Gonzalez v. U.S. Dept. of Commerce Nat. Oceanic, Civil Action No. 1:06-CV-105.
| Citation | 632 F.Supp.2d 642 |
| Decision Date | 24 June 2009 |
| Docket Number | Civil Action No. 1:06-CV-105. |
| Parties | Jorge GONZALEZ, Chubasco, Inc., El Coronel, Inc., El Grande Trawlers, Inc., Gonzalez Fisheries, Inc., Leon Trawlers, Inc., Rio Purification, Inc., and Rio San Marcos, Plaintiffs, v. UNITED STATES DEPARTMENT OF COMMERCE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
On June 30, 2006, Plaintiffs Jorge Gonzalez et al. filed a Complaint in this Court against the United States Department of Commerce, National Oceanic and Atmospheric Administration challenging four separate but related administrative actions concerning civil-penalty assessments and permit sanctions in connection with Plaintiffs' activities in the federal gulf shrimp fishery. (Doc. No. 1). A series of continuances were granted while two of these actions worked their way through the administrative process, and on August 11, 2008, Plaintiffs filed their Second Amended Complaint (Doc. No. 20).
On February 27, 2009, Defendant filed a Motion to Dismiss, asking the Court to dismiss all of Plaintiffs' claims for, inter alia, failure to state a claim and want of jurisdiction. (Doc. No. 27). Plaintiffs filed a Response on March 27, 2009 (Doc. No. 28), to which Defendant replied on April 10, 2009 (Doc. No. 29). The Court set a hearing to consider oral argument on the Motion to Dismiss, which was ultimately held on June 16, 2009.
Having considered Defendant's Motion to Dismiss, Plaintiffs' Response, Defendant's Reply, the argument of the hearing held June 16, 2009, and all relevant facts and law, Defendant's Motion to Dismiss (Doc. No. 27) is hereby GRANTED IN PART and DENIED IN PART.
Plaintiffs in this action challenge four separate but related administrative actions of the National Oceanic and Atmospheric Administration ("NOAA") concerning civil-penalty assessments and permit sanctions in connection with Plaintiffs' activities in the federal gulf shrimp fishery. Plaintiff Jorge Gonzalez is the officer/director/shareholder of all of the corporate Plaintiffs in this case. These corporations own boats that have conducted fishing and shrimping operations throughout the Gulf of Mexico. Mr. Gonzalez and/or the corporations have had a long history of conflict with the NOAA. Since 1983, corporations controlled by Mr. Gonzalez have been issued at least 33 separate civil penalties or permit sanctions for violations of federal law and regulations.
The administrative actions at issue in this case begin with a two-count Notice of Violation and Assessment ("NOVA") issued by the NOAA on September 12, 2002, against Respondent corporation Rio Purificacion, Inc. in case number SE001412ES/FM ("1412") for violations of the Magnuson-Stevens Act () and the Endangered Species Act (a turtle-excluder-device violation) that occurred on or about November 10, 2000. The NOVA assessed civil penalties totaling $14,000. A copy of the NOVA was received and signed for via certified mail by Raul Garcia, an employee of Mr. Gonzalez's and/or one or more of the corporations of which he is the principal shareholder, on November 18, 2002. This NOVA (1412) was also personally served on Mr. Garcia on February 11, 2003.
Roughly a month after the issuance of NOVA 1412, on December 5, 2002, regulations promulgated by the NOAA requiring persons to possess a valid federal permit in order to harvest shrimp in the Gulf Exclusive Economic Zone ("EEZ") went into effect. See 50 C.F.R. § 622.4(a)(2)(xi); Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Shrimp Fishery of the Gulf of Mexico; Amendment 11, 67 Fed. Reg. 51,074-02 (Aug. 7, 2002). In March of 2003, five Gonzalez-related corporations submitted applications for federal permits. On April 11, 2003, these applications were returned by the agency for more complete information.2 These applications were never resubmitted.
On August 1, 2003, NOAA issued a Notice of Permit Sanction/Notice of Intent to Deny Permit ("NIDP") for the failure to pay an overdue penalty in case 1412. The NIDP was addressed and by its terms applied to not only Rio Purificacion, Inc., the corporation cited in NOVA 1412, but to eight other corporations owned by Mr. Gonzalez, as well.
In December of 2003, Mr. Gonzalez met with NOAA attorney Karen Raine in Florida for discussions concerning the outstanding fine. Mr. Gonzalez had apparently by this time retained an attorney, Mr. Dennis M. Sanchez. At this meeting Ms. Raine advised Mr. Gonzalez that the matter should be handled by Mr. Gonzalez's attorney and apparently indicated that she believed a resolution of the issue was likely.
On April 22, 2004, the NOAA issued a NOVA against Rio San Marcos, Inc. (i.e., not Rio Purificacion, Inc., the company cited in NOVA 1412, but another company whose stock is owned by Mr. Gonzalez) in case number SE30369FM ("30369") for a violation of the Magnuson-Stevens Act () on or about October 17, 2003 (i.e., about 2 months after the NIDP was issued and about 2 months before Mr. Gonzalez met with Ms. Raines). This NOVA assessed a penalty of $30,000. NOVA 30369 was sent by certified mail and received and signed for by Raul Garcia on September 15, 2004.
On March 22, 2005, NOAA issued a NOVA against Gonzalez Fisheries, Inc. (another Gonzalez corporation) in case number SE050027FM ("50027") for fishing or possessing shrimp without a federal Gulf of Mexico shrimp permit on or about February 3, 2005. The boarding party found approximately 1,354 pounds of shrimp onboard the vessel, which National Marine Fisheries Agents seized and sold the following day for $5,912.65. This NOVA also assessed a penalty of $30,000. This NOVA was sent by certified mail and received and signed for by Raul Garcia on April 1, 2005.
On June 24, 2005, NOAA issued a NOVA against Rio San Marcos, Inc. (the same company that received NOVA 30369) in case number SE43022FM ("43022") for fishing for or possessing shrimp without a federal Gulf of Mexico shrimp permit. The NOVA assessed a $30,000 penalty. The NOVA was sent by certified mail and received and signed for by Raul Garcia on June 29, 2005. On the same day that Raul Garcia signed for NOVA 43022, i.e., June 29, 2005, Mr. Gonzalez requested a hearing on all four of the NOVAs just described.
On October 25, 2005, NOAA issued a second NIDP, this time for the failure to pay the overdue fine on NOVA 30369. The NIDP was, as before, addressed and by its terms applied to not only Rio San Marcos, Inc., the corporation cited in NOVA 30369, but also to eight other corporations whose stock is owned by Mr. Gonzalez.
On April 18, 2006, Administrative Law Judge ("ALJ") Walter Brudzinski issued an Order granting the Agency's Motion in Opposition to Hearing Request in case numbers 1412 and 30369. (Doc. No. 1 Ex. A at 3). The issue before the ALJ was whether the request for a hearing on these two NOVAs was made within 30 days after each was served, as required by 15 C.F.R. § 904.102. (Id.). Mr. Gonzalez argued that he (or more specifically, the corporate respondents) were never properly served because Raul Garcia was not authorized to accept service for any of Mr. Gonzalez's companies. The ALJ held that the respondents were effectively served because Garcia was an "other representative" for the purposes of 15 C.F.R. 904.3(c). (Id. at 9-10). The ALJ ultimately denied a hearing on NOVAs 1412 and 30369 on the grounds that each respondent had failed to request a hearing within 30 days of being served. (Id.). The ALJ further held that Respondents' failure to timely request a hearing resulted in the NOVAs becoming final agency action. (Id.). The ALJ granted a hearing on NOVAs 50027 and 43022, however, after finding that the request was timely for both. (Id.).
On May 31, 2006, the same ALJ issued an Order denying Respondents' Request for Reconsideration, holding, inter alia, that the respondents did not have a right to a hearing on the two NIDPs (i.e., the permit sanctions related to NOVAs 1412 and 30369) because they had had a previous opportunity to participate as a party in an administrative hearing on the underlying NOVAs pursuant to 15 C.F.R. § 904.304(b), which provides:
There will be no opportunity for a hearing if, with respect to the violation that forms the basis for the NIDP, the permit holder had a previous opportunity to participate as a party in an administrative or judicial hearing, whether or not the permit holder did participate, and whether such a hearing was held.
In the case of these two NIDPs, no hearings on the underlying NOVAs were held because Mr. Gonzalez failed to timely request them. (See Doc. No. 1 Ex. A at 7-9).
On March 21, 2006, ALJ Brudzinski held an in-person hearing on NOVA 50027 and on December 5, 2006, issued an Initial Decision concluding that the Respondent had violated the regulations as charged, and imposed a civil penalty of $30,000. . On January 4, 2007, Respondent filed a petition requesting discretionary review of this decision, which was denied on May 1, 2007, constituting final agency action on the matter. (Id.).
On August 22, 2006, ALJ Thomas E. McElligott held an in-person hearing on NOVA 43022 and on February 12, 2008, issued an Initial Decision concluding that the Respondent had violated the regulations as charged, and imposed a civil penalty of $30,000. . On March 13, 2008, Respondent filed a petition requesting discretionary review of this decision, which was denied on July 10, 2008, constituting final administrative action on the matter. (Id.).
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