Kolb v. United States

CourtUnited States Court of Federal Claims
DecidedJune 16, 2022
Docket20-784
StatusPublished

This text of Kolb v. United States (Kolb v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kolb v. United States, (uscfc 2022).

Opinion

In the United States Court of Federal Claims No. 20-784C (Filed June 16, 2022)

LAURA KOLB, et al., Randolph-Sheppard Act; RCFC 12(b)(1); Plaintiffs, Mandatory Arbitration; Implied-In-Fact Contract v.

THE UNITED STATES,

Defendant.

Fazeel S. Khan, Haynes Kessler Myers & Postalakis, Incorporated of Worthington, Ohio, for plaintiff. Eric B. Hershberger, Haynes Kessler Myers & Postalakis, Incorporated, of counsel.

Jimmy S. McBirney, Trial Attorney, Commercial Litigation Branch, United States Department of Justice, Washington D.C., for defendant.

OPINION AND ORDER

FUTEY, Senior Judge.

Plaintiffs Laura Kolb and Yvette Shackleford (the Vendors), are blind vendors who have been licensed to provide vending services on federal property through a state-federal partnership established pursuant to the Randolph-Sheppard Act (RSA), 20 U.S.C. §§ 107 et seq. (2018). The RSA limits the purposes for which funds that vendors earn may be set aside. The Vendors allege that the government committed illegal exactions and breached implied-in-fact contracts by collecting commissions from the gross income generated by their vending facilities, for purposes not permitted by the RSA. The Vendors filed a complaint in this court, seeking money damages equal to the commissions they have paid to the government over the past six years. The government moved to dismiss the case under Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (RCFC), arguing that this court lacks subject-matter jurisdiction over the matter because the Vendors failed to exhaust administrative remedies provided for in the RSA and because there is no contract between the government and the Vendors that could bring the claim within the purview of the Tucker Act, 28 U.S.C. § 1491 (2018). The government also moved to dismiss under RCFC 12(b)(6), arguing that the Vendors failed to state a claim for breach of an implied-in-fact contract.

I. BACKGROUND

A. Statutory and Regulatory Context

The RSA is a federal statute that is intended to “provid[e] blind persons with remunerative employment, enlarg[e] the economic opportunities of the blind, and stimulat[e] the blind to greater efforts in striving to make themselves self- supporting,” by establishing a system by which blind Americans may become licensed to provide vending services on federal property. 20 U.S.C. § 107. In order to achieve this, the RSA and its implementing regulations establish a regime in which the Secretary of Education designates, for each state, a state licensing agency (SLA) “to issue licenses to blind persons who are citizens of the United States for the operating of vending facilities on Federal and other property in such State for the vending of newspapers, periodicals, confections, tobacco products, foods, beverages, and other articles or services,” Id. § 107a(a)(5).

The SLAs form contracts with state and federal agencies for the rights to operate vending facilities, and form contracts with licensed blind vendors, assigning them those rights. The RSA allows SLAs to set aside certain funds from the vending facilities they oversee, but only for limited purposes:

“[I]f any funds are set aside, or caused to be set aside, from the net proceeds of the operation 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 replacement of equipment; (B) the purchase of new equipment; (C) management services; (D) assuring a fair minimum return to operators of vending facilities; and (E) retirement or pension funds, health insurance contributions, and provision for paid sick leave and vacation time.”

20 U.S.C. § 107b(3). See also 34 C.F.R. § 395.9(b).

The RSA and its implementing regulations establish different procedures and processes for individual vendors grievances and complaints brought by SLAs. In any action brought by a vendor before either an SLA or the Secretary of Education they are required “to provide to any blind licensee dissatisfied with any action

-2- arising from the operation or administration of the vending facility program 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.” 20 U.S.C. § 107b(6); 107d-1(a).

The section of the RSA relating to grievance procedures contains two provisions, one for claims brought by vendors, the other for those brought by SLAs. The one titled “Hearing and arbitration,” provides procedures for complaining vendors. It provides that “[a]ny blind licensee who is dissatisfied with any action arising from the operation or administration of the vending facility program may submit to a [SLA] a request for a full evidentiary hearing, which shall be provided by such agency . . . 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 . . . and the decision of such panel shall be final and binding on the parties except as otherwise provided in [the RSA].” Id. § 107d-1(a). The corollary federal regulation is similar, but specifies that SLAs are required to provide hearing procedures for “each blind vendor … dissatisfied with any State licensing agency action arising from the operation or administration of the vending facility program,” 34 C.F.R. § 395.13(a) (emphasis added), rather than the statute’s broader wording of “any action arising from the operation or administration of the vending facility program.” 20 U.S.C. § 107d-1(a) (emphasis added).

The RSA’s second complaint provision provides procedures for disputes brought by SLAs and is titled “Noncompliance by Federal departments and agencies; complaints by State licensing agencies; arbitration.” It provides that “[w]henever any [SLA] determines that any department, agency, or instrumentality of the United States that has control of the maintenance, operation, and protection of Federal property is failing to comply with the provisions of this chapter or any regulations issued thereunder . . . such licensing agency may file a complaint with the Secretary who shall convene a panel to arbitrate the dispute . . . and the decision of such panel shall be final and binding on the parties except as otherwise provided in [the RSA]. Id. § 107d-1(b).

The RSA’s section on arbitration provides different procedures for panels convened by the Secretary of Education “to hear grievances of blind licensees,” id. § 107d-2(b)(1), and panels convened “to hear complaints filed by a State licensing agency.” Id. § 107d-2(b)(2). Arbitration panels convened under the vendor- grievance provision of the RSA and its implementing regulation are to consist of a member designated by the vendor, a member designated by the SLA, and a neutral chairperson on whom the two parties agree. Id. § 107d-2(b)(1). See also 34 C.F.R.

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