NH v. US DOE, et al. CV-01-346-M 05/16/02 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
State of New Hampshire, Department of Administrative Services; Department of Transportation; State Treasurer; and Department of Education, Division of Vocational Rehabilitation, Bureau of Services for the Blind and Visually Impaired, Petitioners
v. Civil No. 01-346-M Opinion No. 2002 DNH 097 United States Department of Education and the New Hampshire Committee of Blind Vendors (David Ramsey, John Lovedav, John Toomev, Melinda Conrad, Wavne Aldrich, Norman Jitras, Michael Rossi, John Scarlotto and Martha York) , Respondents.
O R D E R
In these consolidated cases (01-346-M and 01-347-JD) , four
New Hampshire state agencies are appealing an administrative
decision by an arbitration panel convened by the United States
Department of Education ("US DOE"). The arbitrators determined
that New Hampshire violated the rights of the New Hampshire
Committee of Blind Vendors ("Blind Vendors"), as established under 23 U.S.C. § 111(b), by failing to extend to Blind Vendors a
right of first refusal with respect to the operation of vending
machines at rest areas along New Hampshire's interstate highways.
Before the court is respondents' motion to dismiss three of the
four petitioners on grounds that they are not proper parties to
this litigation. All four petitioners object. For the reasons
given below, respondents' motion is granted.
In 1998, Blind Vendors sued the New Hampshire Department of
Administrative Services ("DAS") claiming that DAS had violated
its right to a priority, under 23 U.S.C. § 111(b), with regard to
operating vending machines at rest areas along the state's
interstate highways. See N.H. Comm, of Blind Vendors v. N.H.
Dep't of Admin. Servs., 98-011-M. Rather than defending on the
merits of the claim, DAS successfully moved to dismiss on grounds
that this court lacked subject matter jurisdiction, due to Blind
Vendors' failure to exhaust available administrative remedies.1
The only possible administrative remedy available to Blind
Vendors - and the remedy ordered by the court, on DAS's motion -
1 DAS now contradicts itself and says that, based upon post- 1998 decisional law, it would no longer make the argument it did in 98-011-M, and that it was error for the court to have relied upon its argument and to have granted the relief it requested.
2 was the process outlined in 20 U.S.C. §§ 107d-l and d-2, part of
the Randolph-Sheppard Vending Stand Act.
Blind Vendors promptly pursued those administrative
remedies, as the State requested, through the New Hampshire
Department of Education ("NH DOE"), as specified in 20 U.S.C. §
107d-l(a). DAS also successfully moved to dismiss that
proceeding, on grounds that NH DOE did not have jurisdiction over
Blind Vendors' complaint. Blind Vendors appealed to the
Secretary of the United States Department of Education, under the
provisions of 20 U.S.C. § 107d-l. Consistent with common
practice. Blind Vendors complained against NH DOE, the decision
maker, rather than DAS, the administrative opponent below. Blind
Vendors did not attempt to join DAS, DOT, or the State Treasurer
in its administrative complaint against NH DOE, nor did any of
those agencies seek to intervene in Blind Vendors' administrative
appeal. Pursuant to 20 U.S.C. § 107d-2(a), the Secretary
convened an arbitration panel which twice ruled in favor of Blind
Vendors, first by denying NH DOE's motion to dismiss for lack of
jurisdiction, and then by granting Blind Vendors relief on the
merits.
3 In response to the decision of the arbitration panel, two
suits were filed in this court, one by NH DOE (01-347-JD), the
other by three executive branch agencies: DAS, the New Hampshire
Department of Transportation ("DOT"), and the State Treasurer
(01-346-M).2 Both actions purport to be appeals from the
decision of the US DOE arbitration panel, as authorized by 20
U.S.C. § 107d-2(a). By order dated January 16, 2002, the two
suits were consolidated, with 01-346-M designated as the main
case.
Blind Vendors now moves to dismiss DAS, DOT, and the State
Treasurer as parties to this suit, on grounds that: (1) those
agencies did not participate in the administrative proceeding
before the US DOE arbitration panel, have not exhausted whatever
administrative remedies they may have had and, therefore, are not
proper parties to NH DOE's administrative appeal; and (2) even if
those agencies are not subject to an exhaustion requirement, and
are proper parties to this suit, they may not adopt legal
2 DOT and the State Treasurer claim to have standing in this case because they currently share the revenues generated by vending machines operated at interstate highway rest areas, and would lose that income should Blind Vendors be awarded the right to operate the rest area vending machines.
4 positions independent of or contrary to those of NH DOE, because
each is an executive branch agency (that is, each agency is "the
State").
DAS, DOT, and the State Treasurer counter that: (1) they
were not obligated to exhaust administrative remedies because 23
U.S.C. § 111(b), the statute under which Blind Vendors seeks
relief, provides for no administrative remedies; (2) they could
not intervene in the proceeding before the US DOE arbitration
panel - despite having interests different from those of NH DOE -
for fear that by doing so they would waive Eleventh Amendment
immunity; and (3) they do have standing to sue because each has a
discrete property interest in the revenue from vending machine
operations at interstate highway rest areas.
The question before the court is whether the interests of
the State of New Hampshire in this action may be represented by
more than one state agency. Under the relevant rule of civil
procedure, ". . . capacity to sue or be sued shall be determined
by the law of the state in which the district court is held . . .
." F e d . R. C i v . P. 17(b). DAS, DOT, and the State Treasurer have
5 identified no New Hampshire legal authority supporting the notion
that the State's interests in this case should be represented by
more than one subordinate executive branch agency. Moreover,
none of the four agencies that have petitioned this court for
relief appear to possess those characteristics that make
agencies, such as the New Hampshire Housing Finance Authority,
the municipal bond bank, and the New Hampshire Retirement System,
"legislatively created entit[ies] independent of the executive
branch N.H. Ret. S y s . v. Sununu, 126 N.H. 104, 107-08
(1985). As between NH DOE, on the one hand, and DAS, DOT, and
the State Treasurer, on the other, it seems beyond serious
question that NH DOE, as the agency that appeared and acted on
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NH v. US DOE, et al. CV-01-346-M 05/16/02 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
State of New Hampshire, Department of Administrative Services; Department of Transportation; State Treasurer; and Department of Education, Division of Vocational Rehabilitation, Bureau of Services for the Blind and Visually Impaired, Petitioners
v. Civil No. 01-346-M Opinion No. 2002 DNH 097 United States Department of Education and the New Hampshire Committee of Blind Vendors (David Ramsey, John Lovedav, John Toomev, Melinda Conrad, Wavne Aldrich, Norman Jitras, Michael Rossi, John Scarlotto and Martha York) , Respondents.
O R D E R
In these consolidated cases (01-346-M and 01-347-JD) , four
New Hampshire state agencies are appealing an administrative
decision by an arbitration panel convened by the United States
Department of Education ("US DOE"). The arbitrators determined
that New Hampshire violated the rights of the New Hampshire
Committee of Blind Vendors ("Blind Vendors"), as established under 23 U.S.C. § 111(b), by failing to extend to Blind Vendors a
right of first refusal with respect to the operation of vending
machines at rest areas along New Hampshire's interstate highways.
Before the court is respondents' motion to dismiss three of the
four petitioners on grounds that they are not proper parties to
this litigation. All four petitioners object. For the reasons
given below, respondents' motion is granted.
In 1998, Blind Vendors sued the New Hampshire Department of
Administrative Services ("DAS") claiming that DAS had violated
its right to a priority, under 23 U.S.C. § 111(b), with regard to
operating vending machines at rest areas along the state's
interstate highways. See N.H. Comm, of Blind Vendors v. N.H.
Dep't of Admin. Servs., 98-011-M. Rather than defending on the
merits of the claim, DAS successfully moved to dismiss on grounds
that this court lacked subject matter jurisdiction, due to Blind
Vendors' failure to exhaust available administrative remedies.1
The only possible administrative remedy available to Blind
Vendors - and the remedy ordered by the court, on DAS's motion -
1 DAS now contradicts itself and says that, based upon post- 1998 decisional law, it would no longer make the argument it did in 98-011-M, and that it was error for the court to have relied upon its argument and to have granted the relief it requested.
2 was the process outlined in 20 U.S.C. §§ 107d-l and d-2, part of
the Randolph-Sheppard Vending Stand Act.
Blind Vendors promptly pursued those administrative
remedies, as the State requested, through the New Hampshire
Department of Education ("NH DOE"), as specified in 20 U.S.C. §
107d-l(a). DAS also successfully moved to dismiss that
proceeding, on grounds that NH DOE did not have jurisdiction over
Blind Vendors' complaint. Blind Vendors appealed to the
Secretary of the United States Department of Education, under the
provisions of 20 U.S.C. § 107d-l. Consistent with common
practice. Blind Vendors complained against NH DOE, the decision
maker, rather than DAS, the administrative opponent below. Blind
Vendors did not attempt to join DAS, DOT, or the State Treasurer
in its administrative complaint against NH DOE, nor did any of
those agencies seek to intervene in Blind Vendors' administrative
appeal. Pursuant to 20 U.S.C. § 107d-2(a), the Secretary
convened an arbitration panel which twice ruled in favor of Blind
Vendors, first by denying NH DOE's motion to dismiss for lack of
jurisdiction, and then by granting Blind Vendors relief on the
merits.
3 In response to the decision of the arbitration panel, two
suits were filed in this court, one by NH DOE (01-347-JD), the
other by three executive branch agencies: DAS, the New Hampshire
Department of Transportation ("DOT"), and the State Treasurer
(01-346-M).2 Both actions purport to be appeals from the
decision of the US DOE arbitration panel, as authorized by 20
U.S.C. § 107d-2(a). By order dated January 16, 2002, the two
suits were consolidated, with 01-346-M designated as the main
case.
Blind Vendors now moves to dismiss DAS, DOT, and the State
Treasurer as parties to this suit, on grounds that: (1) those
agencies did not participate in the administrative proceeding
before the US DOE arbitration panel, have not exhausted whatever
administrative remedies they may have had and, therefore, are not
proper parties to NH DOE's administrative appeal; and (2) even if
those agencies are not subject to an exhaustion requirement, and
are proper parties to this suit, they may not adopt legal
2 DOT and the State Treasurer claim to have standing in this case because they currently share the revenues generated by vending machines operated at interstate highway rest areas, and would lose that income should Blind Vendors be awarded the right to operate the rest area vending machines.
4 positions independent of or contrary to those of NH DOE, because
each is an executive branch agency (that is, each agency is "the
State").
DAS, DOT, and the State Treasurer counter that: (1) they
were not obligated to exhaust administrative remedies because 23
U.S.C. § 111(b), the statute under which Blind Vendors seeks
relief, provides for no administrative remedies; (2) they could
not intervene in the proceeding before the US DOE arbitration
panel - despite having interests different from those of NH DOE -
for fear that by doing so they would waive Eleventh Amendment
immunity; and (3) they do have standing to sue because each has a
discrete property interest in the revenue from vending machine
operations at interstate highway rest areas.
The question before the court is whether the interests of
the State of New Hampshire in this action may be represented by
more than one state agency. Under the relevant rule of civil
procedure, ". . . capacity to sue or be sued shall be determined
by the law of the state in which the district court is held . . .
." F e d . R. C i v . P. 17(b). DAS, DOT, and the State Treasurer have
5 identified no New Hampshire legal authority supporting the notion
that the State's interests in this case should be represented by
more than one subordinate executive branch agency. Moreover,
none of the four agencies that have petitioned this court for
relief appear to possess those characteristics that make
agencies, such as the New Hampshire Housing Finance Authority,
the municipal bond bank, and the New Hampshire Retirement System,
"legislatively created entit[ies] independent of the executive
branch N.H. Ret. S y s . v. Sununu, 126 N.H. 104, 107-08
(1985). As between NH DOE, on the one hand, and DAS, DOT, and
the State Treasurer, on the other, it seems beyond serious
question that NH DOE, as the agency that appeared and acted on
behalf of the State before the US DOE arbitration panel, is
certainly a proper party to bring an appeal from the decision of
that panel.
But, of course, the State's interests, in the end, are
ultimately determined (within the executive branch) by the
Governor, and are represented by the Attorney General. See RSA
7:6 (Supp. 2001) ("The attorney general shall act as attorney for
the state in all criminal and civil cases . . . in which the
6 state is interested . . . Any internal "conflicts" between or
among state agencies are resolvable by the Governor, or the
Attorney General as necessary, to formulate the State's position.
See RSA 7:8 (1988) (the attorney general "shall, under the
direction of the governor and council, exercise a general
supervision over the state departments, commissions, boards,
bureaus, and officers, to the end that they perform their duties
according to law"). Accordingly, respondents' motion to dismiss
DAS, DOT, and the State Treasurer is granted, since NH DOE, the
nominal agency-party, acting under the direction of the Governor
and Executive Council, and the Attorney General, can fully and
completely present the State's case.
The court notes, by way of conclusion, that nothing in this
ruling should place the State at any disadvantage. While DAS,
DOT, and the State Treasurer contend that it would be naive to
assume that they have the same interests as NH DOE, see Mem.
Supp. O b j . to US DOE's Mot. to Dismiss Certain Pet'rs at 8, they
also assert that they have taken no legal positions "that are
contradictory to the position taken by any other state entity,"
i d . at 10-11. To the extent state agencies find themselves in
7 intramural disputes, they must look to the Governor and Council,
or the Attorney General, for resolution and not a federal court.
The State is quite capable of sorting out executive branch
disagreements and formulating its position in this and other
litigation matters. Certainly, the Attorney General possesses
all the authority necessary to resolve intramural legal disputes
among executive agencies. See RSA 7:8.
The limited relief granted by this order seems especially
appropriate in light of the history of this litigation, in which
the State: (1) argued, in 98-011-M, that this court lacked
jurisdiction over Blind Vendors' complaint; (2) argued in the
administrative proceeding before NH DOE that NH DOE lacked
jurisdiction over Blind Vendors' complaint, despite having just
argued in this court that Blind Vendors had to exhaust available
administrative remedies before coming to court; and (3) now says
that: (a) it would no longer argue, as it did in 1998, that Blind
Vendors had to exhaust available administrative remedies; and (b)
it was error, in 1998, for this court to have relied upon the
State's argument and legal position. Blind Vendors has had to
litigate against more contradictory legal maneuvering than common courtesy should permit. The State's suggestion that multiple
executive branch agencies should now be allowed to present
inconsistent positions on the pending issues would lead to more,
not less, prejudice to Blind Vendors, and as noted, the State is
capable of resolving its own intramural disagreements.
Because DAS, DOT, and the State Treasurer have pointed to no
authority under New Hampshire law for the proposition that the
State may assert contradictory interests peculiar to subordinate
executive branch agencies in litigation, the motion to dismiss
DAS, DOT, and the State Treasurer as named parties is granted.
The State is fully capable of determining and asserting its
legitimate legal interests, as the State. Absent a motion to
substitute the State of New Hampshire for NH DOE, as the real
party in interest, the representative state agency, NH DOE, shall
remain the sole nominal plaintiff/appellant.
SO ORDERED.
Steven J. McAuliffe United States District Judge
May 16, 2002
9 cc: Jack B. Middleton, Esq. Joshua Z. Rabinovitz, Esq. Nancy J. Smith, Esq. Emily G. Rice, Esq.