DC Circuit Awards Attorneys’ Fees to SecurityPoint for Illegal and Improper Unilateral Decisions by the Transportation Security Administration

Thursday, September 8, 2016 - 17:06

WASHINGTON, D.C., Sept. 6, 2016—The U.S. Court of Appeals for the D.C. Circuit vacated and remanded the illegal and improper unilateral decision made by the Transportation Security Administration (TSA) to prevent Florida-based SecurityPoint Media (SPM) from entering into contracts with airport authorities to use its innovative and patented systems at security checkpoints.  This punitive action by the TSA was punished by the Court of Appeals on Sept. 2 as the court took the extraordinary action of requiring the TSA to pay SPM's attorneys’ fees of $86,714.78, finding that the federal agency was indifferent to taxpayers and its own mission.

SPM successfully argued that the agency was “arbitrary and capricious” in its unilateral revision of an agreement that governs the use of a patented process at security screening checkpoints at airports throughout the United States. SPM has maintained that the TSA retaliated against the small business by inserting a “classic poison pill” that would destroy SPM’s business relationships with local airport authorities. Writing for the three-judge panel, Judge Williams wrote: “The absence of any affirmative explanation for TSA’s action buttressed the claim of retaliation.” (Op. at 13).

In ordering TSA to pay SPM’s attorneys’ fees, the D.C. Circuit held: “SecurityPoint won a significant victory – an opinion vacating the challenged order on the ground that the agency had failed to meet the minimum requirements of reasoned decision making.” (Op. at 14).The court also held that TSA’s revisions to the agreement were “wholly unresponsive” to SecurityPoint’s legal and policy arguments—and that TSA was effectively shooting itself in the foot by “shifting equipment costs to the agency” and, by extension, American taxpayers. (Op. at 11).

Joseph T. Ambrefe, Jr., SecurityPoint’s President & CEO said, “We couldn’t be more pleased with the Court’s decision.  This is a major victory for not only small, innovative businesses such as SecurityPoint, but also taxpayers. It’s frustrating that TSA has yet to revise language in the agreement that is central to the case. It’s hard to comprehend.”

Partners Brad Graveline, Don Pelto and Laura Burson of Sheppard, Mullin, Richter & Hampton LLP represented SPM in the case. 

The case is SecurityPoint Holdings, Inc. v. Transportation Security Administration, Case No. 13-1068 (DC Cir. September 2, 2016).