Memorandum Opinion Granting MomoCon Summary Judgment — MomoCon v. SBA (D.D.C.)

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U.S. District Court for the District of Columbia · No. 1:21-cv-02386-RC · Doc. 32 · 2022-02-10 · Docket on CourtListener

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UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF COLUMBIA 
MOMOCON, LLC, 
: 
: 
Plaintiff, 
: 
2386 (RC)
: 
v. 
: 
: 
SMALL BUSINESS ADMINISTRATION, 
: 
Civil Action No.: 
21-
Re Document Nos.: 
19, 21 
REDACTED 
et al.,  
: 
: 
Defendants. 
: 
MEMORANDUM OPINION 
GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANTS’
MOTION TO DISMISS AND, IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT 
I. INTRODUCTION
Plaintiff MomoCon, LLC, filed this suit against Defendants the U.S. Small Business 
Administration and its Administrator, Isabella Casillas Guzman (collectively, “SBA”), to review 
SBA’s denial of MomoCon’s application for Shuttered Venue Operators Grant (“SVOG”) funds.  
MomoCon moves for summary judgment that SBA’s denial was arbitrary and capricious in 
violation of the Administrative Procedure Act (“APA”) at least because SBA granted SVOG 
applications made by entities similar to MomoCon and did not appropriately consider the 
relevant evidence.  SBA moves for summary judgment that this Court lacks jurisdiction over this 
suit due to sovereign immunity and that its decision was not arbitrary or capricious.  For the 
reasons given below, the Court grants MomoCon’s motion and denies SBA’s motion. 
II. BACKGROUND
The SVOG program was established by Congress to—as the name suggests—provide 
grants to shuttered venue operators.  Shuttered Venue Operators Grant, U.S. Small Bus. Admin., 
https://www.sba.gov/funding-programs/loans/covid-19-relief-options/shuttered-venue-operators-
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grant.  One category of potential grant recipients is “a live venue operator or promoter, theatrical 
producer, or live performing arts organization operator.”  15 U.S.C. § 9009a(a)(1)(A).  To fall 
into that category, an applicant must be “an individual or entity that, as a principal business 
activity, organizes, promotes, produces, manages, or hosts live concerts, comedy shows, 
theatrical productions, or other events by performing artists,” among other requirements.  Id. 
§ 9009a(a)(3)(A)(i)(I). 
“MomoCon is a festival organization that creates an annual 4-day event” to “bring[] 
together fans of Japanese Anime, American Animation, Comics, Video Games, and Tabletop 
Games to celebrate their passion by costuming/cosplay, browsing the huge exhibitors hall, 
meeting celebrity voice talent, designers, and writers behind their favorite shows, games, and 
comics and much . . . more,” including live performances.  Administrative Record (“AR”) at 56, 
1675, ECF No. 27-1;1 Mot. Dismiss & in the Alternative for Summ. J. & Opp’n Pl.’s Mot. 
Summ. J. (“Defs.’ Opp’n & Mem.”) at 6–7, ECF Nos. 21 & 22.  Due to the COVID-19 
pandemic, MomoCon canceled its 2020 and 2021 events.  Pl.’s Mem. P. & A. Supp. Mot. Summ. 
J. (“Pl.’s Mem.”) at 5, ECF No. 19. 
In April 2021, MomoCon applied for a SVOG award.  Id. at 3.  After some back and 
forth—including a denial, an administrative appeal (in which MomoCon changed its category 
from “live performing arts organization to live venue promoter”), a denial of the appeal, filing of 
this case, and voluntary remand to SBA on SBA’s request—the parties arrived at what they both 
treat as the final and operative denial.  Id. at 3–7.  Namely, on October 15, 2021, SBA stated that 
it had conducted “a thorough and comprehensive review of [MomoCon’s] appeal” and decided 
that its “application remains declined.”  AR at 1696.  The denial states that the application was 
 
1 A public, redacted version of the AR was filed at ECF No. 28. 
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denied “at least in part” for failure to “meet the principal business activity standard for the entity 
type under which applied,” citing 15 U.S.C. § 9009a(a)(3)(A).  Id.  According to SBA, 
MomoCon 
principally focuses on presenting exhibits, participatory events, and interactions 
with professionals who work in their favored areas of fandom.  While MomoCon 
does include a few bona fide performing arts events such as musical concerts, it is 
clear from the record that such events are minimal in number compared to other 
events at the convention, and they do not factor significantly in the way the 
convention is presented.  These events represent a secondary or sideline activity 
rather than the principal business of the convention. 
Id. at 1696–97.  MomoCon’s appeal referenced other companies that both received SVOG grants 
and, according to MomoCon, put on “fan conventions” similar to MomoCon’s.  Pl.’s Mem. at 6; 
see also AR at 86–87 (citing companies’ websites and describing similarities to MomoCon). 
III.  LEGAL STANDARD 
“Federal courts are courts of limited jurisdiction,” and “[i]t is to be presumed that a cause 
lies outside this limited jurisdiction.”  Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 
377 (1994).  Thus, to survive a Rule 12(b)(1) motion to dismiss, a plaintiff bears the burden of 
establishing that a court has jurisdiction over his claim.  See Steel Co. v. Citizens for a Better 
Env’t, 523 U.S. 83, 103–04 (1998) (standing and Article III jurisdiction); Moms Against Mercury 
v. FDA, 483 F.3d 824, 828 (D.C. Cir. 2007) (subject-matter jurisdiction).  To determine whether 
jurisdiction exists, a court may “consider the complaint supplemented by undisputed facts 
evidenced in the record, or the complaint supplemented by undisputed facts plus the court’s 
resolution of disputed facts.”  Coal. for Underground Expansion v. Mineta, 333 F.3d 193, 198 
(D.C. Cir. 2003).  “If sovereign immunity has not been waived, a claim is subject to dismissal 
under Rule 12(b)(1) for lack of subject matter jurisdiction.”  Clayton v. District of Columbia, 931 
F. Supp. 2d 192, 200 (D.D.C. 2013). 
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Although Rule 56 requires a court to grant summary judgment “if the movant shows that 
there is no genuine dispute as to any material fact and the movant is entitled to judgment as a 
matter of law,” Fed. R. Civ. P. 56(a), “in APA cases, the summary judgment standard functions 
slightly differently, because the reviewing court generally . . . reviews the agency’s decision as 
an appellate court addressing issues of law,” Pol’y & Rsch., LLC v. U.S. Dep’t of Health & Hum. 
Servs., 313 F. Supp. 3d 62, 74 (D.D.C. 2018) (cleaned up).  Stated another way, “[t]he entire 
case on review is a question of law, and only a question of law.”  Marshall Cnty. Health Care 
Auth. v. Shalala, 988 F.2d 1221, 1226 (D.C. Cir. 1993).  Accordingly, “whether the issue is one 
of reviewability or otherwise, the court must limit its review to the administrative record and the 
facts and reasons contained therein to determine whether the agency’s action was consistent with 
the relevant APA standard of review.”  Pol’y & Rsch., LLC, 313 F. Supp. 3d at 74 (cleaned up).  
However, judicial review under the APA may go beyond the administrative record “when there 
has been a strong showing of bad faith or improper behavior or when the record is so bare that it 
prevents effective judicial review.”  Theodore Roosevelt Conservation P’ship v. Salazar, 616 
F.3d 497, 514 (D.C. Cir. 2010) (internal quotation marks omitted) (quoting Com. Drapery 
Contractors, Inc. v. United States, 133 F.3d 1, 7 (D.C. Cir. 1998)). 
IV.  ANALYSIS 
MomoCon moves for summary judgment that SBA’s denial of MomoCon’s SVOG 
application violated the APA because it was arbitrary and capricious.  Pl.’s Mem. at 8–16.  SBA 
moves for summary judgment that the Court lacks jurisdiction over this case due to sovereign 
immunity and that SBA’s decision was not arbitrary and capricious.  Defs.’ Opp’n & Mem. at 
10–20.  For the reasons given below, the Court holds that (1) SBA has not demonstrated that the 
Court lacks jurisdiction, and (2) SBA’s decision was arbitrary and capricious.  MomoCon’s 
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motion is therefore granted, and this matter is remanded to SBA for supplementation of the 
administrative record and further proceedings in line with this opinion. 
A.  Jurisdiction 
SBA moves to dismiss this case for lack of jurisdiction.  See Defs.’ Opp’n & Mem. at 10–
12.  Specifically, SBA argues that the Court lacks jurisdiction to hear this case because 
MomoCon sues for money damages and the only relevant waiver of the United States’ sovereign 
immunity does not cover actions for “money damages.”  5 U.S.C. § 702.  For the reasons below, 
the Court holds that it has jurisdiction to hear this case. 
“It is axiomatic that the United States may not be sued without its consent and that the 
existence of consent is a prerequisite for jurisdiction.”  United States v. Mitchell, 463 U.S. 206, 
212 (1983).  The APA waives sovereign immunity for certain claims: 
An action in a court of the United States seeking relief other than money damages 
and stating a claim that an agency or an officer or employee thereof acted or 
failed to act in an official capacity or under color of legal authority shall not be 
dismissed nor relief therein be denied on the ground that it is against the United 
States or that the United States is an indispensable party. 
5 U.S.C. § 702 (emphasis added).  “[M]oney damages represent compensatory relief, an award 
given to a plaintiff as a substitute for that which has been lost; specific relief in contrast 
represents an attempt to restore to the plaintiff that to which it was entitled from the beginning.”  
Am.’s Cmty. Bankers v. FDIC, 200 F.3d 822, 829 (D.C. Cir. 2000).  Declaratory and injunctive 
relief do not generally constitute money damages.  Robles v. Kerry, 74 F. Supp. 3d 254, 260 
(D.D.C. 2014).  Specific relief, including “monetary relief sought as a statutory entitlement,” 
also does not constitute money damages.  Id. 
The Supreme Court has provided guidance for determining whether monetary relief 
constitutes money damages.  In Bowen v. Massachusetts, 487 U.S. 879 (1988), the Court 
addressed whether federal district courts had “jurisdiction to review a final order of the Secretary 
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of Health and Human Services refusing to reimburse a State for a category of expenditures under 
its Medicaid program.”  Id. at 882.  The Court concluded that the APA did not preclude judicial 
review because (1) to the extent that the plaintiffs sought declaratory and injunctive relief, such 
requests were not for monetary damages, and (2) “the monetary aspects of the relief that the 
State sought are not ‘money damages.’”  Id. at 893.  On the latter point, the Court explained that 
damages “are intended to provide a victim with monetary compensation for an injury,” while 
equitable actions provide specific relief such as reinstatement of an employee or the recovery of 
specific “monies.”  Id.  Judicial relief that entails payment of money from one party to another is 
not necessarily money damages.  Id.  For example, “relief that orders a town to reimburse parents 
for educational costs that Congress intended the town to pay is not ‘damages.’”  Id. at 893–94. 
The Court quoted heavily from a D.C. Circuit opinion where “Maryland asked the district 
court for a declaratory judgment and for injunctive relief ‘enjoin[ing] defendants from reducing 
funds otherwise due to plaintiffs, or imposing any sanctions on such funds for alleged Title XX 
violations.’”  Id. at 894 (quoting Md. Dep’t of Hum. Res. v. Dep’t of Health & Hum. Servs., 763 
F.2d 1441, 1446 (D.C. Cir. 1985)).  That opinion explained that damages “substitute for a 
suffered loss” while specific remedies are an “attempt to give the plaintiff the very thing to 
which he was entitled.”  Id. (quoting Md. Dep’t of Hum. Res., 763 F.2d at 1446).  In that case, 
“Maryland [was] seeking funds to which a statute allegedly entitles it, rather than money in 
compensation for the losses, whatever they may be, that Maryland will suffer or has suffered by 
virtue of the withholding of those funds.”  Id. (quoting Md. Dep’t of Hum. Res., 763 F.2d at 
1446). 
The Bowen Court concluded that the suit was not seeking “compensation for the damage 
sustained by the failure of the Federal Government to pay as mandated; rather, it is a suit seeking 
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to enforce the statutory mandate itself, which happens to be one for the payment of money.”  Id. 
at 900.  That made the payment a form of specific relief rather than money damages.  Id.; see 
also ITServe All., Inc. v. Cuccinelli, 502 F. Supp. 3d 278, 284 (D.D.C. 2020) (“If what Plaintiffs 
really seek is ‘specific relief’ for money owed, Bowen instructs, the federal district court has 
jurisdiction over the claim under the APA.” (quoting Bowen, 487 U.S. at 910)).  In a later case, 
the Supreme Court explained that Bowen’s analysis did not turn on whether the relief sought was 
equitable.  Equitable relief could constitute money damages if it was “merely a means to the end 
of satisfying a claim for the recovery of money,” such as a lien, as opposed to “giv[ing] the 
plaintiff the very thing to which he was entitled.”  Dep’t of Army v. Blue Fox, Inc., 525 U.S. 255, 
at 262–63 (1999) (quoting Bowen, 487 U.S. at 895). 
None of the remedies requested by MomoCon constitute money damages.  The closest 
requests to money damages made by MomoCon are those for the Court to order SBA to “award” 
and “grant” specific dollar amounts of funds to MomoCon.  Am. Compl. at 10–11, ECF No. 14-
1.  But these would not constitute money damages because they would not serve as substitutes 
for harms.  MomoCon does not “request monetary compensation for a legal wrong suffered; 
rather, it [seeks] the very thing which it has been deprived of which happened to be the payment 
of money.”  Esch v. Yeutter, 876 F.2d 976, 981 (D.C. Cir. 1989); see also McKoy v. Spencer, 271 
F. Supp. 3d 25, 33 (D.D.C. 2017) (explaining that damages such as “back pay, front pay, lost 
benefits and compensatory damages for emotional distress and hardship” are money damages 
because they are not “based on any specific legal entitlement to particular monies” and instead 
“would be substitutes for Plaintiff’s alleged losses”).  As the Supreme Court put it in Bowen, 
MomoCon is not seeking “compensation for the damage sustained by the failure of the Federal 
Government to pay as mandated; rather, it is a suit seeking to enforce the statutory mandate 
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itself, which happens to be one for the payment of money.”  Bowen, 487 U.S. at 900.  In other 
words, MomoCon argues that it is statutorily entitled to SVOG funds (or at least consideration 
for SVOG funds in accordance with the APA), not that it suffered damages in the amount of 
funds it applied for.  See ITServe All., Inc., 502 F. Supp. 3d at 285–86 (explaining that plaintiffs’ 
request for return of illegally collected fees is a request for money damages because it was a 
request to be “made whole” due to actions exceeding congressional authorization, as opposed to 
showing “entitlement to the return of excess fees under a statute”). 
SBA focuses on MomoCon’s request for “monetary relief” or “money recovery,” e.g., 
Defs.’ Opp’n & Mem. at 11–12, but the relevant question is whether MomoCon requests “money 
damages,” 5 U.S.C. § 702 (emphasis added).  As explained above, the monetary relief 
MomoCon seeks is not damages.  It therefore is not problematic that MomoCon requests “a very 
specific amount” of money.  Defs.’ Opp’n & Mem. at 12.  SBA attempts to distinguish this case 
from Bowen’s guidance that “relief that orders a town to reimburse parents for educational costs 
that Congress intended the town to pay is not one for damages.”  Reply Supp. Defs.’ Mot. 
Dismiss & for Summ. J. (“Defs.’ Reply”) at 3, ECF No. 25.  To do so, SBA argues that, instead 
of asking the Court to “order SBA to pay that which Congress intended to pay MomoCon under 
the SVOG statute,” MomoCon instead “asks that the Court involve itself in SBA’s decision-
making and direct SBA to make two very specific awards.”  Id.  This is impermissible, according 
to SBA, because “order[ing] SBA to pay MomoCon very specific monetary awards” is “outside 
the bounds of the waiver of sovereign immunity under the APA.”  Id. at 4.  But SBA does not 
explain why ordering SBA to pay specific amounts here would be considered money damages.  
Similarly, SBA attempts to distinguish Anselmo v. King, 902 F. Supp. 273 (D.D.C. 1995), 
because those plaintiffs sought “funds to which a statute allegedly entitles them,” while here, 
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MomoCon seeks a court order for SBA “to pay an exact amount of monetary relief.”  Defs.’ 
Reply at 4 (quoting Anselmo, 902 F. Supp. at 275).  Again, SBA does not explain why requesting 
specific dollar amounts turns otherwise non-damages relief, such as money to which a party is 
entitled by statute, into money damages.  For these reasons, the Court holds that MomoCon does 
not seek money damages, the APA’s waiver of sovereign immunity applies, and SBA has 
therefore not shown that this Court lacks jurisdiction. 
B.  Arbitrary and Capricious 
The parties dispute whether SBA acted arbitrarily or capriciously in denying MomoCon’s 
application for SVOG funds.  Under the APA, an agency decision should be upheld unless it is 
unsupported by substantial evidence, “arbitrary, capricious, an abuse of discretion, or otherwise 
not in accordance with law.”  5 U.S.C. § 706(2)(A).  The parties’ arguments focus on two issues: 
(1) SBA’s failure to explain why similar companies’ applications were granted, and (2) SBA’s 
determination that MomoCon does not have the right principal business activity.  For the reasons 
given below, the Court holds that SBA acted arbitrarily and capriciously on both issues. 
1.  Similar Companies 
SBA’s failure to explain why it treated MomoCon differently than other potentially 
similar companies renders SBA’s decision arbitrary and capricious.  SBA must therefore 
supplement the administrative record and explain how MomoCon is meaningfully different than 
the other companies or explain why SBA has changed how it decides SVOG applications.2 
 
2 SBA suggests that it might seek repayment of funds granted to MomoCon’s 
competitors.  See Defs.’ Opp’n & Mem. at 17–18 (“While AWA did in fact receive an initial 
SVOG award, SBA is reviewing the company’s application to determine if SVOG funds were 
improperly made. . . .  Indeed, should SBA determine that the award to AWA was inconsistent 
with the statute based on the review of AWA’s application, the appropriate remedy is not to 
award MomoCon relief in this action, but for SBA to seek the repayment of funds by filing a 
complaint against AWA, which is a remedy that is well-within the Agency’s discretion.”).  
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“[A]n agency may not treat like cases differently.”  Eagle Broad. Grp., Ltd. v. FCC, 563 
F.3d 543, 551 (D.C. Cir. 2009); see also Westar Energy, Inc. v. Fed. Energy Regul. Comm’n, 
473 F.3d 1239, 1241 (D.C. Cir. 2007) (“A fundamental norm of administrative procedure 
requires an agency to treat like cases alike.”).  “At the very least, ‘an agency changing its course 
must supply a reasoned analysis indicating that prior policies and standards are being 
deliberately changed, not casually ignored, and if an agency glosses over or swerves from prior 
precedents without discussion it may cross the line from tolerably terse to intolerably mute.’”  
Airmark Corp. v. FAA, 758 F.2d 685, 692 (D.C. Cir. 1985) (quoting Greater Boston Television 
Corp. v. FCC, 444 F.2d 841, 852 (D.C. Cir. 1970)); see also Westar Energy, Inc., 473 F.3d at 
1241 (“If the agency makes an exception in one case, then it must either make an exception in a 
similar case or point to a relevant distinction between the two cases.”); Kreis v. Sec’y of Air 
Force, 406 F.3d 684, 687 (D.C. Cir. 2005) (“It is axiomatic that an agency must treat similar 
cases in a similar manner unless it can provide a legitimate reason for failing to do so.” (cleaned 
up)).  SBA appears to acknowledge that it did not consider the application outcomes of 
MomoCon’s supposed competitors in coming to its decision on MomoCon’s application.  See 
Defs.’ Opp’n & Mem. at 18 (“MomoCon’s competitors’ applications were not considered by the 
SBA when it reevaluated MomoCon’s application; rather, the SBA reviewed MomoCon’s 
application on its own sufficiency to determine whether its primary business activities were live 
performances.”).  And SBA does not argue in its briefs that MomoCon is sufficiently different 
from the competitors such that comparison with the competitors’ application results is irrelevant. 
The remaining question, therefore, is whether the agency was required to consider these 
competitors at all.  “The APA limits judicial review to the administrative record ‘except when 
 
Rescission of funds granted to MomoCon’s competitors would moot this ground for challenging 
the denial of MomoCon’s application, but mere uncertain plans to do so in the future do not. 
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there has been a strong showing of bad faith or improper behavior or when the record is so bare 
that it prevents effective judicial review.’”  Theodore Roosevelt Conservation P’ship, 616 F.3d at 
514 (internal quotation marks omitted) (quoting Com. Drapery Contractors, Inc., 133 F.3d at 7).  
Although the parties disagree about whether there is sufficient evidence in the administrative 
record regarding the supposed competitors’ similarity, MomoCon does not explicitly ask to 
supplement or go beyond the administrative record.  Regardless, the administrative record is 
sufficient to show that the supposed competitors may be similar to MomoCon such that SBA 
must explain the different application outcomes to avoid making an arbitrary and capricious 
decision. 
SBA gives two arguments in favor of its decisionmaking with regard to the supposedly 
similar competitors.  First, SBA claims that the administrative record “contains no supporting 
evidence, other than MomoCon’s own statements, that similarly situated entities received SVOG 
funding and those awardees are similar to MomoCon.”  Defs.’ Reply at 5.  MomoCon’s own 
statements are, according to SBA, “self-serving.”  Id.; accord Defs.’ Opp’n & Mem. at 17 
(referencing MomoCon’s “own self-serving application materials that it performed activities 
similar to that of AWA and that the SBA awarded SVOG funds to AWA”); id. at 18 
(“MomoCon’s own statements regarding its competitor’s business activities and SVOG awards, 
while part of the administrative record, were considered by the SBA in the lens presented—as 
self-serving statements made by MomoCon.”).  Regarding MomoCon’s citations to, and quotes 
drawn from, the competitors’ websites, SBA responds that the information about these 
competitors “was limited to what MomoCon knew, not what these companies’ SVOG 
applications actually reflected.”  Defs.’ Reply at 5.  Second, and similarly, SBA argues that the 
competitors’ application materials are not part of the administrative record.  Defs.’ Opp’n & 
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Mem. at 17; Defs.’ Reply at 6.  Presumably, SBA is arguing that the competitors’ application 
materials would need to be part of the administrative record to sustain an arbitrary-and-
capricious challenge based on failure to treat similar entities similarly.  See Defs.’ Reply at 6 
(“MomCon lacks direct knowledge of the information that their competitors presented to the 
SBA.”). 
These arguments are not convincing.  First, SBA does not discuss at least some parts of 
the administrative record identified by MomoCon as demonstrating the competitors’ similarity.  
MomoCon cites a letter that it claims is from the “City of Atlanta’s Convention and Visitor’s 
Bureau” stating that “[t]here are no material difference between MomoCon and the competitors 
that were approved, including AWA, LLC,” and a letter that it claims is from the “Metro Atlanta 
Chamber” stating, “We feel that there exist no significant differences between MomoCon and 
their competitor that was approved, AWA, LLC.”  Pl.’s Reply Supp. Mot. Summ. J. & Opp’n 
Govt’s Cross-Mot. Dismiss or for Summ. J. (“Pl.’s Reply & Opp’n”) at 5, ECF Nos. 23 & 24; 
AR at 120, 288.  SBA does not address these letters specifically.  Without any response to 
evidence specifically called out in MomoCon’s brief, the Court hesitates to discount its 
evidentiary value, and SBA’s failure to consider it is arbitrary and capricious.  See Mori v. Dep’t 
of the Navy, 917 F. Supp. 2d 60, 64–65 (D.D.C. 2013) (“By not discussing plaintiff’s evidence, 
the Secretary leaves plaintiff and the Court to scratch their heads as to why the Secretary found 
plaintiff’s evidence unpersuasive.  An agency action that lacks explanation is a textbook example 
of arbitrary and capricious action. . . .  If the Secretary is aware of the analogous circumstances 
plaintiff referenced but fails to distinguish them, the Secretary commits an arbitrary and 
capricious act.”). 
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Second, SBA does not explain why it can ignore MomoCon’s statements in its 
application because they are self-serving or not supported by further “documentary evidence.”  
Defs.’ Opp’n & Mem. at 17.  Specifically, the administrative record contains statements by 
MomoCon in one of its application documents identifying five organizations that MomoCon 
contends received SVOG funds (based on “the weekly publication from the SVOG datasets”) 
and put on events that “are functionally identical to MomoCon.”  AR at 86–87.  MomoCon states 
each organization’s website, the amount of funds received, and some details comparing their 
events to MomoCon.  See, e.g., id. at 86 (AWA LLC’s event is “almost identical to MomoCon 
LLC,” is MomoCon’s competitor, and hires many of the same performers); id. (MAGFest, Inc’s 
convention uses “an almost identical floorplan to MomoCon’s” and “almost identical music 
lineups”); id. at 87 (“MomoCon hosts more content and performances” than Nostalgia 
Conventions).  No supporting documentation is cited beyond MomoCon’s statements, but SBA 
does not explain why that is fatal.  These facts could be within MomoCon’s knowledge given 
that the companies operate in the same industry and much of this information is publicly 
available.  See, e.g., Shuttered Venue Operators Grantees, U.S. Small Bus. Admin., 
https://data.sba.gov/dataset/svog (linking to spreadsheet containing “Recipients of the Shuttered 
Venue Operators Grant”).3  For these reasons, the administrative record shows that entities 
potentially similar to MomoCon have been treated dissimilarly, and SBA’s failure to explain 
why they are dissimilar or otherwise treated dissimilarly was arbitrary and capricious.  See 
Republic Airline Inc. v. U.S. Dep’t of Transp., 669 F.3d 296, 300 (D.C. Cir. 2012) (“But where, 
as here, ‘a party makes a significant showing that analogous cases have been decided differently, 
 
3 The parties agree that “[t]he Court may take judicial notice of information posted on 
official public websites of government agencies.”  Defs.’ Opp’n & Mem. at 3 n.2; accord Pl.’s 
Reply & Opp’n at 5; Markowicz v. Johnson, 206 F. Supp. 3d 158, 161 n.2 (D.D.C. 2016). 
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the agency must do more than simply ignore that argument.’” (quoting LeMoyne–Owen Coll. v. 
NLRB, 357 F.3d 55, 61 (D.C. Cir. 2004))). 
SBA’s chief complaint seems to be that the competitors’ applications were not in the 
administrative record, but it is not clear that MomoCon bears the blame for this absence.  SBA 
surely has access to these applications, but the parties do not discuss whether they are publicly 
available.  Cf. Pl.’s Notice of Filing Under Seal, ECF No. 27 (requesting, with SBA’s consent, to 
file MomoCon’s administrative record under seal, suggesting that similar records for competitors 
are not public); Pl.’s Notice of Filing Resp. Ct.’s Dec. 29, 2021 Min. Order, ECF No. 28 (filing 
redacted version of AR).  Given SBA’s insistence that the competitors’ applications would need 
to be compared to MomoCon’s to determine their similarity, that seems to be the logical path 
forward and entirely within SBA’s power.4  See Muwekma Ohlone Tribe v. Kempthorne, 452 F. 
Supp. 2d 105, 118–19, 125 (D.D.C. 2006) (ordering supplementation of administrative record 
after rejecting defendants’ argument that Native American tribe cannot establish APA violation 
based on disparate treatment from other tribes because other tribes’ administrative records were 
not before the court). 
 
4 Additionally, although the current administrative record does show that SBA was 
required to, but did not, explain the disparate outcomes, there also appears to be at least some 
justification for going beyond the administrative record based on evidence of “bad faith or 
improper behavior” or the record being “so bare that it prevents effective judicial review.”  
Theodore Roosevelt Conservation P’ship, 616 F.3d at 514 (internal quotation marks omitted) 
(quoting Com. Drapery Contractors, Inc., 133 F.3d at 7).  For example, MomoCon cites a 
webinar on SVOG appeals in which the SBA stated that citing similar applicants who received 
different results will not be helpful.  See Pl.’s Mem. at 10 n.1.  SBA does not address this 
webinar in its briefs.  Absent further explanation, it would appear to be bad faith to oppose 
MomoCon’s motion due to the administrative record lacking competitor information if SBA 
discouraged MomoCon from including that information.  However, it is not necessary to resolve 
this question because the administrative record here demonstrates that SBA acted arbitrarily and 
capriciously. 
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2.  Principal Business Activity 
SBA also acted arbitrarily and capriciously in its consideration of at least some of 
MomoCon’s evidence.  To survive the “narrow” review of the arbitrary and capricious standard, 
an “agency must examine the relevant data and articulate a satisfactory explanation for its action 
including a ‘rational connection between the facts found and the choice made.’”  Motor Vehicle 
Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quoting 
Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)).  “Normally, an agency rule 
would be arbitrary and capricious if the agency has relied on factors which Congress has not 
intended it to consider, entirely failed to consider an important aspect of the problem, offered an 
explanation for its decision that runs counter to the evidence before the agency, or is so 
implausible that it could not be ascribed to a difference in view or the product of agency 
expertise.”  Id.; see also Borgess Med. Ctr. v. Sebelius, 966 F. Supp. 2d 1, 5 (D.D.C. 2013) 
(“Under the arbitrary and capricious standard, an agency action ‘may be invalidated . . . if [it is] 
not rational and based on consideration of the relevant factors.” (alterations in original) (quoting 
FCC v. Nat’l Citizens Comm. for Broad., 436 U.S. 775, 803 (1978))), aff’d sub nom. Borgess 
Med. Ctr. v. Burwell, 843 F.3d 497 (D.C. Cir. 2016). 
The parties’ chief dispute is whether MomoCon meets the “principal business activity” 
requirement.  The statute imposes the requirement that an applicant, “as a principal business 
activity, organizes, promotes, produces, manages, or hosts live concerts, comedy shows, 
theatrical productions, or other events by performing artists.”  15 U.S.C. § 9009a(a)(3)(A)(i)(I) 
(emphasis added).  SBA found that MomoCon’s primary activity was hosting a “fan-festival that 
focused on presenting exhibits, participatory events, and interactions with comics professionals, 
and to a far lesser extent, live performances.”  Defs.’ Opp’n & Mem. at 14.  Accordingly, SBA 
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16 
denied MomoCon’s application for failure to meet the “principal business activity” requirement.  
See AR at 1696 (SBA’s application “declined” because MomoCon “[d]id not meet the principal 
business activity standard for the entity type under which applied”).  SBA noted that, although 
“MomoCon does include a few bona fide performing arts events such as musical concerts, it is 
clear from the record that such events are minimal in number compared to other events at the 
convention, and they do not factor significantly in the way the convention is presented.  These 
events represent a secondary or sideline activity rather than the principal business of the 
convention.”  Id. at 1696–97.  The denial does not elaborate on SBA’s reasoning, stating only 
that SBA’s finding was based on “the record evidence, including MomoCon’s own promotions 
materials” and “[a]fter a thorough and comprehensive review of [MomoCon’s] appeal.”  Id. at 
1696. 
In its opening brief, SBA discusses at least two aspects of its analysis of MomoCon’s 
evidence that betray SBA’s arbitrary and capricious consideration of that evidence.5  First, SBA 
argues that MomoCon did not provide live performances as a primary business activity because 
the record “show[s] that it engaged in contracts with nine performers for approximately nine 
hours[] over the course of the four-day annual event (approximately 48 hours),” meaning “live 
performances constituted just 15% of the total time MomoCon provided to its attendees.”  Defs.’ 
 
5 It is unclear whether the Court can even rely on these explanations given that they are 
not in the Administrative Record and therefore resemble impermissible post-hoc rationalizations.  
See Delta Air Lines, Inc. v. Exp.-Imp. Bank of U.S., 85 F. Supp. 3d 436, 448 (D.D.C. 2015) 
(“[P]ost-hoc rationalizations ‘have traditionally been found to be an inadequate basis for review’ 
of agency decisions.” (quoting Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 419 
(1971))); see also Dep’t of Homeland Sec. v. Regents of the Univ. of Cal., 140 S. Ct. 1891, 1909 
(2020) (“The basic rule here is clear: An agency must defend its actions based on the reasons it 
gave when it acted.”).  Nonetheless, the Court reviews them because consideration of these 
arguments could only help SBA.  Without them, SBA would have presented almost no 
substantive argument attempting to demonstrate how it arrived at its principal-business-activity 
conclusion in a way that was not arbitrary or capricious. 
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Opp’n & Mem. at 15; accord id. at 20 (“The nine live performance contracts represented a very 
small percentage in time and total costs of MomoCon’s predominant activity—the organization 
and promotion of a fan convention.”).  But, in response, MomoCon points to its statement in the 
record that these nine contracts “represent some of the headlining talent at MomoCon 2019.”  AR 
at 64 (emphasis added); Pl.’s Reply & Opp’n at 8.  MomoCon also points to its “need statement,” 
which says that MomoCon “hosts over 800 hours of live concerts, performances, amateur 
theatrical productions, and other events including cultural programs promoting both Japanese 
and American artistic works.”  AR at 1547; Pl.’s Reply & Opp’n at 7.  SBA’s response is 
essentially that these are “self-serving statements” that SBA need not consider, as opposed to the 
contracts which it did consider.  See Defs.’ Reply at 9–10.  But SBA cites no authority requiring 
applicants to submit contracts justifying every live performance considered for the “principal 
business activity” inquiry.  SBA calculates a percentage of time devoted to live performances 
based on numbers that, according to MomoCon, are necessarily too low.  Regarding MomoCon’s 
argument that it hosts “over 800 hours of live performances,” Pl.’s Reply & Opp’n at 6, SBA 
counters that the 800-hour number used in the administrative record also includes “other events 
including cultural programs promoting both Japanese and American artistic works,” which may 
not be live performances, Defs.’ Reply at 9.  That is true, but it would require a strained reading 
of that sentence: according to SBA, of the 800+ hours, 9 hours are covered by at least three of 
the four categories listed—“live concerts, performances, amateur theatrical productions,” and 
“other events” that constitute live performances—while over 791 hours are devoted to a subset of 
one of the four categories—“other events” that do not constitute live performances.  See id.  
Without further explanation, that is not a reasonable interpretation of MomoCon’s statement.  
See State Farm Mut. Auto. Ins. Co., 463 U.S. at 43 (agency explanation cannot be “so 
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implausible that it could not be ascribed to a difference in view or the product of agency 
expertise”).  Accordingly, without authority supporting SBA’s decision to ignore MomoCon’s 
statements, SBA’s conclusion that there were only nine live performances over nine hours is an 
arbitrary and capricious interpretation of the record because it runs counter to the evidence 
before the agency.  See id. 
Second, SBA argues that “the amount of money MomoCon spent on its fandom activities 
versus the amount MomoCon spent on live performances” shows “that live performers 
constituted only a small portion of its overall activities.”  Defs.’ Opp’n & Mem. at 16.  Namely, 
contracting for the venue cost 
 while the nine contracts for live performances cost 
.  Id.  According to SBA, this shows “that live performers constituted only a small 
portion of [MomoCon’s] overall activities.”  Id.  This is arbitrary and capricious at least for the 
same reason as above because it also relies on the nine contracts as being the entirety of 
MomoCon’s live performances.  Additionally, as MomoCon points out, this comparison ignores 
that the venue cost is part of the cost of putting on live performances, including the performance 
space, security personnel, sound systems, lighting systems, “and a custom built stage,” and 
therefore at least some of this cost should be combined with the performance contracts to 
evaluate MomoCon’s focus on live performances.  Pls.’ Reply & Opp’n at 9.  SBA tries to 
salvage its reasoning by arguing that the venue “contract in totality” should not be combined 
with the performance contracts because only two spaces in the venue were used for live 
performances and MomoCon did not explain which portions of the venue contract were related 
to live performances.  Defs.’ Reply at 11.  SBA may be correct, but SBA’s opening brief 
indicates that it reasoned that no part at all of this cost went toward supporting live 
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19 
performances, which is not accurate.  This was therefore an arbitrary and capricious 
interpretation of the record.  See State Farm Mut. Auto. Ins. Co., 463 U.S. at 43. 
* 
 
* 
 
* 
MomoCon raises other issues with the application process—such as SBA’s denial stating 
that MomoCon did not qualify as a “live performing arts organization operator” despite 
MomoCon changing its category to “live venue promoter” during appeal, as apparently permitted 
by SBA, Pl.’s Mem. at 11; Pl.’s Reply & Opp’n at 6 n.4—but the above is enough to warrant 
remand to SBA.  Similarly, it is unnecessary to evaluate MomoCon’s separate (and minimal) 
arguments that SBA’s denial was contrary to law or not supported by substantial evidence.  See 
Pl.’s Mem. at 16. 
The Court is cognizant that it must not “substitute its judgment for that of the agency,” 
State Farm Mut. Auto. Ins. Co., 463 U.S. at 43, “especially with respect to matters relating to an 
agency’s areas of technical expertise,” Friends of Animals v. Ross, 396 F. Supp. 3d 1, 7 (D.D.C. 
2019) (quoting Fox v. Clinton, 684 F.3d 67, 75 (D.C. Cir. 2012)); see also Defs.’ Opp’n & Mem. 
at 14–15 (“SBA is drawing from its years of experience in ascertaining a firm’s primary industry 
under the SBA size regulations (13 C.F.R. § 121.107) to define ‘principal business activity.’”).  
And SBA may ultimately come to the same conclusion on remand.  But based on the current 
record and the parties’ arguments, SBA acted arbitrarily and capriciously in denying 
MomoCon’s application. 
“When an agency provides a statement of reasons insufficient to permit a court to discern 
its rationale, or states no reasons at all, the usual remedy is a ‘remand to the agency for additional 
investigation and explanation.’”  Tourus Recs., Inc. v. Drug Enf’t Admin., 259 F.3d 731, 737 
(D.C. Cir. 2001) (quoting Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985)); see also 
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20 
N. Air Cargo v. U.S. Postal Serv., 674 F.3d 852, 861 (D.C. Cir. 2012) (“When a district court 
reverses agency action and determines that the agency acted unlawfully, ordinarily the 
appropriate course is simply to identify a legal error and then remand to the agency, because the 
role of the district court in such situations is to act as an appellate tribunal.”).  Here, remand for 
additional investigation—including supplementation of the record as necessary—and explanation 
is warranted. 
V.  CONCLUSION 
For the foregoing reasons, Plaintiff’s motion for summary judgment (ECF No. 19) is 
GRANTED and Defendants’ motion to dismiss and, in the alternative, for summary judgment 
(ECF No. 21) is DENIED.  This case is REMANDED to the SBA for supplementation of the 
administrative record as necessary regarding MomoCon’s competitors and further proceedings 
consistent with this opinion.  An order consistent with this Memorandum Opinion is separately 
and contemporaneously issued. 
Dated:  February 10, 2022 
RUDOLPH CONTRERAS 
 
United States District Judge 
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