[00:00:01] Speaker 00: Case number 22-5253, Concert Investor LLC Appellant versus Small Business Administration and Isabella Casillas Guzman, Administrator, Small Business Administration. [00:00:13] Speaker 00: Mr. Tice for the Appellant and Mr. Silverman for the Appellees. [00:00:19] Speaker 04: Good morning, Mr. Tice. [00:00:20] Speaker 04: You may proceed when you're ready. [00:00:22] Speaker 01: Thank you. [00:00:23] Speaker 01: May it please the court, through the Save Our Stages Act, [00:00:27] Speaker 01: Congress offered vital aid to small businesses in the concert industry that were devastated by the pandemic. [00:00:33] Speaker 01: Through a series of errors, the SBA wrongly denied that aid to concert investors, easily qualifies as an eligible live performing arts organization operator. [00:00:43] Speaker 01: An entity is eligible as long as one of its principal business activities is to produce, organize, or manage live concerts. [00:00:51] Speaker 01: That describes my client to a T. [00:00:54] Speaker 01: Shown by extensive record evidence reflecting accepted industry usage, Concert Investor is a full-service production agency, significant organizational and managerial tour oversight. [00:01:06] Speaker 01: Among other things, it advances extensive financing for tours, organizes and manages the tour budgets, hires, pays, and insures the tour staff, contracts with the artists themselves, promoters. [00:01:20] Speaker 01: It hires, excuse me, it pays the bills for the dozens of tour service providers who do things like stage managing, power, lighting, sound, rigging, transportation, special effects, and much, much more. [00:01:33] Speaker 01: In short, it puts it all together for its tours. [00:01:37] Speaker 01: Beside Concert Investor, every other firm on the 21 Pilots Tour discussed in the briefs was a subcontractor. [00:01:44] Speaker 01: Based with all of that overwhelming evidence, the government was forced to shift gears in litigation and offered for the first time its unduly stringent ultimate control over all aspects definition. [00:01:56] Speaker 01: If that were correct, no entity at all would ever be considered a producer because different entities routinely divide ultimate control over different parts of concerts, such as ticketing and marketing versus- Let's start with why you went from theatrical producer to live performing arts organization operator. [00:02:13] Speaker 05: And then part two of that question is the term produce, according to the statute, would fit both of those categories anyway. [00:02:23] Speaker 01: I'll take both. [00:02:23] Speaker 01: The first is that the entity, when it was not represented by council, submitted an application, thought that that was the category that might describe it the best. [00:02:32] Speaker 01: The agency's own regulations suggested, though, that once you've submitted an application, you can feel free to change it to abide better by the frequency [00:02:42] Speaker 01: Number two, I don't think it's the same definition for a theatrical producer and for a live performing arts organization operator. [00:02:48] Speaker 05: No, I'm not saying it's the same definition. [00:02:50] Speaker 05: I'm saying the term produce is within both if you look at the steps. [00:02:54] Speaker 01: You're right, Your Honor. [00:02:55] Speaker 01: It is in both. [00:02:56] Speaker 01: I do think that agency itself treated those two terms differently. [00:03:01] Speaker 01: If you look at their frequently asked questions, I believe it's page 735, I believe is the relevant one. [00:03:08] Speaker 01: It defines theatrical producer separately from [00:03:11] Speaker 01: performing arts organization operator. [00:03:14] Speaker 01: So it suggested that the roles that [00:03:17] Speaker 01: would play in those two contexts are different. [00:03:21] Speaker 01: That's what the agency's view was. [00:03:22] Speaker 01: And we agreed to it. [00:03:23] Speaker 01: It seems that Congress intended to provide broad relief to a large category of industry players, to be sure, those with organizational and managerial and production roles, but still a broad category. [00:03:39] Speaker 01: And it wanted those definitions, as both my client and the government agree, to be interpreted using the accepted industry definition. [00:03:47] Speaker 01: I do think there are some relevant differences between theatrical industry, the concert industry, the movie and film industries, and other sort of production. [00:03:57] Speaker 05: How do we get to what you say they're looking at as all aspects of production, but then how would you more narrowly define it? [00:04:06] Speaker 05: You know, again, using the category of produced because the statute does have [00:04:11] Speaker 05: commas in that it indicates produce, manages, or host live concerts, et cetera, et cetera, which suggests that each one of those terms could be sufficient to qualify you. [00:04:23] Speaker 01: That's right, Your Honor. [00:04:23] Speaker 01: I think they're all independent. [00:04:25] Speaker 01: But I also think that ordinarily, in financial reconstruction context like this, you'd look at them. [00:04:29] Speaker 01: They can, to some extent, inform neighboring. [00:04:35] Speaker 01: So for example, you know, it might not be the case that anybody who could said to be produced a very small discrete aspect of the show would be equivalent to someone who manages or organizes. [00:04:46] Speaker 01: So I think no word is known by the company keeps produces here suggests that same sort of managerial or supervisory. [00:04:54] Speaker 01: But I think the all aspects definition just goes way too far. [00:04:57] Speaker 01: It just makes no sense in the way that concerts are actually put on. [00:05:01] Speaker 04: And so the main thing you've identified, so you sort of have two buckets of challenges. [00:05:07] Speaker 04: One is that they've given a definition of live concert production that is in conflict with the statute. [00:05:16] Speaker 04: But then you also have to deal with the factual determinations. [00:05:20] Speaker 04: And you said that they're unsupported or arbitrary. [00:05:23] Speaker 04: On the first question about the legal, the challenge you make is that, [00:05:28] Speaker 04: is to the all aspects that have ultimate control over all aspects? [00:05:32] Speaker 01: It is, Your Honor. [00:05:32] Speaker 01: We just don't think that's supportable. [00:05:34] Speaker 01: We don't think it makes sense on its own terms. [00:05:36] Speaker 01: I can get into that if you like. [00:05:39] Speaker 01: But it's primarily to the all aspects. [00:05:41] Speaker 01: We agree that a producer tends to be, again, sort of supervisory managerial role. [00:05:45] Speaker 01: We would define it as something more like, again, we think it was the entity's, excuse me, SBA's job to define in the first instance. [00:05:50] Speaker 01: But putting that aside, if we were to define it to be something like the entity or entities with organization or managerial control over [00:05:57] Speaker 01: many significant aspects of a show based on industry understanding. [00:06:01] Speaker 01: Flexible definition, it's a functional definition. [00:06:03] Speaker 01: That's actually the way it is used in the concert industry. [00:06:09] Speaker 04: It's the all aspects. [00:06:11] Speaker 04: But they also, as I read the SBA, determined that Concert Investors was only responsible for [00:06:23] Speaker 04: lighting. [00:06:24] Speaker 04: So there's sort of the definitional side, but also even under a definition that would allow more than one or wouldn't have to be all aspects. [00:06:33] Speaker 04: So do you have to also win a challenge to the reading of the record in order to prevail? [00:06:38] Speaker 01: Well, I think we do need to show, Your Honor, that we're not just a mere service provider. [00:06:42] Speaker 01: But I think it's really important what it means to be just a mere service provider. [00:06:45] Speaker 01: We accept that person who is actually hired by Concert Investor to install the rigging. [00:06:51] Speaker 01: or the person hired by concert investor to perform the stage managing function. [00:06:55] Speaker 01: Those are service providers. [00:06:56] Speaker 01: Those are providing services to eligible producers, artists, promoters, et cetera, those who might be eligible in the statute otherwise. [00:07:05] Speaker 01: What we do contest with and what we think the record is [00:07:07] Speaker 01: is overwhelmingly clear on is that that is not what Concert Investor does. [00:07:12] Speaker 01: It plays that organizational supervisory role over the concert tours themselves. [00:07:18] Speaker 01: It is the one that's organizing the tour budget. [00:07:20] Speaker 01: It is the one that's paying all the invoices for everyone on the show. [00:07:23] Speaker 01: It's paying the lighting installer. [00:07:26] Speaker 01: It's paying, I mean, we have a list of invoices on pages 13 and 14 of our brief. [00:07:29] Speaker 01: It's things like [00:07:30] Speaker 01: stage managing, graphic design, staging, power generation distribution, audio package, LED package, lighting packet, screen media server package. [00:07:40] Speaker 01: I could go on and on, video crew and equipment, special effects, lasers, smoke generators, et cetera. [00:07:45] Speaker 01: It would make no sense for us to be a service provider that would then be paying the invoices for all the other service providers on the tour. [00:07:51] Speaker 01: And as I said before, other than Concert Investor, every other entity was a subcontractor. [00:07:57] Speaker 04: Now, is the record sufficient for us to confidently so conclude that every other entity was a subcontractor? [00:08:04] Speaker 04: There are entities mentioned in those invoices that are contractors of concert investors, but we don't actually know whether there was some financial guru in some other bucket of activities, whether there was some music investors, [00:08:20] Speaker 04: entity that was side by side that could produce a similar record that looks exhausted. [00:08:27] Speaker 04: But what would we look to in the record that would help us exclude the unknowns? [00:08:34] Speaker 01: Understood, Your Honor. [00:08:35] Speaker 01: And it's a good question. [00:08:36] Speaker 01: But I do think there's lots in this record that actually does show that. [00:08:40] Speaker 01: Again, going back to industry usage, I think that's sort of a critical component of this. [00:08:44] Speaker 01: And I think the government agrees that industry usage is important, but they find industry usage from dictionary definitions where we've pointed to things that show what the industry, how the industry use those terms. [00:08:53] Speaker 01: So answer your question. [00:08:54] Speaker 01: Things like the magazine that described us as a production agency. [00:09:00] Speaker 04: said that the articles seem to describe you and then some other individuals in the name with somebody that was in charge of the lighting was that somebody that was part of your part of concert investors or under concert investors supervision or concert investor was not only a technical producer in the sense it was paying everyone's [00:09:22] Speaker 01: salaries and it was hiring the tour staff and it was transporting the equipment from one continent to another. [00:09:27] Speaker 01: It was also in charge of a lot of the creative elements too. [00:09:30] Speaker 01: And frankly, I think that's where a lot of this confusion came in. [00:09:32] Speaker 01: Because Concert Investor does so much for the show, it doesn't just oversee at a very high level the budget. [00:09:38] Speaker 01: It also does things like get his hands dirty and programs lighting [00:09:42] Speaker 01: sound cues. [00:09:45] Speaker 01: It confused the agency to think that's all it was doing. [00:09:47] Speaker 01: That's not the case. [00:09:49] Speaker 04: So there are two magazine articles. [00:09:51] Speaker 04: One of them is, you don't have handy. [00:09:54] Speaker 01: I have the sites for handy. [00:09:57] Speaker 01: One was 671 and the other is 658. [00:10:00] Speaker 01: Fortunately, one of them, it's just a link to the actual article. [00:10:04] Speaker 01: And I would encourage you on page, I believe that's the 671. [00:10:07] Speaker 01: I'll double check. [00:10:08] Speaker 01: I believe that's the 671. [00:10:09] Speaker 01: But I encourage you to go to that too, because you could read the whole article. [00:10:11] Speaker 01: There's an excerpt of the best paragraph, I think, that says putting it all together and really shows what our client does. [00:10:18] Speaker 01: But if you go to the actual [00:10:18] Speaker 01: article itself. [00:10:20] Speaker 01: There's a link to it in footnote five, I believe, of our opening brief. [00:10:25] Speaker 01: If you turn to page 41, there's actually an advertisement for Concert Investor that says, full service production agency. [00:10:31] Speaker 01: And it shows all the things Concert Investor does. [00:10:34] Speaker 04: But the article that is reproduced, that's the one that treats it as sort of hear the sound people and they're the lighting people. [00:10:41] Speaker 04: And I just [00:10:42] Speaker 04: interested in how and I think that's the way the SBA understood it and I'm wondering if you know what your pushback is on that. [00:10:51] Speaker 04: That's the article it appears two different places in the JA. [00:10:55] Speaker 01: Well these are these are magazines called things like production lights and staging news so it's not surprising to us that they would focus on those sort of light sound intensive that's what them. [00:11:04] Speaker 04: But what I [00:11:06] Speaker 04: to be saying, and maybe this is wrong, is that they're attributing the lighting not to Concert Investors, but to somebody else. [00:11:13] Speaker 01: Lighting is absolutely attributed to Concert Investor. [00:11:15] Speaker 01: I think later on in the article, they talk about another person with a sound engineering role. [00:11:20] Speaker 01: I'm sorry, I missed that. [00:11:21] Speaker 01: That person was not associated with Concert Investor, or not, excuse me, that person is not a member of Concert Investor. [00:11:28] Speaker 01: that person was paid by concert. [00:11:30] Speaker 04: That person was a subcontractor. [00:11:32] Speaker 01: That's right. [00:11:32] Speaker 01: If you look at, well, I think there's it's outside of the record. [00:11:37] Speaker 01: Unfortunately, it gets a little bit complicated. [00:11:38] Speaker 01: I think for the first half of the tour concert, the artist used its existing sound engineer halfway through that person left and the concert investor hired the sound engineer. [00:11:47] Speaker 01: Again, it goes to show that sound engineer is the service. [00:11:51] Speaker 01: That's the that's the contractor providing services to the eligible entities like the producer. [00:11:58] Speaker 05: You use the term produce from the dictionary definition, it could mean different things depending on your role, like if you're in film. [00:12:11] Speaker 05: Absolutely. [00:12:12] Speaker 05: Okay. [00:12:13] Speaker 05: So we're not, when we say all aspects of production, that's even further defined by the particular role. [00:12:19] Speaker 01: I think that's right, Your Honor. [00:12:20] Speaker 01: And I think our main point there is because it's a flexible definition, and that's what even some of the government's sites, such as the Berklee Music Citation suggests, flexible ones going to depend concert to concert. [00:12:32] Speaker 01: That's why it's important to look at the industry usage. [00:12:34] Speaker 01: And also, frankly, why the all aspects definition makes no sense, because in that case, there would almost never be a producer, because there's also always an artist who has control over creative aspects and writes the songs. [00:12:46] Speaker 01: and does other important things. [00:12:47] Speaker 01: There's a venue that actually hosts the concerts that do things like concessions. [00:12:51] Speaker 01: And then there's the promoter that markets the concert. [00:12:56] Speaker 05: If at all, because this is kind of, as you indicated, a definition that comes later on. [00:13:03] Speaker 05: And it's generally when we're looking to Deference, Chevron, Skidmore, et cetera, is a little more formality to the process in terms of how any definition or articulation of or interpretation is developed over time. [00:13:15] Speaker 01: Absolutely, your honor. [00:13:16] Speaker 01: And I think that, you know, part of this is product of it being sort of a rush process. [00:13:20] Speaker 01: So the agency did not go through notice and comment rulemaking with respect to the different definitions. [00:13:25] Speaker 01: And in fact, as we pointed out in our brief, I think if you look at page 735, they adopted a definition of performing arts organization operator that seems us to conflict with the statutory language. [00:13:35] Speaker 01: But putting that aside, we don't think they get any deference on the statutory construction issue here. [00:13:39] Speaker 01: This is a question of law for the court to decide what is the definition of producer. [00:13:43] Speaker 01: That's how the district court treated it well. [00:13:45] Speaker 01: I think below they asked for skidmore deference on that question. [00:13:48] Speaker 01: I think they've abandoned that on appeal by failing to raise it, asked for it. [00:13:52] Speaker 01: So I don't think they get any deference on that. [00:13:54] Speaker 01: With respect to the record, it's substantial evidence review. [00:13:58] Speaker 04: And the place that you were just as a matter of information, helpfully describing the [00:14:03] Speaker 04: role of the sound engineer. [00:14:05] Speaker 04: Citations in the record that would pin down the concert investors' responsibility for music, audio rig, kinds of things that SBA thought you weren't responsible for. [00:14:19] Speaker 04: And I pulled out some sites, but I actually would be guided by sites that you think are the best sites to establish that. [00:14:25] Speaker 01: Right. [00:14:26] Speaker 01: Well, I can give you a few different ones, Your Honor. [00:14:28] Speaker 01: I think the, let's see, we're just actually looking at this. [00:14:32] Speaker 01: The sound engineer is called Sound Solution. [00:14:37] Speaker 01: One of the sound engineers, that's on page 677 of the record. [00:14:40] Speaker 01: Stage manager, that's separate from sound, that's 678. [00:14:44] Speaker 01: I pulled a couple other invoices too. [00:14:46] Speaker 01: For example, VER, we paid them for the audio package, that's at 647. [00:14:51] Speaker 01: We paid someone called PRG Music for audio equipment, that's a [00:14:57] Speaker 01: I'm sorry, that's at 647. [00:14:58] Speaker 01: The VR was at 643. [00:15:00] Speaker 01: And then we paid sound solutions. [00:15:02] Speaker 01: That's also in the record elsewhere at 560. [00:15:04] Speaker 01: So those are just some examples. [00:15:06] Speaker 01: I think the SBA also found that we were at least a service provider for lighting and sound. [00:15:11] Speaker 01: Actually, to be clear, I think they said at most. [00:15:13] Speaker 01: But either way, I think it's common ground that we do at least, for appeal, we do lighting and sound. [00:15:21] Speaker 01: But I want to go back to your question about what else in the record because we talked about the magazine articles. [00:15:26] Speaker 01: I do think they're quite compelling. [00:15:28] Speaker 01: And again, I'd urge you to look at that hyperlink and go to page 41 because it says right there in black and white, or actually full color, that we advertise ourselves as a full service production company. [00:15:38] Speaker 01: And that's way before [00:15:39] Speaker 01: this this grant eligibility requirement. [00:15:43] Speaker 01: But I would also suggest there's a bunch of other stuff too that just was not considered by SBA. [00:15:47] Speaker 01: I think that's really critical. [00:15:48] Speaker 01: For example, the contract between the live nation, which is the promoter, [00:15:57] Speaker 01: Twenty One Pilot, the band, and my client. [00:15:59] Speaker 01: That describes us as providing production services for the concert. [00:16:03] Speaker 01: Of course, there's the concert, the contract between Concert Investor and the band Twenty One Pilots, which explicitly refers to us. [00:16:10] Speaker 01: It defines us as producer. [00:16:13] Speaker 01: Again, there are no other producers. [00:16:16] Speaker 01: Oh, sure, sure. [00:16:18] Speaker 01: The contract is Twenty One Pilots contract is at J.A. [00:16:23] Speaker 01: 611 through 626. [00:16:25] Speaker 01: And if you go to 6-11, it's right there in black and white. [00:16:27] Speaker 01: It says concert investor, parentheses, capital P producer, and it's with the band itself. [00:16:34] Speaker 01: And again, that's what the band hired concert investor to do. [00:16:37] Speaker 05: And what is your response to SBA's position that you weren't responsible for them using? [00:16:42] Speaker 01: But I mean it's true we're not responsible in the sense that again we didn't run the sound board during the show we didn't write the music we didn't write the songs for the band, but we were paying all we're managing the entire tour budget we're paying all the vendors who are doing sound things so even if we didn't have creative control over certain aspects of the show which. [00:17:01] Speaker 01: Ultimately, is within the purview of the artist, in a show like this, they can decide when they hire a producer to produce their show, they can decide, we want you to do most aspects, but we have the sound covered. [00:17:12] Speaker 01: Or we want you to do, we want you to do this, but we already hired Live Nation to do our marketing, to do our promoting, and to sell the tickets. [00:17:19] Speaker 01: So we don't need you to do that. [00:17:20] Speaker 01: But we do actually want you to play a creative role in designing our show. [00:17:24] Speaker 01: And that's what happened here. [00:17:25] Speaker 05: So what's your ultimate remedy here, because you're not [00:17:30] Speaker 05: to all aspects of production. [00:17:33] Speaker 05: And so if we were to reverse, that's the definition that's still there. [00:17:37] Speaker 05: So are you asking us to define what produce is? [00:17:40] Speaker 01: Well, again, you're right. [00:17:41] Speaker 01: It's not a situation where you have to defer to the agency. [00:17:43] Speaker 01: So I think you can and should adopt a definition that makes sense based on the statutory terms. [00:17:49] Speaker 01: And again, we have some statutory clues that suggest it requires that it's a broad definition, a flexible one, but it includes some organizational managerial production role. [00:18:00] Speaker 01: which again describes what my client does. [00:18:03] Speaker 01: So I think you can and should adopt that definition. [00:18:05] Speaker 01: And once you've determined that that definition is the correct one and you can reverse the summary judgment ruling and hold that the denial of funding was improper because it was, we met all the eligibility requirements, including the live performing arts operator organization eligibility. [00:18:28] Speaker 05: So in the documents definition though, because you're asking us to kind of come up with it based on industry usage, perhaps dictionary terms, but would the definition then ensure that, as I spoke about earlier, these other acts, manage, post, et cetera, [00:18:50] Speaker 05: would have been individually sufficient to meet the criteria so that that comma matters. [00:18:56] Speaker 01: That's absolutely right, Your Honor. [00:18:57] Speaker 01: We agree that it matters. [00:18:58] Speaker 01: There's an or there. [00:18:59] Speaker 01: I think anybody doing any single one of those functions. [00:19:02] Speaker 01: And to be clear, we think we also manage tours and we organize tours. [00:19:06] Speaker 01: We might even host tours. [00:19:07] Speaker 01: depending on how the SBA wanted to define that term. [00:19:10] Speaker 05: So if that's the case, then could you have just met the definition another way without us defining produce? [00:19:15] Speaker 01: Yes, Your Honor. [00:19:16] Speaker 01: I think you could say that. [00:19:18] Speaker 01: I think one way to resolve this is to say under any reasonable conception of what those broad terms mean, concert investor meets it or at a minimum, the agency was wrong to deny concert investors funding. [00:19:32] Speaker 01: And obviously in that situation, sometimes the case will be remanded back to the agency. [00:19:36] Speaker 01: Don't think that that is the best course here, at least not a remand without explicit instructions to say essentially that this is the sort of entity that Congress had in mind when it was trying to broadly distribute $15 billion worth of pandemic relief funding. [00:19:51] Speaker 01: Just because the history of the case, I think it's been two and a half years since my client applied for this funding. [00:19:57] Speaker 01: In those two and a half years, the company has essentially gone defunct. [00:20:00] Speaker 01: as its direct competitors who were awarded funding based on very similar and seemingly ad hoc distinction, I mean, similar responsibilities and yet ad hoc distinctions among them have been able to actually bid on those major international tours, those multi-continent tours that my client used to produce shows for and no longer can because of the SBA's mistake. [00:20:20] Speaker 01: So we would urge that rather than sending it back to the agency and having [00:20:24] Speaker 01: potentially more delay and more errors, at least if there's a remand, it's with clear instructions about what the agency should be focused on, if not just simply an outright under any reasonable exception by client title. [00:20:38] Speaker 05: And SBA did have a statement going back to whether or not you were responsible for the music. [00:20:46] Speaker 05: And so do you think that their statement is broad in the record? [00:20:49] Speaker 05: And I think I'm thinking about JASITE 807, [00:20:52] Speaker 05: that essentially says it's not even responsible for the music, not responsible for the audio or the instruments. [00:20:58] Speaker 05: Is your response just that we were, it doesn't mean that we individually did it, but we had the subcontracts? [00:21:04] Speaker 01: We were responsible based on our sworn statement to the SBA, based on the other evidence in the record, we were responsible for each and every element of the tour. [00:21:16] Speaker 01: Obviously, that doesn't mean literally everything, because again, we didn't do marketing, that was Live Nation's job, but we were responsible for [00:21:22] Speaker 01: all of the production services that the band needed. [00:21:24] Speaker 01: That's in fact why the band hired us to perform those functions. [00:21:28] Speaker 01: We are the eligible entity that was paying all of the service providers who were putting on the show, the ones who were running the sound, who were installing the rigging, who were hanging speakers. [00:21:38] Speaker 01: And again, I think my client actually has a broader role than some producers in the sense that they were also very intimately involved in the creative aspects of the show. [00:21:46] Speaker 01: That's not always true of a producer. [00:21:48] Speaker 01: A producer can just be at a remove [00:21:50] Speaker 01: This was a hands-on producer, started 14 months before the international tour started, that worked very closely with bands to develop not only just the overall budget, but also all of the creative elements. [00:22:04] Speaker 01: lighting cues, you know, special effects. [00:22:06] Speaker 01: It made it like a spectacular show that it was. [00:22:09] Speaker 01: So I don't think, I mean, I think there could be situations where a band doesn't do that, only does the tech stuff and still be considered a producer. [00:22:15] Speaker 01: It shouldn't be held against my client that it also happened to play this very pivotal creative role in the show in addition to the managing the overall tour budget and kind of plan it. [00:22:25] Speaker 04: And instruments were the band's responsibility? [00:22:28] Speaker 01: I don't know. [00:22:30] Speaker 01: I'm guessing the answer is yes. [00:22:32] Speaker 01: I will see if my colleagues know the answer to that. [00:22:36] Speaker 01: But again, to be clear, our position is not that we work [00:22:40] Speaker 01: in ultimate control of all aspects of the show, read literally, just because we think that's nonsensical would be impossible. [00:22:46] Speaker 01: So there might be small things like, did we pay for the instruments? [00:22:49] Speaker 01: No, that's the band, the band took care of that. [00:22:51] Speaker 01: You can imagine a scenario where the band would say, we really need someone to manage this budget for this massive tour, but we have, I love to do lighting cues, I'm gonna do that myself. [00:23:00] Speaker 01: To me, that wouldn't mean that you're not a producer, it just means that, [00:23:05] Speaker 04: It's more custom to the tour, to the band, to the nature of the production. [00:23:12] Speaker 01: Absolutely. [00:23:13] Speaker 01: Custom is a great word. [00:23:13] Speaker 01: We use flexible below, but it's flexible. [00:23:15] Speaker 01: It's going to depend on the show. [00:23:16] Speaker 01: That doesn't mean there's no limit. [00:23:17] Speaker 01: It doesn't mean that anybody who just does anything for the band, you know, the roadie doesn't qualify as producer under that definition, but kind of read sensibly, we think. [00:23:27] Speaker 01: I'll make one other quick point, which is that we've been focusing on the word producer. [00:23:30] Speaker 01: But again, the question is whether one of our principal activities is to produce, manage, or organize. [00:23:37] Speaker 01: And if you're doing one of those things, it doesn't matter if you're the capital P producer, like in the musical, The Producers. [00:23:43] Speaker 01: It matters whether one of your principal activities is to do that on the level that Congress had in mind when it authorized this $15 billion funding. [00:23:53] Speaker 01: So I'm happy to answer any other questions, or I'm happy to pause and [00:23:59] Speaker 06: Thank you. [00:24:00] Speaker 06: Thank you. [00:24:14] Speaker 04: Mr. Silverman, proceed when you're ready. [00:24:17] Speaker 02: Good morning. [00:24:17] Speaker 02: Your honors may please the court. [00:24:19] Speaker 02: Bradley Silverman for SBA and the administrator. [00:24:22] Speaker 02: SBA reasonably determines that Concert Investor does not produce concerts due to the limited nature of the services that it provides. [00:24:30] Speaker 02: Now, as a threshold matter, Concert Investor has forfeit the argument that the government's definition is wrong by failing to raise it below. [00:24:39] Speaker 05: At most, during the summary judgment... When you say failing to raise it, are you talking about articulating a specific argument about it or is the record sufficient [00:24:50] Speaker 02: In itself, because there was certainly a discussion about what it does and the term produce the two things concert investor never disputed that the government's definition of produces concerts was wrong. [00:25:04] Speaker 02: It raised up other arguments that argued that it satisfied that definition, but it never argued that that definition was wrong. [00:25:10] Speaker 03: What government definition. [00:25:11] Speaker 02: The ultimate control or responsibility for all aspects. [00:25:15] Speaker 03: All aspects of production is council's definition. [00:25:19] Speaker 03: I'll tell you my concern here. [00:25:21] Speaker 03: That is council's definition. [00:25:22] Speaker 03: That is not the agency's definition. [00:25:25] Speaker 03: I do not understand as I prepared this case, and if you can help me, I'll be grateful. [00:25:30] Speaker 03: I do not understand what legal standard you think the agency was applying. [00:25:38] Speaker 03: And don't just say production, because that doesn't tell me anything. [00:25:42] Speaker 03: I counsel tried to cover the agency below by saying all aspects of production. [00:25:49] Speaker 03: That is not the agency's definition. [00:25:51] Speaker 03: The agency did not send them a letter that endorsed that position. [00:25:55] Speaker 03: They've never endorsed that position. [00:25:57] Speaker 03: And as I went through this and looked at the other cases and looked at this case, I have no idea what the legal standard is that is being applied. [00:26:06] Speaker 03: And normally, I go back to my long roots here, the administrative cases, [00:26:12] Speaker 03: You're applying. [00:26:12] Speaker 03: We look to see what the legal standard was and then whether it was faithfully applied. [00:26:16] Speaker 03: There is no legal standards been stated here. [00:26:18] Speaker 02: None. [00:26:20] Speaker 02: Three points in response to that, Your Honor. [00:26:22] Speaker 02: First of all, this is the definition that SBA applied and what SBA did not do was fully flesh it out and to spell it out. [00:26:29] Speaker 03: You agree they never said and certainly not in the letter to these people. [00:26:33] Speaker 03: All aspects of production is what we're applying. [00:26:36] Speaker 03: That's not the agency's view, okay? [00:26:38] Speaker 03: Correct, Your Honor. [00:26:39] Speaker 03: Okay, go ahead. [00:26:39] Speaker 03: What's your second point? [00:26:40] Speaker 02: Well, on that point, they didn't need to say that. [00:26:43] Speaker 02: It was enough that they imply the standard and that it is discernible that that is the standard they applied. [00:26:47] Speaker 02: What they said was that Concert Investor does not produce concerts. [00:26:51] Speaker 02: And the reason they gave for that was the limited nature of its role. [00:26:56] Speaker 03: Let me tell you, as a judge looking at this, what I saw was [00:27:01] Speaker 03: you on their behalf are telling me some things that they don't do or do, but you're not telling me what it is they should have done. [00:27:13] Speaker 03: You're telling me what they don't do. [00:27:15] Speaker 03: I don't know whether it's right or wrong. [00:27:16] Speaker 03: They contest it. [00:27:19] Speaker 03: I continue reading the sentences and the paragraphs to try and figure out, OK, maybe they do that. [00:27:25] Speaker 03: But is that inconsistent with the legal standard that's been stated somewhere? [00:27:29] Speaker 03: There is no legal standard. [00:27:31] Speaker 03: There is no legal standard that amplifies the statutory provision. [00:27:36] Speaker 03: And it shouldn't be our job on review to now figure out what production or whatever word you think is between the two of you think is appropriate, we're supposed to give meaning to it. [00:27:49] Speaker 03: And we can see by the presentation of this case, there are all kinds of ways to think about that. [00:27:53] Speaker 03: And there's an expert agency that should have done it. [00:27:58] Speaker 02: Three points, Your Honor. [00:27:59] Speaker 02: Very quickly on the first one, then move on to the second and third point. [00:28:01] Speaker 02: Very quickly, to say what producing a concert is not naturally implies what producing a concert is. [00:28:07] Speaker 02: So providing limited services, limited aspects of the show is not enough to produce a concert, then it follows that producing a concert requires more than just a limited role. [00:28:18] Speaker 03: It implies all aspects of production? [00:28:21] Speaker 03: That's right. [00:28:21] Speaker 03: Of course not. [00:28:22] Speaker 03: Why does it imply that? [00:28:24] Speaker 03: Even if... You're saying what they did [00:28:26] Speaker 03: intuitively to you seem too limited. [00:28:28] Speaker 03: And so, you self-servingly say, so the standard must be they have to meet an all aspects of production standard. [00:28:37] Speaker 03: Says who? [00:28:38] Speaker 03: The agency never said that. [00:28:39] Speaker 03: The statute doesn't say that. [00:28:41] Speaker 03: They say production. [00:28:42] Speaker 03: It doesn't follow that because the word production is there. [00:28:45] Speaker 03: That means you must attend to all aspects of production in order to be within the statutory category. [00:28:51] Speaker 03: Where does it say that? [00:28:52] Speaker 02: Two more points, Your Honor, even if it doesn't. [00:28:54] Speaker 02: We're up to number seven now. [00:28:56] Speaker 02: Sorry? [00:28:56] Speaker 03: We're up to number seven point. [00:28:58] Speaker 02: Seven, seven and a half, somewhere there. [00:29:00] Speaker 02: Even if SBA did not say that, and even if SBA should have said that, any error in failing to say that was harmless, because this is the definition, this is the correct answer, this is what SBA- How do I know that's the correct answer? [00:29:13] Speaker 02: Because we've explained it in our briefing. [00:29:14] Speaker 03: Because you said it in your briefing. [00:29:16] Speaker 02: This is a legal question, Your Honor. [00:29:20] Speaker 05: Sorry? [00:29:23] Speaker 05: respect to application. [00:29:25] Speaker 02: SBA has made three mistakes in granting funds, but as evidence that this is the standard applies it acknowledged that these were mistakes that it should not have done that and has moved to recoup those funds. [00:29:39] Speaker 02: If SBA was applying no standard here, [00:29:41] Speaker 02: then it wouldn't say that it made a mistake, it wouldn't try to recover those funds. [00:29:46] Speaker 02: Only if SBA has a consistent definition that it actually applies across the board, can you even say, we made a mistake in giving you these funds in the first place. [00:29:56] Speaker 05: You're saying a consistent definition, at what time did this definition was it derived? [00:30:03] Speaker 02: I can't point to a particular moment. [00:30:05] Speaker 02: I cannot point to a particular moment. [00:30:08] Speaker 02: What I can say is that SBA was reviewing tens of thousands of applications. [00:30:13] Speaker 02: In the course of doing this, it formulates an understanding of what this term means and what satisfies it and what doesn't. [00:30:19] Speaker 02: But even if SBA did not say this, and Chenery requires it to have said so, it would do the same thing on remand, any error would be harmless, because this is a pure question of- I guarantee you, if it went back on remand and we said we need to understand what it is you think the statute means, give us a standard, they would not do the same thing. [00:30:39] Speaker 03: They actually would. [00:30:40] Speaker 03: I'm not talking about the result. [00:30:41] Speaker 03: I'm talking about explaining what it is they think they're applying. [00:30:44] Speaker 03: And then we would know whether or not their application is fragile. [00:30:49] Speaker 02: They would be saying this, Your Honor, but you don't even need to take my word for that because this is a pure question of statutory interpretation. [00:30:55] Speaker 02: That is when the courts are well equipped to answer. [00:30:58] Speaker 02: What does the term produces concert means? [00:31:00] Speaker 02: We did not ask for Chevron deference on that question. [00:31:03] Speaker 02: We argued this is what the term means. [00:31:05] Speaker 03: Look, I don't know where we're going to go with Chevron. [00:31:09] Speaker 03: I don't know where we're going to end up with Chevron. [00:31:11] Speaker 03: That's not the issue. [00:31:13] Speaker 03: But there's no way I can imagine that this court in its administrative law [00:31:18] Speaker 03: is ever going to reach a point where we have challenges to agencies, interpretation, and applications of statutes, where we ignore what the agency said, because we have to understand how the agency got to the result that it did. [00:31:33] Speaker 03: So we have to understand what it is the agency thought it was applying. [00:31:36] Speaker 03: And if the agency doesn't cite a legal standard, [00:31:39] Speaker 03: then we're not in a position to be able to judge. [00:31:42] Speaker 03: That's not going to change. [00:31:43] Speaker 03: That's not about Chevron or anything else. [00:31:45] Speaker 03: That's the way we have to do business. [00:31:47] Speaker 03: We have to know what legal standard the agency thought it was applying. [00:31:53] Speaker 03: That's what's fair to the parties. [00:31:55] Speaker 03: Parties are entitled to know that. [00:31:57] Speaker 03: And then they set their cases up accordingly and answer your challenges. [00:32:00] Speaker 03: You never did it here. [00:32:02] Speaker 03: And you said you can't cite to anything because it's not there. [00:32:05] Speaker 03: And I look. [00:32:07] Speaker 02: Your honor, the question of what it means to produce concerts is a pure question of law. [00:32:11] Speaker 02: Whether or not a particular applicant satisfies that standard, that's a mixed question. [00:32:16] Speaker 02: Whether or not. [00:32:16] Speaker 05: Let's go with my comments again. [00:32:18] Speaker 05: Organize, promote, produce, manage, or host. [00:32:24] Speaker 05: So aren't those individual buckets that would essentially individually be sufficient enough to meet the various categories for granting an application? [00:32:36] Speaker 02: Yes, meeting them. [00:32:36] Speaker 05: And how do you distinguish the commas, those words between the commas? [00:32:40] Speaker 02: Oh, I agree that the commas matter, Your Honor. [00:32:42] Speaker 02: The fact that there are five different words, you have produces alongside words like organize, manage. [00:32:48] Speaker 05: Produce can include promote, right? [00:32:50] Speaker 05: It includes it. [00:32:50] Speaker 05: Produce can include manage. [00:32:52] Speaker 02: It's broader, it includes. [00:32:54] Speaker 05: Okay, but the point is that if any of these individually could meet it, then why is producing all of a sudden all aspects of? [00:33:02] Speaker 02: Well, because Concert Investor only applied on the ground that it produces concerts. [00:33:06] Speaker 02: If you look at their justification statement, they say they only produce concerts. [00:33:10] Speaker 02: That's the rationale they offer. [00:33:12] Speaker 02: In fact, Concert Investor emphasizes the opinion of its accountant. [00:33:18] Speaker 02: Concert Investor places great [00:33:20] Speaker 02: emphasis on the accountants' words. [00:33:22] Speaker 02: The accountant says in concert investors' submission of its application, concert investors' sole business is producing concerts, not managing, not organizing, produces. [00:33:33] Speaker 02: So at the agency level, the only question put before the agency was whether concert investor produces concerts. [00:33:40] Speaker 05: If you find that in the paperwork submitted and then [00:33:45] Speaker 05: You know, just looking at various articles, just anything that just kind of supports the application, that some of it was actually managing. [00:33:53] Speaker 05: Do they then get to, despite that they applied under producing edit, because they articulated another individual category for which they could have qualified? [00:34:05] Speaker 02: SBA had no obligation to make arguments on- You can have them stand or fail on their own application. [00:34:11] Speaker 02: Yes, your honor. [00:34:12] Speaker 02: Yes. [00:34:13] Speaker 04: So I'm going to use it. [00:34:14] Speaker 04: So the determination was they were a contractor solely for light and sound, not a producer. [00:34:19] Speaker 04: That's correct. [00:34:20] Speaker 04: And so reading the record, there's evidence that the SBA doesn't address about being involved in developing creative elements, about retaining equipment needed, including rigging, custom set pieces, special effects, invoicing for power services, submitting an overall custom budget, overseeing set construction, [00:34:49] Speaker 04: negotiating with vendors, tour staff. [00:34:54] Speaker 04: How do we account for what looks like on one reading a much broader set of functions than what the SBA is crediting? [00:35:04] Speaker 02: I would say that Your Honor has just enumerated all the different various aspects of producing the visual elements of a concert. [00:35:11] Speaker 02: You can describe it succinctly as the visual elements, or you can describe it in- Visual and sound elements. [00:35:17] Speaker 02: The sound role, if any, [00:35:19] Speaker 02: of concert investor is murky and unclear. [00:35:24] Speaker 02: Council in his turn up here said that concert investor is responsible for the music or at least indirectly responsible for the musical aspects of the show, but that is not in the record. [00:35:34] Speaker 02: There's the Lighting and Sounds America article describes what concert investor does. [00:35:39] Speaker 02: It describes them using visual effects of the show and then it describes a completely different person sound engineer who actually is responsible for bringing the music, which is the most important part of the show to the audience's ears. [00:35:54] Speaker 02: and there's no apparent connection between that person and Concert Investor. [00:35:58] Speaker 02: Now Concert Investor argues that, well, actually, we pay that person responsible, but that's not in the record. [00:36:05] Speaker 02: At best, you have these cryptic and, frankly, impenetrable invoices. [00:36:10] Speaker 04: But I'm probably looking at the wrong document here, but JA108, the letter from the SBA, said that Concert Investor at best serves the needs of touring concert artists for lighting and sound. [00:36:23] Speaker 04: designing plots, obtaining subcontractors to install and operate the necessary equipment during a concert. [00:36:28] Speaker 04: And that's no longer the view of the record that you're operating on because that's before the appeal. [00:36:34] Speaker 02: I think the way to understand the term lighting and sound in the denial letter is if you look at the FAQs, SBA treats lighting and sound service providers as sort of a bucket category, a general category. [00:36:46] Speaker 02: So in using the same general term, that is meant just to refer to the general category used in the FAQs, not to say specifically you do lighting and sound. [00:36:57] Speaker 04: And the designing plots, obtaining subcontractors and necessary equipment, you see that all as [00:37:02] Speaker 04: in service of the lighting role. [00:37:04] Speaker 02: Yes, that is correct, Your Honor. [00:37:06] Speaker 02: These are all different components of lighting, visual effects to put it more charitably because they do more than just strobe lights. [00:37:14] Speaker 02: There's a lot of visuals. [00:37:15] Speaker 02: It's an impressive set and no one disputes that, but it's only the visual component. [00:37:20] Speaker 02: possibly, possibly, and I say possibly because the record is just not clear on this point, some sort of ancillary sound-related function such as perhaps syncing visuals with music or some sort of sound effects that go along with it. [00:37:38] Speaker 02: And I have to speculate about that because there's nothing in the record that says what they do. [00:37:42] Speaker 02: Certainly nothing that suggests that they are responsible for the sound engineer, the person at the audio board, [00:37:48] Speaker 02: actually is responsible for enabling the audience to hear the music, which is the most important part of a concert. [00:37:56] Speaker 05: Now, does your definition of produce require that they originate the idea of the concert and actually approach musicians about performing it? [00:38:04] Speaker 02: No, Your Honor. [00:38:05] Speaker 05: Because I'm just trying to figure out when you say all aspects, what is the entering point into that definition? [00:38:12] Speaker 02: Ultimately, do they have control, responsibility, whether directly in what they do or in who they supervise and who they can oversee and countermand for everything that goes into a concert. [00:38:24] Speaker 02: It's fine for a band or artist to come to them and say, we want you to produce our concert. [00:38:29] Speaker 02: That has to start from somewhere. [00:38:32] Speaker 02: But there can't be broad aspects of the show that they're not responsible for. [00:38:36] Speaker 02: In addition to the music, which nothing in the record suggests they're responsible for, there's no evidence in the record. [00:38:42] Speaker 02: And in fact, I believe it's undisputed that they do not schedule tour dates. [00:38:47] Speaker 02: They do not book venues. [00:38:48] Speaker 02: They do not negotiate. [00:38:50] Speaker 04: They're clear that that's Live Nation. [00:38:52] Speaker 04: Live Nation is the promoter, and they do the venues, and they do the dates. [00:38:59] Speaker 04: And I recognize that in the, I guess it was the district court oral argument, [00:39:06] Speaker 04: SBA had said, if this was you, said the producer might have been Live Nation, or the producer might have been the band, or I guess the producer is just someone else that we haven't heard about. [00:39:18] Speaker 04: That's right. [00:39:18] Speaker 04: Because it seems to me not persuasive. [00:39:20] Speaker 04: If we think that it's clearly not Live Nation, it's clearly not the band. [00:39:25] Speaker 04: And so is the position that there is potentially some other entity? [00:39:31] Speaker 02: Potentially. [00:39:32] Speaker 02: I would say it could be the band. [00:39:33] Speaker 02: One thing that's important to note about the record here [00:39:36] Speaker 02: is there is no reason to believe that the record submitted to SBA necessarily would reveal who the producer is. [00:39:44] Speaker 04: I appreciate that, yeah. [00:39:47] Speaker 02: This is a record that they submitted in support of their application. [00:39:50] Speaker 02: It's possible, and again I'm speculating because the record supports nothing more, [00:39:54] Speaker 02: that it is the band ultimately responsible for that. [00:39:57] Speaker 02: Sometimes a band will have a production company, either that they hire from someone else or that it's their own company. [00:40:04] Speaker 02: Taylor Swift, for example, has, I forget the name of it, her own production company that does everything for her shows. [00:40:10] Speaker 02: So it's not her exactly, but it's a company that the band creates and controls. [00:40:15] Speaker 02: So that could be the case here. [00:40:17] Speaker 04: It seems, I mean, we've got a lot of information. [00:40:19] Speaker 04: I appreciate that the information is compiled for purposes of this application. [00:40:25] Speaker 04: It seems peculiar that there would be no mention, particularly in industry articles. [00:40:30] Speaker 04: And I know those are articles. [00:40:34] Speaker 04: They're not sworn declarations. [00:40:36] Speaker 04: But it would be odd if there was no mention to an actual producer. [00:40:44] Speaker 02: Not necessarily, Your Honor. [00:40:45] Speaker 02: These are materials that this company compiled and submitted and selected, possibly cherry picked, for the purpose of trying to persuade a government entity that it should receive several million dollars in free cash. [00:40:57] Speaker 02: It is not surprising that they might be able to find the best evidence that shows that they perform a large role. [00:41:03] Speaker 02: That doesn't necessarily mean that they actually are responsible for everything. [00:41:07] Speaker 04: And the kinds of things that you would ordinarily see that would give you much more confidence [00:41:12] Speaker 04: that aren't in this application would be more detailed declarations, would be kinds of things. [00:41:19] Speaker 02: I don't think the problem is a lack of detail. [00:41:22] Speaker 02: The problem is the function that they play, the roles that they serve. [00:41:25] Speaker 04: But I'm wondering if there is a way that, I mean, I appreciate that this was a lot of processing of a lot of the people's money during a short amount of time. [00:41:37] Speaker 04: I'm sure that the people at the SBA had things that gave them more confidence and less. [00:41:44] Speaker 04: And maybe that's not something that you can speak to. [00:41:47] Speaker 04: But I'm curious about what makes, and we're only seeing this one, but what makes this look like unconvincing to the administration? [00:41:59] Speaker 02: The narrowness of the the the roles the functions that play on the tour not doing the music not booking the venues not scheduling tour dates not having responsibility for security for any number of different things it's the it's it's. [00:42:14] Speaker 02: If concert investor articulated what it does in more detail, I'm not sure that would help. [00:42:22] Speaker 02: Maybe if it's true, and I say if because the record doesn't support that, if they actually were responsible for the musical aspect of a show, then [00:42:31] Speaker 02: Possibly, that could be important. [00:42:34] Speaker 02: Maybe not, because they still don't seem to actually schedule the venues or book the, you know, schedule the tour dates or book venues. [00:42:40] Speaker 02: But that is one glaring omission. [00:42:44] Speaker 04: Live Nation does that, and I gather Live Nation does that for a lot of actors. [00:42:47] Speaker 02: Well, what I would say is if there is a whole separate entity that is doing that, that sort of suggests that the other entity, Concert Investor, is not responsible. [00:42:55] Speaker 02: So whatever entity is both retaining Live Nation and Concert Investor, because presumably they're not just coming in here scheduling concerts that, you know, band has not decided to throw yet, someone is coming and saying, [00:43:09] Speaker 02: We are retaining you, Live Nation, and we are retaining you, Concert Investor. [00:43:14] Speaker 05: To that end, let's assume that Concert Investor doesn't host, promote, manage, or organize. [00:43:20] Speaker 05: Then what is your definition of produce? [00:43:22] Speaker 05: I'm sorry, Your Honor? [00:43:22] Speaker 05: Let's assume that Concert Investor does not host, manage, promote, or organize. [00:43:27] Speaker 05: Yes. [00:43:27] Speaker 05: Then how do we get to the definition of produce? [00:43:29] Speaker 02: I would say it's the same definition that we described, ultimate control over all aspects. [00:43:33] Speaker 02: And if they have no, if. [00:43:34] Speaker 05: But when you say all aspects, those terms. [00:43:38] Speaker 05: are some aspects. [00:43:40] Speaker 02: Okay, let me clarify then. [00:43:42] Speaker 02: A concert investor does not need to personally perform any of this, but it has to be, I guess for lack of a better way of putting it, final decision. [00:43:50] Speaker 02: Someone else can do these things. [00:43:51] Speaker 02: You can delegate tasks, you can oversee tasks, but at the end of the day, someone makes the big calls as to what happens in a concert. [00:43:58] Speaker 02: Is concert investor making these calls or someone else making them? [00:44:01] Speaker 04: So producer in that string of definitions, in your view, producer is above manage, organize, host. [00:44:09] Speaker 02: I would, I would, I would believe so with the caveat that because concert investor never raised the manager organizations arguments at the agency level or for the district court. [00:44:19] Speaker 02: Well, they raised it, but then they abandoned it in the reply brief when the government argued they produce concerts and they never said, well, we also manage concerts and organizing. [00:44:27] Speaker 04: I think the point is not that. [00:44:29] Speaker 04: that they manage, it's that there are other important actors. [00:44:32] Speaker 04: And you could still be a producer and not be responsible for all aspects because, in fact, this is defined in contradistinction in a list to some other important roles. [00:44:43] Speaker 04: So the notion that you would be responsible for playing the guitar or for something that is actually host or managed is, in the statutory definition itself, [00:44:56] Speaker 04: is rebutted? [00:44:59] Speaker 05: I don't think that's correct, Your Honor. [00:45:01] Speaker 05: I think that- But the manager could hire the producer. [00:45:04] Speaker 05: I'm sorry? [00:45:04] Speaker 05: The manager could hire the producer. [00:45:07] Speaker 02: Maybe. [00:45:07] Speaker 02: Maybe the managers will hire the producer because concert- See, all of your answers are maybe. [00:45:11] Speaker 03: I mean, that's the thing that's driving me crazy in listening to this, the lack of legal standard. [00:45:15] Speaker 03: Your first answer to the question that my colleague raised was, you know, what would they have had to put in? [00:45:21] Speaker 03: You said, well, maybe if they put X in and then you said, [00:45:26] Speaker 03: Well, I don't know. [00:45:26] Speaker 03: Maybe not. [00:45:28] Speaker 03: But maybe if they put Y in, that's not a standard. [00:45:32] Speaker 03: And it's you. [00:45:33] Speaker 03: It's not even the agency doing it. [00:45:34] Speaker 03: My view is that's what the agency sits and thinks through and makes the decision. [00:45:40] Speaker 03: You're sitting before a court of appeals and say, oh, I don't know. [00:45:43] Speaker 03: Maybe it could be a good case for them if they use A and B. And then my colleagues are pointing out that there are several terms here [00:45:49] Speaker 03: You're not sure you're thinking intelligently. [00:45:52] Speaker 03: Well, wait, how should I square that for the court so it sounds reasonable? [00:45:56] Speaker 03: Makes no sense to me. [00:45:56] Speaker 03: It's not a legal standard. [00:45:58] Speaker 03: You're just guessing. [00:45:59] Speaker 03: And you admitted it by saying, I don't know. [00:46:01] Speaker 03: That's not a legal standard. [00:46:03] Speaker 02: Your Honor, just one more point on this, and we discussed this earlier. [00:46:06] Speaker 02: The Chenery Doctrine, under which an agency needs to, you can only defend its reasoning, that it articulated at the outset, that does not apply to questions of law. [00:46:17] Speaker 03: That does not apply to questions of... Counsel, let me tell you, there are more cases that I could begin to count to tell you the support of what I'm saying. [00:46:24] Speaker 03: That is, we need a legal standard. [00:46:26] Speaker 03: that we understand that is reasonable, permissible with law, and enforceable. [00:46:31] Speaker 03: It's got to be comprehensible. [00:46:32] Speaker 03: Otherwise, the parties who are regulated have nothing to guide them. [00:46:36] Speaker 03: That's what we look at over and over again, and I know you know that. [00:46:40] Speaker 02: Your Honor, I would say that the meaning of produces concerts is sufficiently clear as a matter of ordinary use, as a matter of what that term is. [00:46:50] Speaker 02: It doesn't need to be spelled out. [00:46:52] Speaker 02: It goes without saying. [00:46:53] Speaker 02: When we're in law school, we learn how to perform legal analysis. [00:46:57] Speaker 02: Issue, rule, analysis, conclusion. [00:46:59] Speaker 02: That's the way we're used to writing. [00:47:01] Speaker 02: But an agency doesn't need to do that. [00:47:03] Speaker 02: Certainly not when it is writing thousands of decision letters or making thousands of decisions. [00:47:10] Speaker 02: It is enough, even if it doesn't spell out the R aspect of Iraq, its analysis makes it clear. [00:47:15] Speaker 03: What they normally do is to say, we have this statute to enforce, and it has this requirement in this section, and what we, the agency, think that means, and this is what we're going to apply. [00:47:26] Speaker 03: And all the cases that are going to start pouring in is this standard. [00:47:29] Speaker 03: And they never did that. [00:47:30] Speaker 03: First person who did it was you. [00:47:33] Speaker 02: Your Honor, they addressed the statutory standard by performing arts organization. [00:47:37] Speaker 02: They looked at produces and they said, this is why concert investor doesn't use concerts. [00:47:42] Speaker 02: Of course, they could have said more. [00:47:43] Speaker 02: An agency always can say more, but that is what they did. [00:47:47] Speaker 04: Thank you. [00:47:48] Speaker 02: Thank you, Your Honor. [00:47:57] Speaker 01: Thank you, Your Honor. [00:47:58] Speaker 01: A few quick points. [00:48:00] Speaker 01: I think it's pretty clear that under the governor of the government's definition, there would be no producer for this concert, given the acknowledged role of the band and of Live Nation. [00:48:09] Speaker 01: But they admitted below that on page JA805, they admitted below that every concert has at least one producer. [00:48:17] Speaker 01: But clearly here, all these different entities are each taking, having ultimate control over different aspects of the show. [00:48:24] Speaker 01: That makes no sense. [00:48:25] Speaker 01: The band hired concert producer or concert investor to be the producer. [00:48:29] Speaker 01: And if I think you look at the agency's own definition of what a promoter does, it's things like on JA735, it's renting the performance site, marketing, collecting gate receipts, and then critically contracting with artists or a production company for the performance. [00:48:45] Speaker 01: The SBA itself contemplated that there would be multiple entities having ultimate control over a concert. [00:48:51] Speaker 01: That's point number one. [00:48:52] Speaker 01: Number two, to your point, Judge Edwards, there is a lot of daylight between saying you're a mere service provider having ultimate control over all aspects. [00:49:00] Speaker 01: I think that by itself shows that this is a post hoc definition. [00:49:03] Speaker 01: There could be someone with recorders of control over the concert. [00:49:07] Speaker 01: That's different from saying, [00:49:09] Speaker 01: You could be not a mere service provider, but have control over most aspects and that still would not get you to the all aspects definition that they've suggested today and telling Lee reason why in district court they adopted that all aspects definition. [00:49:22] Speaker 01: because they were confronted with the SBA's mistakes in reviewing the record and seeing that in fact, my client does perform that overall supervisory production role, even if not all aspects literally red. [00:49:37] Speaker 01: Number three, who was a producer? [00:49:40] Speaker 01: I think there've been a bunch of questions about whether there might be some other secret producer somewhere. [00:49:44] Speaker 01: I would point to your, I think there's a lot of evidence of the record, including the magazine articles that we read that, you know, J658 says everyone else was a subcontract for example. [00:49:53] Speaker 01: But I would also point you to the sworn statements of both my client and of our CPA. [00:50:00] Speaker 01: And those are at, let's see, the CPA I believe is at 335. [00:50:05] Speaker 01: I just have this written down. [00:50:07] Speaker 01: Oh, 355, that's the CPA saying, this is our business. [00:50:11] Speaker 01: This is the CPA who does the day-to-day work and says, this is what they do. [00:50:15] Speaker 01: They're in the full service production business. [00:50:17] Speaker 01: OK? [00:50:18] Speaker 01: And then my client, JA572 through 575, wrote a detailed statement to the agency explaining exactly what they do. [00:50:25] Speaker 01: And in that statement, [00:50:27] Speaker 01: They would have been committing a federal crime by swearing that they did not perform these roles that they said they were performing. [00:50:33] Speaker 01: So I urge you to look at that, too. [00:50:34] Speaker 05: I think that's a relevant question about who is the producer. [00:50:36] Speaker 05: Is that generally going to even be a dispute? [00:50:39] Speaker 05: Like, in other words, for the post-managed organizer promoter, is there kind of an agreement about who is the producer? [00:50:46] Speaker 05: versus the manager, versus the organizer, versus the promoter? [00:50:49] Speaker 01: I mean, to be honest, I don't really know if things like manager and organizer are defined roles on a tour. [00:50:54] Speaker 01: I think what Congress was, a producer certainly is, a host, I don't know if it's also a defined role, promoter also is. [00:51:01] Speaker 01: So Congress kind of blended some common terms like promoter and producer, potentially, with other just verbs, which leads me to believe it was not seeking someone who is the capital P producer necessarily, but someone who's playing a substantial role in producing the show, including a production company. [00:51:16] Speaker 01: But that's how I would answer that question. [00:51:20] Speaker 01: I guess I have one other, unless you have a question, Your Honor, I'll leave with one final point, which is that at the end of the day, I think at a bare minimum, if there's any questions about what the record shows, it should go back to the agency just because to the extent [00:51:37] Speaker 01: we would have been able to put in more evidence had we known what the standard was going to be. [00:51:41] Speaker 01: Unfortunately, we were unable to do that. [00:51:43] Speaker 01: And I do have sympathy for the rush process that SBA went through. [00:51:46] Speaker 01: Obviously, they had tons of applications to go through. [00:51:49] Speaker 01: It was a crazy time. [00:51:51] Speaker 01: We all remember it. [00:51:52] Speaker 01: But the question here today is not whether they did a good enough job. [00:51:56] Speaker 01: And yeah, they made some mistakes. [00:51:57] Speaker 01: It's whether or not we satisfied the definition. [00:51:59] Speaker 01: So if they made a mistake before, it should be fixed now. [00:52:02] Speaker 01: They made a mistake. [00:52:02] Speaker 01: The question is what to do about it. [00:52:04] Speaker 01: We think the answer is clear. [00:52:06] Speaker 01: where it should hold that under any reasonable conception of what a live performing arts organization operator is, my client satisfies that definition. [00:52:16] Speaker 01: Thank you very much. [00:52:16] Speaker 04: Thank you. [00:52:18] Speaker 04: The case is submitted.