Bird v. Or. Comm'n for the Blind

22 F.4th 809

Jerry BIRD, Petitioner-Appellee,

v.OREGON COMMISSION FOR THE BLIND, an agency of the State of Oregon, Respondent-Appellant,

v.U.S. Department of Education, Rehabilitation Services Administration, Respondent-Appellee.

No. 20-36066

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 8, 2021 Portland, Oregon

January 7, 2022

Christopher A. Perdue (argued), Assistant Attorney General; Benjamin Gutman, Solicitor General; Ellen F. Rosenblum, Attorney General; Oregon Department of Justice, Salem, Oregon; for Respondent-Appellant.

Kristian Roggendorf (argued), The Zalkin Law Firm, P.C., San Diego, California; Roger K. Harris, Harris Berne Christensen LLP, Portland, Oregon; for Petitioner-Appellee.

No appearance for Respondent-Appellee.

Before: Susan P. Graber and Morgan Christen, Circuit Judges, and Raner C. Collins,^* District Judge.

R. COLLINS, District Judge:

Respondent Oregon Commission for the Blind ("OCB") appeals the district court's affirmation of an arbitration panel's award of compensatory relief, attorney's fees, and costs in favor of Petitioner Jerry Bird. We have jurisdiction pursuant to 28 U.S.C. § 1291. Reviewing the denial of sovereign immunity de novo, Ray v. County of Los Angeles , 935 F.3d 703, 708 (9th Cir. 2019), we reverse. Neither the Randolph-Sheppard Act ("RSA") nor the parties' operating agreements unequivocally waive a state's sovereign immunity from liability for monetary damages, attorney's fees, or costs. In coming to this conclusion, we join the Sixth and Tenth Circuits and conclude that our holding in Premo v. Martin , 119 F.3d 764 (9th Cir. 1997), is no longer binding.

I. Factual and Procedural History

The RSA creates a cooperative federal-state program that gives preference to blind applicants for vending licenses at federal facilities. 20 U.S.C. §§ 107 – 107f. At the federal level, the Secretary of Education is responsible for administering the Act. 20 U.S.C. §§ 107(b), 107a(a). At the state level, state licensing agencies designated by the Secretary of Education implement the program. 20 U.S.C. § 107a(a)(5). Under the RSA, a blind licensee who is dissatisfied with "any action arising from the operation or administration of the vending facility program" may request an evidentiary hearing before the licensing agency. 20 U.S.C.§ 107d-1(a). If the licensee disagrees with the hearing's result, he or she may file a complaint with the Secretary of Education, who will summon an arbitration panel to resolve the dispute. Id. The arbitration panel's decision is "final and binding on the parties" and is reviewable by the district court as a final agency decision under the Administrative Procedures Act. Id. §§ 107d-1, 107d-2(a).

Oregon's mini-RSA is the state equivalent of the RSA, applied to licenses at state buildings. See Or. Rev. Stat. §§ 346.510 – 346.570. OCB is a state licensing agency that executes the state's version of the RSA by obtaining vending permits in state buildings, licensing blind vendors, and assigning blind vendors to vending sites. See id. §§ 346.120, 346.540. "State participation in the program is voluntary, and a state agency seeking to be designated as a[n RSA licensing agency] must apply to the Secretary of Education and agree to a number of conditions." Premo , 119 F.3d at 767. Oregon agreed to have the OCB "[s]ubmit to an arbitration panel (upon its being convened by the Secretary [of Education]) those grievances of any vendor which the vendor believes to be unresolved after a full evidentiary hearing."

Bird is a blind vendor who gave up his vending contract at the Oregon Lottery building in 2005 in response to OCB's promise to assign him to the vending contracts at Chemeketa Community College ("CCC") and Santiam Correctional Facility. Despite its promise, OCB did not assign Bird to those locations, choosing instead to contract with another vendor.

In 2006, Bird filed a grievance alleging that he should have been assigned the vending contract at CCC. In 2009, an arbitration panel reviewed Bird's grievance and determined that OCB had violated the RSA. The arbitration panel ordered OCB to: (1) "pay Bird an amount equal to the net revenues from vending at CCC"; (2) "award Bird the vending contract at CCC"; and (3) consult with an elected committee of blind vendors regarding any further actions for additional vending that might become available at CCC. OCB did not appeal that decision.

Bird later realized that OCB did not control all the vending contracts at CCC. Consequently, Bird asked OCB to commence "whatever action" was necessary to enforce CCC's compliance with state and federal laws. In March 2011, OCB filed a lawsuit against CCC. In response, CCC cancelled all vending contracts and voided the agreement with OCB in May 2011. CCC then opened up its vending opportunities for proposals. OCB submitted a response, but CCC selected a private vending company that offered CCC a percentage of the revenues.

In July 2011, Bird and six other blind vendors filed a formal complaint with OCB seeking arbitration, prospective relief, and attorney's fees as a consequence of OCB's alleged mishandling of vending contracts and representation of blind vendors' interests. The arbitration panel denied relief, and Bird filed a petition for review in the Oregon District Court. The district court concluded that the Eleventh Amendment did not protect OCB from liability for compensatory damages. Bird v. U.S. Dep't of Educ. , No. 3:14-CV-00843-YY, 2017 WL 2365110, at *6 (D. Or. May 31, 2017). The district court's decision relied primarily upon the Ninth Circuit holding in Premo .

In Premo , we concluded that Eleventh Amendment sovereign immunity did not apply to an arbitration panel's decision under the RSA, reasoning "[i]t has been widely recognized" that the RSA allows for "arbitration panels to award compensatory relief" because, when the arbitration provision was formulated, it was intended to resolve blind vendors' disputes, which necessarily included "back pay and other forms of compensatory relief." 119 F.3d at 769–70 (first citing Tenn. Dep't of Hum. Servs. v. U.S. Dep't of Educ. , 979 F.2d 1162, 1165 (6th Cir. 1992) ; then citing Del. Dep't of Health & Soc. Servs. v. U.S. Dep't of Educ. , 772 F.2d 1123, 1136–37 (3rd Cir. 1985) ). We permitted judicial enforcement of the arbitration decisions granting compensatory relief because the RSA provided that any dispute could be arbitrated and that the arbitration panel's decision would be binding on the parties. Id. Therefore, although waiver of sovereign immunity from compensatory relief was not expressly contained within the statutory text, we concluded a constructive waiver was sufficient given the "overwhelming implication of the statute." Id. at 770–71.

After we issued Premo , however, the Supreme Court decided Sossamon v. Texas , 563 U.S. 277, 131 S.Ct. 1651, 179 L.Ed.2d 700 (2011). In Sossamon , the Court analyzed whether a state waives sovereign immunity from compensatory relief through acceptance of federal funding under the Religious Land Use and Institutionalized Persons Act of 2000 ("RLUIPA"), 114 Stat. 803, 42 U.S.C. § 2000cc, et seq. Id. at 280, 131 S.Ct. 1651. Although RLUIPA provides for "appropriate relief against a government" for violations of that statute, the Court held that a state's waiver of sovereign immunity "must be ‘unequivocally expressed’ in the text of the relevant statute" and cannot be inferred from context. Id. at 282, 284, 131 S.Ct. 1651 (quoting Pennhurst State Sch. & Hosp. v. Halderman , 465 U.S. 89, 99, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984) ). In addition, the Court ruled that a state's waiver of sovereign immunity from compensatory relief must be unambiguous, regardless of the waiver of sovereign immunity from any other form of relief. Id. at 285, 131 S.Ct. 1651. Therefore, the Court concluded, RLUIPA's reference to "appropriate relief" did not waive the state's sovereign immunity as to damages because the reference was ambiguous. Id. at 286, 131 S.Ct. 1651.

The district court here considered Sossamon but ultimately distinguished the binding-arbitration text in the RSA from the text found in Sossamon . Bird , 2017 WL 2365110, at *6. The court concluded that the Eleventh Amendment did not preclude liability because states participating in the RSA grant "explicit consent" to binding arbitration of all disputes. Id. The district court considered Oregon's consent to be explicit because of Premo 's observation that arbitration is commonly understood to permit compensatory relief. Id. Dismissing Sossamon as inapposite, the court remanded the matter to the arbitration panel for a determination of compensatory relief and attorney's fees and costs, if appropriate. Id. at *8. The arbitration panel, in turn, granted Bird both compensatory relief and attorney's fees and costs.

Bird petitioned for review of the arbitration panel's second decision, and OCB filed a cross-petition arguing that OCB had not waived sovereign immunity from liability by participating in the RSA. The matter was referred to a magistrate judge, who issued Findings and a Recommendation that the district court reaffirm its original analysis about sovereign immunity from liability. Expanding upon the district court's previous order, the magistrate judge stated that the decision in Premo was binding and its reasoning "unequivocal." The magistrate judge noted that the Ninth Circuit was not alone in reaching this conclusion; the Third Circuit came to the same conclusion in Delaware Department of Health and Social Services , 772 F.2d at 1138.

In so reasoning, the magistrate judge dismissed OCB's argument that the Supreme Court's decision in Federal Maritime Commission v. South Carolina State Ports Authority , 535 U.S. 743, 122 S.Ct. 1864, 152 L.Ed.2d 962 (2002) ( FMC ), was irreconcilable with Premo . In FMC , the Supreme Court determined that state sovereign immunity prevented an individual from forcing South Carolina to...