MEMORANDUM OPINION
CHRISTOPHER R. COOPER UNITED STATES DISTRICT JUDGE.
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 ...