Douglas v. Seacoast Products, Inc

• Decision Date: 23 May 1977
• Docket Number: No. 75-1255,75-1255
• Parties: James E. DOUGLAS, Jr., Commissioner, Virginia Marine Resources Commission, Appellant, v. SEACOAST PRODUCTS, INC., et al
• Court: U.S. Supreme Court

431 U.S. 265

97 S.Ct. 1740

52 L.Ed.2d 304

James E. DOUGLAS, Jr., Commissioner, Virginia Marine Resources Commission, Appellant,

v SEACOAST PRODUCTS, INC., et al.

No. 75-1255.

Argued Jan. 17, 1977.

Decided May 23, 1977.

Syllabus

The federal enrollment and licensing laws, under which vessels engaged in domestic or coastwise trade or used for fishing are "enrolled" for the purpose of evidencing their national character and to enable them to obtain licenses regulating the use to which the vessels may be put held to pre-empt Virginia statutes that in effect prohibit nonresidents of Virginia from catching menhaden in the Virginia portion of Chesapeake Bay and that bar noncitizens (regardless of where they reside) from obtaining commercial fishing licenses for any kind of fish from Virginia. Hence, under the Supremacy Clause, the Virginia laws cannot prevent appellees, whose fishing vessels, though foreign owned, have been federally licensed, from fishing for menhaden in Virginia's waters. Pp. 271-287.

(a) Gibbons v. Ogden, 9 Wheat. 1, 6 L.Ed. 23 (1824), decided three decades after the federal enrollment and licensing laws were enacted (and which have been re-enacted without substantial change), established the invalidity of discriminatory state regulation of shipping as applied to vessels federally licensed to engage in the coasting trade, though subsequent decisions have permitted States to impose upon federal licensees reasonable nondiscriminatory conservation and environmental protection measures otherwise within the state police power. Pp. 274-279.

(b) The license does not merely establish the nationality of the vessel (which is performed by the enrollment) but "implies, unequivocally, an authority to licensed vessels to carry on" the activity for which they are licensed. Gibbons, supra, at 212. Pp. 280-282.

(c) The Virginia statutes, by prohibiting federally licensed vessels owned by nonresidents of Virginia from fishing in Chesapeake Bay and by not allowing such ships owned by noncitizens to catch fish anywhere in the Commonwealth, deny licensees their federally granted right to engage in fishing activities on the same terms as state residents. P. 283.

(d) The broad language of the Submerged Lands Act did not impliedly repeal the federal licensing laws. P. 283-284.

432 F.Supp. 1, affirmed.

James E. Moore, Norfolk, Va., for appellant.

John J. Loflin, New York City, for appellees.

[Amicus Curiae Information from page 266 intentionally omitted] Mr. Justice MARSHALL delivered the opinion of the Court.

The issue in this case is the validity of two Virginia statutes that limit the right of nonresidents and aliens to catch fish in the territorial waters of the Commonwealth.

I

Persons or corporations wishing to fish commercially in Virginia must obtain licenses. Section 28.1-81.1 of the Virginia Code (§ 81.1) (Supp. 1976),¹ enacted in 1975, limits the issuance of commercial fishing licenses to United States citizens. Under this law, participants in any licensed partnership, firm, or association must be citizens. A fishing business organized in corporate form may be licensed only if it is chartered in this country; American citizens own and control at least 75% of its stock; and its president, board chairman, and controlling board majority are citizens.

Section 28.1-60 of the Virginia Code (§ 60) (1976 Supp.) ² governs licensing of nonresidents of Virginia to fish for menhaden, an inedible but commercially valuable species of fin fish.³ Section 60 allows nonresidents who meet the citizenship requirements of § 81.1 to obtain licenses to fish for menhaden in the three-mile-wide belt of Virginia's territorial sea off the Commonwealth's eastern coastline. At the same time, however, § 60 prohibits nonresidents from catching menhaden in the Virginia portion of Chesapeake Bay.

Appellee Seacoast Products, Inc., is one of three companies that dominate the menhaden industry. The other two firms, unlike Seacoast, have fish-processing plants in Virginia and are owned by American citizens. Hence, they are not affected by either of the restrictions challenged in this case. Seacoast was founded in New Jersey in 1911 and maintains its principal offices in that State; it is incorporated in Delaware and qualified to do business in Virginia. The other appellees are subsidiaries of Seacoast; they are incorporated and maintain plants and offices in States other than Virginia. In 1973 the family of Seacoast's founder sold the business to Hanson Trust, Ltd., a United Kingdom company almost entirely owned by alien stockholders. Seacoast continued its operations unchanged after the sale. All of its officers, directors, boat captains and crews are American citizens, as are over 95% of its plant employees.

At the time of its sale, Seacoast's fishing vessels were enrolled and licensed American-flag ships. See infra, at 272-274. Under 46 U.S.C. §§ 808, 835, the transfer of these vessels to a foreign-controlled corporation required the approval of the Department of Commerce. This was granted unconditionally over the opposition of Seacoast's competitors after a full public hearing that considered the effect of the transfer on fish conservation and management, on American workers and consumers, and on competition and other social and economic concerns. See 38 Fed.Reg. 29239-29240 (1973); 39 Fed.Reg. 7819, 33812-33813 (1974); App. 29-32. Following this approval, appellees' fishing vessels were re-enrolled and relicensed pursuant to 46 U.S.C. §§ 251-252, 263. They remain subject to all United States laws governing maritime commerce.

In past decades, although not recently, Seacoast had operated processing plants in Virginia and was thereby entitled to fish in Chesapeake Bay as a resident. Tr. of Oral Arg. 28-29, 34. More recently, Seacoast obtained nonresident menhaden licenses as restricted by § 60 to waters outside Chesapeake Bay. In 1975 however, § 81.1 was passed by the Virginia Legislature, c. 338, 1975 Va. Acts, and appellant James E. Douglas, Jr., the Commissioner of Marine Resources for Virginia, denied appellees' license applications on the basis of the new law. Seacoast and its subsidiaries were thereby completely excluded from the Virginia menhaden fishery.

(1, 2) Appellees accordingly filed a complaint in the District Court for the Eastern District of Virginia, seeking to have §§ 60 and 81.1 declared unconstitutional and their enforcement enjoined. A three-judge court was convened and it struck down both statutes. It held that the citizenship requirement of § 81.1 was pre-empted by the Bartlett Act, 16 U.S.C. § 1081 et seq., and that the residency restriction of § 60 violated the Equal Protection Clause of the Fourteenth Amendment. We noted probable jurisdiction of the Commissioner's appeal, 425 U.S. 949, 96 S.Ct. 1723, 48 L.Ed.2d 193 (1976), and we affirm.⁴

II

Seacoast advances a number of theories to support affirmance of the judgment below. See Fusari v. Steinberg, 419 U.S. 379, 387 n. 13, 95 S.Ct. 533, 539 n. 13, 42 L.Ed.2d 521 (1975); Dandridge v. Williams, 397 U.S. 471, 475, n. 6, 90 S.Ct. 1153, 1156, n. 6, 25 L.Ed.2d 491 (1970). Among these is the claim that the Virginia statutes are pre-empted by federal enrollment and licensing laws for fishing vessels.⁵ The United States has filed a brief as amicus curiae supporting this contention. Al- though the claim is basically constitutional in nature, deriving its force from the operation of the Supremacy Clause, Art. VI, cl. 2, it is treated as "statutory" for purposes of our practice of deciding statutory claims first to avoid unnecessary constitutional adjudications. See Hagans v. Lavine, 415 U.S. 528, 549, 94 S.Ct. 1372, 1385, 39 L.Ed.2d 577 (1974).⁶ Since we decide the case on this ground, we do not reach the constitutional issues raised by the parties.

The well-known principles of pre-emption have been rehearsed only recently in our decisions. See, e. g. Jones v. Rath Packing Co., 430 U.S. 519, at 525-526, 97 S.Ct. 1305, at 1309, 51 L.Ed.2d 604 (1977); De Canas v. Bica, 424 U.S. 351, 96 S.Ct. 933, 47 L.Ed.2d 43 (1976). No purpose would be served by repeating them here. It is enough to note that we deal in this case with federal legislation arguably superseding state law in a "field which . . . has been traditionally occupied by the States." Jones v. Rath Packing Co., supra, at 525, 97 S.Ct., at 1309. Preemption accordingly will be found only if " 'that was the clear and manifest purpose of Congress.' Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947)." Ibid. We turn our focus, then, to the congressional intent embodied in the enrollment and licensing laws.

A.

The basic form for the comprehensive federal regulation of trading and fishing vessels was established in the earliest days of the Nation and has changed little since. Ships engaged in trade with foreign lands are "registered," a documentation procedure set up by the Second Congress in the Act of Dec. 31, 1792, 1 Stat. 287,⁷ and now codified in 46 U.S.C., c. 2. "The purpose of a register is to declare the nationality of a vessel . . . and to enable her to assert that nationality wherever found." The Mohawk, 3 Wall. 566, 571, 18 L.Ed. 67 (1866); Anderson v. Pacific Coast S. S. Co., 225 U.S. 187, 199, 32 S.Ct. 626, 630, 56 L.Ed. 1047 (1912). Vessels engaged in domestic or coastwise trade or used for fishing are "enrolled" under procedures established by the Enrollment and Licensing Act of Feb. 18, 1793, 1 Stat. 305, codified in 46 U.S.C., c. 12. "The purpose of an enrollment is to evidence the national character of a vessel . . . and to enable such vessel to procure a . . . license." The Mohawk, supra; Anderson v. Pacific Coast S. S. Co., supra.

A "license," in turn, regulates the use to which a vessel may be put and is intended to prevent fraud on the revenue of the United States. See 46 U.S.C. §§ 262, 263, 319, 325; 46 CFR § 67.01-13 (1976). The form of a...