Tyler v. U.S. Dep't of Educ. Rehab. Servs. Admin.
904 F.3d 1167
10th Cir.2018Background
- ODRS (Oklahoma SLA) selected Robert Brown to manage a Fort Sill federal vending contract after a committee process; David Altstatt (a blind vendor) challenged selection alleging procedural flaws, bias, and Brown’s tax delinquency.
- DOE convened an RSA arbitration panel that found ODRS violated the Randolph‑Sheppard Act (RSA), concluding Brown was ineligible (tax delinquency), the committee process was unfair, and a committee member was biased.
- The Panel ordered Brown removed, Altstatt appointed to the contract, and awarded Altstatt damages and attorney fees.
- ODRS sought judicial review under the Administrative Procedure Act (APA); the district court affirmed the Panel in full. ODRS appealed to the Tenth Circuit.
- The Tenth Circuit affirmed the Panel’s finding that Brown was ineligible and its injunctive relief (remove Brown and appoint Altstatt), but reversed the awards of damages and attorney fees.
Issues
| Issue | Plaintiff's Argument (ODRS) | Defendant's Argument (Altstatt) | Held |
|---|---|---|---|
| Was Brown ineligible due to tax delinquency? | Panel’s finding unsupported by substantial evidence; lien alone doesn’t prove delinquency. | IRS liens and assessed liabilities show delinquency within the 3‑year eligibility window. | Panel’s finding supported: assessed liabilities and liens constitute evidence of delinquency despite later installment plan. |
| Could the arbitration panel order prospective relief (appoint Altstatt)? | Panel exceeded remedial authority; may only review SLA process. | RSA allows arbitration panels to fashion prospective equitable relief to make arbitration meaningful. | Panel acted within RSA authority to order appointment (prospective/injunctive relief valid). |
| Could the panel award money damages against the state? | RSA and arbitration permit full relief including damages. | State sovereign immunity bars money damages; RSA is not an unequivocal waiver. | Damages vacated: sovereign immunity applies to RSA arbitrations and RSA does not clearly waive immunity for money damages. |
| Could the panel award attorney fees? | RSA implicitly allows fees as part of relief. | American Rule requires explicit statutory authorization; RSA is silent. | Attorney‑fee award vacated: RSA lacks explicit waiver or statutory authority to award fees. |
Key Cases Cited
- Fed. Mar. Comm’n v. S. Carolina State Ports Auth., 535 U.S. 743 (2002) (state sovereign immunity bars federal agency adjudications of private complaints)
- Sossamon v. Texas, 563 U.S. 277 (2011) (waiver of sovereign immunity for damages requires an unequivocal statutory statement)
- Del. Dep’t of Health & Soc. Servs. v. U.S. Dep’t of Educ., 772 F.2d 1123 (3d Cir. 1985) (arbitrators may award compensatory relief under RSA)
- Ga. Dep’t of Human Res. v. Nash, 915 F.2d 1482 (11th Cir. 1990) (distinguishing remedial powers between vendor‑vs‑SLA and SLA‑vs‑federal‑entity arbitrations)
- Wisconsin Dep’t of Workforce Dev. v. U.S. Dept. of Educ., 667 F. Supp. 2d 1007 (W.D. Wis. 2009) (vacated damages on sovereign immunity grounds; upheld injunctive relief)
- Baker Botts L.L.P. v. ASARCO LLC, 135 S. Ct. 2158 (2015) (American Rule: attorney fees require explicit statutory authorization)
- Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240 (1975) (historical basis for the American Rule on attorney fees)