have since been promulgated and are now in effect. They suggest that the Court remand this case to DCRSA for resolution by administrative process. The Court declines this belated invitation. Undoubtedly, resolution of the claims presented in this case would have been simplified by the benefit of administrative expertise. In addition, complex cases such as this one tax the resources of the Court. But those reasons do not authorize the Court to decline jurisdiction where it properly exists. Plaintiffs are entitled to a resolution of their grievances, which have been pending in some form since 1985. The Third Circuit's conclusion sheds light on the issue: "The evolution of the Randolph-Sheppard Act from 1936 through 1974 shows increasing concern that the contractual remedies available to [the] vendors be expeditious and completely effective." Delaware Dep't of Health and Social Servs., 772 F.2d at 1139. This Court will not require plaintiffs to further delay resolution of their claims to give effect to recently adopted rules that should have been promulgated some fifteen years ago. See Committee of Blind Vendors, 695 F. Supp. at 1239 n. 3.
6. In its October 7, 1988 opinion, this Court agreed with the analysis in Delaware Dep't of Health and Social Servs., supra, in which the Third Circuit concluded that blind vendors were, in effect, third party beneficiaries of the licensing agreements between the participating states and the federal government. See 772 F.2d at 1127; Committee of Blind Vendors, 695 F. Supp. at 1240-41. The Court today reaffirms its concurrence with that analysis. The Act was intended to benefit blind vendors and confer upon them legally enforceable rights. Plaintiffs' claims in this action are grounded in their contractual relationship with the defendants or their status as beneficiaries of contracts between defendants and the United States. Accordingly, monetary damages are available to aggrieved plaintiffs under the Randolph-Sheppard Act.
7. Defendants request that the Court depart from its earlier opinion and the analysis set forth in Delaware Dep't of Health and instead follow a more recent Eighth Circuit case in which a divided court held that retroactive money damages are not available to blind vendors under the Randolph-Sheppard Act. In McNabb v. United States Dep't of Educ., 862 F.2d 681, 683 (8th Cir. 1988), cert. denied, 493 U.S. 811, 110 S. Ct. 55, 107 L. Ed. 2d 23 (1989), two Judges concluded that the eleventh amendment forbids subjecting states to monetary liability for their participation in the Randolph-Sheppard program, because no clear and unambiguous congressional intent to impose such liability is expressed in the Act. Id. at 685-87 (Fagg & Doty, JJ., dissenting and concurring). This Court declines to follow the divided opinion in McNabb. The Court adheres to its earlier opinion, the exhaustive analysis of the Third Circuit in Delaware Dep't of Health, and Chief Judge Lay's dissenting view in McNabb, in which he concluded that Congress, in enacting the Randolph-Sheppard Act, "clearly must have foreseen and approved awards of compensatory relief against states." McNabb, 862 F.2d at 684 (Lay, C.J., concurring and dissenting).
8. Defendants argue that plaintiffs may not challenge defendants' allocation of resources under the Randolph-Sheppard Act. In the final analysis, the Court's monetary award to these plaintiffs is not assessed against District of Columbia appropriated funds. Rather, the source of funds upon which the District's liability rests is the vendors themselves. The award sounds in restitution. Accordingly, the Court is not, as defendants fear, dictating to the agency "how best to allocate its resources." Wisconsin v. Federal Power Comm'n, 373 U.S. 294, 313-14, 10 L. Ed. 2d 357, 83 S. Ct. 1266 (1963).
9. On November 22, 1988, the Court held that the three-year statute of limitations found in D.C. Code § 12-301 applies to plaintiffs' claims. Memorandum (Nov. 22, 1988) at 7. Thus, events occurring prior to January 21, 1985, are generally not actionable. However, the Court further held that the "continuing wrong" doctrine applied in this case, subject to plaintiffs' proof. Under this doctrine, the statute of limitations may be "tolled" so that plaintiffs' claims do not accrue until defendants cease their unlawful conduct. Id. at 12. See Havens Realty Corp. v. Coleman, 455 U.S. 363, 380-81, 71 L. Ed. 2d 214, 102 S. Ct. 1114 (1982). Whether defendants' conduct constituted a continuing wrong will be addressed with respect to each claim.
The DAC Corporation Contract
10. The Randolph-Sheppard regulations define "nominee" to mean "a nonprofit agency or organization designated by the State licensing agency through a written agreement to act as its agent in the provision of services to blind licensees under the State's vending facility program." 34 C.F.R. § 395.1(1). The evidence clearly established that in functional terms, DAC Corporation was a nominee within the meaning of these regulations. In contracting with DAC, a for-profit entity, to provide management services to the blind vendors, the District of Columbia violated the Randolph-Sheppard Act.
11. The Act requires participation by the BVC in "major administrative decisions and policy and program development" of the Randolph-Sheppard program. 20 U.S.C. § 107b-1(3). Likewise, the regulations state that the BVC shall "actively participate with the State licensing agency in major administrative decisions and policy and program development decisions affecting the overall administration of the State's vending facility program." 34 C.F.R. § 395.14(b)(1). The evidence established that DCRSA's decision to terminate DEB and to utilize DAC instead was motivated in part by DCRSA's desire to expand the District's vending facility program into the operation of large "emporia." This was a major administrative decision regarding program development which by law required the active participation of the BVC. Likewise, DCRSA's decision to utilize DAC to carry out this program expansion required the active participation of the vendors.
12. The evidence established that DCRSA acted unilaterally when it issued the RFP to minority businesses, when it terminated DEB, and when it entered into the contract with DAC. In fact, DCRSA not only failed to involve the BVC in these major decisions, but it actively ignored the BVC's vocal protests and legitimate concerns regarding DAC's for-profit status and inexperience with the vending facility program. The failure by DCRSA administrators to allow for the active participation of the BVC when deciding to enter into the management service contract with DAC violated the Randolph-Sheppard Act.
13. Defendants maintain that issues involving the District's contract with DAC are not actionable because the contract was entered into on December 21, 1984, and performance began on January 2, 1985, while the complaint was filed January 21, 1988, more than three years later. This Court has already noted that discrete conduct, such as entering into a contract, generally cannot be classified as a continuing wrong. Memorandum (Nov. 22, 1988) at 12. In two distinct respects, however, the District's contract with DAC constituted a "continuing wrong" with respect to plaintiffs.
First, the contract was solicited without the participation of the BVC, in violation of the Act. Moreover, DCRSA continued to ignore the vendors' protests. DCRSA's chronic failure to involve the BVC in any major decisions regarding DAC's services continued through the first few months of 1985, well within the three-year statutory period. See, e.g., P-46 (letter from Veronica Holt to Dr. Pacinelli, Feb. 4, 1985); P-49 (letter from Robert Humphreys to Dr. Pacinelli, Mar. 7, 1985). Since plaintiffs have challenged DCRSA's "continuing pattern, practice, and policy" of unlawfully refusing to allow the BVC to actively participate in major administrative and program decisions, plaintiffs' complaints with respect to the DAC contract are timely. Havens Realty, 455 U.S. at 381.
Second, the DAC contract was financed in part with funds levied from the vendors' net proceeds as authorized by 34 C.F.R. § 395.9. These funds were extracted from the vendors despite the fact that DAC was an illegal nominee that provided no appreciable services. Said another way, these levied funds were wrongfully taken from the vendors, and this wrongful taking continued into mid-1985. The Court concludes that this taking was a continuing wrong for which the statute of limitations did not begin to run until defendants stopped collecting the levy to fund the illegal contract, that is, upon DAC's termination on May 31, 1985. See Almond v. Boyles, 612 F. Supp. 223, 228-29 (E.D.N.C. 1985) (holding that state's wrongful deduction from blind vendors was "a continuing wrong for which the statute of limitations did not begin to run until the defendants stopped making the deductions"), aff'd in part and rev'd on other grounds, 792 F.2d 451 (4th Cir. 1986), cert. denied, 479 U.S. 1091, 94 L. Ed. 2d 157, 107 S. Ct. 1302 (1987). Since defendants' conduct constituted a continuing wrong, plaintiffs' claims regarding the DAC contract are not time-barred, and plaintiffs' recovery, set forth below, is not limited to amounts collected after January 21, 1985.
14. During fiscal year 1985, the Randolph-Sheppard program in the District collected $ 525,423.00 in the form of an administrative levy assessed against the net proceeds of the individual vendors.
This levy, or set aside fund, represents private funds generated by the vendors and was intended to defray the costs of management services provided to the vendors during fiscal year 1985 pursuant to DCRSA's licensing agreement with the federal government. See 34 C.F.R. § 395.9(b). The evidence established that the vendors received no appreciable services from January 1 to May 31, 1985, while DAC's contract was in effect, and received no services at all from June 1 to September 30, 1985, while DAC was winding up its operations. Services to the vendors did not resume until the fall of 1985. Since the vendors were deprived of management services for this nine month period, they are entitled to restitution of the amount they paid for services that should have been rendered. An appropriate award is arrived at by returning to plaintiffs 3/4 of the levy assessed against their net proceeds in fiscal year 1985, in compensation for the 9/12 of the year they were without services. The Court will therefore award plaintiffs $ 394,067.25, which represents 75% of the levy assessed in fiscal year 1985, to compensate the blind vendors for the amount their income was wrongfully diminished during the nine months in which DAC was the contractor.
15. In the District of Columbia, the general rule is that interest may be recovered only from the date of judgment. See D.C. Code Ann. § 15-109 (1989). However, prejudgment interest may be awarded where "necessary to fully compensate the plaintiff[s]." Id.; Edmund J. Flynn Co. LaVay, 431 A.2d 543, 550 n. 6 (1981). The Court finds that plaintiffs in this case are entitled to prejudgment interest. By virtue of the District's failure to promulgate timely evidentiary hearing regulations, the blind vendors were deprived of an administrative forum and made to tolerate lengthy delays in resolving this dispute. Cf. Granite-Groves v. Washington Metro. Area Transit Auth., 269 U.S. App. D.C. 273, 845 F.2d 330, 342-43 (D.C. Cir. 1988) (award of prejudgment interest under § 15-109 justified where processing of plaintiff's claims by contracting officer was subject to unreasonable delay). Plaintiffs' claims arise from contract, not tort, therefore prejudgment interest is allowed. See Reiman & Co. v. Eromanga Invs., N.V., 622 F. Supp. 13, 21 & n. 33 (D.D.C. 1985); compare Schneider v. Lockheed Aircraft Corp., 212 U.S. App. D.C. 87, 658 F.2d 835, 855 (D.C. Cir. 1981) (prejudgment interest not allowed in tort actions), cert. denied, 455 U.S. 994, 71 L. Ed. 2d 855, 102 S. Ct. 1622 (1982).
16. The Court further concludes that interest on this claim should be calculated from January, 1985, when the DAC contract first took effect, to the date of this decision. The rate of interest for contract actions is set by statute. In the District of Columbia, that rate is 6% per annum. D.C. Code Ann. § 28-3302(a) (1981 & Supp. 1989). Accordingly, the Court will award plaintiffs $ 394,067.25, as noted above, plus interest in the amount of $ 126,022.71, for a total recovery of $ 520,089.96 in compensation for the amount the vendors' income was wrongfully diminished while DAC was the contractor.
This amount shall be distributed to the blind vendors pro rata in amounts equal to, or in proportion to, each vendor's contribution to the set aside fund during the period of January 1 to September 30, 1985.
The Surplus Levy
17. A financial audit of DEB for fiscal year 1984 revealed a surplus in the administrative levy of $ 79,084. This figure represents an excess in the amount the vendors paid for management services over the amount actually expended by DEB on their behalf. On September 30, 1984, this amount was identified as available for distribution to the vendors, as was customary. The evidence established that in March 1985 the Board of Directors of DEB demanded that the surplus be returned. DCRSA thereafter acknowledged its obligation to refund the excess amount, "after a thorough review of program expenditures has been completed." P-60 at 6. DCRSA never refunded this surplus.
18. A review of program expenditures reveals that this excess amount was transferred to the 627 account
and was accordingly used to pay for management services that DAC contracted to provide. The Court has already concluded that the DAC contract was illegal under the Act and that DAC's failure to provide any appreciable services to the vendors entitles them to a partial refund of the levy assessed in fiscal year 1985. For those same reasons, DAC's expenditure of the excess was wrongful. The vendors are therefore entitled to a refund of the surplus identified as available on September 30, 1984.
19. Defendants assert that plaintiffs' claim to this surplus is time barred. They argue that plaintiffs' claim arose on September 30, 1984, when the surplus was first identified in the audit as available for distribution. This argument is unpersuasive. In view of the letter from Vernon Hawkins to Dr. Pacinelli acknowledging DCRSA's obligation to refund the excess, see P-60, plaintiffs clearly had no reason to believe that a refund would not be forthcoming until Randolph-Sheppard staff so decided a year later, in September, 1985. See P-68. Defendants put forth no evidence to show that DCRSA normally would have distributed the surplus on the date it was identified. Moreover, the regulations contemplate that the decision about whether surplus levy is to be refunded is normally a joint one involving both DCRSA and the "active participation" of the BVC. 34 C.F.R. § 395.9(c). Defendants' decision not to refund the surplus was clearly a unilateral one. Under these circumstances, the Court concludes that plaintiffs' legal claim to the surplus did not accrue until it was disputed sometime during the fall of 1985, well within the three-year statutory limit. Accordingly, plaintiffs' claim is not barred by the statute of limitations.
20. Finally, the Court concludes that the vendors are entitled to an award of prejudgment interest on this claim, and that interest should accrue from September 1985 (when defendants unilaterally decided not to refund the surplus) to the date of this decision. Accordingly, with respect to this claim, the Court will award plaintiffs $ 79,084, plus interest in the amount of $ 21,352.68,
for a total recovery of $ 100,436.68 with respect to this claim. This amount shall be distributed to the vendors pro rata in amounts equal to, or in proportion to, each vendor's contribution to the set aside fund during fiscal year 1984.
Reduction of Administrative Levy
21. Plaintiffs claim that DCRSA promised to reduce the administrative levy from 21% to 18% beginning in fiscal year 1987. They claim that DCRSA breached this promise and ask for damages in the amount of $ 112,000, which represents the amount the vendors would have saved had the levy been reduced by 3% in fiscal years 1987 and 1988. The evidence showed that no outright promise was made, but rather that DCRSA's commitment to reduce the levy was conditioned on the availability of funds. The evidence further showed that the levy, which now stands at 21%, cannot be further reduced without diminishing services to the vendors. Accordingly, the Court concludes that defendants breached no promise to plaintiffs respecting this claim, because the condition precedent to a 3% reduction was not satisfied. Plaintiffs' request for damages with respect to this claim is therefore denied.
Collection of Vending Machine Income
22. Plaintiffs claim that defendants have failed to identify, collect, and distribute to the blind vendors all vending machine income from machines located in federal buildings, in violation of 20 U.S.C. §§ 107b(1), 107d-1(b), 107d-3(a)(b)(c), and 34 C.F.R. §§ 395.8, 395.9, 395.32, 395.37. The evidence clearly supports plaintiffs' assertion that not all vending machine income from federal sources has been identified and accounted for. But as plaintiffs concede, it is very difficult, perhaps impossible, to trace these amounts with any reasonable accuracy.
23. It is undisputed that DCRSA is obligated to distribute to the blind vendors income which has been disbursed to DCRSA by the federal agencies. See 34 C.F.R. § 395.8(a). However, defendants argue that Congress placed the legal responsibility for the collection of, and accounting for, vending machine income from federal property on the managers of that federal property, and not on the SLA's. Specifically, in the same section of the Act in which Congress provided that vending machine income on federal property would accrue to the blind vendors, Congress also stated:
The head of each department, agency, and instrumentality of the United States shall insure compliance with this section with respect to buildings, installations, and facilities under his control, and shall be responsible for collection of, and accounting for, such vending machine income.