Braille Monitor                                                                  March 1985

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Breaking Ground Again in the Randolph-Sheppard Program: The Pete Howe Case

by Marc Maurer

In that famous television program, Dragnet, Sargeant Friday often said, 'The facts, Ma'am, just the facts." What happened was more important than what might have happened, or could have happened, or should have happened. What people thought or what they claimed didn't matter if it was different from the facts.

So, what do the facts tell us? There are those who say that the American Council of the Blind provides assistance to blind vendors. There are those who claim that the Randolph-Sheppard Vendors of America (an ACB affiliate) is a principal organization benefiting blind vendors. On the other hand, we have the facts and the facts tell the story.

The Randolph-Sheppard amendments were adopted as a part of Public Law 93-516 in 1974. Included in these amendments were provisions for a fair hearing and arbitration process. These provisions were modeled on the arbitration process then in place at the Iowa Commission for the Blind. The Federation created these procedures and recommended that they become a part of the Randolph-Sheppard Program nationwide. Without the National Federation of the Blind, there would be no such appeal process. Once this appeal process was in place, vendors had the right to appeal. The first appeal to assist a blind vendor was taken with the advice and assistance of the National Federation of the Blind.

Then came the court reviews. With the assistance of the organized blind movement, the rights of blind vendors to reasonable treatment under the Randolph Sheppard Act were established through federal litigation and are now a matter of the public record through decisions of the federal courts. It was done with the support and assistance of the National Federation of the Blind.

Now, in the Pete Howe case, we have established another precedent. Still another breakthrough has been made. The rights of blind vendors have been expanded and protected once again. Dr. Jernigan outlined the problem in the Presidential Report at the 1984 Convention of the National Federation of the Blind. He said, "Pete Howe is a blind vendor in the post office in Green Bay, Wisconsin. He has operated both vending machines and an over-the-counter business there for over twenty years. But the post office is moving, and it attempted to replace Pete as the vending machine operator in the process. Bids for the vending machine service at the new building were solicited on June 18, 1984, to be returned for opening by 11:00 a.m. June 25. This was a violation of Pete Howe's priority under the Randolph-Sheppard Act.

"But the Wisconsin agency was doing nothing. (And, of course, I don't need to tell you that the Randolph-Sheppard Vendors of America, the ACB affiliate, was doing nothing either.)

"On Monday, June 25, 1984, we went to the federal court in Milwaukee to get an order stopping the postal service from opening the bids at 11:00 a.m. as scheduled. We succeeded. At 10:35 a.m. we got our temporary restraining order blocking the opening of the bids. That order was signed by a federal judge. By five minutes of eleven the postal authorities in Chicago, where the bids were being opened, had been notified that they could not award a contract. There will be a hearing for a permanent injunction on Monday, July 9. Jim Gashel will be there. In the meantime, Pete Howe, who is at this Convention, continues as the vendor. He will continue after July 9, I can assure you."

The hearing took place in Milwaukee as scheduled. Jim Gashel was there. The post office took the position that Pete Howe had a permit to operate a vending facility at the post office in Green Bay for only as long as the post office remained at its current address. Inasmuch as the post office was moving, the permit was void. After all, they said, the permit lists the address of the post office. If Pete Howe wished to operate the vending facility at the new location, he could bid on the site along with all other interested parties. Of course, at the old location Pete Howe was operating vending machines in the swing room and an over-the-counter business in the lobby. In the new location the vending machines in the swing room would be operated by a private vendor. The blind vendor assigned to this location would be limited to the over-the counter operation and would not get the profit from the vending machines. What makes the injustice of this position even worse is that several years ago Pete Howe bought the vending facility in the post office. Now that the post office was moving to a new building, this vending facility was virtually worthless. If Pete did not move to the new post office, the money that he had spent to purchase the vending facility in the old post office would simply be gone.

On December 7, 1974, the Randolph-Sheppard Act Amendments of 1974 became law. For the first time blind vendors had an established appeal process for grievances in the Vending Facilities Program. For the first time blind vendors had a right to a "priority" in assignments to vending locations. However, these amendments did not answer ill of the questions. The appeals process in the Randolph-Sheppard Act permits the blind vendor to complain against the state licensing agency but "not against the federal government. The post office was moving. It had decided it would not honor Pete Howe's priority to the vending location in the post office. The Wisconsin Vocational Rehabilitation Department, rather than defending Pete Howe, did nothing. Pete Howe was being squeezed out. Furthermore, vending appeals take a long time--often two years. The post office was moving immediately. Even if Pete Howe complained through the arbitration process about the activities of the state licensing agency, and even if he won, his victory would be several years in the future, and he would have no vending location in the meantime. No court had ever fully considered this matter and concluded that the Randolph-Sheppard Act gave the blind vendor the right to emergency court action and a preliminary injunction. Was Pete Howe entitled to an order telling the postal service that it could not alter the vending permit before Pete Howe had been given the opportunity to present his case through the statutory arbitration process established by the Randolph-Sheppard Act? This was the question presented to the United States Federal District Court for the Eastern District of Wisconsin. The National Federation of the Blind prepared the case and stood forth to fight for the rights of blind vendors. Others may have wished us and the vendors well, but no one stood with us. We were in the courtroom alone. It was clear that the permit granted to Pete Howe the priority for the vending facility in the post office. The address on the permit was merely informational and a technicality. The Randolph-Sheppard rules state specifically at 34 C.F.R. Section 395.7 that a blind vendor will have an opportunity for a hearing before he or she may be removed from the vending facility. The terms and conditions of the permit issued to Pete Howe for the operation of the vending facility at the post office could not be ignored or changed unilaterally by postal. officials. To strip Pete Howe of his livelihood without providing an opportunity for him to present his case was a violation of due process. All of this was presented to the court. As President Jernigan confidently predicted, the Court answered the question clearly and unequivocally. We prevailed. The decision of the United States Federal District Court makes it clear that a blind vendor has a right to a hearing and a full review of the priority granted to that vendor before termination of that vendor. The power of the federal courts may be used to protect these rights and to insure that fairness and even-handedness prevail. However, it is important to realize that these victories for blind vendors do not occur in a vacuum. In fact, if someone with expertise, resources, and the will to fight had not been present to resist the action of the post office in the Pete Howe case, not only would Pete Howe have lost his vending location but there would also have been a bad precedent established as well. The priority guaranteed under Randolph-Sheppard would have been weakened, and every blind vendor in the nation would have been less secure and more exposed. Repeatedly the National Federation of the Blind has stepped forward to save the vending program, and more and more vendors are recognizing the fact and joining the movement. Yet, some of the vendors still stand aloof and hope to ride free--or, even worse, fail to understand, and refuse to take the time to study the issues so that they can understand.

In the present instance certain facts should be underscored. Pete Howe has a job today as a vendor in the Green Bay, Wisconsin, post office. If the Federation had not taken prompt and decisive action, he would not have that job. The decision of the federal judge has been published and can be used as a precedent in future litigation. This strengthens the Randolph-Sheppard Act and increases the likelihood of victory in future cases. It also makes it less likely that the post office and other federal agencies will try to disregard the rights of blind vendors. This contrasts sharply with the recent case which the American Council of the Blind, their affiliate the Randolph-Sheppard Vendors of America, and others brought against the Defense Department to try to get the contract for McDonald's to establish fast food operations on navy bases declared illegal. We declined to participate in that case because we thought there were better ways to attack the problem, because in a previous case of similar nature the ACB lost and caused a bad precedent weakening the Randolph-Sheppard Act to be established, because we thought the McDonald's case would likely end in another bad precedent and further weakening of the Randolph-Sheppard Act, and because the American Council of the Blind rarely conducts any activity in such a way as to achieve positive results. Regrettably we were right. The American Council of the Blind, its affiliate the Randolph-Sheppard Vendors of America, and their allies have now lost their court case, and the decision is devastating for blind vendors. It is too early to be sure of the interpretation of all of the details of the court decision, but it has the potential to cut the very heart out of the Randolph-Sheppard program and virtually destroy any meaningful preference for blind vendors.

The decision of the United States Federal District Court in the Pete Howe case, issued July 20, 1984, is as follows:

IN THE UNITED STATES
DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

MARTIN B. HOWE,

Plaintiff,

v.

WILLIAM BOLGER, in his capacity as Postmaster General of the United States and PATRICIA G. KALLSEN, in her capacity as Administrator of the Division of Vocational Rehabilitation of the State of Wisconsin,

Defendants.

Case Number 84-C-843

DECISION AND ORDER

The Plaintiff, Martin B. Howe, in the aoove-captioned action seeks a preliminary injunction for the purpose of maintaining his status as a blind operator of a vending machine enterprise in the United States Post Office in Green Bay, Wisconsin under the Randolph-Sheppard Act. 20 U.S.C. Section 107 et seq., until Howe has an opportunity to exhaust his administrative remedies under state and federal law.

On June 25, 1984, this Court issued a temporary restraining order requiring Defendant William Bolger, in his capacity as Postmaster General of the United States, to suspend the bidding process for vending facilities at the new post office in Green Bay. He was also restrained from soliciting bids, contracting for vending services at the new oost office, and from terminating the permit to operate the business, defendant Patricia G. Kallsen, in her capacity as Administrator of the Division of Vacational Rehabilitation of the State of Wisconsin, was enjoined from terminating the Plaintiff's license to operate his vending business.

An evidentiary hearing was held on July 9, 1984, after which this Court ectended the temporary restraining order jr.til July 2 0, 1984. Under the terms of this extended order the Defendants were allowed to bring food for sale into the -iew post office, but the food could not re in vending machines or subject to a contract.

Pursuant to this Court's order, Defendant Kallsen informed the Court by ietter that the grievance procedure available at the state level would take three months to complete. Additional time would be needed at the federal level. Howe is asking that a preliminary injunction be granted incorporating the terms of the temporary restraining order and allowing him to operate his vending machines in the new post office pending the outcome of the administrative proceeding and staying this action until the termination of those proceedings.

In ruling on a preliminary injunction, a trial court must consider: (1) the reasonable likelihood of success of the merits; (2) whether there will be irreparable injury and absence of an adequate remedy at law; (3) whether the threatened harm to the Plaintiff outweighs the harm the injunction may cause the Defendants; and (4) whether the granting of the injunction will disserve the public interest. Shaffer v. Globe Protection, Inc., 721 F.2d 1121, 1123, (7th Cir. 1983).

Howe asserts that he had a reasonable probability of establishing, through recourse to administrative remedies, that the license covering his vending enterprise in the Green Bay Post Office will not be terminated by a move of that office to a new address. He alleges that he is a third-party beneficiary to the contract between the federal and state defendants and contends that his license to operate the vending facilities should be transferrable to the new facility.

Plaintiff claims to have been operating a vending stand in the lobby of the main post office at Green Bay since 1960. In 1970, he executed an Automatic Vending Agreement with the Green Bay Post Office to expand his facility to include the employee lunchroom. Howe believes that he has a property interest in maintenance of the vending facilities at both sites, and additionally, a contractual interest in the lunchroom site.

The federal Defendant maintains that the Plaintiff has no property interest in doing business in a particular location. The Court notes that this case does not involve an application for a license, but the de facto termination of a license. As such, the Plaintiff is entitled to procedural due process rights. See Sumpter v. White Plains Housing Authority, 29 N.Y.2d 420, cert, denied, 406 U.S. 928 (1972). ("It has long been settled that a party aggrieved by loss of a pre-existing right or privilege may enjoy procedural rights not available to one denied the right or privilege in the first instance.") Licenses which involve activities which are essentials of life should not be taken away or nullified without affording an opportunity for a hearing prior to termination. Bell v. Burson, 402 U.S. 535 (1971) ("Once licenses are issued...their continued possession may become essential in the pursuit of a livelihood. Suspension of issued licenses thus involves state action that adjudicates important interests of the licensees. In such cases, the licenses are not to be taken away without that procedural due process required by the Fourteenth Amendment.")

The federal Defendant has pointed out that the state Defendant has not taken action to cancel Howe's license, yet it is the Defendants ' position that this license would not transfer to another location. Thus, if the main post office in Green Bay has moved to a new location, a license to operate a vending machine business in the former facility would have no value even if it is not formally terminated. In regard to the written contract covering the vending facilities in the employee lunchroom, the Defendants have offered no subsequent writing showing a modification of this specific agreement.

The sole issue in this case is whether a preliminary injunction should issue allowing the Plaintiff to continue his vending business at the new main post office in Green Bay until he has exhausted his administrative remedies. See Amended Verified Complaint. This Court need not address the underlying issue of whether the Plaintiff should be awarded a contract to provide vending services at the new post office. The Plaintiff concedes, and the Court agrees, that this determination is best left to the decision-making bodies designated in the Randolph-Sheppard Act. See Massachusetts Elected Committee for Blind Vendors v. Matava, 482 F. Supp. 1186 (D. Mass. 1980).

Thus, the Court finds that the Plaintiff does have an arguable property interest in his license to conduct his vending business at the Green Bay Post Office, at whatever location and that, therefore, he is entitled to a due process hearing. Congress has provided for such a hearing under the Randolph-Sheppard Act, 20 U.S.C. Section 107d-1, so the Plaintiff should be allowed to avail himself of the procedures thereunder before his opportunity to operate under his license is terminated.

The Plaintiff alleges that his injury will be irreparable because a Randolph-Sheppard Arbitration Panel, convened under and pursuant to 20 U.S.C. Sections 107d-1 and 107d-2, does not have the authority to award retroactive relief in the form of compensatory monetary damages or reinstatement. The federal Defendant cited Georgia Department of Human Resources v. Bell, 528 F. Supp. 17, 25 (N.D.Ga. 1981) as an instance in which compensatory damages were awarded, hut the Plaintiff has submitted evidence that the United States is appealing this decision on the ground that these panels do not have the power to award monetary damages to blind vendors in the form of Dack pay awards or legal fees. [We interrupt the court order to remind Monitor readers that the Georgia case here referred to is the Jessie Nash case, which the Federation planned and sponsored from its inception through its successive stages of victory. The court order continues:] No other reported cases have dealt with this precise issue, so should the federal government prevail in its appeal, there would be precedent for denying relief to liowe in this case. Thus, the Court finds that the Plaintiff has shown that he could be irreparably injured and without an adequate remedy at law.

At the hearing held on July 9, 1984, the Plaintiff testified that he received no income other than that from his vending business. If he is not allowed to conduct this business pending the outcome of the administrative proceedings, he will be deprived of his livelihood. The federal Defendant hypothesizes that the disappointed bidders might bring actions against the government if the bidding process is halted. However, the defendant cites no authority which would give these bidders standing to sue the government for a mere expectance interest. The Court finds, therefore, that the harm to the Plaintiff would be greater than that to the Defendants if this injunction does not issue.

The Plaintiff has pointed out that the Randolph-Sheppard Act Amendments (which provide for the grievance procedure) were passed by a unanimous vote of both houses of Congress in 1974. Brief in Support of Second Amended Motion for Preliminary Injunction at 12.

In this Act, Congress clearly intended to benefit blind citizens and to enable them to earn a living. 20 U.S.C. Section 107. If Howe does not retain his vending operation in the main Green Bay Post Office at the new location, others, who are not blind vendors, will be allowed to bid for the contract to operate the same business and a percentage of the profits will be contributed to the Employees Social and Recreational Committee. Quesnell Deposition at 6365. This, too, is contrary to the intent of the Randolph-Sheppard Act and leads the Court to find that the public interest would best be served by allowing Howe to continue his business pending the outcome of the administrative proceedings. See 120 Cong. Rec. 2011920 (1974).

Accordingly, IT IS ORDERED that a preliminary injunction is hereby issued against the Defendants, William Bolger in his capacity as Postmaster General of the United States, and Patricia G. Kallsen, in her capacity as Administrator of the Division of Vocational Rehabilitation of the State of Wisconsin. Under the terms of the injunction IT IS ORDERED that:

1. Defendant Bolger must suspend the bidding process for vending facilities at the new location of the main United States Post Office in Green Bay, Wisconsin until the Plaintiff has had an opportunity to exhaust his administrative remedies under the law.

2. Defendant Bolger is restrained from contracting for vending services with anyone at the new location of the main United States Post Office in Green Bay, Wisconsin until the Plaintiff has had an opportunity to fully exhaust his administrative remedies under the law.

3. Defendant Bolger is restrained from terminating the vending facility permit with Defendant Kallsen or taking any action which would otherwise prejudice the rights and priority status of the Plaintiff until the Plaintiff has had an opportunity to fully exhaust his administrative remedies under the law.

4. The Defendants must allow the Plaintiff to move his vending facilities at his own expense to the lobby and employee lunchroom of the main United States Post Office in Green Bay, Wisconsin. The Plaintiff may operate only the same vending machines as he operated at the former facility until he has had an opportunity to fully exhaust his administrative remedies under the law.

5. The Defendants may supplement the vending machine facilities provided by the Plaintiff by offering other food for sale at the new main post office. This food cannot be in vending machines or subject to a contract.

6. Defendant Kallsen is restrained from terminating the Plaintiff's vendor's license or otherwise taking any action which will prejudice the rights and priority status of the Plaintiff, except in strict compliance with the manner provided by law.

IT IS FURTHER ORDERED that the above captioned action shall be stayed until such time as the Plaintiff has completely and fully exhausted his administrative remedies under the law, and until such time as the Plaintiff or one or both of the Defendants apply to this Court for an order confirming the arbitration decision of the Secretary of Education of the United States, which arbitration decision shall be made under and pursuant to the provision of H.S.S. Section 260.05 of the Wisconsin Administrative Code and 20 U.S.C. Section 107d-1(b).

IT IS FURTHER ORDERED that at such time as the Plaintiff shall apply to this Court for confirmation of an arbitration award in his favor, the Plaintiff shall be permitted to ask this Court to require Defendant Bolger to pay the costs of the Plaintiff's relocation to the new location of the main United States Post Office in Green Bay, Wisconsin pursuant to 34 C.F.R. Section 395.35.

IT IS FURTHER ORDERED that after this Court has confirmed the final and binding arbitration decision of the Secretary of Education of the United States, upon petition of either the Plaintiff or one of the Defendants, this action may be dismissed.

Done and Ordered in Chambers at the United States Courthouse, Milwaukee, Wisconsin this 20th day of July, 1984.

Thomas J. Curran
United States District Judge