Glacier Fish Co. v. Pritzker

• Decision Date: 10 August 2016
• Docket Number: No. 15-35103,15-35103
• Parties: Glacier Fish Company LLC, a Washington limited liability company, Plaintiff–Appellant, v. Penny Pritzker, in her official capacity as Secretary of U.S. Department of Commerce; National Oceanic and Atmospheric Administration; National Marine Fisheries Service, Defendants–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

832 F.3d 1113

Glacier Fish Company LLC, a Washington limited liability company, Plaintiff–Appellant,

v.Penny Pritzker, in her official capacity as Secretary of U.S. Department of Commerce; National Oceanic and Atmospheric Administration; National Marine Fisheries Service, Defendants–Appellees.

No. 15-35103

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 10, 2016, San Francisco, California

Filed August 10, 2016

Andrew Richards (argued), Sullivan & Richards LLP, Seattle, Washington, for Plaintiff–Appellant.

Evelyn S. Ying (argued), J. David Gunter, II and John H. Martin ; John C. Cruden, Assistant Attorney General; Environment and Natural Resources Division; United States Department of Justice, Washington, D.C.; Ryan Couch, Office of the General Counsel National Oceanic & Atmospheric Administration, Seattle, Washington; for Defendants–Appellees.

Before: Sandra S. Ikuta, and Paul J. Watford, Circuit Judges, and Derrick Kahala Watson,^* District Judge.

Partial Concurrence by Judge Watson

OPINION

IKUTA

, Circuit Judge:

Glacier Fish Co. challenges the fee imposed on it by the National Marine Fisheries Service (NMFS) pursuant to the agency's cost recovery program developed under the Magnuson–Stevens Fishery Conservation and Management Act (Magnuson–Stevens Act, or MSA). We conclude that the agency had the authority to require Glacier to pay a cost recovery fee but that the agency's calculation of the amount of the 2014 cost recovery fee was inconsistent with its own regulations. We therefore reverse the district court's grant of summary judgment in part and remand to the agency.

I

The Magnuson–Stevens Act created eight Regional Fishery Management Councils.¹ Each council creates a fishery management plan, which must contain conservation and management measures and an assessment of the maximum sustainable yield from each fishery. 16 U.S.C. § 1853(a)

. Beginning in 1990, the councils were given the discretion to use “a limited access system for the fishery in order to achieve optimum yield.” Id. § 1853(b)(6). A limited access system allows only those entities that satisfy certain eligibility criteria or requirements contained in a fishery management plan to participate in a fishery. Id. § 1802(27).

In 2007, Congress reauthorized the Magnuson–Stevens Act with amendments that, among other things, were intended to encourage market-based fishery management through “limited access privilege programs” (referred to by NMFS as a LAPP). The term “limited access privilege” is defined as “a Federal permit, issued as part of a limited access system under section 1853a

of this title to harvest a quantity of fish ... representing a portion of the total allowable catch of the fishery that may be received or held for exclusive use by a person.” 16 U.S.C. § 1802(26). Thus, a limited access privilege program (which must be part of a limited access system) is a program in which fishery participants obtain a Federal permit “to harvest a certain portion of the total catch allowed for a particular species.” Pac. Coast Fed'n of Fishermen's Ass'ns v. Blank , 693 F.3d 1084, 1088 (9th Cir. 2012). One way to implement such a program is to distribute the allocated portion through “individual fishing quota” (IFQ), or quota shares (i.e., a specified percentage of the total catch). 16 U.S.C. § 1802(23). But councils need not adopt IFQ programs; they retain discretion to implement limited access privilege programs in different ways. See id. §§ 1853a, 1802(26).

Any council that elects to implement a limited access privilege program must also implement a cost-recovery program. Id. § 1853a(e)

. The Magnuson–Stevens Act requires councils to “develop a methodology and the means to identify and assess the management, data collection and analysis, and enforcement programs that are directly related to and in support of the program,” id. § 1853a(e)(1), and then provide “for a program of fees paid by limited access privilege holders that will cover the costs of management, data collection and analysis, and enforcement activities,” id. § 1853a(e)(2). The Secretary of Commerce is authorized to “collect a fee to recover the actual costs directly related to the management, data collection, and enforcement of any limited access privilege program.” Id. § 1854(d)(2)(A)(i). The fee “shall not exceed 3 percent of the ex-vessel value² of fish harvested under any such program, and shall be collected at either the time of the landing, filing of a landing report, or sale of such fish during a fishing season or in the last quarter of the calendar year in which the fish is harvested.” Id. § 1854(d)(2)(B).

Once a regional council has prepared a fishery management plan for each fishery within its jurisdiction that requires such a plan, it submits the plan and any proposed regulations to the Secretary of Commerce. Id. § 1852(h)(1). The Secretary must review the plan to determine whether it is consistent with statutory requirements, id. § 1854(a)(1)(A), and publish a notice of proposed rulemaking in the Federal Register, id. § 1854(a)(1)(B). This publication starts a public notice and comment period. Id. If the Secretary approves the plan, the Secretary must review the council's proposed regulations for consistency with its fishery management plan and other law. 16 U.S.C. § 1854(b)

. The Secretary must publish these regulations as well for public comment. Id. The Secretary has delegated her responsibilities under the Act to NMFS, which is housed in the National Oceanic and Atmospheric Administration in the Department of Commerce.

One of the eight regional councils established by the Magnuson–Stevens Act is the Pacific Fishery Management Council (Pacific Council), which consists of representatives from California, Oregon, Washington, and Idaho and covers the fisheries seaward of those states. 16 U.S.C. § 1852(a)(1)(F)

. One of those fisheries is the Pacific groundfish fishery, which “extends 200 miles into the Pacific Ocean, along the coasts of California, Oregon, and Washington, and includes more than 90 species of fish that dwell near the sea floor.” Pac. Coast Fed'n of Fishermen's Ass'ns , 693 F.3d at 1088. The Pacific groundfish fishery is comprised of three sectors: the catcher-processor (C/P) sector, which consists of trawl fishing vessels that catch and process whiting on board; the shoreside sector, which consists of vessels that catch whiting and deliver the catch to processors on land; and the mothership sector, which consists of vessels that catch whiting and deliver the catch to processors at sea. The Pacific Council first developed the Pacific Coast Groundfish Fishery Management Plan (Groundfish Management Plan) in 1982. The plan covers the Pacific whiting, the species of fish at issue here, among other groundfish.

In 1994, Amendment 6 to the Groundfish Management Plan limited participation in the Pacific groundfish catcher-processor sector by requiring each vessel to obtain one of a small number of limited entry permits.³ The Council also provided certain allocations of whiting to each sector of the fishery; for instance, in 1997, the Council allocated 34 percent of the allowable catch to the catcher-processor sector, 42 percent to the shoreside sector, and 24 percent to the mothership sector. Whiting Allocation Among Nontribal Sectors, 62 Fed. Reg. 27519-01, 27520 (May 20, 1997)

. In addition, the Council established a short season for whiting and allowed permitted vessels to harvest whiting only from the time the season opened until the time the catch limit was reached. This management structure led to a so-called “race for fish.” A vessel with a limited entry permit had an incentive to make an intense, concentrated effort at the beginning of the season to harvest the largest possible portion of the catcher-processor allocation of whiting before the window closed.

In an attempt to eliminate this “race for fish,” catcher-processors formed a private cooperative, the Pacific Whiting Conservation Cooperative (PWCC), in 1997. Through private agreements, each member of the PWCC agreed to limit its own whiting harvest to a certain percentage of the catcher-processor sector whiting allocation. By agreeing to apportion shares of the whiting allocation in advance, the members no longer needed to race to catch their portion of the catcher-processor sector's allocation. This private solution was effective, and NMFS acknowledged that the catcher-processor sector no longer raised the “race for fish” problem.

But because other sectors had not successfully ended the race for fish, in 2003, the Pacific Council and NMFS began developing a limited access privilege program for the groundfish fishery as a whole (including the catcher-processor sector). The program's primary goal was to implement an IFQ program (or quota share system) for the shoreside sector. In January 2004, NMFS published a notice of proposed rulemaking, which stated that the Pacific Council was considering implementing a limited access privilege program in the form of a “trawl rationalization program” for the Pacific groundfish fishery. 69 Fed. Reg. 1563-01 (Jan. 9, 2004)

. The Pacific Council then engaged in a lengthy process to develop an amendment to the Groundfish Management Plan that would implement the trawl rationalization program. Finally, in 2009, the Pacific Council submitted its proposal for a trawl rationalization program to the Secretary as Amendment 20 to the Groundfish Management Plan. NMFS published the proposed amendment for comment in May 2010, see Amendments 20 and 21, Trawl Rationalization Program, 75 Fed. Reg. 26,702 -01 (May 12, 2010), and the proposed regulations for implementing Amendment 20 in June 2010, see Amendments 20 and 21, Trawl Rationalization Program, 75 Fed. Reg. 32,994 -01 (June 10, 2010). After a round of notice and comment, NMFS adopted Amendment 20 to the Groundfish Management Plan and promulgated implementing regulations. See Amendments 20 and 21, Trawl Rationalization...