Etheridge v. Pritzker
| Decision Date | 22 November 2013 |
| Docket Number | NO. 2:12-CV-79-BO,2:12-CV-79-BO |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | WILLIE ETHERIDGE, III and MARK CORDEIRO, Plaintiffs, v. PENNY PRITZKER, Secretary of the United States Department of Commerce and KATHRYN D. SULLIVAN, Acting Under Secretary of Commerce for Oceans and Atmosphere, Defendants. |
This matter is before the Court on the parties' cross motions for summary judgment [DE 17 & 19]. The motions are now ripe for adjudication. For the reasons stated herein, the defendants' motion for summary judgment is DENIED and the plaintiffs' motion for summary judgment is GRANTED. The decision of the Secretary is REVERSED.
Plaintiffs seek review and partial reversal of a decision issued on a petition for discretionary review after remand dated October 11, 2012 [AR 78] issued by Jane Lubchenco, the National Oceanic and Atmospheric Administration Assistant Administrator for Fisheries from an initial decision entered by Administrative Law Judge ("ALJ") Parlen McKenna on January 5, 2011 [AR 71] finding plaintiffs in violation of 50 C.F.R. §§ 600.1203(a)(2) and 600.1203(a)(3) with regard to 13 counts of shark finning alleged by the Agency, and imposing fines of $1,500 per count and 60 day permit sanctions.
This case originated as a notice of violation and assessment and a notice of permit sanction ("NOVA/NOPS") dated April 11, 2006, which alleged 18 counts of possessing shark fins without the corresponding carcasses onboard a US fishing vessel as required by 50 C.F.R. 600.1203(a)(2). The proposed penalty was $10,000 per count with additional fishing permit sanctions. On October 12, 2006, approximately one month before hearing, the Agency amended the NOVA/NOPS to change the cited violation to 50 C.F.R. § 635.71(a)(28), and changed the language in each charge to assert a violation occurred by reason of the plaintiffs "possessing or offloading shark fins in a quantity that exceeds 5 percent of their dressed weight of the shark carcasses." At a hearing held on November 13, 2007, the Agency offered evidence, which the plaintiffs did not dispute, that on 18 occasions, they possessed or landed shark fins in excess of 5% of the total weight of shark landed. Plaintiffs argued that they landed shark fins and corresponding carcasses as required by 50 C.F.R. 600.1203(a)(2) and that they acted in compliance with advice of the NOAA law enforcement agents that as long as they landed fins with the corresponding carcasses, they would be in compliance with National Marine Fisheries Service ("NMFS") regulations.
The ALJ was persuaded that the only issue was whether plaintiffs' fin to carcass ratio exceeded 5%, and as that fact was not disputed, found the plaintiffs in violation of the regulation and imposed penalties and sanctions. Plaintiffs contended that the Agency was required to prove that they finned sharks, as specified in the Shark Finning Prohibition Act, 16 U.S.C. § 1857(1)(P)(i)-(ii), and implementing regulations. Plaintiffs argued that they could rebut the presumption of finning created by the Act based on the variations within their fisheries. Plaintiffs timely sought discretionary review which was granted on February 25, 2008. The Administratorordered the case to be remanded to allow the plaintiffs to rebut the presumption of shark finning based on the fin to carcass ratios exceeding 5%.
Following, and in accordance with, the remand, the Agency modified its NOVA/NOPS to assert charges under 50 C.F.R. § 600.1203(a)(2), charging plaintiffs with shark finning based on the presumption of shark finning contained within the regulation as their fin to carcass ratios exceeded 5%. A supplemental hearing was held on October 13 through October 15, 2009. The parties agreed to extend the timeline for a final decision, based on the Agency's publication of a proposed modification to the ALJ's standard of review of Agency proposed penalties, which was subsequently published as a final rule See 15 C.F.R. § 904.204(m). The parties agreed that this governed the ALJ's decision in this case.
The ALJ rendered his decision on January 5, 2011, accepting in part plaintiff's argument that based on their fishing methods and species landed, the appropriate fin to carcass ratio would have been in excess of 5%. The ALJ calculated an "adjusted violation threshold" for each count, in effect creating a separate percentage presumption for each count of the NOVA/NOPS based on the plaintiffs' evidence that he accepted. The plaintiffs filed this action on November 29, 2012.
A motion for summary judgment cannot be granted unless there are no genuine issues of material fact for trial. FED. R. CIV. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Here, the parties agree that there are no genuine issues of material fact and that the only issue at hand is whether the ALJ and NMFS properly interpreted and applied the rebuttable presumption created by the Shark Finning Prohibition Act, Pub. L. No. 106-557 (Dec. 21, 2000).
This Court has jurisdiction under section 308(b) of the Magnuson-Stevens Act to review the civil penalties issued in this case. 16 U.S.C. § 1858(b). The Act provides that these penalties and sanctions must be set aside if the Court concludes that they are not "supported by substantial evidence. . . ." Id. Substantial evidence means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. of New York v. NLRB, 305 U.S. 197, 217 (1938). It is "more than a mere scintilla." Id. The substantiality of the evidence must take into account the "record in its entirety," including "whatever in the record fairly detracts from its weight." Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951). It is not significant that different findings might also be supported by substantial evidence. Diehl v. Franklin, 826 F. Supp. 874, 878 (citation omitted). To reverse, the Court must conclude that the alternative finding is compelled by the evidence. Id. (citation omitted).
With respect to questions of law other than an agency's interpretation of a statute it administers, courts review the determination of the agency de novo. Bath Iron Works Corp. v. United States Dep't of Labor, 336 F.3d 51, 55 (1st Cir. 2003). However, courts owe "substantial deference to an agency's interpretation of its own regulations." Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994). "[T]he agency's interpretation must be given 'controlling weight unless it is plainly erroneous or inconsistent with the regulation.'" Id. "When a court reviews an agency's construction of a statute which it administers, it is confronted with two questions." Chevron v. Natural Resources Defense Council, 467 U.S. 837, 842 (1984). "First, always, is the question of whether Congress has directly spoken to the precise question as issue." Id. If the intent is clear, that is the end of the matter. Id. "If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute. . . ." Id. at 843. Instead, "if the statute is silent orambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute. Id. The court "may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency. Id. at 844.
Plaintiffs base their challenge on an alleged error in the ALJ's and the Administrator's legal analysis. Plaintiffs essentially allege that the ALJ, and in turn the Administrator, erred by holding that the presumption contained in the regulations mandated his finding of responsibility on 13 counts despite plaintiffs' successful rebuttal of the 5% presumption in the statute and implementing regulation, and the Agency's lack of evidence proving shark finning. They argue that the ALJ based his findings of responsibility for the violation solely on the legal basis that the plaintiffs could not prove in each instance why their fin to carcass ratio exceeded an "adjusted violation threshold," which was in excess of 5%, essentially creating a new presumption at a higher fin to carcass ratio based on the plaintiffs' actual fishing practices, and some assumed minimum variations that affected plaintiffs' fin ratios such as species targeted, excess trimming of carcasses, and excess meat on fins.
The plaintiffs argue that to successfully rebut the presumption and force the Agency to prove all the elements of the case, including actual finning, all they needed to do was offer credible evidence that reasonably explained why their fin to carcass ratio exceeded 5%. Once they offered that evidence, they argue that they had rebutted the presumption and then the finder of fact must decide whether the fair preponderance of the evidence proves finning occurred or not, with the burden of proof on the Agency. The plaintiffs claim that the ALJ agreed that they rebutted the 5% presumption, established a new "Adjusted Violation Threshold" ("AVT") andsubstituted it for the presumption, and then found against plaintiffs because the AVT required a finding of a violation unless plaintiffs could state specific circumstances as to why their fin to carcass ratios exceeded the ALJ's AVT on those dates. Plaintiffs claim that in doing so, the ALJ made an error of law because he relied on the AVT as a presumption requiring a finding of finning, rather than relying on the evidence submitted by the Agency to prove finning occurred.
Defendants, on the contrary, argue that plaintiffs were required to come forward with "reliable, credible, and probative" evidence to establish reasons why a particular fin to carcass ratio in a given charge exceeded the statutory/regulatory threshold. They argue that where the plaintiffs...
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