Federal District Court finds that Agency’s Denial of Disadvantaged Business Enterprise Certification was not Arbitrary and Capricious

Certification as a Disadvantaged, Women, or Minority-Owned Business Enterprise can have a substantial impact on a business’ operations and bottom-line. A recent case out of the United States District Court for the Eastern District of New York demonstrates how important such certification can be, and how businesses often seek judicial intervention to obtain such certification. The case involved issues of administrative law, regulatory law, business law and administrative procedure.

The case, Beach Erectors, Inc. v. United States Department of Transportation, 2012 U.S. Dist. LEXIS 127632 (E.D.N.Y. September 7, 2012), involved a metal subcontractor and installer company based in New York, whose sole shareholder was a woman. The owner sought to be designated as a Disadvantaged Business Enterprise by the New York Metropolitan Transit Authority, but was denied such certification when the agency found that she lacked technical expertise in the field, only performed administrative tasks while her male family members oversaw construction work, and the company was run, overall, by the family. After analyzing Federal administrative review standards, Judge Hurley considered the agency’s determinations and upheld them as not arbitrary and capricious, thereby dismissing the case.

The attorneys at Tesser, Ryan & Rochman, LLP, have appeared before a variety of different New York State and Federal agencies. Our experience with such administrative and regulatory agencies allows us to advise our clients about the complicated procedures of many administrative agencies and advise clients about challenging such agencies’ decisions.