Kentucky v. United States Ex Rel. Hangel
759 F.3d 588
6th Cir.2014Background
- The Randolph-Sheppard Act gives blind persons priority to operate vending facilities on federal property; state licensing agencies (like Kentucky’s Office for the Blind, OFB) bid on behalf of blind vendors and disputes proceed to DOE-convened arbitration panels.
- OFB and its blind vendor (First Choice) held the Fort Campbell dining-facility-attendant contract for years; the Army classified the 2012 solicitation as an SBA HUBZone set-aside rather than a Randolph-Sheppard procurement.
- OFB demanded DOE arbitration and simultaneously sought a TRO/preliminary injunction in district court to stop the new procurement pending arbitration; the district court denied relief, concluding it lacked jurisdiction because OFB had not completed arbitration.
- OFB appealed; this court found the case not moot under the "capable of repetition, yet evading review" exception and questioned the district court’s exhaustion/jurisdiction ruling.
- The Sixth Circuit held that the Act’s arbitration-exhaustion requirement is not jurisdictional under Arbaugh and related precedents, excused exhaustion here under the irreparable-harm exception, vacated the district court’s judgment, and remanded for reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Mootness of appeal after contract award | OFB: dispute fits "capable of repetition, yet evading review" because solicitations and awards occur too fast to litigate before contract starts and will recur between parties | Army: awarding contract renders appeal moot | Held not moot; exception applies (short procurement timelines + reasonable expectation of recurrence) |
| Whether Act’s arbitration/exhaustion requirement is jurisdictional | OFB: exhaustion is not jurisdictional; federal courts retain power to hear injunction requests | Army: failure to complete arbitration deprives courts of jurisdiction | Held not jurisdictional — statute lacks clear jurisdictional statement; Arbaugh framework controls |
| Whether exhaustion should be excused (prudential exceptions) | OFB: completing arbitration before injunction would cause irreparable harm (loss of incumbency with no damages remedy due to sovereign immunity) | Army: exhaustion serves agency authority and efficiency and should bar relief | Held exhaustion excused here under irreparable-harm exception (loss of nonremediable economic and statutory interests) |
| Availability of preliminary injunction on merits | OFB: likely to succeed because Act covers dining-facility-attendant services; irreparable harm present | Army: OFB unlikely to prevail; district court should deny extraordinary relief | Court: declined to decide merits now — vacated district court order and remanded so district court can reconsider in light of arbitration decision and current posture |
Key Cases Cited
- Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998) (clarifies careful treatment of jurisdictional rulings)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) (requires clear congressional statement to treat statutory limits as jurisdictional)
- Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010) (distinguishes jurisdictional conditions from claim-processing rules)
- Allen v. Highlands Hosp. Corp., 545 F.3d 387 (6th Cir. 2008) (exhaustion requirement under ADEA not jurisdictional; analogous reasoning applied)
- McCarthy v. Madigan, 503 U.S. 140 (1992) (recognizes prudential exceptions to exhaustion requirements)
- Turner v. Rogers, 564 U.S. 431 (2011) (short litigation windows can make review impracticable; timeframes that evade review)
- City of Pontiac Retired Emps. Ass’n v. Schimmel, 751 F.3d 427 (6th Cir. 2014) (standards and review principles for preliminary injunctions)