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Brooks v. District of Columbia

United States District Court, District of Columbia

March 22, 2019

HAZELL BROOKS, et al., Plaintiffs,



         Three blind vending-facility operators challenge the District of Columbia's inspections of their establishments and calculation of their income under a federal program that gives preferences to visually impaired vendors. Although Plaintiffs frame their challenge under various anti-discrimination statutes, the substance of their complaints concerns the District's administration of the program. As a result, they were required to litigate their claims through local administrative processes before filing suit in federal court, which they did not do. The Court therefore must dismiss the case.

         I. Background

         Congress enacted the Randolph-Sheppard Act (“RSA” or “Act”) in 1936 to provide employment opportunities to individuals with vision impairments. 20 U.S.C. § 107(a). The Act gives licensed blind persons priority to operate vending facilities located on federal property. Id. § 107(b). It also entitles them to a percentage of all income generated by vending machines located on that property, even if those machines are not operated by program participants. Id. § 107d-3.

         Participating states (including the District of Columbia) and the federal government share responsibility for administering the Act. The Secretary of Education interprets and enforces the Act and designates a state licensing agency (“SLA”) to administer the Act within each participating state. Id. § 107a(a). In the District of Columbia, that agency is the Department on Disability Services, Rehabilitation Services Administration (“DDS-RSA”). Each SLA manages the day-to-day operations of the RSA in its state by, among other things, licensing individual vendors, identifying locations for facilities, and monitoring compliance with the program's rules and regulations. 20 U.S.C. § 107a(b).

         Plaintiffs Hazell Brooks, Derwin Patten, and Roy Patten are current or past participants in the District of Columbia's Randolph Sheppard Vending Facilities Program (“RSVFP” or “Program”). Second Am. Compl., ECF No. 17-1, (“SAC”) ¶¶ 3-5. They allege that they have suffered “ongoing discrimination” based on their blindness arising from the District's administration of the Program, including “discriminatory inspections of blind vendors' facilities, ” “failure to provide adequate auxiliary aids for blind vendors, ” and “excessive or unauthorized deductions, set asides, and other such levies and expenses on vending machine” and “vending operations.” Id. at 2. Plaintiffs assert claims of discrimination under Title II of the Americans with Disabilities Act (“ADA”), Section 504 of the Rehabilitation Act, and the District of Columbia Human Rights Act (“DCHRA”). They also bring claims for breach of fiduciary duty, unjust enrichment, and resulting trusts related to the allegedly excessive deductions.

         II. Legal Standard

         The District of Columbia has moved to dismiss the case for failure to exhaust administrative remedies under Federal Rule of Civil Procedure 12(b)(1) and failure to state a claim under Rule 12(b)(6).[1] When analyzing a motion to dismiss under either Rule 12(b)(1) or 12(b)(6), the Court “assumes the truth of all well-pleaded factual allegations in the complaint and construes reasonable inferences from those allegations in the plaintiff's favor, but is not required to accept the plaintiff's legal conclusions as correct.” Sissel v. U.S. Dep't of Health & Human Servs., 760 F.3d 1, 4 (D.C. Cir. 2014) (citation omitted); see also Jerome Stevens Pharm., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005). When considering a 12(b)(6) motion, the Court “may only consider the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, and matters about which the Court may take judicial notice.” Gustave-Schmidt v. Chao, 226 F.Supp.2d 191, 196 (D.D.C. 2002).

         III. Analysis

         A. Mandatory Exhaustion under the Randolph-Sheppard Act

         The Randolph-Sheppard Act contains a detailed administrative grievance procedure. A licensee “who is dissatisfied with any action arising from the operation or administration of the vending facility program” is entitled to a “full evidentiary hearing” by the SLA. 20 U.S.C. § 107d-1(a); see also id. § 107b(6) (requiring SLAs to provide “dissatisfied” licensees with “an opportunity for a fair hearing”); 34 C.F.R. § 395.13 (same). To implement these requirements, the District of Columbia provides for an “[i]nformal due process hearing before the D.C. Office of Administrative Hearings (OAH).” D.C. Mun. Reg. tit. 29, § 218.2(b)(3). An aggrieved licensee dissatisfied with the results of the OAH hearing “may appeal . . . either to the D.C. Court of Appeals . . . or to the United States Secretary of Education.” Id. § 218.2(c). If the licensee elects the latter, the Secretary submits the complaint to an arbitration panel pursuant to 20 U.S.C. § 107d-1(a). The panel's decision is considered “final and binding” except as subject to judicial review as a final agency action under the Administrative Procedure Act. Id.; id. § 107d-2(a); 34 C.F.R. § 395.13(c).

         The D.C. Circuit has long held that a licensee must exhaust these administrative remedies before seeking judicial review in federal court. Comm. of Blind Vendors of D.C., 28 F.3d at 133-35; Randolph-Sheppard Vendors of Am. v. Weinberger, 795 F.2d 90, 102-04 (D.C. Cir. 1986); see also Morris v. Maryland, 908 F.2d 967 (tbl.), 1990 WL 101396, at *3 (4th Cir. 1990); Fillinger v. Cleveland Soc'y for the Blind, 587 F.2d 336, 338 (6th Cir. 1978). Plaintiffs did not do so here. In their complaint, they do not allege that they exhausted the available administrative remedies before turning to this Court.[2] And in their opposition, they note attempts to exhaust by only two of the three named plaintiffs. Opp'n, ECF 21, at 8-9. But even those attempts were insufficient. As explained, Plaintiffs were required to appeal the OAH's determination to either the D.C. Court of Appeals or the Secretary of Education. They neither allege nor assert that they did either. Instead, they filed suit in federal court, which only has jurisdiction to review claims arising out of the administration of the RSA after the arbitration panel convened by the Secretary reaches a decision and only then, under the strictures of the APA.

         B. Plaintiffs' Counterarguments

         Plaintiffs offer three reasons why the Act's exhaustion requirement does not bar their claims: (1) they do not in fact allege claims under the Randolph-Sheppard Act; (2) D.C. waived the Act's exhaustion requirement when it passed the District of Columbia Human Rights ...

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