UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, D.C. 

J&B ENTERPRISES, INC., 

d^/a/ RHYTHM SHINE, 

Complainant, 

METROPOLITAN NASHVILLE AIRPORT 

AUTHORITY, 

Respondent. 

Docket No.: 16-08-07 

|EMOWE| 

AUG 32009 

PART 16 DOCKETS 

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COMPLAINANT J&B ENTERPRISES' REPLY 

ON MOTION TO SUPPLEMENT THE RECORD AND OPPOSITION 

TO RES%NDENT'S MOTION TO STRIKE NEW ISSUES ON APPEAL 

• - • •: ' . ) 

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Complainant J&B Enterprises, Inc., d^/a/ Rhythm Shine (hereafter "Complainant" o | 

"J&B"), by its counsel, hereby responds to Respondent Metropolitan Nashville Airport 

Authority's ("MNAA") Opposition To Complainant's Motion To Supplement The Record On 

Appeal And Motion To Strike New Issues On Appeal. For the reasons outlined in J&B's July 

17, 2009 Opposition to MNAA's Motion for Immediate Stay and an Extension of Time to File 

Its Reply, the Assistant Administrator should decide these matters in comiection with deciding 

the appeal of the Director's Determination. The MNAA is not entitled to a separate, advance 

decision of whether the record should be supplemented and what issues will be addressed in the 

appeal. 

For the additional .masons stated below, when these matters are decided, the Assistant 

Administmtor should exe«.ise her discredon to supplement the record, as J&B has requested. In 

addition, upon reviewing the record, the Assistant Administrator should find that J&B's 

complain, squarely alleged retaliatory conduct and that MNAA was in violation of the FAA Part 

26 regulation prohibiting retaliation, and that tite Director's Determmadon discussed flte 

allegaaons, but only in the context of dkparate intpact and treatment claims and, thus. 
erroneously failed to apply the law recognizing retaliation as discrimination to those allegations. 

Further, after reviewing the entire record, including the factual assertions and exhibits in 

MNAA's Answer and Motion to Dismiss, and the Director's Determination, the Assistant 

Administrator should find that J&B's complaint alleged that the Hudson-Olympic Supply joint 

venture did not satisfy ACDBE requirements and that MNAA directly put at issue its obligations 

to determine and monitor those factors regarding the independent operation of Olympic required 

for ACDBE status. The Assistant Administrator also should find and conclude that the 

Director's Determination purported to make findings that the Hudson-Olympic joint venture 

satisfied ACDBE requirements and that MNAA satisfied its obligations to determine and 

monitor the ACDBE status of Olympic, but erred in reaching those conclusions because it failed 

to consider or require facts that established that Olympic operated independently and satisfied all 

the requirements for ACDBE status in the Part 23 regulations and the FAA's Joint Venture 

Guidance and that MNAA had performed and satisfied its obligations to determine and monitor 

those factors, as required for it to credit and coimt Olympic as ACDBE participation under those 

same regulations and FAA Joint Venture Guidance. 

For all these reasons, J&B's motion to supplement should be granted and MNAA's 

motion to strike should be denied. 

REPLY ON MOTION TO SUPPLEMENT 

MNAA opposes supplementation of the record to include the six documents referred to in 

the motion—^three letters actually submitted to the FAA in January and February 2009 by J&B 

pro se in coimection with the appeal, a June 19, 2008 letter fi-om J&B's then-attomey to MNAA 

and two letters dated in January and May of 2009 appended to the appeal regarding the DBE 

status of Olympic in a contractual relationship with Hudson at the BWI airport in Maryland. 

These will be addressed in turn. 
First, the three letters from i&Bpro se to the FAA were J&B's attempt to supplement the 

record with material it thought bore on the issues associated with the complaint. Although 

physically in the record, the DD excluded them from the record because they were improperly 

filed and "not served properly." DD at 9 & rm. 57 and 58. MNAA acknowledges that they were 

submitted in support of J&B's case but complains that they contain "unsubstantiated facts and 

conclusory statements." MNAA Opposition at 4. These documents meet the test for 

supplementation stated in the cases upon which MNAA relies, as J&B sought to and believed 

they were submitting them to the FAA prior to the DD. Further, that the DD excised these pro se 

submissions from the record for lack of service seems unjust in the absence of evidence that J&B 

was informed by the FAA in the course of these communications that the documents needed to 

be served on MNAA to be considered. 

Second, the MNAA's opposition is correct in pointing out that the motion to supplement 

was wrong in stating that the Jime 19, 2008 letter from J&B's then-attomey to MNAA was 

referred to in the July 30, 2008 letter of Complaint. See MNAA Opposition at 4 n. 1. On further 

review of the Complaint, it is not so referenced and that statement in error. Thus, that ground for 

supplementation does not exist. However, the document was sent to and presumably is in the 

possession of MNAA and, although not before the Director, its consideration on appeal will not 

prejudice MNAA. 

Third, the two letters containing the findings of the Maryland Aviation Administration 

that 01)mipic was not operating independently of Hudson such that it did not qualify as an 

ACDBE, Appendix B to the appeal, and the January 9, 2009 letter to M. Freilich, FAA's 

Director of DBE Compliance, Western Region, from M. Rosales, complaining that Hudson and 

Olympic were operating a "sham ACDBE joint venture[] at BWI airport," attached as Appendix 

A to the appeal, both satisfy the test for supplementation stated in the cases upon which MNAA 

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relies, as they were not known or available to J&B prior to the DD and were submitted by 

motion with the appeal as soon as they were known. In addition, although not previously known 

to J&B, these documents should have been known to MNAA as the entity responsible for 

monitoring the ACDBE status of Olympic, and were available to the FAA at the time of and 

should have been considered by the Director in making his determination. Finally, they are 

unquestionably relevant to the issue of the viability of the Hudson-Olympic Supply joint venture 

at issue before the Director and in this appeal, as demonsfrated below. 

OPPOSITION TO MOTION TO STRIKE 

MNAA erroneously argues that two issues raised in J&B's appeal are "new" or are 

"raised for the first time" in the appeed. The two issues claimed to be new are MNAA's 

retaliation against J&B for complaining that it was not in compliance with ACDBE regulations, 

and the viability of the Hudson-Olympic Supply joint venture as satisfying ACDBE regulations 

and the FAA's Joint Venture Guidance. Each is considered in turn below and, for the reasons 

indicated, neither issue is new or raised for the first time on appeal. Thus, MNAA's motion to 

strike should be denied. 

MNAA's Retaliation Against J&B 

The Complaint, on page 1, specifically alleged that MNAA was in violation of 49 CFR 

26.109. That regulation explicitly provides: 

§ 26.109 What are the rules governing information, confidentiality, cooperation, and 

intimidation or retaliation? 

(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 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. If 

you violate this prohibition, you are in noncompliance with this part. 
(emphasis added). 

The Complaint also contains specific allegations of discrimination as retaliatory conduct 

by both MNAA and Hudson. It alleged, at p. 3, that "Hudson has discriminated against J&B 

based on race by resorting to tactics of intimidation to force J&B to collaborate in an artifice that 

would permit Hudson to continue the fraudulent performance of its concession management 

confract with the MNAA." (Emphasis supplied.) It also alleged that J&B was ''^threatened with 

removal from the premises by MNAA and Hudson" when it refused to submit to Hudson's 

discriminatory freatment. Id. 

The Complaint also expressly alleged that MNAA retaliated against J&B after it 

complained that MNAA was not complying with DBE regulations in terminating its existing 

concession agreement and giving it notice that MNAA would issue a new RFP for a shoe shine 

concession. Specifically, the Complaint alleged that, rather than meeting to attempt to resolve 

J&B's concerns that MNAA was not operating in compliance with the ACDBE regulations, as 

requested in J&B's April 16 letter, "instead the MNAA responded by terminating the contract 

with J&B." Complaint, p. 4. Finally, the Complaint specifically requested relief to remedy 

MNAA's retaliation in terminating that concession agreement. The Complaint requested "an 

Agency directive prohibiting MNAA from terminating the concession agreement with J&B until 

after the Agency conducts a compliance review of all aspects of the contract performance of 

Hudson regarding the management of concessions at the [MNAA]." Complaint, p. 5. 

These allegations were discussed in the Director's Determination. See, e.g., DD at 2, 8. 

Unfortimately, it considered them, if at all, only in the context of a potential disparate impact or 

disparate treatment claims. See, e.g., DD at 20, 25. The DD simply failed to acknowledge the 

explicit claims of retaliation stated in the Complaint or to recognize that the Supreme Court 

consistently has held that "[r]etaliation against a person because that person has complained of 

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... discrimination is another form of intentional ... discrimination...." Jackson v. Birmingham 

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

Thus, the failure of the DD to recognize and consider J&B's retaliation claim did not 

result from any lack of allegations that MNAA terminated J&B's existing concession agreement 

in response to the letter suggesting ACDBE regulatory violations. Instead, it resulted from the 

DD's failiu-e to recognize that the plain factual allegations of retaliation constituted a violation of 

Title VI regulations. This is most clearly demonsfrated by the fact that, although the DD 

constantly referred to the U.S. Department Of Justice Title VI Legal Manual for guidance, it 

completely ignored the fact that retaliation is explicitly included, along with disparate treatment 

and disparate impact, in the definition of "What Constitutes Discriminatory Conduct?" in that 

Manual. That Manual, in the same section to which the DD constantly referred, outlines that 

retaliation is discriminatory conduct and the elements of a retaliation claim that match the 

allegations of the Complaint. That section, in part, provides as follows: 

VIII. What Constitutes Discriminatory Conduct? 

C. Retaliation 

A complainant may bring a retaliation claim under Title VI or under a Title VI 

regulation that prohibits retaliation. For example, most agency Title VI regulations 

provide that "[n]o recipient or other person shall intimidate, threaten, coerce, or 

discriminate against any individual for the purpose of interfering with any right or 

privilege secured by [Title VI], or because he has made a complaint, testified, assisted, or 

participated in any maimer in an investigation, proceeding or hearing under this subpart." 

28 C.F.R. § 42.108(e) (Department of Justice Regulation). 

To establish a. prima facie case of retaliation, the investigating agency must fnst 

determine if the complainant can show (1) that he or she engaged in a protected activity, 

(2) that the recipient knew of the complainant's protected activity, (3) that the recipient 

took some sort of adverse action against the complainant, and (4) that there was a causal 

connection between the complammt's protected activity and the recipient's adverse 

^ ' ' ^^^^^^^^^^^^^^^^21^ ^ (last visited 7/26/09). 

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Accordingly, the Complaint's allegation of retaliation is not a "new" issue. Instead, it is 

an issue properly raised as a failure of the DD to reach a "conclusion of law ... made in 

accordance with applicable law, precedent, and public policy," and the DDs failure to make 

findings of fact regarding discrimination that "are supported by a preponderance of reliable, 

probative, and substantial evidence." See 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). 

MNAA's Compliance With ACDBE Program Regulations 

The Complaint alleged that Olympic's participation in the AMS-Olympic Joint Venture 

did not satisfy ACDBE participation requirements. Complaint, p. 2. It also alleged that that 

MNAA "was fully aware of the deficiencies with [sic] respect to the amoimt of ACDBE 

participation, but in concert with Hudson chose to ignore them." Id. The Complaint also alleged 

that J&B was the only ACDBE-eligible entity "operating under the contract awarded to Hudson" 

at the MNAA and that Hudson failed to meet either the percentage of the joint venture 

participation or subconfract participation. Id., at 3. In these respects, the Complaint alleged that 

MNAA was in violation of 49 CFR §§ 26.41 and 26.47(b). Id., at 2. The Director's 

Determination ("DD") pointed out that the proper regulatory provisions for requirements of the 

ACDBE program were 49 CFR §§ 23.59 and 23.57 and that its review would be under those 

sections. DD, at 18 n. 62. Finally, the Complaint specifically requested as relief "a compliance 

review of all aspects of the confract performance of Hudson regarding the management of 

concessions at the [MNAA]." Complaint, p. 5. 

MNAA's Answer and Motion to Dismiss certainly recognized the Complaint as having 

raised the larger issue whether it was operating its ACDBE program in compliance with FAA 

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regulations, rather than some narrowly defined question. This is most easily demonsfrated by the 

heading MNAA chose for that section of its argiunent: "MNAA Has Operated Its ACDBE 

Program in Good Faith and Has Fostered DBE Participation in Its Concessions." MNAA 

Answer, at 30. 

It the argument that followed, MNAA did not simply respond to the specific issues of 

whether Olympic was certified in Tennessee at the time of the RFP and the 51% percent 

ownership interest.' Instead, it went on to assert affirmatively that "the Joint Venture with 

Olympic Supply was a 'viable partnership'... [and] w[as] 'responsive' to the requirements of 

Part 23" at the time of the RFP, and submitted as an Exhibit its analysis of the proposed Joint 

Venture. MNAA Answer, at 32; Item 10 Ex. 34. That Exhibit included summary statements 

purporting to be analyses and conclusions regarding levels of capital contribution, participation 

in daily operations, management functions and conunercially usefijl function in the proposed 

Hudson-Olympic Joint Venture. See Item 10 Ex. 34, at p. 2. Indeed, MNAA's Answer and 

Motion to Dismiss explicitly argued not only that the Hudson-Olympic arrangement was a 

"viable partnership," but that it had "rejected the proposed joint venture agreement of another 

proposal" for apparent failure to satisfy the reqmrements of 49 CFR Part 23. Id. MNAA argued 

that it "carefully considered the DBE participation in all the NG&S proposals," "in keeping with 

its obligations under Part 23." MNAA Answer, at 32. MNAA also there referred to, relied on 

' On those narrow issues, MNAA purported to provide evidence that Olympic was certified in both Maryland and 

Tennessee at the time of the RFP submission, yet the only material submitted relating to Maryland was not a DBE 

certification but an affidavit of only one owner of Olympic seeking DBE status in January 2006, and the form itself 

indicates that an affidavit of only one owner is not sufficient. See Item 8, Ex. 32, at 3-4. Of course, at the time 

MNAA submitted this affidavit in response to the Complamt, the Maryland Aviation Administration was refiising to 

recognize or count Olympic's participation as an ACDBE in a similar agreement with Hudson at the BaltimoreWashington International Airport. See Appeal Appendix B. Thus, MNAA was either so uninformed as to Olympic 

that it was oblivious to the fact that it had lost its home-state status as counting as an ACDBE, or was aware but 

withheld that information from the FAA and J&B in responding to the Complaint here. Moreover, the only 

document MNAA submitted relating to Tennessee is not a DBE certification, but what appears to be only an undated 

printout. Item 8, Ex. 32, at 5. Thus, the only certification of Olympic as a DBE in the record is that issued by 

MNAA itself Item 8, Ex. 32, at 1-2. 

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and put before the Director as an exhibit the FAA's Joint Venture Guidance. MNAA Answer, at 

31; Item 10 Ex. 33. 

Further, in its statement of facts, MNAA also asserted that its ACDBELO "is responsible 

for ensuring that the Airport's concessions program complies with FAA requirements" and thus, 

among other things, '"''monitors participation rates and reports those rates to the FAA." MNAA 

Answer, at 6; Item 8 (Gooding Affidavit) (emphasis added). The Answer then asserts that "[t]he 

concessions covered by a master concession lease with Hudson, which are at issue here, also 

exceeded MNAA's goal of 15.7% ACDBE participation" because "[i]n FY 2008, 17% of gross 

receipts of Hudson's News and Gift retail concessions were attributed to DBEs." MNAA 

Answer, at 6 (emphasis added). 

Thus, the Complaint and MNAA's Answer and Motion to Dismiss squarely put at issue 

the viability of the Hudson-Olympic partnership in the joint venture under the ACDBE 

regulations and the FAA's Joint Venture Guidance. MNAA's answer specifically put at issue 

the propriety of MNAA's assessment of the viability of that partnership at the time of the RFP, 

its ongoing monitoring of the joint venture, its attribution of 17% of the gross receipts of the joint 

venture as ACDBE participation and its reporting of that rate of ACDBE participation to the 

FAA. Having responded to the Complaint with these asserted facts and arguments regarding the 

validity of the Hudson-Olympic partnership and how that joint venture should be coimted for 

ACDBE participation, MNAA caimot now claun that these same issues are "new" or are raised 

for the first time on appeal. 

Finally, the Director's Determination ("DD") considered the issue broadly, as the parties 

had fi-amed the issue. It recognized that "[t]he Complainant alleges that AMS-Olympic 

Nashville, a Joint Venture (the Hudson Group)...failed to meet the 15.7 percent contract goal 

that was set in the solicitation." DD, at 18. And its formulation of Issue 1 for determination 
encompassed both whether the Joint Venture met the contract concession goal and whether 

MNAA complied with Part 23. Id. Moreover, the DD purported to make specific findings that 

that "Respondent counted the Hudson Group's proposed amount of ACDBE participation (17 

percent) correctly ... and that the Hudson Group met the ACDBE contract goal of 15.7 percent" 

based on evidence indicating that "ACDBE participation of 17 percent was attributed to the joint 

venture participation of Olympic Supply." Id, at 19 (emphasis added). 

What the DD failed to do, and the error identified in the appeal, was to make inquiries 

and findings necessary to conclude that the Hudson-Olympic joint venture satisfied ACDBE 

requisites and goals and, thus, to recognize that the record did not contain evidence to support 

MNAA's contention that it had satisfied its responsibilities in scrutinizing the Hudson-Olympic 

joint venture under the FAA's Joint Venture Guidance. These responsibilities included what 

airports are required to do in reviewing joint venture participation, see Item 10, Ex. 33 at 11-18, 

monitoring ACDBE participation in joint ventures, see Item 10, Ex. 33 at 23-25, and coimting 

ACDBE participation in joint ventures. See Item 10, Ex. 33 at 18-23. In short, the DD 

recognized and firamed the issue to be determined as the broad question whether MNAA properly 

evaluated the joint venture participation of Olympic Supply but then completely ignored the 

^ See also, e.g., 49 C.F.R. § 23.55: 

How do recipients count ACDBE participation toward goals for items other than car rentals? 

(a) You count only ACDBE participation that results from a commercially usefiil fimction.... 

(d) When an ACDBE performs as a participant in a joint venture, count a portion of the gross receipts equal 

to the distinct, clearly defined portion of the work of the concession that the ACDBE performs with its own 

forces toward ACDBE goals. 

(i) If a firm has not been certified as an ACDBE in accordance with the standards in this part, do not count 

the firm's participation toward ACDBE goals. 

(j) Do not count the work performed or gross receipts earned by a firm after its eligibility has been removed 

toward ACDBE goals.... 

(emphasis added). 

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requirements and FAA's Joint Venture Guidance in determining that the joint venture properly 

met the ACDBE goals and MNAA properly administered its program. That is the error properly 

identified from the DD and the record and raised on appeal. 

WHEREFORE, Complainant J&B Enterprises, Inc., respectfully requests that its Motion 

to Supplement be granted and that MNAA's Motion to Strike be denied. 

ResifeectfuMy submitted. 

ThonigsJiJlenderson 

Henderson Law Firm, PLLC 

1425 K Sti-eet, NW, Suite 350 

Washington, DC 20005 

(202) 587-5687 Telephone 

(202) 587-5601 Facsimile 

Counsel for Complainant 

J&B Enterprises, Inc. 

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CERTIFICATE OF SERVICE 

I hereby certify that I have this day served the foregoing Opposition to Respondent's Motion 

For Immediate Stay And An Extension Of Time To File Reply on the following persons at the 

following addresses, by first class mail this 27th day of July, 2009: 

Arthur P. Berg 

Kaplan Kirsch & Rockwell LLP 

641 Lexington Ave., Suite 1409 

New York, New York 10022 

Thomas R. Devine 

Kaplan Kirsch & Rockwell LLP 

1001 Connecticut Ave., N.W. 

Suite 800 

Washington, D.C. 20036 

Lisa Reynolds 

Kaplan Kirsch & Rockwell LLP 

1675 Broadway, Suite 2300 

Denver, CO 80202 

Robert Watson 

MNAA 

One Terminal Drive, Suite 501 

Nashville, TN 37214 

Thomas JHSenderson 

Counsel for Complainant 

J&B Enterprises, Inc. 

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