Conti v. U.S.

• Decision Date: 29 May 2002
• Docket Number: No. 01-5068.,01-5068.
• Citation: 291 F.3d 1334
• Parties: Paul CONTI and Conti Corporation (as owner of F/V Providenza), Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

291 F.3d 1334

Paul CONTI and Conti Corporation (as owner of F/V Providenza), Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 01-5068.

United States Court of Appeals, Federal Circuit.

May 29, 2002.

Paul Antinori, of North Andover, MA, argued or plaintiff-appellant.

Marian E. Sullivan, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief were Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director; and Deborah A. Bynum, Assistant Director. Of counsel on the brief were Mariam McCall and Deborah Ben-David, Office of the General Counsel, National Oceanic and Atmospheric Administration, Department of Commerce, of Silver Spring, MD.

Before NEWMAN, CLEVENGER, and SCHALL, Circuit Judges.

SCHALL, Circuit Judge.

Paul Conti is a swordfisherman. Along with Conti Corporation, he filed suit in the United States Court of Federal Claims seeking compensation under the taking clause of the Fifth Amendment. In his complaint, Mr. Conti alleged that the government's 1999 prohibition on drift gillnet swordfishing in the Atlantic Swordfish Fishery had deprived him of all economic value in his swordfishing permit, his vessel, the F/V Providenza (owned by Conti Corporation), and his swordfishing gear. The Court of Federal Claims granted the government's motion to dismiss the complaint under its Rule 12(b)(4) for failure to state a claim upon which relief could be granted. Conti v. United States, 48 Fed. Cl. 532 (2001). The court held that the swordfishing ban did not deprive Mr. Conti of the possession of his vessel and swordfishing gear and thus did not constitute a compensable taking of that property. Id. at 537. The court also held that Mr. Conti's swordfishing permit did not give rise to a property interest cognizable under the Fifth Amendment and that it therefore could not be the subject of a taking. Id. at 537-38. Mr. Conti now appeals the court's decision.¹ Because we conclude that the swordfishing ban did not take any of Mr. Conti's property, we affirm.

BACKGROUND

I.

The following facts either are undisputed or are taken from Mr. Conti's complaint. Swordfish are caught using drift gillnets, longlines, or handgear. The drift gillnet technique, utilized by Mr. Conti, consists of deploying specially designed nets (pelagic drift gillnets). The nets are attached to a vessel and are deployed to catch swordfish by entangling them.

Mr. Conti began his swordfishing career in the Pacific Ocean in 1979. Complaint of Plaintiffs-Appellants Paul Conti and Conti Corporation (hereinafter "Complaint") at ¶ 3. That year, he acquired and launched the Providenza, which was specifically designed for driftnetting. Id. Six years later, he moved his base of operations from Seattle, Washington, to Gloucester, Massachusetts, and deployed his vessel and gear off the Atlantic Coast. Id. at ¶ 5. Between his arrival in Massachusetts in 1985 and the government's permanent ban on drift gillnets in 1999, Mr. Conti harvested swordfish in the Atlantic Swordfish Fishery using the Providenza. According to Mr. Conti, drift gillnet fishing for swordfish accounted for 100% of his income.

II.

During the period that he fished in the Atlantic Swordfish Fishery, Mr. Conti faced a regulatory regime that increasingly restricted his activities. Pursuant to the 1976 Magnuson-Stevens Act, 16 U.S.C. § 1801 ("MSA") (1994), the Secretary of Commerce possesses the power to regulate fisheries within an Exclusive Economic Zone ("EEZ") that extends from 3 to 200 miles off the United States coast.² The Secretary manages the fisheries by approving Fishery Management Plans, which may "prohibit, limit, condition, or require the use of specified types and quantities of fishing gear, fishing vessels, or equipment," 16 U.S.C. § 1853(b)(4) (2000), in order to effectuate the MSA's purpose of preserving the fisheries' health, stability, and fish stocks. See 16 U.S.C. § 1853(a)(1)(A) (2000). Regulations implementing Fishery Management Plans, often promulgated by the National Marine Fisheries Service ("NMFS"), have the force and effect of law. See 16 U.S.C. §§ 1854-1855; Alaska Factory Trawler Ass'n v. Baldridge, 831 F.2d 1456, 1464 (9th Cir.1987).

Despite the government's broad de jure power to regulate the Atlantic Swordfish Fishery under the MSA, Mr. Conti alleges that he harvested swordfish without de facto regulatory interference until 1986, when NMFS enacted regulations which had the effect of requiring him to apply for a revocable, non-transferable permit. See Atlantic Swordfish Fishery, 50 Fed.Reg. 33,952, 33,957 (Aug. 22, 1985). Subsequent regulations that were promulgated pursuant to the M.S.A. § and other statutes, including the Atlantic Tunas Convention Act, 16 U.S.C. § 971 (1994), the Marine Mammal Protection Act, 16 U.S.C. § 1361 (1994), and the Endangered Species Act, 16 U.S.C. § 1531 (1994), created an increasingly onerous regulatory environment. Many of these regulations were specifically directed to reducing drift gillnet fishing, which had aroused national and international concern on account of that fact that drift gillnets ensnare significant numbers of sea turtles and marine mammals, including whales. See, e.g., Taking of Marine Mammals Incidental to Commercial Fishing Operations; Atlantic Large Whale Take Reduction Plan Regulations, 62 Fed.Reg. 39,157 (July 22, 1997).

In 1989, the United Nations banned the use of drift gillnets in international waters, which led Congress to enact the Driftnet Act Amendments of 1990. G.A. Res. 225, U.N. GAOR, 44th Sess., 85th plen. mtg., U.N. Doc. A/44/225 (1989); 16 U.S.C. § 1826 (1994). The amendments provided for implementing the international moratorium on the use of drift gillnets of a certain length beyond the EEZ and for the imposition of sanctions against nations whose vessels or nationals were not in compliance. 18 U.S.C. § 1826. In 1991, the government began to implement increasingly severe quotas that limited each fisherman's catch using drift gillnets, see Atlantic Swordfish Fishery, 56 Fed.Reg. 65,007 (Dec. 13, 1991), and the NMFS closed the Atlantic Swordfish Fishery entirely from December of 1996 through July of 1998. See Atlantic Swordfish Fishery; Drift Gillnet Emergency Closure, 61 Fed. Reg. 64,486 (Dec. 5, 1996); Atlantic Swordfish Fishery; Extension of Drift Gillnet Emergency Closure, 62 Fed.Reg. 30,775 (June 5, 1997); North Atlantic Swordfish Fishery; Closure, 63 Fed.Reg. 41,205 (Aug. 3, 1998). Finally, in its ongoing effort to reduce bycatch³ and preserve the swordfish stock, the NMFS issued a final regulation in January of 1999, prohibiting the use of drift gillnet gear entirely in the Atlantic Swordfish Fishery. Atlantic Swordfish Fishery; Management of Driftnet Gear, 64 Fed.Reg. 4055 (Jan. 27, 1999); 50 C.F.R. §§ 635.71(a)(17), (e)(8) (2000). The object of the ban was to reduce marine mammal and sea turtle catch while conserving swordfish and other marine resources. See 64 Fed.Reg. at 4055. Since the regulation permitted the harvesting of swordfish in the fishery using methods other than drift gillnet fishing, the NMFS sought to mitigate the ban's economic impact by allowing permit holders, for the first time, to sell permits for use with non-drift gillnet gear. See 50 C.F.R. § 635.21(d)(1) (2000).

III.

In December of 1999, Mr. Conti brought suit in the Court of Federal Claims, alleging that the January 1999 ban on harvesting swordfish using drift gillnets constituted a regulatory taking of his fishing permit, the Providenza, and his gillnet gear without just compensation, in violation of the Fifth Amendment. Complaint at ¶ 14. Mr. Conti asserted that the ban had "inversely deprived him of the economically viable use and enjoyment of his property." Complaint at ¶ 12.

In due course, the government moved under RCFC 12(b)(4) to dismiss Mr. Conti's complaint for failure to state a claim upon which relief could be granted. Addressing the motion, the Court of Federal Claims applied the two-part test for regulatory takings claims that is set forth in M & J Coal Co. v. United States, 47 F.3d 1148, 1153-54 (Fed.Cir.1995). That test requires a claimant to establish 1) a compensable property interest that 2) the government took through regulation. After considering the several property interests asserted by Mr. Conti, the court concluded that none of them could form the basis for a viable taking claim. Conti, 48 Fed. Cl. at 536 540. The court first considered Mr. Conti's fishing vessel and drift gillnet gear. While the court acknowledged that Mr. Conti's ownership of the Providenza and its gear "has traditional characteristics of personal property," the court concluded that the drift gillnetting ban did not take that property. Id. at 536-37. The court reasoned that Mr. Conti's continuing ability "to sell the vessel and the gear, fish in a different fishery, or put both the nets and the vessel to other uses" precluded a finding that a regulatory taking had occurred. Id. at 537. As for Mr. Conti's efforts to characterize the right to use the permit and his vessel and gear to earn a living as the relevant property interest taken by the regulation, the Court of Federal Claims determined that continued use of Mr. Conti's property for harvesting swordfish with drift gillnets did not constitute a compensable property interest. Therefore, the court held, the right could not qualify as an interest that could be the subject of a Fifth Amendment taking claim. Finally, in the setting of the pervasive regulatory environment circumscribing Mr. Conti's ability to harvest swordfish using drift gillnets in the Atlantic Swordfish Fishery, the court viewed the interest conferred by the swordfishing permit as resembling a revocable license instead of a compensable property right. Id. at 538-39.

DISCUSSION

I.

We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1295(a)(3) (2...