Sauer v. United States Department of Education

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ANTHONY P. SAUER, Director of the 

California Department of

Rehabilitation,

Plaintiff-Appellant,

No. 10-55642

v.

UNITED STATES DEPARTMENT OF  D.C. No.

2:09-cv-01161-

EDUCATION, REHABILITATION

AHM-PLA

SERVICES ADMINISTRATION,

Defendant-Appellee,

DAVID ZELICKSON,

Intervenor-Appellee.



ANTHONY P. SAUER, Director of the 

California Department of

Rehabilitation,

Plaintiff-Appellee,

No. 10-55877

v.

D.C. No.

UNITED STATES DEPARTMENT OF

EDUCATION, REHABILITATION  2:09-cv-01161-

AHM-PLA

SERVICES ADMINISTRATION,

Defendant-Appellant, OPINION

and

DAVID ZELICKSON,

Intervenor.



Appeal from the United States District Court

for the Central District of California

A. Howard Matz, District Judge, Presiding

1091

1092 SAUER v. U.S. DEPARTMENT OF EDUCATION

Argued December 6, 2011

Submitted January 26, 2012

Pasadena, California

Filed February 3, 2012

Before: John T. Noonan, Ronald M. Gould, and

Sandra S. Ikuta, Circuit Judges.

Opinion by Judge Ikuta

1094 SAUER v. U.S. DEPARTMENT OF EDUCATION

COUNSEL

Ismael A. Castro (argued), Supervising Deputy Attorney Gen-

eral, and Julie Weng-Gutierrez (argued), Supervising Deputy

Attorney General, Sacramento, California, for plaintiff, appel-

lant, and cross-appellee Anthony P. Sauer, Director of the

California Department of Rehabilitation.

Jeffrica J. Lee (argued), DOJ, Washington, D.C., for

defendant-appellee and cross-appellant United States Depart-

ment of Education, Rehabilitation Services Administration.

George Langendorf, Esq. (argued), Arnold & Porter LLP, San

Francisco, California, for intervenor-appellee David Zelick-

son.

OPINION

IKUTA, Circuit Judge:

The California Department of Rehabilitation (DOR) and

the United States Department of Education appeal from the

district court’s decision enforcing a 2008 arbitration award

issued pursuant to 20 U.S.C. § 107d-1(a) of the Randolph-

Sheppard Vending Stand Act (the Act). We have jurisdiction

pursuant to 28 U.S.C. § 1291, and we reverse.

SAUER v. U.S. DEPARTMENT OF EDUCATION 1095

I

Some familiarity with the structure of the Randolph-

Sheppard Act and the manner in which it provides for resolu-

tion of disputes is necessary to understand the sequence of

events in this case. We briefly provide the relevant back-

ground.

A

The Randolph-Sheppard Act establishes a cooperative pro-

gram between the federal government and the states to assist

blind persons who wish to operate vending facilities on fed-

eral property. See 20 U.S.C. § 107. The stated purposes of the

Act are “providing blind persons with remunerative employ-

ment, enlarging the economic opportunities of the blind, and

stimulating the blind to greater efforts in striving to make

themselves self-supporting.” § 107(a). The Rehabilitation Ser-

vices Administration within the Department of Education

administers the Act with the help of state agencies designated

by the Secretary of Education. §§ 107(b), 107a(a), 107b. In

participating states, these state agencies (referred to as “state

licensing agencies”) issue licenses to blind persons that make

them eligible to operate vending facilities on federal proper-

ties within that state. § 107a(b). In order to establish a vend-

ing site, a state licensing agency must seek authorization in

the form of a permit from the federal agency in control of the

property on which the site is to be located. § 107a(c); 34

C.F.R. § 395.16.

State participation in the Randolph-Sheppard program is

voluntary. See 20 U.S.C. § 107b. A state agency that wishes

to participate must apply to the Secretary for designation as

a state licensing agency and agree to “cooperate with the Sec-

retary in carrying out the purpose” of the Act, § 107b(1), as

well as comply with a number of more specific requirements,

see, e.g., § 107b(2)-(6). For example, a state licensing agency

must “give preference to blind persons who are in need of

1096 SAUER v. U.S. DEPARTMENT OF EDUCATION

employment” when issuing licenses, § 107a(b); provide each

licensed blind vendor with “such vending facility equipment,

and adequate initial stock of suitable articles to be vended

therefrom, as may be necessary,” § 107b(2); make periodic

reports to the Secretary of Education, § 107b(4); provide

licensed blind vendors with relevant financial data, § 107b-1;

conduct a biennial election of a Committee of Blind Vendors

to represent all blind licensees in the state program, § 107b-

1(2); cooperate with the Committee in the training of blind

licensees, § 107b-1(3); disburse vending machine income to

licensed blind vendors according to a particular formula,

§ 107d-3; 34 C.F.R. § 395.8(a)-(b); and use any remaining

vending machine income to establish retirement and other

benefits plans for the blind and to purchase, maintain, and

replace vending equipment, 20 U.S.C. § 107d-3(c); 34 C.F.R.

§ 395.8(c).

B

The Act also provides for proceedings to resolve two types

of disputes: (1) disputes between the licensed blind vendor

and the state licensing agency, on the one hand, and (2) dis-

putes between the state licensing agency and the federal

agency in control of the property on which the vending site

is located, on the other.

The first type of dispute, between the blind licensee and the

state licensing agency, is governed by the procedures set forth

in §§ 107b(6), 107d-1(a), 107d-2(a), and 107d-2(b)(1) of the

Act. At the request of any blind licensee who is dissatisfied

with the operation of the program, the state licensing agency

must give the blind licensee a full evidentiary hearing. 20

U.S.C. §§ 107b(6); 107d-1(a). If the blind licensee’s griev-

ances are not resolved by such a hearing, the blind licensee

“may file a complaint with the Secretary who shall convene

a panel to arbitrate the dispute.” § 107d-1(a).1

1

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

(a) Hearing and arbitration

SAUER v. U.S. DEPARTMENT OF EDUCATION 1097

The second type of dispute, between a state licensing

agency and the federal entity in control of the property on

which a vending site is located, is governed by §§ 107d-1(b),

107d-2(a), and 107d-2(b)(2) of the Act. If a state licensing

agency determines that the federal entity in control of the

property on which a vending site is located is failing to com-

ply with the Act, the state agency “may file a complaint with

the Secretary who shall convene a panel to arbitrate the dis-

pute.” § 107d-1(b).2

If a blind licensee triggers an arbitration proceeding, it is

governed by § 107d-2(b)(1) of the Act.3 In these circum-

Any blind licensee who is dissatisfied with any action arising

from the operation or administration of the vending facility pro-

gram may submit to a State licensing agency a request for a full

evidentiary hearing, which shall be provided by such agency in

accordance with section 107b(6) of this title. If such blind

licensee is dissatisfied with any action taken or decision rendered

as a result of such hearing, he may file a complaint with the Sec-

retary who shall convene a panel to arbitrate the dispute pursuant

to section 107d-2 of this title, and the decision of such panel shall

be final and binding on the parties except as otherwise provided

in this chapter.

2

Section 107d-1(b) provides, in full:

(b) Noncompliance by Federal departments and agencies; com-

plaints by State licensing agencies; arbitration

Whenever any State licensing agency determines that any depart-

ment, agency, or instrumentality of the United States that has

control of the maintenance, operation, and protection of Federal

property is failing to comply with the provisions of this chapter

or any regulations issued thereunder (including a limitation on

the placement or operation of a vending facility described in sec-

tion 107(b) of this title and the Secretary’s determination thereon)

such licensing agency may file a complaint with the Secretary

who shall convene a panel to arbitrate the dispute pursuant to sec-

tion 107d-2 of this title, and the decision of such panel shall be

final and binding on the parties except as otherwise provided in

this chapter.

3

Section 107d-2(b)(1) provides, in full:

The arbitration panel convened by the Secretary to hear griev-

1098 SAUER v. U.S. DEPARTMENT OF EDUCATION

stances, the arbitration panel is composed of one member cho-

sen by the blind licensee, one member chosen by the state

licensing agency, and one member jointly designated by the

other two members. § 107d-2(b)(1). If a state licensing

agency triggers an arbitration proceeding, it is governed by

§ 107d-2(b)(2) of the Act.4 In this case, the panel is composed

ances of blind licensees shall be composed of three members

appointed as follows:

(A) one individual designated by the State licensing agency;

(B) one individual designated by the blind licensee; and

(C) one individual, not employed by the State licensing

agency or, where appropriate, its parent agency, who shall

serve as chairman, jointly designated by the members

appointed under subparagraphs (A) and (B).

If any party fails to designate a member under subparagraph

(1)(A), (B), or (C), the Secretary shall designate a member on

behalf of such party.

4

Section 107d-2(b)(2) provides, in full:

The arbitration panel convened by the Secretary to hear com-

plaints filed by a State licensing agency shall be composed of

three members appointed as follows:

(A) one individual, designated by the State licensing agency;

(B) one individual, designated by the head of the Federal

department, agency, or instrumentality controlling the Fed-

eral property over which the dispute arose; and

(C) one individual, not employed by the Federal department,

agency, or instrumentality controlling the Federal property

over which the dispute arose, who shall serve as chairman,

jointly designated by the members appointed under subpara-

graphs (A) and (B).

If any party fails to designate a member under subparagraph

(2)(A), (B), or (C), the Secretary shall designate such member on

behalf of such party. If the panel appointed pursuant to paragraph

(2) finds that the acts or practices of any such department,

agency, or instrumentality are in violation of this chapter, or any

regulation issued thereunder, the head of any such department,

agency, or instrumentality shall cause such acts or practices to be

terminated promptly and shall take such other action as may be

necessary to carry out the decision of the panel.

SAUER v. U.S. DEPARTMENT OF EDUCATION 1099

of one member chosen by the state-licensing agency, one

member chosen by the federal agency, and one member

jointly designated by the other two members. § 107d-2(b)(2).

Decisions by both types of panels are “final and binding on

the parties,” §§ 107d-1(a), 107d-1(b), except that each is

“subject to appeal and review as a final agency action for pur-

poses of chapter 7 of [the Administrative Procedure Act],”

§ 107d-2(a).

The Act treats vendor-triggered arbitrations differently than

state-triggered arbitrations in one significant respect. Whereas

§ 107d-2(b)(1) is silent as to the type of relief that a vendor-

triggered arbitration panel may grant, the Act provides that if

a state licensing agency triggers arbitration, and the arbitra-

tion panel determines that the federal agency is in violation of

the Act, the head of the federal agency “shall cause such acts

or practices to be terminated promptly and shall take such

other action as may be necessary to carry out the decision of

the panel.” § 107d-2(b)(2).

II

We now turn to the facts of this case. The California DOR

is the state licensing agency designated by the Secretary to

administer the Act in California. In 1993, the federal General

Services Administration (GSA), which manages the Roybal

Federal Building in downtown Los Angeles, granted DOR a

permit to establish a vending facility in the building.5 The

DOR contracted with David Zelickson, a blind vendor

licensed under the Act, to operate a snack shop in the build-

ing.

5

The GSA is the department responsible for managing the majority of

federal properties nationwide, and manages 762 properties in California.

See General Services Administration (GSA) Inventory of Owned and

Leased Properties: California (Jan. 20, 2012, 5:32 PM), http://

www.iolp.gsa.gov/iolp/BuildingsList.asp?sID=6&pOrd=c.

1100 SAUER v. U.S. DEPARTMENT OF EDUCATION

In 1997, GSA notified DOR that it intended to terminate

Zelickson’s employment at the Roybal Building because of

allegedly unprofessional behavior. The DOR opposed Zelick-

son’s termination, arguing that GSA had not established

“good cause” for Zelickson’s removal as required by state

laws governing the operation of the Randolph-Sheppard Act

program, and that DOR, and not GSA, was in charge of ven-

dor licensing and selection under the Act. Despite DOR’s

efforts, GSA suspended DOR’s permit to operate a vending

facility at the Roybal Building and issued a revocable license

to another party.

In October 1998, DOR filed an administrative complaint

against GSA with the Secretary and requested arbitration pur-

suant to § 107d-1(b) of the Act. On December 26, 2000, the

arbitration panel ruled that GSA had violated the Act by

expelling Zelickson without going through California’s hear-

ing process, and concluded that GSA had to reinstate Zelick-

son. Nonetheless, the panel determined that GSA should have

an opportunity to litigate Zelickson’s qualifications, and

therefore directed DOR to provide GSA with a forum in

which to do so. The arbitration panel held that “[i]f GSA does

not exercise its options to litigate the question of Mr. Zelick-

son’s qualifications within [30 days from the date of deci-

sion], then it must pay Mr. Zelickson the damages to which

he is entitled, namely the difference between what he has

been able to earn and what [the interim vendor] earned . . .

plus interest on those amounts of money.”

When GSA failed to reinstate Zelickson or take any steps

to litigate Zelickson’s qualifications within the 30-day period,

DOR made numerous unsuccessful attempts to secure GSA’s

compliance with the 2000 arbitration award. In March 2001,

DOR sent a letter to GSA insisting that GSA terminate its

contract with the new vendor and reinstate Zelickson. The fol-

lowing month, DOR sent GSA a letter demanding GSA’s

compliance with the panel’s decision. DOR and GSA then

met with a Department of Education official who attempted

SAUER v. U.S. DEPARTMENT OF EDUCATION 1101

to mediate their dispute. The Department of Education media-

tor informed DOR that his only role was to “facilitate dia-

logue” between the two agencies and that “despite the fact

that [the Department of Education] is DOR’s federal oversight

agency, [the Department of Education] is not in a position to

exert pressure on GSA to comply with the Award.” Mediation

was ultimately unsuccessful because GSA maintained its

position that “the arbitration panel lacked the authority to

award either the vendor or [DOR] damages from the Federal

government, and . . . in any event, the United States has not

waived its sovereign immunity with regard to Randolph-

Sheppard ‘damages.’ ” DOR later sought help from the Cali-

fornia Attorney General’s Office, which sent a letter to GSA

in December 2002 suggesting that the state might file suit if

GSA did not comply with the award or reach some other reso-

lution with DOR. This threat, too, was to no avail.

In addition to attempting to bring GSA into compliance

with the 2000 arbitration award, DOR repeatedly encouraged

Zelickson to consider competing for other vending locations,

and advised him he was unlikely to recover damages from

GSA. Although DOR assured Zelickson that taking a job at

another vending facility would not jeopardize his chances of

returning to the Roybal Building, Zelickson did not apply

elsewhere. DOR allowed Zelickson to operate a facility at a

Los Angeles traffic court location under an “interim” permit

until at least 2008, much longer than the usual six months’

duration for such a permit.

In 2006, Zelickson notified DOR that he was requesting an

evidentiary hearing under § 107d-1(a) regarding DOR’s fail-

ure to compel GSA to reinstate him at the Roybal Building.

DOR refused this request as untimely. Zelickson then filed a

complaint with the Department of Education under § 107d-

1(a) requesting arbitration of his dispute with DOR. The

Department of Education convened a second arbitration panel

pursuant to § 107d-2(b)(1) in order to determine whether

1102 SAUER v. U.S. DEPARTMENT OF EDUCATION

DOR had breached an obligation to enforce the 2000 arbitra-

tion award between DOR and GSA.

The second arbitration panel determined that DOR had

breached its obligation to Zelickson. According to the panel,

because GSA did not comply with the 2000 arbitration award

“despite the best efforts of DOR to secure compliance short

of a lawsuit,” DOR had a duty to seek enforcement of the

arbitration award in federal court. The panel reasoned that

“[t]here is no statutory or judicial prohibition against the

enforcement of an arbitration decision, and a lawsuit is the

only way [a state licensing agency] can protect its interest in

a facility it establishes, as well as protecting the blind ven-

dor’s interest,” because “[t]he blind vendor has no right to

enforce a favorable arbitration award on his own.” “Even

assuming that DOR has discretion whether or not to bring

lawsuits against violating federal agencies,” the panel held

that in this case the DOR abused its discretion by failing to

sue GSA given that “[t]here was no other way” to enforce

Zelickson’s rights.

Having concluded that DOR breached its obligation to Zel-

ickson by failing to file a lawsuit against GSA, the panel ruled

that because of this failure, “DOR became liable for the dam-

ages that were afforded to [Zelickson]” under the 2000 arbi-

tration award. Accordingly, the panel ordered DOR to pay

Zelickson $140,000 in damages, which amounted to $2,500

per month of lost earnings for the 56 months between Zelick-

son’s improper removal on December 1, 1997, and the date on

which DOR advised Zelickson “to make application for

another permanent facility without waiving his rights to return

to Roybal.” The panel also ordered DOR to pay Zelickson

$2,500 per month until it succeeded in reinstating him at

either the Roybal Federal Building or a comparable facility.

DOR protested this ruling, and in November 2008, DOR

filed suit against the Department of Education in federal dis-

trict court, seeking review of the 2008 arbitration award. Zel-

SAUER v. U.S. DEPARTMENT OF EDUCATION 1103

ickson later intervened to defend the panel’s decision. The

district court affirmed the award, and both DOR and the

Department of Education appeal.6

III

This appeal raises a single question: whether the 2008 arbi-

tration panel exceeded its authority under the Act when it

ruled that DOR had a statutory obligation to sue GSA for its

failure to comply with the 2000 arbitration award, and there-

fore was liable for damages in favor of Zelickson when it

failed to do so.

A

An arbitration decision under the Act is “subject to appeal

and review as a final agency action” under the standards set

forth in the Administrative Procedure Act (APA). See 20

U.S.C. § 107d-2(a). The APA requires a reviewing court to

“decide all relevant questions of law [and] interpret constitu-

tional and statutory provisions.” 5 U.S.C. § 706. In addition,

the reviewing court must “hold unlawful and set aside agency

action, findings, and conclusions” that are “arbitrary, capri-

cious, an abuse of discretion, or otherwise not in accordance

with law,” § 706(2)(A), or are “in excess of statutory jurisdic-

tion, authority, or limitations, or short of statutory right,” id.

§ 706(2)(C).

We review de novo the questions of law at issue in this

case, and must set aside the 2008 arbitration award if it is “not

in accordance with law.” § 706(2)(A); see also Del. Dep’t of

Health & Soc. Servs. v. U.S. Dep’t of Educ., 772 F.2d 1123,

1139 (3d Cir. 1985) (“[U]nder 20 U.S.C. § 107d-2(a) and 5

6

Although nominally on opposing sides, DOR and the Department of

Education agree that the arbitration panel exceeded its authority in issuing

the award against DOR; only Zelickson, as the real party in interest,

defends the arbitration panel’s award.

1104 SAUER v. U.S. DEPARTMENT OF EDUCATION

U.S.C. § 706(2)(A) our decision on legal questions is plena-

ry.”). In deciding the legal question whether the Act requires

a state licensing agency to sue a noncomplying federal

agency, we do not give any special deference to the arbitra-

tion panel’s interpretation of the Act. C.f. Chevron, U.S.A.

Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-45

(1984) (holding that courts should give considerable weight to

an executive agency’s construction of a statutory scheme that

it is entrusted to administer). Chevron deference “is warranted

only ‘when it appears that Congress delegated authority to the

agency generally to make rules carrying the force of law, and

that the agency interpretation claiming deference was promul-

gated in the exercise of that authority.’ ” Gonzales v. Oregon,

546 U.S. 243, 255-56 (2006) (quoting United States v. Mead

Corp., 533 U.S. 218, 226-27 (2001)). Deference is inapplica-

ble here because the Act does not delegate interpretive author-

ity to the arbitration panel; instead, it gives the Secretary of

Education the responsibility of administering the Act and

issuing interpretive regulations. See 20 U.S.C. § 107(b).

Although an arbitration panel’s decision is considered a final

action of the Secretary for purposes of appeal, see § 107d-

2(a), this is a legal fiction: an arbitration panel is composed

of members appointed by the parties to the arbitration, not of

Department of Education officials whose expertise merits our

deference. Mead Corp., 533 U.S. at 228. Indeed, in this case,

DOE opposes the arbitration panel’s interpretation of the Act.

B

[1] In addressing the legal question at issue, we begin with

the plain language of the Act. “Statutory interpretation

focuses on ‘the language itself, the specific context in which

that language is used, and the broader context of the statute

as a whole.’ ” United States v. Havelock, ___ F.3d ___, 2012

WL 29347 (9th Cir. Jan. 6, 2012) (quoting Robinson v. Shell

Oil Co., 519 U.S. 337, 341 (1997)). “If the text of the statute

is clear, this court looks no further in determining the statute’s

meaning.” K & N Eng’g, Inc. v. Bulat, 510 F.3d 1079, 1081

SAUER v. U.S. DEPARTMENT OF EDUCATION 1105

(9th Cir. 2007) (quoting United States v. Mendoza, 244 F.3d

1037, 1042 (9th Cir. 2001)) (internal quotation marks omit-

ted). By its terms, the Act does not require a state licensing

agency to sue a federal agency that refuses to comply with a

§ 107d-1(b) arbitration award. While a state agency that elects

to participate in the Randolph-Sheppard program agrees to a

number of detailed requirements and duties, see supra at

1095-96, there is no provision in the Act even mentioning

judicial enforcement of arbitration awards, let alone requiring

a state licensing agency to bring a judicial enforcement action

against a federal agency that refuses to comply with the Act.

[2] Nor is there any such implicit requirement in the Act.

To the contrary, the text of the statute weighs against an infer-

ence that Congress intended to require a state licensing

agency to bring an enforcement action against a federal

agency. First, the Act provides that when a state licensing

agency determines that a federal entity is violating the Act,

the state licensing agency “may file a complaint with the Sec-

retary who shall convene a panel to arbitrate the dispute.” 20

U.S.C § 107d-1(b) (emphasis added). As the Supreme Court

has explained, “[t]he word ‘may,’ when used in a statute, usu-

ally implies some degree of discretion,” United States v. Rod-

gers, 461 U.S. 677, 706 (1983), especially “when the same

[provision] uses both ‘may’ and ‘shall,’ ” in which case, “the

normal inference is that each is used in its usual sense—the

one act being permissive, the other mandatory,” Anderson v.

Yungkau, 329 U.S. 482, 485 (1947). Here, Congress’s use of

“may” and “shall” makes clear that it has given the state

licensing agency the discretion (not the obligation) to trigger

an arbitration proceeding with a noncompliant federal agency

while imposing a mandatory obligation on the Secretary to

convene an arbitration panel upon the state’s request. Because

Congress gave the state licensing agency the option whether

or not to pursue arbitration with a noncompliant federal

agency, we can infer that Congress did not intend to impose

a statutory duty on a state licensing agency to bring a judicial

1106 SAUER v. U.S. DEPARTMENT OF EDUCATION

enforcement action against the federal agency if it refuses to

comply with an arbitration decision.

There is a second textual indication that Congress did not

intend to impose such an obligation on a state licensing

agency: the Act provides that “[t]he Secretary shall pay all

reasonable costs of arbitration,” 20 U.S.C. § 107d-2(d), but

there is no requirement that the Secretary pay the costs of an

enforcement action. There would be little incentive for a state

licensing agency to file a complaint with the Secretary if the

consequence of a successful arbitration would be that the state

would have to bear either the cost of an enforcement action

in federal court or, as here, the cost of remedying the federal

agency’s violations.

Third, the structure of the Act weighs against interpreting

it as imposing a requirement on a state licensing agency to sue

any noncompliant federal agency, as such an interpretation

would be at odds with the Act’s emphasis on cooperation

between the states and the federal government. See § 107b

(requiring a state licensing agency “to cooperate with the Sec-

retary in carrying out the purpose of this chapter”); § 107a(c)

(requiring a state licensing agency to seek authorization from

a federal agency before establishing a vending site on federal

property); 34 C.F.R. § 395.37(a) (giving a state licensing

agency authority to initiate arbitration against a federal

agency only when the SLA determines that the federal agency

is failing to comply with the Act “and all informal attempts

to resolve the issues have been unsuccessful” (emphasis

added)). A state agency could reasonably decide not to pursue

a lawsuit against GSA given its ongoing relationship with

GSA in connection with other GSA-managed buildings.

[3] Therefore, the plain language of the statute weighs

against interpreting the Act as imposing a duty on state licens-

ing agencies to sue federal agencies, and holding them liable

for damages if they fail to do so.

SAUER v. U.S. DEPARTMENT OF EDUCATION 1107

C

[4] This interpretation of the text is supported by other

principles of statutory construction. First, the Supreme Court

“has recognized on several occasions over many years that an

agency’s decision not to prosecute or enforce, whether

through civil or criminal process, is a decision generally com-

mitted to an agency’s absolute discretion.” Heckler v. Chaney,

470 U.S. 821, 831 (1985) (citing United States v. Batchelder,

442 U.S. 114, 123-24 (1979); United States v. Nixon, 418

U.S. 683, 693 (1974); Vaca v. Sipes, 386 U.S. 171, 182

(1967); Confiscation Cases, 7 Wall. 454 (1869)).7 Although

this presumption “may be rebutted where the substantive stat-

ute has provided guidelines for the agency to follow in exer-

cising its enforcement powers,” id. at 832-33, there is no

language in the Act that provides such enforcement guidelines

to a state licensing agency; as explained above, the Act does

not expressly give state licensing agencies the right, let alone

the duty, to bring an action to enforce an arbitration award. In

the absence of any express statement in the Act, we conclude

that Congress has not varied from the general rule giving state

agencies absolute discretion on this issue.

[5] Second, while Congress may impose requirements on

states as a condition of participating in a federally funded pro-

gram, it “must do so unambiguously . . . , enabl[ing] the

States to exercise their choice knowingly, cognizant of the

consequences of their participation.” South Dakota v. Dole,

483 U.S. 203, 207 (1987) (alterations in original) (quoting

Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 17

(1981)). A state’s acceptance of its statutory obligations is not

“knowing” if the state “is unaware of the conditions or is

unable to ascertain what is expected of it.” Pennhurst, 451

7

Although these cases consider the discretion of a federal agency (not

a state agency), principles of federalism and comity direct us to apply the

same interpretative approach when considering the discretion of a state

agency to prosecute or bring an enforcement action.

1108 SAUER v. U.S. DEPARTMENT OF EDUCATION

U.S. at 17. If legislation compels a state to participate in a

federal program without its knowing agreement to the condi-

tions of participation, it may conflict with the Tenth Amend-

ment principle that Congress may not directly commandeer

the states “to administer or enforce a federal regulatory pro-

gram.” Printz v. United States, 521 U.S. 898, 935 (1997).

Here, the Act does not clearly require participating states to

sue federal agencies that refuse to comply with an arbitration

award, and therefore we cannot say that a state licensing

agency participating in the Randolph-Sheppard program has

accepted such an obligation knowingly. In the absence of a

clear congressional intent to the contrary, the canon of consti-

tutional avoidance counsels us to interpret the Act as not

imposing such a condition on the states’ participation in the

vendor program. See, e.g., Edward J. DeBartolo Corp. v. Fl.

Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568,

575 (1988).

[6] We also note that two of our sister circuits have held

that an arbitration panel convened under § 107d-1(b) lacks

authority to order a federal agency to take remedial action;

under this interpretation of the Act, a state licensing agency

would not have the ability (let alone the obligation) to enforce

a § 107d-1(b) arbitration decision against the federal govern-

ment. See Md. State Dep’t of Educ. v. U.S. Dep’t of Veterans

Affairs, 98 F.3d 165, 169-70 (4th Cir. 1996); Ga. Dep’t of

Human Res. v. Nash, 915 F.2d 1482, 1492 (11th Cir. 1990).

As we previously noted, under the provision governing arbi-

trations triggered by a state licensing agency, § 107d-2(b)(2),

if the arbitration panel determines that a federal agency is

engaging in acts or practices that violate the Act, “the head of

[the federal agency] shall cause such acts or practices to be

terminated promptly and shall take such other action as may

be necessary to carry out the decision of the panel.” The

Fourth and Eleventh Circuits have interpreted this language as

indicating a congressional intent to make the federal agency

solely responsible for remedying its own violations and thus

to preclude an arbitration panel convened under § 107d-1(b)

SAUER v. U.S. DEPARTMENT OF EDUCATION 1109

from ordering the federal government to take any type of

remedial action. See Md. State Dep’t of Educ., 98 F.3d at

169-70 (“[T]he statute places the responsibility for ending the

violation on the head of the federal entity and does not autho-

rize a § 107d-1(b) arbitration panel to order the federal entity

to take specific remedial action.”); Nash, 915 F.2d at 1492

(“[A]lthough the panel may determine that a violation is

occurring and may identify the discrete acts that are in viola-

tion, the statute does not authorize the arbitration panel to

order the federal entity to take any remedial action.”). Under

this interpretation, a state licensing agency would not be able

to enforce an arbitration decision, because there would be no

remedial award in the decision to enforce. We do not need to

reach this issue here, but note that our sister circuits’ opinions

further weigh against interpreting the Act as requiring a state

licensing agency to enforce the arbitration panel’s remedial

orders, given that under their interpretation of the Act, such

suits would not be possible.

D

Zelickson’s argument to the contrary relies primarily on our

decision in Premo v. Martin, 119 F.3d 764 (9th Cir. 1997). In

Premo, a state licensing agency appealed an arbitration award

ruling that the state licensing agency had violated the Act by

“refusing to secure the renovation of [a blind vendor’s] facili-

ties . . . , by failing to insist on assignment of income from

competing vending machines to [the vendor], and by declin-

ing to take effective steps to prevent the [United States] Postal

Service from renewing a contract with another vendor.” Id. at

767. The arbitration panel had ordered the state licensing

agency to reinstate the vendor and pay her compensatory

damages in the form of lost income and attorney’s fees and

costs. See id. Premo affirmed the district court’s decision

upholding the award. Id. at 771-72. Zelickson argues that

under Premo, a state licensing agency has a statutory obliga-

tion to protect a blind vendor from the federal government’s

violations of the Act, and an arbitration panel could properly

1110 SAUER v. U.S. DEPARTMENT OF EDUCATION

award compensatory damages against the state licensing

agency for failing to do so.

We disagree. In Premo, the state licensing agency did not

contest the arbitration panel’s ruling that it had violated the

Act. Instead, it challenged the award only on the grounds that

the Eleventh Amendment barred the award of compensatory

relief against a state, and that the Department of Education

had violated the state licensing agency’s due process rights by

empaneling a biased arbitrator and refusing to admit certain

testimony. See id. at 766. Our ruling was limited to these

claims. Specifically, we held that the state licensing agency

had waived its sovereign immunity by agreeing to participate

in the Randolph-Sheppard program and that the arbitration

panel was authorized to award compensatory damages. Id. at

768-70. We also rejected the state’s due process argument. Id.

at 771-72. We did not hold that a state licensing agency has

a general statutory obligation to protect blind vendors from

the federal government’s violations of the Act. Indeed, we did

not address the question whether the state licensing agency

had violated the Act in the first place, because the issue was

not raised. Accordingly, Premo does not shed light on the

central question before us, namely, whether a state licensing

agency has a duty to bring an enforcement action against a

federal agency to enforce an arbitration award issued pursuant

to 20 U.S.C. § 107d-1(b).

We also reject Zelickson’s argument that we must read the

Act as compelling a state licensing agency to sue a federal

agency that refuses to comply with a § 107d-1(b) arbitration

award because otherwise a blind vendor would have no way

to protect his rights under the Act. The Act provides blind

vendors with a detailed dispute resolution procedure, includ-

ing a process for arbitrating grievances. It also imposes a duty

on the head of the relevant federal agency to comply with the

arbitration panel’s ruling when a state licensing agency pre-

vails in an arbitration proceeding. See § 107d-2(b)(2). But

Congress did not see fit to require the state licensing agency

SAUER v. U.S. DEPARTMENT OF EDUCATION 1111

to sue the federal agency in control of the property on which

the vending site is located to enforce the arbitration panel’s

award. We cannot rewrite the statute based on our own view

of how best to carry out the purposes of the Act. Furthermore,

a blind vendor may be able to obtain relief through other ave-

nues, such as by a mandamus action under 28 U.S.C. § 1361,

or an action to “compel agency action unlawfully withheld or

unreasonably delayed” under 5 U.S.C. § 706(1). We take no

position on whether such an action would be successful.

IV

[7] Accordingly, based on the plain language of the Act

and other guides to statutory construction, we conclude that

the Act does not impose a statutory obligation on a state

licensing agency to sue a federal agency for its failure to com-

ply with a Randolph-Sheppard arbitration award. The 2008

arbitration panel therefore committed a legal error when it

interpreted the Act as requiring DOR to bring an action

against GSA, and that DOR’s failure to do so made it liable

for compensatory damages. Because DOR had no statutory

obligation to sue GSA to enforce the 2000 Arbitration Award,

the 2008 arbitration panel’s ruling that DOR became liable for

the damages against GSA by failing to bring such an enforce-

ment action was “not in accordance with law” and must be set

aside. See 5 U.S.C. § 706(2).

REVERSED.