appellate decisions outside the

Fourth Circuit. See, e.g., Tyler v. United States Dep’t of Educ.

Rehab. Servs. Admin., 904 F.3d 1167, 1193 (10th Cir. 2018) (finding

that SLA “has not waived its sovereign immunity to a damages award

from an RSA arbitration panel” (citing as a “/bjut see” example

Delaware Dep’t of Health, 772 F.2d at 1138 (finding that SLA waived

sovereign immunity through RSA participation)), cert. denied sub

nom. Altstatt v. Fruendt, U.S. _, 139 S. Ct. 1214 (2019);

Sauer, 668 F.3d at 654 (explaining that in Premo v. Martin, 119

F.3d 764 (9th Cir. 1997), the court “held that the [SLA] 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”); Tennessee Dep’t of

Human Servs. v. United States Dep’t of Educ., 979 F.2d 1162, 1165-

69 (6th Cir. 1992) (concluding that RSA arbitrators possessed

authority to award retroactive monetary damages, but eleventh-

7(...continued)

Ramsey, 366 F.3d 1, 15 (lst Cir. 2004) (“A state can waive its

Eleventh Amendment immunity to suit . . . by consent to or

participation in a federal program for which waiver of immunity is

an express condition... .”).

8 “Because a [litigant] otherwise protected by the Eleventh

Amendment can waive its protection .. . . sovereign immunity is

akin to an affirmative defense, which [Plaintiff] bears the burden

of demonstrating.” Hutto v. South Carolina Ret. Sys., 773 F.3d

536, 543 (4th Cir. 2014).

amendment immunity precluded enforcement of such award in federal

court); McNabb v. United States Dep’t of Educ., 862 F.2d 681,

683-84 (8th Cir. 1988) (concluding that RSA arbitration panel could

award prospective, but not retrospective, compensatory damages);

see also McNabb, 862 F.2d at 685 (Lay, C.J., concurring &

dissenting) (“agree[ing] with the Third Circuit’s conclusion that

the [E]leventh [A]mendment is not a bar to awarding compensatory

relief against state agencies under the [RSA],” but finding,

instead of waiver, that Congress “abrogate[d] sovereign immunity of

the participating states” under the RSA).

Plaintiff and Defendant agree that the Fourth Circuit has not

yet determined whether eleventh-amendment immunity precludes

compensatory damages awards against an SLA in RSA proceedings.

(See Docket Entry 19-1 at 18; Docket Entry 20 at 11.) However, in

an unpublished decision twenty-nine years ago, the Fourth Circuit

briefly addressed the applicability of the Eleventh Amendment to

compensatory damages awards in the RSA context. See Morris v.

Maryland, No. 89-1013, 908 F.2d 967 (table), 1990 WL 101396, at *6

(4th Cir. July 11, 1990).° There, blind vendors sued under the RSA

for, inter alia, the State’s alleged improper collection of set-

aside charges. See id. at *1l. The district court dismissed the

vendors’ suit for failure to exhaust administrative remedies.

9 The parties did not discuss this decision. (See, e€.g.,

Docket Entry 19-1 at 4-5 (listing cited authorities); Docket Entry

20 at 4-7 (same); see generally Docket Entry 21.)

See id. On appeal, the vendors argued, in part, that “an

administrative proceeding would have caused irreparable injury,”

id. at *2, on the theory that, “if the[ vendors] exhaust their

administrative remedies, they would be required to pay [the]

set-aside in the interim, but upon a later victory, recovery of the

charges would be precluded by the State’s eleventh amendment

immunity,” id. at *6.

The Fourth Circuit disposed of that argument as follows:

But the set-aside currently being collected has now

been approved by the Secretary; thus, it seems unlikely

that the amount is being collected in violation of the

[RSA]. The real issue in the merits of their case is

whether the State properly collected set-aside prior to

the Secretary’s approval — any irreparable injury in that

regard has already occurred.

It is also doubtful whether eleventh amendment

immunity would be available to the State if the vendors

do eventually file for a review of the administrative

proceedings. See Delaware Dep’t of Health . . ., 772

F.2d [at] 1136–37 . . . (eleventh amendment does not bar

recovery from state pursuant to Randolph–Sheppard because

the [RSA] requires the states to submit to arbitration,

where damages are commonplace; hence, relationship is

essentially contractual); Committee of Blind Vendors [v.

District of Columbia], 695 F. Supp. [1234,] 1240–41

[(D.D.C. 1988)] (agreeing with the Third Circuit’s

analysis on the issue). We, therefore, do not consider

it “likely” that the vendors will suffer irreparable

injury as a result of the exhaustion requirement.

Morris, 1990 WL 101396, at *6.

The Third Circuit’s decision cited in Morris analyzed both the

RSA arbitration panel’s authority to award compensatory damages and

the Eleventh Amendment’s impact on such damages awards. As to the

first issue, the Third Circuit concluded that, in light of the

well-recognized practice of awarding compensatory damages in

arbitration proceedings when Congress added the arbitration

requirement to the RSA, the “unambiguous” statutory language, and

the absence of “legislative history support[ing] any reading of the

term arbitration other than the conventional one,” RSA arbitration

panels possessed authority “to award compensatory damages.”

Delaware Dep’t of Health, 772 F.2d at 1136-37. The Third Circuit

then rejected the State’s argument that the Eleventh Amendment

barred such awards. See id. at 1137 (“Thus Delaware’s only

remaining argument in support of vacating the arbitrators’ award is

that the eleventh amendment somehow authorizes it to withdraw

unilaterally from an arbitration agreement which it made with the

United States, acting in the interest of blind vendors. That

contention lacks merit.”). As to the latter issue, the Third

Circuit concluded that Delaware “plainly . . . waived” eleventh-

amendment immunity “when, after full notice of the [RSA’s]

requirements, one of which was an agreement to arbitration, it

voluntarily made application with the Secretary to participate in

the Randolph-Sheppard program. The waiver of sovereign immunity

with respect to arbitration could hardly have been made more

clearly.” Id. (citations omitted).

Since the Morris and Delaware Department of Health decisions,

however, the United States Supreme Court has clarified the

standards for finding waivers of eleventh-amendment immunity.

See Sossamon v. Texas, 563 U.S. 277, 284-86 (2011) (finding that

States did not waive sovereign immunity as to monetary damages

under statute authorizing “appropriate relief against a

government”). In particular, the Supreme Court explained that “a

waiver of sovereign immunity will be strictly construed, in terms

of its scope, in favor of the sovereign.” Id. at 285 (internal

quotation marks omitted). As such, “[w]aiver may not be implied.”

Id. at 284. Moreover, “a waiver of sovereign immunity to other

types of relief does not waive immunity to damages[.]” Id. at 285.

Rather, “[t]he waiver of sovereign immunity must extend

unambiguously to such monetary claims.” Id. (internal quotation

marks omitted). Thus, “where a statute is susceptible of multiple

plausible interpretations, including one preserving immunity, [a

court] will not consider a State to have waived its sovereign

immunity.” Id. at 287.

As relevant here, the RSA provides:

A State agency for the blind or other State agency

desiring to be designated as the licensing agency shall,

with the approval of the chief executive of the State,

make application to the Secretary and agree —

*****

(6) to provide to any blind licensee dissatisfied

with any action arising from the operation or

administration of the vending facility program an

opportunity for a fair hearing, and to agree to

submit the grievances of any blind licensee not

otherwise resolved by such hearing to arbitration

as provided in [S]ection 107d-1 of this title.

20 U.S.C. § 107b (emphasis added). In turn, Section 107d-1

specifies in pertinent part that

[a]ny blind licensee who is dissatisfied with any

action arising from the operation or administration of

the vending facility program may submit to a[n SLA] a

request for a full evidentiary hearing, which shall be

provided by such agency in accordance with [S]ection

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 [S]ection 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.

20 U.S.C. § 107d-1(a) (emphasis added).

Entitled “[n]otice and hearing,” Section 107d-2(a) states:

Upon receipt of a complaint filed under [S]ection

107d-1 of this title, the Secretary shall convene an ad

hoc arbitration panel as provided in subsection (b).

Such panel shall, in accordance with the provisions of

subchapter II of chapter 5 of Title 5, give notice,

conduct a hearing, and render its decision which shall be

subject to appeal and review as a final agency action for

purposes of chapter 7 of such Title 5.

20 U.S.C. § 107d-2(a). Finally, under the title “[c]omposition of

panel; designation of chairman; termination of violations,” Section

107d-2(b) specifies the procedure for appointing arbitrators for

arbitrations between an SLA and federal entity as well as between

an SLA and a blind licensee. See 20 U.S.C. § 107d-2(b). Notably,

although it specifies the arbitration panel’s scope of authority in

an arbitration between an SLA and federal entity,10 Section 107d-

2(b) provides no further details regarding arbitrations involving

blind licensees. Compare 20 U.S.C. § 107d-2(b)(2) (SLA-federal

entity arbitration), with 20 U.S.C. § 107d-2(b)(1) (blind licensee-

SLA arbitration).

Under these circumstances, and “[g]uided by Sossamon, [the

Court should] conclude that the RSA is insufficiently explicit to

render state participation in the RSA Program a waiver of sovereign

immunity from an RSA arbitration panel award for damages.” Tyler,

904 F.3d at 1193. Because “the [RSA] is silent as to any type of

remedy, only mandating the [arbitration p]anel’s decision ‘shall be

final and binding,’” Ohio v. United States Dep’t of Educ., 377 F.

Supp. 3d 823, 838 (S.D. Ohio 2019), appeal filed, No. 19-3397 (6th

Cir. Apr. 30, 2019), it qualifies as “open-ended and ambiguous

about what types of relief it includes,” Sossamon, 563 U.S. at 286.

See Tyler, 904 F.3d at 1193 (“[The RSA] is silent as to what

remedies aggrieved vendors may obtain against SLAs and is therefore

10 To wit:

[i]f 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.

20 U.S.C. § 107d-2(b)(2).

just as ‘open-ended and ambiguous’ as [the statute at issue in

Sossamon], if not more.”); see also New Hampshire v. Ramsey, 366

F.3d 1, 21-22 (1st Cir. 2004) (“At best, there is disagreement as

to whether the [RSA] arbitration panels can award damages, with

reasoned arguments made on both sides.”). Thus, because the RSA

“falls short of the unequivocal textual expression necessary to

waive State immunity from suits for damages,” Madison v. Virginia,

474 F.3d 118, 131 (4th Cir. 2006), the Court should find that

“[Plaintiff] has not waived its sovereign immunity to a damages

award from an RSA arbitration panel,” Tyler, 904 F.3d at 1193. See

also Tennessee Dep’t of Human Servs., 979 F.2d at 1168 (“[T]he

[RSA] contains no mention of retroactive liability or of states’

liability for, or immunity from, damages. A mere reference to

binding arbitration in the [RSA] does not unmistakably suggest that

a vendor will be able to collect retroactive damages in federal

court or that a state will surrender its sovereign immunity.

According to the Supreme Court, much more explicit language is

required to abrogate or waive a state’s sovereign immunity.”).

C. Attorney’s Fees Challenge

Plaintiff’s Complaint/Petition and opening memorandum assert

only that eleventh-amendment immunity precludes the award of

attorney’s fees. (See Docket Entry 1 at 9; Docket Entry 19-1 at

16, 20.)'! Defendant responds that he “is entitled to his

attorneys’ fees because he was awarded non-monetary prospective

relief” and because “[t]he Fourth Circuit has upheld the award of

attorneys’ fees in a Randolph-Sheppard challenge.” (Docket Entry

20 at 18 (emphasis omitted) (citing Almond v. Boyles, 792 F.2d 451,

456-57 (4th Cir. 1986) (“Almond”)).) Defendant’s arguments possess

merit.

In Almond, officials operating the RSA program in North

Carolina deducted “employer” and “employee” retirement

contributions from vending machine proceeds in violation of the

RSA, depositing this money in the North Carolina Teachers’ and

State Employees’ Retirement System (the “Retirement System”).

See Almond v. Boyles, 612 F. Supp. 223, 225-26 (E.D.N.C. 1985)

(“Almond 1”), aff’d in part, vacated in non-relevant part, 792 F.2d

451 (4th Cir. 1986). In 1983, the North Carolina General Assembly

passed an act prohibiting any new blind vendors’ participation in

the Retirement System and requiring currently participating blind

vendors to irrevocably elect one of several options regarding their

Retirement System participation. See id. at 226. These options

included ceasing participation in the Retirement System and

11 Plaintiff’s opening memorandum does not independently

address the interplay between eleventh-amendment immunity and

attorney’s fees; rather, Plaintiff devotes its eleventh-amendment

argument to compensatory damages and asserts without elaboration

that the Eleventh Amendment also bars attorney’s fees. (See Docket

Entry 19-1 at 16-20.)

“receiv[ing] a refund of ‘employee’ contributions plus statutory

interest,” but “vendors were not given the option to withdraw both

the ‘employer’ and ‘employee’ contributions from the [Retirement]

System.” Id.

Blind vendors filed suit under the RSA against officials

administering both the RSA and the Retirement System, “seek[ing]

declaratory and injunctive relief on behalf of themselves and all

similarly situated Randolph-Sheppard vendors to recover all monies

that they were forced to contribute to the [Retirement] System.”

Id. at 225. Granting the plaintiffs’ summary judgment motion, the

district court found that “[t]here was clearly a violation of the

[RSA] in this case,” and that “[t]he only equitable solution at

this point is to give the vendors the option to withdraw from the

Retirement System and receive a refund of their ‘employer’ and

‘employee’ contributions to the Retirement System plus statutory

interest.” Id. at 226-27.'* The Almond I court then (i) granted

12 The Almond I court further found that eleventh-amendment

immunity did not preclude recovery of the employer contributions

from the Retirement System, see id. at 227-28, a ruling the Fourth

Circuit affirmed, see Almond, 792 F.2d at 456. That ruling does

not control the sovereign immunity analysis, however, as (i) it

addressed only the question of “whether requiring the Retirement

System to refund the vendors’ ‘employer’ contributions would in

effect be the same as a retroactive award of monetary damages

against the state,” Almond I, 612 F. Supp. at 227, without

considering any interplay between the RSA and sovereign immunity,

see id. at 227-28, and (ii), in any event, due to a subsequent

Supreme Court decision, the framework Almond I used in that regard

“is no longer applicable,” Hutto, 773 F.3d at 546 (citing Regents

of the Univ. of Cal. v. Doe, 519 U.S. 425, 431 (1997)).

class certification, (ii) ordered the preparation of class notices

and an accounting of all “employer” contributions to the Retirement

System, and (iii) required the Retirement System to “give members

of the plaintiff class the option of receiving an immediate refund

of both the ‘employer’ and ‘employee’ contributions to the

Retirement System, reduced by the amount of benefits actually

received, plus four per cent (4%) interest,” id. at 230. See

id. at 229-30.

The parties thereafter appealed to the Fourth Circuit, with

the defendants challenging “the district court’s order [sic]

granting summary judgment and awarding attorneys’ fees to

plaintiffs,” and the plaintiffs challenging “the interest component

of the judgment.” Almond, 792 F.2d at 455. The Fourth Circuit

rejected the parties’ contentions — mainly “for the reasons stated

by the district court,” id. at 456 (citing Almond I) — except that,

“[w]ith respect to the award of attorneys’ fees, [it] conclude[d]

that the district court applied the wrong standard in calculating

the award,” id. The Fourth Circuit therefore vacated the

attorney’s fees award and remanded to the district court for it to

recalculate the “appropriate attorneys’ fees.” Id. at 457.

Defendant maintains that, although the Fourth Circuit “upheld

the award of attorneys’ fees” in that RSA challenge “without

substantial discussion, Almond remains binding precedent in the

Fourth Circuit. Accordingly, the [arbitration p]anel’s award of

attorneys’ fees to [Defendant], as the prevailing party, should be

affirmed.” (Docket Entry 20 at 18.) Plaintiff’s reply counters

that Almond

is not binding precedent regarding awards of attorneys’

fees in [RSA] matters. First, the context in which

attorneys’ fees were awarded in that case bears no

resemblance to this one. The award of attorneys’ fees in

Almond is also distinguishable from the present case

because the Almond award was an exception to the American

Rule.

(Docket Entry 21 at 7; see also id. at 8 (“Here, there is no

applicable exception to the American Rule.”).)'% Plaintiff’s

contentions fall short.

To begin, Plaintiff fails to develop any argument related to

its broad statement that “the context in which attorneys’ fees were

awarded in that case bears no resemblance to this one” (id. at 7).

(See id. at 7-10.) “A party should not expect a court to do the

work that it elected not to do.” Hughes v. B/E Aerospace, Inc.,

No. 1:12cv717, 2014 WL 906220, at *1 n.1 (M.D.N.C. Mar. 7, 2014).

Similarly, Plaintiff provides no support for its suggestion that

the Court should strike the attorney’s fees portion of the

Arbitration Award because “the Almond award was an exception to the

American Rule” (Docket Entry 21 at 7). (See generally Docket Entry

21.) Almond I contains no discussion of attorney’s fees, see id.,

13. Under the so-called American Rule, a prevailing litigant

in the United States “is ordinarily not entitled to collect a

reasonable attorneys’ fee from the loser.” Alyeska Pipeline Serv.

Co. v. Wilderness Soc’y, 421 U.S. 240, 247 (1975).

612 F. Supp. at 223-30, and Almond provides no explanation

regarding the grounds for awarding attorney’s fees, id., 792 F.2d

at 451-57. In addition, Plaintiff has not presented, and the

undersigned has not found, the district court decision awarding

attorney’s fees. (See Docket Entry 21 at 7-10.) Accordingly, the

Court cannot determine that Almond’s affirmance of the awarding of

attorney’s fees rests on a factual or legal foundation that

materially differs from this case.

Conversely, a number of factors support the view that Almond’s

upholding of an award of attorney’s fees should control the outcome

here. First, Almond I and Almond involve an award of attorney’s

fees against state litigants in conjunction with prospective

equitable relief designed to remedy an RSA violation, the same

Situation involved in this case. Further, prior to the Almond

decision, the Supreme Court had held that courts may award

attorney’s fees ancillary to injunctive relief in appropriate

circumstances, and that such awards do not contravene the Eleventh

Amendment when awarded against state litigants. See Hutto v.

Finney, 437 U.S. 678, 689-700 (1978). The failure of the Almond

defendants to raise a sovereign immunity challenge to the

attorney’s fees award on appeal, see 792 F.2d at 456, suggests that

the attorney’s fee award arose in the ancillary-to-injunctive-

relief context. Under these circumstances, Plaintiff has not

established that Almond “is not binding precedent regarding awards

of attorneys’ fees in [RSA] matters” (Docket Entry 21 at 7). See

Doe v. Chao, 511 F.3d 461, 465 (4th Cir. 2007) (“It is axiomatic

that in our judicial hierarchy, the decisions of the circuit courts

of appeals bind the district courts . . . .”); see also United

States v. Collins, 415 F.3d 304, 311 (4th Cir. 2005) (“A

[published] decision of a panel of this court becomes the law of

the circuit and is binding on other panels unless it is overruled

by a subsequent en banc opinion of this court or a superseding

contrary decision of the Supreme Court.” (internal quotation marks

omitted)).

In its reply, Plaintiff next asserts that “[Defendant] relies

on Tennessee Dep’t of Human Servs. to argue that the American Rule

does not apply.” (Docket Entry 21 at 8.) However, Defendant did

not raise any arguments regarding the American Rule. (See Docket

Entry 20 at 18-19 (asserting that the Tennessee Dep’t of Human

Servs. “Court found that the Supreme Court has held that ancillary

costs to the state, such as attorneys’ fees, are not barred by the

Eleventh Amendment if such costs are awarded only to a prevailing

party in regard to prospective relief”).) Further, to the extent

that Plaintiff’s reply contends that the American Rule deprived the

arbitrators of authority to award attorney’s fees, “[t]he ordinary

rule in federal courts is that an argument raised for the first

time in a reply brief or memorandum will not be considered,”

Clawson v. FedEx Ground Package Sys., Inc., 451 F. Supp. 2d 731,

734 (D. Md. 2006). See, e.g., Hunt v. Nuth, 57 F.3d 1327, 1338

(4th Cir. 1995) (explaining that “courts generally will not address

new arguments raised in a reply brief because it would be unfair to

the [other party] and would risk an improvident or ill-advised

opinion on the legal issues raised”); HSK v. Provident Life &

Accident Ins. Co., 128 F. Supp. 3d 874, 884 (D. Md. 2015) (“To the

extent [the plaintiff] suggests that [the defendant’s]

non-compliance with the settlement agreement is an independent

basis for liability, that argument is procedurally improper. By

waiting to raise it until his reply brief, [the plaintiff] deprived

[the defendant] of an opportunity to respond, and deprived this

court of the benefit of any such response.”). This rule has

particular force here, given that the applicability of the American

Rule to RSA arbitrations divides federal courts. Compare, e.g.,

Tennessee Dep’t of Human Servs., 979 F.2d at 1169 (rejecting

argument that American Rule applies to RSA arbitrations), with

Tyler, 904 F.3d at 1194 (concluding that American Rule applies to

RSA arbitrations).

Finally, Plaintiff’s reply elaborates upon the position (to

which it adverted in its Complaint/Petition and opening memorandum

(see Docket Entry 1 at 9; Docket Entry 19-1 at 16, 20)) that, “[i]n

the context of the [RSA], an award of attorneys’ fees clearly

violates North Carolina’s Eleventh Amendment sovereign immunity.”

(Docket Entry 21 at 9.) In Plaintiff’s view, “a state cannot have

reasonable notice that Congress intended it be subjected to

attorneys’ fees in [RSA] arbitrations where the act is silent on

fee assessments to the parties and where Congress expressed an

intent that certain costs be paid by the Secretary.” (Id. at 10.)14

As such, Plaintiff contends, the RSA lacks the necessary

“unequivocal expression of congressional intent for a state to

waive its immunity.” (Id. at 9-10.) Plaintiff’s assertions miss

the mark.

In Hutto, the Supreme Court rejected a State’s contention that

an attorney’s fee “award was subject to the Eleventh Amendment’s

constraints on actions for damages payable from a State’s

treasury.” Missouri v. Jenkins by Agyei, 491 U.S. 274, 278

(1989).15 “After Hutto, therefore, it must be accepted as settled

14 Plaintiff’s reply does not contend that awarding

attorney’s fees against an SLA runs afoul of the RSA due to the

RSA’s provision that the DOE “pay all reasonable costs of

arbitration under this section in accordance with a schedule of

fees and expenses . . . publish[ed] in the Federal Register,” 20

U.S.C. § 107d-2(c). (See Docket Entry 21 at 9-10.) In any event,

Plaintiff could not have raised such an argument for the first time

in a reply brief. See Clawson, 451 F. Supp. 2d at 734.

15 In so ruling, the Hutto Court relied

on the distinction drawn in [the Supreme Court’s] earlier

cases between “retroactive monetary relief” and

“prospective injunctive relief.” Attorney’s fees, [the

Supreme Court] held, belonged to the latter category,

because they constituted reimbursement of “expenses

incurred in litigation seeking only prospective relief,”

rather than “retroactive liability for prelitigation

conduct.” [The Supreme Court] explained: “Unlike

ordinary ‘retroactive’ relief such as damages or

(continued...)

that an award of attorney’s fees ancillary to prospective relief is

not subject to the strictures of the Eleventh Amendment.” Id. at

279. Moreover, because “the Eleventh Amendment d[oes] not apply to

an award of attorney’s fees ancillary to a grant of prospective

relief,” Hutto’s holding “is unaffected by [the Supreme Court’s]

subsequent jurisprudence concerning the degree of clarity with

which Congress must speak in order to override Eleventh Amendment

immunity.” Id. at 280. Thus, the question of whether the RSA

speaks with sufficient clarity to effect a waiver of a State’s

sovereign immunity has no bearing on an award of attorney’s fees

ancillary to prospective equitable relief.

In sum, Plaintiff’s challenge to the attorney’s fee award

lacks merit.16

III. Discretionary Points Challenges

A. Oral Exam/Interview

Plaintiff next maintains that the Arbitration Award erred in

“finding [that Plaintiff] failed to conduct a give and take

interview as a basis for awarding discretionary points in violation

15(...continued)

restitution, an award of costs does not compensate the

plaintiff for the injury that first brought him into

court. Instead, the award reimburses him for a portion

of the expenses he incurred in seeking prospective

relief.”

Jenkins, 491 U.S. at 278 (citations omitted).

16 Plaintiff does not challenge the calculation of the

attorney’s fee award. (See Docket Entries 19-1, 21.)

of 10A N.C.A.C. § 63C.0204(d)(5)(F)” (the “Interview Subsection”).

(Docket Entry 19-1 at 20 (capitalization and emphasis omitted).)

According to Plaintiff, (i) the Interview Subsection qualifies as

ambiguous (see id.), (ii) “[Plaintiff] interprets the statute to

provide for a single interview with the candidate with two scoring

components” (id. at 23 (citing A.R. 1171)), and (iii) “[Defendant]

was afforded a give and take interview that enabled the interview

panel to achieve its stated purpose of the interview, which is ‘to

evaluate the applicant’s expertise, maturity, experience and

ability’” (id. (quoting 10A N.C. Admin. Code § 63C.0204(d)(5)(F))).

In turn, Defendant contends that, “[a]s the arbitration panel

correctly found, [the Interview Subsection] unambiguously requires

that discretionary points be based on a ‘give and take’ interview,

and that did not occur.” (Docket Entry 20 at 20.) Defendant’s

position should prevail.

The North Carolina Administrative Code (the “Code”) provides

that, “[a]fter adding together the points from the sanitation,

seniority, Financial Analysis/Operating Standards, Customer

Relations and Oral Exam/Interview Sections [Subparagraphs (d), (1),

(2), (3), (4), (5), (6), (7) of this Rule] for each applicant, the

applicant with the highest point total (if above 60 points) shall

be awarded the [BEP facility] vacancy.” 10A N.C. Admin. Code

§ 63C.0204(c)(5) (second set of brackets in original). In regard

to the “Oral Exam/Interview Section[,]” the Code states:

(5) Oral Exam/Interview:

(A) 30 points maximum.

(B) Interview shall be face to face (no conference

calls).

(D) The Interview Committee shall consist of:

*******

(E) The Oral Exam part shall consist of 10

questions drawn either from a pool of standard

questions or developed by the Interview Committee

prior to the interview. The oral exam questions

shall relate to any special needs of the vacant

facility as well as to standard responsibilities

and knowledge areas of Business Enterprises

operators. Each member of the Interview Committee

shall evaluate the applicant’s response to each

question in the oral exam. The applicant shall

receive one point by demonstrating basic knowledge,

the applicant shall receive one and one-half points

for demonstrating above average knowledge, and the

applicant shall be awarded two points for

demonstrating exceptional knowledge for each

interview question. There shall be at least one

question involving a calculation and a talking

calculator shall be provided, although applicants

may bring their own. The oral exam shall yield a

possible 20 points.

(F) The interview part shall consist of a variety

of questions in a give and take format. Each

member of the Interview Committee shall evaluate

the applicant’s response to the interview questions

and shall award up to 10 additional points based on

the applicant’s previous food service experience,

knowledge and financial performance. If the

applicant meets the requirements for the facility,

the applicant shall receive five additional points.

If the applicant’s qualifications exceed the

requirements of the facility, he may be awarded up

to ten additional points. The interview shall

include the following elements: questions related

to business philosophy to promote general

discussion to enable the interview panel to

evaluate the applicant’s expertise, maturity,

experience and ability; a discussion of any related

work experience outside the [BEP]; at least two

business math questions. Since points are awarded

for seniority, time in the [BEP] shall not be

considered as a reason to award points; however,

relevant work experience in the [BEP] may be

discussed and taken into consideration. Applicants

may bring letters of recommendation, certificates,

and other documents that would aid the Interview

Committee in awarding its discretionary points.

(G) Each interviewer shall award discretionary

points individually and the total score of Oral

Exam and Interview points from each interviewer

shall be averaged and added to the applicant’s

points from the other Sections.

10A N.C. Admin. Code § 63C.0204(d)(5) (the “Regulation”).

Plaintiff asserts that the Interview Subsection qualifies as

ambiguous. (See Docket Entry 19-1 at 20-23; Docket Entry 21 at 10-

12.) As such, Plaintiff maintains, the Arbitration Award erred by

not deferring to Plaintiff’s alleged 20-year “policy” of

interpreting the Regulation “to provide for a single interview with

two scoring components.” (Docket Entry 21 at 11; see also Docket

Entry 19-1 at 20-23.) In Plaintiff’s view, contrary to the

arbitrators’ findings, “there is no requirement for panel members

to ask additional ‘give and take’ questions beyond the oral exam

component or to do anything beyond what was done here.” (Docket

Entry 21 at 11-12.) Plaintiff’s contentions warrant no relief.

First, as the Arbitration Award correctly found, the

Regulation and Interview Subsection remain unambiguous on this

issue. (See A.R. 1146-47.)17 The Regulation provides for an “Oral

Exam part” consisting of ten preselected standardized “oral exam

questions [that] relate to any special needs of the vacant facility

as well as to standard responsibilities and knowledge areas of

Business Enterprises operators.” 10A N.C. Admin. Code

§ 63C.0204(d)(5)(E) (the “Oral Exam Subsection”) (emphasis added).

These oral exam questions must include “at least one question

involving a calculation,” and “[t]he oral exam shall yield a

possible 20 points,” id., towards the “30 points maximum”

attainable in the “Oral Exam/Interview,” 10A N.C. Admin. Code

§ 63C.0204(d)(5)(A).

The Regulation additionally mandates an “interview part [that]

consist[s] of a variety of questions in a give and take format,”

which can yield “up to 10 additional points” towards the possible

30-point total. 10A N.C. Admin. Code § 63C.0204(d)(5)(F). The

Regulation further specifies the “elements” required for the

“interview part,” including “questions related to business

philosophy to promote general discussion . . .[,] a discussion of

any related work experience outside the [BEP, and] at least two

business math questions.” Id. Although cautioning that time in

the BEP alone cannot “be considered as a reason to award points,”

the Regulation also permits “relevant work experience in the [BEP

17 “[D]etermining whether a regulation . . . is ambiguous

presents a legal question, which [the Court] determine[s] de novo.

Humanoids Grp. v. Rogan, 375 F.3d 301, 306 (4th Cir. 2004).

to] be discussed and taken into consideration.” Id. Finally, the

Regulation instructs the Interview Committee to award the ten

possible points for the “interview part” based on their

“evaluat[ion of] the applicant’s response to the interview

questions.” Id. (emphasis added).

Accordingly, the Regulation unambiguously requires both a ten-

question “Oral Exam,” 10A N.C. Admin. Code § 63C.0204(d)(5)(E), as

well as a separate “interview” involving “a variety of questions in

a give and take format,” 10A N.C. Admin. Code § 63C.0204(d)(5)(F).

Given that the Regulation’s plain language mandates this two-part

process, Plaintiff errs in contending that “there is no requirement

for panel members to ask additional ‘give and take’ questions

beyond the oral exam component” (Docket Entry 21 at 11-12).

Rather, as the Arbitration Award correctly concluded, under the

Regulation, “[Plaintiff] has no discretion to conduct or not

conduct a ‘give and take’ discussion interview. [The Interview

Subsection] has no ambiguity in that regard. A ‘give and take’

interview is required under the regulations. [Plaintiff] is

obligated to conduct such interviews and award interview points.”

(A.R. 1146.)

Moreover, “[b]ecause the [R]egulation is not ambiguous

. . .[,] deference [to Plaintiff’s alleged interpretation18] is

18 “Auer deference” refers to the practice of “defer[ring] to

agencies’ reasonable readings of genuinely ambiguous regulations.”

(continued...)

unwarranted.” Christensen v. Harris Cty., 529 U.S. 576, 588

(2000). As the Supreme Court recently explained:

[A] court should not afford Auer deference unless the

regulation is genuinely ambiguous. See [id. at] 588;

[Bowles v.] Seminole Rock [& Sand Co.], 325 U.S. [410,]

414 [(1945)] (deferring only “if the meaning of the words

used is in doubt”). If uncertainty does not exist, there

is no plausible reason for deference. The regulation

then just means what it means — and the court must give

it effect, as the court would any law. Otherwise said,

the core theory of Auer deference is that sometimes the

law runs out, and policy-laden choice is what is left

over. See supra, at 2412 - 2413. But if the law gives

an answer — if there is only one reasonable construction

of a regulation — then a court has no business deferring

to any other reading, no matter how much the agency

insists it would make more sense. Deference in that

circumstance would “permit the agency, under the guise of

interpreting a regulation, to create de facto a new

regulation.” See Christensen, 529 U.S. at 588.

Kisor v. Wilkie, __ U.S. __, __, 139 S. Ct. 2400, 2415 (2019)

(parallel citations omitted). Because the Regulation does not

qualify as “genuinely ambiguous,” id. at __, 139 S. Ct. at 2414,

deference to Plaintiff’s alleged interpretation that “the

[Regulation] provide[s] for a single interview with two scoring

components” (Docket Entry 21 at 11) “is ‘unwarranted,’” Kisor, __

U.S. at __, 139 S. Ct. at 2414.19

18(...continued)

Kisor v. Wilkie, __ U.S. __, __, 139 S. Ct. 2400, 2408 (2019).

19 Moreover, even assuming that the Regulation qualified as

ambiguous, Plaintiff has not established that this purported

interpretation reflects the “authoritative, expertise-based, fair[,

and] considered judgment,” id., 139 S. Ct. at 2414 (internal

quotation marks omitted), of the agency tasked with administering

the RSA. As support for its purported policy, Plaintiff cites only

(continued...)

In addition, the Arbitration Award correctly determined that

Plaintiff failed to afford Defendant the required interview.20

Here, the interviewers asked Defendant ten questions, each of which

he answered without further follow-up from any of the interviewers.

(See A.R. 688-97.)21 They then asked Defendant whether he had any

19(...continued)

to the conclusory statement in the Arbitration Award’s dissenting

opinion that Plaintiff interprets the Regulation as authorizing “a

single face-to-face event with two scoring components” (A.R. 1171)

and to Clay Pope’s testimony at the full evidentiary hearing that

“for the last 15 years or so” the oral exam/interviews have been

done the “[s]ame way,” with “the interview and oral exam” being

“considered one and the same” (A.R. 54, 55). (See Docket Entry 19-

1 at 23; Docket Entry 21 at 11.) Plaintiff has not shown, however,

that the unsupported assertion of either the dissenting arbitrator

or Clay Pope (chief of the BEP rather than of Plaintiff) represents

the relevant “agency’s ‘authoritative’ or ‘official position,’

rather than [a] more ad hoc statement not reflecting the agency’s

views.” Kisor, __ U.S. at __, 139 S. Ct. at 2416. Absent proof

that the alleged interpretation “at the least emanate[s] from those

actors, using those vehicles, understood to make authoritative

policy in the relevant context,” the Court could not defer to the

purported interpretation even if the Regulation actually suffered

from ambiguity. Id., 139 S. Ct. at 2416.

20 Plaintiff suggests a de novo standard of review applies to

the issue of whether “[D]efendant was . . . afforded a ‘give and

take’ interview in accordance with [the Interview Subsection]”

(Docket Entry 19-1 at 24). (See id. at 23-25; see also Docket

Entry 21 at 12 (“Under any fair analysis the actions taken by these

panel members would meet the requirements as set out in the

[C]ode.”).) Arguably, the challenged determination constitutes a

factual finding subject to the substantial evidence standard.

See 5 U.S.C. § 706(2)(E). Under any standard of review, however,

the Arbitration Award correctly determined that Defendant did not

receive the required interview.

21 At the time, Clay Pope (the head interviewer (see, e.g.,

A.R. 701)) called these questions the “interview questions” (A.R.

697), but he later described them as the “oral exam” (A.R. 58).

The differing terminology apparently reflects his practice of

(continued...)

questions or wished to present anything. (See A.R. 697 (“All

right. ·That concludes the interview questions. Now, [Defendant],

any questions you have or anything you’d like to [inaudible]

present?”).) Defendant then presented “a few things” (id.),

without interruption by, or discussion with, the interview panel

(see A.R. 697-701). After Defendant’s presentation, the

interviewers declined to ask any further questions, at which point

the transcript states: “Interview Concludes.” (A.R. 701 (all-cap

font omitted).)

This event does not satisfy the requirements for “[t]he

interview part,” 10A N.C. Admin. Code § 63C.0204(d)(5)(F), of the

“Oral Exam/Interview Section[],” 10A N.C. Admin. Code

§ 63C.0204(c)(5). The Regulation specifies that “[t]he interview

part shall consist of a variety of questions in a give and take

format” that “promote general discussion.” 10A N.C. Admin. Code

§ 63C.0204(d)(5)(F). “Give and take” signifies an “[e]xchange of

talk, esp[ecially] of repartee,” Give and take, Oxford English

Dictionary, https://www.oed.com/view/Entry/78556#eid2944361 (last

visited Aug. 23, 2019), which in turn means, inter alia, “a lively

conversation,” Repartee, Oxford English Dictionary,

https://www.oed.com/view/Entry/162666 (last visited Aug. 23, 2019).

The record reflects that no such exchange occurred here; instead,

21(...continued)

conflating the interview and oral exam, in which “the interview is

an oral exam” (A.R. 56).

it reveals that (i) the interview panel conducted an oral exam

(which contained no questions regarding at least one of the

interview part’s “elements,” namely “related work experience

outside the [BEP],” 10A N.C. Admin. Code § 63C.0204(d)(5)(F) (see

A.R. 688-97)), (ii) asked Defendant a single additional question —

“any questions you have or anything you’d like to [inaudible]

present?” (A.R. 697) — and (iii) listened passively to Defendant’s

subsequent presentation (see A.R. 697-701).

In sum, the Regulation unambiguously requires both an Oral

Exam and an Interview, which Plaintiff failed to provide to

Defendant. Accordingly, the Court should affirm the Arbitration

Award’s “finding [that Plaintiff] failed to conduct a give and take

interview as a basis for awarding discretionary points in violation

of 10A N.C.A.C. § 63C.0204(d)(5)(F)” (Docket Entry 19-1 at 20

(capitalization and emphasis omitted)).

B. Eller’s Points

Plaintiff next contends that “there was no substantial

evidence upon which the arbitration panel could reasonably conclude

that Mr. Eller’s [sic] awarded discretionary points arbitrarily.”

(Id. at 28.) In so arguing, Plaintiff urges the Court to apply the

“[a]rbitrary and capricious standard” of “deferential review” to

Eller’s award of the ten potential points associated with “[t]he

interview part,” 10A N.C. Admin. Code § 63C.0204(d)(5)(F), of

Defendant’s Oral Exam/Interview. (See Docket Entry 19-1 at 25-28.)

The Court should reject these arguments.

As a preliminary matter, the Arbitration Award, not Eller’s

discretionary points determination, constitutes the “final agency

action” subject to the APA’s arbitrary and capricious review

standard. See, e.g., Sauer, 668 F.3d at 650 (“An arbitration

decision under the [RSA] is ‘subject to appeal and review as a

final agency action’ under the standards set forth in the [APA].”

(quoting 20 U.S.C. § 107d-2(a))); Browder, 2000 WL 1724027, at *2

(“The underlying arbitration panel decision we review today is

deemed a final agency action under the [APA].”). In addition,

because they did not afford Defendant the required interview, the

interviewers’ award of discretionary points for the interview

component of the Oral Exam/Interview necessarily qualifies as

arbitrary. See, e.g., Shipbuilders Council of Am. v. United States

Dep’t of Homeland Sec., 770 F. Supp. 2d 793, 800 (E.D. Va. 2011)

(explaining that an agency’s determination “lacked any evidentiary

foundation and, therefore, violated the APA’s prohibition against

arbitrary and capricious decision making” (internal quotation marks

omitted)).

Finally, substantial evidence supports the Arbitration Award’s

conclusion that Eller’s consideration of information not disclosed

during Defendant’s Oral Exam/Interview violated the Regulation.

(See A.R. 1147.) Plaintiff maintains that “[it] has consistently

interpreted [the Interview Subsection] to mean that an applicant’s

relevant history within the BEP program may be discussed and/or

taken into consideration without any discussion of the same during

the interview.” (Docket Entry 19-1 at 26.) As support for this

alleged interpretation, Plaintiff relies on Pope’s description of

awarding discretionary points (see id. (quoting A.R. 77)),22 as well

as on Eller’s testimony that he awards discretionary points based

on information that “[they] don’t discuss [during] the interview”

(A.R. 93; see Docket Entry 19-1 at 27 (citing A.R. 93)). However,

Plaintiff proffers no evidence that the individual interviewers’

evidentiary hearing testimony as to their personal practices

regarding discretionary points constitutes the pertinent “agency’s

‘authoritative’ or ‘official position’ rather than a[] more ad hoc

statement not reflecting the agency’s views.” Kisor, __ U.S. at

__, 139 S. Ct. at 2416. Because Plaintiff fails to show that the

22 More specifically, the relevant testimony states:

Q. What is your definition of discretionary points?

A. The way I look at it is the way it goes in the rules.

It should be awarded five points if they can do the job.

And then from five to ten, it’s really at your discretion

what they presented, what I know about them as an

operator, how they’ve performed, that kind of thing.

Q. So for each person on the panel it would be a

subjective decision on how many points?

A. Right.

(A.R. 77.)

alleged interpretation “at the least emanate[s] from those actors,

using those vehicles, understood to make authoritative policy in

the relevant context,” the Court could not defer to the purported

interpretation even if the Interview Subsection qualified as

ambiguous. Id., 139 S. Ct. at 2416; see also id., __ U.S. at __,

139 S. Ct. at 2414 (explaining that courts can defer only to an

agency’s “authoritative, expertise-based, fair[, and] considered

judgment” (internal quotation marks omitted)).

In any event, as the Arbitration Award correctly concluded,

the Regulation unambiguously limits discretionary point awards to

material discussed during the interview. (See A.R. 1147 (“The

regulations are clear, however. The awarding of points must be

based on matters covered during an interview. No provision exists

for ex parte or undisclosed considerations.”).) The Interview

Subsection specifies that “[e]ach member of the Interview Committee

shall evaluate the applicant’s response to the interview questions

and shall award up to 10 additional points . . . .” 10A N.C.

Admin. Code § 63C.0204(d)(5)(F) (emphasis added). It further

details “elements” that the interview must include, such as “a

discussion of any related work experience outside the [BEP].” Id.

It then specifies that, “[s]ince points are awarded for seniority,

time in the [BEP] shall not be considered as a reason to award

points; however, relevant work experience in the [BEP] may be

discussed and taken into consideration.” Id.23 Thus, the Interview

Subsection makes discussion of relevant BEP experience a

precondition to its consideration in awarding discretionary points.

Any other interpretation would impermissibly render superfluous the

phrase “discussed and.” See Shipbuilders Council of Am. v. United

States Coast Guard, 578 F.3d 234, 244 (4th Cir. 2009) (“In

interpreting statutes and regulations, [courts] have a duty, where

possible, ‘to give effect’ to all operative portions of the enacted

language, including its ‘every clause and word.’”).

Finally, substantial evidence24 supports the Arbitration

Award’s finding that Eller did not base his award of discretionary

points on information discussed during Defendant’s “Oral

Exam/Interview.” (A.R. 1147.) Eller testified that he based his

discretionary points on three facts not discussed during the Oral

Exam/Interview: Defendant’s alleged purchase of “Gatorade at a

Sam’s Club for his vending facility” (A.R. 1124), Defendant’s

alleged month-long absence from his location, and Defendant’s

23 In other words, the Interview Subsection permits, but does

not require, an interview committee to discuss and consider

relevant BEP experience in awarding discretionary points.

24 “[Substantial evidence] means such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion.”

Richardson v. Perales, 402 U.S. 389, 401 (1971) (internal quotation

marks omitted); see also Tyler, 904 F.3d at 1178 n.7 (explaining

that, under the “substantial evidence and arbitrary or capricious

. . . . standards, [a court] do[es] not overturn an agency’s

factual findings if ‘a reasonable mind would consider the evidence

adequate to support the conclusion reached’”).

allegedly lenient sanitation grader. (See A.R. 101-03; 842-44.)25

Therefore, substantial evidence supports the Arbitration Award’s

conclusion that “grader Eller also violated [the Interview

Subsection] when he considered a Gatorade incident, an occasion

when the petitioner was away from his facility as well as his

sanitation grade.” (A.R. 1147.)

C. Remedy

To remedy the foregoing violations, the Arbitration Award

ordered Plaintiff to delete the previous discretionary interview

point awards, reconvene the same interview panel, and conduct

proper interviews of “the original eight applicants.” (A.R. 1161;

see A.R. 1148, 1149.) It further ordered that, if Defendant “has

the highest point total after points are awarded by the

reconstituted interview panel, he shall be assigned the I-85 [Rest

Stop] . . . .” (A.R. 1162.) Plaintiff raises the following

challenge to this order:

The arbitration panel’s order that the licensing

agency delete all discretionary points awarded for the

I-85 [Rest Stop] contradicts the Department of Education

approved licensing agency regulation 10A N.C.A.C.

25 Eller changed his testimony regarding the source of this

information between the Grievance Hearing and the Full Evidentiary

Hearing. (Compare A.R. 101-03, with A.R. 842-44.) However, he

consistently testified that (i) he considered this information,

which (ii) was not discussed in the interview. (See, e.g., A.R.

92, 93, 101-03, 842-50.) Eller further testified that, if he had

not considered this information, he would have given Defendant

“[p]ossibly a six” for discretionary points. (A.R. 110.) If Eller

increased Defendant’s point total at all, Defendant would have won

the I-85 Rest Stop. (See A.R. 342, 1125, 1126.)

§ 63C.0204 regarding the award of facilities. The

arbitration panel’s decision effectively creates an

arbitrary result, as any potential award of a location

that does not consider discretionary points directly

violates 10A N.C.A.C. § 63C.0204.

(Docket Entry 19-1 at 30, 31.)

This argument misconstrues the Arbitration Award, which merely

instructs Plaintiff to redo the interview with fresh discretionary

points awards, to ensure that the award of the I-85 Rest Stop

complies with the Regulation. (See A.R. 1149 (“The original panel

. . . must be reconstituted to conduct (5)(F) interviews with each

of the applicants seeking a valid point total. Prior (5)(F) points

shall be deleted from the total score of each applicant. The

reconstituted panel shall conduct interviews with and award points

to all eight applicants and award points in accordance with

subsection (5)(F). Each applicant’s total score must be

recalculated. Then the applicant with the highest score must be

awarded the I-85 [Rest Stop].”).) It does not, as Plaintiff

contends, direct the awarding of the I-85 Rest Stop without

considering discretionary points.26

Accordingly, Plaintiff’s challenge to the remedy portion of

the Arbitration Award’s conclusions regarding the handling of

discretionary points, like the related objections to the

26 Indeed, the Arbitration Award explicitly rejected the

prospect of omitting discretionary interview points from

applicants’ scores. (See A.R. 1148 (“The difficulty with this

alternative is its[] noncompliance with subsection (5)(F). . . .

The only remedy for noncompliance is compliance.”).)

Arbitration Award’s determinations about the inadequacy of the

Interview and the arbitrary quality of Eller’s assignment of

points, entitle Plaintiff to no relief.

IV. Confidentiality Regulation Challenges

Lastly, Plaintiff challenges the Arbitration Award’s order

that “[t]he Agency and [Plaintiff] shall set aside all regulations

prohibiting or restricting licensee access to relevant financial

data under 20 U.S.C. § 107b-1” (A.R. 1161). (See Docket Entry 19-1

at 28-30.)27 This ruling originated with Defendant’s request for

certain financial information to calculate his compensatory damages

claim. (See A.R. 1150-56.) Plaintiff refused to disclose such

information (see A.R. 1150), on the grounds that “federal and state

regulations prohibit disclosure of financial information under

confidentiality provisions” (A.R. 1151).

The Arbitration Award found that these confidentiality

provisions violated Section 107b-1 of the RSA, which provides:

27 In that context, “Agency” apparently refers to the DOE.

(See A.R. 1153-55, 1160-62.) However, consistent with the federal

statute, see 20 U.S.C. § 107d-2(b)(1) (providing for arbitration

between SLA and blind vendor), the DOE took no part in the

arbitration between Plaintiff and Defendant. (See, e.g., Docket

Entry 1-1 at 1 (identifying parties in Arbitration Award); Docket

Entry 14-1 at 4 (acknowledging, in Supplemental Award, that “the

agency is not named as a party”).) The arbitration panel thus

lacked authority over the DOE. Therefore, to the extent that

Defendant requests wholesale confirmation of both awards

(see Docket Entry 20 at 51), the Court should decline to enforce

those aspects of the Arbitration Award and Supplemental Award that

address the DOE. See 5 U.S.C. § 706(2)(C).

In addition to other requirements imposed in this title

and in this chapter upon [SLAs], such agencies shall —

(1) provide to each blind licensee access to all

relevant financial data, including quarterly and

annual financial reports, on the operation of the

State vending facility program;

20 U.S.C. § 107b-1(1). As the Arbitration Award stated, “[t]his

language is clear and unambiguous. It is not limited to quarterly

and annual financial reports.” (A.R. 1151.) In the arbitration

panel’s opinion, without information regarding a facility’s “gross

profit, cost of goods sold, overhead expenses[, and] net

profit. . . .[,] a licensee may be making a financial mistake” in

applying for a facility, and “Congress did not intend to take

advantage of blind handicapped persons under the [RSA].” (A.R.

1152.) As such, the arbitrators concluded that “both federal and

state regulations conflict with the statute. The regulations

simply are not in accord with the statutory language. The

regulations prohibiting licensee access to facility financial data

must be set aside.” (Id.)

Notably, in asking the Court to vacate this portion of the

Arbitration Award, Plaintiff fails to address the arbitrators’

ruling that the regulation conflicts with Section 107b-1 of the

RSA. (See Docket Entry 19-1 at 28-30.) In turn, Defendant

maintains only that this ruling “should be affirmed for the reasons

provided by the Panel at [A.R.] 1150-56, which are incorporated

[into Defendant’s memorandum] by reference.” (Docket Entry 20 at

50.) The parties “cannot expect the Court to do [their] work for

[them] . . . .” Baptiste v. Capital One Bank (USA), N.A., No. CIV.

11-3535, 2012 WL 1657207, at *1 (D. Md. May 10, 2012).

Nevertheless, it bears noting that, in determining that

certain state and federal regulations violated the RSA, the

arbitrators overlooked the fact that the RSA distinguishes between

“the operation [and] administration of the vending facility

program,” 20 U.S.C. § 107b(6), but the pertinent statutory

provision addresses only the “operation” of such programs, 20

U.S.C. § 107b-1(1). (See A.R. 1150-56.) This distinction “invokes

the rule that ‘[w]here Congress includes particular language in one

section of a statute but omits it in another section of the same

Act, it is generally presumed that Congress acts intentionally and

purposely in the disparate inclusion or exclusion.’” Brown v.

Gardner, 513 U.S. 115, 120 (1994) (brackets in original).

Moreover, this distinction carries particular relevance here given

that the challenged state regulation specifically references the

administration of the program. See 10A N.C. Admin. Code § 63C.0206

(“All information and records pertaining to participants in the

[BEP] shall be confidential and may not be revealed except in the

administration of the program, by the consent of the participant,

or as otherwise required by law.”). Further, as the arbitrators

themselves posit, arguably the state regulation permits disclosure

of the disputed facility financial information in connection with

filling a facility vacancy. (See A.R. 1151.)

In addition, that Section 107b-1’s “language is clear and

unambiguous” insofar as “[i]t is not limited to quarterly and

annual financial reports” (id.), does not automatically mean that

Section 107b-1 mandates the disclosure of all information obtained

in the “operation or administration of the vending facility

program,” 20 U.S.C. § 107b(6). Indeed, Section 107b-1 limits the

permissible information to “relevant financial data” rather than

“all financial data,” see 20 U.S.C. § 107b-1(1), suggesting that

licensees should have access only to certain operation-specific

financial information. Such information might include, for

instance, information regarding accrued vending machine income, see

20 U.S.C. § 107d-3(c). However, neither the arbitrators nor

Defendant point to anything in the RSA suggesting that the

“relevant” financial data encompasses the desired facility-specific

information (see A.R. 1150-52; Docket Entry 20 at 50), and

Plaintiff merely asserts, without support or elaboration, that

“[f]inancial data of individual blind vendors’ sales performance is

not relevant to ‘the operation of the State vending facility

program.’” (Docket Entry 19-1 at 29 (quoting 34 C.F.R. § 395.12).)

In sum, the arbitrators’ reasoning, which Defendant adopts,

does not clearly establish that the challenged “regulations

conflict with the statute” (A.R. 1152), and, in any event,

Plaintiff’s sovereign immunity effectively moots the need for

disclosure of the disputed information, as Defendant cannot recover

compensatory damages. Under these circumstances, the Court should

decline to enforce this portion of the Arbitration Award.

CONCLUSION

Sovereign immunity precludes the Arbitration Award’s

contingent grant of compensatory damages, but not its award of

attorney’s fees. In addition, the Arbitration Award correctly

determined (i) that Plaintiff violated the Regulation by failing to

conduct the required give and take interview, (ii) that Eller

violated the Regulation by basing his discretionary points award on

undisclosed considerations, and (iii) that Plaintiff must re-award

discretionary points after conducting proper interviews. However,

the Court should not enforce the Arbitration Award’s directive

regarding disclosure of financial information.

IT IS THEREFORE RECOMMENDED that the Complaint/Petition

(Docket Entry 1) be granted in part and denied in part as follows:

1. The Arbitration Award be vacated insofar as it authorizes

compensatory damages. (See Docket Entry 1-1 at 51.)

2. The Arbitration Award and Supplemental Award be affirmed in

their award of attorney’s fees. (See id.; Docket Entry 14-1 at

24.)

3. The Arbitration Award be affirmed in its findings that

Plaintiff and Eller violated the Regulation. (See Docket Entry 1-1

at 50.)

4. The Arbitration Award be affirmed in ordering the deletion

of previous discretionary point awards. (See id.)

5. The Arbitration Award be affirmed in ordering Plaintiff to

reconstitute the original interview panel, perform the required

give and take interviews with all eight original applicants, award

discretionary points based only on information disclosed in such

interviews, in conformity with the Regulation (see id.), and award

the I-85 Rest Stop to Defendant if he “has the highest point total

after points are awarded by the reconstituted interview panel” (id.

at 51).

6. The Arbitration Award be vacated insofar as it orders

Plaintiff to set aside confidentiality regulations and provide

blind licensees access to specified financial information. (See

id.)

This 23rd day of August, 2019.

/s/ L. Patrick Auld

L. Patrick Auld

United States Magistrate Judge

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.