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COMMITTEE OF BLIND VENDORS OF THE DIST. OF COLUMBI

October 7, 1988

COMMITTEE OF BLIND VENDORS OF THE DISTRICT OF COLUMBIA, et al., Plaintiffs,
v.
DISTRICT OF COLUMBIA, et al., Defendants



The opinion of the court was delivered by: GASCH

 OLIVER GASCH, SENIOR UNITED STATES DISTRICT JUDGE

 The matters before the Court are defendants' motion to dismiss, or, in the alternative, for summary judgment, and plaintiffs' motion for certification as class action. This is a suit brought by blind vendors and their representatives against the District of Columbia Rehabilitation Services Administration (DCRSA) and other District of Columbia agencies. The gravamen of plaintiffs' complaint is that the defendants have mismanaged the District's Randolph-Sheppard program to the detriment of the plaintiffs. Plaintiffs seek a writ of mandamus to compel defendants to adhere to the Randolph-Sheppard Act, and damages of approximately $1,166,000 for breach of contract. On September 28, 1988, the Court issued an order denying in part defendants' motion to dismiss, or, in the alternative, for summary judgment and granting plaintiffs' motion for certification as a class action. This memorandum is to accompany that order.

 I. Introduction

 The Randolph-Sheppard Act authorizes state agencies approved by the Secretary of Education to license blind persons to operate vending facilities on federal property. 20 U.S.C. § 107. State licensing agencies (SLA's) select the location and type of facility to be provided. Id; see 34 C.F.R. § 395.7. Blind vendor programs are to be self-supporting. Net proceeds are to accrue to the blind vendors, though the SLA may set aside funds for maintenance and replacement of equipment, management services, and assuring a fair minimum return to vendors (although the amounts set aside must be reasonable in the view of the Secretary of Education). 20 U.S.C. § 107b. Amounts may also be set aside for pension fund, health insurance, and sick leave expenses by a majority vote of the blind vendors. SLA's must also provide an opportunity for a fair evidentiary hearing to licensees dissatisfied with operation or administration of the vending facility program, and agree to submit grievances not resolved by such hearing to an arbitration panel convened by the Secretary of Education. Id. § 107d-2. The arbitration panel's decision "shall be subject to appeal and review as a final agency action" under the Administrative Procedures Act. 20 U.S.C. § 107d-1.

 Plaintiffs allege that from December, 1974 to the present, DCSLA has neglected its duties to identify and/or satisfactorily account for all sources of vending machine and vendor income, and thus deprived the blind vendors of substantial revenues. Defendants have also allegedly failed to identify satisfactory sites for vending facilities. Plaintiffs' complaint also asserts that DCRSA violated the Randolph-Sheppard Act by contracting with DAC Corporation to manage the Randolph-Sheppard program, and that DAC failed to provide adequate services, and wrongfully set aside funds. DAC also allegedly failed to deposit into the blind vendors' pension fund monies set aside for that purpose and likewise failed to remit to the IRS monies collected for vendors' social security contributions. Moreover, DCSRA has purportedly violated the Act by failing to enunciate or implement a training and upward mobility program and by requiring that cafeterias operated on federal property employ sighted persons. The D.C. government has allegedly entered into a contract with GVMS, Inc. allowing that company to collect income from vending machines and receive a commission on the collections. Defendant DCRSA is claimed to have operated "departmental" vending stands with sighted vendors. Plaintiffs assert that these departmental stands have lost money, depleting the stabilization fund of the blind vendors. A surplus from the set aside levy from 1984 has allegedly not been distributed despite promises that it would be; likewise, a promised reduction in the percentage of funds set aside has not occurred. Finally, defendants have allegedly excluded plaintiff Committee of Blind Vendors (CBV) from the decisionmaking process and failed to properly administer the vendors' pension fund.

 On October 23, 1985, plaintiff CBV requested a hearing from the DCRSA, making some of the same allegations contained in the complaint giving rise to this action. In November, DCRSA responded by promising to conduct an audit and amend the promotion and transfer policy. CBV rejected DCRSA's response and again requested a hearing. In January, 1986, DCRSA requested that the D.C. Office of Fair Hearings conduct a hearing. At a prehearing conference in March, the Office of Fair Hearings determined that an evidentiary hearing should be deferred until the audits then being conducted by the Department of Human Services and the City Auditor were complete. Upon the completion of those audits in August, CBV renewed its request for a hearing and filed an amended complaint which included most of the charges present in this suit. A hearing was scheduled for September 2, 1987, but on August 28 CBV requested an indefinite continuance in light of an opinion from the D.C. Superior Court holding that an evidentiary hearing on a Randolph-Sheppard complaint would have no legal effect. Plaintiffs subsequently filed their suit in this Court in January, 1988.

 II. Discussion

 A. Motion to Dismiss or for Summary Judgment

 1. Standing

 Defendants assert five grounds in support of their motion. First, they claim that plaintiffs lack standing. Plaintiffs are both individuals and organizations. Plaintiffs Veronica Holt and Gale Conard are blind vendors as well as heads of the respective organizational plaintiffs. Defendants argue that they do not have standing to bring the claims of economic injury because there is no specific allegation that either of them suffered any discrete injury; the complaint alleges that all blind vendors were injured. This is an unconvincing argument. The two individual plaintiffs clearly have standing to the extent that they were injured by the defendants' acts.

 Defendants contend that plaintiff CBV lacks standing because it is an agency within the District of Columbia and thus lacks both the power to sue and the necessary adverseness with respect to the District. Defendants argue that BVC is an agency of the District because it was created by a Mayoral Order. See Mayor's Order 77-131 (August 8, 1977). Plaintiffs contend that plaintiff CBV is a creation of Congress, not the District of Columbia. The Randolph-Sheppard Act provides that SLA's are to " conduct the biennial election of a Committee of Blind Vendors." 20 U.S.C. § 107b-1. The statute also requires SLA's to incorporate the CBV's into the decisionmaking process. *fn1" The statute does not, however, explain how CBV's are to be created, and whether they are creatures of state (i.e., District of Columbia) government. The preamble to the federal regulations implementing the Act declares that the "Randolph-Sheppard Act Amendments of 1974 formally establish a State Committee of Blind Vendors." 42 Fed. Reg. 15802, 15803 (March 23, 1977). The Court is persuaded that the statute allows the state blind vendor committees to sue on behalf of vendors. The statute provides that their functions include "receiving grievances of blind licensees and serving as advocates for such licensees." 20 U.S.C. § 107b-1. The federal regulations provide that BVC's are to "receive and transmit to the State licensing agency grievances at the request of blind vendors and serve as advocates for such vendors in connection with such grievances." 34 C.F.R. § 395.14(b)(2). If CBV is to represent vendors in hearings against SLA's, and the results of those hearings may be arbitrated and ultimately litigated, it would appear that CBV is empowered to represent vendors in suits against SLA's. There is nothing to suggest that CBV's are to cease their representation if the vendors exercise their statutory right to appeal; the specific provision of an appeal process suggests the contrary. Moreover, a CBV has sued the state government in at least one other case, although the issue of standing was not specifically addressed in that decision. See Massachusetts Elected Committee of Blind Vendors v. Matava, 482 F. Supp. 1186 (D. Mass. 1980). The Court holds that plaintiff CBV has standing to maintain this action.

 Defendants also argue that both CBV and plaintiff Randolph-Sheppard Vendors Association of the District of Columbia (RSVA) lack standing to sue as associations for those claims that seek a monetary remedy. *fn2" In Hunt v. Washington Apple Advertising Commission, 432 U.S. 333, 53 L. Ed. 2d 383, 97 S. Ct. 2434 (1976), the Supreme Court articulated the requirements for associational standing:

 
An association has standing to sue on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the ...

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