Concert Investor, LLC v. Small Business Administration

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 16, 2023 Decided May 3, 2024
No. 22-5253
CONCERT INVESTOR, LLC,
APPELLANT
v.
SMALL BUSINESS ADMINISTRATION AND ISABELLA CASILLAS
GUZMAN, ADMINISTRATOR, SMALL BUSINESS
ADMINISTRATION,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:21-cv-03150)
James E. Tysse argued the cause for appellant. With him
on the briefs were Michael Weisbuch, Caroline L. Wolverton,
Lide E. Paterno, and Michael W. Fires.
Bradley G. Silverman, Assistant U.S. Attorney, argued the
cause for appellees. With him on the brief were Brian P.
Hudak and Jane M. Lyons, Assistant U.S. Attorneys. R. Craig
Lawrence, Assistant U.S. Attorney, entered an appearance.
Before: PILLARD and CHILDS, Circuit Judges, and
EDWARDS, Senior Circuit Judge.

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Opinion for the court filed by Circuit Judge CHILDS.
CHILDS, Circuit Judge. The Economic Aid to Hard-Hit
Small Businesses, Nonprofits, and Venues Act appropriated
over $15 billion to the Small Business Administration (the
“SBA”) to disburse Shuttered Venue Operators Grants
(“Grants”) to small businesses impacted by the Covid-19
pandemic. Pub. L. No. 116-260, § 324, 134 Stat. 1182, 2022
(2020) (codified at 15 U.S.C. § 9009a); Pub. L. No. 117-
2, § 5005(a), 135 Stat. 4, 91 (the “Act”). Alongside other
economic-relief measures such as the Paycheck Protection
Program, Congress designed these Grants to make emergency
income support broadly available to entertainment businesses
that suffered at least a 25% reduction in gross revenue in 2020.
See 15 U.S.C. § 9009a(a)(1)(A)(i)(II). This case arises out of
Appellant Concert Investor LLC’s (“Concert Investor”)
unsuccessful application for a Grant.
I.
Concert Investor is a small business, based out of
Nashville, Tennessee that helps mount concert tours on behalf
of performing artists such as Twenty One Pilots, Little Big
Town, and O.A.R. Due to the drop in demand for live concerts
during the Covid-19 pandemic, Concert Investor’s 2020
revenue fell 94% from 2019. Struggling to stay afloat, Concert
Investor applied in April 2021 for a Grant of $4,988,317.35, or
44.6% of its 2019 revenue. See 15
U.S.C. § 9009a(c)(1)(A)(i)(I) (providing for up to 45% of
gross earned revenue in grant funding).

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In its application, Concert Investor asserted eligibility for
a Grant as a “live performing arts organization operator,”1
which the Act defines as an 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.” 15 U.S.C. § 9009a(3)(A)(i)(I)(aa) (The
Act also identifies other criteria not relevant here). Concert
Investor claimed that it met this definition because it
“produces” live music concerts.
To demonstrate its eligibility, Concert Investor submitted
documentation showing the wide range of its responsibilities
for the tours that it puts on, and in particular the Twenty One
Pilots Bandito Tour (“the tour”), which ran from October 2018
to December 2019. That documentation showed that its
participation in the planning and design of the tour began
fourteen months before the tour opened. Concert Investor’s
contributions included creative set elements such as a
plexiglass bridge spanning two stages and a burning Cadillac,
as well as logistical elements such as schematic diagrams
detailing the staging, engineering, lighting, video, and special
effects. It was also responsible for hiring subcontractors to
provide services such as stage managing and staging, graphic
design, audio, lighting, screen media, video, rigging, and
special effects.
To support its April 2021 application, Concert Investor
attached: magazine articles describing its participation in the
1 Concert Investor originally applied in April claiming
eligibility as a theatrical producer, but the only application at
issue here is the one that it resubmitted in August as a live
performing arts organization operator, a category it thought
better reflected that it produces music concerts rather than
theatrical productions.

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tour, an unsigned contract with Twenty One Pilots referring to
Concert Investor as the “Producer” for the tour and requiring
Concert Investor to provide “experienced touring
technicians. . .for all necessary purposes. . .for the concert
tour,” a comprehensive budget and week-by-week timeline of
costs for the tour, a master ledger for the tour showing costs
actually incurred, invoices for travel costs including chartering
an airplane to transport show equipment between continents,
as well as bank records of payroll payments and workers
compensation and employee liability insurance policies for
tour staff.
On July 10, 2021, Concert Investor learned through the
SBA’s application portal that its Grant application had been
denied. Concert Investor filed an administrative appeal in
August 2021, and received a boilerplate denial later that month.
Nine days after it denied Concert Investor’s appeal, the SBA
notified Concert Investor that it would re-evaluate its decision
on the appeal. However, upon reconsideration the SBA again
denied Concert Investor’s appeal. In its denial following
reconsideration, the SBA stated that Concert Investor “[d]id
not meet the principal business activity standard for the entity
type under which [it had] applied” and “[d]id not meet one or
more of the eligibility criteria specific to the entity type under
which [it had] applied.” JA251. Following the SBA’s
decision, Concert Investor filed a lawsuit in the United States
District Court for the District of Columbia seeking judicial
review of the SBA’s decision under the Administrative
Procedure Act, 5 U.S.C. § 701 et seq. (the “APA”). While the
lawsuit was pending, the SBA notified Concert Investor that it
was rescinding its denial, but just one month later, the SBA
issued a final denial of Concert Investor’s appeal.
The SBA continued to find Concert Investor ineligible for
a Grant, explaining:

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Concert Investor, at best, serves the needs of
touring concert artists for lighting and sound,
designing the plots and obtaining
subcontractors to install and operate the
necessary equipment during a concert. This is
insufficient to meet the definition of a
performing arts organization operator. Concert
Investor does not create, perform, or present
live performances – its clients/artists do.
Concert Investor also does not organize or host
live concerts.
The SBA then referred Concert Investor to the Frequently
Asked Questions page of its website, which stated that
“[Grants] are not available for service providers that support
eligible entities.” JA109. The SBA did not, however, identify
which eligible entity it concluded Concert Investor supported.
Additionally, responding to Concert Investor’s argument that
several of its competitors received Grants, the SBA stated that
it would re-review the eligibility of those Grant recipients.
Following the SBA’s final denial, both parties moved for
summary judgment in the district court. In its summary
judgment motion, Concert Investor reiterated its argument that
the record evidence showed that it met the definition of a live
performing arts operator based on its role in producing
concerts. The SBA, meanwhile, argued that to “produce”
concerts within the meaning of the statute required “ultimate
control over and responsibility for all aspects of bringing a
show to fruition—such as booking a venue; selecting artists to
perform; hiring lighting/sound contractors; and arranging
financing, marketing, ticketing, and security—not mere
intermediate oversight of discrete facets of the show.” ECF

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No. 46 at 11.2 Because Concert Investor did not “hav[e]
responsibility for all aspects of the concerts,” id. at 9, it did not
“produce” concerts. The SBA also reiterated that it was
“reconsidering the grants that it awarded to [certain of Concert
Investor’s competitors], and will rescind those grants if it
determines that they were improper.” Id. at 15. Concert
Investor objected to the SBA’s definition of a producer as
someone with responsibility over “all aspects” of a concert.
ECF No. 48 at 1-2. Concert Investor argued that the “all
aspects” definition was a post hoc rationalization that the SBA
had raised for the first time in the district court, in violation of
Chenery. ECF No. 48 at 1-2 (citing Sec. & Exch. Comm’n v.
Chenery Corp., 318 U.S. 80 (1943) (A court can only uphold
agency action for reasons the agency articulated in the
administrative record.)).
The district court denied Concert Investor’s motion for
summary judgment and granted the SBA’s. Concert Inv., LLC
v. SBA, 616 F. Supp. 3d 25 (D.D.C. 2022). It held that the
SBA’s definition of “producer” was not an impermissible post
hoc rationalization, but rather “an amplified articulation of its
definition of producer where the relevant portions of the
definition were already present in the underlying opinion.” Id.
at 31 (internal quotation marks omitted). It then agreed with
the SBA that substantial evidence in the record showed that
Concert Investor was not a producer. Id. at 34-35. Finally, the
district court rejected Concert Investor’s argument that it was
treated differently from similarly situated competitors. Id. at
35-37.
Concert Investor appeals the district court’s order denying
its summary judgment motion and granting the SBA’s.
2 All ECF citations refer to the district court’s docket in
Concert Investor v. SBA, 21-cv-03150 (D.D.C.).

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Reviewing the district court’s summary judgment order de
novo, see Ark Initiative v. Tidwell, 816 F.3d 119, 126-127 (D.C.
Cir. 2016), we vacate the district court’s order granting
summary judgment to the SBA and remand this case for further
proceedings consistent with this opinion.
II.
Before turning to the merits, we first address two threshold
arguments raised by the parties.
A.
Concert Investor argues that the SBA engaged in
impermissible post hoc rationalization by defining an eligible
“produce[r]” as an entity that exercises “ultimate control over
and responsibility for all aspects of bringing a show to fruition”
for the first time in the district court. ECF No. 48 at 12.
“The policy of the post hoc rationalization rule does not
prohibit [an agency] from submitting an amplified articulation
of the distinctions it sees.” Alpharma, Inc. v. Leavitt, 460 F.3d
1, 6 (D.C. Cir. 2006) (internal citation and quotation marks
omitted). Nor does it require that “[a]n agency’s decision. . .be
‘a model of analytic precision to survive a challenge.’” United
Airlines v. Transp. Sec. Admin., 20 F.4th 57, 62 (D.C. Cir.
2021) (quoting Dickson v. Sec’y of Def., 68 F.3d 1396, 1404
(D.C. Cir. 1995)). Where an agency’s prior explanation fails
to fully explain its reasoning, the agency may “offer a fuller
explanation of [its] reasoning at the time of the agency action.”
See Dep’t of Homeland Sec. v. Regents of the Univ. of Cal., 140
S. Ct. 1891, 1907 (2020) (cleaned up).
We hold that the “all aspects” definition of producer that
the SBA relies upon in its litigation briefing is a permissible
amplification of the justification that the SBA articulated in the

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agency record. In its final decision, the SBA concluded that
“the limited services which Concert Investor provided for its
client renders it ineligible for a [Grant].” JA63. The SBA
explained that other entities were responsible for a range of
tasks related to putting on concerts. For example, the musical
duo Twenty One Pilots was “responsible for the transportation
of the equipment and personnel retained by Concert Investor
as well as the lodging of and per diem rates for the personnel.”
JA61. And “every venue that Concert Investor operated
in. . .had a box office manager and security staff, was booked
by a professional talent agency[,] and a majority of the venues
were operated and promoted by [entertainment company] Live
Nation.” JA61. The SBA concluded that Concert Investor’s
role working with “lighting and sound, designing the plots and
obtaining subcontractors to install and operate the necessary
equipment during a concert” was too limited for it to qualify as
a “producer.” JA62. Although the SBA did not use the phrase
“all aspects,” its conclusion that Concert Investor is not a
producer because it does not have all of the responsibilities
described above made sufficiently clear it thought that a
producer must have all of those responsibilities. We therefore
conclude that the SBA’s “all aspects” definition is a
permissible amplification of the explanation that it provided in
the administrative record.
B.
We also reject the SBA’s argument that Concert Investor
forfeited its challenge to the SBA’s “all aspects definition” by
not raising it below. Concert Investor promptly challenged the
SBA’s “all aspects” definition once the SBA fully articulated
it to the district court. See Shea v. Kerry, 796 F.3d 42, 54 (D.C.
Cir. 2015) (holding that a plaintiff may respond to newly raised
arguments where its response falls within the “latitude” to
“elaborate” its prior arguments). For instance, at the hearing

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on the parties’ cross motions for summary judgment, Concert
Investor told the district court that “Concert Investor may not
handle things like booking or marketing, ticketing or security,
but. . .[t]he statute. . .recognizes that venues typically handle
those types of things, including especially security, and then
also a promoter can take care of it.” JA801. Concert Investor
went on to argue that although “the promoter Live
Nation. . .managed the ticketing. . .[a]nd then the venues
themselves handled. . .hosting the event,” “Concert Investor
brought the show into those venues through its design and
contracting with all the service providers who put on the
shows.” JA792.
III.
We now turn to the merits of the SBA’s decision. To
recapitulate briefly, an entity qualifies for a Grant as a “live
performing arts organization operator” if one of its primary
business activities is, as relevant here, “produc[ing]. . .live
concerts.” 15 U.S.C. § 9009a(a)(3)(A)(i)(I). According to the
SBA, a concert “produce[r]” must have “ultimate control over
and responsibility for all aspects of a show”—including tasks
such as “booking a venue,” “selecting artists to perform,” and
“arranging financing, marketing, ticketing, and security.” ECF
No. 46. In this case, because other entities were responsible
for some of these tasks—a professional talent agency booked
the venues, Live Nation operated and promoted the concerts,
and Twenty One Pilots itself acquired certain equipment and
personnel—the SBA decided that Concert Investor was not a
“produce[r].” We find that decision was “not in accordance
with law.” 5 U.S.C. § 706.
A.
The SBA’s reading of the Act is inconsistent with the
statutory language. A plain reading of the disjunctive list:

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“organizes, promotes, produces, manages, or hosts live
concerts. . .,” id. § 9009a(a)(3)(A)(i)(I) (emphasis added),
reveals that an entity need perform only one of these activities
to be eligible. See, e.g., Encino Motorcars, LLC v. Navarro,
584 U.S. 79, 87 (2018) (“‘[O]r’ is almost always disjunctive.”)
(cleaned up). And a familiar canon of statutory interpretation
counsels against reading the definition of “produces” to require
organizing, promoting, managing, or hosting a concert. Courts
avoid reading statutes in a manner that would render certain
statutory terms “altogether redundant.” See Mercy Hosp., Inc.
v. Azar, 891 F.3d 1062, 1068 (D.C. Cir. 2018) (quoting
ANTONIN SCALIA & BRYAN A. GARDNER, READING LAW: THE
INTERPRETATION OF LEGAL TEXTS 176-77 (2012)). If an entity
also had to organize, promote, manage, or host a concert in
order to produce it, then any entity that met the definition of
“produces” would simultaneously meet another basis for
eligibility—rendering “produces” superfluous. Thus, it is
unlikely that the definition of “produces” encompasses all of
these other aspects of bringing a concert to the public.
Our plain reading of the Act is consistent with how the
industry defines a producer. Where Congress uses a term that
has an “established meaning within a particular industry,” the
term should be construed with “reference to the actual context
of the regulated industry in question.” Ass’n of Am. R.R. v.
Costle, 562 F.2d 1310, 1319-21 (D.C. Cir. 1977); see Concert
Investor Br. at 25; SBA Br. at 26-27. Here, a source that both
parties identify as authoritative defines live event producers by
the significant financial, creative, and managerial role that they
play throughout the life cycle of an event. See, e.g., JA143,
171-73, 773-774 (citing Concert/Event Producer, Berklee
Coll. of Music, https://perma.cc/C8U9-W3YL). But the
industry definition of producer is not limited to those with
control over all aspects of a concert—in many cases no one has
total control. As the parties’ proffered publication explains, a

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producer may sometimes also be the concert’s “promoter,”
“live experience designer, and “music director,” while other
times those roles may be performed by different parties. See
id. An appropriate definition must therefore capture the
significant financial, creative, and managerial role that live
event producers play from start to finish.
B.
Because the SBA defined “produces” too narrowly, it also
failed to consider relevant record evidence supporting Concert
Investor’s eligibility for a Grant. The SBA’s conclusion that
Concert Investor was a mere “service provider” for lighting and
sound, did not account for several types of evidence submitted
by Concert Investor.
Among it, the SBA apparently ignored 107 pages of
creative elements submitted by Concert Investor, many of
which were eventually featured in the tour. First, Concert
Investor submitted extensive schematic diagrams showing its
involvement in designing creative elements for Twenty One
Pilots. That work extended beyond light and sound to include,
for example, substantial set construction. Concert Investor’s
significant creative work for the tour began fourteen months
before the first show. Second, the SBA also ignored evidence
of Concert Investor’s significant managerial role on the tour.
That work involved superintending a wide range of production-
related tasks for the duration of the tour, including coordinating
transportation, managing the tour’s budget, and hiring
necessary tour personnel. This evidence included invoices for
travel costs related to chartering an airplane to transport show
equipment between continents, a comprehensive budget and
week-by-week timeline of tour costs, a master ledger, workers
compensation and employee liability insurance policies, and a
contract with Twenty One Pilots making Concert Investor

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responsible to provide “experienced touring technicians . . . for
all necessary purposes . . . for the concert tour.” JA611.
Together, this evidence paints a picture that Concert Investor
has substantial responsibility over many different aspects of the
tour.
Finally, the SBA ignored Concert Investor’s financial role
on the tour, evidenced by the numerous invoices between
Concert Investor and the subcontractors it hired, including a
sound engineer, a stage manager, an audio package and
equipment, power generation and distribution, video directors,
content creators, and special effects. These invoices support
Concert Investor’s claim that it was responsible for hiring the
subcontractors used for sound engineering, audio equipment,
special effects, and touring infrastructure, and they undermine
the SBA’s conclusion that Concert Investor was itself a mere
subcontractor or service provider for light and sound.
On remand, the SBA should reconsider Concert Investor’s
application in light of the complete administrative record.
C.
Finally, in light of the above holding that SBA incorrectly
applied the Act to Concert Investor, we need not reach Concert
Investor’s alternative claim that the SBA violated the APA by
awarding Grants to six companies with business models similar
to Concert Investor’s while denying relief to Concert Investor.
*****
For the foregoing reasons, we vacate the district court’s
order granting summary judgment to the SBA and remand this
case for further proceedings consistent with this opinion.
So ordered.

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