It's hard to believe that any government agency, let alone the highly esteemed BATFE, would be guilty of "arbitrary and capricious" rulings and regulations. [/sarcasm]
The real problem is that the judge then remanded the ruling back to the BATFE to render a ruling using a "rational" methodology. I'm sure they could have done that the first time. How many more times will the manufacturer of this device have to expensively and time-consumingly litigate this question? I'm sure the BATFE is in no hurry to "get it right", as they have unlimited tax-payer dollars and unlimited time with their bureaucratic civil service jobs to take as long as they want to obstruct this private company. And as we've seen with Fast and Furious these bureaucrats face no penalties or punishments for egregious transgressions of the law, even transgressions that result in the deaths of many people, including U.S. Border Patrol agent Brian Terry.
Another question, of course, is how ruling "suppressors" mostly illegal is NOT "arbitrary and capricious". Where are the legitimate studies showing the legalizing suppressors would further crime? There are plenty of studies showing that suppressors are effective hearing safety devices. Most of these laws enforced by BATFE have no rational basis ("barrel shroud" anyone?).
Of course the real question is why the BATFE even exists. Aren't there enough other government agencies to enforce all the "gun control" laws? So they can run guns to Mexican drug cartels and then lie about it? This agency serves mostly to deny American citizens their liberties via intimidation and the enforcement of "arbitrary and capricious" rulings. Welcome to America, papers please.