FR Doc 2010-31879[Federal Register: December 20, 2010 (Volume 75, Number 243)]
[Page 79352-79354]
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Arbitration Panel Decision Under the Randolph-Sheppard Act

AGENCY: Department of Education.

ACTION: Notice of arbitration panel decision under the Randolph-
Sheppard Act.


SUMMARY: The Department of Education (Department) gives notice that on 
July 17, 2009, an arbitration panel rendered a decision in the matter 
of Jerry Bird v. Oregon Commission for the Blind, Case no. R-S/07-2. 
This panel was convened by the Department under 20 U.S.C. 107d-1(a), 
after the Department received a complaint filed by the petitioner, 
Jerry Bird.

FOR FURTHER INFORMATION CONTACT: You may obtain a copy of the full text 
of the arbitration panel decision from Suzette E. Haynes, U.S. 
Department of Education, 400 Maryland Avenue, SW., room 5022, Potomac 
Center Plaza, Washington, DC 20202-2800. Telephone: (202) 245-7374. If 
you use a telecommunications device for the deaf (TDD), you may call 
the Federal Relay Service (FRS), toll-free, at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
accessible format (e.g., braille, large print, audiotape, or computer 
diskette) on request to the contact person listed under FOR FURTHER 

SUPPLEMENTARY INFORMATION: Under section 6(c) of the Randolph-Sheppard 
Act (Act), 20 U.S.C. 107d-2(c), the Secretary publishes in the Federal 
Register a synopsis of each arbitration panel decision affecting the 
administration of vending facilities on Federal and other property.


    Jerry Bird (Complainant) alleged violations by the Oregon 
Commission for the Blind, the State licensing agency (SLA), under the 
Act and implementing regulations in 34 CFR part 395. Specifically, 
Complainant alleged that

[[Page 79353]]

the SLA improperly administered the Randolph-Sheppard Vending Facility 
Program in violation of the Act, implementing regulations under the 
Act, and State rules and regulations. Complainant further alleged that 
the SLA denied him an opportunity to manage vending machines at the 
Chemeketa Community College in addition to those he was already 
operating in exchange for relinquishing his vending location at the 
Oregon State Lottery Building (Lottery Building) as well as a proposed 
espresso cart operation in the Lottery Building.
    Since 1991, Complainant has been a licensed blind vendor in the 
Randolph-Sheppard Vending Facility Program. In the fall of 2005, while 
operating his vending location at the Lottery Building, Complainant 
learned from another blind vendor at the Lottery Building that 
customers had approached her regarding their interest in having an 
espresso cart in the building. The other vendor discussed her plans 
with building management and with a member of the Blind Enterprise 
Consumer Committee (BECC). BECC is the Elected Committee of Blind 
Vendors under the Act. The BECC member informed Complainant of the 
    Subsequently, Complainant contacted SLA staff to raise his concerns 
of direct competition to his vending location with the placement of the 
proposed espresso cart at the Lottery Building. Moreover, Complainant 
felt the espresso cart should become part of his vending location. 
Complainant alleged that initially SLA staff agreed with his position, 
but later changed its opinion and moved forward with its intention of 
installing the espresso cart at the Lottery Building separate from 
Complainant's vending location.
    Complainant objected to the SLA's decision. A meeting was held in 
October 2005 with SLA staff and a BECC member. At the meeting, 
Complainant alleged that he offered to give up the Lottery Building 
vending location, thereby permitting it to be combined with the 
proposed espresso cart, in return for a vending machine location at the 
Santiam Correctional Facility, which would cover his lost revenue from 
the vending machines in the Lottery Building, and at the Chemeketa 
Community College, which would reimburse him for lost income for the 
proposed espresso cart.
    In November 2005, Complainant was contacted by an SLA staff member 
informing him that the vending machines at the Santiam Correctional 
Facility were being transferred to him. Later, in early 2006, 
Complainant contacted the SLA to inquire whether it had pursued a 
vending contract with the Chemeketa Community College. The SLA informed 
Complainant that it was in the process of obtaining an opinion from the 
Oregon Attorney General's (AG) office concerning the extent of the 
SLA's legal authority under State law regarding community colleges and 
that a response from the AG's office was expected soon.
    On July 21, 2006, the SLA informed Complainant that the Santiam 
Correctional Facility and another vending location he had recently 
received would more than compensate him for the loss of income at the 
Lottery Building. Also, the SLA informed Complainant that it would not 
assign him any additional vending locations without the approval of the 
BECC. Eventually, while the BECC voted to assign Complainant the 
Chemeketa Community College vending facility, the SLA invalidated the 
vote due to an alleged conflict of interest.
    Complainant requested a State fair hearing on the SLA's decisions. 
A State fair hearing on this matter was held. On October 31, 2007, the 
hearing officer issued a decision denying Complainant's grievance. On 
December 14, 2007, the SLA adopted the hearing officer's decision as 
final agency action. It was this decision that Complainant sought 
review of by a Federal arbitration panel.
    According to the arbitration panel, the issues to be resolved were: 
(1) Whether the SLA violated the Act when it failed to give Complainant 
the Chemeketa Community College vending or an equivalent opportunity; 
(2) Whether the SLA violated the Act by delaying the administrative 
appeal process; and (3) If there was a violation of the Randolph-
Sheppard Act, what was the appropriate remedy.

Arbitration Panel Decision

    After hearing testimony and reviewing all of the evidence, the 
panel majority ruled that the Oregon Commission for the Blind violated 
the Act by operating the Randolph-Sheppard program in an arbitrary and 
capricious manner when it: (1) Offered the Chemeketa Community College 
vending location or its equivalent to Complainant as part of a 
negotiation with him to relinquish his vending location in the Lottery 
Building without consulting the BECC; (2) ignored the active 
participation of the BECC by declaring the BECC's vote on the vending 
location at the Chemeketa Community College invalid; and (3) delayed 
the administrative process in response to Complainant's request for a 
State fair hearing.
    Notwithstanding the SLA's argument that it had not waived sovereign 
immunity, the panel found that it had jurisdiction to order monetary 
damages. Thus, as a remedy, the panel majority ruled that the SLA 
should: (1) Remit to Complainant an amount equal to the net revenues 
from the vending location at the Chemeketa Community College less set-
aside, plus interest at the applicable Federal statutory rate, 
retroactive to April 2007; (2) award to Complainant the vending 
location at the Chemeketa Community College; and (3) amend its 
regulations to provide for timelines in processing vendor complaints 
and requests for Federal arbitrations under the Act. Additionally, the 
panel majority ruled that the Complainant was entitled to reasonable 
attorney's fees and costs. The panel also retained jurisdiction for 90 
days following the award's issuance to monitor implementation and 
calculation of the award of attorney's fees.
    One panel member dissented from the panel majority's decision. The 
panel member dissented from the panel majority regarding: (1) The award 
of monetary damages and attorney's fees to Complainant, (2) the finding 
that the SLA had violated the Act because it did not consult the BECC, 
and (3) the finding that the SLA violated the Act as the result of a 
delay in the administrative hearing process.
    Conversely, the panel member concurred with the panel majority that 
the actions of the SLA were in violation of the Act, not in breach of a 
contract. Also, the panel member concurred with the panel majority 
regarding prospective relief available to Complainant.
    Subsequent to the arbitration panel decision, the attorney for the 
Complainant requested that the panel reconsider its decision and amend 
the award based upon the fact that Chemeketa Community College had 
entered into a beverage contract that was contrary to the Act. Also, 
the attorney requested that the panel award him $98,624.00 in legal 
fees and costs.
    On April 1, 2010, the panel majority found that the new allegation 
regarding the beverage contract was outside the scope of the panel's 
authority and thus denied the request of Complainant's attorney to 
reconsider and amend the original award. Additionally, the panel 
reviewed the billing statements in detail from the attorney regarding 
his services rendered and the legal fees and costs to represent the 
Complainant. Based upon the finding that not all of the hours claimed 
by Complainant's attorney were pertinent to this arbitration, the panel

[[Page 79354]]

majority concluded that reasonable attorney's fees and costs for this 
arbitration should be reduced to $28,393.50.
    One panel member dissented stating that the scope and amount of an 
award of attorney's fees and costs would not materially damage the 
Oregon Commission for the Blind's Randolph-Sheppard program. 
Consequently, this panel member would award Complainant's attorney 
$65,749.33, reducing the original amount requested by one-third.
    The views and opinions expressed by the panel do not necessarily 
represent the views and opinions of the Department.
    Electronic Access to This Document: You can view this document, as 
well as all other Department of Education documents published in the 
Federal Register, in text or Adobe Portable Document Format (PDF) on 
the Internet at the following site: 
To use PDF you must have Adobe Acrobat Reader, which is available free 
at this site.

    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO Access at:

    Dated: December 15, 2010.
Alexa Posny,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 2010-31879 Filed 12-17-10; 8:45 am]