Alliance Against IFQs v. Brown

• Citation: 84 F.3d 343
• Decision Date: 22 May 1996
• Docket Number: No. 95-35077,95-35077
• Parties: 96 Cal. Daily Op. Serv. 3590, 96 Daily Journal D.A.R. 5828 ALLIANCE AGAINST IFQs; Lady Blackie, Inc.; Mako Haggerty; Mathew Donohoe; Nancy L. Lande; Adrian Lecornu; Howard Carlough; Jere Murray; Paul K. Seaton; William Sullivan; Don Hall, Plaintiffs-Appellants, v. Ronald H. BROWN, Secretary of Commerce; Clarence G. Pautzke, Executive Director North Pacific Fishery Management Council; Western Alaska Fisheries Development Association, Defendants-Appellees, and Peter M. Knutsen; Edwin Fuglvog; Robert J. Wurm; Andrew Scalzi; Nancy Phillips, et al., Defendants-Intervenors-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 343

84 F.3d 343

96 Cal. Daily Op. Serv. 3590, 96 Daily Journal

D.A.R. 5828

ALLIANCE AGAINST IFQs; Lady Blackie, Inc.; Mako Haggerty Mathew Donohoe; Nancy L. Lande; Adrian Lecornu; Howard Carlough; Jere Murray; Paul K. Seaton; William Sullivan Don Hall, Plaintiffs-Appellants, v. Ronald H. BROWN, Secretary of Commerce; Clarence G Pautzke, Executive Director North Pacific Fishery Management Council; Western Alaska Fisheries Development Association Defendants-Appellees, and Peter M. Knutsen; Edwin Fuglvog; Robert J. Wurm; Andrew Scalzi; Nancy Phillips, et al., Defendants-Intervenors-Appellees.

No. 95-35077.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 9, 1995.

Decided May 22, 1996.

Susan E. Reeves, Rubini & Reeves, Anchorage, Alaska, for plaintiffs-appellants.

Martin W. Matzen, United States Department of Justice, Washington, D.C., for defendants-appellees.

Donald Craig Mitchell, Anchorage, Alaska, for defendants-appellees Western Alaska Fisheries Development Association.

George J. Mannina, Jr., O'Connor & Hannan, Washington, D.C., for intervenor-defendant Knutsen.

Appeal from the United States District Court for the District of Alaska, James K. Singleton, District Judge, Presiding.

Before: HALL, WIGGINS, and KLEINFELD, Circuit Judges.

OPINION

KLEINFELD, Circuit Judge:

The only issue in this case is whether regulations for implementing a fishery management plan in and near Alaska waters was arbitrary and capricious, or violative of the authorizing statute. We conclude that the regulations were a permissible exercise of authority by the Secretary of Commerce.

I. FACTS AND REGULATORY FRAMEWORK

Commercial ocean fishing combines difficult and risky labor with large capital investments to make money from a resource owned by no one, the fish. Unlimited access tends to cause declining fisheries. The reason is that to get title to a fish, a fisherman has to catch it before someone else does. Pierson v. Post, 3 Caines 175, 2 Am. Dec. 264 (N.Y.1805). This gives each fishermen an incentive to invest in a fast, large boat and to fish as fast as possible. As boats and crews get more efficient, fewer fish escape the fishermen and live to reproduce. "The result is lower profits for the too many fishermen investing in too much capital to catch too few fish." Terry L. Anderson and Donald R. Leal, Free Market Environmentalism, 123 (1991).

Congress made findings in the Magnuson Fishery Conservation and Management Act ("Magnuson Act"), 16 U.S.C. § 1801 et seq., that "certain stocks of such fish have been overfished to the point where their survival is threatened," 16 U.S.C. § 1801(a)(2)(A), and that "[a] national program for the conservation and management of the fishery resources of the United States is necessary to prevent overfishing, to rebuild overfished stocks, to ensure conservation, and to realize the full potential of the Nation's fishery resources." 16 U.S.C. § 1801(a)(6). Among the purposes of the Magnuson Act were providing for "fishery management plans which will achieve and maintain, on a continuing basis, the optimum yield from each fishery," 16 U.S.C. § 1801(b)(4), and "establish[ing] Regional Fishery Management Councils to ... prepar[e], monitor[ ] and revis[e] such plans." 16 U.S.C. § 1801(b)(5). The Secretary of Commerce, pursuant to the Magnuson Act and the Northern Pacific Halibut Act of 1982 ("Halibut Act"), 16 U.S.C. § 773 et seq., promulgated regulations to limit access to sablefish and halibut fisheries in the Gulf of Alaska and the Bering Sea and Aleutian Islands area. See 50 C.F.R., Part 676.

The Secretary of Commerce implemented by regulation a management plan for sablefish and pacific halibut fishing. 50 C.F.R. §§ 676.10-676.25. The basic scheme is that any boat that fishes commercially for the regulated fish in the regulated area must have an individual quota share (IFQ) permit on board, specifying the individual fishing quota allowed for the vessel, and anyone who receives the regulated fish must possess a "registered buyer permit." 50 C.F.R. § 676.13(a). The regulated area consists of portions of the Gulf of Alaska, Bering Sea, and waters off the Aleutian Islands. 50 C.F.R. § 676.10(b).

The regional director of the National Marine Fisheries Service (NMFS) in the Department of Commerce assigns to each owner or lessee of a vessel which made legal landings of halibut or sablefish during 1988, 1989, or 1990, a quota share (QS) based on the person's highest total legal landings of halibut and sablefish during 1984 to 1990. 50 C.F.R. § 676.20(b). Each year, the regional director allocates individual fishing quotas (IFQs) by multiplying the person's quota share by the annual allowable catch. 50 C.F.R. § 676.20(f)(1). Subject to some restrictions, the quota shares and individual fishing quotas can be sold, leased and otherwise transferred. 50 C.F.R. § 676.21. If someone who did not fish in the regulated waters during 1988 to 1990 wants a quota share, he has to buy it from someone who did.

Like any governmental regulatory scheme, this one substitutes a governmental decision for myriad individual decisions to determine who shall be permitted to make money in the regulated industry. The plaintiffs are people who suffer from the economic impact of the regulation. Some have invested in fishing vessels and fished in the regulated waters for halibut or sablefish, but not during the critical three years which would give them a quota share. Some have consistently fished for the regulated fish in the regulated waters, but did not own or lease the boats. Of those who acquired quota shares under the scheme, some probably never fished, and just invested in fishing boats to get investment tax credits and depreciation. The regulatory scheme has the practical effect of transferring economic power over the fishery from those who fished to those who owned or leased fishing boats. For these reasons, among others, the case is troubling and difficult.

II. ANALYSIS

The district court granted summary judgment in favor of the government and dismissed the complaint. We review a grant of summary judgment de novo. Washington Crab Producers, Inc. v. Mosbacher, 924 F.2d 1438, 1440 (9th Cir.1990). Where we review regulations promulgated by the Secretary of Commerce under the Magnuson Act, our only function is to determine whether the Secretary "has considered the relevant factors and articulated a rational connection between the facts found and the choice made." Id. at 1440-41 (quotation omitted). We determine only if the Secretary acted in an arbitrary and capricious manner in promulgating such regulations. Id. at 1441. See also 16 U.S.C. § 1855(b)(1)(B); 5 U.S.C. § 706(2)(A)-(D). We cannot substitute our judgment of what might be a better regulatory scheme, or overturn a regulation because we disagree with it, if the Secretary's reasons for adopting it were not arbitrary and capricious.

Plaintiffs urge us to adopt a more onerous standard of review and cite Atwood v. Newmont Gold Co., Inc., 45 F.3d 1317 (9th Cir.1995), as support. Atwood is distinguishable, because we were reviewing an ERISA plan fiduciary's duty, not those of the Secretary of Commerce, and were doing so in light of facts indicating a conflict of interest.

A. "Present Participation in the Fishery."

Congress erected various conditions on the Secretary's discretion to establish a limited access system for the fishery. Among the factors which the Council and Secretary must "take into account" is "present participation in the fishery." 16 U.S.C. § 1853(b)(6)(A):

(b) Discretionary provisions. Any fishery management plan which is prepared by any Council, or by the Secretary, with respect to any fishery, may--

...

(6) establish a system for limiting access to the fishery in order to achieve optimum yield if, in developing such system, the Council and the Secretary take into account--

(A) present participation in the fishery,

(B) historical fishing practices in, and dependence on, the fishery,

(C) the economics of the fishery,

(D) the capability of fishing vessels used in the fishery to engage in other fisheries,

(E) the cultural and social framework relevant to the fishery, and

(F) any other relevant considerations;

The Halibut Act provides that limited access regulations "shall be consistent with the limited entry criteria set forth in section [303(b)(6) of the Magnuson Fishery Conservation and Management Act]." 16 U.S.C. § 773c(c).

The final rule was promulgated November 9, 1993. 58 Fed.Reg. 59,375 (1993). But the years during which people had to own or lease vessels and land halibut or sablefish, to obtain qualifying shares, were 1988, 1989 and 1990. 50 C.F.R. § 676.20(a)(1)(i). Plaintiffs argue that this violates the Congressional command to take into account "present" fishing. As they correctly observe, a person who last fished in 1988 would get a qualifying share, but someone who had fished only in 1991, 1992 and 1993 would not. Indeed, the complaint alleges that one of the plaintiffs fished for halibut in the regulated waters in 1975, 1977 through 1987, and 1992, but fished for salmon in Cook Inlet, not part of the regulated waters, during the three quota share years.

Substantial time was taken up between formulation of the plan and promulgation, by such activities as preparing environmental impact statements on the plan. In a 1992 environmental impact statement, the Council gave several reasons for using a 1990 cutoff. Perhaps the most persuasive was that if participation in the fishery while the rule was under consideration had been considered, then people would have fished and invested in boats in order to obtain quota shares, even though that would have exacerbated overcapacity and made no economic sense independently of the regulatory benefit:

There are two reasons why the end of the qualifying periods is 1990. First, extending it beyond that would have provided an incentive both for additional...