Opposition Brief — Schlank v. Williams

Peg See ds Ce

Pa ee BSS

OM TS ae nD ee ; ’

Ae BRET or eS

a . ? ” . J

Supreme Coéri, U.S. °F”

= 5 ba)

FIL £:D <43

ie

a ‘=

; Y Clot 4 1990

No. 89-1897 JOSEPH F. SPANIOL, JR.

In The

Supreme Court of the United States

Ocroper Term, 1989

Biiure R. ScHianx,

Vv,

Katuerine A. Witiiams, AcTING ADMINISTRATOR,

REHABILITATION SERVICES ADMINISTRATION OF THE

Commission on Sociat SERVICES OF THE

District or CotumsiA DePpaRTMENT OF HUMAN SERVICES,

Respondent. ~

Sa” see!) eee * Ae a Se a)

Se, eee: > SS es > »?

On Petition for a Writ of Certiorari to the

District of Columbia Court of Appeals

BRIEF IN OPPOSITION BY THE

DISTRICT OF COLUMBIA

Hersert O. Rexp, Sr.,

Corporation Counsel, D.C.

Cuartes L. Rerscnen,

Deputy Corporation Counsel, D.C.

Appellate Division

*James C. McKay, Jr.,

Assistant Corporation Counsel, D.C.

Office of the Corporation Counsel, D.C.

District Building, Room 305

1350 Pennsylvania Ave., N.W.

Washington, D.C. 20004

Telephone: (202) 727-6252

Attorneys for Respondent

*Counsel of Record

——————————— 3

"BEST AVAILABLE COPY

TABLE OF CONTENTS

Page

a Oe ss ae acee ees 1

STATEMENT OF THE CASE..................... 1

REASONS FOR DENYING THE PETITION ....... 3

I. THE COURTS BELOW CORRECTLY REFUSED

TO AWARD ATTORNEYS FEES UNDER THE

AMERICAN RULE, SET FORTH BY THIS

COURT IN ALYESKA, AS THE RANDOLPH-

SHEPPARD ACT DOES NOT EXPRESSLY

AUTHORIZE FEE SHIFTING. ............... 3

II. THE VENDOR’S ARGUMENT THAT AN EXCEP-

TION TO THE AMERICAN RULE MAY BE IM-

PLIED FROM A LEGISLATIVE INTENT TO

MAKE A PROTECTED PERSON WHOLE OR

FROM CONTRACUTAL OBLIGATIONS ARIS-

ING FROM A STATE’S PARTICIPATION IN A

FEDERAL PROGRAM IS CONTRARY TO THIS

COURT’S DECISIONS IN F.D. RICH, SUMMIT

VALLEY, AND PENNAURST. ............... 4

III. THE DECISIONS CITED BY THE VENDOR ARE

eS eee rere 8

| I Oey eee or ee 13

TABLE OF AUTHORITIES

CASES Page

Almond v. Boyles, 792 F.2d 451 (4th Cir. 1986), cert. denied,

aS ea 8,10, 11, 13

Alyeska Pipeline Service Company v. Wilderness Society,

ee rs eee ea ha wee es oe Paces 3, 4, 11

Board of Education of the Hendrick Hudson Central School

District Board of Education, Westchester County v.

oe 7

Committee of Blind Vendors of the District of Columbia v.

District of Columbia, 736 F.Supp. 292 (D.D.C. 1990) . 8

Committee of Blind Vendors of the District of Columbia v.

District of Columbia, 1990 WL 116813 (Civ Act. No.

88-0142-OG, D.D.C. July 31, 1990) ...... ean 12

i

TABLE OF AUTHORITIES (continued)

Crawford Fitting Company v. J.T. Gibbons, Inc., 482 U.S.

CS oie es eek KA ean eee eens 3

Delaware Department of Health and Social Services, Division

for the Visually Impaired v. United States Department of

Page

Education, 772 F.2d 1123 (8rd Cir. 1985) ....... 4, 5, 8, 10, 11

F.D. Rich Company v. United States ex rel. Industrial Labor

Company, Inc., 417 U.S. 116 (1974) ................ 5, 6, 13

Georgia Department of Human Resources v. Bell, 528

Pe ae er 11

Independent Federation of Flight Attendants v. Zipes, 491

is oe Fe | ere 3

MacEnvoy & Company v. United States ex rel. Tomkins

Company, 322 U.S. 102 (1944)..................... 5

McNabb v. United States Department of Education, 862

F.2d 681 (8th Cir. 1988), cert. denied, sub. nom., McNabb

v. Cavazos, ___ US. , 110 S.Ct. 55 (1989) ....... 8, 9, 10

Pennhurst State School and Hospital v. Halderman, 451

Se so oo yn arguack seo Sa lathe a be wwe 5, 7, 8, 13

Runyon v. McCrary, 427 U.S. 160 (1976) ............. 6

Schlank v. Williams, 572 A.2d 101 (D.C. 1990)......... passim

South Dakota v. Dole, 483 U.S. 203 (1987}............ 7

Summit Valley Industries, Inc. v. Local 112, United

Brotherhood of Carpenters and Joiners oi America, 456

8 RI erate ie hi2 ahs Sek ain pO Rand 5, 6, 13

STATUTES

Randoiph-Sheppard Vending Stand Act, 20 U.S.C. §§ 107-

SAGs aac ee ns aor ee . passim —

ee od wc dee we ORM Me ee 8

oe See oe a edi ee 9,11,12

Be Rees ED «gw ee oe vce cee 2

Oe Wes I MD woo ois caw ee lence cuss: 5, 6

pe ee Oe ID wk. bocce awed ob neews 5, 6

ee eg oo aang heen d wees 6

No. 89-1897

In The

Supreme Court of the United States

OcToBER TERM, 1989

BiLuie R. ScHLANK,

Petitioner,

Vv.

KATHERINE A. WILLIAMS, ACTING ADMINISTRATOR,

REHABILITATION SERVICES ADMINISTRATION OF THE

CoMMISSION ON SOCIAL SERVICES OF THE

District oF COLUMBIA DEPARTMENT OF HUMAN SERVICES,

Respondent.

On Petition for a Writ of Certiorari to the

District of Columbia Court of Appeals

BRIEF IN OPPOSITION BY THE

DISTRICT OF COLUMBIA

OPINION BELOW

The opinion of the District of Columbia Court of Appeals,

A. 1la-27a,' is reported at 572 A.2d 101 (D.C. 1990).

STATEMENT OF THE CASE

Petitioner (the ‘‘vendor’’), a blind person, operates a vend-

ing stand in the United States Department of State under

the Randolph-Sheppard Vending Stand Act, 20 U.S.C.

'**A.”’ references are to documents included in the Appendix to the

Petition.

2

§§ 107-107f£ (1988).2 She seeks reversal of a decision of the

District of Columbia Court of Appeals affirming an order

of the Superior Court of the District of Columbia denying

her motion for attorneys fees.

The vendor filed an action in the Superior Court against

the Acting Administrator of the Rehabilitative Services

Administration of the Commission on Social Services of the

District of Columbia Department of Human Services seek-

ing the right to service vending machines in the State Depart-

ment in areas outside her facility, to have her stand

reclassified for purposes of promotion and transfer, to incor-

porate her business or be exempted from the business fran-

chise tax and receive a refund of taxes paid, and to deduct

legal fees as part of her operating expenses for calculating

her ‘‘net proceeds.’’®

On cross-motions for summary judgment, the Superior

Court held that the vendor had a right to incorporate; certi-

fied the tax issues to the court’s tax division; declared invalid

certain program instructions used as a basis to deny the

vendor’s application to service vending machines in the State

Department, but left the issue of whether there were other

valid reasons for denial for trial; invalidated the state agency’s

formula to determine the performance standard for promo-

tion and transfer; and rejected the vendor’s argument that

she could deduct legal fees from net proceeds in determin-

ing her contribution to a required administrative set-aside

for the benefit of all blind vendors. A. 7a-8a.

The vendor then moved for attorneys fees, but the Superior

Court denied the motion. Relying on the American Rule, the

court determined that the Randolph-Sheppard Act itself did

?The Act is administered by the federal Rehabilitative Services Ad-

ministration of the Department of Education and by the Rehabilitative

‘ Services Administration of the Commission on Social Services of the D.C.

Department of Human Services, which is a ‘“‘state agency” under the Act.

The District of Columbia is considered a ‘‘state’”’ for purposes of the Act.

See 20 U.S.C. § 107e(5) (1988).

° The vendor also moved to maintain a class action, which motion was

denied.

3

not provide for the award of attorneys fees, and expressly

rejected the vendor’s assertion that the defendants’ conduct

was in bad faith. A. 42a-45a. The District of Columbia Court

of Appeals affirmed.

REASONS FOR DENYING THE PETITION

I. THE COURTS BELOW CORRECTLY REFUSED TO

AWARD ATTORNEYS FEES UNDER THE AMERI-

CAN RULE, SET FORTH BY THIS COURT IN

ALYESKA, AS THE RANDOLPH-SHEPPARD ACT

DOES NOT EXPRESSLY AUTHORIZE FEE SHIFT-

ING.

Under the American Rule, set forth in Alyeska Pipeline

Service Company v. Wilderness Society, 421 U.S. 240 (1975),

each party bears its own litigation expenses unless the court

is authorized to shift fees by an express statutory or con-

tractual provision or under one of the three equitable excep-

tions to the rule—ie., where a party has preserved or

recovered a common fund benefiting others, shown ‘‘willful

disobedience of a court order,”’ or ‘‘acted in bad faith,

vexatiously, wantonly, or for oppressive reasons.”’ Jd. at

257-258.‘

The vendor does not argue before this Court that the D.C.

Court of Appeals erred in affirming the Superior Court’s re-

jection of her claim that the respondent had acted in bad

faith. A. 21a-22a, 43a. Nor does she argue that any of the

other equitable exceptions to the American Rule apply. In-

stead, she relies entirely on the theory that the Randolph-

Sheppard Act itself authorized an award of attorneys fees.

However, the vendor has not pointed to any provision of

the Act authorizing fee shifting or cited any legislative

‘ This Court has recently reaffirmed this decision in Independent Federa-

tion of Flight Attendants v. Zipes, 491 U.S. ___, 109 S.Ct. 2732 (1989).

See also, Crawford Fitting Company v. J.T. Gibbons, Inc., 482 U.S. 437

(1987).

4

history evidencing a congressional intent to shift fees.°

Rather, she argues that the authority to shift fees can be

implied from a legislative intent to make whole vendors

injured by violations of the Act or from contractual obliga-

tions toward those vendors, as third-party beneficiaries,

arising from a state’s participation in the federal program.

Pet. at 6. As we shall show, the decisions of this Court do

not permit exceptions to the American Rule based on such

reasoning.

II. THE VENDOR’S ARGUMENT THAT AN EXCEP-

TION TO THE AMERICAN RULE MAY BE IM-

PLIED FROM A LEGISLATIVE INTENT TO MAKE

A PROTECTED PERSON WHOLE OR FROM CON-

TRACTUAL OBLIGATIONS ARISING FROM A>

STATE’S PARTICIPATION IN A FEDERAL PRO-

GRAM IS CONTRARY TO THIS COURT’S DECI-

SIONS IN F.D. RICH, SUMMIT VALLEY, AND

PENNHURST.

Following the Third Circuit’s decision in Delaware Depart-

ment of Health and Social Services, Division for the Visually

Impaired v. United States Department of Education, 772 F.2d

1123 (8rd Cir. 1985), the vendor argues that the American

Rule does not apply because ‘‘[t]he District of Columbia, by

virtue of its participation in the Federal blind vendors pro-

gram) [has] undertaken to make blind vendors whole for

breach of its contractual obligations’’ and that “ ‘the blind

vendors became, in effect third party beneficiaries of

agreements between the participating states and the federal

government.’ ”’ Pet. at 9, quoting Delaware, supra, 772 F.2d

at 1127. As the D.C. Court of Appeals pointed out (A. 19a),

and as we explain, infra, Part III, this case is distinguishable

* The Act, thus, stands in stark contrast to the Acts of Congress men-

tioned by this Court in Alyeska, which contained ‘‘specific and explicit

provisions for the allowance of attorneys’ fees.’’ 421 U.S. at 260.

5

on its facts from Delaware. More fundamentally, this ap-

proach is precluded by the decisions of this Court in F.D.

Rich Company v. United States ex rel. Industrial Labor Com-

pany, Inc., 417 U.S. 116 (1974); Summit Valley Industries,

Inc. v. Local 112, United Brotherhood of Carpenters and

Joiners of America, 456 U.S. 717 (1982); and Pennhurst State

School and Hospital v. Halderman, 451 U.S. 1 (1971).

In F.D. Rich, this Court reversed a decision of the Ninth

Circuit authorizing an award of attorneys fees to a successful

litigant under the Miller Act. The Court recognized that

“t]he Miller Act is ‘highly remedial [and] entitled to a liberal

construction and application in order properly to effectuate

the Congressional intent to protect those whose labors and

materials go into public projects.’ ’’ 417 U.S. at 124, quoting

MacEnvoy & Company v. United States ex rel. Tomkins

Company, 322 U.S. 102, 107 (1944). However, the Court re-

jected the Ninth Circuit’s theory that ‘‘in providing Miller

Act claimants should recover ‘sums justly due,’ 40 U.S.C.

§ 270b(a), Congress must have intended to provide for the

award of attorneys’ fees because without such fee shifting,

Miller Act claimants would not be fully compensated .. .”

417 U.S. at 128. The Court noted that “‘[t]his argument

merely restates one of the oft-repeated criticisms of the

American Rule.” Jd.

Likewise, in Summit Valley, this Court refused to construe

a provision in the National Labor Relations Act entitling a

person injured in violation of the Act to ‘““damages’’ to per-

mit an award of attorneys fees. 456 U.S. at 722-723. The

Court, like the one in F.D. Rich, was not impressed by the

fact that the statute was remedial in nature or that it was

designed to make the injured litigant whole. As the Court

noted:

Ultimately, petitioner’s argument rests on the

assumption that ‘‘Co 8 | ogrw d intended Section

303 [29 U.S.C. § 187(b)] to be fully remedial and to

restore to the victimized employer all . . . losses

caused by the illegal activity . . ..’’ Even assum-

6

ing that attorneys fees are necessary to achieve full

compensation, this justification alone is not suffi-

cient to create an exception to the American Rule

in the absence of express congressional authority.

F.D. Rich Co v. United States ex rel. Industrial

Lumber Co... .

456 U.S. at 724-725 (emphasis in original).

While the vendor attempts to distinguish these cases—

FD. Rich on the ground that it involved “commercial”’ litiga-

tion, and Summit Valley on the ground that it involved ‘‘a

private damages action between an employer and union,”’

Pet. at 11 n. 6—she cannot show that the principle for which

they stand does not apply here. Although the Randolph-

Sheppard Act is remedial and entitled to liberal construc-

tion, so are the Acts of Congress construed in these cases.

This Court described the Miller Act as ‘“‘highly remedial”’

and the National Labor Relations Act as ‘‘fully remedial.”’

Moreover, those Acts contain provisions expressly giving

a protected injured person a private cause of action with the

right to recover ‘‘sums justly due,” and ‘‘damages,’’ respect-

fully. See 40 U.S.C. § 270b(a) (1988); 29 U.S.C. § 187(b) (1988).

The Randolph-Sheppard Act contains no such provision and,

therefore, is even less susceptible to a construction that it

provides authority to shift fees. That this Court, in light

of the American Rule, refused to read a right to attorneys

fees into either of these two remedial Acts, even though those

Acts contained express policies to make injured parties whole

and rights to compensation, strongly supports the D.C. Court

of Appeals’ conclusion that no similar right should be read

into the Randolph-Sheppard Act.*

* The D.C. Court of Appeals’ decision finds further support in Runyon

v. McCrary, 427 U.S. 160, 183-185 (1976), in which the Court refused to

read 42 U.S.C. § 1988, as it then read, as authorizing an award of attorneys

fees to parents of Black children who were excluded from admission to

Virginia private schools solely on racial grounds. That the Court declined

to construe this highly remedial provision of the Civil Rights Act to

authorize attorneys fees argues in favor of not construing the Randolph-

Sheppard Act to permit fee shifting, in the absence of express congres-

sional direction.

7

Nor can fee shifting here be justified on an implied con-

tract theory based on the District’s participation in a federal-

state program established by federal legislation. Under

Pennhurst State School and Hospital v. Halderman, supra,

a state participating in such a program cannot be deemed

to have agreed to be liable for financial burdens, such as

attorneys fees, unless such consequences are spelled out

unambiguously in the Act establishing the program. Since

the Randolph-Sheppard Act does not provide for fee shifting,

this financial liability on the part of the District cannot be

implied.

In Pennhurst, this Court reversed a circuit court decision

holding that mentally retarded residents of a state facility

receiving federal funds under the Developmentally Disabled

Assistance and Bill of Rights Act of 1975 were entitled to

‘appropriate treatment”’ in the ‘‘least restrictive environ-

ment.’’ The Court held:

. . . [L]egislation enacted pursuant to the spen-

ding power is much in the nature of a contract: in

return for federal funds, the States to comply

with federally imposed conditions. The legitimacy

of Congress’ power thus rests on whether the State

voluntarily or knowingly accepts the terms of the

‘“‘contract.’’ There can, of course, be no knowing

acceptance if a State is unaware of the conditions

or is unable to ascertain what is expected of it.

Accordingly, if Congress intends to impose a condi-

tion on the grant of federal moneys, it must do so

unambiguously. By insisting that Congress speak

with a clear voice, we enable the States to exercise

their choice knowingly, cognizant of the conse-

quences of their participation.

Id. at 17 (emphasis added). Accord, South Dakota v. Dole,

483 U.S. 203, 207 (1987); Board of Education of the Hendrick

Hudson Central School District Board of Education, West-

chester County v. Rawley, 458 U.S. 176, 204 n.26 (1982).

The Randolph-Sheppard Act, like the Developmentally

Disabled Assistance and Bill of Rights Act of 1975, requires

8

participating states to enter into agreements with the federal

government for the benefit of the persons protected by those

Acts. See 20 U.S.C. § 107b (1988). Had Congress intended

that a consequence of a state’s participation in this program

would be to expose it to civil liability for damages and

attorneys fees, Congress certainly knew how to do so. The

absence of any evidence of such an intent in the text or

legislative history of the Randolph-Sheppard Act precludes

construing the Act to permit attorneys fees, since under

Pennhurst this Court ‘‘may assume that Congress will not

implicitly attempt to impose massive financial obligations

on the States.’’ 451 U.S. at 17.

Indeed, a majority of the Eighth Circuit in McNabb v.

United States Department of Education, 862 F.2d 681 (8th

Cir. 1988), cert. denied,sub. nom., McNabb v. Cavazos, ___

U.S. __, 110 S.Ct. 55 (1989), expressly relied on Pennhurst

in ruling that the Randolph-Sheppard Act cannot be con-

strued to make participating states liable for compensatory

damages and, a fortiori, attorneys fees. See 862 F.2d 685

(Fagg, J.) and 687-688 (Doty, J.). As Judge Fagg noted,

‘‘[njeither Congress, nor a court interpreting the Act, is per-

mitted to ‘surprisfe] participating [s]tates with post-

acceptance . . . conditions.’” Id. 687 (Fagg. J., concurring

and dissenting), quoting Pennhurst, supra, 451 U.S. at 25.

Therefore, the vendor’s argument that a right to attorneys

fees under the Randolph-Sheppard Act can be implied runs

afoul of the decisions of this Court.

III. THE DECISIONS CITED BY THE VENDOR ARE

DISTINGUISHABLE.

In addition to Delaware, the vendor relies on decisions of

the Eighth Circuit in McNabb v. United States Department

of Education, supra; the Fourth Circuit in Almond v. Boyles,

792 F.2d 451 (4th Cir. 1986), cert. denied, 479 U.S. 1091

(1987); and the District Court for the District of Columbia

in Committee of Blind Vendors of the District of Columbia

v. District of Columbia, 736 F.Supp. 292 (D.D.C. 1990).

These cases are all distinguishable.

9

A. The vendor’s reliance on McNabb is surprising, since,

as noted above, that case is directly contrary to her posi-

tion. In McNabb, a blind vendor filed a grievance after a

vending facility he sought was awarded to a vendor with less

seniority. The federal arbitration panel ruled that he was

entitled to the vending facility and that he had the right to

request that the panel be reconvened to award him compen-

satory damages and attorneys fees. The Secretary of Educa-

tion refused to reconvene the panel, but the district court

ordered the Secretary to reconvene the panel, holding that

an arbitration panel had the authority to make such awards.

The Eighth Circuit affirmed the order of the district court

to reconvene the panel, but did not decide the issue of the

authority of am arbitration panel to award attorneys fees.

Indeed, a majority of the court held that the Randolph-

Sheppard Act did not give an injured person a right of action

against a state for compensation for injuries. It only left

open the possibility that attorneys fees might be assessed

against the Secretary as a consequence of his refusal to con-

vene a panel, but did not decide that question, leaving its

resolution to the arbitration panel.

Each member of the three-judge panel wrote a separate

opinion. Chief Judge Lay, the only member who believed

that an arbitration panel could award compensatory dam-

ages against a state, held simply that the authority to

award attorneys fees as part of compensatory damages

is a question more properly decided in the first instance

by the arbitration panel when it reconvenes.” 862 F.2d at

685. Judge Fagg sharply disagreed with Judge Lay’s state-

ment that the Act permitted the panel to award compensatory

damages against a state, id. at 685-696, but agreed that “the

arbitration panel may determine that attorneys fees should

be paid by the Secretary of Education rather than the State

of Arkansas.”’ Id. at 687. Judge Doty sided with Judge Fagg

on this question. While stating that, ‘[uJnder [20 U.S.C.]

§ 107d-2(d) . . . the vendor should . . . be reirnbursed for

any costs, including reasonable attorney’s fees, made

necessary by the acts of the Secretary,” he made it clear that

10

attorneys fees could not be awarded against a state, noting

that this holding would ‘‘avoid the onerous effect on a state

treasury of retroactive damages.’ 862 F.2d at 687. Thus,

a majority of the Eighth Circuit held that the Randolph-

Sheppard Act could not be construed to permit an award

of compensatory damages against a state for violation of the

Act. If the Act does not permit compensatory damages

against a state, a fortiori, it does not permit an award of

attorneys fees.

Furthermore, all three judges distanced themselves from

the Third Circuit’s holding in Delaware. Chief Judge Lay

distinguished Delaware on the ground that the matter had

been fully arbitrated in that case. Id. at 685. Both Judges

Fagg and Doty directly criticized the decision on the ground

that the financial burden imposed on the state simply from

its participation in the blind vendor program conflicted with

Pennhurst. See 862 F.2d at 686 (Fagg. J.) and 687-688 (Doty,

J.). Judge Doty stated “I would not follow the holding of

the Third Circuit in Delaware . . . as I believe the legal

underpinnings of that case have been fatally eroded.”’ Jd.

at 687-688. Thus, McNabb rejects, rather than supports, the

vendor’s argument.

B. The Fourth Circuit’s decision in Almond did not address

the issue at hand. In that case, blind vendors brought an

action to recover “employer” and “‘employee”’ contributions,

which North Carolina had wrongfully required them to pay

in clear violation of the Act, which treats vendors as self-

employed, independent contractors. The district court

awarded plaintiffs attorneys fees, and increased the lodestar

by 50 percent owing to the complexity, novelty, and con-

tingent nature of the case. The Fourth Circuit reversed the

district court’s award, concluding that the District Court

“applied the wrong standard in calculating the award [of

attorneys fees].”” 792 F.2d at 456. However, the issue of the

authority of the district court to make the award in the first

place was not before the Circuit because the defendants had

not challenged the court’s authority. They had merely con-

tended that the court had ‘‘abused its discretion in the award

11

of attorneys’ fees.’’ Jd. As the Superior Court noted, in

distinguishing Almond from the case at hand, “‘the issue of

whether there was statutory authority for an award of

counsel] fees was not contested, and therefore not decided

or considered, by the Fourth Circuit.’’ A. 44a (emphasis in

original). Thus, Almond did not even address the issue of

whether the Randolph-Sheppard Act authorized fee shifting.

C. As the D.C. Court of Appeals pointed out, the Third

Circuit’s decision in Delaware is distinguishable from this

case. As the court below noted, Delaware relied on the

‘broad make-whole powers of [an] arbitration panel’ under

federal law, rather than the powers of a state court. A. 19a,

quoting Delaware, supra, 772 F.2d at 1140.’ Whether an

arbitration panel possesses the authority to grant attorneys

fees under any circumstances has been disputed. See Georgia

Department of Human Resources v. Bell, 528 F.Supp. 17,

25 (N.D.Ga. 1981). But, even assuming arguendo that a

federal arbitration panel possesses this power, as the D.C.

Court of Appeals noted, ‘‘[oJnly by analogy can the pro-

ceedings in Superior Court in this case be said to have mir-

rored the arbitration panel’s decision in Delaware.” A. 19a.

The Superior Court does not possess the powers of a federal

arbitration panel and is clearly limited by the American Rule,

which is part of the common law. See Alyeska, supra, 421

’ Indeed, as the court in Delaware emphasized, 772 F.2d at 1130:

. . . No witness in hearings on S. 2582. and no member of

Congress ever suggested that the scope of relief which could

be awarded in these arbitration proceedings, agreed to by virtue

of a state’s voluntary participation in the say ce geen se

program, was in any d different than that available in

other arbitration pr ings.

* That court observed:

[20 U.S.C. §] 107d-2(d) of the Act provides that “‘[t]he

Secretary shall pay all reasonable costs of arbitration . . . in

ees ore Senne oe eer cumenses lo ee ee

in the Federal Register.”’ This Court finds that, by specifically

directing the Secretary to pay for arbitration expenses in

accordance with a schedule of fees, Congress foreclosed any

action by an arbitration panel to award arbitration expenses.

12

U.S. at 247. Moreover, the single statutory peg on which

the court in Delaware based its decision, 20 U.S.C. §107d2(d),

which provides that “[t]he Secretary [of Education] shall pay

all reasonable costs of arbitration . . .,’’ clearly does not

apply to the Superior Court. Therefore, the analogy of

Delaware to this case is inapt.

D. Finally, the vendor relies o1 the decision of the District

Court for the District of Columbia in Committee of Blind

Vendors of the District of Columbia v. District of Columbia,

supra. Pet at 10. However, on July 31, 1990, that court

issued a memorandum decision, on defendants’ motion to

alter or arnend the judgment, distinguishing this case from

that before the district court:

Admittedly, the Court of Appeals’ very thorough

analysis in Schlank igo this Court some pause.

Nonetheless, in light of the very unique cir-

cumstances presented by this case, the Court

distinguishes Schlank and reaffirms its prior con-

clusion that a fee award is justified. While Schlank

involved the claims of one vendor, this case involved

: myriad claims by 63 blind vendors, who ultimately

sought to compel the District's overall compliance

with a federal program.

Committee of Blind Vendors of the District of Columbia v.

District of Columbia, 1990 WL 116813 (Civ. Act. No.

88-0142-0G, D.D.C. July 31, 1990).

In any event when the district court makes an award of

attorneys fees, the District of Columbia intends to appeal,

and the District of Columbia Circuit will have the oppor-

tunity to express its views on the question of whether the

Randolph-Sheppard Act authorizes fee-shifting.

* x *

In sum, the D.C. Court of Appeals and Superior Court of

the District of Columbia correctly applied the American Rule

in this case. In the absence of any express statutory or con-

tractual provision or equitable principle authorizing fee shift-

aa ereereantneineet eel

13

ing, the courts below correctly refused to award attorneys

fees. The vendor’s arguments, if accepted, would create a

new and broad exception to the American Rule under which

courts could award attorneys fees by reason of a state’s par-

ticipation in a federal program. We submit that the vendor’s

argument is contrary to this Court’s decisions in Alyeska,

F.D. Rich, Summit Valley, and Pennhurst, and should be

rejected.

CONCLUSION

The petition should be denied.

Respectfully submitted,

HERBERT O. RE vp, Sr.,

Corporation Counsel, D.C.

CHARLES L. REISCHEL,

Deputy Corporation Counsel, D.C.

Appellate Division

*JameEs C. McKay, JR.,

Assistant Corporation Counsel, D.C.

Office of the Corporation Counsel, D.C.

District Building, Room 305

1350 Pennsylvania Ave., N.W.

Washington, D.C. 20004

Telephone: (202) 727-6252

*Counsel of Record

OcToBER 4, 1990