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UNITE D STATE S DEPARTMEN T O FTRANSPORTATIO N FEDERAL AVIATIO N ADMINISTRATIO N

WASHINGTON , D.C . J& B ENTERPRISES , INC. , d/h/a J RHYTH M SHINE , Complainant , METROPOLITA N NASHVILL E AIRPOR T AUTHORITY , Respondent . Docke t No. : 16-08-0 7

APPEA L O FDIRECTOR' S DETERMINATIO N T O ASSISTAN T ADMINISTRATO RFO RCIVI L RIGHT S I . INTRODUCTIO N c 3 Complainan t

J& B Enterprises , Inc. , d/b/a / Rhyth mShin e (hereafter "Complainant " o r "J&B") , pursuan t

t o 1 4 C.F.R . § § 16.33 , hereb y appeal s t o th e Assistan t Administrato r

for Civi l Right s th e Ma y 5 , 200 9 Director' s Determinatio n i n thi s matter . O n tha t date , th e Directo r

o f th e Offic e o f Airpor t Complianc e an dFiel dOperation s entere dadeterminatio n o f J&B' s complain t tha t Responden t

wa s operatin g i n violatio n o f 4 9 C.F.R . Par t

23 , Participatio n o f

Disadvantage d Busines s Enterpris e i n Airpor t Concessions , an dC.F.R . Part 26 , Participatio n by Disadvantage d Busines s Enterprise s i n Departmen t o f Transportatio n Financia l Assistanc e Programs . Th e Directo r identifie dfour

issue s an dmad e findings an dconclusion s tha t th e Responden t

ha dme t it s ACDB E contrac t

goals , tha t

it s policie s an daction s towar dJ& B wer e no t discriminator y an d tha t i t wa s i n complianc e with th e requirement s o f 4 9 CF RPart s 2 3 an d26 . O n Complainants ' motion , o n Jun e 18 , 2009 , th e Directo r entere dan Orde r

enlargin g th e tim e for

an appea l unti l Jul y 8,2009 .

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II . ISSUE S O N APPEA L Ther e ar e severa l issue s o n appeal , generall y organize dalon g th e line s o f th e issue s identifie db y th e Directo r i n hi s Determination . Complainant s respectfull y sugges t that th e Director' s Determinatio n i s i n erro r i n th e followin g respects : 1 . Th e Directo r

erre di n hi s analysi s an dconclusio n tha t Responden t

di dno t subjec t Complainan t

t o discrimination . a . Th e Directo r

faile dcompletel y t o recognize , an dt o findo n th e basi s o f undispute dfacts , tha t

Responden t

intentionall y discriminate dagains t •Complainan t

b y retaliatin g agains t

i t for makin g acomplain t

tha t Responden t an dHudso n wer e i n violatio n o f th e ACDB E regulation s i n violatio n o f 4 9 C.F.R . §§23.1 1 an d26.109 . b . Th e Directo r

erre di n hi s analysi s an dconclusio n tha t Respondent' s administratio n o f

it s ne w shoeshin e concessio n leasin g polic y an dprocedur e di dnot discriminat e agains t

Complainan t

i n violatio n o f

4 9 C.F.R . §§23. 9 an d 26.7(b) . (Issu e 2 i n th e Director' s Determination. ) c . Th e Directo r

erre di n hi s analysi s an dconclusio n tha t th e Complainan t

was not subjec t t o disparat e treatmen t

discriminatio n i n violatio n o f 4 9 C.F.R . §§23. 9 an d26.7(b) . (Issu e 3 i n th e Director' s Determination. ) 2 . Th e Directo r

faile dt o mak e inquirie s an dfindings necessar y t o conclud e tha t th e Hudso n Grou p me t

Respondent' s ACDB E goa l an dth e recor ddoe s no t contai n evidenc e t o support

th e Director' s Determinatio n tha t th e Hudso n Grou p me t Respondent' s ACDB E goal . (Issu e 1 i n th e Director' s Determination. ) 3 . Th e Directo r

erre di n hi s analysi s an dconclusio n tha t th e Respondent' s actions , o r lac k o f actions , individuall y o r cumulatively , wer e contrar y t o th e administrative , genera l an dcomplianc e requirement s o f 4 9 C.F.R . Part s 2 3 an d2 6 an dFedera l Gran t Assurance s Nos . 3 0 an d37 . (Issu e 4 i n th e Director' s Determination. ) III . FACT S Th e Director' s Determinatio n contain s alength y discussio n o f mos t o f th e fact s relevan t t o th e determinatio n o f

J&B' s complain t

an dRespondent' s compliance . Th e fact s generall y ar e

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not i n dispute . Rather , i t

i s th e largel y th e significanc e o f th e fact s i n th e recor d(o r absen t from th e record ) an dth e conclusion s dravr afro mth e fact s b y th e Directo r that ar e at issu e i n thi s appeal . Thus , instea do f

repeatin g th e fact s separately , th e relevan t fact s wil l b e discusse di n connectio n with th e discussio n o f th e issue s i n th e appea l below . IV . ARGUMEN T I n thi s appeal , pursuan t

t o 1 4 CF R§ 16.3 3 fi-om aDirector' s Determination , withou t a hearing , wher e th e complain t i s dismisse dafte

r investigation , i t

i s th e Assistan t

Administrator' s "responsibilit y t o determin e whethe r (a ) th e findings o f

fac t mad e b y th e Directo r

ar e supporte d b y apreponderanc e o f

reliable , probative , an dsubstantia l evidence , an d(b ) eac h conclusio n o f la w i s mad e i n accordanc e with applicabl e law , precedent , an dpubli c policy. " Airborn e Flyin g Service , Inc. , v . Cit

y o f Ho t Springs , Arkansas , FA A Docke t No . 16-07-06 , (May 2 , 2008 ) (Final Decisio n an dOrder ) pag e 1 4 (citin g Rick s v . Millineto n Municipa l Airport , FA A Docke t No . 16

- 98-19 , (Decembe r

30 , 1999 ) (Fina l Decisio n an dOrder ) pag e 21 , an d1 4 CFR , Part 16 , § 16.227) . A s demonstrate dbelow , applyin g thi s standar drequire s tha t th e Director' s Determinatio n b e reversed , tha t Responden t

b e foun di n violatio n o f 4 9 C.F.R . § § 23.1 1 an d 26.109 , an dtha t

th e matte r

b e remande dfor

athoroug h investigation , pursuan t t o 1 4 CFR§ 16.29(b)(2 ) an d(3) , o f

Complainant' s complaint , Hudson' s complianc e with ACDB E join t ventur e requirement s an dguidanc e an dRespondent' s an dHudson' s complianc e with ACDB E requirement s an dgoals , an dRespondent' s operatio n o f it s ACDB E progra mconsisten t with th e purpos e an drequirement s o f 4 9 C.F.R . Part s 2 3 an d26 , an dFedera l Gran t Assurance s Nos . 3 0 an d37 .A . Th e Directo r erre di n hi s analysi s an dconclusio n tha t Responden t

di dno t subjec t Complainan t

t o discrimination . A s indicate di n th e statemen t o f issue s above , th e Director' s Determinatio n erre di n determinin g J&B' s complain t o f discriminatio n i n thre e ways . Eac h i s discusse di n turn . 1 . Th e Directo r

faile dcompletel y t o recognize , an dt o fin do n th e basi s o f undispute dfacts , tha t

Responden t

intentionall y discriminate dagains t Complainan t

b y retaliatin g agains t i t fo r makin g acomplain t

tha t Responden t

an dHudso n wer e i n violatio n o f th e ACDB E regulation s i n violatio n o f

4 9 C.F.R . § § 23.1 1 an d26.109 . Th e Director' s Determinatio n mad e an effor t t o understan dan dasses s J&B' s discriminatio n complain t unde r th e "disparat e impact " an d"disparat e treatment " standards, a s discusse dbelow . However , i n considerin g thos e allegation s o f discriminatio n b y MNAA , th e Director' s Determmatio n (o r "DD" ) simpl y faile dt o recogniz e o r acknowledg e th e complaint' s allegatio n tha t

i n respons e t o J&B' s reques t for asettlemen t

conferenc e t o resolv e issue s raise d i n th e complaint , "th e requeste dconferenc e wa s neve r scheduled ; instea dth e MNA A responde d b y terminatin g th e contrac t with J&B. " Apri l 15 , 200 8 Lette r fro mA . Robinso n t o R . Regalado , p . 4 , Ite m1 an dIte m10 , Ex . 2 9 i n Administrativ e Record. ^ Moreover , th e D D als o faile dt o recogniz e wha t

th e unconteste dfact s show—^tha t MNA A violate dan dremain s i n violatio n o f th e ACDB E Progra mb y retaliatin g agains t J& B Enterprise s for

makin g acomplain t

tha t MNA A was violatin g th e DB E Progra mregulations . Th e Suprem e Court

ha s hel dthat

retaliatio n i s discrimination . I n holdin g that retaliatio n was encompasse dwithi n th e anti-sex-discriminatio n prohibitio n o f Title IX , th e Suprem e Court stated : Retaliatio n agains t aperso n becaus e tha t

perso n ha s complaine do f se x discriminatio n i s anothe r for mo f intentiona l se x discriminatio n encompasse db y Title IX' s privat e caus e o f action . Retaliatio n is , b y definition , a n intentiona l act . I t i s afor mo f "discrimination "

' Reference s to th e Administrativ e Recor dar e indicatedb

y Ite mnumbe r and , wher

e applicable , Exhibi

t number, fromth e Inde x o f Administrativ e Recor

dattachedas FA

A Exhibit 1 t o th e Director' s Determination . 4

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becaus e th e complainan t

i s bein g subjecte dt o differential treatment . Moreover , retaliatio n i s discriminatio n "o n th e basi s o f sex " becaus e i t

i s an intentiona l respons e t o th e natur e o f th e complaint : an allegatio n o f se x discrimination . W e conclud e that whe n afimding recipien t retaliate s agains t

aperso n becaus e h e complain s o f se x discrimination , thi s constitute s intentiona l "discrimination " "o n th e basi s o f sex, " i n violatio n o f

Title IX. Jackso n V

. Birmingha mBd . ofEduc , 54 4 U.S . 167 , 173-17 4 (2005 ) (citation s omitted) . Indeed , th e Suprem e Court

consistentl y ha s hel dtha t anti-discriminatio n law s als o outla w retaliatio n for makin g complaint s o f

discrimination . See , e.g. , CBOC S West , Inc . v . Humphries , 12 8 S.Ct . 195 1 (2008 ) (4 2 U.S.C . § 1981) ; Gomez-Pere z v . Potter , 12 8 S.Ct . 193 1 (2008 ) (federal-secto r provisio n o f

th e ADEA , 2 9 U.S.C . § 633a(a)) . >4oreover , th e ACDB E Progra mregulation s specificall y prohibi t retaliation . Th e regulation s a

t at 4 9 C.F.R . § 23.11 , "Wha t complianc e an denforcemen t provision s ar e use d unde r thi s part? " expressl y incorporat e "[t]h e complianc e an denforcemen t provision s of.. . [4 9 C.F.R . §]26.109. " Th e DB E Progra mregulation s at 4 9 C.F.R . § 26.109 , "Wha t ar e th e rule s govemin g information , confidentiality , cooperation , an dintimidatio n o r retaliation? " provid e that : (d ) Intimidation an dretaliation . I f yo u ar e arecipient , contractor , o r an y othe r

participan t i n th e program , yo u mus t not intimidate , threaten , coerce , o r discriminat e agains t

any individua l o r

firmfor th e purpos e o f

interferin g vsdt

h an y right

o r privileg e secure db y thi s part o r becaus e th e individua l o r firmha s mad e acomplaint , testified , assisted , o r participate di n an y manne r i n an investigation , proceeding , o r hearing unde r

thi s part . I f yo u violat e thi s prohibition , yo u ar e i n noncomplianc e wit h thi s part . (emphasi s added. ) Accordingly , th e FAA' s ACDB E regulation s expressl y recogniz e that retaliatio n i s prohibite ddiscrimination . Althoug h th e regulation s an dSuprem e Court preceden t

both explicitl y recogniz e retaliatio n a s prohibite ddiscrimination , th e Director' s Determinatio n make s n o mentio n o f i t and , thus , th e decisio n fail s t o includ e an y analysi s o f retaliation . Thi s constitute s an erro r o f la w a s/ - >

th e Director' s Determinatio n wa s no t "mad e i n accordanc e with applicabl e law , precedent , an d publi c policy. " Airborn e Flyin g Service , Inc . I n addition , analysi s o f

th e recor devidenc e establishe s th e elements o f retaliatio n that

th e Director' s Determinatio n shoul dhav e found . Th e MNAA' s formal submissio n i n thi s matte r an d th e affidavit s o f

it s employee s admitte dthat MNA A terminatedit s existin g Concessio n Agreemen t

with J& B Enterprise s an dput tha t shoeshin e concessio n u p for publi c bi dafte

r receivin g an di n respons e t o th e Apri l 15 , 200 8 lette r fi-omJ&B' s attorne y complainin g "tha t MNA A an dHudson " wer e i n violatio n o f DB E progra mregulation s an dtha t an "administrativ e action " woul db e commence di f discussion s amon g th e partie s di dnot resul t i n "volimtary option s for

bringin g thi s matte r

int o compliance. " Ite m1 an dIte m10 , a s Ex . 29 . Th e sworn statemen t

o f Ambe r Danc y Goodling , MNAA' s Directo r o f Busines s Diversity an dth e designatedAirport Concession s Disadvantage dBusines s Enterpris e Liaiso n Office r (ACDBELO) , explicitl y admitte dthat MNA A too k

thi s actio n i n respons e t o th e lette r regardin g progra mviolations . He r affidavi t expressl y state s tha t

"...MNAA , after

receivin g a lette r fi-omJ&B' s attorne y claimin g aviolatio n o f DB E requirements , decide do n Jun e 6 , 200 8 t o declin e t o rene w J&B' s existin g concessio n agreemen t whic h was expirin g o n Augus t 31 , 2008 , an dinstea dt o publicl y bi dth e sho e shin e concession. " Admin . Rec , Ite m8 , at 1116. Further , th e sworn statemen t

o f Joh n Howard , Jr. , MNAA' s Assistan t Vic e Presiden t

o f Propertie s an d Busines s Developmen t

claime dtha t

MNA A was "wel l alon g i n draftin g ane w concessio n agreemen t

vsdt h J&B " whe n h e receive dth e lette r fromJ&B' s attorne y "statin g tha t MNA A an d Hudso n Grou p wer e i n violatio n o f 4 9 C.F.R . 26.1-26.109 " an drequestin g ameeting . Ite m7 , ^|22 . Mr . Howar dthe n state s onl y tha t afte r Apri l 15* , "MNA A unsuccessfiill y attempte dt o schedul e ameeting " with J& B an dit s attorney , id . a t |23 , an d"[o] n Jun e 6 , 2008 , afte r n o meetin g ha dye t

bee n schedule s [sic] , MNA A informe dJ&B' s lega l counse l tha t MNA A ha d 6

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decide dthat , upo n expiratio n o n Augus t 31 , 200 8 o f

J&B' s existin g agreemen t with MNAA , th e airport would , [sic ] solici t

publi c bid s for

Sho e Shin e service s withi n th e Airport. " Id . at ^24 . Thus , th e Howar dAffidavi t offer s n o reaso n o r

basi s othe r

tha n receip t

o f th e lette r

an dth e inability t o schedul e ameetin g for MNA A refusin g t o g o forwar dwith th e ne w concessio n agreemen t

for J& B and , instead , completel y reversin g positio n an ddecidin g t o terminat e any relationshi p with J& B an dpublicall y bi dit s concession . Base do n thes e sworn statements , MNAA' s Answe r an dMemorandu m("Mem.") als o admitte dtha t

MNA A determine dt o terminat e it s concessio n agreemen t with J& B onl y afte

r receivin g th e lette r

fro mJ&B' s attorne y allegin g violation s o f DB E regulations . Again,"referrin g t o n o intervenin g even t

an dstatin g onl y tha t

n o meetin g with J& B an dit s attorne y ha dbee n held , th e brie f acknowledge s tha t

MNA A abruptl y change dit s positio n after receivin g th e letter—fro m draftin g ane w direc t

concessio n agreemen t

wit h J& B t o terminatin g it s existin g concessio n agreemen t

with J& B an dputtin g J&B' s shoeshin e concessio n out t o bid . MNA A Mem . at 17 . Th e brie f attempt s t o argu e that

MNA A terminate dJ&B' s concessio n agreemen t "afte r almos t a year o f unsuccessfta

l attempt s t o reac h agreemen t with J&B. " Bu t

i t wa s no t unti l Novembe r 2007—onl y seve n month s earlier—^tha t MNA A acknowledge dtha t J&B' s shoeshin e stand s shoul db e remove dfro mth e Hudso n maste r concession s agreemen t

an dtha t J& B shoul dhav e a direc t concessio n agreemen t

with MNAA . An di t

was th e five-month delay i n whic h MNA A faile dt o produc e tha t

direc t concessio n agreemen t

with J&B—fro mNovembe r 200 7 t o Apri l 2008—whic h le dt o th e complain t lette r fromJ&B' s attorney . Further , J&B' s complain t lette r expressl y sough t

ameetin g t o resolv e th e issues , an dMNA A make s n o clai mtha t J& B wa s a

t faul t for th e fac t tha t n o meetin g ha dbee n hel db y earl y June . I n fact , i n aJun e 19 , 200 8 letter , J&B' s attorne y responde dt o MNAA' s Jun e 6 notic e o f terminatio n discussin g J&B' s goo dfait

h attempt s t o schedul e ameetin g an drenewin g th e reques t for ameeting. ^ T o th e contrary , th e evidenc e establishe s that , followin g receip t o f th e complain t

letter , MNA A apparentl y stoppe dan y wor

k o n th e direc t

concessio n agreemen t

i t was preparin g for

J& B and , withou t

an y othe r intervenin g basi s o r

reason , terminate dit s existin g concessio n agreemen t with J& B an dput th e shoeshin e concessio n out i n an RFP . Thes e fact s establis h th e elements o f retaliatio n an dth e Director' s Determinatio n shoul d hav e applie dth e la w an dmad e appropriat e findings . I n applyin g Title VII , court s hav e articulate dtha t

"[t] o establis h a.prim afaci e cas e o f retaliation. . . aplaintif

f mus t sho w that : (1 ) h e engage di n statutoril y protecte dexpression ; (2 ) hi s employe r subjecte dhi mt o an ac t

that wo'il d hav e bee n materiall y advers e t o areasonabl e employe e o r jo b applicant ; an d(3 ) ther e i s som e causa l relatio n betwee n th e tw o events. " Gerar dv . Boar do f Regents , 200 9 WL 1101524 , * 7 (ll" ' Cir . Apri l 24 , 2009 ) (citation s omitted) . A s t o eac h o f thes e elements , first, i t

i s wel l establishe dtha t

"[s]tatutoril y protecte dexpressio n include s interna l complaint s o f discriminatio n t o superiors , a s wel l a s complaint s lodge dwit h [agencies ] an ddiscrimination-base dlawsuits, " suc h a s th e complain t

lette r o f J&B' s attorne y t o MNAA . Id . Second , ther e can b e n o questio n tha t terminatin g J&B' s existin g concessio n agreemen t an dputtin g th e concessio n ou t for bi dwa s "materiall y adverse " t o J&B . "T o establis h th e causa l connectio n require db y th e thir dprong , th e plaintif

f mus t sho w tha t

(a ) th e decision-maker s wer e awar e o f th e protecte dconduct ; an d(b ) th e protecte dactivity an dth e advers e actio n wer e not wholl y unrelated . Clos e tempora l proximit y ma y b e sufficien t t o sho w tha t

th e protecte dactivit y an dth e advers e actio n wer e not wholl y unrelate dfor

aprim afaci e case . Id , (interna l quotation s an dcitation s omitted) . Here , MNA A admit s bot h tha t i t ha dknowledg e o f

th e complain t

lette r an dtha t i n les s tha n tw o

^ J&B' s complain

t lette r refers t o thi s lette r as a n attachment , Ite

m1 a t p . 4 , althoug

h i t i s not listedi n th e DD' s Inde x o f Administrative Record . See Jun e 19 , 200 8 lette

r fromA Robinso

n t o R . Watson , attachedt

o Complainant' s Motio n t o Supplemen

t the Record . 8month s i t informe dJ&B' s attorne y o f adecisio n i t

ha dalread y mad e t o terminat e any relationshi p vsdt

h J&B . Clearly , th e unconteste drecor destablishe s aprim afaci e cas e o f retaliation . "I f aplaintif

f make s aprim afaci e showin g o f retaliation , an dth e employe r offer s a legitimate , non-discriminator y reaso n for th e employmen t

action , th e plaintif

f mus t the n com e forwardwith evidenc e sufficien t t o permi t

areasonabl e fac t

finde r t o conclud e that

th e reason s give n b y th e employe r

wer e pretextual. " Id . Here , i t i s no t at al l clear tha t MNA A offere da "legitimate , non-discriminator y reason " for it s about-face . It s witnesse s refer onl y t o th e fac t

that ameetin g ha dno t

bee n schedule dbut , a s noted , the y d o not attemp t t o blam e t o J& B for

tha t o r describ e an y effort s o n thei r par t t o arrang e ameeting . Moreover , give n th e fac t tha t i t wa s MNA A that

delaye dproducin g adirec t concessio n agreemen t

for J& B fro mNovembe r

200 7 unti l i t terminate dit s agreemen t wit h J& B i n Jun e 2008 , i t i s difficul t

t o imagin e wh y o r

ho w a delay o f onl y afraction o f

tha t tim e coul drepresen t

alegitimat e reaso n for

MNA A t o revers e it s position s an dterminat e J&B' s agreemen t an dconcession . Eve n assumin g for

th e sak e o f

analysi s tha t

MNA A di doffe

r alegitimate , non discriminatory reason , her e th e recor dcontain s mor e tha n sufficien t evidenc e "t o permi t

a reasonabl e fac t

finder t o conclud e tha t

th e reason s give n b y [MNAA ] wer e pretextual. " Id . Th e onl y reaso n mentione di n th e MNA A affidavit s fo r terminatin g th e relationshi p with J& B othe r that th e receip t

o f th e complain t

lette r i s tha t n o meetin g ha dbee n hel db y earl y June. "T o sho w pretext , th e plaintif

f mus t presen t sufficien t

evidenc e t o permi t

areasonabl e fac t

finder t o conclud e tha t

th e reason s give n b y th e employe r wer e no t

th e rea l reason s for

th e advers e employmen t

decision. " Id . at

*8 . Her e ther e i s overwhelmin g evidenc e o f pretext . First , bot h MNA A affidavit s explicitl y refer t o th e complain t

lette r an dd o s o a s awatershe devent , after whic h MNA A decide s t o 9terminat e J&B . Second , th e clos e tempora l proximit y betwee n receip t o f th e complain t

lette r an d MNA A terminatin g it s relationshi p wit h J& B i s evidenc e tha t th e lette r

wa s th e caus e o f

th e termination . Id . a

t *1 . Third , ther e i s nothin g abou t th e fac t tha t th e partie s ha dye t

bee n unabl e t o mee t that explain s wh y MNA A woul dchang e it s positio n o n th e merit s o f th e issue—fro m agreein g with J& B tha t

i t shoul doperat e unde r

adirec t concessio n agreemen t

t o terminatin g an y relationshi p with J&B . I n short , th e reaso n offere ddoe s no t rationall y justif

y th e advers e action . Fourth , instead , th e evidenc e fromMNAA' s witnesse s clearl y suggest s tha t MNA A ha da positiv e an dsympatheti c vie w o f J&B , agree dwith J&B' s concern s an dpositio n an dwa s actin g t o facilitat e an dimplemen t adirec t concessio n agreemen t

i n appropriat e location s o f appropriat e siz e an dfacilities , bu t

onl y u p t o th e momen t

th e complain t

lette r wa s received . Th e affidavit s sa y nothin g abou t

acontinue dsympatheti c o r positiv e vie w o f

J& B afte r receip t o f th e complain t lette r o r o f an y desir e o r

effort s o n MNAA' s part t o facilitat e o r

implemen t

it s earlie r

agreemen t with J& B o n adirec t

an dappropriat e concessio n arrangement . Accordingly , th e recor devidenc e demonstrate s tha t

th e proffere dreaso n tha t th e partie s ha dye t

bee n unabl e t o mee t

i s no t a legitimat e reaso n explainin g th e terminatio n o f J& B an di s pretex t

fo r MNAA' s chang e i n positio n a s aresul t

o f th e complain t

letter . Th e Director' s Determination , therefore , shoul db e reverse da s t o it s conclusion s that J& B suffere dn o discrimination , an dth e Assistan t Adminisfrato r

shoul dfindMNA A i n violatio n o f 4 9 C.F.R . § § 23.1 1 an d26.10 9 for terminatin g th e existin g concessio n agreemen t an d abandonin g it s effort s t o correc t th e sever e problem s cause dt o J& B b y th e maste r concessio n agreemen t

an dHudso n Grou p a s maste r concessionaire . 2 . Th e Directo r

erre di n hi s analysi s an dconclusio n tha t Respondent' s administratio n o f

it s ne w shoeshin e concessio n leasin g polic y an d procedur e di dno t

discriminat e agains t

Complainan t

i n violatio n o f

4 9 C.F.R . § § 23. 9 an d26.7(b) . (Issu e 2 i n th e Director' s Determination. ) 1 0Th e Director' s Determinatio n mad e an effor t t o appl y th e disparat e impac t standar do f discriminatio n pursuan t

t o 4 9 C.F.R . § 26.7(b ) i n addressin g Issu e 2 . Director' s Determinatio n ("DD" ) at 21-24 . A s note di n th e DD , th e disparat e impac t theor y o f

discriminatio n focuse s o n th e discriminatory effec t o f an otherwis e neutra l polic y o f th e Respondent . D D at 21 . In applyin g th e disparat e impac t analysis , th e D D correctl y identifie dth e offendin g polic y t o b e "Respondent' s ne w Concession s Progra mPlan...an dspecifically , it s decisio n t o plac e th e sho e shin e concessio n unde r

th e news , gif

t an dspecialt y retai l maste r concessionair e a s alocal subcontractor , an dnot

t o continu e with adirec t leas e t o Respondent. " D D at 22 . Th e D D erred , first, i n concludin g tha t ther e was n o dispara+ e impac t violatio n becaus e J& B di dnot

sho w tha t

th e polic y ha da"disproportiona l an dadvers e impac t o n African America n sho e shin e operators. " Id . (emphasis added) . Thi s was erro r becaus e J&B , an African America n owne dbusiness , wa s th e onl y existin g concessio n tha t MNA A subjecte dt o th e challenge dpolicy , D D a

t 23 , an dwas an di s th e onl y shoeshin e operato r at MNAA . D D at

27 . Tha t is , J& B was th e onl y concessio n MNA A force dt o b e asubcontracto r t o th e maste r concessionaire . D D a t

3-4 , 22 . So , i n requirin g proo f o f th e impac t

o f tha t poUcy o n member s o f an y othe r racia l groups , not

t o mentio n othe r

shoeshin e operators , th e D D require dJ& B t o prov e th e impossible . I n fact , th e recor ddemonstrate s tha t MNAA' s polic y adversel y affecte donl y a n African America n owne dconcessio n an dthereb y ha dademonstrabl y advers e impac t o n African Americans . I n contrast , othe r existin g concession s includin g non-minority-ownedconcession s wer e permitte dt o continu e t o operat e free o f thi s polic y an dunde r

direc t concessio n agreement s with MNAA . D D at

2 3 ("ther e woul db e separat e direc t lease s for

servic e provider s (such a s a nai l salon , massag e bar , advertising , fravel an dbusines s center , ban k an dATMs , vide o gam e rooms , medica l clinic , storag e locker s an dluggag e cart s services") . Thus , th e recor destablishe s tha t th e challenge dpolic y ha dadisparat e impac t o n African American s both b y virtu e o f th e fac t 1 1that

i t applie donl y t o an African America n owne dbusines s an dtha t i t wa s not applie dt o non minorit y owne dbusinesses . Th e D D erred , second , i n concludin g tha t MNA A "me t

it s burde n o f

providin g a substantia l justificatio n for it s policies, " D D at 24 , an dfailin g t o acknowledg e that notwithstandin g MNAA' aasserte djustification , th e polic y ha dan unlawfu l disparat e impac t becaus e "ther e was acomparabl y effectiv e practic e tha t woul dhav e mad e th e Airport' s objective s efficientl y an dwoul dhav e les s discriminatory effect, " notabl y a"direc t leas e with th e Airport " a s Complainan t suggested . Id . Th e D D erre di n thes e respect s becaus e MNA A itsel f conclude dtha t

requirin g th e shoeshin e concessio n t o operat e unde r th e maste r

concessionair e arrangemen t

was not justifie da s i t

di dnot wor k for J& B an dMNA A ha s no w issue dRFP s fo r shoeshin e operation s a s direc t concession s with th e Airport , rathe r tha n a s subcontractor s unde r th e maste r

concessio n agreement . D D a t 7-8 , 24 . Further , th e D D concluded , i n connectio n with it s determinatio n o f

Issu e 4 , tha t

ther e wer e anumbe r

o f seriou s problem s an dinconsistencie s with th e polic y o f

includin g shoeshin e operation s (an dACDBE s i n general ) unde r amaste r retai l concessionair e prim e contractor . D D at 30-31 . Th e recor devidenc e demonstrate s tha t th e D D shoul dhav e foun dtha t MNAA' s maste r concessionair e polic y ha da n unlawfu l disparat e impac t becaus e i t

di dno t hav e asubstantia l justification , but

was misguided . Eve n after finding th e polic y justified , th e recor destablishe s that th e D D shoul dhav e foun dtha t MNA A coul dhav e achieve dit s end s throug h th e comparabl y effective , les s discriminator y polic y o f adirec t concessio n agreement . Instead , th e D D aborte d it s analysi s an davoide dfinding th e les s discriminator y polic y MNA A actuall y adopte di n it s recen t RFP s b y retreatin g t o it s earlier , flawedconclusio n tha t n o disparat e impac t

ha dbee n shown . D D at

24 . O n tha t

erroneou s basis , th e D D foun d"n o violatio n b y th e Responden t o f 4 9
1 2C.F.R . § 23. 9 an d§ 26.7(b) " an ddismisse dth e disparat e impac t discriminatio n claim . Id . Du e t o that error , th e D D shoul db e reversed . 3 . Th e Directo r

erre di n hi s analysi s an dconclusio n tha t th e Complainan t wa s no t subjec t t o disparat e treatmen t discriminatio n i n violatio n o f 4 9 C.F.R . §§23. 9 an d26.7(b) . (Issu e 3 i n th e Director' s Determination. ) Th e Director' s Determinatio n als o attempte dt o appl y th e "intentiona l discriminatio n o r disparat e treatmen t

theor y o f discrimination " pursuan t t o 4 9 C.F.R . § 26.7(a) , i n addressin g Issu e 3 . D D at 26-30 . Th e disparat e treatmen t analysi s purporte dt o respon dt o J&B' s allegation s that MNA A force di t

int o th e subcontrac t

relationshi p wit h Hudso n wher e i t was "no t afforde dth e sam e rights tha t

wer e hel db y othe r

concessio n operator s at

th e Airport " an d"i t

wa s ordere dt o pay for abooth tha t

serve dneithe r

th e need s o f

it s customers no r

it s ow n operationa l requirements. " DDat25 . Th e D D erre di n it s analysis , first , b y decidin g tha t J& B faile dt o establis h aprim afaci e cas e o f discriminatio n becaus e "[ajlthoug h th e Complainan t ha s describe dho w i t

wa s treate db y Hudso n an dth e Respondent , i t ha s provide dn o dat at o sho w ho w Hudso n treate dothe r subcontractor s not

o f Complainant' s race . Th e Complainan t di dno t demonstrat e tha t

th e Responden t

selecte daconcessionair e matchin g th e Complainant' s qualification s t o operat e th e sho e shin e concession . O n th e contrary...th e Complainan t was th e onl y sho e shin e concessionair e operatin g at th e Airport. " D D at

27 . Thi s i s erro r

becaus e i t

i s amechanica l applicatio n o f

th e standar di n McDonne l Dougla s Corp . v . Green , 41 1 U.S . 792 , 80 2 (1973) , t o th e fact s o f

tha t selectio n cas e rathe r

tha n th e allegation s o f

J& B i n thi s case . J& B di dno t clai m tha t i t was discriminate dagains t becaus e anothe r

wa s selecte dfor

th e shoeshin e concession . Rather , a s th e DD' s descriptio n o f th e complain t

make s clear , J& B complaine do f discriminatio n i n bein g denie dth e opportunit y an dfacilitie s properl y t o operat e it s concession . 1 3Further , requirin g proo f o f "ho w Hudso n treate dothe r subcontractors " i s inapposit e an d unfai r a s Hudso n ha dn o othe r subcontractor s similarl y situate dt o J&B—^tha t is , force dt o b e locate di n an dapart

o f anothe r concession . D D at

31 . Further , requirin g suc h ashowin g i s contradicte db y th e DD' s earlie r finding tha t

J& B complaine dt o MNA A tha t i t was treate d differentl y tha n othe r

concessio n operator s bu t wa s "denie dcompariso n informatio n o f th e othe r operator s withi n th e Airpor t an dtol di t

wa s no t relevan t t o Respondent. " D D at 25 . A s i n th e disparat e impac t

analysi s discusse dabove , th e D D erre di n requirin g J& B t o establis h th e impossible , her e becaus e withholdin g informatio n regardin g othe r concessio n operator s wa s on e aspec t o f th e violation . Th e D D continue dthi s erro r i n it s analysi s b y concludin g that J& B faile dt o establis h a prim afaci e cas e o f

discriminatio n becaus e i t provide devidenc e tha t

i t wa s treate ddifferentl y tha n othe r

concessio n operator s at

th e Airport . Th e D D conclude dthat "mos t o f th e example s that Complainan t

ha s cite dt o support

it s clai mtha t

i t wa s not afforde dth e sam e rights a s othe r concessio n operator s at

th e Airpor t

ar e misdirecte dbecaus e th e grou p tha t th e Complainan t appear s t o b e comparin g itsel f t o ar e operator s with direc t lease s with th e Airport . Sinc e th e Complainan t

i s asubtenan t

t o Hudso n for

th e ne w shoeshin e locations , i t ha s not provide dvali d compariso n dat afo r

th e purpos e o f

provin g discrimination. " D D at 27 . Thi s i s error , again , becaus e i t require s acompariso n tha t i s to o narrow . Ther e i s n o logica l reaso n wh y bein g asubtenan t t o aprim e concessio n woul djustif y discriminatory treatmen t

o f th e subcontracto r

o r treatmen t

differen t fro mtha t

othe r concession s at MNA A i n thei r

ability t o operat e profitably . Indeed , th e D D recognize s tha t MNA A i s responsibl e t o no t

onl y refrai n fro mit s ow n discriminatio n bu t i s "require dt o ensur e non discriminatio n b y [its ] contractor s an dsubcontractors. " D D at 29 . An dth e D D elsewher e acknowledge s tha t

J& B complaine do f

discriminatio n b y bot h MNA A an dHudso n an do f bein g 1 4force db y MNA A int o th e positio n o f subcontracto r

t o Hudso n an dther e denie dth e facilitie s an d opportunitie s neede dt o successfull y operat e it s concession . See , e.g. , D D a t 25 . Thus , comparison s t o th e manne r i n whic h othe r

concessio n operator s ar e th e airport wer e treate dar e entirel y appropriat e t o prov e that claim . An di n anothe r

sectio n o f

th e Determinatio n (that addressin g Ite m4) , th e D D makes finding s tha t

establis h J&B' s clai mtha t i t was treate ddifferentl y an dunfairl y a s aresul t o f th e subcontracto r

status . Th e D D foun dtha t J& B wa s treate ddifferentl y tha n othe r concessionaire s b y both MNA A an dHudso n whe n i t wa s force dint o th e positio n o f subconfracto r

i n th e maste r concessio n agreement . D D a t 30-31 . Ther e th e D D foun dtha t MNA A mad e J&B , a s th e subcontractor , subjec t

t o "th e prim e contractor' s incentiv e t o maximiz e profi t i n it s space, " foun d "tha t Responden t

faile dt o provid e detaile dstandards , specifications , o r squar e footag e allotment s for

th e sho e shin e concessio n a s i t di dfor it s othe r retai l concepts, " an dfaile dt o conside r th e difference s i n businesse s i n settin g th e rent . O n th e basi s o f thi s differential treatment , "th e Directo r

f[ound ] th e Responden t create dth e condition s for issue s suc h a s thos e experience db y th e Complainan t o n th e unsuitabilit y o f

th e spac e an ddesig n o f th e shoeshin e stand. " DDat31 . Moreover , th e recor dals o show s tha t MNA A wa s awar e tha t thes e problem s wer e th e expecte doutcom e whe n i t mad e th e decisio n t o forc e th e shoeshin e operato r t o becom e a subcontracto r

t o amaste r

concessionaire . Indeed , th e MNA A Concession s Maste r Plan informe d MNA A tha t

selectin g tha t

model generall y woul dhav e " anegativ e impac t o n th e operation s o f th e maste r

concessionaire' s subcontractors " an d"DBE s and/o r loca l businesses, " i n highe r rent , i n bein g relegate dt o "les s desirabl e locations " an di n bein g exclude dfrom"th e mor e popular...retai l merchandise. " Ite m10 , Ex . 2 , a t pp . IX-1 . Indeed , th e Pla n conclude dth e discussio n o f

th e effect s o f

subcontractin g o n DBE s b y statin g tha t "[f]ro mafinancial an d 1 5operatin g standpoint , thes e smal l businesse s i n som e instance s ar e at adisadvantag e fromth e very beginning , an dcan en du p performin g poorl y o r i n som e case s closin g thei r businesse s at th e airport. " Id . a

t pp . IX-l-IX-2 . Thus , th e evidenc e show s tha t MNA A kne w tha t

th e shoeshin e operato r

wa s likel y t o receiv e th e unequa l treatmen t J& B experience dbu t

nevertheles s decide dt o forc e th e shoeshin e concessio n t o b e suc h asubcontractor . And , i f not MNAA , th e FA A ha s previousl y bee n mad e awar e o f conduc t b y maste r

concessionaires , includin g Hudson , that harmo r put ACDB E concession s ou t o f business . Se e Januar y 9 , 200 9 lette r t o M . Freilich , FAA' s Directo r

o f DB E Compliance , Wester n Region , fromM . Rosales , at pp . 3-6 , attache da s Appendi x A : Thus , th e D D erre di n concludin g tha t J& B di dnot

mak e ou t

aprim afaci e cas e o f discriminatio n agains t

MNA A an dHudso n b y requirin g inappropriat e comparisons an dignorin g it s ow n finding s o f

th e differential an dunfavorabl e treatmen t o f J&B . Th e D D als o erre di n evaluatin g th e disparat e freatment discriminatio n clai mi n finding that MNA A articulate dalegitimat e non-discriminator y reaso n for it s action s an dtha t

th e evidenc e doe s not

establis h pretext . D D a t 27-30 . Here , th e D D purporte dt o findtha t MNA A wa s someho w excuse dfromresponsibilit y for forcin g J& B fro mit s successfu l locatio n an d operation s an dplacin g J& B i n th e untenable positio n o f subcontracto r

t o Hudso n becaus e i t mad e J& B awar e tha t

i t was doin g s o an dthe n "too k immediat e action " whe n i t learne do f Hudson' s treatmen t

o f J&B . However , informin g th e subjec t o f discriminatio n tha t

i t i s comin g i s no t alegitimat e non-discriminator y explanatio n for th e discrimination , an dth e recor di s clea r tha t MNA A di danythin g bu t ac t quickl y i n respons e t o J&B' s complaint s regardin g it s treatmen t an dfaile deve r

t o ac t t o eliminat e thos e condition s i t agree dwer e unfair . Th e recor di s clear

tha t J& B ha dt o continuall y escalat e it s concern s highe r i n MNA A an dbeyon dt o ge t

an y attentio n an deve n whe n MNA A purportedl y agree dthat J& B shoul db e 1 6remove dfro mth e agreemen t wit h Hudso n an dmove dt o different locations , i t

neve r actuall y effectuate dthos e changes . Indeed , despit e J&B' s continue drequest s for th e direc t

concessio n agreemen t

MNA A claime dt o b e preparin g an dmeeting s t o implemen t th e supposedl y agree d upo n changes , MNA A neve r mad e the mhappen . Instea do f correctin g th e problem s i n an agreemen t

with J& B a s i t

sai di t would , MNA A lef

t J& B i n th e untenabl e circumstances , terminate dit s functional an dpre-existin g concessio n agreemen t with J&B , an dissue da

n RF P for other s t o bi do n tha t

concessio n a s aseparat e direc t concession . Ther e i s nothin g legitimat e o r non-discriminatory abou t tha t cours e o f

action , an dMNAA' s claim s that i t was bein g responsiv e fai l an dar e hollo w wher e th e recor dshow s tha t i t ha dth e authority an dability t o resolv e th e unfai r condition s J& B face dbu t di dnot . Moreover , th e D D foun dtha t "th e recor dindicate s tha t Responden t

di dno t mee t it s contractua l obligation " t o J& B unde r th e existin g leas e i n forcin g i t t o submi t

t o th e maste r concessio n agreement . D D a t 29 . Th e D D als o foun dtha t "Responden t

di dnot provid e an y evidenc e t o disput e Complainant' s allegation s o f Hudson' s freatment

o f Complainan t

concernin g th e disseminatio n o f

vita l information , includin g th e desig n o f th e shoeshin e stan di n locatio n B

5 , an dth e fmalizatio n o f d o fa n execute dsublease. " Ye t th e D D purporte dt o excus e tha t treatmen t becaus e MNA A "too k immediat e actio n t o communicat e tha t i t wa s entirel y imacceptabl e for

th e Complainan t

t o hav e th e impressio n tha t the y wer e bein g treate di n a 'demeaning ' manner. " D D at 29 . Bu t MNA A canno t

properl y b e excuse dfromo r foun dt o hav e responde di n accordanc e with it s obligation s t o ensur e non-discriminatio n simpl y for "communicating " abou t

"perceptions, " wher e i t faile dt o correc t

th e behavio r

an dcondition s abou t whic h J& B constantl y complaine dan dwhic h MNA A eventuall y agree dwa s aproblem . Th e recor dshow s tha t

J& B was th e onl y minority-owne dconcessio n place dunde r th e Hudso n maste r

concessionair e agreement . Indeed , examinatio n o f MNA A report s t o FA A wil l 1 7^

revea l that

apreexistin g minorit y news an dgif t concession . Gif

t Connection , was not

include di n an ddi dno t

becom e apar t

o f th e news an dgif

t concessio n operate db y Hudson . Se e Ite m1 2 (printou t fromDoor s database) . Althoug h th e D D note s tha t tw o othe r

ACDBEs , on e African America n owned , participate di n Hudso n concession s proposa l an dneithe r ha s expresse d discontent , D D at

21 , tha t finding say s nothin g abou t discriminatio n agains t

J&B . Th e African America n owne dbusines s referre dto , Olympi c Supply , i s no t aconcessio n operatin g unde r a subcontrac t

with Hudson , but

i s apurporte djoin t

ventur e partne r

o f Hudson , previousl y foun dt o allo w Hudso n t o operat e it s busines s rathe r tha n operatin g independently . Ite m8 , Goodin g Affidavi t ^ ^ 20 , se e Issu e B below . Thus , i t i s no t i n J&B' s position . Th e othe r entity referre dto , CBR , althoug h onc e an ACDBE , was neve r minority-owne dan dha s not bee n an ACDB E fo

r som e years , a s i t

wa s sol dt o majority owners . Ite m8 , Goodin g Affidavi t ^ 20 . Th e effec t

o f MNAA' s action s an dit s toleranc e o f Hudson' s actions , therefore , ha s resulte di n th e oustin g o f th e las t minority-ovrae dconcessio n an donl y ACDB E concessio n fromth e news an dgift s concession s a

t MNAA . Thi s to o i s evidenc e o f th e racia l impac t

o f both MNAA' s an dHudson' s actions. ^ I n sum , th e D D erre di n avariet y o f way s i n misapplyin g th e la w an dreachin g unjustifie d conclusion s a s t o J&B' s disparat e treatmen t claim s t o th e undispute dfacts . Accordingly , th e D D

^ Th e D D appears t

o have bee n mor e concernedwit

h wha t i t viewe das a n inappropriat

e loca l preferenc e regarding th e shoeshin

e operation to b e includedi n th e maste

r concession agreemen

t tha n th e allegation s o

f discrimination o

r th e effec t o f th e operation o

f MNAA' s ACDB E progra

mo n minority-ownedconcession s an dACDBEs . Se

e D D a t 2 4 & n . 8 2 an

d32 . Thes e discussion sugges t tha t the Directo

r was , fo r thi s reason , pleasedb

y the termination o

f th e relationshi p wit h J& B an dsolicitation o

f ne w concessions . I

f so , erroneousl

y applying anti-discrimination la w an d justifying th

e ouste r o f along-tim

e minority-ownedACDB E concessionair e a s asuppose

dremed y fo r MNA A stating aloca

l preferenc e ma

n RF P wouldb e acuriou s an

dunfortimat

e result o f acomplain

t b y a n ACDBE . I

t woul dals o b e aresul

t contrar y t o the inten t of th e ba n o n loca l preference s an

dcontrar y t o th e interest s i

n protecting against discrimination i

n the operation o

f th e ACDB E program . I n addition , the recor

di s not clea r tha t suc h asubcontract

provision wa s no

t arac e consciou s goa

l o f MNAA' s ACDB E Plan . Se e Ite m1 2 Race Consciou s Goal s (e.g. , i n F Y 0 7 rac e consciou s goa

l o f 14.5 % compare

d to rac e neutra

l goa l o f onl y 1.2%) . Th

e D D didnot inquir e int o o r mak e finding s regarding the MNAA' s goal s an d ho w the y wer e to be achieved . As well , the Director' s understanding o f the underlying analysi s requiredfo r th e ACDB E Plan , including MNA A disparit y studies , i s unclea

r as th e D D purport s t

o fin dtha t "[t]her e i s als o n

o evidence tha

t Responden

t ha s apas t histor y of discrimination, " D

D a t 29 , aproposition a

t odd s wit h th e basi s fo

r the ACDB E progra

man dth e require dbasi s fo

r locally-establishe dgoals .

1 8shoul db e reverse dan dfinding s o f discriminatio n entere db y th e Assistan t Administrato r

o r remande dfor

consideratio n unde r

prope r standard s b y th e appropriat e Director . B . Th e Directo r

faile dt o mak e inquirie s an dHnding s necessar y t o conclud e tha t th e Hudso n Grou p me t

Respondent' s ACDB E goa l an dth e recor ddoe s no t contai n evidenc e t o suppor t

th e Director' s Determinatio n tha t th e Hudso n Grou p me t Respondent' s ACDB E goal . (Issu e 1 i n th e Director' s Determination. ) O n th e issu e o f

Complainant' s allegation s tha t Hudson , throug h th e purporte djoin t ventur e AMS-Olympi c Nashvill e (whic h th e D D refer s t o a s "th e Hudso n Group, " th e D D foun d tha t "th e Hudso n Grou p me t th e ACDB E contrac t

goa l o f 15. 7 percen t

require dfor

th e award " becaus e "th e recor devidenc e indicate s th e ACDB E participatio n o f 1 7 percen t

was attribute dt o th e join t ventur e participatio n o f Oljonpi c Supply. " D D at 19 . I t base dthi s conclusio n o n it s finding s that

"th e recor devidenc e show s tha t Olympi c Suppl y wa s certifie da s a n ACDB E b y th e State o f Tennessee , an dhel da17 % ovmershi p interes t i n aJoin t

Ventur e with Hudson. " Id . Th e D D als o wen t

o n t o decid e tha t

MNA A "exercise ddu e diligenc e i n evaluatin g th e participatio n proposed " an d"carrie dou t it s responsibilit y i n evaluatin g eac h competitor' s propose dACDB E participation , includin g th e Hudso n Group , i n goo dfaith. " I t als o reste dthi s finding o n it s finding that

th e Hudso n "Join t

Ventur e submitte daproposa l documentin g 17 % ACDB E participatio n exceedin g th e contrac t goa l o f 15.7%. " D D a t

20 . Th e D D erre di n findin g tha t th e Hudso n join t

ventur e me t

th e requirement s fo

r ACDB E participatio n becaus e i t

neve r inquire dwhethe r

th e join t ventur e actuall y satisfie dth e requisit e ACDB E regulation s regardin g join t ventures . I n recitin g th e regulator y backgroun dfo r it s decisio n th e D D recognize dtha t t o b e considere da s contributin g t o ACDB E participation , neithe r th e participatio n o f

an ACDB E firmi n ajoin t ventur e no r

astate downershi p interes t b y an ACDB E firmi s sufficient . Instead , th e join t ventur e mus t

b e on e "i n whic h th e ACDB E i s responsibl e for

adistinct , clearl y define dportio n o f th e work o f th e contrac t

an dwhos e share s i n 1 9th e capita l contribution , control , management , risks, an dprofit s o f th e join t

ventur e are commensurat e wit h it s ownershi p interest. " D D a t 1 2 quotin g 4 9 C.F.R . § 23.3 . However , i n decidin g that

th e join t ventur e satisfie dth e goal s an dthat MNA A satisfie dit s obligation s to evaluat e th e propose dparticipation , th e D D neve r sough t t o determin e whethe r

th e Hudso n join t ventur e her e satisfie dth e requisit e actua l participatio n i n th e work o f th e contrac t

o r whethe r MNA A di dso . Curiously , althoug h th e D D referre dt o th e FAA' s Join t Ventur e Guidanc e issue dat th e approximatel y th e tim e o f J&B' s complain t

an dth e Guidanc e wa s submitte da s a n exhibit , se e Ite m10 , E x 33 , i t

di dnot conside r o r examin e an y o f

th e provision s o f

th e Join t

Ventur e Guidanc e relevan t

t o th e question s raise di n th e complaint . D D at 19 . Fo r example , i t

di dno t appl y th e definition s i n th e Guidanc e o f variou s element s o f

aqualifyin g join t

venture , se e Ite m 10 , Ex . 3 3 at

8-11 , o r conside r wha t airport s ar e require dt o d o i n reviewing join t ventur e participation , se e Ite m10 , Ex . 3 3 at 11-18 , o r

asses s ho w th e Guidanc e indicate s ACDB E participatio n i n join t

venture s shoul db e counted , se e Ite m10 , Ex . 3 3 at 18-23 , o r

ho w ACDB E participatio n i n join t

venture s shoul db e monitored . Se e Ite m10 , Ex . 3 3 at 23-25 . In short , th e D D completel y ignore dth e Guidanc e i n determinin g whethe r MNA A properl y me t

it s ACDB E goal s throug h th e Hudso n join t venture , an di n determinin g whethe r MNA A properl y evaluate d th e join t ventur e participatio n o f

Olympi c Supply . Thi s plainl y was error . An di n thi s case , i n particular , th e DD' s deficienc y i n thi s regar dwa s anythin g but harmles s error . A t

th e ver y tim e tha t

MNA A was claimin g credi t for th e join t

ventur e participatio n o f

Olympi c Suppl y i n th e Hudso n Grou p an dth e D D wa s concludin g tha t MNA A properl y ha dme t

it s ACDB E goal s throug h Olympics ' participatio n i n th e Nashvill e join t ventur e with Hudson , Olympics ' hom e stat e Marylan dAviatio n Adminisfratio n wa s auditin g ACDB E complianc e an ddisqualifie dOlympi c News/Olympi c Suppl y fromACDB E credi t 2 0becaus e i t

was no t operatin g independentl y fromHudso n i n ajoin t agreemen t

at th e Baltimor e Washingto n Intemationa l Airport . Se e Marylan dAviatio n Administratio n ACDB E Audi t Findings , attache da s Appendi x B . Se e als o Januar y 9 , 200 9 lette r t o M . Freilich , FAA' s Directo r o f DB E Compliance , Wester n Region , fromM . Rosales , a t pp . 2-3 , attache da s Appendi x A . Th e Marylan dAviatio n Administratio n ACDB E Audit make s clear

that th e D D improperl y assume dtha t

th e Nashvill e join t

ventur e includin g Olympi c me t ACDB E regulatory standard s withou t

further inquiry ; an dsuggests , at least , tha t

MNA A performanc e an d monitorin g o f

it s ACDB E participatio n throug h tha t join t ventur e wa s anythin g but thoroug h Accordingly , th e DD' s conclusion s tha t MNA A properl y achieve dit s ACDB E participatio n an d properl y assesse dwhethe r th e join t

ventur e qualifie dfor

ACDB E participatio n shoul db e reverse dan dan examinatio n o f th e actua l functionin g o f th e join t ventur e shoul db e ordere d pursuan t t o 1 4 C.F.R . § 16.29(b) . C . Th e Directo r

erre di n hi s analysi s an dconclusio n tha t th e Respondent' s actions , o r lac k o f actions , individuall y o r cumulatively , wer e contrar y t o th e administrative , genera l an dcomplianc e requirement s o f 4 9 C.F.R . Part s 2 3 an d 2 6 an dFedera l Gran t

Assurance s Nos . 3 0 an d37 . (Issu e 4 i n th e Director' s Determination. ) Finally , th e D D purporte dt o conside r th e totalit y o f

th e recor dt o determin e whethe r MNAA' s action s o r

inaction s wer e contrar y t o th e requirement s o f 4 9 C.F.R . Part s 2 3 an d2 6 an d Federa l Gran t

Assurance s Nos . 3 0 an d37 . O n tha t question , th e D D conclude dtha t MNA A was "full y responsiv e i n resolvin g al l issue s raise db y Complainant , an dtha t contrary t o Complainant' s allegation , i t attempte dt o d o everythin g i t believe di t

coul dt o facilitat e Complainant' s full participatio n i n th e ACDB E program. " D D at 32 . Thi s i s not

onl y acuriou s conclusio n t o reac h wher e th e mos t definitiv e actio n Responden t too k wa s t o terminat e it s 2 1

# r

^

existin g concessio n contrac t with th e Complainan t

an dpu t it s longstandin g concessio n ou t i n a RFP , bu t i s contradicte db y th e recor devidence . A s discusse dabove , th e recor di s clear tha t MNA A promise dman y thing s but faile dt o ac t t o correc t

th e problem s i t

create dthroug h th e maste r concessio n pla n i t

adopted , an dth e conduc t o f Hudso n i t

purporte dt o condem n but continue dt o tolerate . Indeed , i t i s i n addressin g thi s Issu e tha t

th e D D catalogue s th e differential an dunfai r treatmen t

o f J& B a s th e shoeshin e concessio n force dt o submi t t o th e interest s o f

amaste r concessionaire . D D at

30-31 . Ye t

th e D D the n purport s t o excus e thes e harm s b y finding "exttaordinar y efforts " o n th e part o f MNA A t o resolv e th e dispute s tha t th e D D foun dit s maste r concessio n pla n create dbetwee n T& B an d Hudson . Othe r tha n agreein g t o maintai n th e prio r renta l rate , thos e "exttaordinar y efforts " for th e mos t par t boi l dow n t o offer s tha t wer e neve r

kep t an dagreement s tha t

MNA A neve r

fulfilled . Thes e empty promise s range dfro ma n offe r t o pa y hal f

th e cos t o f ane w stan dthat

was neve r built , t o an offe

r t o mov e J& B t o alocatio n t o whic h i t was neve r

moved , t o th e promis e o f ane w direc t concessio n agreemen t

v^th MNA A tha t

neve r wa s presente d(an dwher e suc h a n agreemen t

was imnecessary becaus e J& B ha da n existin g direc t concessio n agreemen t

whic h MNA A subsequentl y terminated) . D D at 4-8 , 20-21 . Indeed , althoug h MNA A attempt s t o sugges t tha t i t ha dagree dwith J& B i n earl y Novembe r 200 7 tha t

i t shoul db e remove dfromth e maste r concessio n agreemen t

an dhav e aseparat e direc t concessio n agreemen t

with MNAA , i t produce dn o suc h agreemen t ove r th e followin g seve n months , an dthre e month s later , i t urge d J& B t o ente r

int o asubleas e with Hudson . Se e D D at 7 ; Ite m10 , Ex . 27 ; se e als o letter s date d

2 2Januar y 5 , February 9 , an dFebruary 17 , 200 9 fromJ& B Enterprise s t o th e FA A attache dt o

Complainant' s Motion t o Supplemen t th e Record.' * Thus , ther e i s not

substantial evidenc e t o support th e DD' s conclusio n tha t MNA A di dal l tha t i t could , an dth e recor devidenc e plainl y contradict s suc h aconclusion . Th e evidenc e mos t starkl y contradictin g th e DD' s conclusio n i s that , after receivin g th e complain t lette r fromJ& B tha t MNA A ha dnot

followe dthroug h o n solvin g th e problems , MNA A di dno t redoubl e it s effort s o r brin g th e matte r

t o th e conclusio n i t

ha dpromised , but

reverse ditsel f

an dno t onl y refuse dt o produc e ane w direc t concessio n agreement , but terminate dth e existin g concessio n agreemen t

vsdt h J& B an dpu t

th e concessio n i t

ha ddevelope dan dn mfo r fiftepn year s ou t

for a RFP . After

makin g findings abou t th e way s i n whic h J& B was treate ddifferentl y an d disadvantage db y MNA A requirin g i t t o b e par t

o f th e maste r

concessio n plan , th e DD' s closin g remark s ar e incomprehensible : Th e Directo r

believe s i t

i s importan t

t o emphasiz e tha t

th e ACDB E progra mi s designe d t o creat e aleve l playin g fieldo n whic h ACDBE s ca n compet e fairl y for opportunitie s for concessions . A s Responden t state s i n it s Answer , i t

doe s not giv e th e Complainan t

a perpetua l righ t

t o operat e th e shoeshin e concessio n withou t competin g for

suc h aright. D D a t 32 . T o sugges t

tha t J& B was someho w claimin g aright t o perpetua l operatio n o f a concessio n becaus e i t

complaine do f

bein g force dint o asubcontrac t unde r amaste r concessio n pla n bear s n o relatio n t o th e fact s o f thi s case . I t

was MNA A tha t

decide dt o alte r

th e manne r

i n whic h i t operate dit s concession s an dMNA A tha t dictate dall o f

th e term s accordin g t o whic h J& B ha dt o operate . J& B simpl y sought , an dcontinue s t o seek , onl y th e opportunit y t o operat e th e concessio n i t

ha s sinc e 199 2 o n term s tha t ar e fair an dwil l allo w i t

t o succeed . Th e DD' s failur e t o recogniz e thi s i s furthe r evidenc e tha t

it s conclusion s mus t

b e reversed .

* The DD excludedthes e letter s fromth e recor dbecaus e the

y wer e file dpr o s e an

dwer e "not servedproperly. " D

D a t 9 & nn . 5 7 an

d58 . 2 3V . CONCLUSIO N

Base do n th e argument s abov e an dth e recor devidenc e th e Assistan t Administrato r shoul drevers e th e Director' s Determination , findtha t Responden t

i s i n violatio n o f

4 9 C.F.R . § § 23.1 1 an d26.109 , 4 9 C.F.R . § § 23. 9 an d26.7(a ) an d(b) , an dreman dth e matte r t o th e appropriat e FA A official(s ) for athoroug h investigation , pursuan t t o 1 4 CF R§ 16.29(b)(2 ) an d (3) , o f Respondent' s an dth e Hudso n Group' s complianc e wit h th e FAA' s ACDB E Join t Ventur e Guidance , requirement s an dgoals , an dRespondent' s operatio n o f it s ACDB E progra m consisten t with th e purpos e an drequirement s o f 4 9 C.F.R . Part s 2 3 an d26 , an dFedera l Gran t Assurance s Nos . 3 0 an d37 . Respectfull y submitted , A / Thoma s J . Henderso n Thoma s J . Henderso n Henderso n La w Firm , PLL C Suit e 35 0 142 5 K Street , N W Washington , D C 2000 5 (202 ) 587-568 7 Telephon e (202 ) 587-560 1 Facsimile E-mail : tjh@hendersonfirm.ne t Counse l fo r

Complainan t J& B Enterprises , Inc .

2 4CERTIFICAT E O FSERVIC E

I hereb y certif

y tha t I hav e thi s day serve dth e foregoin g Appea l o n th e followin g person s a t th e followin g addresses , b y first clas s mai l thi s 8t

h da y o f July , 2009 : Arthu r P . Ber g Kapla n Kirsc h & Rockwel l LL P 64 1 Lexingto n Ave. , Suit e 140 9 Ne w York , Ne w Yor

k 1002 2 (212)328-951 5 Facsimil e number : (646 ) 514-544 0 E-mai l address : aberg@kaplankirsch.co m Thoma s R . Devin e Kapla n Kirsch & Rockwel l LL P " 100 1 Connecticu t

Ave. , N.W . Suit e 80 0 Washington , D.C . 2003 6 (202)955-560 0 Facsimil e number : (202 ) 955-561 6 E-mai l address : tdevine(a),kaplankirsch.co m Lis aReynold s Kapla n Kirsc h & Rockwel l LL P 167 5 Broadway , Suit e 230 0 Denver , C O 8020 2 (303 ) 825-700 0 Facsimil e number : (303 ) 825-700 5 Robert Watso n MNA A On e Termina l Drive , Suit e 50 1 Nashville , T N 3721 4 (615)275-163 7 Facsimile number : (615 ) 275-430 2 _/s / Thoma s J . Henderso n Thoma s J . Henderso n Counse l fo r

Complainan t J& B Enterprises , Inc . 2 5