Opposition Brief — Premo v. Martin

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UPiaue Court, t

—

4 i JAN 22

No. 97-641 | CLERK

4 eed

In The >

Supreme Court of the United States

October Term, 1997

7 SJ

BRENDA PREMO, Director of the Department of

Rehabilitation, State of California,

Petitioner,

Vs.

JEANA MARTIN; THE UNITED STATES DEPARTMENT

OF EDUCATION; RICHARD W. RILEY, SECRETARY OF

THE UNITED STATES DEPARTMENT OF EDUCATION,

Respondents.

” .

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

7 e

BRIEF OF RESPONDENT JEANA MARTIN IN

OPPOSITION TO PETITION FOR

WRIT OF CERTIORARI

_ +

B. V. YTuRBIDE

Janice A. JENKINS

Counsel of Record

Corinthian Court, Suite 408

512 Van Ness Avenue

San Francisco, CA 94102-3267

Telephone: (415) 626-3450

Counsel for Respondent

Jeana Martin

QUESTIONS PRESENTED

Respondent Jeana Martin hereby undertakes her own

statement of the questions presented on this petition, con-

vinced that the petition’s version not only suffers from lack of

adequate focus in the substantive sense, but also ignores

entirely threshold issues militating against this Court’s inter-

cession.

The overarching question on this petition is whether the

petition sets forth “compelling reasons” for granting it in

accordance with the criterion prescribed by this Court’s own

Rule 10.

Subsumed at the threshold as to all the questions claimed

in the petition to be involved are issues as to whether this

Court should decline to intercede in view of postures chosen

by petitioner below which were redolent of lulling conces-

sion, invitation, and/or waiver and consent.

More accurately framed (absent foreclosure at the thresh-

old), the questions said by the petition to be presented should

be:

(a) Whether, by electing to have agencies of theirs

agree to the terms and conditions imposed by Congress to

qualify as state licensing agencies administering at the state

level the federal program for the benefit of the blind created

by the Randolph-Sheppard Act (20 U.S.C. §§ 107, et seq.),

participating States have consented to waive the Eleventh

Amendment of the United States Constitution and expose

themselves to potential suit in federal court.

QUESTIONS PRESENTED -— Continued

(b) Whether state licensing agencies undertaking

administration of the Randolph-Sheppard Act have been left

by Congress with complete and unfettered discretion not to

take the remedial action authorized by the Act against federal

agencies violating the Act, regardless of how clear the viola-

tions and resulting harm to the blind beneficiaries of the Act

may be.

dolph-Sheppard Act to arbitrate disputes between blind ven-

dors and state licensing agencies are powerless to fashion

relief commensurate with the scope of inquiry and have not

been given authority by Congress to grant a vendor relief

inclusive of monetary damages even if the panel finds such

relief to be appropriate in the circumstances proved by the

vendor.

TABLE OF CONTENTS

Page

I Sa 6 Gb ce sac cuescepecnseepe na i

ee iii

RE SUE TEE woo 5 is v5 c's ce cece ceacvess’ iv

BRIEF OF RESPONDENT JEANA MARTIN IN OPPO-

SITION TO PETITION FOR CERTIORARI ........ |

rs AG OE Ned oR es ceed e Gd Oe beau |

CORRECTIVE STATEMENT OF THE CASE......... 3

ee a ies kek aveebbecees is bese 3

2. The Proceedings in the District Court ............ 9

3. The Court of Appeals’ Opinion .................. 11

REASONS FOR DENYING THE PETITION.......... 12

I. The Complete and Absolute Discretion Question 12

ee ee I CII UO, ni es cc wees cavctase 16

Ill. The Eleventh Amendment Question ............. 21

IV. The Practical and Equitable Considerations Calling

ae ee eS ee ee ee ree 27

ee eG kL cae eee hb Sawn areee weeehedes 28

TABLE OF AUTHORITIES

Page

Casgs:

Burlington Northern, Inc. v. American Ry. Supervisors

Ass'n, 327 BOE ZUG: Tae Ge, DG FoPe s snc neeccen cvs 23

Delaware Dept. of Health v. U.S. Dept. of Educ., 772

F.28 BUSS Cope Ge Bee ce rie AS 19, 21, 24, 26

Ernst & Ernst v. Hockfelder, 425 U.S. 185, rehearing

dented 426 UB: FOG ATeT i a eS GIA 13

Fillinger v. Cleveland Society for the Blind, 587 F.2d

OM: Si am eer eee Ope he eee ee ee 25

Franklin v. Gwinnett County Pub. Schs., 503 U.S. 60

ORR gk ach gat doa ne bos Gwe een ees See 19, 25

Georgia Dept. of Human Resources v. Nash, 915 F.2d

RGR CER KO PO ba xs co ov eevek bicetess 14, 19, 20

Glen Falls Indemnity Co. v. United States, 229 F.2d

SID Cae Gey Fk so + caesar b eons Haida ngs «5 23

Mass. Elected Committee of Blind Vendors v. Matava,

OER Fa, CU Ce cas ak Sais ov o's how tk ogee te ees 25

Matter of Arbitration Between Intercarbon Bermuda,

OGG Fie. OS Eee eB oo sb vena dbgncades sce 23

McNabb vy. U.S. Dept. of Educ., 862 F.2d 681 (8th Cir.

DOES wd. 640s eaeieanciates cde hese n Rees ahs es 19

Port Authority Trans-Hudson Corp. v. Fenney, 495

CER... Flee Ces ci v's 65a 6 eee ome REESE ER eae k es 26

Randolph-Sheppard Vendors of America v. Weinberg,

oe ® FF ae | RR ore ee ee 15

State of N.Y. v. U.S. Postal Service, 690 F.Supp. 1346

Geis Be. PEE os 00s ox cdselzdwhian bimeesanwieunks 15

TABLE OF AUTHORITIES — Continued

Page

Taylor v. Freeland & Kronz, et al., 503 U.S. 638

ae tee Ee el Coke ices eR Na 13

Tenn. Dept. of Human Serv. v. U.S. Dept. of Educ.,

OTe Cia BU We Gs RDG G Dia as kin vais ce des 19, 26

United States v. L.A. Tucker Truck Lines, 344 U.S. 33

COs £52 SOR HOLD Oh a Fi RE ROR 13

Will v. Michigan Dept. of State Police, 491 U.S. 58

a eh es i ae WES vat Sr RAS we aoe Ewe baw tate ub ce 18

STATUTES:

pe MEE Slows rind asi pte + vn cen oie een en 20

BR nee RE eg ee ee rere ree 2, 24, 25

I a ge sy Ln ea glee cee ec ee y a

ee has ew a pA MK Re Ae vee aan ee l

ee Sere cd Ok 6 0 Wc wl OU eee Ok RNa vende, ae ¥ |

ee ee I So 0s hd hein Saas Sew OA ada cw es 18

20 U.S.C.

ee es OED ok ch 6 he Ne heme Oea cae DOE abe’ 1, 23

ee PN non ives ss couetnnsescsaey eubacenes 18

ee Sa ee SEED oo navn s esate e wane sneesanes 2

TABLE OF AUTHORITIES — Continued

Page

Feperat Ruves or Civi. PRocepure:

ee ee ea ee er ee alee a ae

Rutes or THe Supreme Court or tHe Unrrep Starrs:

I a i aR ee a ee ee ee

Orner AUTHORITIES:

~~ @ Se See. eer ee 18

Eleventh Amendment of the United States

SEES EMOTES ECE CC ST ore ee passim

BRIEF OF RESPONDENT JEANA MARTIN IN

OPPOSITION TO PETITION FOR CERTIORARI

PROVISIONS OF LAW

With the caveats and the clarifications now to be indi-

cated, respondent Jeana Martin (hereafter often “Ms. Martin”)

does not disagree with the petition’s submission under the

heading, “Constitutional and Statutory Provisions,” as far as

it goes. Also of particular importance and interest here are

provisions unmentioned in the petition.

As to the Randolph-Sheppard Act, Ms. Martin views the

petition’s submission as too summary and fragmented for

adequate appreciation in several important respects. More

inclusive quotation of the Act is set forth and attached hereto

as Appendix 1 to facilitate ready and deserved verbatim

attention in general and as to the following in particular:

(a) The Act’s unmistakable purpose and intent of creat-

ing a program for the economic benefit of the blind by

establishment for them of a “priority” to engage in vending

operations generally on federal property, including vending

machine operations, and to be honored by the various federal

agencies respectively in charge of properties subject to the

Act (20 U.S.C. § 107, subdivisions (a) and (b), App. | hereto,

pp. 1-2);

(b) The wide-ranging commitments required of state

agencies in voluntarily seeking to qualify as state licensing

agencies to implement and administer the program at the state

level, including the commitment to observe the detailed pro-

cedure provided to resolve “any” dispute between them and

blind vendors in their charge (20 U.S.C. §§ 107b, subdiv. (6)

and 107d-1, subdiv. (a), App. 1 hereto, pp. 3-4); and,

and 107d-2(a), App. 1, p. 4) of arbitration whose outcome

shall be “final and binding” unless appealed under the Admin-

istrative Procedures Act.

Lest there be confusion due to the petition’s reference

generally to the responsibilities and services under the Act of

a state licensing agency (hereafter “SLA”), the phrase “to

negotiate with federal agencies to obtain locations for vend-

ing facilities upon federal property” (at p. 2), should not be

understood to mean that federal agencies in charge of prop-

erty have been left free by the Act to allow vending opera-

tions by others than the blind unless and until the SLA

persuades the federal agency to do otherwise through negotia-

tion. The vending priority of the blind on properties under the

Act is imposed by the Act itself in the provisions cited above

upon those in charge of the property (although such things as

location design, products to be sold, etc., are “negotiated” by

the SLAs).

The provisions of the Act buttressing the priority of the

blind as to vending machines outside a vendor's facility but

located on the same property have two especially noteworthy

aspects in regard to a situation like Ms. Martin’s. If such

machines are not in “direct competition” with the vendor’s

facility, the vendor is to receive thirty percent of the income

derived from them, but, if they are in such “direct competi-

tion,” the vendor is to receive “100 per centum” of the income

produced. (20 U.S.C. § 107d-3(b)(1).)

As to the Administrative Procedures Act (hereafter “the

APA”), referred to by the Randolph-Sheppard Act, the peti-

tion omits an important aspect of the APA section (5 U.S.C.

§ 706) regarding the things to be considered given due chal-

lenge of final administrative action. That APA section makes

it clear that responsibility of the reviewing courts does not

invariably extend to all the matters specified but only to those

necessary to decision “and when presented.”

Omitted in its entirety in the petition is the APA section

providing that, absent a different specification in the enact-

ment involved, the proper court in which to challenge an

administrative agency’s final action is any “court of compe-

tent jurisdiction.” (5 U.S.C. § 703.) That section also makes it

clear that, “Except to the extent that prior, adequate, and

exclusive opportunity for judicial review is provided by law,

agency action is subject to judicial review in civil or criminal

proceedings for judicial enforcement.”

Two rules are so crucial here as to merit special attention

at this juncture. One is Rule 13 of the Federal Rules of Civil

Procedure, relating to counterclaims (reproduced and attached

hereto as Appendix 2). The other is this Court’s own Rule 10

which cautions that certiorari petitions will be granted “only

for compelling reasons,” and it makes clear that even con-

flicts of courts of appeals’ decisions with one another or with

the decision of this Court on an “important” federal question

merely indicate the character of reasons considered by this

Court but do not control or fully measure the Court’s discre-

tion,

CORRECTIVE STATEMENT OF THE CASE

Regrettably, Ms. Martin is forced to submit her own

statement of the case in considerable detail in order to over-

come the mischief worked by the petition.! Her concern is

that, in various objectionable ways and more, perhaps, by

what it has ignored than by what it has narrowly and selec-

tively discussed, its version is apparently and unfortunately

designed to convey the misimpression that, at all stages

below, each of the questions and related contentions now

advanced should have been decided in favor of, and was

diligently pursued by, the State but fell on deaf ears.

1. The Arbitration

To the extent stated or intimated in the petition’s account

of the arbitration, every aspect of the following is fallacious

and objected to: (a) that Ms. Martin’s arbitration complaint

and supplemental complaint and the panel's decisions and

awards dealt with nothing more than a wrong committed by

the Postal Service, rather than any wrong directly attributable

to the State itself; (b) that the Postal Service's only violation

of the Act at issue was the withholding of income from

vending machines not part of Ms. Martin’s location but in the

same building; (c) that, “specifically,” the loss of income

from those vending machines related to a relatively short two-

' Although the federal respondents’ “Statement” is a definite

improvement, further attention as to several important features is called for.

year period beginning in September 1989 during which that

loss resulted from the low-pricing “break-even” contract

between the Postal Service and a private competitor of Ms.

Martin, which contract was terminated with reasonable speed

through the Department of Rehabilitation’s arbitration pro-

ceeding ultimately begun against the Postal Service and cul-

minating in a settlement putting things to right; (d) that, in

finding the State liable for all Ms. Martin’s harm solely on the

basis of the State’s failure to take formal remedial action

against the Postal Service sooner, the panel conjured up a

“non-discretionary” obligation of SLAs under the Act to pur-

sue, as protectors and surrogate agents of the vendors, all

grievances to litigated conclusion if necessary regardless of

merit; (e) that the panel based the existence of such an

obligation on a single provision, rather than on the language

and spirit of the Act as a whole; and (f) that the relief

awarded consisted of only money damages granted in disre-

gard of the State’s diligent claim that the panel lacked power

to award such damages, as a matter of statutory construction

of the Act itself.

All such insinuations are not only contrary to fact but are

belied in all essential respects on the faces of the panel’s

liability and remedies decisions and awards, which the State

could not escape attaching to its petition (Appendices C and

D). Without here engaging in detailed repetition of those

decisions, which speak eloquently for themselves, we note a

few points in demonstration of the thorough and thoughtful

way in which the evidence and contentions in actuality then

put before it by the parties were considered and disposed of

by the panel.

It took more than seventeen pages of the liability deci-

sion for the panel’s initial reference to the background and

evidentiary considerations it found persuasive in Ms. Martin’s

favor on her claims of multi-faceted and disastrously harmful

wrongdoing by the State. In prelude to its dispositive discus-

sion of liability (Pet. App. C, p. 18) the panel summarized its

views as follows:

“Upon the complaint and supplement to the com-

plaint, the evidence adduced at the hearing, the

ee ee

documentary evidence submitted by the parties, the

post-hearing briefs of the parties, and the entire

record herein, the Arbitration Panel finds that

Respondent violated the letter and spirit of the Ran-

dolph-Sheppard Act, 20 U.S.C. §§ 107-107e (“the

Act”), as set forth below, in its relationship with

Complainant. The testimony and documentary evi-

dence establish the validity of the Complainant’s

claims against Respondent. Respondent failed to

protect the program or uphold the law as it was

bound to do under the assurances it gave the Secre-

tary of Education in exchange for its designation as

a State Licensing Agency (“SLA”) pursuant to the

Act.

“In broad terms, the State violated the spirit and

letter of the Act by failing to protect the priority

accorded blind vending facilities under the Act; by

failing to insist upon remittance to the State’s blind

vending program of all vending machine income to

which blind vendors were entitled; by failing to

stand firm against the promulgation and continua-

tion of a break-even contract which proximately and

directly led to Complainant’s economic demise; and

finally, by terminating without sufficient foundation

Complainant’s license and her means of self-sup-

port. Those failures, taken together, represent a sub-

stantial violation of the State’s assurances to the

Department of Education. ... ”

(To the same effect, see Pet. App. C, p. 24.)

In the amplifying discussion which followed, the panel

stressed: (a) that Ms. Martin’s income loss did not simply

relate to the withholding from her of vending machine income

as such but also to her loss in her own vending operations due

to the deflection of patronage to the subject machines; (b) that

the wrongdoing violative of her priority under the Act was not

limited to the two-year period during which the “break-even”

contract was in force but to the entirety of her tenure at the

facility, beginning in 1985 and ending in 1991; and (c) that,

based on both documentary evidence and the panel’s own visit

to the site, it was obvious that the subject vending machines

had been in “direct competition” with Ms. Martin’s facility,

thus entitling her to one hundred percent of the income they

produced. (Pet. App. C, pp. 14, 17, 19-23.)

The reality is that, as the matter was tried before the

panel, the contest focused on factual issues, not legal ones.

The strategy of the State at the arbitration (perpetuated in the

courts below but now wisely dropped) was to prove that the

State acted reasonably and that Ms. Martin’s financial misfor-

tunes could not reasonably be found to have resulted from the

matters complained of by her because, in truth, her economic

collapse was due to nothing more than her own incompetence,

irresponsibility, and lack of qualifications as a successful

vendor. The supporting evidence detailed by the panel (Pet.

App. C, pp. 8-18) was strong, much of it being documentary

in character and essentially irrefutable, particularly since it

was authored by the Department of Rehabilitation itself. Such

was the case as to the State’s blame-shifting stratagem, as the

liability decision expressly pointed out in detail in rejecting

the idea. The panel stressed that it found more credible than

witnesses produced by the State years after the fact the

glowing evaluations and other Department documentation to.

the effect that, even in the midst of her financial difficulties,

Ms. Martin was an excellent and exceptionally qualified ven-

dor, one of the best in the program. (Pet. App. C, pp. 22-23.)

Nowhere did the panel make, or have any need to make,

reference to a “non-discretionary” obligation of SLAs to

pursue claims against federal agencies for violations of the

Act to litigated conclusion even if perceived to lack merit.

Nor, conversely, did the State make, nor would have wanted

to make, its present contention that SLAs in all events have

absolute discretion under the Act not to take any formal

action at all against offending federal agencies even if their

violations of the Act are clear. Indeed, as noted by the panel

(Pet. App. C, pp. 18-24), the Department evidenced in various

ways its awareness of its obligations under the Act to take

formal action against a federal agency’s continuing conduct in

violation of the Act.

For example, on October 6, 1989, just a month after the

“break-even” contract had taken effect, an official in the

Department wrote a letter, reproduced and attached hereto as

Appendix 3, warning the Postal Service that the contract was

in clear violation of the Act and had already shown it would

reduce Ms. Martin’s income by more than fifty percent and

that, unless the problem was quickly resolved, the Department

“will be forced” to take the remedial steps allowed by law.

Actually, as noted by the panel (Pet. App. C, pp. 21-22), the

Department had demonstrated awareness of its responsibility

under the Act before Ms. Martin even began her tenure by

maintaining a successful arbitration against the Postal Service

which established that a “break-even” contract affecting a

vendor in San Francisco was illegal.

Also, the fact is that, after allowing a year to elapse

following the warning of October 1989 (and transparently in

an effort to diffuse Ms. Martin’s appeal to the Department’s

Appeals Board commenced by her months earlier but then

scheduled to be heard a week away), the Department did

belatedly begin an arbitration proceeding against the Postal

Service in regard to the illegal contract affecting Ms. Martin,

albeit a proceeding allowed to languish until after Ms. Martin

left the affected location in 1991 and so wanly pursued as to

result in a settlement which, although ameliorating the situa-

tion to some extent as to the future, absolved the Postal

Service from having to pay anything to Ms. Martin to redress

the financial disaster she was caused to suffer during her

tenure.

At no point in the arbitration did the State make a

contention, as it does now, that arbitration panels under the

Act, as a matter of purely statutory construction independent

of the Eleventh Amendment, lack any power or authority to

grant deserving blind vendors relief in the form of money

damages. To the contrary, the State affirmatively recognized

the panel’s power to award damages. A telling example is the

conclusion of the State’s brief in support of its motion to

dismiss made before the arbitration hearing even began.? The

relevant page of that brief is reproduced and attached hereto

as Appendix 4.

And the relief the panel proceeded to grant was hardly

limited in the way indicated in the petition. The remedial

award granted no damages at all in regard to the “break-even”

contract, with the explanation that an overlap might occur in

view of the award being made to redress the harm done by

violation of Ms. Martin’s priority throughout her tenure. (Pet.

App. D, p. 3.) Also contrary to the intimations in the present

petition, damages were awarded for the State’s own pro-

tracted failure to perform the needed and promised remodel-

ing and upgrading of Ms. Martin’s location. (/d. at p. 4.) In

regard to the Department’s wrongful revocation of her vend-

ing license, the relief ordered by the panel was only futuristic

in reach and was essentially injunctive in character. The

Department was ordered to restore her license and to place

her “forthwith” in a vending facility within the State’s blind

vendor program producing monthly income of $5,731.94, the

amount found to be what she would be currently earning at

her former Postal Service facility after cure of the harmful

wrongs to which she had been subjected. Accordingly, in the

event of delay by it beyond January 31, 1995, in implement-

ing the injunctive relief, the State was ordered to pay Ms.

Martin $5,731.94 for each month until that relief was in fact

implemented. (/d., at p. 6.)

Noteworthy also in view of the shortcomings of the

arbitration the petition alludes to is that the panel expressly

reserved jurisdiction of the matter for ninety days following

its decision “for the purpose of receiving any motion, infor-

mation, or other matter related to the effectuation of the

Panel’s decision and award.” (/d., at p. 6.) The State did not

avail itself of that continued jurisdiction. Instead, without

2 The understandably unsuccessful motion to dismiss was based on

the theory that, as a practical matter, the arbitration would be a pointless

waste of time because, assertedly, the only relief the panel would award if

finding for Ms. Martin would be damages and such relief could not be

enforced in federal court by reason of the Eleventh Amendment.

giving the panel opportunity to cure any perceived error, the

State hurried to the District Court.

2. The Proceedings in the District Court

As to what actually happened in the District Court, the

petition is also muffling and misleading. This is true not only

as to whether the State was duly diligent in pursuing there all

the questions and contentions it now asks this Court to con-

sider, but also as to the fact that Ms. Martin as a defendant put

in issue before the District Court from the start confirmation

and enforcement of the arbitration awards in her favor the

State came to the court as a plaintiff to attack.

At no time prior to the District Court’s judgment did the

State include in its pleadings, in spite of being allowed to

amend the original twice, any allegations challenging the

orbitration awards on two of the three grounds now urged.

The pleadings did not challenge the award on either the

ground that the Act does not authorize damages relief or on

the ground that the panel had disregarded the complete discre-

tion of SLAs not to take remedial action on behalf of

aggrieved vendors against federal agencies violating the Act.

The State’s second amended complaint challenged the awards

on grounds in addition to the alleged unenforceability in

federal court because of the Eleventh Amendment (Pet. App.

B, pp. 15-20), but they involved the claimed denial of due

process resulting from the participation of two persons in the

arbitration (a claim not now made).

From the inception in response to the State’s pleadings,

Ms. Martin filed not only denying answers but also counter-

claims affirmatively alleging the validity of the arbitration

awards in all respects and praying that the court uphold them

and order their enforcement forthwith. (Pet. App. B, p. 20.)

As agreed by the parties, the District Court resolved the

action as a matter of law on the basis of the arbitration record

and upon appropriate cross-motions by the parties to assist the

court to that end. It is true, as indicated in the petition, that, in

the course of its motion for disqualification of the panel, for

reversal of the awards and for convening of another panel to

arbitrate the matter anew, the State attempted to interject

claims of error additional to those it had pled, including the

complete-discretion claim now urged. Those bare bones, how-

ever, hardly tell, and even hide, the full and strange story.

The fact is that, in its initial memorandum in support of

the disqualification/remand motion, the State openly

acknowledged just the opposite of what is now argued. It said

that the Act “imposes an obligation” on a SLA to “protect”

the vendor’s “priority” and that the SLA “must” pursue a

vendor’s grievance when the vendor’s “rights” are “arguably”

being jeopardized by a federal agency’s actions. (See, Mem-

orandum pages 12-13 reproduced and attached hereto as App.

5.)

Later, in the reply to the defendants’ oppositions to its

motion, the State made a remarkable about-face. Having

apparently discovered to its chagrin that a District Court

decision influencing its acknowledgment of obligation had

been overruled on appeal, the State did not hesitate to change

horses in mid-stream in abandonment of its opening position

and to invoke some broad language in the appellate decision

that SLAs have complete and unfettered discretion both as to

whether a federal agency is in fact violating the Act and as to

whether it should in all events be subjected to formal reme-

dial action by the SLA. (Memo., pp. 5-6, reproduced and

attached as App. 6.)

Disposing with particularity of the issues pled but obvi-

ously in light of its own review of the arbitration record, the

District Court concluded, “For the reasons expressed above,

and after reviewing the record of the arbitration proceedings,

the Court finds that the orders of the arbitration panel were

adequately supported by the evidence, and were not arbitrary,

capricious, or an abuse of discretion.” It denied the State’s

motions and granted those of the defendants, including Ms.

Martin’s motion for summary judgment on her counterclaim.

(Pet. App. B, p. 20.) Judgment was entered accordingly,

including the order that the State “shall comply forthwith”

with the panel’s remedial decision. (/d., p. 2.)3

3. The Court of Appeals’ Opinion

In regard to the petition’s brusque treatment of the opin-

ion of the Court of Appeals (Pet. App. A), our basic response

is that the opinion speaks best for itself as to what it did and

did not do. From our perspective, in affirming the judgment,

it focused preponderantly on the Eleventh Amendment ques-

tion, and properly so in view of what had transpired below

and what was developed and contested in the briefs of the

parties and at oral argument. The rejection of the Eleventh

Amendment as a bar was a result reached on the basis of the

Court of Appeals’ careful analysis of the language of the Act,

as well as the impact of the Randolph-Sheppard authority it

found persuasive and the teaching of this Court in point.

The petition asserts that the State’s complete-discretion

contention was not addressed and that factual error was com-

mitted in saying that there was no dispute that the arbitration

panel had authority to award damages as relief under the Act.

That statement in the opinion certainly is in accord with the

State’s affirmatively taken position at the arbitration and with

the absence of any pleading in the District Court departing

from that position. In all events, if such faults had been

genuinely perceived at the time to have importance, rather

than being the outgrowth of strategy for present purposes, the

State’s best recourse for cure would obviously have been a

petition for rehearing. The State filed none.

3 The court of appeals correctly held (App. A to Pet., p. 14) that the

District Court’s denying the State leave to amend its complaint after the

judgment was a proper exercise of discretion, and the State does not now

claim otherwise.

REASONS FOR DENYING THE PETITION

As to all of the three questions advanced by the petition

to induce this Court’s intercession, there are, we respectfully

submit, two lines of analysis and reasoning against a grant,

each by itself decisive. One line involves threshold consider-

ations of the State’s conduct below amounting to concession,

lulling invitation, or waiver and consent. The other demon-

strates the petition’s failure in any event to show an occasion

for a grant. Further, a denial is forcefully called for by

overarching practical and equitable considerations.

I. The Complete and Absolute Discretion Question

Immediately below, beginning with the threshold impedi-

ments, we address first the purported but realistically phan-

tom question which, for the sake of brevity, we will

sometimes, as we have already to some extent, refer to as the

complete-discretion or absolute-discretion question.

As we have seen, it was late in the game, indeed, before

the State’s lulled opponents before the District Court or the

State itself, for that matter, had the slightest reason to think

that the State would dare a contention that the Act vests the

SLAs with absolutely unfettered and unassailable discretion

not to take the remedial action authorized by the Act for them

to take against federal agencies violating the Act, regardless

of how clear and harmful the violations are. Certainly, no

such contention had been made at the arbitration or included

as an attack on the arbitration awards in the State’s original

district court pleading or in either of the two amendments

allowed. More lulling still, of course, was the State’s own

acknowledgment, in its initial memorandum supporting its

disqualification/remand motion, of the Act’s imposition upon

SLAs of a mandatory obligation to “protect” the vending

priority and to pursue a vendor’s grievance whenever the

vendor’s rights are “arguably” being jeopardized by a federal

agency’s actions. (App. 5, pp. 1-2.)

It should not be hard to imagine the surprise of the

defendants (not to mention the court) who, having naturally

relied on that acknowledgment of obligation in preparing

oppositions to the State’s motion, were suddenly treated in the

State’s reply memorandum with a total about-face and eager

embrace of the complete-discretion idea. Yet more, even

though the State in the same reply alluded to its readiness to

file a third amended complaint to allege attacks on the arbi-

tration additional to its existing pleadings (App. 7 hereto),

months elapsed before the judgment without the State’s both-

ering in all that time to attempt the filing of any new pleading

(Pet. App. A, p. 14).

Obviously, just because an action begins in an arbitration

or administrative hearing, it should not be less subject to the

rule, rooted in fairness and kindred concerns and a common-

place in the purely court setting, which bars a party from

asserting on review as error anything below which the party

conceded or affirmatively invited or caused or passively

waived by failure to plead or object or by other acquiescent

conduct. The rule has thus been applied in such cases by this

Court as well as by others. (E.g., Taylor v. Freeland & Kronz,

et al., 503 U.S. 638, 645-646 (1992); Ernst & Ernst v.

Hochfelder, 425 U.S. 185, 194, n. 13, rehearing denied 426

U.S. 986 (1976); United States v. L.A. Tucker Truck Lines,

344 U.S. 33, 37 (1952).) At least partially, it is encouched in

the APA section requiring points for review to be “presented”

(5 U.S.C. 706), cited by the District Court in duly declining to

consider the State’s unpled attacks (Pet. App. B, pp. 19-20).

We are not unaware that, in exceptional cases involving

special circumstances of a ringing equitable tenor, the general

rule has been relaxed. Nothing calling for such special solici-

tude for the State is involved here. Quite the reverse, about

which we hope to have space enough to say more later.

Substantively in any event, the petition does nothing but

attempt to brew a tempest in a teapot as to the purported

question of complete discretion. It is even mystifying how the

present opinion of the Court of Appeals can be said in the

petition to be one of the two decisions engendering conflict

and confusion on the subject. The petition (at p. 7), complains

of the Court of Appeals’ failure even to address the issue, so

it eludes ready grasp how it can also be accused of addressing

the matter in a conflicting way.

Nor is it certain precisely what contribution to the elusive

conflict proclaimed by the petition was truly intended to have

been made by the other contestant it pushes into the ring. The

majority opinion in Georgia Dept. of Human Resources v.

Nash, 915 F.2d 1482 (11th Cir. 1990) sheds but faint light on

the circumstances in that case surrounding the Marine Corps’

closing of the blind vendor’s facility. It is hard to tell whether

or not something extenuating, such as a budgetary cutback or }

special military problem, may have been involved to militate

against the clarity of the alleged violation. Also, there was not

a hint in the opinion of protracted and repeated violations by

the federal agency, let alore of the SLA’s own direct and

affirmative causation of harm to the vendor by anything like,

as here, the SLA’s own failure to remodel the facility as

needed and promised and the wrongful revocation of the

vendor’s license. And, serving to make the obfuscation come

full circle, the majority did take some pains to use qualifying

expressions contrapuntal to its more sweeping utterances. For

example, at the point of voicing the actual holding, the major-

ity used the words, “at least in the present case,” to tether its

views to the facts there involved, which, although left unclear

in what may have been other significant respects, certainly

included the fact, stressed by the opinion, that the SLA had

never there determined that the Marine Corps was in violation

of the Act. (915 F.2d at p. 1489.)

To be sure, there is broad language in the majority

opinion which, considered in the abstract and alone, can be

construed as standing for an iron-clad rule that, even if a

federal agency clearly violates the Act in a manner seriously

harmful to a vendor, the administering SLA has been vested

by the Act with absolute discretion not to take against the

violator the remedial steps it authorizes. As shown in the

dissent (at pp. 1495-1501), such a notion is blind to the Act’s

purpose and its requirements imposed upon SLAs in carrying

out the priority established. It basically derives, instead, from

a starkly crabbed reasoning process focusing in a vacuum on

the semantic difference between the Act’s provisions for ven-

dor-SLA arbitrations (subdivision (a) of 20 U.S.C. 107d-1)

and the ones for arbitrations of SLA-federal agency disputes

(subdivision (b) of that section). The word “may” in the latter,

entirely appropriate to the end of general authorization depen-

dent upon clarity and importance of violations, was hardly

intended to authorize in reverse the condoning by SLAs of

clear and harmful violations of the basic priority objective of

the very Act SLAs have committed themselves to implement.

Undeniably, besides, subdivision (a) all-inclusively mandates

availability of the procedure, including arbitration, to every

vendor dissatisfied with “any” SLA conduct, thus obviously

not excluding SLA handling of violations by federal agencies.

At bottom, in the abstract and alone, the broad language

of the majority opinion attributes to Congress the absurdity of

establishing a valuable right without a reasonably certain

remedy in the event of its violation by federal agencies. In

that connection, it merits emphasis that, since SLAs have

been made the protectors against abuses, courts have reasoned

that blind vendors themselves have no standing to proceed

against offending agencies. (E.g., Randolph-Sheppard Ven-

dors of America v. Weinberg, 795 F.2d 90, 102-103 (D.C. Cir.

1986); State of N.Y. v. U.S. Postal Service, 690 F.Supp. 1346,

1350 (S.D.N.Y. 1988).) It would be a farce, indeed, if the self-

same provisions were held both to bar vendors’ direct efforts

to get relief against offenders and to allow SLAs to refuse at

whim to seek such relief for them, thus unconscionably leav-

ing vendors, however clear and harmful the violations, to

hang and turn slowly and helplessly in the wind of a legal no-

man’s land.

Altogether, there is little, if any, likelihood that the

reasonably thoughtful will be misled by the subject majority

Opinion into trusting in a rule of absolute and unassailable

SLA discretion without regard to the clarity and harm of

federal agency violations. The petition cites no other court of

appeals authority for such a notion, and we know of none. In

all events, the present decision of the Court of Appeals

neither denounced that notion nor needed to and cannot be

understood as in irreconcilable “conflict” with it.4

The Act impacts on a relatively few, and, during the

nearly quarter century that the procedure to resolve vendor-

SLA disputes has been part of it, the decisions involving that

procedure have been sparse indeed. The plain truth is that

questions in regard to that procedure in general, let alone the

shadowy one now at hand, are likely to recur rarely at most in

the foreseeable future and to be of narrow reach in all events

compared to the plethora of federal questions of widespread

concern to the country at large which arise on a regular or

even daily basis and which can legitimately be said to be

needful of attention at the highest judicial level.

In short, the purported but phantom complete-discretion

issue is barred at the threshold, but, even if it were not, it is

far from an “important” let alone “compeliing,” matter of the

kind specified in this Court’s Rule 10.5

II. The Panel Power Question

The State’s ungainly clutching for inclusion in its cer-

tiorari quiver at what its own hand buried below surfaces

again as to whether vendor-SLA arbitrators have power to

grant damages relief if found appropriate. The State is so

intent on the disinterment as to be unembarrassed, evidently,

by its failure to file a petition for rehearing to undo the

asserted error of the Court of Appeals in attributing to it a

concession of such power. There can be no doubt that the

State affirmatively acknowledged such power in its own brief

to dismiss the arbitration (App. 4) and that in none of its

pleadings in the District Court was the Act itself, that is, aside

4 Given the State’s failure to raise the point with due diligence, even

the Court of Appeals’ holding is not contrary to it.

5 In urging denial of the petition, the federal respondents in their brief

(pp. 7-8) point out that the State is not here in a position to raise the

complete discretion question. Significantly, too, even amici curiae do not

include that question among the ones said to be presented and shy

throughout from joining hands with the State in that regard.

from the alleged bar of the Eleventh Amendment, invoked as

prohibiting a damages award. Once more thwarting the State

at the threshold, therefore, is the aforecited rule barring on

review questions not duly raised or preserved below.

Substantively in any event, the petition, without succor

from amici curiae, suffers from several shortcomings in urg-

ing this Court to resolve this question. Naturally for starters

and without more, one is inclined to take with a sizeable grain

of salt assertions so belatedly espoused at such odds with the

State’s stances below. It is hard to credit seriously a position

the State would obviously have found advantageous to

advance from the outset of and throughout the litigation had it

in fact been thought reasonably tenable.

Not surprisingly, therefore, candid focus on the Act’s

purpose and its provisions for arbitration of vendor-SLA

disputes quickly negates the remedial handcuffing conjured

up by the State in myopic afterthought. Obviously, the basic

purpose of the Act is to ease the economic plight of the blind

by enhancing their opportunity to earn money through estab-

lishment of a valuable vending priority. (20 U.S.C. 107(b),

App. |, p. 1.) That monetary orientation, of course, neces-

sarily configures as well the responsibilities of the SLAs

undertaking to implement and administer the Act. Potentially

and intimately at stake depending on faithful or derelict SLA

function is the difference between realization or loss of ven-

dor earnings or opportunity to earn. This is clearly so whether

the particular SLA function focused upon is, for example, the

issuance or revocation of a vendor’s license, the installation

Or maintenance of adequate vending facility, the taking of

action against a federal agency violating a vendor’s priority,

or the proper application of money collected from vendors as

“set-aside” fees under the Act.®

the cost of the State’s blind vending program (e.g., purchase of equipment

and fixtures, construction and maintenance of vending facilities, and

benefits such as health insurance and pension plans), are derived from “set-

aside” fees collected by the State from the vendors themselves and are held

Particularly against that telling backdrop, it is inevitable

that much or most, if not all, of SLA conduct potentially open

to dispute by vendors will concern money in some way,

naturally including claims for money already lost in some

situations. Thus, from the text of the Act, it clearly and

manifestly follows that lost-money grievances were intended

to be among those for whose resolution at a vendor’s behest

Congress mandated the arbitration and other procedure in 20

U.S.C. sections 107d-1(a) and 107d-2, having taken in section

107b(6) exquisite introductory care to exact from every SLA

an express and specific observance commitment of contrac-

tual dimension. (App. | hereto.) After all, the only expression

definitive of the kind of vendor-SLA dispute to be so resolved

is the term “any,” a term unmistakably of all-inclusive reach

in common usage.

The State strays in precisely the opposite direction from

the true mark in urging that the lack in the Act of express and

specific authorization of damages as a remedy is fatal to the

arbitral granting of relief in that form. That maladroitness is

compounded by inapt reliance on Will v. Michigan Dept. of

State Police, 491 U.S. 58 (1989), which is not a remedies but

a liability decision. It involves an entirely different statute

and the obviously different question of whether the word

“person” served to bring the States of the union within the

ambit of the prohibitory provision at issue there. In holding in

the negative, this Court reasoned among other things (at p.

64) that “person” does not include “the sovereign” in common

usage.

What the State misses is that the Act is silent not just as

to damages as a remedy but as to any and all remedies

appropriate in the context of vendor-SLA arbitrations, a fact

tellingly signifying inclusion rather than exclusion of dam-

ages among the potential remedies intended. Obviously,

instead of undertaking the onerous and even precarious task

of attempting to forecast a remedial construct sufficiently and

in trust for use for the limited purposes specified. (Calif. Welf. & Inst. C.

§ 19629.)

ne ee NR ee ee

variantly responsive to the all-inclusive SLA violations made

subject to the process, Congress sensibly empowered the

fault-finding arbitrators in a particular case to resort to the

remedies otherwise commonly available in the federal legal

system in fashioning the relief determined to be most appro-

priate in light of the nature of violation and harm found. That

approach was hardly iconoclastic; it is in accord with estab-

lished general principles of longstanding applicability where

a cause of action to sue in vindication of a federal right exists

and Congress has been silent on the question of remedies.

(E.g., Franklin v. Gwinnett County Pub. Schs., 503 U.S. 60,

69-71 (1992).) Thus, it is easy to understand why, in holding

in favor of the Act’s authorization of damages, the Courts of

Appeals for the Sixth and Third Circuits included in their

cogent reasoning (in addition to the clear thrust of the Act

otherwise) the absence from the Act of anything ousting

retroactive compensatory relief and attorneys’ fees in spite of

the well known use of such relief at the time in arbitrations

generally. (Tenn. Dept. of Human Serv. v. U.S. Dept. of Educ.,

979 F.2d 1162, 1165 (6th Cir. 1992); Delaware Dept. of

Health v. U.S. Dept. of Educ., 772 F.2d 1123, 1136, et seq.

(3rd Cir. 1985).)

Predictably in the foregoing and clear light, the State’s

account of sharp circuit division on the question is errant and

grossly overblown. To begin with, the Eleventh Circuit’s

aforediscussed decision in Georgia, supra, 915 F.2d 1482 did

not overturn the damages award on the ground of a general

lack of power to make such an award under the Act where

appropriate but on the ground of no liability for any relief. In

actuality, the court (at p. 1492) cited in passing and with

seeming approval the Third Circuit’s decision in Delaware,

supra, applying the Act as authorizing damages.

The decisions holding in the affirmative on the authoriza-

tion issue, that is, the one by the Court of Appeals here (Pet.

App. A, pp. 8-9) and the ones by the Courts of Appeals for the

Sixth and the Third Circuits in Tennessee, supra, and Dela-

ware, supra, are each unanimous. In the three-way opinions in

McNabb vy. U.S. Dept. of Educ., 862 F.2d 681 (8th Cir. 1988),

the dissent of Judge Lay (at pp. 684-685) joins the authoriza-

tion group. Judge Fagg (at pp. 685-687) rejects authorization

of damages of any kind. In an opinion appearing to be based

more on the bar of the Eleventh Amendment than on the terms

of the Act as such, Judge Doty compromises the issue, con-

cluding, somehow, that the Act authorizes prospective but not

retrospective damages (at pp. 687-688).

Thus, an accurate tally inclusive of the approving dictum

in Georgia shows that, of the fifteen court of appeals judges

in five Circuits who can be said to have addressed the issue

squarely, no less than thirteen have recognized the Act’s

authorization of damages as a remedy, only one has declined

to do so, and the other neuters the issue through conglomera-

tion with the Eleventh Amendment.’

’ Nothing of merit to rescue the petition on the issue is

added by amici curiae, who, in spite of the Court of Appeals’

alert, have ignored that the State whose unfit coattails they

clutch gave away the store below. To the scant extent they try

legal analysis at all instead of “scare tactics,” they parrot the

State’s mistakes, including the avowal of sharp circuit con-

flict. In the same indiscriminate way, they blend in a pinch of

inapposite authority of their own. For example, undaunted by

the obvious fact that the Act is the measure of vendor

remedies against SLAs and does not refer to the APA for

remedies but solely for review purposes, they drag in by the

heels 5 U.S.C. § 702, which, of course, can touch at most the

remedial exposure of such federal parties as come within the

basic design of the APA.

The main theme of amici curiae is a transparently bogus

one. The pretense is that, if allowed to stand, the decision of

the Court of Appeals is so revolutionary that it will cause the

States in general to reconsider and drop participation in the

Randolph-Sheppard program and an array of other programs

7 That the reasoning of the overwhelming weight of court of appeals’

decisions regarding the Act has been so cogent as to induce the federal

respondents to depart from their erstwhile anti-power view noted by the

State serves to belie rather than indicate a need for this Court to decide the

issue.

under far-reaching enactments, all out of fear of the avalanche

of greedy and bankrupting claims unleashed.

No twisting can hide that, aside from the State’s fatal

concession, the Court of Appeals’ decision rests on nothing

which has not been reported for years, including Delaware,

decided more than a decade ago; that the Act is a special and

unique creature, entirely unlike the other enactments alluded

to; or that, in the more than ten years since Delaware, the

incidence of successful damages claims against SLAs has

been minuscule and will, in the last and just analysis, increase

if at all due not to courts but to the dictates of the Act and

proof of SLA abuses.

The explanation, we suspect, for the appearance of amici

curiae is the hope that joinder in the State’s outcry by eleven

more of such important entities will impress the Court that the

matter sought to be raised is also important and needful of

attention. Far more impressive in that light, we submit, is that

thirty-eight states have stayed away in spite of, no doubt, the

present State’s general campaign to recruit amici from among

its sisters. (See, magazine excerpt reproduced and attached

hereto as Appendix 8.)

In sum, the panel power issue is foreclosed at the thresh-

old and is the subject at worst of a dwarfling conflict in the

Circuits. The Court of Appeals’ decision is in accord with the

clear weight of Circuit authority which is in turn faithful to

the clear intent of the Act. Wide recurrence of the issue is

unlikely in view of the Act’s inherently small reach and the

historic dearth of litigation under it. Nothing is remotely at

hand amounting to a “compelling” or even “important” reason

for a grant required by Rule 10.

Ill. The Eleventh Amendment Question

There are multiple threshold obstacles to granting of the

petition to resolve whether the Eleventh Amendment bars

enforcement in a federal court of an arbitral award of dam-

ages found to be appropriate under the Act to redress SLA

defaults. We welcome in that regard the demonstration by the

federal respondents’ brief (at pp. 8-9, 10, 12, et seq.) of some

of the considerations standing cogently in the way. Since the

State was not duly diligent to raise or preserve any liability

question now claimed, the case is not a suitable vehicle for

resolution of a remedial issue. Also, it seems unavoidable that

the point can be disposed of purely as a matter of statutory

construction without ever reaching the Amendment because

the Act authorized the damages award under a procedure

potentially leading to federal court under the APA and to

which every SLA has unmistakably been required to consent

by the Act.

Yet another complication tending to undermine suit-

ability of this case as a vehicle for the question is the one

which the petition contrives to hide. As we have seen, the

present arbitral award grants important injunctive relief of

futuristic reach, not just compensation as to the past.8

Still more, and perhaps most telling of all, we think, the

State is foreclosed at the threshold (that is, quite apart from

the waiver exacted by the Act, discussed later) by its waiver

of the Eleventh Amendment flowing from the circumstances

surrounding its own selection of a federal court in which to

commence this very action with ihe aim of invalidating the

arbitration award. Important to recall is that the attacks on the

arbitration included grounds for invalidation other than the

unenforceability of the award under the Eleventh Amend-

ment.

8 The State’s distortion of the relief granted is aimed, we think, at

avoidance of the undermining complication not just factually, but legally as

well to avoid the doctrine that the Eleventh Amendment does not bar

injunctive relief against individuals who are State officials in charge and

have been made parties.

9 In addition to the claims of denial of due process in the arbitration

noted above, which continued to be pressed throughout in the courts below,

the State’s initial pleading contained an attack illustrative of its reckless

determination to “win” this case (manifesting itself in various ways). It

even alleged the unconstitutionality of the Randolph-Sheppard Act in its

entirety, the very foundation of the State’s own blind vendor program and

of like programs throughout the nation and the raison d’etre of financing

It is inescapable that, by its own choice of forum, the

State opened the door to the potential exercise of federal

jurisdiction over itself unhampered by the Amendment. After

all, one potential outcome obvious from the start was that, if

the court rejected all of the State’s attacks on the award, a

natural concomitant of such rejection (even in the absence of

a counterclaim) would be for the court expressly to uphold

and enforce an award which the Act made clear was to be

final and “binding on the parties” unless overturned on APA

review. (20 U.S.C. §§ 107d-1(a) and 107d-2(a).) Such a con-

comitant ruling in the event of the State’s failure was espe-

cially foreseeable and virtually invited since, unless her

counsel was asleep at the switch, Ms. Martin was almost

certain to file a counterclaim for confirmation and enforce-

ment lest her rights be otherwise lost by operation of the

compulsory counterclaim rule (Fed.R.Civ.P. Rule 13(a), App.

2 hereto). Her claim not merely arose from the same transac-

tion or occurrence as the State complained of but was the

reverse side of the very coin the State had put into the judicial

hopper. Significantly, there is decisional authority that a com-

pulsory counterclaim need not be shown to have an indepen-

dent basis otherwise for the court’s jurisdiction over it and

that a pleading seeking to invalidate an administrative award

makes a counterpleading to uphold the award compulsory.

(E.g., Glen Falls Indemnity Co. v. United States, 229 F.2d

370, 373-374 (9th Cir. 1955); Burlington Northern, Inc. v.

American Ry. Supervisors Ass’n, 527 F.2d 216, 223 (Sth Cir.

1975); Matter of Arbitration Between Intercarbon Bermuda,

146 F.R.D. 64 (S.D.N.Y. 1993).)

There is also a feature of the APA, referred to by the Act,

which merits emphasis at this point. The APA makes it

such programs to an overwhelming extent by federal “matching” funds

together with “set-aside” fees collected from the blind vendors themselves

under the Act. The wild attack on a wholesome enactment of sixty years’

standing was expunged from the amended pleading in, no doubt,

understandable though slow alarm at the folly of burning down the house to

roast the pig.

expressly clear that “judicial enforcement” is included within

“judicial review.” (5 U.S.C. § 703.)

In such circumstances, it would, we submit, be uncon-

scionable to leave the State free, at one and the same time, to

chance invocation of federal court jurisdiction to the end of

hoped-for self-advantage and yet to reserve the shield of the

Eleventh Amendment in the event of failure and consequent

and foreseeable confirmation and enforcement of the award in

accordance with the compulsory counterclaim.

Once more in all events, the petition because of substan-

tive deficiencies fails to show occasion for this Court to

intercede on an Eleventh Amendment issue. Since those defi-

ciencies essentially parallel the ones we have shown above to

exist as to the panel power issue, brief recapitulation of what

we have pointed out as to that issue should suffice now with a

few additions.

All that is needed is candid focus on the text of this

special and unique Act’s network of pertinent provisions

which, “clearly” and “manifestly” and at least by “over-

whelming implication,” require every SLA to consent to a

waiver of the Amendment in order to qualify as a SLA. Such

focus is eschewed by the State, which contents itself with

empty rhetoric and self-proving conclusions as to what the

Act does not do. It is poppycock that the decisions of the

Court of Appeals here and of the one for the Third Circuit in

Delaware, supra, rest solely on the provision for vendor-SLA

arbitration and the fact that compensatory relief is awarded in

arbitrations generally.

We recall from above: In view of the monetary orienta-

tion of the Act’s very purpose and thus necessarily of SLA

functions, it is inevitable that SLA conduct open to dispute by

vendors will include those causing loss of money in some

instances. It follows that such lost-money claims are among

the disputes for whose resolution at a vendor’s behest Con-

gress has mandated a process inclusive of arbitration. The

only definitive expression of the kind of disputes to be so

resolved is the all-inclusive word “any.” And Congress has

taken introductory care in mandatory terms with use of the

word “agree” to exact from every SLA advance commitment

to honor the resolution process.

We remind now as well that arbitral outcomes in the all-

inclusive vendor-SLA process are unmistakably intended to

be dispositive in view of their entrenchment as “final and

binding on the parties” unless overturned on APA review.

Without question, the potential to end up subject to the

jurisdiction of federal courts is part of the all-inclusive pro-

cess to which SLAs have consented. Under 5 U.S.C. § 703,

the APA venue section, the proper court for review is “a court

of competent jurisdiction,” a phrase which, in light of the

involvement of a federal underlying Act, must necessarily

include, if not exclusively designate, federal courts.!° And

because, under the same APA section, the term “judicial

review” expressly includes “judicial enforcement,” and is

clearly consistent with the intention that the arbitral outcomes

be “final and binding on the parties,” it is obvious that the

process to which SLAs have consented may result not just in

affirmance by a reviewing court but in enforcement by that

court as well. Certainly, it is absurd to suppose that Congress

envisioned two separate suits in two different courts concern-

ing the same arbitration, one by the loser to have the award

overturned and the other by the winner to enforce it.

On this question as well, the State cries out that the Act

says nothing about damages as a remedy, ignoring that the

Act is silent as to any remedy in vendor-SLA arbitrations,

thus revealing potential inclusion of damages if appropriate

among the intended remedies in conformity with the rule

applied in cases such as Franklin, supra.

Such decisions of this Court as the State cites in a futile

effort to manufacture a conflict with the Court of Appeals’

decision involve enactments entirely different from the pre-

sent one and lack anything remotely close to the network of

10 Significantly, at least two decisions that we know of treat the

phrase under consideration as leading only to federal district court.

(Fillinger v. Cleveland Society for the Blind, 587 F.2d 336, 338 (1978);

Mass. Elected Committee of Blind Vendors v. Matava, 482 F.Supp. 1186,

1189 (1980).)

dispositive provisions, except for Port Authority Trans-Hud-

son Corp. v. Feeney, 495 U.S. 299 (1990), which held in favor

of waiver of the Amendment under the “overwhelming impli-

cation” test.

In accord with Delaware and faithful to the dictates of

the text of the Act, the Court of Appeals here held against the

bar of the Amendment, correctly relying on the holding of and

test applied in Port Authority. It is true that the Court of

Appeals held to the contrary in Tennessee, supra, 979 F.2d at

p. 1168, et seqg., even though it also first held that arbitration

panels have power to award damages under the Act. It seems

doubtful that, in view of intervening developments including

the Court of Appeals’ present decision, Tennessee on this

point will be followed even in that Circuit or be of influence

elsewhere. Its reasoning on the point is readily seen to be far

from ideal. For one thing, it seems internally inconsistent

since the power and the Amendment issues are both disposed

of with clarity and force by features of the same dispute-

resolution process. Also, at various points, the opinion

appears to wander into adoption of the stricter test applicable

to cases involving the question of Congressional abrogation

of immunity under the Amendment.

Because of the threshold impediments involved, this in

no event is a case suited for raising or resolving the Eleventh

Amendment issue. Moreover, the Court of Appeals has cor-

rectly responded to the clear dictates of the Act, which the

State docs not try to explain away with reasoning or the

citation of apposite authority. Under the Court’s Rule 10, even

circuit conflict on an “important” federal question does not

control or fully measure the Court’s discretion, and the two-

to-one conflict involved here is far from “important” in these

circumstances. In view of the inherently small reach of the

Act, and as attested to by the paucity of presentation of the

point in the nearly twenty-five years the vendor-SLA process

has been in existence, the chances of recurrence soon are slim

and, in terms of wide impact, none. By no analysis can the

matter be viewed as amounting to “compelling reasons” as

required for a grant by Rule 10.

IV. The Practical and Equitable Considerations Calling

for Denial

Much counseling against a grant of the petition could be

said in terms of considerations which sound in good sense,

avoidance of undue hardship, the orderly and expeditious

administration of justice under our system, and just plain

fairness. However, there is not world enough and time at the

moment, so we must find comfort in the thought that a good

deal of the sorry picture should be discernable from what we

have already said above, as well as from the decisions below,

particularly the detailed rehearsal in the arbitrators’ liability

opinion.

Suffice it now to point out that Ms. Martin, a woman

nearly sixty years old and of starkly limited means, has been

struggling for eight years to obtain relief by proceedings

specified in the Act from multi-faceted wrongdoing at the

hands of those charged with the obligation to protect her. The

wrongdoing brought about financial disaster, including the

wrongful termination of the very license indispensable to her

livelihood. Nevertheless, she has persevered and succeeded

through eight years encompassing administrative hearings,

the arbitration, the district court and the court of appeals. She

shudders at the threat of greater delay on account of the

present petition, particularly since the State was not duly

diligent to raise and preserve any of the questions now sought

to be advanced. Moreover, she has been and remains mysti-

fied as to why a question like the Eleventh Amendment can

possibly excuse the failure of the State to implement for years

the important injunctive relief ordered by the arbitrators,

including restoration of her license.

At every inch of the way, the State has doggedly fought

her even with stances reflecting a reckless no-holds-barred

determination to “win” the case. At one point, there was even

a transitional readiness to jettison the Act as unconstitutional

in its entirety. At every stage below, it did not hesitate to

vilify her as the cause of her own misfortunes through incom-

petence and irresponsibility as a vendor though knowing full

well that the State’s own evaluations were directly to the

contrary. Even now, the petition is contrived to hide the true

nature of the wrongdoing found by the panel and the courts,

as well as the true nature of the relief involved.

The one solacing feature of Ms. Martin’s plight is that the

arbitration and decisions of the courts below have vindicated

her rights under the Act and serve, if not now disturbed, to

relieve one of the objects of the Act’s solicitude. If ever a

time comes (which we think inherently doubtful for reasons

already indicated) when this Court is inclined to intervene to

resolve any of the questions sought unfitly to be raised, let it

be, we earnestly pray, in a case where the decisions below

have resolved the issues in a manner turning a beneficiary of

the Act away without relief — let it be also in a case where the

petitioner has been duly diligent below to raise and preserve

the issues.

CONCLUSION

For the reasons stated above, the petition should be

denied.

Respectfully submitted,

Janice A. JENKINS

B.V. YTURBIDE

Counsel for Respondent Jeana Martin

—

App. 1

APPENDIX 1

[Selected Provisions of the Randolph-Sheppard Act]

20 U.S.C. § 107. Operation of vending facilities

“(a) Authorization. For the purpose of provid-

ing 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-sup-

porting, blind persons licensed under the provi-

sions of this chapter shall be authorized to

operate vending facilities on any Federal prop-

erty.

“(b) Preferences, regulations; justification for

limitation on operation. In authorizing the oper-

ation of vending facilities on Federal property,

priority shall be given to blind persons licensed

by a State agency as provided in this chapter;

and the Secretary, through the Commissioner,

shall, after consultation with the Administrator

of General Services and other heads of depart-

ments, agencies or instrumentalities of the

United States in control of the maintenance,

operation, and protection of Federal property,

prescribe regulations designed to assure that -

“(1) the priority under this subsection is given

to such licensed blind persons (including

assignment of vending machine income pur-

suant to section 107d-3 of this title to achieve

and protect such priority), and

“(2) wherever feasible, one or more vending

facilities are established on all Federal property

to the extent that any such facility or facilities

would not adversely affect the interests of the

United States. Any limitation on the placement

App. 2

or operation of a vending facility based on a

finding that such placement or operation would

adversely affect the interests of the United

States shall be fully justified in writing to the

Secretary, who shall determine whether such

limitation is justified. A determination made by

the Secretary pursuant to this provision shall be

binding on any department, agency, or instru-

mentality of the United States affected by such

determination. The Secretary shall publish such

determination, along with supporting documen-

tation, in the Federal Register.”

20 U.S.C. § 107b. Application for designation as State

Licensing Agency; cooperation with Secretary; furnishing

initial stock

“A State agency for the blind or other State

agency desiring to be designated as the licens-

ing agency shall, with the approval of the chief

executive of the State, make special application

to the Secretary and agree -

“(1) to cooperate with the Secretary in carrying

out the purpose of this chapter;

“(2) to provide for each licensed blind person

such vending facility equipment, and adequate

initial stock of suitable articles to be vended

therefrom, as may be necessary . . .

“(3) that if any funds are set aside, or caused to

be set aside, from the net proceeds of the opera-

tion of the vending facilities such funds shall be

set aside, or caused to be set aside, only to the

extent necessary for and may be used only for

the purposes of (A) maintenance and replace-

ment of equipment; (B) the purchase of new

App. 3

equipment; (C) management services; (D) assur-

ing a fair minimum return to operators of vend-

ing facilities; and (E) retirement or pension

funds, health insurance contributions, and pro-

vision for paid sick leave and vacation time, if it

is determined by a majority vote of blind

licensees licensed by such State agency, after

such agency provides to each such licensee full

information on all matters relevant to such pro-

posed program, that funds under this paragraph

shall be set aside for such purposes: Provided,

however, That in no event shall the amount of

such funds to be set aside from the net proceeds

of any vending facility exceed a reasonable

amount which shall be determined by the Secre-

tary;

“(4) to make such reports in such form and

containing such information as the Secretary

may from time to time require and to comply

with such provisions as he may from time to

time find necessary to assure the correctness

and verification of such reports;

“(5) to issue such regulations, consistent with

the provisions of this chapter, as may be neces-

sary for the operation of this program;

“(6) to provide to any blind licensee dissat-

isfied with any action arising from the operation

or administration of the vending facility pro-

gram 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 107d-1 of

this title.”

App. 4

20 U.S.C. § 107d-1, Grievances of blind licensees, pro-

vides in relevant part:

“(a) Hearing and Arbitration. Any blind

licensee who is dissatisfied with any action aris-

ing from the operation or administration of the

vending facility program may submit to a State

licensing agency a request for a full evidentiary

hearing, which shall be provided by such

agency in accordance with section 107b(6) of

this title. If such blind licensee is dissatisfied

with any action taken or decision rendered as a

result of such hearing, he may file a complaint

with the Secretary who shall convene a panel to

arbitrate the dispute pursuant to section 107d-2

of this title, and the decision of such panel shall

be final and binding on the parties except as

otherwise provided in this chapter.”

20 U.S.C. 107d-2, Arbitration, provides in relevant part:

“(a) Notice and Hearing. Upon receipt of a

complaint filed under section 107d-1 of this title,

the Secretary shall convene an ad hoc arbitration

panel as provided in subsection (b) of this sec-

tion. 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 the purposes

of chapter 7 of such title 5.”

App. 5

APPENDIX 2

Rule 13, Federal Rules of Civil Procedure

“(a) Compulsory counterclaims. A pleading

shall state as a counterclaim any claim which at

the time of serving the pleading the pleader has

against any opposing party, if it arises out of the

transaction or occurrence that is the subject mat-

ter of the opposing party’s claim and does not

require for its adjudication the presence of third

parties of whom the court cannot require juris-

diction. ...

“(b) Permissive counterclaims. A pleading may

state as a counterclaim any claim against an

opposing party not arising out of the transaction

or occurrence that is the subject of the opposing

party’s claim.”

App. 6

APPENDIX 3

DEPARTMENT OF REHABILITATION

830 K St., 2nd Floor

Sacramento, CA 95811

(916) 322-2070

October 6, 1989

Postmaster

U.S. Postal Service

3101 W. Sunflower

Santa Ana, CA 92799

Dear Sir:

The Department of Rehabilitation, Business Enterprise

program would like your support in correcting an unac-

ceptable violation of the Randolph-Sheppard Act at your

facility. The blind vendor, Ms. Jeana Martin, has experi-

enced more than a fifty percent loss of income due to

unfair and direct competition which started when your

private vending machine contract was renewed Septem-

ber 1, 1989. Prices were immediately reduced in the pri-

vate machines thereby reducing the volume of sales in the

blind vendor’s machines.

Further, the vending machine income owed to Ms. Martin

has not been paid by your organization for the period of

October 1988 through September 1989.

The Department views the actions of your organization to

be in violation of the letter and spirit of the Randolph-

Sheppard Act (20 U.S.C. 107) and supporting federal

regulations (34 CFR 395).

We hereby request a meeting with you to immediately

resolve this problem. Time is of the essence and unless

the matter can be quickly resolved, the Department of

App. 7

Rehabilitation will be forced to pursue any and all reme-

dial steps allowed by law.

Your prompt attention and response is most appreciated.

Sincerely,

HAO Q. LAM, Deputy Director

Program Management

& Support Division

HOQL:11

cc: Don D. Edmon

Jeana Martin

App. 8

APPENDIX 4

[Excerpt from State’s brief supporting motion to dismiss

arbitration]

* * *

[p. 14] CONCLUSION

Complainant has filed a Complaint which on its face

is flawed. It is subject to the defense of absolute immu-

nity. This panel has the jurisdiction to hear the issues

raised by Ms. Martin, and to award her damages, yet if to

does so, Ms. Martin has no means by which to enforce the

award. Dismissal of the Complaint for Arbitration and

Supplement is the only means by which to avoid the

misuse of time and taxpayers’ dollars. The State of Cali-

fornia respectfully requests that this panel exercise its

authority to dismiss the existing Complaint and Supple-

ment, on the basis of the sovereign immunity of the State

of California.

Dated: December 9, 1993

Respectfully submitted,

/s/ Gwynne Pratt Bacigaluppi

GWYNNE PRATT BACIGALUPPI

Acting Chief Counsel

Department of Rehabilitation

Attorney for Respondent

Department of Rehabilitation

State of California

App. 9

APPENDIX 5

[Excerpt from State’s opening memorandum supporting

district court motion to disqualify the arbitration panel

and to reverse and remand to new panel]

* * *

[p. 12] remodeling, she not only made an increased profit

but also improved customer relations immediately.

However, the panel chose to ignore all evidence the

plaintiff as respondent presented at the arbitration. The

panel ignored the testimony of both Don Edmon and

David Lyman and dismissed their testimony by stating

incorrectly that the respondent’s “denigration” of Com-

plainant was unwarranted. (Exhibit B, page 29, 2nd para-

graph) The panel accepted all Martin’s letters over

respondent’s live testimony, the panel accepted uncor-

roborated, self-serving statements by complainant over

all of the respondent’s-department’s witnesses. It was,

therefore, inevitable that the panel would arrive at a

decision on both liability and damages that was not only

clearly erroneous but without “substantial evidence” to

support it.

The panel ascribed “binding” precedential value to a

1981 San Francisco arbitration case taken out of context,

never litigated beyond arbitration, and never given the

force of law by any tribunal. (See page 29 of Exhibit B,

first paragraph) Without authority and without any sem-

blance of reason, the panel gave “great weight” to this

unpublished, uncertified, and unrecognized arbitration

decision. This was improper, illegal, and an abuse of

discretion. An attorney who relies on unpublished opin-

ions is sanctioned. The panel should be sanctioned.

App. 10

In Georgia Dept. of Human Resources v. Bell, 528

F.Supp. 17, 24 (1981), the court clearly recognized that the

state licensing agency (SLA) has discretion to file a com-

plaint whenever a licensed blind vendor so requests. The

Act imposes an [p. 13] obligation on the SLA to protect ,

the vendor’s “priority”. The SLA must “pursue” a ven-

dor’s grievance when the vendor’s rights are arguably

being jeopardized by the Federal agency’s actions.

Here, the panel discounted the efforts of Mr. Edmon

to settle the dispute without the need for arbitration. The

panel denigrated Mr. Edmon’s efforts, substituting their

Martinet-like judgment for a rational and measured

approach. The panel improperly ignored the “discretion”

that the court in Georgia Dept. of Human Resources v. Bell

found. The fact is the plaintiff-respondent “pursued”

Martin’s grievance and protected Martin’s rights as much

as practical, as the evidence showed. The panel capri-

ciously, unfairly, and without justification ignored the

law and the plaintiff’s evidence. The panel repeatedly

abused its discretion.

Even the U.S. Department of Education itself, the

panel’s own empowering agency “encourages” both “par-

ties involved to meet and discuss the issues, employing

all reasonable efforts to reach an amicable settlement of

the dispute.” (See Exhibit A, third paragraph). The plain-

tiff-respondent adopted the same policy in dealing with

the GMF but the panel, unrealistic in the extreme, capri-

ciously found that insufficient.

The panel clearly found, in so many words, that

though the work “priority” is used in the Act that the law

should say “exclusivity”, that no matter what Martin did

————

App. 11

that she should be guaranteed a certain level of income,

i.e., that the Act, rather than legislating a program of self-

support, renumerative [sic] employment and the fur-

therance of economic opportunities for the blind, is, in

fact, a thinly veiled welfare program for the

* * *

App. 12

APPENDIX 6

[Excerpt from State’s district court reply to defendants’

oppositions to State’s disqualification/remand motion]

+ * *

[p. 5] In Georgia Department of Human Resources v.

Nash, 915 F.2d 1482, 1488-1489, (11th Cir. 1990), the court

held that the Randolph-Sheppard Act gives a State

Licensing Agency (SLA) like the plaintiff herein, “com-

plete discretion both to determine that a federal entity is

not complying with the Act and to file a complaint in the

case of noncompliance.” (Emphasis added) The court

found that 20 U.S.C. section 107d-1(b) mandates no pro-

cedures or substantive rules to govern either of the deter-

minations mentioned supra. It was plainly the call of the

plaintiff whether the General Mail Facility in Santa Ana

was complying with the Act and whether to file a com-

plaint for non-compliance against the GMF. It was, and is,

therefore, error on the part of the arbitration panel to

order compliance and error on the part of the defendants

to assert that the panel was correct in ordering compli-

ance.

The court in Nash (supra) applied an abuse of discre-

tion burden on the vendor in both (1) showing that the

state agency there abused its discretion in not determin-

ing that the federal facility was not in compliance and

that, (2) even if the federal facility was not in compliance,

that the state agency committed an abuse of discretion in

not filing a complaint. (See Nash, supra, p. 1489-1490.)

The court concluded and ruled that the vendor may

invoke the grievance procedures guaranteed under 20

App. 13

U.S.C. section 107d-1(a), but “the vendor has no substan-

tive right to challenge a state licensing agency’s failure to

bring a complaint pursuant to 20 U.S.C. section

107d-1(b).” (Nash, supra, p. 1495.)

[p. 6] Here, the plaintiff pursued Martin’s grievances

in the most expeditious manner possible to protect Mar-

tin’s rights under Randolph-Sheppard and to effect a

solution compatible with the Federal agency here

involved. Though Martin is now dissatisfied with plain-

tiff’s efforts, Martin has no substantive right to challenge

this plaintiff’s decision not to adopt the autocratic, non-

business-like methods Martin and the panel would

apparently prefer. Plaintiff under Nash has full discretion

to resolve the matter in whatever way plaintiff sees fit.

Martin alienated her customers at the Santa Ana Postal

Facility (the General Mail Facility or GMF) and the GMF

provided a contract for vending machine maintenance to

another vendor. Plaintiff stepped in and did resolve the

dispute by placing another vendor in the GMF (Patricia

Evans) and giving Martin other facilities plus additional

funding, plus support in the form of Joanne Gelfeld. The

record is clear that plaintiff administered the Business

Enterprise Program for Blind Vendors in a business-like

manner.

Plaintiff exercised her business judgment and full

discretion not to file and pursue a complaint against GMF

but rather to place another vendor who successfully man-

aged the facility at the GMF. Martin, though given

another sizable facility at the Hall of Administration in

App. 14

Los Angeles, could not correct her poor business prac-

tices. The panel ignored the evidence of plaintiff com-

pletely and, in so doing, blatantly denied plaintiff due

process.

Plaintiff cannot now be denied her discretion under

Nash and the Randolph-Sheppard Act, and both the

defendant Martin and the Arbitration Panel are clearly in

error in thinking they

* * +

App. 15

APPENDIX 7

[Excerpt from State’s district court reply to defendants’

Opposition to State’s disqualification/remand motion]

+ * +

[p. 8] court, so egregious was the denial of due process,

So egregious the capriciousness of the panel’s decisions.

The Federal defendants assert that the Fifth Amend-

ment due process clause does not apply to states, such as

plaintiff. (See Federal defendants moving papers-points

and authorities p. 7, line 22 to p. 8 line 18.) However, it is

inconceivable that plaintiff, whether a “state” or a “per-

son” should be denied the rights and privileges con-

nected with concepts of “due process” and “fundamental

fairness” by an ad hoc arbitration panel appointed to seek

the truth and resolve a dispute. Such a narrow interpreta-

tion is itself wholly inequitable and unjust. The Federal

defendants are saying, in essence, that a pure legalism

should be allowed to defeat the fair administration of the

Act's arbitration process, a process into which plaintiff

entered and in which plaintiff participated in good faith.

However, the provisions of the Administrative Pro-

cedure Act (APA) for review, set out by the Federal

defendants on page 7 of their points and authorities

speak directly to abuses of discretion, arbitrary and capri-

c‘ous decisions and decisions running counter to admit-

ted evidence. Essentially, then, the standard to be applied

by the court here should be one of fundamental fairness,

i.e. due process. Couched in different terms, the standard

of review to be applied by this court is one of due process

to all parties by avoiding the antithesis of due process,

arbitrariness and capriciousness. Therefore, whether

App. 16

under the label “due process” or under a standard set out

in the APA, and cited by the Federal defendants, the goal

of fundamental fairness remains the same.

[p. 9] Plaintiff is, therefore, prepared to file a third

amended complaint (Exhibit A) which changes Paragraph

20 of the Second Amended Complaint to one encompass-

ing the standards set out in the APA. However, in the

interests of judicial economy, plaintiff believes the issue

of the panel’s arbitrary decision should be litigated now

using cited APA standards.

Further, the Federal defendants assert that the arbi-

tration was not conducted in a capricious and arbitrary

manner. Yet the standard of review the Federal defen-

dants cite includes as factors to be considered in a review:

“.... entirely failed to consider an important aspect of

the problem, offered an explanation for its decision that

runs counter to the evidence before the agency... . ” (See

Federal defendant points and authorities p. 7, lines

12-15).

The arbitration Panel failed to consider Martin’s own

conduct and business shortcomings in arriving at its deci-

sion. The panel failed to consider the financial reports

submitted that showed that Martin made a profit despite

her transgressions. They failed to consider Martin’s ongo-

ing pattern of negligence, her tax problems, and the clear

difference a competent vendor (Patricia Evans) made

when placed at the GMF. The evidence presented by

plaintiff, as respondent, to the panel does run counter to

the panel’s decision and its cumulative effect clearly dem-

onstrates that the panel’s decisions were arbitrary and

capricious.

App. 17

For example, the panel and the defendants cite no

specific legal duty imposed on the plaintiff by the Act or

its regulations that plaintiff must collect, account for, be

* + *

App. 18

APPENDIX 8

[Excerpt from page 48 of “Year-End Legal Tidbits” by

Charles S.P. Hodge, The Braille Forum (vol. XXXVI, No. 6),

published by The American Council of the Blind]

“In September I reported that the Ninth Circuit Court of

appeals had affirmed the federal trail court’s ruling in

favor of Jeana Martin, a former licensed blind vendor in

the California program, and had ordered the state licens-

ing agency to pay considerable monetary damages to

Martin. The attorney general of California has neverthe-

less sought Supreme Court review, and the California

state licensing agency through the National Council of

State Agencies for the Blind has invited other state licens-

ing agencies to file amicus curiae or friend of the court

briefs with the court endorsing California’s legal position

in the case... .

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.