UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, D.C. 

J&B ENTERPRISES, INC. d/b/a. RHYTHM 

SHINE, 

PART 16 DOCKETS 

Complainant, 

METROPOLITAN NASHVILLE AIRPORT 

AUTHORITY, 

FAA Docket No. 16-08-07 

Respondent. 

- r\ 

"^ —I 

RESPONDENT METROPOLITAN NASHVILLE AIRPORT AUTHORITY'S 

REPLY TO COMPLAINANT'S APPEAL OF THE DIRECTOR'S DETERMINATION 

vi:? 

Robert Watson 

Metropolitan Nashville Airport Authority 

One Terminal Drive, Suite 501 

Nashville, TN 37214 

Telephone: (615) 275-1637 

Facsimile: (615)275-4302 

Arthur P. Berg 

KAPLAN KIRSCH & ROCKWELL LLP 

641 Lexington Ave. Suite 1409 

New York, NY 10022 

Telephone: (212) 328-9515 

Facsimile: (646) 514-5440 

Thomas Devine 

KAPLAN KIRSCH & ROCKWELL LLP 

1001 Connecticut Ave NW, Suite 800 

Washington, DC 20036 

Telephone: (202) 955-5600X568 

Facsimile: (202) 955-5616 

Lisa Reynolds 

KAPLAN KIRSCH & ROCKWELL LLP 

1675 Broadway, Suite 2300 

Denver, CO 80202 

Telephone: (303) 825-7000 

Facsimile: (303) 825-7005 
TABLE OF CONTENTS 

TABLE OF AUTHORITIES iii 

I. INTRODUCTION AND SUMMARY OF FACTS 1 

A. SUMMARY OF FACTS 2 

B. STANDARD OF REVIEW 7 

IL RETALIATION 8 

A. THE ASSISTANT ADMINISTRATOR SHOULD 

STRIKE THE RETALIATION ISSUE BECAUSE 

IT WAS NOT RAISED BELOW 9 

B. J&B HAS NOT ESTABLISHED A 

PRIMA FACIE CASE OF RETALIATION 10 

(i) J&B DID NOT ENGAGE IN 

A PROTECTED ACTIVITY 11 

(ii) MNAA DID NOT TAKE A MATERIALLY 

ADVERSE ACTION AGAINST J&B 12 

(iii) MNAA HAD LEGITIMATE, 

NON-DISCRIMINATORY REASONS 

FOR NOT RENEWING J&B'S CONTRACT 

AND ISSUING AN RFP FOR THE 

SHOE SHINE CONCESSION 15 

III. THE AMS-OLYMPIC SUPPLY JOINT VENTURE 17 

A. THE ASSISTANT ADMINISTRATOR SHOULD 

STRIKE THIS ISSUE BECAUSE IT WAS NOT 

RAISED BELOW 17 

B. J&B LACKS STANDING TO CHALLENGE 

THE STRUCTURE OF THE JOINT VENTURE 19 

C. THERE IS NO EVIDENCE IN THE RECORD 

TO SUPPORT THE CLAIM THAT OLYMPIC 

DOES NOT SUFFICIENTLY PARTICIPATE 

IN THE OWNERSHIP AND CONTROL 

OF THE JOINT VENTURE 20 
IV. DISPARATE IMPACT 21 

A. BOTH AFRICAN-AMERICAN AND 

NON-AFRICAN-AMERICAN OWNED BUSINESSES 

WERE MADE SUBTENANTS IN THE CONCESSIONS 

MASTER PLAN 21 

B. J&B DID NOT SUBMIT ANY FACTUAL 

OR STATISTICAL EVIDENCE ESTABLISHING 

DISPARATE IMPACT 23 

C. THE DIRECTOR CORRECTLY FOUND THAT 

MNAA PROVIDED SUBSTANTIAL 

JUSTIFICATION FOR ITS ACTIONS 24 

V. INTENTIONAL DISCRIMINATION 

(DISPARATE TREATMENT) 25 

VI. GENERAL COMPLL\NCE WITH PARTS 23 AND 26 

AND GRANT ASSURANCES 28 

A. THE RECORD SUPPORTS THE DIRECTOR'S 

FINDING THAT MNAA MADE EXTRAORDINARY 

EFFORTS TO ACCOMMODATE J&B'S CONCERNS 29 

VII. CONCLUSION 30 

n 
TABLE OF AUTHORITIES 

Cases 

Adventure Aviation v. City of Las Cruces 

FAA Docket No. 16-01-14, 2003 WL 22696923 at *16 

(Final Decision and Order, Sept. 9, 2003) 11, 23, 24 

Albuquerque Valet Parking Serv. v. City of Albuquerque 

FAA Docket No. 16-01-01, 2002 WL 34429134 at 8 

(Final Agency Decision and Order, Aug. 2, 2002) 18, 26, 30 

Boston Air Charter v. Norwood Airport Comm 'n 

FAA Docket No. 16-07-03, 2008 WL 4186034 at *20 

(Final Decision and Order, Aug. 14, 2008) 10 

Burlington N. & Santa Fe v. White 

548 U.S. 53, 68 (2006) 14 

Consolidated Serv. Engineers & Constructors, Inc. v. City of Palm Spring 

FAA Docket No. 16-03-05, 2004 WL 3198204 at *44 

(Director's Determination, June 10, 2004) 19 

Flamingo Express, Inc. v. City of Cincinnati 

FAA Docket No. 16-06-04, 2007 WL 2399861 at *12 

(Final Decision and Order, Aug. 9, 2007) 20, 23 

Gerard v. Board of Regents 

2009 WL 1101524 (11th Cir. 2009) 13 

J&B Enterprises, Inc. v. Metro. Nashville Airport Auth. 

FAA Docket No. 16-08-07, 2009 WL 1800821 at 5-6 

(Director's Determination May 5, 2009) passim 

Jimsair Aviation Serv., Inc. v. San Diego County Reg'I Airport Auth. 

FAA Docket No. 16-06-08, 2007 WL 2399862 at *7 

(Final Agency Decision, Aug. 9, 2007) 7 

McDonnell Douglas v. Green 

411 U.S 792 (1973) 30,31 

Richard E. Steerev. County of San Diego 

FAA Docket No. 16-99-15, 2004 WL 3198209 at *9, *16, *21, *22 

(Final Decision and Order Dec. 7, 2004) 29 

Roadhouse Aviation, LLC v. City of Tulsa 

FAA Docket No. 16-05-08, 2007 WL 1966160 at *9 

(Final Decision and Order, June 26, 2007) 9, 10, 20 

Roberts v. Daviess County, Indiana Bd. of Aviation Comm 'rs 

FAA Docket No. 16-00-06, 2001 WL 1683273 at *10 

(Final Decision and Order, Dec. 13, 2001) 11 

Rogers v. Metro. Washington Airport Auth. 

FAA Docket No. 13-93-28 at 8 (Order, May 31, 2000) 17 

Peters v. Jenney 

327 F.3d 307, 320 (4"" Cir. 2003) 12 

Sun 's, Inc. v. Port of Seattle 

FAA Docket No. 16-06-13, 2008 WL 5955352 at *21 

ni 
(Director's Determination, Nov. 14, 2008) 35 

Thermco Aviation Inc. v. County of Los Angeles 

FAA Docket No. 16-06-07 (Final Agency Decision, Dec. 17, 2007) 22 

Waller v. Wichita Airport Auth. 

FAA Docket No. 16-98-13, 1999 WL 500028 at *4 

(Director's Determination, Mar. 12, 1999) 10 

Waller v. Wichita Airport Authority, et al. 

FAA Docket No. 16-98-13 at *4 (Director's Determination, March 12,1999) 13 

Other Authorities 

U.S. Department of Justice Title VI Legal Manual, at VIII.A (Jan. 1, 2001) 12, 30 

Regulations 

14 C.F.R. § 16.29(b)(1) 8, 11, 23 

49 C.F.R.§§ 16.23(a), (b)(4) 21 

49C.F.R. §23.1 17 

49 C.F.R. § 23.75 18 

49 C.F.R. § 26.7(a) 29 

49 C.F.R. § 26.7(b) 26 

49 C.F.R. Part 23 2 

49 C.F.R. Part 23 and Part 26 1, 3, 9, 35 

49 CFR 26.109(d) 13 

IV 
I. INTRODUCTION AND SUMMARY OF FACTS 

Respondent Metropolitan Nashville Airport Authority hereby files its Reply to 

Complainant J&B Enterprises, Inc. (J&B)'s Appeal of the Director's Determination. MNAA 

respectfully requests that the Assistant Administrator (1) deny J&B's appeal; (2) hold that the 

Director's findings of fact are supported by a preponderance of reliable evidence, and that his 

conclusions of law were made in accordance with applicable law, precedent, and public policy; 

and (3) affirm the dismissal of J&B's Complaint. 

On July 30, 2008, J&B filed a Part 16 complaint against the Authority alleging violations 

of 49 C.F.R. Part 23 and Part 26. Pursuant to an extension of time granted by FAA, MNAA filed 

an Answer and Motion to Dismiss on November 3, 2008. J&B did not file a Reply. On May 5, 

2009, the Director granted MNAA's Motion to Dismiss J&B's complaint. 

On June 3, 2009, J&B sought an extension of time to file an appeal of the Director's 

Determination. On June 15th, 2009, the FAA extended J&B's time to appeal to July 8, 2009. 

On July 8, 2009, J&B filed its appeal together with a Motion to Supplement the Record. 

On July 16th, 2009, MNAA filed its Opposition to J&B's Motion to Supplement the Record and 

also filed a Motion to Strike New Issues Raised for the First Time on Appeal. MNAA also 

moved for an extension of time to file its Reply to the Appeal until after the Assistant 

Administrator had ruled on the Motion to Supplement the Record and the Motion to Strike New 

Issues Raised on Appeal. 

On July 27, 2009, J&B filed a Reply on Motion to Supplement and Opposition to 

Respondent's Motion to Strike New Issues on Appeal. On July 31, 2009, MNAA filed a Motion 

to Strike J&B's Unauthorized Reply. J&B has not filed any Opposition to MNAA's Motion to 

Stiike J&B's Reply. 
By Orders issued July 24 and August 5, 2009, the FAA stated that J&B's Motion to 

Supplement the Record and MNAA's Motion to Strike New Issues Raised on Appeal would 

likely be decided as part of the Appeal and granted MNAA an extension of time until September 

2, 2009, to file its Reply to the Appeal 

MNAA renews its request that the Assistant Administrator deny J&B's motion to 

supplement the record and grant MNAA's motion to strike the two new issues raised for the first 

time on appeal: J&B's retaliation claim and its claim that the joint venture between Olympic 

Supply and Hudson Group does not meet FAA's allocation of work requirements for joint 

ventures involving ACDBEs.' 

A. Summary of Facts 

This Part 16 Proceeding involves a claim by J&B, an Afiican-American ACDBE 

concessionaire at Nashville International Airport, that the Authority violated Parts 23 and 26 of 

the FAA regulations in the management of its ACDBE program and by discriminating against 

J&B on the basis of race. In his May 5, 2009 Determination, the Director rejected all of J&B's 

claims of discriminatory conduct. Specifically, the Director found that: (1) MNAA complied in 

good faith with 49 C.F.R. Part 23 in awarding the Hudson Group the master concession 

contracts; (2) MNAA's administration of its new shoeshine concession leasing policy and 

procedure did not have a disparate impact on Afiican-American ACDBEs; (3) MNAA did not 

discriminate against J&B on the basis of the race of its owners; and (4) MNAA complied with 

' In its Complaint, J&B did not allege retaliation and with regard to the AMS-Olympic Supply 

Joint Venture it mistakenly alleged that Olympic is not a certified ACDBE in Tennessee and that 

for ACDBE credit, the law requires the ACDBE participant to have a 51% ownership of the Joint 

Venture. Complaint at 2. Nowhere did the Complaint allege, as claimed on Appeal, that the 

allocation of work and responsibilities between the joint venture partners was improper. See 

MNAA's Opposition to Supplement the Record on Appeal and Motion to Strike New Issues 

Raised for the First Time on Appeal. 
the administrative, general and compliance requirements of 49 C.F.R. Parts 23 and 26 and Grant 

Assurances No. 30 and No. 37. 

Although both MNAA's Memorandum of Points and Authorities in Support of Its 

Answer and Motion to Dismiss and the Director's Determination contain thorough discussions of 

the facts, we will briefly sunmiarize the facts here as they pertain to J&B's Appeal. 

In 2004, MNAA adopted a new Concessions Master Plan as part of the Authority's longterm strategic business plan. The new master plan called for two master concessionaires for food 

and beverage services and one for news, gifts, and specialty retail concessions. Director's 

Determination, Index of Administrative Record ("DD Index"), Item 10, Ex. 2 at viii. In addition, 

the master plan contemplated separate, direct leases with certain service providers such as a nail 

salon, massage bar, and video game rooms. Id. at IX-6. It also provided that a shoe shine 

concession would be located inside the news stores and would be a subtenant of the news, gifts, 

and specialty retail master concessionaire. Id. at VII-12. At the time, the shoe shine concession 

was (and is currently) held by Complainant J&B Enterprises, Inc., a certified ACDBE owned by 

James and Betty Druett. J&B has been operating at the airport under a direct lease since 1992. 

^ This summary draws upon material in the Record on Appeal and upon the Affidavit of Rebecca 

Ramsey in Support of Respondent MNAA's Reply to Appeal ("Second Affidavit of R. 

Ramsey"), submitted with MNAA's Motion to Supplement the Record, both of which were filed 

together with this Reply on September 2, 2009. 

^ The original contract with J&B ran fi-om September 1, 1992 for a three-year period, after 

which it became a year-to-year contract, renewable at the Authority's sole discretion "until such 

time [as] the Authority implements its Long Range Commercial Strategic Plan." See DD Index, 

ItemlO, Ex. 8. 
MNAA received bids firom three proposers seeking to act as master concessionaires for 

news, gift, and specialty retail (NG&S), two of which included J&B as the shoe shine subtenant. 

DD Index, Item 6 f 11. Both NG&S contracts were awarded to Hudson Group, which proposed 

to manage the news and gift concessions through a joint venture with a certified AfiicanAmerican ACDBE, Olympic Supply. DD Index, Item 10 at 11. 

Upon implementation of the first phase of the concession master plan, one of J&B's shoe 

shine stands was moved from its location in the B Concourse to a new location inside a Hudson 

CNN News Store. Id. at 12. Although J&B's owners understood when they agreed to be part of 

Hudson's bid that they would be located inside the news store, J&B was unhappy with its new 

location, and had multiple disagreements with Hudson Group about the design and location of 

the shoe shine stand. DD Index, Item 6^6. J&B made its concerns known to MNAA, which 

took action to resolve the disputes with Hudson and to ensure that J&B had a viable location 

from which to operate. DD Index, Item 10 at 12-16; J&B Enterprises, Inc. v. Metro. Nashville 

Airport Auth., FAA Docket No. 16-08-07, 2009 WL 1800821 at 5-6 (Director's Determination 

May 5, 2009) [hereinafter DD]. J&B continued to be unhappy with its situation, however, and 

refiised to sign a sublease with Hudson. DD Index, Item 10 at 12-16. In an attempt to 

accommodate J&B and keep it operating at the airport, MNAA agreed to take the shoe shine 

concession out of the master concessionaire's lease and utilize a direct lease between J&B and 

MNAA.^ DD at 7; DD Index, Item 7 TI17. Months passed, however, without agreement 

between MNAA and J&B on a new, direct lease. 

'* As explained in MNAA's Answer, there were two RFPs for News Gift & Specialty Retail 

master concessionaires. Hudson was awarded both of them. 

^ At this time, only the B concourse shoe shine location had been relocated within a news store. 

C Concourse had not yet begun construction, and J&B was still operating its second shoe shine 

stand from its original C Concourse location. 
In April 2008, MNAA received a letter from J&B's coimsel alleging MNAA was in 

violation of its ACDBE program and seeking a meeting within 30 days to attempt to resolve the 

problems between the parties. DD Index, Item 10, Ex. 29. Over the next month and a half, 

MNAA attempted without success to set up a meeting with J&B and its attorney. DD Index, 

Item 10, Ex. 30; see also Item 7 TI23. Ultimately MNAA abandoned its eight-month-long effort 

to reach agreement with J&B on a new direct lease and decided instead to put the shoe shine 

concession out for bid, setting forth the terms of the direct lease in the RFP. DD Index, Item 10, 

Ex. 30. Upon informing J&B that it would be putting the shoe shine concession out for bid, and 

encouraging the J&B to bid on the RFP, MNAA also informed J&B that it would not be 

renewing the year-to-year lease imder which J&B was then operating. Id. Instead, MNAA 

requested that J&B continue to operate at the airport on a month-to-month basis when its current 

lease expired, and do so until the conclusion of the RFP process. Id. 

Despite outreach and encouragement from MNAA, J&B did not submit a bid on either 

the first or second shoe shine concession RFP. Affidavit of Rebecca Ramsey in Support of 

Respondent MNAA's Reply to Appeal ("Second Affidavit of R. Ramsey"), submitted with 

MNAA's Motion to Supplement the Record ^ 6, 12. The first time the RFP was issued, MNAA 

received two responses, neither of which was deemed responsive to the RFP. Id.'^S. MNAA's 

Properties Manager, Rebecca Ramsey, telephoned all of the concessionaires who attended the 

pre-bid meeting who had not bid, including J&B, to find out why they had not bid. Id. ^ 7. Mr. 

Druett gave Ms. Ramsey a number of reasons for not bidding, and Ms. Ramsey explained that 

the Authority would issue a second RFP for the shoe shine concession, and that J&B would not 

be able to continue operating at the Airport if it did not submit a bid. Id. ^ 8, 9. 
Subsequently, when MNAA issued the second RFP, it received one bid, from a womanowned ACDBE, Goodfellows Shoeshine. Again, J&B did not submit a bid. Id. TI^ 12, 13. The 

Goodfellows bid proposed to pay MNAA a minimum of $12,960 per year, which is 

approximately $2,600 more than the RFP specified as a minimum and approximately $5,400 

more than J&B's minimum guarantee under its year-to-year lease with MNAA. Id. THI16, 18. 

MNAA staff is reconunending to its Board that the Board accept the Goodfellows 

proposal. Id.^\5 . If it is accepted, Goodfellows has projected that the airport will receive in 

excess of $38,000 annually in rent from the new concession agreement, partly as a result of 

Goodfellows' plans to sell men's fravel related merchandise in addition to offering shoeshine 

services. Id. 1119. Should the Board accept Goodfellows' proposal, J&B's month-to-month 

lease will not be renewed and J&B will no longer have the right to operate a shoe shine 

concession at the airport. 

After MNAA had announced that it was going to put the shoe shine concession out for 

bid, J&B filed its Part 16 complaint with the FAA, alleging that MNAA discriminated against it 

on the basis of race in violation of Parts 23 and 26. Upon review of the record and the applicable 

law, the Director fovmd that J&B had failed to make out aprima facie case for intentional 

discrimination/disparate treatment or disparate impact discrimination. DD at 22, 27. In addition, 

to the extent that any of MNAA's decisions had impacted J&B unfavorably, the Director found 

that MNAA had been "fully responsive" in resolving "all issues raised by [J&B]," and that 

MNAA "attempted to do everything it believed it could to facilitate Complainant's full 

participation in the ACDBE program." Id. at 32. 

J&B appealed the Director's Determination, alleging that the Director had misread the 

facts in the record and erroneously failed to decide the issue of retaliation and whether the joint 
venttare between Olympic Supply and Hudson Group complies with FAA's actual participation 

requirements for ACDBEs who are partners in joint ventures; those issues, however, were not 

raised in the Complaint. J&B also sought to supplement the record with materials that were 

available before the Director issued his determination and which provided (a) unsubstantiated 

and untimely argument from J&B that had already been rejected by the Director when first 

proffered, DD at 9 n.58, or (b) irrelevant information about a different business entity operating 

at a different airport. 

B. Standard of Review 

Under the proper standard of review for a Part 16 appeal, the Assistant Administrator 

must determine (a) whether the Director's findings of fact are supported by a preponderance of 

reliable, probative, and substantial evidence, and (b) whether each conclusion of law is made in 

accordance with applicable law, precedent, and public policy." See, e.g., Jimsair Aviation Serv., 

Inc. V. San Diego County Reg'l Airport Auth., FAA Docket No. 16-06-08, 2007 WL 2399862 at 

*7 (Final Agency Decision, Aug. 9, 2007). 

MNAA submitted substantial evidence into the record constituting a preponderance of 

reliable, probative, and substantial evidence supporting the Director's findings of fact. In 

addition, the Director's conclusions of law are in accord with applicable law, precedent and 

public policy. 

In contrast, J&B's Appeal is not supported by applicable law and precedent; in fact, it 

makes remarkably few references to applicable law or precedent. Instead, it accuses the Director 

of (a) not addressing certain issues which were not raised by J&B in its Complaint, and (b) 

failing to conduct an investigation to uncover evidence to support J&B's allegations - but the 

Director is under no obligation to make up for J&B's utter failure to provide facts and statistics 
necessary to prove its allegations. Instead, the Director is entitled to rely on the argument and 

evidence supplied by the parties in reaching his Determination. 14 C.F.R. § 16.29(b)(1). 

II. RETALIATION 

In its appeal, J&B argues that the Director erred because he "failed to recognize" that 

MNAA intentionally discriminated by "retaliating" against J&B for "making a complaint" that 

MNAA had violated ACDBE regulations. J&B Appeal of Director's Determination ("Appeal") 

at 2. This argument fails for a number of separate and independent reasons. First, it is 

improperly raised on appeal; it was not raised below, and there is no Director's Determination on 

the issue for the Assistant Administrator to review. Second, the facts in the record do not 

support SL prima facie case for retaliation. Finally, the alleged retaliatory act - issuing a Request 

for Proposals (RFP) for the shoeshine concession - is consistent with FAA policy regarding the 

administration of airport concession contracts, and would have been a reasonable corrective 

action plan for the Authority to propose, if the Director had found that MNAA had violated 49 

C.F.R. Parts 23 or 26. Indeed, J&B on appeal says it is not "claiming a right to perpetual 

operation of a concession" but seeks "only the opportunity to operate the concession it has since 

1992." (Appeal at 23) The RFPs issued by the Authority gave J&B the "opportunity to operate 

the [shoe shine] concession" at the airport, but although encouraged by MNAA to do so, J&B 

chose not to participate in the RFP process. 

Consequently, the Assistant Administrator should strike the issue of retaliation as 

improperly raised for the first time on appeal or, in the alternative, dismiss the retaliation claim 

on the merits. 
A. The Assistant Administrator Should Strike the Retaliation Issue Because It 

Was Not Raised Below 

J&B improperly raises the allegation of "retaliation" for the first time on appeal, and this, 

in and of itself, is sufficient reason for the Assistant Administrator to strike it from the appeal. It 

is well established that new issues may not be raised for the first time on appeal in a Part 16 

proceeding. Roadhouse Aviation, LLC v. City of Tulsa, FAA Docket No. 16-05-08, 2007 WL 

1966160 at *9 (Final Decision and Order, June 26, 2007); see also MNAA's Opposition to 

Complainant's Motion to Supplement the Record On Appeal and Motion to Strike New Issues 

Raised On Appeal ("MNAA Motion to Stiike") (filed July 16, 2009). Review by the Assistant 

Administrator "is limited to an examination of the Director's Determination and the Record upon 

which such determination was based." Boston Air Charter v. Norwood Airport Comm 'n, FAA 

Docket No. 16-07-03, 2008 WL 4186034 at *20 (Final Decision and Order, Aug. 14, 2008). 

In addition, when alleging retaliation in a Part 16 proceeding, a complainant must state 

specifically in the Complaint how the alleged act of retaliation interfered with a right or privilege 

secured by Part 23, and must state the "specific provisions(s) of the regulation he feels were 

violated." Waller v. Wichita Airport Auth., FAA Docket No. 16-98-13, 1999 WL 500028 at *4 

(Director's Determination, Mar. 12, 1999). Here, J&B's Complaint did not (1) specifically 

mention "retaliation," (2) demonsfrate that MNAA interfered with a right or privilege secured by 

Part 23, or (3) cite specific provisions of the regulations which were allegedly violated. 

Consequently, the allegation of retaliation may not be reviewed on appeal: "[fjailure to raise all 

issues and allegations in the original complaint documents may be cause for such issues and 

allegations to be deemed waived and not reviewable upon appeal." Roadhouse Aviation, LLC v. 

City of Tulsa, FAA Docket No. 16-05-08, 2007 WL 1966160 at *9 (Final Decision and Order, 

June 26, 2007). 
Nor can the Director be faulted for not independently investigating an issue which J&B 

did not raise in its Complaint. Part 16 specifically provides that in rendering the Director's 

Determination "the FAA may rely entirely on the complaint and the responsive pleadings 

provided under this subpart." 14 C.F.R. § 16.29(b)(1); see also Adventure Aviation v. City of Las 

Cruces, FAA Docket No. 16-01-14, 2003 WL 22696923 at *16 (Final Decision and Order, Sept. 

9, 2003). In similar circumstances, the FAA has held that "the Director could not have erred in 

failing to address an issue that was not raised or argued in the initial Complaint or Reply" and 

"the Associate Adminisfrator will not decide this issue on Appeal." Roberts v. Daviess County, 

Indiana Bd. of Aviation Comm'rs, FAA Docket No. 16-00-06, 2001 WL 1683273 at *10 (Final 

Decision and Order, Dec. 13, 2001) (citations omitted). The Director cannot be faulted for not 

"recognizing" an argument that was not presented to him. 

Accordingly, J&B's "retaliation" claim should be rejected by the Assistant Administrator, 

as improperly raised for the first time on appeal. 

B. J&B Has Not Established A Prima Facie Case of Retaliation. 

Even if it is assumed, contrary to law, that J&B properly raised the issue of "retaliation," 

its claim must be dismissed because J&B failed to establish di prima facie case. 

To establish di prima facie case of retaliation, a complainant must show (1) that he 

engaged in a protected activity, (2) that the airport sponsor knew of the complainant's protected 

activity, (3) that the sponsor took some sort of adverse action against the complainant, and (4) 

that there was a causal connection between the complainant's protected activity and the 

recipient's adverse actions. Department of Justice Title VI Legal Manual at 65; see also Peters v. 

Jenney, 321 F.3d 307, 320 (4* Cir. 2003). The record here does not show either that J&B 

engaged in a protected activity (the first required element) or that the sponsor took adverse action 

10 
against it (the third required element). It follows that J&B has also failed to establish the second 

and fourth required elements. That is, having failed to establish that J&B engaged in a "protected 

activity," it cannot show that the Authority knew of the (nonexistent) protected activity. And 

having failed to establish that it engaged in a "protected activity" and that the Authority took 

"adverse action" against it, J&B obviously can not demonstrate there was a causal connection 

between the two non-existent actions. 

(i) J&B did not engage in a protected activity. 

In the context of a retaliation claim under Titie VI, FAA regulations define "protected 

activity" as follows: "[An airport sponsor] must not intimidate, threaten, coerce, or discriminate 

against any individual or firm for the purpose of interfering with 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." 49 CFR 

26.109(d). Thus, the retaliatory act must^//ow a complaint or other participation in an 

investigation, or alternatively must be done for the purpose of interfering with a right or privilege 

secured by Part 23 or Part 26. Waller v. Wichita Airport Authority, et al., FAA Docket No. 16-

98-13 at *4 (Director's Determination, March 12, 1999) (rejecting retaliation claim where 

Complainant failed to show that alleged retaliation interfered with a right or privilege secured by 

Part 23). 

Here, when MNAA notified J&B that it was going to put the shoe shine concession out 

for bid, J&B had not yet "made a complaint, testified, assisted, or participated in any manner in 

an investigation, proceeding or hearing." All J&B had done at that point was notify the CEO of 

MNAA that it was interested in exploring "voluntary options" for addressing what it believed to 

be MNAA and Hudson's violation of the Part 26 regulations. DD Index, Item 10, Exhibit 29 

11 
(April 15 2008 letter from A. Robinson to R. Regalado). Moreover, nowhere in the April 15 

letter did J&B's attorney explicitly complain of racial discrimination. Id.*^ This letter did not 

constitute protected activity for purposes of 49 C.F.R. § 26.109(d). 

In addition, MNAA did not issue an RFP for the shoe shine concession for the purpose of 

interfering with any right or privilege conferted by Part 23 on J&B. The Authority had been 

trying without success for eight months to reach agreement with J&B on a lease under which it 

would operate its shoe shine concessions in conformance with the redesign project, including 

new locations, and the Authority's long-range commercial plans. No "right or privilege secured 

by" Part 23 or Part 26 includes the right to a perpetual concession contract without having to 

compete for it. 

(ii) MNAA did not take a materially adverse action against J&B 

Under the Supreme Court's case law on retaliation, the "adverse action" taken by the 

sponsor must be '''materially adverse," such that in the employment discrimination context, a 

challenged action "well might have dissuaded a reasonable worker from making or supporting a 

charge of discrimination." Burlington N. & Santa Fe v. White, 548 U.S. 53, 68 (2006). 

In April 2008, J&B was operating under a year-to-year contract which came up for 

renewal on August 31 of each year. DD Index, Item 10, Exhibits 8 and 9 (original lease and 

^ In its appeal, J&B cited as support for its retaliation claim an unpublished Eleventh Circuit 

case for legal authority regarding retaliation cases. Appeal at 8-9 (Gerard v. Board of Regents, 

2009 WL 1101524 (11th Cir. 2009). What J&B fails to mention, however, is that the acttial 

holding in Gerard was that the plaintiff, who alleged retaliatory withdrawal of promised work 

because of sending a complaint letter, did not engage in "protected activity" where his complaint 

letter did not specifically assert a claim of "racial discrimination." 2009 WL 1101524 at *8 (the 

letter "laid out a list of grievances, but did not indicate that [plaintiff] was discriminated against 

based on his membership in a protected group"). Similarly, here, the April 15, 2008 letter from 

J&B's counsel does not assert a claim of racial discrimination. 

12 
Dec. 1999 letter extending it on year-to-year basis). When MNAA first extended the J&B lease 

on a year-to-year basis in 1999, J&B was informed in writing that the Airport would continue 

renewing the lease each year "until such time the Authority implements its Long Range 

Commercial Sfrategic Plan." DD Index, Item 10, Ex. 9 (Dec. 23 1999 letter from R. Ramsey to 

J. Druett). 

The Terminal redesign and Concession Master Plan are part of the implementation of the 

Airport's Long Range Commercial Strategic Plan. In 2006 when MNAA brought in a new 

master concessionaire for news, gift, and specialty retail (Hudson Group), to whom J&B had 

agreed to be a subtenant, MNAA anticipated that a new sublease between Hudson and J&B 

would replace the direct lease between MNAA and J&B. Because of the string of issues raised 

by J&B in the summer and fall of 2007, however, a sublease was never signed, and even though 

it was operating one of its operations in the Hudson store and paying rent to Hudson rather than 

to MNAA, J&B continued operating under its old lease, which did not reflect the current 

operations. When it became apparent that no agreement on a sublease could be reached between 

J&B and Hudson, MNAA decided to remove J&B from the Hudson Master Concession 

Agreement and enter into a direct lease with J&B. 

In April 2008, MNAA received a letter from J&B's coimsel alleging MNAA was in 

violation of its ACDBE program and seeking a meeting within 30 days to attempt to resolve the 

problems between the parties. DD Index, Item 10, Ex. 29. Over the next month and a half, 

MNAA attempted without success to set up a meeting with J&B and its attorney. DD Index, 

Item 10, Ex. 30; see also DD Index, Item 7 ^ 23. In early Jvme 2008, having unsuccessfully 

attempted over an eight month period to negotiate a direct lease with J&B, MNAA decided 

instead to allow J&B's contract to expire and put the shoe shine concession out for bid, setting 

13 
forth the terms of the direct lease in the RFP. DD Index, Item 10, Ex. 30. This action was 

consistent with its 1999 statement that it would renew J&B's lease each year until it 

implemented its Long Range Commercial Sfrategic Plan. 

J&B's claim on appeal that "MNAA had a positive and sympathetic view of J&B ... but 

only up to the moment the complaint letter was received" is contrary to the record. (Appeal at 

10). Subsequent to the complaint letter, MNAA stated that it was "hopeful Mr. and Mrs. Druett 

will participate in this [RFP] process and heartily encourage them to do so." DD Index, Item 10, 

Ex. 30. Additionally, MNAA asked J&B to "continue to provide shoeshine service on a monthto-month basis until the conclusion of the competitive process." Id. Finally, when J&B did not 

bid on the first RFP MNAA called Mr. Druett to find out why he didn't bid and to urge him to 

bid on the second RFP. (Second Affidavit of R. Ramsey ^ 9,10). Notwithstanding the airport's 

outreach, J&B did not submit a bid on either the first or the second RFP. 

The Authority's decision not to extend J&B's year-to-year confract and to put the shoe 

shine concession out for bid was not action "materially adverse" to J&B, since J&B had the right 

~ and indeed was encouraged by MNAA — to compete for the shoe shine concession. J&B held 

the shoe shine concession for fifteen years without having to compete for the right to operate at 

the Airport during that time. That J&B was asked to compete, after it had neither signed a 

sublease with the master concessionaire nor negotiated a new direct lease with MNAA, simply 

does not constitute a "materially adverse" act on the part of MNAA. An airport sponsor is under 

no legal obligation to continue to allow a concessionaire to operate on a year-to-year basis, 

particularly when the airport sponsor has developed and implemented a long-term sfrategic plan 

to maximize concession revenues in the context of a terminal redevelopment project. Indeed, 

J&B itself disavows any right to perpetual operation of the shoe shine concession. Appeal at 23. 

14 
As the Director noted, pursuant to Part 23, an ACEDBE program is designed to create a level 

playing field on which ACDBEs can compete fairly for opportunities for concessions. DD at 32. 

The program does not give ACDBEs the privilege of not having to compete at all. See 49 

C.F.R. §23.1. 

Accordingly, MNAA did not take action "materially adverse" to J&B when it acted in 

accordance with its contractual rights to exercise its sole discretion not to renew J&B's year-toyear contract and instead to issue an RFP for the shoe shine concession. 

(iii) MNAA had legitimate, non-discriminatory reasons for not renewing J&B's 

contract and issuing an RFP for the shoe shine concession. 

Even if it is assumed, contrary to law, that J&B could raise the retaliation issue for the 

first time on appeal and that J&B had established a prima facie case of retaliation, J&B's claim 

of retaliation still would fail because MNAA had a legitimate, non-discriminatory reason for 

issuing an RFP for the shoe shine concession. Rogers v. Metro. Washington Airport Auth., FAA 

Docket No. 13-93-28 at 8 (Order, May 31, 2000) (rejecting retahation claim based partly on nondiscriminatory reason for termination of taxicab concession contract). 

As described above, J&B was on notice that its year-to-year contract would be renewed 

only until "such time as the Authority implements its Long Range Commercial Strategic Plan." 

DD Index, Item 10, Ex. 9. Even after MNAA agreed to take J&B out of the master 

concessionaire's lease so that it could have a direct lease with the airport instead of subleasing 

from Hudson, a new concession agreement was needed to determine, among other things, new 

locations. This was the agreement which MNAA unsuccessfully attempted to negotiate with 

J&B in 2007-2008. The airport needed a new lease for its shoeshine concession to reflect new 

locations for operations and to reflect its overall concession program objectives, and it had 

become apparent that it and J&B were not able to re-negotiate J&B's soon-to-expire lease. 

15 
Issuing an RFP for the shoe shine concession can hardly be considered improper action 

by MNAA when both Grant Assurance 24 (requiring airports to maintain a "fee and rental 

structure for the facilities and services at the airport which will make the airport as selfsustaining as possible under the circumstances existing at the particular airport") and 49 C.F.R. § 

23.75 (prohibition on long term confracts) sfrongly encourage airports to competitively bid 

confracts. In light of these requirements, FAA has held that an airport sponsor's use of an RFP 

process to award concession confracts does not violate its ACDBE program, even if it results in a 

non-ACDBE being awarded a contract instead of an ACDBE. Albuquerque Valet Parking Serv. 

V. City of Albuquerque, FAA Docket No. 16-01-01, 2002 WL 34429134 at 8 (Final Agency 

Decision and Order, Aug. 2, 2002) (holding on appeal that awarding a contract to a higher bidder 

than an ACDBE was consistent with Grant Assurance 24 and not a violation of the airport 

sponsor's obligations under Part 23).^ 

Nor does compliance with Part 23 require airport sponsors to refrain from exercising their 

fundamental rights upon learning that a tenant is contemplating filing a Part 16 complaint. For 

example, the FAA found no violation of its anti-retaliation rule when an airport sponsor declared 

its intention to defend itself in a Part 16 proceeding, and informed the potential Complainant at a 

meeting that the sponsor would "pvirsue all rights it may have against [Complainant]" if she filed 

a Part 16 claim. Consolidated Serv. Engineers & Constructors, Inc. v. City of Palm Springs, 

FAA Docket No. 16-03-05, 2004 WL 3198204 at *44 (Director's Determination, June 10, 2004). 

Likewise here, MNAA did not violate Part 23 when it exercised its confractual right not to renew 

^ Here, the award of the shoe shine concession contract to Goodfellows, a woman-owned 

ACDBE, will result in a significant increase in revenues to MNAA over what was paid to 

MNAA by J&B. See Section l.A. above at 4-5. 

16 
J&B's year-to-year lease and exercised its right as an airport sponsor to issue an RFP for the 

shoeshine concession. 

III. THE AMS-OLYMPIC SUPPLY JOINT VENTURE 

Next, although the issue was not raised in the Complaint, J&B argues on appeal that the 

Director erred by failing to investigate whether Olympic Supply was a bona fide participant in 

the ownership and confrol of the AMS-Olympic Joint Venture with Hudson. Appeal at 19-20. 

In conjunction with this, J&B argues that the Director "completely ignored the [FAA's Joint 

Venture] 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." Appeal at 20. J&B claims it "plainly was error" for the 

Director not to consider every facet of joint ventures as discussed by the FAA in its Guidance 

document. Id. 

J&B's claims with regard to Olympic's participation in the joint venture must be rejected 

for three separate and independent reasons. First, this issue was not raised below and cannot be 

raised for the first time on appeal; second, J&B lacks standing to challenge the structiure of the 

joint venture; and third, there is no evidence in the record which supports the claim that the joint 

venture is structured improperly. 

A. The Assistant Administrator Should Strike This Issue Because It Was Not 

Raised Below 

J&B improperly raises the allegation that Olympic does not sufficiently participate in the 

ownership and control of the AMS-Joint Venture for the first time on appeal, and for this reason 

alone the Assistant Adminisfrator should strike it from the appeal. It is well established that new 

issues may not be raised for the first time on appeal in a Part 16 proceeding. Roadhouse 

Aviation, lOQl WL 1966160 at *9; see also MNAA Motion to Strike at 5-8. 

17 
J&B's Complaint alleged only that the AMS-Olympic Joint Venture failed to meet the 

15.7% confract goal because (a) Olympic was not certified as an ACDBE in Tennessee; and (b) 

Olympic did not meet a 51% ownership criterion allegedly required by FAA regulations for 

ACDBE/joint ventures. Complaint at 2. Notably, the Complaint did not allege that the Joint 

Venture failed to meet any applicable standards for the ACDBE's actual participation in the 

ownership and control of the Joint Venture or in the work of the confract. The Director is imder 

no obligation to assume Complainant intended to make any claim other than exactly what it said 

in its Complaint. See, e.g.. Flamingo Express, Inc. v. City of Cincinnati, FAA Docket No. 16-06-

04, 2007 WL 2399861 at *12 (Final Decision and Order, Aug. 9, 2007) (rejecting Complainant's 

argument that the Director failed to recognize a claim not raised in the Complaint, noting that 

"[t]he Director could not have been expected to assume the Complainant really meant" 

something other than what it asserted in its Complaint). Thus, the entirely new allegation relating 

to Olympic's participation in the AMS-Olympic Joint Venture, raised for the first time in J&B's 

Appeal, should not be considered by the Assistant Administrator. 

In addition, confrary to J&B's assertion at page 20 of its Appeal, the Director did not 

ignore the Joint Venture Guidance - he specifically relied on it in rejecting the allegations J&B 

actually made in the Complaint; that Olympic's 17% ownership of the Joint Venture could not be 

counted towards meeting the Authority's 15.7% ACDBE participation goal unless Olympic 

owned at least 51% of the Joint Venture. The Director referred to the Guidance in finding that 

the ACDBE need not own 51% of the joint venture in order for the ACDBE's participation in a 

joint venture to be counted towards an airport's ACDBE goals. DD at 18. 

18 
B. J&B Lacks Standing To Challenge The Structure Of The Joint Venture. 

Even if it is assumed, contrary to law, that J&B could raise for the first time on appeal 

Olympic's actual participation in the joint venture, J&B's claim still must be dismissed because 

J&B lacks standing to raise this issue. 

Part 16 requires that a Complainant show that it was "directly and substantially affected" 

by any noncompliance with FAA requirements. 49 C.F.R. §§ 16.23(a), (b)(4). It also requires 

the Director to dismiss a complaint if the complainant lacks standing to file a complaint under 

16.23. Id. § 16.25(c). 

Pursuant to these requirements, J&B lacks standing to challenge MNAA's alleged 

noncompliance with a grant assurance if the record provides no evidence that J&B was directly 

and substantially affected by the specific alleged noncompliance. Thermco Aviation Inc. v. 

County of Los Angeles, FAA Docket No. 16-06-07 (Final Agency Decision, Dec. 17, 2007). In 

Thermco, the Associate Adminisfrator agreed with the Director's finding that the Complainant 

lacked standing to challenge an airport sponsor's use either of land for non-aeronautical purposes 

because the Complainant was not denied a lease in favor of a non-aeronautical tenant or because 

no aeronautical land was available. Rather, the Complainant actually had a lease during the 

entire time the airport sponsor allegedly was improperly using land for non-aeronautical 

purposes. Id. at 24-25. 

Here, like the Complainant in Thermco, J&B continuously operated its shoe shine 

concession during the entire period it alleges that the AMS-Olympic Joint Venture was 

improperly structured. Moreover, the actions which J&B complains of (being forced into a 

sublease with Hudson's news stores; not having its yezir-to-year lease renewed when it expired in 

2008) are unrelated to whether the AMS-Olympic Joint Venture was properly structured, and 

19 
J&B has made no effort to show otherwise. Whether or not the Joint Venture was properly 

structured has no bearing on whether J&B was able to operate its shoe shine concession, or on 

whether MNAA would implement its Master Concession Plan and require the shoe shine 

g 

concession to be a subtenant of the master concessionaire. 

Accordingly, the newly raised issue of the structure of the joint venture should be 

dismissed since J&B has not shown in either the Complaint or the Appeal that it is "directiy and 

substantially" affected by the status of the AMS-Olympic Joint Venture. 

C. There is No Evidence in the Record to Support the Claim that Olympic Does 

Not Sufficiently Participate in the Ownership and Control of the Joint 

Venture 

Even if it is assumed, contrary to law, that J&B could raise for the first time on appeal 

Olympic's actual participation in the joint venture, and that it has standing to do so, the claim 

must be dismissed because J&B has failed to establish any impropriety in Olympic's level of 

participation in the ownership and confrol of the Joint Venture. 

It is well established that the Complainant in a Part 16 proceeding has the burden of 

pleading and proving its case. Adventure Aviation, 2003 WL 22696923 at *15. In their 

pleadings. Complainants must provide a "concise but complete statement of the facts relied upon 

to substantiate each allegation." Flamingo Express, 2007 WL 2399861 at *12 (emphasis in 

original). Also, as previously noted, 14 C.F.R. § 16.29(b)(1) specifically provides that in 

rendering the Director's Determination "the FAA may rely entirely on the complaint and the 

responsive pleadings provided under this subpart." The Director is under no obligation to 

investigate beyond the pleadings. Adventure Aviation, 2003 WL 22696923 at *15. 

Indeed, it could be argued that J&B as part of the winning Hudson bid, benefited from AMSOlympic's status as an ACDBE Joint Venture. 

20 
Here, J&B's new claim with regard to the structvire of the Joint Venture should be dismissed 

since J&B has not cited to a single piece of evidence in the record to support its new allegation 

that AMS-Olympic violates FAA Guidance regarding joint ventures. All J&B submitted in 

support of this allegation is the improperly proffered letters attached to its Appeal, which are 

entirely irrelevant, as they deal with a different entity operating at a different airport.^ Indeed the 

ACDBE referred to in the proffered letters, Olympic News, was operating as a sublessee of 

Hudson at Baltimore-Washington Intl. Airport, not as a partner in a Joint Venture. Moreover, 

the ultimate conclusion contained in the proffered letters is that Olympic News, the DBE, is now 

in compliance with FAA requirements for DBEs. 

IV. DISPARATE IMPACT 

J&B claims that the Director erred by failing to find that MNAA's master concessionaire 

policy had an unlawfiil disparate impact upon African-Americans. Appeal at 12. J&B's appeal 

of this issue errs for a number of reasons. First, it is based on the incorrect premise that only 

African-American-owned businesses were designated to be sub-tenants of the master 

concessionaire. Second, J&B does not dispute that it did not infroduce any factual or statistical 

evidence of disparate impact on African-Americans. And finally, MNAA had substantial nondiscriminatory reasons for its actions. 

A. Both African-American and Non-African-American Owned Businesses Were 

Made Subtenants in the Concessions Master Plan 

The crux of J&B's claim on appeal regarding disparate impact is the demonstrably false 

allegation that "the record demonstrates that MNAA's policy adversely affected only an AfricanAmerican owned concession." Appeal at 11. J&B argues that the Director correctly identified 

^ See MNAA's Opposition to Complainant's Motion to Supplement the Record on Appeal and 

Motion to Strike New Issues Raised on Appeal (filed July 16, 2009). 

21 
MNAA'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 

subconfractor," as the policy that resulted in alleged discrimination. Appeal at 11 (citing DD at 

22). J&B claims incorrectly, however, that this policy affected only an African-American owned 

business because "other existing concessions including non-minority-owned concessions were 

permitted to continue to operate free of [having to be a sublessee of the master concessionaire] 

and under direct concession agreements." Appeal at 11. The record shows that of the two 

concessionaires required to become subtenants to the master concessionaire under the News, Gift 

& Specialty Retail plan, one was African-American owned (J&B), and the other was not 

(CBR).'° DD Index, Item 10, Ex. 14. In addition, an Afiican-American-owned concession, 

Nashville Nails, was among the concessions that were permitted to keep direct leases with the 

airport." DD Index, Item 10, Ex. 2 at vii. Thus both African-American and non-AfricanAmerican owned businesses were slated to be subtenants to Hudson, and both African-American 

and non-African-American businesses retained direct leases with the Airport.'^ Consequently, 

the record contradicts J&B's argument on appeal. 

Finally, even if J&B had been the sole sub-tenant of Hudson, MNAA, based on J&B's 

dissatisfaction, offered to enter into a direct lease with J&B. It was only after it proved 

impossible to negotiate a direct lease with J&B that MNAA requested bids on a shoe shine 

'° At the time the NG&S RFPs were out for bids, CBR was owned by a non-minority woman; it 

has since been bought by Host, Inc., which is not an ACDBE. See DD Index, Item 12 (DOORS 

Report showing CBR as a non-minority ACDBE). 

'' See DD Index Item 12, DOORS Report, showing Nashville Nails as an Afiican-Americanowned ACDBE. 

19 

The Massage bar, which is non-African-American-owned, also kept its direct lease. See DD 

Index Item 12, DOORS Report and DD Index, Item 10, Ex. 2 at vii. 

22 
concession, which would be operated under a direct lease with the airport. See Appeal at 12 

where (J&B acknowledges that "MNAA has now issued RFPs for shoeshine operations as direct 

concessions with the airport"). Inexplicably J&B failed to bid on the RFPs that provide the type 

of lease it claims to have desired. 

B. J&B Did Not Submit Any Factual or Statistical Evidence Establishing 

Disparate Impact. 

As the Director noted, to make a showing of disparate impact under 49 C.F.R. § 26.7(b), 

a Complainant must show that Respondent's facially neufral policy had a disproportionate and 

adverse impact on similarly situated members of the protected class as a group, as compared to 

members of non-protected groups. DD at 21-22; see also Albuquerque Valet Service, 2002 WL 

34429134 at *11. 

J&B bore the burden to submit factual and statistical evidence showing that MNAA's 

policy adversely affected members of the protected group as compared with a non-protected 

group. J&B, however, submitted no such evidence and, therefore, did not meet its burden to 

make a. prima facie case of disparate impact. The Director correctly found that J&B had not 

provided any evidence of the impact of MNAA's decisions on other members of J&B's protected 

group or on similarly situated members of a non-protected group. DD at 22. "Without facts or 

statistical data. Complainant is unable to establish a causal link between the neufral policy and 

the alleged disparate impact." Id. 

J&B argues that the Director erred by designating a group of one - African American 

shoe shine operators - as the relevant protected group. Appeal at 11. But as demonstrated 

above, even anecdotal comparison to other African-American and non-African-American news, 

gift, and specialty retail concessionaire fails to show a disparate impact on African American 

23 
concessionaires as a group. It was J&B's duty, through statistical evidence, to demonsfrate a 

disparate impact and it failed to do so. 

C. The Director Correctly Found that MNAA Provided Substantial Justification 

For Its Actions 

Even though he held that J&B had failed to establish st. prima facie case of disparate 

impact discrimination, the Director then assumed for the sake of argument that J&B had met its 

burden to establish ZL prima facie case, and that the burden had shifted to MNAA to demonstrate 

a substantial justification for its decision to assign the shoe shine concession as a subtenant of the 

master concessionaire. DD at 22. The Director correctly found that MNAA had presented a 

legitimate justification for its decision to make the shoe shine concession a sub-tenant of 

Hudson. DDat23. 

The record demonsfrates that the decision to have the shoe shine concession operate 

under a sublease was legitimately based on the long-term business objectives of the Airport, 

including increasing customer service. DD at 23; DD Index, Item 10, Ex. 2 at 1-2 -1-6 (Goals 

and Objectives of the Concessions Master Plan); VII-11-12 (Proposed Merchandising Concepts). 

Moreover, in selecting a particular concession plan, the Authority was properly exercising its 

discretion over its own operations and facilities: "The airport has discretion in fashioning its 

concessions program ... FAA does not seek to confrol or direct the operations of airports." DD 

at 23. 

The shoe shine concession was made a sublessee because it was going to be physically 

located in the news and convenience shops as part of a merchandising concept. Therefore the 

news, gifts and specialty operator would necessarily be responsible for subconfracting the 

shoeshine stand. DD Index, Item 10, Ex. 2 at VII-12 (Concessions Master Plan). In other words, 

it was because J&B operated a shoe shine concession, not because its owners are African24 
American, that it was designated to be a sublessee. J&B made no showing in its Complaint, or 

its Appeal, that the Authority's decision was based on race rather than on non-race-based 

business reasons. 

In addition, when it became apparent that J&B and Hudson could not reach agreement on 

a sublease, MNAA took the shoeshine concession out of the master concession agreement, and 

agreed to continue it as a direct lease. The Director found MNAA to be "fully responsive in 

resolving all issues raised by the Complainant," and that it "attempted to do everything it 

believed it could to facilitate Complainant's full participation in the ACDBE program." DD at 

24.'^ 

V. INTENTIONAL DISCRIMINATION (DISPARATE TREATMENT) 

On appeal, J&B argues that the Director misapplied the legal standard for intentional 

discrimination and that he erred in finding that MNAA had not violated 49 C.F.R. § 26.7(a). 

Appeal at 13. J&B claims that it was "denied the opportunity and facilities properly to operate 

its concession," and that this denial was an intentionally discriminatory act, which targeted J&B 

unfairly because it was an African-American-owned business. Id. The Director properly found, 

however, that J&B failed to make the required showing that MNAA's decision to make J&B a 

subtenant of Hudson was motivated by intent to discriminate on the basis of race. J&B has 

provided no basis in its Appeal to show otherwise. 

'•^ In investigating allegations of grant assurance violations, FAA is concemed with the airport 

sponsor's current compliance or lack of compliance. Richard E. Steere v. County of San Diego, 

FAA Docket No. 16-99-15, 2004 WL 3198209 at *9, *16, *21, *22 (Final Decision and Order 

Dec. 7, 2004). Thus, even if an airport sponsor has, in the past, violated a grant assurance, as 

long as it has corrected it by the time FAA makes its determination, the airport will not be found 

in violation. Id. at *9, * 16 (citing Wilson Air Center LLC v. FAA, 311 F.3d 807 (6*^ Cfr. 2004)) 

(action by the airport to cure any violation of federal obligations is grounds for dismissal of the 

case against the airport). 

25 
When a Complainant brings a claim of intentional discrimination, it bears the burden of 

proving that the Respondent's challenged actions were motivated by intent to discriminate. DD 

at 26 (citingElston v. Talladega County Bd. of Ed., 997 F.2d 1394, 1405 n.l 1 (11* Cir. 1993); 

see also DOJ Title VI Manual at 32. Courts and the Department of Justice have developed a 

burden-shifting mechanism by which a Complainant can employ circumstantial evidence to raise 

an inference of intentional discrimination, which the Respondent must then rebut by showing it 

had a legitimate non-discriminatory reason for its action. Albuquerque Valet Service, 2002 WL 

34429134 at 8. Thus, when it lacks direct proof of discriminatory motive, a Complainant may 

follow the burden-shifting analytic framework established in McDonnell Douglas v. Green, 411 

U.S 792 (1973) to satisfy its burden of proof Id. 

J&B does not claim to have offered direct proof that MNAA acted with discriminatory 

motive. Rather, while it alleges the Director erred in applying the McDonnell Douglas 

framework, J&B provides neither direct proof of discriminatory motive nor an alternative legal 

basis for establishing an inference that MNAA intentionally discriminated against J&B. 

Remarkably, J&B simply rejects the requirement that it must demonstrate that other similarlysituated members of a non-protected group were freated differently than it was, claiming that the 

Director was "requiring J&B to establish the impossible."''* 

Instead of submitting the facts and statistics required to make a. prima facie case of 

disparate treatment or intentional discrimination, J&B resorts to vmsupported allegations that, 

even if accurate, would not support a claim of intentional discrimination. For example, J&B 

''* In claiming the Director erred in its application of the McDonnell-Douglas framework, J&B 

erroneously claims that one of the Director's "findings" was that MNAA refused to give J&B 

"comparison information of the other operators within the Airport." Appeal at 14 (citing DD at 

25). The Director never made such a finding. Rather, in the section cited by J&B, the Director 

is merely re-stating the specific assertions made by J&B regarding violations of § 26.7(a). 

26 
alleges that "MNAA's actions .. . ha[ve] resulted in the ousting of the last minority-owned 

concession and only ACDBE concession from the news and gifts concessions at MNAA." 

Appeal at 18. This allegation is demonsfrably false. The Record establishes that the AMSOlympic joint venture, which is part of the news and gifts concession, includes an AfricanAmerican owned ACDBE as a 17% partner. DD Index, Item 8 ^^ 8-9; DD hidex. Item 10, Ex. 

37. 

Even if true, however, the allegation would not support a claim of disparate freatment or 

disparate impact. MNAA is under no obligation to ensure that there is an ACDBE participating 

in news and gift concessions in particular; MNAA's ACDBE participation goal is airport-wide. 

In fact, under 49 C.F.R. § 23.41(d), ACDBE goals "may not be subdivided into group-specific 

goals." Thus whether there is or is not an African-American owned business operating as part of 

the news, gift, and specialty retail concessions is irrelevant to proof of intentional discrimination 

or disparate freatment. 

In addition, as with the disparate impact claim, the Director assumed "in the interest of 

obtaining a complete review" that J&B had established a prima facie case of discrimination 

based on disparate freatment, and found that MNAA had provided legitimate, non-discriminatory 

reasons for its action. DD at 27-28. The Director also found that the Record showed MNAA 

had taken "the customary steps to phase in the new retail concession operator, and to phase out 

the existing operations in a manner that would maintain shoeshine concession service during the 

transition." Id. at 28. Finally, the Director found that MNAA had acted "appropriately and 

timely in responding to Complainant's concerns," and concluded that "Complainant has not 

proven that Respondent had treated the Druetts differently because of their race." DD at 30. 

27 
The Director properly applied legal precedent to analyze J&B's claim of intentional 

discrimination, and properly found J&B had failed to establish a prima facie case of disparate 

freatment/intentional discrimination. DD at 27. In addition, the Director properly found that the 

Record amply demonsfrates that MNAA made a legitimate, nondiscriminatory business decision 

about where it wanted the shoe shine operation to be located under its new master concession 

plan. DD at 28. There is simply no basis in the Record, direct or inferential, to support a claim 

that MNAA's acts were motivated by intent to discriminate against J&B on the basis of race. 

The Director did not err in holding that J&B failed to demonsfrate otherwise. 

Had J&B responded to the recent RFPs for the shoe shine concession, it would have had 

the opportunity to continue operating at the airport. Its failure to do so cannot be blamed on 

racially discriminatory actions by MNAA: that was a decision made by J&B itself. MNAA's 

selection of a new ACDBE to operate the shoe shine concession at the Airport, in lieu of an 

entity (J&B) that did not even submit a bid, is not evidence of discrimination. The Authority has 

legitimate business reasons for selecting Goodfellows Shoeshine to operate the concession, 

which proposed to generate substantially greater revenues than had been generated by J&B. See 

Second Affidavit of R. Ramsey HH 16-18 

VI. GENERAL COMPLIANCE WITH PARTS 23 AND 26 AND GRANT 

ASSURANCES 

Lastly, J&B alleges that the Director erred in concluding that MNAA complied with the 

appropriate regulations and grant assurances because regardless of the efforts MNAA made to 

accommodate J&B's concerns, it only made "empty promises" and "failed to correct the 

behavior and conditions about which J&B constantly complained." Appeal at 17. 

28 
A. The Record Supports the Director's Finding That MNAA Made 

Extraordinary Efforts to Accommodate J&B's Concerns 

The Record clearly demonstrates the repeated and consistent efforts by MNAA to 

address the complaints raised by J&B. See, e.g, DD Index, Item 10 at 12-17. To the extent that 

J&B's central complaint was having to become a subtenant located inside the Hudson news 

stores, that problem was resolved by the Authority's offer to make J&B a direct tenant and, when 

that failed, by the Authority's issuance of RFPs for a direct lease with MNAA on which the 

Authority urged J&B to bid. See Exhibits A and C to Second Affidavit of R. Ramsey at. In 

addition, Hudson, at the request of the Authority, has permitted J&B to operate out of its store 

for almost two years without a sublease. DD Index, Item 10, Ex. 24; DD Index, Item 6 ^ 33. 

The Record also shows that MNAA's attempts to resolve a problem for J&B often met 

with resistance or inconsistencies from J&B's owners, the Druetts. The Druetts refused to meet 

with the Afiican-American owners of Olympic Supply, which was a participant in the Joint 

Venture. DD Index, Item 10 at 14, 15. The Druetts demanded concessions from the Authority 

and then refused to accept them. Id. at 15-16. The Druetts were slow to respond - or totally nonresponsive - to requests for meetings. Id. at 12-16. The Druetts failed to confirm their 

agreement in writing on acceptable locations for the shoe shine stands, when MNAA was 

attempting to negotiate a direct lease with them. DD Index, Item 7 f 22. Most importantly, 

when they were encouraged to bid on an RFP containing the terms they had been seeking, J&B 

did not submit a bid. Second Affidavit of R. Ramsey Yi 9, 12. 

The fact the MNAA put the shoe shine concession out for an RFP is not evidence of any 

racial discrimination on MNAA's part. Quite to the contrary, as the Director accurately noted, 

and J&B conceded. Part 23 does not give J&B a perpetual right to operate the shoe shine 

concession without competing for the right. DD at 32; Appeal at 23. MNAA did all it could to 

29 
provide a level playing field; that J&B chose not to compete on that field does not place MNAA 

in non-compliance with Parts 23 or 26, or its grant assurances. If, as it claims in its Appeal, J&B 

only seeks "the opportunity to operate the concession it has since 1992 on terms that are fair and 

will allow it to succeed," it only had to submit a bid on the most recent RFP. Its failure to do so 

suggests that it seeks something more than merely a level playing field. See Sun's. Inc. v. Port 

of Seattle, FAA Docket No. 16-06-13, 2008 WL 5955352 at *21 (Director's Determination, Nov. 

14, 2008) (emphasizing that the ACDBE program is designed to create a level playing field). 

Ironically, even if the Director had foimd MNAA in violation of its ACDBE program or 

some sections of Part 23, the corrective action plan to be developed by MNAA and submitted to 

FAA would likely be for MNAA to solicit bids for the shoe shine concession - thereby providing 

J&B with a "level playing field" to compete for the concession. Over the spring and early 

summer of 2009, MNAA provided precisely that opportunity. J&B, however, elected not to 

submit a bid on MNAA's RFP for a shoe shine concessionaire and, thereby, took itself off the 

field altogether. 

VII. CONCLUSION 

The Record amply supports the Director's Determination that: (1) J&B failed to establish 

a prima facie case of intentional discrimination or disparate impact, (2) MNAA had legitimate 

business reasons for its actions; and (3) MNAA has operated its ACDBE program in good faith 

and in compliance with 49 C.F.R. Peirts 23 and 26 and the relevant Grant Assurances. 

The two new issues raised for the first time on appeal - retaliation and the level of 

Olympic's actual participation in the joint venture - should be rejected as untimely. The claim 

regarding Olympic should also be dismissed because J&B lacks standing to raise it. If reviewed 

on the merits, both new claims should be rejected as unproven. 

30 
Consequently, MNAA respectfully requests that the Assistant Adminisfrator (1) deny 

J&B's Appeal; (2) affirm the Director's findings of fact and determinations of law; and (c) 

affirm the dismissal of J&B's Complaint. 

Respectfiilly submitted this 2nd day of September, 2009: 

Robert Watson 

Metropolitan Nashville Airport Authority 

One Terminal Drive, Suite 501 

Nashville, TN 37214 

Telephone: (615) 275-1637 

Facsimile: (615)275-4302 

^ l/V>S<' 

lur P. Berg 

KAPLAN KIRSCH & ROCK^^^ELL LLP 

641 Lexington Ave. Suite 1409 

New York, NY 10022 

Telephone: (212) 328-9515 

Facsimile: (646) 514-5440 

Thomas Devine 

KAPLAN KIRSCH & ROCKWELL LLP 

1001 Connecticut Ave NW, Suite 800 

Washington, DC 20036 

Telephone: (202) 955-5600X568 

Facsimile: (202) 955-5616 

Lisa Reynolds 

KAPLAN KIRSCH & ROCKWELL LLP 

1675 Broadway, Suite 2300 

Denver, CO 80202 

Telephone: (303) 825-7000 

Facsimile: (303) 825-7005 

31 
CERTIFICATE OF SERVICE 

I hereby certify that I have this day served the foregoing Reply To 

Complainant's Appeal Of The Director's Determination on the following persons at 

the following addresses by overnight Federal Express: 

FAA Office of the Chief Counsel 

Part 16 Airport Proceedings Docket, AGC-610 Room 925 

Federal Aviation Administration 

800 Independence Avenue, SW 

Washington, DC 20591 

Original and 3 copies VIA Federal Express No. 7969 1227 9643 

Thomas J. Henderson 

Henderson Law Firm, PLLC 

Suite 350 

1425 K Street, NW 

Washington, DC 20005 

One Copy VIA Federal Express No. 7978 9986 6325 

Dated this 2nd day of September, 2009: 

Lisa A. Reynold^ 

Counsel for Respondent MNAA