Tiare Enterprises, Inc. v. United States Department of Transportation, 246 F. Supp. 3d 437

Tiare Enterprises, owned by Roberta Fithian, was an ACDBE certified since 1986 and submitted its annual continuing-eligibility affidavit in November 2013 reporting personal net worth below the $1.32M cap.
Hawaii DOT (HDOT) queried documents, then issued a December 18, 2013 notice proposing decertification, asserting Fithian's net worth actually exceeded the cap (HDOT calculated ≈ $1.78M) and that a claimed $187,641 liability lacked adequate documentation.
Tiare submitted a written response by the January 31, 2014 deadline but did not timely request an informal hearing; HDOT issued a final decertification on April 2, 2014 citing excess net worth and alleged noncooperation.
Tiare administratively appealed to USDOT, which on July 27, 2015 affirmed HDOT’s decertification based on substantial evidence that Fithian’s net worth exceeded $1.32M and that her overall economic situation demonstrated an ability to accumulate substantial wealth.
Tiare sued under the APA (and initially alleged a due process claim it later abandoned), challenging USDOT’s affirmance on grounds including denial/waiver of hearing, incorrect net-worth calculation, reliance on factors beyond net worth, and improper burden shifting.
The district court reviewed USDOT’s administrative decision under the APA’s arbitrary-and-capricious standard and granted defendants’ motion for summary judgment, denying Tiare’s cross-motion.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Waiver of informal hearing	Tiare contends HDOT denied its right to an informal hearing	HDOT/USDOT say Tiare waived the hearing by not timely requesting it and instead submitting a written response	Court: Tiare waived; written response without a timely hearing request is insufficient to preserve the right
Reliance on alleged noncooperation	Tiare argues USDOT improperly affirmed based on HDOT’s claim of noncooperation	USDOT contends it did not base affirmance solely on cooperation and need not resolve cooperation issue	Court: USDOT’s decision stands without relying on noncooperation ground
Burden of proof in decertification	Tiare says HDOT shifted the burden to the firm and USDOT ignored this error	Defendants say USDOT applied the correct burden (preponderance on decertifying recipient) in its review	Court: USDOT considered and applied the correct burden and its reasoning was discernible and not arbitrary
Consideration of factors beyond net worth	Tiare argues HDOT/USDOT erred by using income/asset-liquidity and other factors not codified in 2013 rule	Defendants point to Appendix E and USDOT General Counsel guidance permitting consideration of overall economic situation; later rulemaking codified this practice	Court: Permissible for recipient to consider broader economic indicators; USDOT’s interpretation entitled to deference; consideration was proper

Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (standard for arbitrary and capricious review)
Rempfer v. Sharfstein, 583 F.3d 860 (D.C. Cir. 2009) (review based on administrative record)
Nat'l Treasury Emps. Union v. Horner, 854 F.2d 490 (D.C. Cir. 1988) (agency must consider relevant factors and explain basis)
Envt'l Def. Fund, Inc. v. EPA, 465 F.2d 528 (D.C. Cir. 1972) (decision may be discerned from clearly relevant sources)
U.S. Sugar Corp. v. EPA, 830 F.3d 579 (D.C. Cir. 2016) (upholding less-than-ideal clarity if agency path is discernible)
Auer v. Robbins, 519 U.S. 452 (agency deference to its own regulatory interpretation)
Lyng v. Pane, 476 U.S. 926 (deference to agency construction of its regulation)
Frizelle v. Slater, 111 F.3d 172 (D.C. Cir. 1997) (agency must address non-frivolous arguments)