Jerry Bird v. Oregon Comm'n for the Blind

Citation: Not availableDocket: 20-36066

Court: Court of Appeals for the Ninth Circuit; January 6, 2022; Federal Appellate Court

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The Ninth Circuit reversed the district court's denial of sovereign immunity to the Oregon Commission for the Blind (OCB) in a case involving Jerry Bird, who sought compensatory relief after alleging mishandling of vending contracts. Bird's initial arbitration complaint against OCB was unsuccessful, leading him to petition for federal review, where the district court ruled that the Eleventh Amendment did not protect OCB from liability. Citing the Supreme Court's decision in Sossamon v. Texas, the panel determined that neither the Randolph-Sheppard Act (RSA) nor the related agreements provided an explicit waiver of sovereign immunity for monetary damages, attorney’s fees, or costs. The panel concluded that the previous ruling in Premo v. Martin, which suggested otherwise, was no longer binding due to Sossamon's clarification regarding waivers of sovereign immunity. Consequently, the court held that OCB had not waived its immunity, thus reversing the district court's decision and denying Bird's claim for attorney's fees.

The Randolph-Sheppard Act (RSA) and related operating agreements do not explicitly waive a state’s sovereign immunity regarding liability for monetary damages, attorney’s fees, or costs. This conclusion aligns with rulings from the Sixth and Tenth Circuits and indicates that the precedent set in Premo v. Martin is no longer applicable. The RSA establishes a federal-state cooperative program aimed at providing vending licenses to blind individuals at federal facilities, with oversight by the Secretary of Education and implementation by state-designated agencies. Blind licensees can request hearings for grievances related to the vending program, and the Secretary of Education can convene an arbitration panel for unresolved issues, whose decisions are final and subject to judicial review.

Oregon's mini-RSA mirrors the federal law, facilitating blind vendors' access to vending opportunities in state buildings through the Oregon Commission for the Blind (OCB). OCB is responsible for licensing and managing vending permits, and its participation in the program is voluntary. In a specific case, a blind vendor named Bird relinquished his contract based on OCB's assurances of future assignments but was not allocated the promised contracts. After filing a grievance, an arbitration panel found OCB in violation of the RSA and ordered remedies, which OCB did not appeal. Later, Bird sought enforcement actions against a state facility that canceled contracts with OCB, leading to further grievances filed with OCB by Bird and others. However, the arbitration panel denied their claims, and Bird subsequently petitioned the Oregon District Court, which found that the Eleventh Amendment did not shield OCB from compensatory damages liability.

The district court based its decision on the Ninth Circuit's ruling in Premo, which established that Eleventh Amendment sovereign immunity does not apply to arbitration panels’ decisions under the Randolph-Sheppard Act (RSA). The court noted that the RSA was designed to resolve disputes involving blind vendors, allowing for awards of compensatory relief, including back pay. Although the RSA does not explicitly state a waiver of sovereign immunity for compensatory relief, the court found a constructive waiver based on the statute's implications. 

After Premo, the Supreme Court's ruling in Sossamon v. Texas clarified that a state must unequivocally express a waiver of sovereign immunity in the statute's text, which cannot be inferred. The Court determined that the ambiguous language in the Religious Land Use and Institutionalized Persons Act (RLUIPA) did not constitute a waiver of sovereign immunity for damages. The district court distinguished the RSA's binding arbitration provisions from those examined in Sossamon, concluding that Oregon's participation in the RSA provided explicit consent to binding arbitration for all disputes. 

The district court remanded the case to the arbitration panel for ruling on compensatory relief and attorney’s fees. The panel subsequently awarded Bird compensatory relief and fees. Bird petitioned for review, while OCB cross-petitioned, contesting the waiver of sovereign immunity. A magistrate judge affirmed the district court's original sovereign immunity analysis, emphasizing that the Premo decision was binding and consistent with similar conclusions reached by the Third Circuit.

The magistrate judge dismissed OCB's claim that the Supreme Court's ruling in Federal Maritime Commission v. South Carolina State Ports Authority contradicted the findings in Premo. The FMC case established that state sovereign immunity barred an individual from compelling South Carolina to resolve disputes under the Shipping Act before the Federal Maritime Commission. The magistrate judge noted that FMC did not pertain to states voluntarily engaging in statutory schemes like the RSA. Furthermore, it was emphasized that the Sossamon decision addressed the ambiguity of "appropriate relief" under RLUIPA rather than the RSA's binding arbitration commitment. The magistrate judge reiterated that sovereign immunity waivers must be explicitly stated, yet concluded that the RSA's language strongly indicated a participating state's waiver of immunity from liability, thus affirming Premo as binding precedent. The district court subsequently endorsed the magistrate's recommendations. On appeal, OCB contests the arbitration award and the district court's ruling that RSA participation waives sovereign immunity regarding compensatory relief and legal costs. 

Key legal principles were reiterated: a state cannot be sued without explicit consent, and any waiver of sovereign immunity must be unequivocal and specific to the type of relief. The court examined whether Premo remains valid following Sossamon and concluded it does not. A circuit court can only revisit a precedent when a higher court's ruling is clearly irreconcilable with it. The court clarified that while Premo previously found a constructive waiver of sovereign immunity, Sossamon's requirement for explicit waivers negated that reliance. The analysis of earlier circuit decisions that supported Premo was also deemed outdated due to Sossamon's clarifications.

The Sixth Circuit reversed its prior decision regarding Ohio's sovereign immunity from monetary damages within the context of the RSA program. It concluded that the RSA does not specify any available remedy, making the text more ambiguous than the term "appropriate relief," which was deemed insufficient for waiver in Sossamon. Consequently, the court determined that Ohio did not waive its immunity from such damages, overriding earlier cases relied upon by Premo. It emphasized that sovereign immunity cannot be waived based on contextual indications, asserting that any waiver must be "unequivocally expressed" in the statute's text. The court ruled that an agreement to arbitrate disputes does not equate to a waiver of sovereign immunity for monetary damages, thus finding the district court's contrary decision erroneous.

Regarding attorney’s fees, the court reaffirmed the American Rule, which mandates that each party bears its own legal costs unless explicitly stated otherwise in a statute or contract. It noted that neither the RSA nor the operating agreements contained provisions for attorney’s fees, resulting in Bird not being entitled to such fees. The decision was reversed and remanded.