GONZALEZ v. UNITED States Dep't of COMMERCE Nat'l OCEANIC

• Decision Date: 29 March 2011
• Docket Number: No. 10-40448,10-40448
• Parties: JORGE GONZALEZ; CHUBASCO, INCORPORATED; EL CORONEL, INCORPORATED; EL GRANDE TRAWLERS, INCORPORATED; GONZALEZ FISHERIES, INCORPORATED; LEON TRAWLERS, INCORPORATED; OCHO HIJOS, INCORPORATED; RIO PURIFICATION, INCORPORATED; RIO SAN MARCOS, INCORPORATED; OJOS NEGROS, INCORPORATED, Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF COMMERCE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

JORGE GONZALEZ; CHUBASCO, INCORPORATED; EL CORONEL, INCORPORATED;EL GRANDE TRAWLERS, INCORPORATED; GONZALEZ FISHERIES, INCORPORATED;LEON TRAWLERS, INCORPORATED; OCHO HIJOS, INCORPORATED; RIO PURIFICATION, INCORPORATED;RIO SAN MARCOS, INCORPORATED; OJOS NEGROS, INCORPORATED, Plaintiffs-Appellants,

v.UNITED STATES DEPARTMENT OF COMMERCE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, Defendant-Appellee.

No. 10-40448

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

March 29, 2011

Appeals from the United States District Court for the Southern District of Texas USDC No. 1:06-CV-105 Before SMITH, DeMOSS, and OWEN, Circuit Judges.

JERRY E. SMITH, Circuit Judge:^*

Jorge Gonzalez and nine of his corporations appeal four sanctions issued by the National Oceanic and Atmospheric Administration ("NOAA"). Finding no error, we affirm.

I.

Gonzalez is the sole owner, director, and shareholder of the nine corporations, each of which owns and operates a shrimp trawler in the Gulf of Mexico. In September 2002, the NOAA issued a notice of violation ("Notice #1412") to Rio Purification and fined it $14,000 for fishing without turtle-excluder and bycatch-reduction devices on its shrimping nets, in violation of regulations under the Endangered Species Act of 1973. See 50 C.F.R. § 223.206(d)(2)(i). The notice informed Gonzalez that he had thirty days to request an administrative hearing to contest the violation and fine. The notice was served in two ways. First, a copy was sent via registered mail on November 18, 2002, and was signed for by Raul Garcia, Gonzalez's bookkeeper. Second, an agency official delivered another copy to Gonzalez's place of business, where it was accepted by Garcia on Gonzalez's behalf.

Six months after service, Gonzalez had not paid the fine. The NOAA issued a Notice of Permit Sanctions/Notices of Intent to Deny Permits ("notice of permit sanctions"), announcing that it would deny any future applications from Rio Purification for federal fishing permits under the authority given to the NOAA by the Magnuson-Stevens Fishery Conservation and Management Act. The notices announced that the other eight corporations also would have their future permit applications denied.

In October 2003, the NOAA issued a notice of violation ("Notice #30369") to Rio San Marcos for operating a trawler without a permit and fined it $30,000. The notice of violation again informed Gonzalez that he had thirty days to contest the notice. An NOAA agent personally delivered the notice to Gonzalez's place of business, where it was accepted by Garcia on behalf of Gonzalez. Gonzalez again failed to pay the fine, so the NOAA issued a notice of permit sanction against the nine corporations.

In February 2005, the Coast Guard boarded a trawler owned by Gonzalez Fisheries, whereupon the captain admitted that he was fishing in federal waters without a permit. In March 2005, the NOAA issued a notice of violation ("Notice #50027") to Gonzalez Fisheries and fined it $30,000. The notice again informed Gonzalez that he had thirty days to request an administrative hearing to challenge the violation and fine. The Coast Guard seized, from the trawler, 1,354 pounds of shrimp, which was sold and the profits seized (an amount totaling $5,912.65). This notice was sent by certified mail on April 1, 2005, and was signed for by Garcia. Gonzalez requested a hearing on May 2, 2005.

In March 2004, Texas game wardens boarded a trawler owned by Rio San Marcos. The captain showed the wardens a list of logbook coordinates indicating that the trawler had been fishing in federal waters without a permit. In June 2005, the NOAA issued a notice of violation ("Notice #43022") to Rio San Marcos and fined it $30,000. Gonzalez requested a hearing on the notice on June 29, 2005. His request included not just Notice #50027 and Notice #43022, but also Notice #1412 and Notice #30369.

An administrative law judge ("ALJ") ruled that Gonzalez's requests for a hearing on Notice #1412 and Notice #30369 were time-barred because Gonzalez did not file his request within thirty days of service of the notice. The ALJ also ruled that Notice #50027 was proper: the corporation was liable for fishing and possessing shrimp without a permit, the $30,000 fine was reasonable, and Gonzalez had not proven that he lacked the ability to pay the fine. Finally, another ALJ ruled that Notice #43022 was also proper.

Again, the ALJ found that the corporation was liable for fishing without a permit, the $30,000 fine was reasonable, and Gonzalez had not proven that he lacked the ability to pay. Gonzalez sought discretionary review of the ALJ's rulings, but the NOAA administrator denied the request, finding that substantial evidence existed in the record to support the ALJ's decisions and that there had been no errors of law.

Gonzalez sued to challenge the ALJ's rulings. The district court upheld all four sanction decisions but ruled that the NOAA should have provided additional notice before enforcing the permit sanctions against other corporations owned by Gonzalez that had not themselves committed any violations. Gonzalez appeals all four sanction decisions, arguing that (1) the denial of an administrative hearing to Rio Purification and Rio San Marcos on Notice #1412 and Notice #30369, respectively, constitutes a violation of their constitutional rights; (2) the NOAA's decision to assess penalties against these corporations violates the separation of powers doctrine; (3) the penalties violated the corporations' due process rights; (4) the penalties violated the corporations' right under the Eighth Amendment to be free of excessive fines; and (5) the seizure of shrimp by the NOAA violates the separation of powers doctrine.

II.

Gonzalez contends that the NOAA violated the Constitution by penalizing Rio Purification and Rio San Marcos without affording them a hearing. This is incorrect—both corporations were provided with an opportunity to request a hearing but failed to do so within the applicable time limits.

Gonzalez argues first that the NOAA did not properly serve the two notices of violations, because Raul Garcia was not the registered agent for service of process for either corporation and thus did not have the authority to receive the notices. Gonzalez bases his argument principally on 15 C.F.R. § 904.3(c), which states that service may be made "on the agent for service of process, on the attorney for the person to be served, or other representative." Even assuming, arguendo, that Garcia does not count as an "other representative" under that regulation, Gonzalez's argument still fails. That regulation governs service by personal delivery, not certified mail—which was how these notices were first served to both corporations.

Under existing regulations governing service of process, the NOAA may serve a notice of violation by certified mail to the violator's last known address, regardless of who signs for receipt. 15 C.F.R. § 904.3(a); see also United States v. Robinson, 434 F.3d 357, 366 (stating that "[d]ue process does not require actual notice or actual receipt of notice"). Gonzalez does not dispute that the mailings were addressed properly. Thus, the notices were properly served.

Gonzalez next claims that the corporations' right to a hearing has not yet lapsed, because the NOAA has not taken a "final action" to trigger a hearing request, given that the NOAA continues to take additional actions against the corporations. This argument is patently incorrect given the plain language of 15 C.F.R. § 904.104(a): "If no request for hearing is timely filed . . . the [notice of violation] becomes effective as the final administrative decision and order of NOAA 30 days after service of the [notice of violation] or on the last day of any delay period granted." Subsequent actions by the administrative agency do not render previous notices of violation non-final.

In sum, the district court properly dismissed Gonzalez's claims concerning Notice #1412 and Notice #30369. The companies were provided an opportunity to request a hearing and failed to do so—their failure to take advantage of that opportunity does not give rise to a constitutional deprivation of process.

III.

Gonzalez contends that allowing the NOAA to determine the...