Fancy Fruits, Inc., is a family business that grows and sells fruit. In the 2000's, Fancy successfully bid on more than twenty contracts awarded by the Food and Drug Administration (FDA). In August 2009, an FDA investigation reported that Fancy appeared to have falsified inspector's signatures, listed false moisture content, and changed the grade of fruits on three official FDA fruit certificates issued between 2007 and 2009. Fancy was subsequently awarded three more FDA contracts. Then, in March 2011, Fancy was the low bidder on two new FDA contracts for school lunches. The FDA awarded these contracts to other bidders, however, and, on the basis of the August 2009 report, suspended Fancy from bidding on government contracts for one year. Fancy appealed the agency's suspension decision to the federal court of appeals.

What legal test will the court use to resolve this issue? What does this test require? Applying the law to these facts, on what basis might the court rule in Fancy's favor? Fully explain.