American Pelagic Fishing Co., L.P. v. U.S., No. 03-5101.

CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit
Writing for the CourtSchall
PartiesAMERICAN PELAGIC FISHING COMPANY, L.P., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.
Docket NumberNo. 03-5101.
Decision Date16 August 2004
379 F.3d 1363
AMERICAN PELAGIC FISHING COMPANY, L.P., Plaintiff-Appellee,
v.
UNITED STATES, Defendant-Appellant.
No. 03-5101.
United States Court of Appeals, Federal Circuit.
August 16, 2004.

Appeal from the Court of Federal Claims, Eric G. Bruggink, Senior Judge.

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Jeffrey W. Sarles, Mayer, Brown, Rowe & Maw LLP, of Chicago, IL, argued for plaintiff-appellee. With him on the brief was Eileen Penner, of Washington, DC. Of counsel on the brief were Laurie Frost Wilson, of Lorton, VA; and Stephen A. Saltzburg, George Washington University National Law Center, of Washington, DC.

Deborah A. Bynum, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellant. With her on the brief were Peter D. Keisler, Assistant Attorney General, and David M. Cohen, Director.

Jeffrey Pidot, Chief, Natural Resources Division, Office of the Attorney General, State of Maine, of Augusta, ME, for amici curiae States of Maine, et al.

Robert G. Dreher, Georgetown Environmental Law & Policy Institute, Georgetown University Law Center, of Washington, DC, for amici curiae Oceana and the Ocean Conservancy.

Before CLEVENGER, SCHALL, and BRYSON, Circuit Judges.

SCHALL, Circuit Judge.


The United States appeals the decision of the United States Court of Federal Claims that American Pelagic Fishing Co., L.P. ("American Pelagic") suffered a taking in violation of the Fifth Amendment to the U.S. Constitution, for which the court awarded damages in the amount of $37,275,952.67. Am. Pelagic Fishing Co. v. United States, 49 Fed.Cl. 36 (2001) (liability) ("Am. Pelagic I"); 55 Fed.Cl. 575 (2003) (damages) ("Am. Pelagic II"). We conclude, however, that American Pelagic did not suffer the taking of a property interest that is legally cognizable under the Fifth Amendment. We therefore reverse the decision with regard to liability, vacate the award of damages, and remand the case to the Court of Federal Claims with the instruction that it enter judgment in favor of the United States.

BACKGROUND
I.

This case involves commercial fishing for mackerel and herring in the Exclusive Economic Zone ("EEZ") of the United States in the Atlantic Ocean. The EEZ consists of the waters two hundred nautical miles from the coastal boundary of each state. See 16 U.S.C. § 1811 (2000); Proclamation No. 5030, 48 Fed.Reg. 10,605 (Mar. 14, 1983).

The pertinent facts are not in dispute. Throughout the 1990s, the National Marine Fisheries Service ("NMFS")1 reported that mackerel and herring stocks in the Atlantic Ocean were at record highs and were substantially underfished. Am. Pelagic

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I, 49 Fed. Cl. at 39. In 1993, a study commissioned by the U.S. Senate Finance Committee and prepared by the U.S. International Trade Commission concluded that only larger ships could improve the competitive position of the U.S. Atlantic mackerel industry with respect to European competitors. Mackerel: Competitiveness of the U.S. Industry in Domestic and Foreign Markets, Inv. No. 332-333, Pub. 2649 (Int'l Trade Comm'n June 1993). In 1994, following a recommendation by the Mid-Atlantic Fishery Management Council ("MAFMC"),2 the NMFS rescinded its potential controls3 over access to the Atlantic mackerel fishery, explaining that stocks were "extremely high" and harvesting low. Atlantic Mackerel, Squid, and Butterfish Fisheries, 59 Fed.Reg. 49,235 (Dep't Commerce Sept. 27, 1994) (rescinding the control date of August 13, 1992, set forth in Atlantic Mackerel, Squid, and Butterfish Fisheries, 57 Fed.Reg. 36,384 (Dep't Commerce Aug. 13, 1992)). In 1996, the MAFMC concluded that

[i]n order to compete in the world bulk market, the U.S. will have to emulate its foreign competitors which harvest, process, and ship mackerel in large quantities so as to take advantage of economies of scale. Currently, the U.S. east coast industry does not have the large vessels necessary to participate in this market....

Annual Quota Specifications for Atlantic Mackerel, Loligo, Illex, and Butterfish for 1997 12 (MAFMC July 1996).

For 1997, the NMFS established an allowable biological catch of 1.178 million metric tons of Atlantic mackerel, but commercial landings totaled only 15,406 metric tons. Am. Pelagic I, 49 Fed.Cl. at 39.4 In its draft FMP for Atlantic herring in 1997, which was partially approved by the Secretary in 1999, the NEFMC proposed an allowable biological catch of 300,000 metric tons; yet, commercial landings totaled only 95,715 metric tons. Id. at 40.

II.

Lisa Torgersen is the President and sole shareholder of American Pelagic. Am. Pelagic II, 55 Fed.Cl. at 577. In November 1996, Atlantic Star Fishing Company, American Pelagic's predecessor, purchased a large, U.S. flagged hull with the intent of transforming it into a commercial fishing vessel. Id. at 579-80. In January 1997, it contracted with a Norwegian shipyard to convert the hull into a freezer trawler — a large, commercial fishing vessel with the capacity to catch all of its own fish, freeze them on board, and offload them for shipping to their final destination. Id. at 579 n. 6, 580. The result was the Atlantic Star, a vessel 369 feet long, displacing 6,900 gross tons, and having a total of

Page 1368

13,400 horsepower (about 7,000 horsepower for running the generators for the freezers and the remainder for propulsion). Id. at 580. Outfitted with the most sophisticated technology for locating, sorting, and freezing fish year-round, the Atlantic Star could safely hold 400 to 500 metric tons of fish. Id. at 580-81. American Pelagic's total investment in the vessel approached $40 million. Am. Pelagic I, 49 Fed. Cl. at 38.

While the vessel was being outfitted, American Pelagic set about applying for the necessary permits and gear authorizations. Pursuant to 50 C.F.R. § 648.4(a)(5) (1996), the Atlantic Star was required to carry on board a valid Atlantic mackerel permit to fish for, possess, or land Atlantic mackerel in or from the EEZ. Because of the potential for incidental bycatch, the Atlantic Star also was required to have a Northeast Multispecies (Nonregulated) fish permit. Id. § 648.4(a)(1). In April 1997, the Northeast Regional Office of the NMFS reissued both permits to American Pelagic:5 Federal Fisheries Permit # 610018 for, inter alia, Atlantic mackerel, expiring December 31, 1997; and Federal Fisheries Permit # 610018 for Northeast Multispecies (Nonregulated), expiring April 30, 1998. In addition, pursuant to 50 C.F.R. § 648.80(d) (1996), on August 28, 1997, the Northeast Regional Office issued to American Pelagic a Gulf of Maine/Georges Bank Midwater Trawl Gear Authorization letter for, inter alia, Atlantic herring, expiring April 30, 1998.6 Am. Pelagic I, 49 Fed. Cl. at 40.

III.

During 1997, as Ms. Torgersen prepared for commercial operation, opposition to the Atlantic Star began to develop. Id. Concerns about the size of the vessel and its potential effect on the Atlantic mackerel and herring fisheries were voiced at a joint meeting of the Herring Section of the Atlantic States Marine Fisheries Commission and the NEFMC Herring Committee in March 1997. These concerns subsequently were incorporated into legislation introduced in the U.S. House of Representatives to establish a moratorium on any fishing vessel, in the Atlantic mackerel and herring industries, equal to or greater than 165 feet in length, with an engine of more than 3,000 horsepower. Id. at 40-41 (citing H.R. 1855, 105th Cong. (1997)). In September 1997, a similar bill was introduced in the U.S. Senate. The Senate bill would have revoked Atlantic mackerel or herring permits that had been issued to vessels 165 feet or longer with an engine of more than 3,000 horsepower. Id. at 41 (citing S. 1192, 105th Cong. (1997)).

Despite the fact that neither bill was enacted, Congress passed a rider to an appropriations act that effectively cancelled American Pelagic's existing permits and authorization letter, and at the same time prevented any further permits from being issued to the Atlantic Star. Id. at 41-42 (citing text of Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1998, Pub.L. No. 105-119, § 616, 111 Stat. 2440, 2518-19 (1997) ("1997 Appropriations Act")). The following year, Congress enacted the identical provision in another appropriations act,7 and in 1999, it made

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the size limitation and permit revocation permanent.8 Id. at 42. The NMFS has since promulgated regulations reflecting this prohibition.9 Id. As a result of the legislation, the Atlantic Star was unable to receive a permit to fish in any U.S. fishery within the EEZ; at the time, no other vessel was affected by the legislation. Id. at 42, 43.

After the Atlantic Star's permits were cancelled, American Pelagic took the vessel to the Baltic Sea to participate in a research project. During this time, the vessel operated as a "mother ship": it did not catch fish itself but merely processed the fish caught by other vessels. Because the venture was not profitable, the Atlantic Star spent only a few months in the Baltic. Subsequently, American Pelagic took the Atlantic Star to Mauritania, off the coast of west Africa, and purchased fishing rights for those waters while maintaining its status as a U.S.-flagged vessel. The vessel and its equipment performed to expectations; however, the lack of fish and warm water temperatures prevented the Atlantic Star from being profitable. American Pelagic chose not to reflag the Atlantic Star and obtain authorization to fish in a foreign fishery. By April 1999, American Pelagic was operating at a loss. After unsuccessful attempts to secure additional financing, and after rejecting Chapter 11 bankruptcy, American Pelagic sold the Atlantic Star to two of its partners on July 6, 1999. Am. Pelagic II, 55 Fed. Cl. at...

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    ...States, 404 F.3d 1335, 1342 (Fed. Cir.), reh'g and reh'g en banc denied (Fed. Cir. 2005); Am. Pelagic Fishing Co., L.P. v. United States, 379 F.3d 1363, 1370-71 (Fed. Cir.), reh'g en banc denied (Fed. Cir. 2004), cert. denied, 545 U.S. 1139 (2005); Mata v. United States, 114 Fed.Cl. 736, 74......
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152 cases
  • BES Design/Build, LLC v. The United States, 19-1892C
    • United States
    • Court of Federal Claims
    • November 30, 2021
    ...States, 404 F.3d 1335, 1342 (Fed. Cir.), reh'g and reh'g en banc denied (Fed. Cir. 2005); Am. Pelagic Fishing Co., L.P. v. United States, 379 F.3d 1363, 1370-71 (Fed. Cir.), reh'g en banc denied (Fed. Cir. 2004), cert. denied, 545 U.S. 1139 (2005); Mata v. United States, 114 Fed.Cl. 736, 74......
  • Howard v. United States, No. 09-575L
    • United States
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    • August 16, 2012
    ...States, 404 F.3d 1335, 1342 (Fed. Cir.), reh'g and reh'g en banc denied (Fed. Cir. 2005); Am. Pelagic Fishing Co., L.P. v. United States, 379 F.3d 1363, 1370-71 (Fed. Cir.), reh'g en banc denied (Fed. Cir. 2004), cert. denied, 545 U.S. 1139 (2005); Cohen v. United States, 100 Fed. Cl. 461, ......
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    ...1348 (Fed. Cir. 2013); Klamath Irr. Dist. v. United States, 635 F.3d 505, 511 (Fed. Cir. 2011); Am. Pelagic Fishing Co. v. United States, 379 F.3d 1363, 1372 (Fed. Cir.) (citing M & J Coal Co. v. United States, 47 F.3d 1148, 1153-54 (Fed. Cir.), cert. denied, 516 U.S. 808 (1995)) reh'g en b......
  • California v. United States, No. 17-206C
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