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UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, D.C. 

J&B ENTERPRISES, INC., 

d/h/aJ RHYTHM SHINE, 

Complainant, 

METROPOLITAN NASHVILLE AIRPORT 

AUTHORITY, 

Respondent. 

Docket No.: 16-08-07 

APPEAL OF DIRECTOR'S DETERMINATION TO 

ASSISTANT ADMINISTRATOR FOR CIVIL RIGHTS 

I. INTRODUCTION c3 

Complainant J&B Enterprises, Inc., d/b/a/ Rhythm Shine (hereafter "Complainant" or 

"J&B"), pursuant to 14 C.F.R. §§ 16.33, hereby appeals to the Assistant Administrator for Civil 

Rights the May 5, 2009 Director's Determination in this matter. On that date, the Director of the 

Office of Airport Compliance and Field Operations entered a determination of J&B's complaint 

that Respondent was operating in violation of 49 C.F.R. Part 23, Participation of Disadvantaged 

Business Enterprise in Airport Concessions, and C.F.R. Part 26, Participation by Disadvantaged 

Business Enterprises in Department of Transportation Financial Assistance Programs. The 

Director identified four issues and made findings and conclusions that the Respondent had met 

its ACDBE contract goals, that its policies and actions toward J&B were not discriminatory and 

that it was in compliance with the requirements of 49 CFR Parts 23 and 26. On Complainants' 

motion, on June 18, 2009, the Director entered an Order enlarging the time for an appeal until 

July 8,2009. 
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II. ISSUES ON APPEAL 

There are several issues on appeal, generally organized along the lines of the issues 

identified by the Director in his Determination. Complainants respectfully suggest that the 

Director's Determination is in error in the following respects: 

1. The Director erred in his analysis and conclusion that Respondent did not subject 

Complainant to discrimination. 

a. The Director failed completely to recognize, and to find on the basis of 

undisputed facts, that Respondent intentionally discriminated against 

•Complainant by retaliating against it for making a complaint that Respondent 

and Hudson were in violation of the ACDBE regulations in violation of 49 

C.F.R. §§23.11 and 26.109. 

b. The Director erred in his analysis and conclusion that Respondent's 

administration of its new shoeshine concession leasing policy and procedure 

did not discriminate against Complainant in violation of 49 C.F.R. §§23.9 and 

26.7(b). (Issue 2 in the Director's Determination.) 

c. The Director erred in his analysis and conclusion that the Complainant was 

not subject to disparate treatment discrimination in violation of 49 C.F.R. 

§§23.9 and 26.7(b). (Issue 3 in the Director's Determination.) 

2. The Director failed to make inquiries and findings necessary to conclude that the 

Hudson Group met Respondent's ACDBE goal and the record does not contain 

evidence to support the Director's Determination that the Hudson Group met 

Respondent's ACDBE goal. (Issue 1 in the Director's Determination.) 

3. The Director erred in his analysis and conclusion that the Respondent's actions, or 

lack of actions, individually or cumulatively, were contrary to the administrative, 

general and compliance requirements of 49 C.F.R. Parts 23 and 26 and Federal Grant 

Assurances Nos. 30 and 37. (Issue 4 in the Director's Determination.) 

III. FACTS 

The Director's Determination contains a lengthy discussion of most of the facts relevant 

to the determination of J&B's complaint and Respondent's compliance. The facts generally are 
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not in dispute. Rather, it is the largely the significance of the facts in the record (or absent from 

the record) and the conclusions dravra from the facts by the Director that are at issue in this 

appeal. Thus, instead of repeating the facts separately, the relevant facts will be discussed in 

connection with the discussion of the issues in the appeal below. 

IV. ARGUMENT 

In this appeal, pursuant to 14 CFR § 16.33 fi-om a Director's Determination, without a 

hearing, where the complaint is dismissed after investigation, it is the Assistant Administrator's 

"responsibility to determine whether (a) the findings of fact made by the Director are supported 

by a preponderance of reliable, probative, and substantial evidence, and (b) each conclusion of 

law is made in accordance with applicable law, precedent, and public policy." Airborne Flying 

Service, Inc., v. City of Hot Springs, Arkansas, FAA Docket No. 16-07-06, (May 2, 2008) (Final 

Decision and Order) page 14 (citing Ricks v. Millineton Municipal Airport, FAA Docket No. 16-

98-19, (December 30, 1999) (Final Decision and Order) page 21, and 14 CFR, Part 16, § 

16.227). As demonstrated below, applying this standard requires that the Director's 

Determination be reversed, that Respondent be found in violation of 49 C.F.R. §§ 23.11 and 

26.109, and that the matter be remanded for a thorough investigation, pursuant to 14 CFR § 

16.29(b)(2) and (3), of Complainant's complaint, Hudson's compliance with ACDBE joint 

venture requirements and guidance and Respondent's and Hudson's compliance with ACDBE 

requirements and goals, and Respondent's operation of its ACDBE program consistent with the 

purpose and requirements of 49 C.F.R. Parts 23 and 26, and Federal Grant Assurances Nos. 30 

and 37. 
A. The Director erred in his analysis and conclusion that Respondent did not 

subject Complainant to discrimination. 

As indicated in the statement of issues above, the Director's Determination erred in 

determining J&B's complaint of discrimination in three ways. Each is discussed in turn. 

1. The Director failed completely to recognize, and to find on the basis of 

undisputed facts, that Respondent intentionally discriminated against 

Complainant by retaliating against it for making a complaint that 

Respondent and Hudson were in violation of the ACDBE regulations in 

violation of 49 C.F.R. §§ 23.11 and 26.109. 

The Director's Determination made an effort to understand and assess J&B's 

discrimination complaint under the "disparate impact" and "disparate treatment" standards, as 

discussed below. However, in considering those allegations of discrimination by MNAA, the 

Director's Determmation (or "DD") simply failed to recognize or acknowledge the complaint's 

allegation that in response to J&B's request for a settlement conference to resolve issues raised 

in the complaint, "the requested conference was never scheduled; instead the MNAA responded 

by terminating the contract with J&B." April 15, 2008 Letter from A. Robinson to R. Regalado, 

p. 4, Item 1 and Item 10, Ex. 29 in Administrative Record.^ Moreover, the DD also failed to 

recognize what the uncontested facts show—^that MNAA violated and remains in violation of the 

ACDBE Program by retaliating against J&B Enterprises for making a complaint that MNAA 

was violating the DBE Program regulations. 

The Supreme Court has held that retaliation is discrimination. In holding that retaliation 

was encompassed within the anti-sex-discrimination prohibition of Title IX, the Supreme Court 

stated: 

Retaliation against a person because that person has complained of sex discrimination is 

another form of intentional sex discrimination encompassed by Title IX's private cause of 

action. Retaliation is, by definition, an intentional act. It is a form of "discrimination" 

' References to the Administrative Record are indicated by Item number and, where applicable, Exhibit number, 

from the Index of Administrative Record attached as FAA Exhibit 1 to the Director's Determination. 

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because the complainant is being subjected to differential treatment. Moreover, retaliation 

is discrimination "on the basis of sex" because it is an intentional response to the nature 

of the complaint: an allegation of sex discrimination. We conclude that when a fimding 

recipient retaliates against a person because he complains of sex discrimination, this 

constitutes intentional "discrimination" "on the basis of sex," in violation of Title IX. 

Jackson V. Birmingham Bd. ofEduc, 544 U.S. 167, 173-174 (2005) (citations omitted). Indeed, 

the Supreme Court consistently has held that anti-discrimination laws also outlaw retaliation for 

making complaints of discrimination. See, e.g., CBOCS West, Inc. v. Humphries, 128 S.Ct. 1951 

(2008) (42 U.S.C. § 1981); Gomez-Perez v. Potter, 128 S.Ct. 1931 (2008) (federal-sector 

provision of the ADEA, 29 U.S.C. § 633a(a)). 

>4oreover, the ACDBE Program regulations specifically prohibit retaliation. The 

regulations at at 49 C.F.R. § 23.11, "What compliance and enforcement provisions are used 

under this part?" expressly incorporate "[t]he compliance and enforcement provisions of... [49 

C.F.R. §]26.109." The DBE Program regulations at 49 C.F.R. § 26.109, "What are the rules 

goveming information, confidentiality, cooperation, and intimidation or retaliation?" provide 

that: 

(d) Intimidation and retaliation. If you are a recipient, contractor, or any other participant 

in the program, you must not intimidate, threaten, coerce, or discriminate against any 

individual or firm for the purpose of interfering vsdth any right or privilege secured by this 

part or because the individual or firm has made a complaint, testified, assisted, or 

participated in any manner in an investigation, proceeding, or hearing under this part. If 

you violate this prohibition, you are in noncompliance with this part. 

(emphasis added.) Accordingly, the FAA's ACDBE regulations expressly recognize that 

retaliation is prohibited discrimination. 

Although the regulations and Supreme Court precedent both explicitly recognize 

retaliation as prohibited discrimination, the Director's Determination makes no mention of it and, 

thus, the decision fails to include any analysis of retaliation. This constitutes an error of law as 
/ - > 

the Director's Determination was not "made in accordance with applicable law, precedent, and 

public policy." Airborne Flying Service, Inc. 

In addition, analysis of the record evidence establishes the elements of retaliation that the 

Director's Determination should have found. The MNAA's formal submission in this matter and 

the affidavits of its employees admitted that MNAA terminated its existing Concession 

Agreement with J&B Enterprises and put that shoeshine concession up for public bid after 

receiving and in response to the April 15, 2008 letter fi-om J&B's attorney complaining "that 

MNAA and Hudson" were in violation of DBE program regulations and that an "administrative 

action" would be commenced if discussions among the parties did not result in "volimtary 

options for bringing this matter into compliance." Item 1 and Item 10, as Ex. 29. 

The sworn statement of Amber Dancy Goodling, MNAA's Director of Business 

Diversity and the designated Airport Concessions Disadvantaged Business Enterprise Liaison 

Officer (ACDBELO), explicitly admitted that MNAA took this action in response to the letter 

regarding program violations. Her affidavit expressly states that "...MNAA, after receiving a 

letter fi-om J&B's attorney claiming a violation of DBE requirements, decided on June 6, 2008 to 

decline to renew J&B's existing concession agreement which was expiring on August 31, 2008, 

and instead to publicly bid the shoe shine concession." Admin. Rec, Item 8, at 1116. Further, the 

sworn statement of John Howard, Jr., MNAA's Assistant Vice President of Properties and 

Business Development claimed that MNAA was "well along in drafting a new concession 

agreement vsdth J&B" when he received the letter from J&B's attorney "stating that MNAA and 

Hudson Group were in violation of 49 C.F.R. 26.1-26.109" and requesting a meeting. Item 7, 

^|22. Mr. Howard then states only that after April 15*, "MNAA unsuccessfiilly attempted to 

schedule a meeting" with J&B and its attorney, id. at |23, and "[o]n June 6, 2008, after no 

meeting had yet been schedules [sic], MNAA informed J&B's legal counsel that MNAA had 

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decided that, upon expiration on August 31, 2008 of J&B's existing agreement with MNAA, the 

airport would, [sic] solicit public bids for Shoe Shine services within the Airport." Id. at ^24. 

Thus, the Howard Affidavit offers no reason or basis other than receipt of the letter and the 

inability to schedule a meeting for MNAA refusing to go forward with the new concession 

agreement for J&B and, instead, completely reversing position and deciding to terminate any 

relationship with J&B and publically bid its concession. 

Based on these sworn statements, MNAA's Answer and Memorandum ("Mem.") also 

admitted that MNAA determined to terminate its concession agreement with J&B only after 

receiving the letter from J&B's attorney alleging violations of DBE regulations. Again,"referring 

to no intervening event and stating only that no meeting with J&B and its attorney had been held, 

the brief acknowledges that MNAA abruptly changed its position after receiving the letter—from 

drafting a new direct concession agreement with J&B to terminating its existing concession 

agreement with J&B and putting J&B's shoeshine concession out to bid. MNAA Mem. at 17. 

The brief attempts to argue that MNAA terminated J&B's concession agreement "after almost a 

year of unsuccessftal attempts to reach agreement with J&B." But it was not until November 

2007—only seven months earlier—^that MNAA acknowledged that J&B's shoeshine stands 

should be removed from the Hudson master concessions agreement and that J&B should have a 

direct concession agreement with MNAA. And it was the five-month delay in which MNAA 

failed to produce that direct concession agreement with J&B—from November 2007 to April 

2008—which led to the complaint letter from J&B's attorney. Further, J&B's complaint letter 

expressly sought a meeting to resolve the issues, and MNAA makes no claim that J&B was at 

fault for the fact that no meeting had been held by early June. In fact, in a June 19, 2008 letter, 

J&B's attorney responded to MNAA's June 6 notice of termination discussing J&B's good 
faith attempts to schedule a meeting and renewing the request for a meeting.^ To the contrary, 

the evidence establishes that, following receipt of the complaint letter, MNAA apparently 

stopped any work on the direct concession agreement it was preparing for J&B and, without any 

other intervening basis or reason, terminated its existing concession agreement with J&B and put 

the shoeshine concession out in an RFP. 

These facts establish the elements of retaliation and the Director's Determination should 

have applied the law and made appropriate findings. In applying Title VII, courts have 

articulated that "[t]o establish a.prima facie case of retaliation.. .a plaintiff must show that: (1) he 

engaged in statutorily protected expression; (2) his employer subjected him to an act that wo'ild 

have been materially adverse to a reasonable employee or job applicant; and (3) there is some 

causal relation between the two events." Gerard v. Board of Regents, 2009 WL 1101524, *7 

(ll"' Cir. April 24, 2009) (citations omitted). As to each of these elements, first, it is well 

established that "[s]tatutorily protected expression includes internal complaints of discrimination 

to superiors, as well as complaints lodged with [agencies] and discrimination-based lawsuits," 

such as the complaint letter of J&B's attorney to MNAA. Id. Second, there can be no question 

that terminating J&B's existing concession agreement and putting the concession out for bid was 

"materially adverse" to J&B. "To establish the causal connection required by the third prong, 

the plaintiff must show that (a) the decision-makers were aware of the protected conduct; and (b) 

the protected activity and the adverse action were not wholly unrelated. Close temporal 

proximity may be sufficient to show that the protected activity and the adverse action were not 

wholly unrelated for a prima facie case. Id, (internal quotations and citations omitted). Here, 

MNAA admits both that it had knowledge of the complaint letter and that in less than two 

^ J&B's complaint letter refers to this letter as an attachment, Item 1 at p. 4, although it is not listed in the DD's 

Index of Administrative Record. See June 19, 2008 letter from A Robinson to R. Watson, attached to Complainant's 

Motion to Supplement the Record. 

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months it informed J&B's attorney of a decision it had already made to terminate any 

relationship vsdth J&B. Clearly, the uncontested record establishes a prima facie case of 

retaliation. 

"If a plaintiff makes a prima facie showing of retaliation, and the employer offers a 

legitimate, non-discriminatory reason for the employment action, the plaintiff must then come 

forward with evidence sufficient to permit a reasonable fact finder to conclude that the reasons 

given by the employer were pretextual." Id. Here, it is not at all clear that MNAA offered a 

"legitimate, non-discriminatory reason" for its about-face. Its witnesses refer only to the fact that 

a meeting had not been scheduled but, as noted, they do not attempt to blame to J&B for that or 

describe any efforts on their part to arrange a meeting. Moreover, given the fact that it was 

MNAA that delayed producing a direct concession agreement for J&B from November 2007 

until it terminated its agreement with J&B in June 2008, it is difficult to imagine why or how a 

delay of only a fraction of that time could represent a legitimate reason for MNAA to reverse its 

positions and terminate J&B's agreement and concession. 

Even assuming for the sake of analysis that MNAA did offer a legitimate, nondiscriminatory reason, here the record contains more than sufficient evidence "to permit a 

reasonable fact finder to conclude that the reasons given by [MNAA] were pretextual." Id. The 

only reason mentioned in the MNAA affidavits for terminating the relationship with J&B other 

that the receipt of the complaint letter is that no meeting had been held by early June. "To show 

pretext, the plaintiff must present sufficient evidence to permit a reasonable fact finder to 

conclude that the reasons given by the employer were not the real reasons for the adverse 

employment decision." Id. at *8. 

Here there is overwhelming evidence of pretext. First, both MNAA affidavits explicitly 

refer to the complaint letter and do so as a watershed event, after which MNAA decides to 

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terminate J&B. Second, the close temporal proximity between receipt of the complaint letter and 

MNAA terminating its relationship with J&B is evidence that the letter was the cause of the 

termination. Id. at *1. Third, there is nothing about the fact that the parties had yet been unable 

to meet that explains why MNAA would change its position on the merits of the issue—from 

agreeing with J&B that it should operate under a direct concession agreement to terminating any 

relationship with J&B. In short, the reason offered does not rationally justify the adverse action. 

Fourth, instead, the evidence from MNAA's witnesses clearly suggests that MNAA had a 

positive and sympathetic view of J&B, agreed with J&B's concerns and position and was acting 

to facilitate and implement a direct concession agreement in appropriate locations of appropriate 

size and facilities, but only up to the moment the complaint letter was received. The affidavits 

say nothing about a continued sympathetic or positive view of J&B after receipt of the complaint 

letter or of any desire or efforts on MNAA's part to facilitate or implement its earlier agreement 

with J&B on a direct and appropriate concession arrangement. Accordingly, the record evidence 

demonstrates that the proffered reason that the parties had yet been unable to meet is not a 

legitimate reason explaining the termination of J&B and is pretext for MNAA's change in 

position as a result of the complaint letter. 

The Director's Determination, therefore, should be reversed as to its conclusions that 

J&B suffered no discrimination, and the Assistant Adminisfrator should find MNAA in violation 

of 49 C.F.R. §§ 23.11 and 26.109 for terminating the existing concession agreement and 

abandoning its efforts to correct the severe problems caused to J&B by the master concession 

agreement and Hudson Group as master concessionaire. 

2. The Director erred in his analysis and conclusion that Respondent's 

administration of its new shoeshine concession leasing policy and 

procedure did not discriminate against Complainant in violation of 49 

C.F.R. §§ 23.9 and 26.7(b). (Issue 2 in the Director's Determination.) 

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The Director's Determination made an effort to apply the disparate impact standard of 

discrimination pursuant to 49 C.F.R. § 26.7(b) in addressing Issue 2. Director's Determination 

("DD") at 21-24. As noted in the DD, the disparate impact theory of discrimination focuses on 

the discriminatory effect of an otherwise neutral policy of the Respondent. DD at 21. In 

applying the disparate impact analysis, the DD correctly identified the offending policy to be 

"Respondent's new Concessions Program Plan...and specifically, its decision to place the shoe 

shine concession under the news, gift and specialty retail master concessionaire as a local 

subcontractor, and not to continue with a direct lease to Respondent." DD at 22. 

The DD erred, first, in concluding that there was no dispara+e impact violation because 

J&B did not show that the policy had a "disproportional and adverse impact on African 

American shoe shine operators." Id. (emphasis added). This was error because J&B, an African 

American owned business, was the only existing concession that MNAA subjected to the 

challenged policy, DD at 23, and was and is the only shoeshine operator at MNAA. DD at 27. 

That is, J&B was the only concession MNAA forced to be a subcontractor to the master 

concessionaire. DD at 3-4, 22. So, in requiring proof of the impact of that poUcy on members of 

any other racial groups, not to mention other shoeshine operators, the DD required J&B to prove 

the impossible. In fact, the record demonstrates that MNAA's policy adversely affected only an 

African American owned concession and thereby had a demonstrably adverse impact on African 

Americans. In contrast, other existing concessions including non-minority-owned concessions 

were permitted to continue to operate free of this policy and under direct concession agreements 

with MNAA. DD at 23 ("there would be separate direct leases for service providers (such as a 

nail salon, massage bar, advertising, fravel and business center, bank and ATMs, video game 

rooms, medical clinic, storage lockers and luggage carts services"). Thus, the record establishes 

that the challenged policy had a disparate impact on African Americans both by virtue of the fact 

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that it applied only to an African American owned business and that it was not applied to nonminority owned businesses. 

The DD erred, second, in concluding that MNAA "met its burden of providing a 

substantial justification for its policies," DD at 24, and failing to acknowledge that 

notwithstanding MNAA'a asserted justification, the policy had an unlawful disparate impact 

because "there was a comparably effective practice that would have made the Airport's 

objectives efficiently and would have less discriminatory effect," notably a "direct lease with the 

Airport" as Complainant suggested. Id. The DD erred in these respects because MNAA itself 

concluded that requiring the shoeshine concession to operate under the master concessionaire 

arrangement was not justified as it did not work for J&B and MNAA has now issued RFPs for 

shoeshine operations as direct concessions with the Airport, rather than as subcontractors under 

the master concession agreement. DD at 7-8, 24. Further, the DD concluded, in connection with 

its determination of Issue 4, that there were a number of serious problems and inconsistencies 

with the policy of including shoeshine operations (and ACDBEs in general) under a master retail 

concessionaire prime contractor. DD at 30-31. 

The record evidence demonstrates that the DD should have found that MNAA's master 

concessionaire policy had an unlawful disparate impact because it did not have a substantial 

justification, but was misguided. Even after finding the policy justified, the record establishes 

that the DD should have found that MNAA could have achieved its ends through the comparably 

effective, less discriminatory policy of a direct concession agreement. Instead, the DD aborted 

its analysis and avoided finding the less discriminatory policy MNAA actually adopted in its 

recent RFPs by retreating to its earlier, flawed conclusion that no disparate impact had been 

shown. DD at 24. On that erroneous basis, the DD found "no violation by the Respondent of 49 

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C.F.R. § 23.9 and § 26.7(b)" and dismissed the disparate impact discrimination claim. Id. Due 

to that error, the DD should be reversed. 

3. The Director erred in his analysis and conclusion that the Complainant 

was not subject to disparate treatment discrimination in violation of 49 

C.F.R. §§23.9 and 26.7(b). (Issue 3 in the Director's Determination.) 

The Director's Determination also attempted to apply the "intentional discrimination or 

disparate treatment theory of discrimination" pursuant to 49 C.F.R. § 26.7(a), in addressing Issue 

3. DD at 26-30. The disparate treatment analysis purported to respond to J&B's allegations that 

MNAA forced it into the subcontract relationship with Hudson where it was "not afforded the 

same rights that were held by other concession operators at the Airport" and "it was ordered to 

pay for a booth that served neither the needs of its customers nor its own operational 

requirements." DDat25. 

The DD erred in its analysis, first, by deciding that J&B failed to establish a prima facie 

case of discrimination because "[ajlthough the Complainant has described how it was treated by 

Hudson and the Respondent, it has provided no data to show how Hudson treated other 

subcontractors not of Complainant's race. The Complainant did not demonstrate that the 

Respondent selected a concessionaire matching the Complainant's qualifications to operate the 

shoe shine concession. On the contrary...the Complainant was the only shoe shine 

concessionaire operating at the Airport." DD at 27. This is error because it is a mechanical 

application of the standard in McDonnel Douglas Corp. v. Green, 411 U.S. 792, 802 (1973), to 

the facts of that selection case rather than the allegations of J&B in this case. J&B did not claim 

that it was discriminated against because another was selected for the shoeshine concession. 

Rather, as the DD's description of the complaint makes clear, J&B complained of discrimination 

in being denied the opportunity and facilities properly to operate its concession. 

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Further, requiring proof of "how Hudson treated other subcontractors" is inapposite and 

unfair as Hudson had no other subcontractors similarly situated to J&B—^that is, forced to be 

located in and a part of another concession. DD at 31. Further, requiring such a showing is 

contradicted by the DD's earlier finding that J&B complained to MNAA that it was treated 

differently than other concession operators but was "denied comparison information of the other 

operators within the Airport and told it was not relevant to Respondent." DD at 25. As in the 

disparate impact analysis discussed above, the DD erred in requiring J&B to establish the 

impossible, here because withholding information regarding other concession operators was one 

aspect of the violation. 

The DD continued this error in its analysis by concluding that J&B failed to establish a 

prima facie case of discrimination because it provided evidence that it was treated differently 

than other concession operators at the Airport. The DD concluded that "most of the examples 

that Complainant has cited to support its claim that it was not afforded the same rights as other 

concession operators at the Airport are misdirected because the group that the Complainant 

appears to be comparing itself to are operators with direct leases with the Airport. Since the 

Complainant is a subtenant to Hudson for the new shoeshine locations, it has not provided valid 

comparison data for the purpose of proving discrimination." DD at 27. This is error, again, 

because it requires a comparison that is too narrow. 

There is no logical reason why being a subtenant to a prime concession would justify 

discriminatory treatment of the subcontractor or treatment different from that other concessions 

at MNAA in their ability to operate profitably. Indeed, the DD recognizes that MNAA is 

responsible to not only refrain from its own discrimination but is "required to ensure nondiscrimination by [its] contractors and subcontractors." DD at 29. And the DD elsewhere 

acknowledges that J&B complained of discrimination by both MNAA and Hudson and of being 

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forced by MNAA into the position of subcontractor to Hudson and there denied the facilities and 

opportunities needed to successfully operate its concession. See, e.g., DD at 25. Thus, 

comparisons to the manner in which other concession operators are the airport were treated are 

entirely appropriate to prove that claim. 

And in another section of the Determination (that addressing Item 4), the DD makes 

findings that establish J&B's claim that it was treated differently and unfairly as a result of the 

subcontractor status. The DD found that J&B was treated differently than other concessionaires 

by both MNAA and Hudson when it was forced into the position of subconfractor in the master 

concession agreement. DD at 30-31. There the DD found that MNAA made J&B, as the 

subcontractor, subject to "the prime contractor's incentive to maximize profit in its space," found 

"that Respondent failed to provide detailed standards, specifications, or square footage 

allotments for the shoe shine concession as it did for its other retail concepts," and failed to 

consider the differences in businesses in setting the rent. On the basis of this differential 

treatment, "the Director f[ound] the Respondent created the conditions for issues such as those 

experienced by the Complainant on the unsuitability of the space and design of the shoeshine 

stand." DDat31. 

Moreover, the record also shows that MNAA was aware that these problems were the 

expected outcome when it made the decision to force the shoeshine operator to become a 

subcontractor to a master concessionaire. Indeed, the MNAA Concessions Master Plan informed 

MNAA that selecting that model generally would have "a negative impact on the operations of 

the master concessionaire's subcontractors" and "DBEs and/or local businesses," in higher rent, 

in being relegated to "less desirable locations" and in being excluded from "the more 

popular...retail merchandise." Item 10, Ex. 2, at pp. IX-1. Indeed, the Plan concluded the 

discussion of the effects of subcontracting on DBEs by stating that "[f]rom a financial and 

15 
operating standpoint, these small businesses in some instances are at a disadvantage from the 

very beginning, and can end up performing poorly or in some cases closing their businesses at 

the airport." Id. at pp. IX-l-IX-2. Thus, the evidence shows that MNAA knew that the 

shoeshine operator was likely to receive the unequal treatment J&B experienced but nevertheless 

decided to force the shoeshine concession to be such a subcontractor. And, if not MNAA, the 

FAA has previously been made aware of conduct by master concessionaires, including Hudson, 

that harm or put ACDBE concessions out of business. See January 9, 2009 letter to M. Freilich, 

FAA's Director of DBE Compliance, Western Region, from M. Rosales, at pp. 3-6, attached as 

Appendix A: 

Thus, the DD erred in concluding that J&B did not make out a prima facie case of 

discrimination against MNAA and Hudson by requiring inappropriate comparisons and ignoring 

its own findings of the differential and unfavorable treatment of J&B. 

The DD also erred in evaluating the disparate freatment discrimination claim in finding 

that MNAA articulated a legitimate non-discriminatory reason for its actions and that the 

evidence does not establish pretext. DD at 27-30. Here, the DD purported to find that MNAA 

was somehow excused from responsibility for forcing J&B from its successful location and 

operations and placing J&B in the untenable position of subcontractor to Hudson because it 

made J&B aware that it was doing so and then "took immediate action" when it learned of 

Hudson's treatment of J&B. However, informing the subject of discrimination that it is coming 

is not a legitimate non-discriminatory explanation for the discrimination, and the record is clear 

that MNAA did anything but act quickly in response to J&B's complaints regarding its treatment 

and failed ever to act to eliminate those conditions it agreed were unfair. 

The record is clear that J&B had to continually escalate its concerns higher in MNAA 

and beyond to get any attention and even when MNAA purportedly agreed that J&B should be 

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removed from the agreement with Hudson and moved to different locations, it never actually 

effectuated those changes. Indeed, despite J&B's continued requests for the direct concession 

agreement MNAA claimed to be preparing and meetings to implement the supposedly agreed 

upon changes, MNAA never made them happen. Instead of correcting the problems in an 

agreement with J&B as it said it would, MNAA left J&B in the untenable circumstances, 

terminated its functional and pre-existing concession agreement with J&B, and issued an RFP for 

others to bid on that concession as a separate direct concession. There is nothing legitimate or 

non-discriminatory about that course of action, and MNAA's claims that it was being responsive 

fail and are hollow where the record shows that it had the authority and ability to resolve the 

unfair conditions J&B faced but did not. 

Moreover, the DD found that "the record indicates that Respondent did not meet its 

contractual obligation" to J&B under the existing lease in forcing it to submit to the master 

concession agreement. DD at 29. The DD also found that "Respondent did not provide any 

evidence to dispute Complainant's allegations of Hudson's freatment of Complainant concerning 

the dissemination of vital information, including the design of the shoeshine stand in location B5, and the fmalization of do fan executed sublease." Yet the DD purported to excuse that 

treatment because MNAA "took immediate action to communicate that it was entirely 

imacceptable for the Complainant to have the impression that they were being treated in a 

'demeaning' manner." DD at 29. But MNAA cannot properly be excused from or found to have 

responded in accordance with its obligations to ensure non-discrimination simply for 

"communicating" about "perceptions," where it failed to correct the behavior and conditions 

about which J&B constantly complained and which MNAA eventually agreed was a problem. 

The record shows that J&B was the only minority-owned concession placed under the 

Hudson master concessionaire agreement. Indeed, examination of MNAA reports to FAA will 

17 
^ 

reveal that a preexisting minority news and gift concession. Gift Connection, was not included in 

and did not become a part of the news and gift concession operated by Hudson. See Item 12 

(printout from Doors database). Although the DD notes that two other ACDBEs, one African 

American owned, participated in Hudson concessions proposal and neither has expressed 

discontent, DD at 21, that finding says nothing about discrimination against J&B. The African 

American owned business referred to, Olympic Supply, is not a concession operating under a 

subcontract with Hudson, but is a purported joint venture partner of Hudson, previously found to 

allow Hudson to operate its business rather than operating independently. Item 8, Gooding 

Affidavit ^^ 20, see Issue B below. Thus, it is not in J&B's position. The other entity referred to, 

CBR, although once an ACDBE, was never minority-owned and has not been an ACDBE for 

some years, as it was sold to majority owners. Item 8, Gooding Affidavit ^ 20. The effect of 

MNAA's actions and its tolerance of Hudson's actions, therefore, has resulted in the ousting of 

the last minority-ovraed concession and only ACDBE concession from the news and gifts 

concessions at MNAA. This too is evidence of the racial impact of both MNAA's and Hudson's 

actions.^ 

In sum, the DD erred in a variety of ways in misapplying the law and reaching unjustified 

conclusions as to J&B's disparate treatment claims to the undisputed facts. Accordingly, the DD 

^ The DD appears to have been more concerned with what it viewed as an inappropriate local preference regarding 

the shoeshine operation to be included in the master concession agreement than the allegations of discrimination or 

the effect of the operation of MNAA's ACDBE program on minority-owned concessions and ACDBEs. See DD at 

24 & n. 82 and 32. These discussion suggest that the Director was, for this reason, pleased by the termination of the 

relationship with J&B and solicitation of new concessions. If so, erroneously applying anti-discrimination law and 

justifying the ouster of a long-time minority-owned ACDBE concessionaire as a supposed remedy for MNAA 

stating a local preference m an RFP would be a curious and unfortimate result of a complaint by an ACDBE. It 

would also be a result contrary to the intent of the ban on local preferences and contrary to the interests in protecting 

against discrimination in the operation of the ACDBE program. 

In addition, the record is not clear that such a subcontract provision was not a race conscious goal of 

MNAA's ACDBE Plan. See Item 12 Race Conscious Goals (e.g., in FY 07 race conscious goal of 14.5% compared 

to race neutral goal of only 1.2%). The DD did not inquire into or make findings regarding the MNAA's goals and 

how they were to be achieved. As well, the Director's understanding of the underlying analysis required for the 

ACDBE Plan, including MNAA disparity studies, is unclear as the DD purports to find that "[t]here is also no 

evidence that Respondent has a past history of discrimination," DD at 29, a proposition at odds with the basis for the 

ACDBE program and the required basis for locally-established goals. 

18 
should be reversed and findings of discrimination entered by the Assistant Administrator or 

remanded for consideration under proper standards by the appropriate Director. 

B. The Director failed to make inquiries and Hndings necessary to conclude that the 

Hudson Group met Respondent's ACDBE goal and the record does not contain 

evidence to support the Director's Determination that the Hudson Group met 

Respondent's ACDBE goal. (Issue 1 in the Director's Determination.) 

On the issue of Complainant's allegations that Hudson, through the purported joint 

venture AMS-Olympic Nashville (which the DD refers to as "the Hudson Group," the DD found 

that "the Hudson Group met the ACDBE contract goal of 15.7 percent required for the award" 

because "the record evidence indicates the ACDBE participation of 17 percent was attributed to 

the joint venture participation of Oljonpic Supply." DD at 19. It based this conclusion on its 

findings that "the record evidence shows that Olympic Supply was certified as an ACDBE by the 

State of Tennessee, and held a 17% ovmership interest in a Joint Venture with Hudson." Id. The 

DD also went on to decide that MNAA "exercised due diligence in evaluating the participation 

proposed" and "carried out its responsibility in evaluating each competitor's proposed ACDBE 

participation, including the Hudson Group, in good faith." It also rested this finding on its 

finding that the Hudson "Joint Venture submitted a proposal documenting 17% ACDBE 

participation exceeding the contract goal of 15.7%." DD at 20. 

The DD erred in finding that the Hudson joint venture met the requirements for ACDBE 

participation because it never inquired whether the joint venture actually satisfied the requisite 

ACDBE regulations regarding joint ventures. In reciting the regulatory background for its 

decision the DD recognized that to be considered as contributing to ACDBE participation, 

neither the participation of an ACDBE firm in a joint venture nor a stated ownership interest by 

an ACDBE firm is sufficient. Instead, the joint venture must be one "in which the ACDBE is 

responsible for a distinct, clearly defined portion of the work of the contract and whose shares in 

19 
the capital contribution, control, management, risks, and profits of the joint venture are 

commensurate with its ownership interest." DD at 12 quoting 49 C.F.R. § 23.3. However, in 

deciding that the joint venture satisfied the goals and that MNAA satisfied its obligations to 

evaluate the proposed participation, the DD never sought to determine whether the Hudson joint 

venture here satisfied the requisite actual participation in the work of the contract or whether 

MNAA did so. 

Curiously, although the DD referred to the FAA's Joint Venture Guidance issued at the 

approximately the time of J&B's complaint and the Guidance was submitted as an exhibit, see 

Item 10, Ex 33, it did not consider or examine any of the provisions of the Joint Venture 

Guidance relevant to the questions raised in the complaint. DD at 19. For example, it did not 

apply the definitions in the Guidance of various elements of a qualifying joint venture, see Item 

10, Ex. 33 at 8-11, or consider what airports are required to do in reviewing joint venture 

participation, see Item 10, Ex. 33 at 11-18, or assess how the Guidance indicates ACDBE 

participation in joint ventures should be counted, see Item 10, Ex. 33 at 18-23, or how ACDBE 

participation in joint ventures should be monitored. See Item 10, Ex. 33 at 23-25. In short, the 

DD completely ignored the Guidance in determining whether MNAA properly met its ACDBE 

goals through the Hudson joint venture, and in determining whether MNAA properly evaluated 

the joint venture participation of Olympic Supply. This plainly was error. 

And in this case, in particular, the DD's deficiency in this regard was anything but 

harmless error. At the very time that MNAA was claiming credit for the joint venture 

participation of Olympic Supply in the Hudson Group and the DD was concluding that MNAA 

properly had met its ACDBE goals through Olympics' participation in the Nashville joint 

venture with Hudson, Olympics' home state Maryland Aviation Adminisfration was auditing 

ACDBE compliance and disqualified Olympic News/Olympic Supply from ACDBE credit 

20 
because it was not operating independently from Hudson in a joint agreement at the Baltimore 

Washington Intemational Airport. See Maryland Aviation Administration ACDBE Audit 

Findings, attached as Appendix B. See also January 9, 2009 letter to M. Freilich, FAA's 

Director of DBE Compliance, Western Region, from M. Rosales, at pp. 2-3, attached as 

Appendix A. 

The Maryland Aviation Administration ACDBE Audit makes clear that the DD 

improperly assumed that the Nashville joint venture including Olympic met ACDBE regulatory 

standards without further inquiry; and suggests, at least, that MNAA performance and 

monitoring of its ACDBE participation through that joint venture was anything but thorough 

Accordingly, the DD's conclusions that MNAA properly achieved its ACDBE participation and 

properly assessed whether the joint venture qualified for ACDBE participation should be 

reversed and an examination of the actual functioning of the joint venture should be ordered 

pursuant to 14 C.F.R. § 16.29(b). 

C. The Director erred in his analysis and conclusion that the Respondent's actions, 

or lack of actions, individually or cumulatively, were contrary to the 

administrative, general and compliance requirements of 49 C.F.R. Parts 23 and 

26 and Federal Grant Assurances Nos. 30 and 37. (Issue 4 in the Director's 

Determination.) 

Finally, the DD purported to consider the totality of the record to determine whether 

MNAA's actions or inactions were contrary to the requirements of 49 C.F.R. Parts 23 and 26 and 

Federal Grant Assurances Nos. 30 and 37. On that question, the DD concluded that MNAA was 

"fully responsive in resolving all issues raised by Complainant, and that contrary to 

Complainant's allegation, it attempted to do everything it believed it could to facilitate 

Complainant's full participation in the ACDBE program." DD at 32. This is not only a curious 

conclusion to reach where the most definitive action Respondent took was to terminate its 

21 
r^ 

existing concession contract with the Complainant and put its longstanding concession out in a 

RFP, but is contradicted by the record evidence. 

As discussed above, the record is clear that MNAA promised many things but failed to 

act to correct the problems it created through the master concession plan it adopted, and the 

conduct of Hudson it purported to condemn but continued to tolerate. Indeed, it is in addressing 

this Issue that the DD catalogues the differential and unfair treatment of J&B as the shoeshine 

concession forced to submit to the interests of a master concessionaire. DD at 30-31. Yet the 

DD then purports to excuse these harms by finding "exttaordinary efforts" on the part of MNAA 

to resolve the disputes that the DD found its master concession plan created between T&B and 

Hudson. 

Other than agreeing to maintain the prior rental rate, those "exttaordinary efforts" for the 

most part boil down to offers that were never kept and agreements that MNAA never fulfilled. 

These empty promises ranged from an offer to pay half the cost of a new stand that was never 

built, to an offer to move J&B to a location to which it was never moved, to the promise of a new 

direct concession agreement v^th MNAA that never was presented (and where such an 

agreement was imnecessary because J&B had an existing direct concession agreement which 

MNAA subsequently terminated). DD at 4-8, 20-21. Indeed, although MNAA attempts to 

suggest that it had agreed with J&B in early November 2007 that it should be removed from the 

master concession agreement and have a separate direct concession agreement with MNAA, it 

produced no such agreement over the following seven months, and three months later, it urged 

J&B to enter into a sublease with Hudson. See DD at 7; Item 10, Ex. 27; see also letters dated 

22 
January 5, February 9, and February 17, 2009 from J&B Enterprises to the FAA attached to 

Complainant's Motion to Supplement the Record.'* 

Thus, there is not substantial evidence to support the DD's conclusion that MNAA did all 

that it could, and the record evidence plainly contradicts such a conclusion. The evidence most 

starkly contradicting the DD's conclusion is that, after receiving the complaint letter from J&B 

that MNAA had not followed through on solving the problems, MNAA did not redouble its 

efforts or bring the matter to the conclusion it had promised, but reversed itself and not only 

refused to produce a new direct concession agreement, but terminated the existing concession 

agreement vsdth J&B and put the concession it had developed and nm for fiftepn years out for a 

RFP. 

After making findings about the ways in which J&B was treated differently and 

disadvantaged by MNAA requiring it to be part of the master concession plan, the DD's closing 

remarks are incomprehensible: 

The Director believes it is important to emphasize that the ACDBE program is designed 

to create a level playing field on which ACDBEs can compete fairly for opportunities for 

concessions. As Respondent states in its Answer, it does not give the Complainant a 

perpetual right to operate the shoeshine concession without competing for such a right. 

DD at 32. To suggest that J&B was somehow claiming a right to perpetual operation of a 

concession because it complained of being forced into a subcontract under a master concession 

plan bears no relation to the facts of this case. It was MNAA that decided to alter the manner in 

which it operated its concessions and MNAA that dictated all of the terms according to which 

J&B had to operate. J&B simply sought, and continues to seek, only the opportunity to operate 

the concession it has since 1992 on terms that are fair and will allow it to succeed. The DD's 

failure to recognize this is further evidence that its conclusions must be reversed. 

* The DD excluded these letters from the record because they were filed pro se and were "not served properly." DD 

at 9 & nn. 57 and 58. 

23 
V. CONCLUSION 

Based on the arguments above and the record evidence the Assistant Administrator 

should reverse the Director's Determination, find that Respondent is in violation of 49 C.F.R. §§ 

23.11 and 26.109, 49 C.F.R. §§ 23.9 and 26.7(a) and (b), and remand the matter to the 

appropriate FAA official(s) for a thorough investigation, pursuant to 14 CFR § 16.29(b)(2) and 

(3), of Respondent's and the Hudson Group's compliance with the FAA's ACDBE Joint Venture 

Guidance, requirements and goals, and Respondent's operation of its ACDBE program 

consistent with the purpose and requirements of 49 C.F.R. Parts 23 and 26, and Federal Grant 

Assurances Nos. 30 and 37. 

Respectfully submitted, 

A/ Thomas J. Henderson 

Thomas J. Henderson 

Henderson Law Firm, PLLC 

Suite 350 

1425 K Street, NW 

Washington, DC 20005 

(202) 587-5687 Telephone 

(202) 587-5601 Facsimile 

E-mail: tjh@hendersonfirm.net 

Counsel for Complainant 

J&B Enterprises, Inc. 

24 
CERTIFICATE OF SERVICE 

I hereby certify that I have this day served the foregoing Appeal on the following persons at the 

following addresses, by first class mail this 8th day of July, 2009: 

Arthur P. Berg 

Kaplan Kirsch & Rockwell LLP 

641 Lexington Ave., Suite 1409 

New York, New York 10022 

(212)328-9515 

Facsimile number: (646) 514-5440 

E-mail address: aberg@kaplankirsch.com 

Thomas R. Devine 

Kaplan Kirsch & Rockwell LLP " 

1001 Connecticut Ave., N.W. 

Suite 800 

Washington, D.C. 20036 

(202)955-5600 

Facsimile number: (202) 955-5616 

E-mail address: tdevine(a),kaplankirsch.com 

Lisa Reynolds 

Kaplan Kirsch & Rockwell LLP 

1675 Broadway, Suite 2300 

Denver, CO 80202 

(303) 825-7000 

Facsimile number: (303) 825-7005 

Robert Watson 

MNAA 

One Terminal Drive, Suite 501 

Nashville, TN 37214 

(615)275-1637 

Facsimile number: (615) 275-4302 

_/s/ Thomas J. Henderson 

Thomas J. Henderson 

Counsel for Complainant 

J&B Enterprises, Inc. 

25