Memorandum Opinion Granting SBA Summary Judgment — MomoCon v. SBA

Record facts

U.S. District Court for the District of Columbia · No. 1:21-cv-02386-RC · Doc. 74 · 2023-12-22 · Docket on CourtListener

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UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF COLUMBIA 
MOMOCON, LLC, 
: 
 
 
: 
 
Plaintiff, 
: 
Civil Action No.: 
21-2386 (RC) 
 
 
: 
 
v. 
: 
Re Document No.: 
53, 55 
 
 
: 
SMALL BUSINESS ADMINISTRATION, 
: 
et al.,   
: 
 
 
: 
 
Defendants. 
: 
 
MEMORANDUM OPINION 
GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S 
MOTION FOR SUMMARY JUDGMENT  
Plaintiff MomoCon, LLC (“MomoCon”)1 began this action against the Defendants, the 
U.S. Small Business Administration and its Administrator, Isabella Casillas Guzman 
(collectively, “SBA”) seeking review of the SBA’s denial of MomoCon’s application for 
Shuttered Venue Operators Grant (“SVOG”) funds.  The Court previously granted summary 
judgment for MomoCon and remanded the case to the SBA.  On remand, the SBA denied 
MomoCon’s application for a second time.  MomoCon once again moves for summary 
judgment, arguing that the SBA’s denial violated the Administrative Procedure Act (“APA”) 
because the SBA failed to consider relevant factors and reached a decision unsupported by the 
administrative record.  The SBA also moves for summary judgment, asserting that it weighed the 
 
1 This opinion generally uses “MomoCon” to refer to both the corporate entity as well as 
the convention event that it hosts, but for clarity, it will at times refer to “MomoCon 2019” or 
“MomoCon 2020.” 
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factors required by the statute and made a decision supported by substantial evidence.  For the 
reasons stated below, the Court grants the SBA’s motion and denies MomoCon’s motion. 
I.  BACKGROUND 
A.  SVOG Program 
When COVID-19 forced many live event venues to close, Congress passed the Economic 
Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act, which established the SVOG 
program to offer financial relief to shuttered venue operators.  See Pub. L. No. 116-260, § 324.  
Between the initial appropriation and additional funding in the later-passed American Rescue 
Plan, Congress allocated over $16 billion in grants that were to be administered by the SBA’s 
Office of Disaster Assistance.  See id.; Pub. L. No. 117-2, § 5005(a).  SVOG is an “emergency 
assistance” program that stopped accepting new applications on August 20, 2021.  Shuttered 
Venue Operators Grant, U.S. Small Bus. Admin., https://www.sba.gov/funding-
programs/loans/covid-19-relief-options/shuttered-venue-operators-grant (last accessed December 
22, 2023).   
The statute lists several categories of entities that are potentially eligible for a grant, 
including “live venue operator[s] [and] promoter[s].”  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,” for which there is (1) a ticketed 
entrance charge, (2) performers are paid based on a percentage of sale or guaranteed amount by 
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contract, and (3) not less than 70% of revenue is generated through ticket sales or event 
beverages, food, or merchandise.2  Id. § 9009a(a)(3)(A)(i)(I)–(II).   
The SBA offered guidance about its approach in a notice inviting SVOG applications, 
where it explained that: 
Principal Business Activity is determined using a firm’s primary industry under the SBA 
size regulations (13 CFR 121.107) to define “principal business activity.” To determine a 
given firm’s principal business activity, the SBA will consider the distribution of an 
entity’s receipts, employees and costs of doing business among the different lines of 
business activity in which its business operations occurred for the most recently completed 
fiscal year. The SBA may also consider other factors, such as the distribution of patents, 
contract awards, and assets, as appropriate. 
 
SBA, Applications for New Awards; Shuttered Venue Operators Grants (SVOG), 86 Fed. Reg. 
16270, 16272 (Mar. 26, 2021).  And the SBA also stated that when an entity has multiple lines of 
business, its principal business activity is “the line of business in which the entity has the greatest 
combined amount of revenues, expenses, employees and work hours, assets, contracts, and other 
business activity as compared to all its other lines of business.” SBA, Shuttered Venue Operators 
Grants FAQs, Definition 26 (Oct. 20, 2021), https://www.sba.gov/sites/default/files/2021-10/10-
20-21%20SVOG%20FAQ%20FINAL_508_final.pdf (last accessed December 22, 2023). 
B.  MomoCon 
MomoCon produces an annual 4-day anime-themed convention in Atlanta, Georgia.3  
MomoCon “brings together fans of Japanese Anime, American Animation, Comics, Video 
 
2 As an alternative option, an individual or entity may also qualify if it, “as a principal 
business activity, makes available for purchase by the public an average of not less than 60 days 
before the date of the event tickets to events” for which the performers are paid based on a 
percentage of sales, a guarantee, or another mutually beneficial formal agreement.  15 U.S.C. § 
9009a(a)(3)(A)(ii).  The statute also sets forth other general eligibility criteria that are not 
relevant to this action. 
3 The name of the convention references its location: “momo” means “peach” in 
Japanese.  See Atlanta Magazine, MomoCon Rising: The Growing Atlanta Anime and Gaming 
Convention Courts a New, Younger Fandom https://www.atlantamagazine.com/news-culture-
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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 [,] much more over this 4 day event.”  See 
https://www.momocon.com (last accessed December 22, 2023).  In addition to the exhibition 
hall, cosplay opportunities, meet and greets, and gaming, MomoCon also features panel 
discussions, live musical performances, and theatrical productions.  Administrative Record 
(“AR”), ECF Nos. 65-2, 65-3, 65-4, 65-5, at 56, 1547.4  MomoCon 2019 ran from May 23 to 26, 
2019, with tickets to the event available as either four-day or single-day packages.  Id. at 1817.  
MomoCon 2020 and MomoCon 2021 were both cancelled due to the COVID-19 pandemic.   
C.  MomoCon’s Application and This Action 
On April 26, 2021, MomoCon applied as a live venue operator for a SVOG grant of 
$1,044,330.08.  AR 1678.  The SBA denied MomoCon’s application, and MomoCon submitted 
an administrative appeal, which the SBA also denied.  AR 56; see Second Am. Compl. ¶ 30, 
ECF No. 48-1. 
On September 9, 2021, MomoCon brought this action for judicial review of the SBA’s 
denial of its SVOG assistance request.  See Compl., ECF No. 1.  The Court approved the SBA’s 
motion for voluntary remand.  See Oct. 1, 2021 Order.  On October 15, 2021, the SBA issued 
another denial of MomoCon’s application, saying that MomoCon had failed to establish the 
requisite principal business activity. AR 1696–97, 1700.  MomoCon challenged this decision 
again, and both parties moved for summary judgment.  
 
articles/momocon-rising-growing-atlanta-anime-gaming-convention-courts-new-younger-
fandom/ (last accessed December 22, 2023). 
4 Citations to the AR use the Bates numbers located at the bottom of each page but omit 
the leading zeros; e.g., AR 1517 refers to the page marked as “SBA_01517”. 
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On February 10, 2022, the Court granted MomoCon’s motion for summary judgment and 
remanded the matter to the SBA.  Mem. Op., ECF No. 32.  The Court held that the SBA’s denial 
was arbitrary and capricious because the SBA “fail[ed] to explain why it treated MomoCon 
differently than other potentially similar companies,” id. at 9, and instructed the SBA to 
“supplement[] the administrative record as necessary regarding MomoCon’s competitors,” id. at 
20.  The Court also directed the SBA to revisit its conclusion that MomoCon did not satisfy the 
SVOG statute’s “principal business activity” requirement, holding that the SBA did not properly 
consider the record and evidence before the agency.  Id. at 16.  
On remand, the SBA issued a new decision, dated June 17, 2022, that once more 
determined that MomoCon was ineligible for SVOG funds.  AR 1782–91.  The SBA amended 
the decision on July 15, 2022, and again on August 1, 2022, when it issued the Second Amended 
Final Remand Decision (“Final Remand Decision”).  AR 1795–1804; id. at 1815–24. 
D.  The SBA’s August 1, 2022 Decision 
The SBA concluded that MomoCon was not eligible for a SVOG award because the 
record did not show that 70% of MomoCon’s earned revenue was attributable to qualifying live 
events, or that as a principal business activity, MomoCon sold tickets 60 days in advance for 
qualifying live performing arts events.  Id. at 1824.  The SBA explained that it followed the 
definition of principal business activity that is listed on the SBA website.  Id. at 1816 (citing 
SBA, Shuttered Venue Operators Grants FAQs, Definition 26, see supra at 3).  
In assessing MomoCon’s revenue, the SBA observed that MomoCon did not sell tickets 
to separate events but to the convention as a whole, and so the SBA decided to apportion 
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MomoCon’s revenue with reference to the hours of events.5  Id. at 1822–23.  The SBA added up 
the hours of live performances at MomoCon 2019 based on its review of an archived copy of a 
schedule for the event, as well as through promotional headliner flyers and the performing artist 
contracts MomoCon submitted with its application.  Id. at 1816–17, 1822–23; see Archived 
MomoCon 2019 Convention Schedule (“Convention Schedule”) 
http://web.archive.org/web/20190506064635/https:/www.momocon.com/schedule/ (last accessed 
December 22, 2023).  As the baseline for the total hours of events, the SBA relied on 
MomoCon’s own estimate that it held over 800 hours of programming—a figure that counts 
simultaneously held events as separate hours.  Id. at 1822.  Upon its consideration of the record, 
the SBA calculated that out of these approximately 800 hours, MomoCon 2019 had 24 hours of 
SVOG eligible live performances.6  Id.  Thus, the SBA determined that these 24 hours accounted 
for 3% of MomoCon’s events, significantly below the 70% threshold required under the SVOG 
statute.  Id.  The SBA also considered an alternative scenario where it instead viewed the hours 
of the convention consecutively, for an assumed total of 60 hours, and found that the 24 hours of 
eligible live performances would be 40% of the convention time, still below the 70% threshold.  
Id. at 1822 n.1. 
 
Then, to give MomoCon “the benefit of the doubt” that there were additional eligible 
events that the SBA missed in its assessment of 24 hours (or 3%), the SBA proceeded with an 
 
5 To be fully accurate, as the SBA recounted in the Final Remand Decision, MomoCon 
2019 did have one separately ticketed event.  See AR 1823.  However, revenues from this event 
were just $16,120, about 1% of the estimated $1,224,261 in ticket sales.  Id.  Because this small 
fraction of revenue would have no impact on whether MomoCon met the SVOG threshold, this 
opinion will not discuss it further. 
6 The SBA also compared the hours of music performances in MomoCon’s two main 
venues to the number of hours of all activities in those venues and found that music 
performances accounted for 25% of total presentation time.  Id. at 1822. 
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assumption that a total of 10% of the events were live performing events.  Id. at 1822.  The SBA 
applied this percentage to MomoCon’s ticket sales revenues.  Id. at 1822–23.  Again, the SBA 
noted that this number was well below the SVOG 70% threshold.  Id. at 1823.  As a result, the 
SBA determined that MomoCon did not satisfy the criteria for a SVOG grant and denied the 
application.7  Id. at 1822–24. 
Finally, the SBA also responded to MomoCon’s argument that it was entitled to receive a 
SVOG award because it was indistinguishable from competitors who did receive an award.  The 
Final Remand Decision incorporated a “MomoCon LLC Competitor Analysis,” id. at 1792–94, 
that looked at MomoCon’s alleged competitors.  Id. at 1824.  Using a similar method as the 
agency used for MomoCon itself, and looking at the hours of eligible live events, the SBA found 
that these five purported competitor conventions also did not meet the SVOG 70% criteria.  Id. at 
1793–94.  The Final Remand Decision stated that the SBA’s SVOG Deputy Director had 
determined that the competitors identified by MomoCon were ineligible for SVOG awards and 
that she would recommend their awards be referred to the agency’s recoupment process.  Id. at 
1824. 
MomoCon now moves for summary judgment, arguing that the SBA’s second denial was 
arbitrary and capricious because the agency failed to weigh the significance of the events, and 
did not correctly identify all of the eligible live events.  Pl.’s Mem. P. & A. Supp. Mot. Summ. J. 
(“Pl.’s Mem.”), ECF No. 53.  The SBA also moves for summary judgment, arguing that the Final 
Remand Decision was consistent with the statute and supported by the evidence.  Defs.’ 
 
7 Consistent with the SVOG statute, the SBA also analyzed MomoCon’s expenses, but 
found that there was a lack of documentation to support allocating any portion of MomoCon’s 
general overhead expenses to live performances.  AR 1823.  Nonetheless, the SBA applied the 
10%  allocation to expenses as well, which still did not show eligibility for a SVOG award.  Id. 
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Combined Mem. Supp. Mot. Summ. J. & Opp’n Pl.’s Mot. Summ. J. (“Defs.’ Opp’n & Mem.”) 
at 6–7, ECF No. 55. 
In addition, the SBA also filed a motion to stay, which MomoCon opposed.  Defs.’ Mot. 
to Stay, ECF No. 59; Pl.’s Mem. P. & A. Opp’n Defs.’ Mot. to Stay, ECF No. 61; Defs.’ Notice 
Regarding Mootness, ECF No. 68; Pl.’s Resp. Defs.’ Notice Regarding Mootness, ECF No. 69.  
Although the SBA argued that the Court should stay the case until the D.C. Circuit resolved 
Concert Investor, LLC v. Small Business Administration, No. 22-5233 (D.C. Cir. filed Sept. 29, 
2022), the Court held that the outcome of that appeal in a similar case would not be dispositive to 
the outcome of the present motions for summary judgment, and therefore denied the motion to 
stay.  See Mem. Op. & Order Denying Mot. Stay, ECF No. 72. 
II.  LEGAL STANDARD 
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); see also Rempfer v. Sharfstein, 583 
F.3d 860, 865 (D.C. Cir. 2009).  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, “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 (internal quotation marks omitted).  However, judicial review pursuant to the APA may go 
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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)). 
Under the APA, a court should uphold an agency’s decision unless it is “arbitrary, 
capricious, an abuse of discretion, or otherwise not in accordance with [the] law.”  5 U.S.C. § 
706(2)(A).  The arbitrary and capricious standard of review is “narrow,” but the court must still 
determine whether the agency “examine[d] the relevant data and articulate[d] 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)).  An 
agency decision “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.  A court will defer to the agency’s interpretation of the statutory 
requirements so long as it is “rational and supported by the record.”  Cooper Hosp. / Univ. Med. 
Ctr. v. Burwell, 179 F. Supp. 3d 31, 39–40 (D.D.C. 2016) (quoting Oceana, Inc. v. Locke, 670 
F.3d 1238, 1240 (D.C. Cir. 2011)). 
III.  ANALYSIS 
The parties dispute whether the SBA acted arbitrarily or capriciously in once again 
denying MomoCon’s application for SVOG funds.  The parties focus on two issues: (1) whether 
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the SBA was obligated to assess the “significance” of MomoCon’s live events and (2) whether 
the SBA correctly calculated the proportional hours of live events at MomoCon 2019.  The Court 
holds that the SBA’s decision to reject MomoCon’s SVOG application was consistent with the 
statute, fairly considered the evidence available to the agency, and was supported by that 
evidence.  
The Court also considers MomoCon’s contention that the SBA still has not addressed its 
unequal treatment compared to competitor applicants that did receive SVOG awards.  The Court 
rejects this argument as well, finding that the SBA adequately explained that it had determined 
those awards were improper and has begun the recoupment process. 
A.  The SBA’s Approach Was Consistent with the SVOG Statute and SBA Guidance 
MomoCon’s principal argument is that the Final Remand Decision should be invalidated 
because the SBA failed to consider the significance of live performing events to the convention.  
See 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 SVOG statute does not require the SBA to weigh significance.  
See generally 15 U.S.C. § 9009a.  SBA regulations do advise that the agency will look at “other 
factors . . . as appropriate.”  Applications for New Awards, 86 Fed. Reg. at 16272.   
MomoCon argues that significance was an appropriate factor that the SBA should have 
looked at, even asserting that the live qualifying performing events “are the reason people come 
to [the] event.”  Pl.’s Reply Supp. Mot. Summ. J. and Opp’n Defs.’ Mot. Summ. J. (“Pl.’s 
Reply”) at 2, ECF No. 57.  But this argument has two fatal flaws.  First, determining the relative 
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significance of particular events at MomoCon would be a highly subjective and difficult 
exercise.  MomoCon appeals to a broad range of interests; it is not themed around any specific 
media franchise or activity, but instead features a wide swathe of programming that relates to 
Japanese culture.  Because there are so many different types of events at MomoCon, it naturally 
follows that guests will diverge on their reason for attendance.  MomoCon offers no basis for 
how the SBA should have determined whether an attendee was drawn to the convention because 
of live music, panels, merchandise sales, gaming, or any other category of event.  Moreover, 
within those categories, attendees would diverge about what entertainment franchises drew their 
interest.  While it is possible that an individual would choose to attend MomoCon based on one 
specific interest, it is far more likely that attendees would buy tickets because they saw a variety 
of events and media products they enjoyed on the schedule.8 
Second, beyond that conceptual hurdle, MomoCon has no record evidence to support its 
assertion that live performing events are the primary driver of attendance.  MomoCon mostly 
cites to its own self-serving statements made while applying for SVOG funds.  See id. at 3 (citing 
AR 56–57, 61, 66, 79, 1547).  MomoCon also points to “evidence of the live shows’ primacy in 
MomoCon’s marketing materials,” id. at 2.  But it rests this statement on a handful of flyers that 
advertise the existence of live concert events, see AR 866, 882–84, but do not suggest that these 
 
8 To illustrate the point, the convention schedule for MomoCon 2019 includes several 
events related to the popular Pokémon video game franchise, as well as other opportunities such 
as cosplay (dressing up as fictional characters) where an individual could express their passion 
for Pokémon.  See Convention Schedule.  But MomoCon is not Pokémon themed—these events 
are a tiny portion of the convention, and many other video game franchises are also present on 
the event schedule.  Additionally, many of these franchises have overlapping fanbases: people 
who enjoy Pokémon also have a higher than usual chance of liking other Nintendo video games 
that have a presence at MomoCon, such as Super Mario or The Legend of Zelda.  Therefore, 
even an individual who is especially interested in Pokémon may spend much of their time at 
MomoCon at other video game events—not to mention the hundreds of events that relate to 
anime, manga, comic books, internet-related media, and other cultural products.   
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events were a predominant feature of MomoCon’s marketing.  This lacking presentation does not 
persuade the Court that SBA should have considered the significance of the live performances, 
or that this was an “important part of the problem” that it missed.  State Farm, 463 U.S. at 43. 
Instead, the SBA’s quantitative approach allowed it to objectively analyze how 
MomoCon’s live events factored into the convention.  MomoCon’s nature as a parallel 
programming event supports the SBA’s decision to look at the total number of programming 
hours in comparison to the number of SVOG-eligible live event hours.  See AR 1822 (noting that 
MomoCon itself asserted that it held over 800 hours of programming in 2019).  To take just one 
example, at any given time of the SVOG-eligible “Bytes & Beats” live performing event on 
Friday of MomoCon 2019, at least thirteen other events were occurring simultaneously.  See 
Convention Schedule.  The SBA had no method of determining the significance of any 
individual events (and MomoCon proposes no way to do so, providing only bald assertions that 
qualifying live performances as a general category were the most significant part of the 
convention) so it was rational that the SBA looked at what proportion of events were qualifying. 
Still, MomoCon argues that the SBA should have at least weighed the relative size of 
attendance and venues for the live performing events, noting that there were “over 8,000 people 
at its EDM concert” at MomoCon 2019, and that it planned a concert with a capacity of “nearly 
10,000” for MomoCon 2020.  Pl.’s Mem. at 12.  MomoCon further explains that “the 1,726-seat 
Sidney Marcus auditorium and the 2,000-seat custom-build arena (Main Stage) are used almost 
entirely for music performances.”9  Id.  But again, MomoCon did not provide evidence of the 
capacity of other venues or the actual attendance at most programming, making it impossible for 
 
9 This statement runs counter to the SBA’s determination that 25% of the programming at 
these events was an eligible live event.  AR 1822. 
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the SBA to estimate how many attendees would have been at eligible live events versus 
ineligible live events at a given time.  And even if the SBA’s analysis included the size of these 
venues, this additional factor would have likely weighed against MomoCon.  Given that 
MomoCon 2019 “had over 39,000 attendees,” AR 1548, the fact that around 8,000 people, or 
less than 25%, of those attendees went to the EDM concert does not support the proposition that 
this event was of primary significance to the convention.  And that comparison is true to a 
greater degree for the other two venues that MomoCon mentions, assuming full capacity 
attendance of 1,726 and 2,000 guests.  Pl.’s Mem. at 12.  Thus, the SBA’s omission of venue 
capacity as a factor does not render its analysis arbitrary or capricious. 
Also, MomoCon’s contention that “neither the decision nor Defendants’ brief give any 
explanation for counting each hour of activity at MomoCon’s event the same when MomoCon 
had emphasized that the live shows are the most important part of the event,” Pl.’s Reply at 3, is 
a rephrased version of the significance argument, and unsuccessful for the same reasons.  The 
SBA’s decision to treat all hours equally was a recognition that attendees could choose from 
many different events at any given time—just as it was difficult for the SBA to assess the 
significance of events, it is hard to imagine how the SBA could have determined which hours of 
events were the most important, or how it should have adjusted its math to account for that 
factor. 
To be certain, in different circumstances the “other factors” that the SBA should 
consider, see Applications for New Awards, 86 Fed. Reg. at 16272, might well have included the 
relative significance of events on the schedule.  If a convention were organized around a 
predominant qualifying live event—think if Taylor Swift sold tickets that offered joint admission 
to her three-hour concert plus a much longer fan convention of non-qualifying panels and 
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activities—a total-hours approach without regard to significance would ignore the reason that 
most people bought their tickets.   
That hypothetical is not MomoCon.  The SBA confronted a convention with hundreds of 
events that was designed to appeal to attendees across a wide spectrum of interests.  See, e.g., AR 
1815–22.  Rather than engaging in a subjective inquiry about which of those many events were 
the most significant, the SBA measured what share of time was devoted to qualifying live events.  
That was a permissible choice that was consistent with the SVOG statute, SBA guidance, and the 
issues facing the SBA.  The Court will not “substitute its judgment for that of the agency,” State 
Farm, 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)). 
B.  The SBA Fairly Endeavored to Quantify the Share of Revenue Attributable to 
Qualifying Live Events 
Under the APA, the agency’s role is to resolve factual issues and arrive at a decision that 
is supported by the administrative record, and the Court is responsible for determining “whether 
or not as a matter of law the evidence in the administrative record permitted the agency to make 
the decision it did.”  Havens v. Mabus, 146 F. Supp. 3d 202, 214 (D.D.C. 2015) (internal 
quotation marks omitted).  Factual conclusions are reviewed under the substantial evidence 
standard and may be overturned where they are “unsupported by substantial evidence in a case.”  
5 U.S.C. § 706(2)(E); see Borgess Med. Ctr., 966 F. Supp. 2d at 5.  Courts reviewing for 
substantial evidence “do not ask whether record evidence could support the petitioner’s view of 
the issue, but whether it supports the [agency’s] ultimate decision.”  Fla. Gas Transmission Co. 
v. FERC, 604 F.3d 636, 645 (D.C. Cir. 2010). 
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The SBA determined that MomoCon’s “predominant activity was the organization and 
promotion of a fan convention.” AR 1815–24.  But that assessment alone would not answer 
whether MomoCon met the statutory requirement that at least 70% of its revenue (or 70% of its 
expenses) was generated in relation to a qualifying live event.  AR 1815–16; see also 15 U.S.C. 
§ 9009a(a)(3).  MomoCon did not provide expenditure allocations of various events, forcing the 
SBA to estimate based on the information it had before it.  Thus, as required by the SVOG 
statute, the SBA endeavored to quantify the amount of MomoCon’s revenue and expenses that 
could be attributed to qualifying live events.  The SBA looked at the full record evidence, 
including contracts associated with MomoCon 2019 and 2020, promotional flyers, and the 
schedule for MomoCon 2019, with the assumption that MomoCon 2020 would have likely 
featured a similar breakdown of events.  See AR 1815–24.   
Although there are some minor irregularities in the SBA’s methodology, the SBA’s 
overall assessment was sound.  The SBA admits that “it was difficult for SBA to ascertain the 
total hours of MomoCon’s 2019 convention.”  See Defs.’ Opp’n & Mem. at 7 (citing AR 1519).  
Accordingly, the SBA considered two ways of measuring MomoCon’s total hours:  
(1) MomoCon’s own allegation that it “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 1547, as the total 
number of MomoCon 2019 and (2) that over the 4-day event, MomoCon 2019 was 
open to patrons up to 15 hours each day over the four days, for a total of 60 hours. 
 
See id.; see also AR 1817.  The Court will consider each of these two scenarios in turn. 
 
In the first scenario, the SBA relied on MomoCon’s 800-hour estimate and determined 
that eligible live performances accounted for only 24 out of the 800 hours.  The SBA’s 
explanation that much of MomoCon’s programming—including many hours of panels—did not 
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qualify as a relevant live event was a decision that fell within the agency’s expertise.10  See 
Friends of Animals, 396 F. Supp. 3d at 7.  The SBA then considered MomoCon’s event 
schedule, flyers, and contracts to find that they evidenced approximately 24 hours of live 
performing arts events.  See AR 1822–24.  Under the SBA’s measure, live performing arts 
activities accounted for just 3% of MomoCon 2019’s programming.  Id. at 1822.  That meant the 
SBA did not find that MomoCon’s principal business activity was hosting or producing eligible 
live performances; it further meant that because the SBA decided to apportion revenue according 
to hours, MomoCon fell far short of satisfying the 70% revenue threshold outlined in the SVOG 
statute.  Id.  
MomoCon argues that the SBA failed to account for some of the artistic performances 
included on the archived schedule for MomoCon 2019.  Pl.’s Reply at 3–4.  Yet the Final 
Remand Decision shows that the SBA considered the entire schedule.  AR 1817–18.  The SBA 
recognized that the 24-hours number might not be exactly precise, but found that there were “a 
very limited number of potentially qualifying events” outside of the figure.  Id. at 1818.  
MomoCon asserts that the SBA improperly excluded “storytelling, drawing performances or 
martial arts performances” from its calculation of total live performance time.  Pl.’s Mem. at 13.  
But MomoCon says little more to explain why these performances should have qualified as live 
performance events, and its application contained no information elaborating on the nature of 
those events, including no contractual materials.  See id. at 13–14.  While the SBA’s effort to 
scour the schedule for titles and descriptions that evinced an eligible live performing event may 
not have caught every single event, there is no indication that the agency made any large scale 
 
10 In fact, MomoCon does not appear to contest most of the SBA’s determinations about 
what types of events fall under the SVOG statute, and makes no argument, for example, that a 
speaking panel or video game tournament should have been considered as live events. 
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errors or failed to consider any important information that would be relevant to resolving the 
problem.  See, e.g., State Farm, 463 U.S. at 43.  And the SBA was not obligated to explain why 
every single event—out of hundreds—did not qualify as an eligible live performing event.  See 
Larouche’s Comm. v. FEC, 439 F.3d 733, 738 (D.C. Cir. 2006) (“[A]n agency is not obliged to 
summarize in its decision the contents of all of the documents in the record before it.” (internal 
quotation marks omitted)).  Therefore, the SBA’s determination that only 3% of MomoCon’s 
hours of activity were eligible live performing events was reasonable. 
 
In the second scenario, the SBA used the same 24-hour number of live events, but 
compared it to an assumed 60 consecutive hours that MomoCon 2019 was open.  AR 1822.  
Using this math, eligible live performing events accounted for 40% of MomoCon’s operations, 
again below the requisite 70% threshold.  Id.  This method of measurement is generous to 
MomoCon, because as explained previously, the convention held many different parallel 
programming options.  To count each hour where at least one live performing event was 
occurring as an eligible hour—despite the other events happening at the time—ignores the nature 
of the convention.  Regardless, even with this favorable approach, MomoCon still did not come 
close to satisfying the 70% threshold.  Id. at 1822 n.1. 
Before moving on, the Court must note some flaws in the SBA’s second scenario, but 
these issues do not call the SBA’s ultimate determination into question.  “There is a fine line 
between ‘harmless error’ and ‘arbitrary and capricious.’  The distinction turns on whether the 
agency’s mistake affected the outcome of its decision or prejudiced the plaintiff.”  PAM Squared 
At Texarkana, LLC v. Azar, 436 F. Supp. 3d 52, 59 (D.D.C. 2020) (citing PDK Labs., Inc. v. 
United States DEA, 362 F.3d 786, 799 (D.C. Cir. 2004)). 
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As MomoCon observes, it is perplexing that the SBA’s denial decision and briefings on 
the present motion reference the hours of “registration” when adding up the total time of 
convention operations, because registration is not an event or activity.  See AR 1817; Defs.’ 
Opp’n & Mem. at 7.  But SBA’s final estimate disregarded those registration hours, instead 
assuming that “over the 4-day event, MomoCon 2019 was open to patrons up to 15 hours each 
day over the four days, for a total of 60 hours.”11  Defs.’ Opp’n & Mem. at 7; AR 1822 n.1.  And 
although MomoCon does not raise this issue, the SBA’s 60-hour assumption is slightly off—
rather than the convention being open for 15 hours each day, it was open for longer on some 
days and shorter on others.  The Court’s reading of the schedule shows 57 hours of events.12  
Nonetheless, this number means that live performing events were still only 42% of the schedule 
in this second scenario.  That 2% difference resembles the type of “missed citation or clerical 
mistake” that constitutes harmless error.  PAM Squared, 436 F. Supp. 3d. at 59.  Such a minor 
deviation would not alter the SBA’s conclusions, and “the agency’s reasoning need not be a 
model of analytical precision.”  Concert Inv., LLC v. Small Bus. Admin., 616 F. Supp. 3d 25, 33 
(D.D.C. 2022) (appeal pending). 
 
That is all the more true because the second scenario was an alternative option to explore 
why even that metric would not save MomoCon; the SBA’s decision eventually rests on the 
framework of the first scenario, where simultaneous events are counted as separate hours.  After 
all, MomoCon itself used such a measure in its application.  See AR 1822 (noting that MomoCon 
suggested it held over 800 hours of events).  Despite finding only 3% of the events to be eligible, 
 
11 Those four days would be Thursday, Friday, Saturday, and Sunday.  Registration was 
also open on Wednesday, but the SBA’s 4-day 60-hour estimate does not include Wednesday.  
12 There were 12 hours of events on Thursday, 18 hours on Friday and Saturday, and 8 ½ 
hours on Sunday, plus an additional half hour of table-top gaming that does not overlap with any 
other event.  See Convention Schedule. 
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“to give MomoCon the benefit of the doubt that it hosted more eligible live performances than 
evidenced by its concert schedules, promotional materials and contracts provided,” the SBA 
bumped the number up to 10%.  Id.  Again, this favorable assumption did not approach the 
crucial 70% SVOG threshold.13   
Therefore, based on the record evidence, the SBA determined that “MomoCon has failed 
to demonstrate that at least 70% of its earned revenue is generated through . . . a live event.”  Id. 
at 1824.  This denial demonstrated “a rational connection between the facts found and the choice 
made,” State Farm, 463 U.S. at 43 (quoting Burlington Truck Lines, 371 U.S. at 168), and the 
SBA adequately “state[d] its reasoning,” Select Specialty Hosp.–Bloomington, Inc. v. Burwell, 
757 F.3d 308, 312 (D.C. Cir. 2014) (quoting Checkosky v. S.E.C., 23 F.3d 452, 463 (D.C. Cir. 
1994)).  In addition, as explained above, the SBA’s conclusion was supported by substantial 
evidence.  Fla. Gas Transmission Co., 604 F.3d at 646.  That much is enough—the Court may 
not “substitute [its] judgment for the agency’s,” even if it “might have reached a different 
conclusion in the first instance.”  Epsilon Elecs., Inc. v. U.S. Dep’t of Treasury, 857 F.3d 913, 
918 (D.C. Cir. 2017). 
C.  The SBA Has Adequately Explained MomoCon’s Alleged Disparate Treatment  
The Court has previously confronted MomoCon’s claim that the SBA denied its 
application while approving applications from similar competitors, without offering any 
explanation for why MomoCon was different.14  See Mem. Op. at 10.  The Court agreed that this 
omission made the SBA’s denial arbitrary and capricious, because the SBA’s failure to 
 
13 And to put it plainly, the Court sees no evidence in the record to indicate that 
MomoCon’s live performances were anywhere near 70% of its programming. 
14 As mentioned earlier when discussing the SBA’s motion to stay, the Court recognizes 
that the D.C. Circuit may issue an opinion in Concert Investor that bears upon this issue. 
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differentiate MomoCon meant that it was potentially violating the rule that “[a]n agency may not 
treat like cases differently.”  Id. (quoting Eagle Broad. Grp., Ltd. v. FCC, 563 F.3d 543, 551 
(D.C. Cir. 2009)).  
The Final Remand Decision incorporates a “MomoCon LLC Competitor Analysis,” AR 
1792–94, that looks at MomoCon’s alleged competitors.  See id. at 1824 (incorporating the 
memo by reference).  In that analysis, the SBA noted that “[a]ll of the conventions analyzed 
herein appear to operate in a similar fashion.”  Id. at 1792.  Much like MomoCon, “[i]n many 
instances, the applicant’s financial statements do not separately delineate revenue or expenses 
attributable to eligible SVOG live performances.”  Id.  Thus, the SBA explained that because 
“numerous convention activities that are non-eligible live performances run currently with 
eligible or potentially eligible SVOG live performances, the reviewer endeavored to make 
reasonable estimations for those categories by examining the available event schedules, website 
information, financial statements, ticketing information, and/or contracts, to determine the 
applicant’s business activity.”  Id.   
Under this approach, which mirrors the way the SBA analyzed MomoCon, the SBA 
estimated values for all five of the competitors that were “not sufficient to demonstrate that the 
applicant’s principal business activity is the hosting or production of eligible SVOG live 
performances.”  Id. at 1793–94.  The SBA determined that “there is a strong likelihood that the 
above companies were improperly awarded because they cannot demonstrate that their principal 
business activity was the hosting or production of eligible SVOG live performances.”  Id. at 
1794.  The SBA recommended that the awards be referred to the recoupment process to recover 
repayment for improper awards.  Id. at 1794, 1824. 
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 This explanation alleviates the SBA’s previous failure to differentiate MomoCon from 
these competitors. 15  See Mem. Op. at 10.  Still, MomoCon argues that it will continue to operate 
at a “competitive disadvantage as a result of the SBA’s error with no concrete assurance that the 
agency will take action to remedy it.”  Pl.’s Reply at 6.  The Court disagrees that the SBA must 
offer any full assurances that it will recoup the incorrect awards. 
The Court previously observed that “[r]escission 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.”  Mem. Op. at 9 n.2.  On November 28, 2023, 
the Court requested an update about the status of the funds granted to MomoCon’s competitors.  
See Min. Order, Nov. 28, 2023.  In response, the SBA provided an update that shows the 
recoupment process has proceeded slowly.  See Joint Status Report, ECF No. 71.  The SBA 
stated that it is “required to participate in a recoupment process, which involves due process and 
practices in accordance with federal debt collection laws.”  Id. at 1.  The SBA said it was 
“sending requests for information to each grantee and allowing grantees to provide additional 
information to address eligibility concerns,” id., and that “the agency expects the first set of 
 
15 “The APA limits judicial review to the administrative record ‘except 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, 616 F.3d at 514 
(internal quotation marks omitted) (quoting Com. Drapery Contractors, Inc., 133 F.3d at 7.  In 
its summary judgment briefing, MomoCon supports its differential treatment claim by listing 
several other supposed competitors that received SVOG awards, including the “Charleston Wine 
& Food Festival,” “Poteet Strawberry Festival Association,” “Taste of Atlanta, Inc.,” “Pittsburgh 
Irish Festival Inc.,” and “Rio Grande Valley Celtic Festival Association.”  Pl.’s Mem. at 11.  
MomoCon does not show that these competitors were introduced in the administrative record.  
The Court has also not located any mention of these competitors in the record, and they are 
notably absent from the portion of MomoCon’s “SVOG Appeal Justification” document that lists 
the competitors that the SBA did address in the Final Remand Decision.  See AR 86–87.  
Because these competitors were not presented administratively, and there is no showing of the 
bad faith or barren record that could justify an exception to the usual rule, the Court will not 
consider them in its review of the Final Remand Decision.   
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demand letters to be sent the week of December 11, 2023,” id at 2.  After that, the SBA would 
decide whether to send a formal demand letter determining ineligibility “as early as this month 
through anytime during the first quarter of 2024,” followed by an appeal process for the grantees.  
Id. at 2. 
In other words, the SBA appears to be some time away from any rescission of the funds 
given to MomoCon’s competitors, meaning that this issue is not moot.  Nonetheless, the Court is 
unpersuaded by MomoCon’s assertion in the Joint Status Report that it should triumph because 
“it is now apparent that the agency’s plans to recoup awards are even more uncertain than 
represented in the final remand decision.”16  Id. at 2.  To be sure, the SBA is not moving quickly: 
the Final Remand Decision stated the SBA would recommend recoupment over a year ago.  AR 
1824.  But the Court finds that the SBA took notice of its disparate treatment of MomoCon and 
is following the process to address that mistake.  Concert Inv., 616 F. Supp. 3d at 33 (“In this 
case, the SBA is well beyond ‘uncertain plans’—it has already concluded that rescission is 
appropriate and has referred the three similar companies to a program to recoup the improperly 
awarded funds.”).  The SBA’s Final Remand Decision on MomoCon’s application cannot 
automatically recoup SVOG funds from competitors, and the agency must follow its recoupment 
procedures to give those entities a chance to introduce more information supporting their awards.  
Joint Status Report at 2. 
Consequently, the Court is unpersuaded by MomoCon’s argument that the Final Remand 
Decision was arbitrary and capricious because the SBA has not yet recouped awards from 
 
16 MomoCon also requests oral argument.  Joint Status Report at 2.  The allowance of 
oral hearings is “within the discretion of the Court.”  LCvR 7(f).  Because the parties’ written 
briefings are sufficient to resolve the instant motion, the Court declines to conduct an oral 
hearing. 
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MomoCon’s competitors.  “The mere fact that the [agency] may have nodded on one occasion 
does not entitle a litigant to a repetition of its blunder.”  Chem-Haulers, Inc. v. Interstate Com. 
Comm’n, 565 F.2d 728, 730 (D.C. Cir. 1977); see also Concert Inv., 616 F. Supp. 3d at 33 (“[I]t 
is well-established that an agency’s recognition that an honest mistake was previously made can 
itself be a legitimate justification for differential treatment.”).  There is no reason to keep this 
litigation alive indefinitely until entirely separate recoupment processes have resolved for 
MomoCon’s competitors.  Unlike the initial denial, the SBA has now applied its methods to 
those competitors and acknowledged a mistake.  That is sufficient, and so the Court will uphold 
the SBA’s second denial.   
IV.  CONCLUSION 
For the foregoing reasons, Plaintiff’s motion for summary judgment (ECF No. 53) is 
DENIED and Defendants’ motion for summary judgment (ECF No. 55) is GRANTED.  An 
order consistent with this Memorandum Opinion is separately and contemporaneously issued. 
Dated:  December 22, 2023 
RUDOLPH CONTRERAS 
 
United States District Judge 
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