Burns Harbor Fish Co., Inc. v. Ralston

• Decision Date: 23 July 1992
• Docket Number: No. IP 89-433-C.,IP 89-433-C.
• Parties: BURNS HARBOR FISH COMPANY, INC., Plaintiff, v. Patrick D. RALSTON, as Director of the Indiana Department of Natural Resources, and the State of Indiana, Defendants.
• Court: U.S. District Court — Southern District of Indiana

800 F. Supp. 722

BURNS HARBOR FISH COMPANY, INC., Plaintiff, v. Patrick D. RALSTON, as Director of the Indiana Department of Natural Resources, and the State of Indiana, Defendants.

No. IP 89-433-C.

United States District Court, S.D. Indiana, Indianapolis Division.

July 23, 1992.

Steven Kovachevich, Gary, Ind., for plaintiff.

Michael T. Schaefer, Deputy Atty. Gen., Indianapolis, Ind., for defendant.

MEMORANDUM ENTRY DISCUSSING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT¹

TINDER, District Judge.

I. Factual Background

Fishing is a sport for some and a living for others. The proprietors of the plaintiff corporation in this case make their living by fishing in the Indiana waters of Lake Michigan. Plaintiff, however, must share its fishing grounds with a plentitude of sport fisherman who ply the cold waters of the Lake for adventure and for enjoyment.

The arbiter between the interests of commercial fishermen and those of sport fishermen in this case is the Indiana Department of Natural Resources (the "DNR"). The DNR licenses commercial fishermen. A license is required in order to fish for profit in the Indiana waters of Lake Michigan. Ind.Code § 14-2-7-11 (Burns 1987).

The Burns Harbor Fish Company, Inc. ("Burns Harbor") has been engaged in commercial fishing operations in Lake Michigan for some time and currently holds four Indiana commercial fishing licenses. Of central importance to Burns Harbor's ability to conduct a profitable fishing business is its ability to efficiently extract large numbers of perch from the Lake.

Until September of 1986 Burns Harbor used what are known as "gill nets" to catch perch. Unfortunately, however, gill nets cannot discriminate among fish, and the nets which commercial fishermen used to snare perch also reaped a harvest of chinook salmon and trout. The fact that numbers of chinook salmon and trout, both prized sport fish, were being caught in commercial fishermen's gill nets was cause for some concern at the DNR as the DNR annually stocks the Lake with large numbers of salmon and trout.

Eventually, in August 1986, after conducting several studies about the effect that gill net fishing had on the salmon and trout populations in Lake Michigan, the DNR announced that, pursuant to its regulatory authority codified at Ind.Code § 14-2-1-1 et seq. (Burns 1987), it would enforce a six week ban on the use of gill nets to fish in Lake Michigan. The ban was to last from September 15, 1986 until October 31, 1986.² The reasons given for the ban by the DNR was that gill netting wasted a public resource (chinook salmon and trout); reduced sport fishing in the Indiana waters of Lake Michigan; threatened to nullify the extensive stocking efforts of the DNR; and could cause economic harm to those individuals, businesses and communities that relied upon sport fishing.

Thereafter, the Indiana legislature made the ban permanent by enacting Ind.Code §§ 14-2-7-11(d) and (e) (Burns 1987) which prohibit gill net fishing in the Indiana waters of Lake Michigan and provide for automatic and permanent termination of the commercial fishing license of anyone taking fish from Lake Michigan by means of a gill net. The statutory ban was enacted despite efforts by the plaintiff and others to encourage the amendment of the statute to permit the seasonal use of gill nets with compensation to the DNR for any catch other than perch. In addition, the plaintiff has proposed various other alternatives to the ban on gill net fishing, none of which have been adopted.

The plaintiff alleges that the statutory ban on gill net fishing has had a devastating effect on its once profitable fishing operation and that the prohibition threatens to drive the Burns Harbor Fish Company out of the commercial fishing business altogether. By its complaint³ the plaintiff has objected to the statutory gill net ban as violative of its due process rights under the federal constitution. Burns Harbor also contends that the statute has worked a taking of its property without just compensation.

In response, the defendant seeks a summary determination on plaintiff's claims. Defendants contend both that plaintiff has failed to adequately allege a property right that has been taken by the enforcement of the ban on gill net fishing and that plaintiff has failed to adequately allege a property interest that is subject to due process protection.

II. Procedural History

The original DNR six week⁴ regulatory ban on the use of gill nets was challenged in state court by a group of plaintiffs that included two of the officers of the Burns Harbor Fish Company. The trial court found in favor of the plaintiffs but was reversed by the Indiana Court of Appeals which ruled that Indiana's commercial fishermen do not have a property interest in the State's fish or in their fishing licenses. See Ridenour v. Furness, 504 N.E.2d 336, 340 (Ind.App.1987), aff'd, 514 N.E.2d 273 (Ind.1987).⁵

The summary judgment motion offered by the defendants in this case is premised almost exclusively upon the holding of the Indiana Court of Appeals in the Ridenour case. Essentially defendants' position is that the Indiana court's holding in Ridenour, that commercial fishermen had no property interest in either the fish in Lake Michigan or in their fishing licenses, precludes any possibility of the plaintiff prevailing in this action.

Some months ago this Court granted defendants' motion for summary judgment. In ruling upon defendants' motion this Court found that this case and the prior Ridenour action in state court involved substantially similar parties and had a similar legal format. Ridenour involved an attempt to overturn or to obtain compensation for a ban on gill net fishing; so does this case.

In addition, this Court determined that the fact that the ban involved in Ridenour was the result of a regulation issued by the DNR and that the ban in this case was a statutory enactment was immaterial to the legal issues involved. Accordingly, based on the Ridenour court's holding that Indiana fishermen do not have a property interest in fish located in Indiana waters, this Court held that the plaintiff in this case could not rely on a theory that it had a property interest in fish found in Indiana waters. While this Court based its ruling on a theory of collateral estoppel, it is clear that the federal constitution would not afford a recovery to plaintiff pursuant to a theory that plaintiff has a property interest in fish found in Indiana waters. See Douglas v. Seacoast Products, Inc., 431 U.S. 265, 284, 97 S.Ct. 1740, 1751, 52 L.Ed.2d 304 (1977) ("A State does not stand in the same position as the owner of a private game preserve and it is pure fantasy to talk of `owning' wild fish, birds, or animals. Neither the States nor the Federal Government, any more than a hopeful fisherman or hunter, has title to these creatures until they are reduced to possession by skillful capture"); see also Hughes v. Oklahoma, 441 U.S. 322, 334-36, 99 S.Ct. 1727, 1735-36, 60 L.Ed.2d 250 (1970) (state does not have ownership interest in minnows). Indeed, plaintiff does not dispute that part of this Court's prior ruling precluding plaintiff from attempting to recover under a theory that it had a property interest in fish swimming in Indiana waters.

Plaintiff's motion to reconsider this Court's prior ruling granting summary judgment in favor of defendants does contest this Court's conclusion that plaintiff does not have property in its fishing licenses that requires protection pursuant to the takings clause of the fifth amendment or the due process clause of the fourteenth amendment. Because the plaintiff did not directly confront the due process and takings issues in its prior briefing and because of the important constitutional and environmental issues at stake in this litigation this Court granted the motion to reconsider and now considers for the second time the propriety of granting summary judgment in this action.

III. Discussion

The federal constitution protects various kinds of "property" in various ways. The fifth amendment prohibits the government from taking property without just compensation. The due process clause of the fourteenth amendment provides that no person shall be deprived of life, liberty, or property without due process of law.

At the heart of some of the confusion over the legal issues in this case has been a tendency to assume that the "property" given protection by the takings clause is equal to the "property interests" that are protected by the requirement of due process of law. The definitions of "property" protected by each of these provisions are, however, not necessarily identical.

A. Takings Clause Analysis

It is clear that the Burns Harbor Fish Company has a property interest in the gill nets that the Company bought and paid for. The State of Indiana could not appropriate these nets from the plaintiff without due process or without paying compensation. However, the State of Indiana did not attempt to take gill nets away from Burns Harbor.

Rather, the State merely forbids Burns Harbor from using gill nets within the confines of the Indiana waters of Lake Michigan. All indications are that Burns Harbor still has dominion and control over its gill nets. Burns Harbor can sell its nets, it can put them to other uses, it can fish with them outside of Indiana waters.⁶ Indeed, it can do virtually anything it wants with its nets except use them to fish in Indiana waters. While the ban on gill net fishing prevents Burns Harbor from obtaining economic benefit from its nets when fishing in Indiana waters, the State's regulation cannot be considered a taking of the gill nets because the State of Indiana by regulating gill net fishing is simply exercising its sovereign right and responsibility to oversee and regulate the environment and wildlife within the State.

When an individual or corporate entity purchases personal property (as opposed to real property)...