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State, Department of Workforce Development v. United States Department of Education

United States District Court, W.D. Wisconsin

June 19, 2018

STATE OF WISCONSIN, DEPARTMENT OF WORKFORCE DEVELOPMENT, DIVISION OF VOCATIONAL REHABILITATION, Petitioner,
v.
UNITED STATES DEPARTMENT OF EDUCATION, BETSY DeVOS, and THERESA TAYLOR, Respondents.

          OPINION & ORDER

          JAMES D. PETERSON DISTRICT JUDGE.

         The Randolph-Sheppard Act, 20 U.S.C. § 107 et seq., ensures that states prioritize individuals who are blind in selecting operators of vending facilities located in government buildings, and it requires the secretary of the United States Department of Education (DOE) to convene an arbitration panel to hear disputes concerning state selection of vending facility operators. Earlier this year, the DOE issued an arbitration decision concluding that the Wisconsin Department of Workforce Development (DWD) violated the Randolph-Sheppard Act when it failed to select Theresa Taylor as the permanent operator of vending facilities in three state government buildings. A few months later, the DWD filed a petition in this court for judicial review of the DOE's decision under the Administrative Procedure Act. Dkt. 1.

         The issue now before the court is where this case should be litigated. Taylor contends that venue is proper only in the Eastern District of Wisconsin. She moves the court to dismiss the petition for improper venue under Federal Rule of Civil Procedure 12(b)(3) or to transfer the case to the Eastern District under 28 U.S.C. § 1404. Dkt. 5. The court will deny her motion.

         ALLEGATIONS OF FACT

         The court draws the following facts from the petition, Dkt. 1, and the parties' affidavits, accepting the DWD's allegations as true unless they are contradicted by affidavits and resolving all factual disputes and drawing all reasonable inferences in the DWD's favor. See Faulkenberg v. CB Tax Franchise Sys., LP, 637 F.3d 801, 806, 809-10 (7th Cir. 2011).

         The DWD is responsible for selecting individuals who are blind to operate vending facilities-cafeterias, vending machines, and the like-in government buildings in Wisconsin, in accordance with the Randolph-Sheppard Act. The DWD's headquarters are in Madison, Wisconsin.

         Taylor lives in Racine County, Wisconsin. She is blind. She has been an operator of several vending facilities in Wisconsin state government buildings, including the three buildings at issue in this suit: Racine Correctional Institution, the Sturtevant Transitional Facility, and the Racine Youthful Offender Correctional Facility, all of which are located in Racine County.

         In 2011, after having been the interim vending operator for the three Racine facilities for several years, Taylor was notified that the DWD would begin a competitive process to select a permanent operator for the Racine facilities. After a drawn-out process, the DWD selected another applicant as the permanent operator. Taylor filed a complaint with the DOE. Betsy DeVos, the secretary of the DOE, convened an arbitration panel to hear the dispute. The arbitration was held in September 2017 in Madison, Wisconsin. The panel concluded that the DWD acted in an arbitrary, capricious, and biased manner in violation of the Randolph-Sheppard Act when it failed to select Taylor as the permanent operator for the Racine facilities. It ordered the DWD to appoint Taylor as the permanent operator and awarded Taylor compensatory damages and legal fees and costs. Under the RSA, the arbitration panel's decision is “subject to appeal and review as a final agency action for purposes of [the Administrative Procedures Act].” 20 U.S.C. § 107d-2(a).

         In March 2018, the DWD filed this lawsuit, contending that the DOE arbitration panel's decision must be vacated because it was arbitrary and capricious, because it was unsupported by substantial evidence, and because the award of monetary damages against the DWD violated the Eleventh Amendment.

         The court has subject matter jurisdiction over the DWD's petition under 28 U.S.C. § 1331 because the action arises under federal law.

         ANALYSIS

         Taylor contends that venue is improper in the Western District of Wisconsin, and so she has moved to dismiss or transfer the case to the Eastern District of Wisconsin where, she argues, the case is properly venued. Actions under the APA are governed by the federal officer venue provision, 28 U.S.C. § 1391(e).[1] See Colley v. James, 254 F.Supp.3d 45, 70 (D.D.C. 2017); Reilly v. United States, 93 Fed.Cl. 643, 653 (Fed. Cl. 2010). The federal officer venue provision provides,

A civil action in which a defendant is an officer or employee of the United States or any agency thereof acting in his official capacity or under color of legal authority, or an agency of the United States, or the United States, may, except as otherwise ...

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