Kuzmin v. Cfec.

• Decision Date: 11 December 2009
• Docket Number: No. S-13115.,S-13115.
• Parties: Fedor Z. KUZMIN, Appellant, v. STATE of Alaska, COMMERCIAL FISHERIES ENTRY COMMISSION, Appellee.
• Court: Alaska Supreme Court

223 P.3d 86

Fedor Z. KUZMIN, Appellant, v. STATE of Alaska, COMMERCIAL FISHERIES ENTRY COMMISSION, Appellee.

No. S-13115.

Supreme Court of Alaska.

December 11, 2009.

Michael Hough, Homer, for Appellant.

Vanessa M. Lamantia, Assistant Attorney General, and Richard A. Svobodny, Acting Attorney General, Juneau, for Appellee.

Before: FABE, Chief Justice, EASTAUGH, CARPENETI, WINFREE, and CHRISTEN, Justices.

OPINION

EASTAUGH, Justice.

I. INTRODUCTION

The Commercial Fisheries Entry Commission (CFEC) denied Fedor Kuzmin's limited entry crab permit application because it found that he had insufficient points. Kuzmin appeals, arguing that the CFEC abused its discretion by refusing to credit him points based on crab deliveries he allegedly made as a partner in his son Romil's 2001 fishing operation. Because substantial evidence supported the CFEC's finding that Kuzmin was not in joint control of Romil's 2001 fishing operation, as 20 Alaska Administrative Code (AAC) 05.834(c) required, we affirm the superior court order affirming the CFEC decision that denied Kuzmin's entry permit application.

II. FACTS AND PROCEEDINGS

In 2004 Fedor Kuzmin applied to Alaska's Commercial Fisheries Entry Commission for an entry permit to the Kodiak bairdi Tanner crab pot fishery. This permit was required because the Limited Entry Act, which promotes the conservation and sustained yield management of Alaska's fisheries,¹ designates the Kodiak crab fishery as one that requires limitation of entry.² The CFEC allocates a maximum of 180 entry permits to the Kodiak bairdi Tanner crab pot fishery each year, ranking applicants according to their degree of economic dependence on the fishery and the extent of their past participation in the fishery.³

The CFEC has established a zero-to-sixty point scale for the Kodiak crab fishery.⁴ An applicant can claim a maximum of twenty points for past participation in the fishery thirty-five points for consistent participation in the fishery, and five points for economic dependence.⁵

When Kuzmin applied for an entry permit to the Kodiak crab fishery in 2004, he indicated that he had harvested at least 100 pounds of crab in 2001 and more than 5,600 pounds of crab in 1994 from the fishery. Based on the amount he had harvested, Kuzmin claimed that he should be awarded nineteen points for consistent participation. Because he had harvested crab in two separate calendar years, Kuzmin claimed that he should be awarded an additional thirteen points for past participation.

In October 2004 the CFEC sent Kuzmin a letter stating that additional information was needed to classify his application. Despite Kuzmin's claim that he harvested at least 100 pounds of crab in 2001, the letter stated that CFEC did not have any landings attributed to Kuzmin's permit in 2001.

Kuzmin submitted a statement alleging that he went crab fishing in January 2001 with his son Romil. Kuzmin stated that they used Kuzmin's crab pots and fished off Romil's boat as partners, splitting in half both income and expenses. Romil submitted an affidavit stating that Kuzmin worked as a deckhand on Romil's boat in 2001 and was paid in cash. Although Romil stated that he used Kuzmin's pots that year, he referred to Kuzmin as his "deckhand" and did not refer to him as his partner.

In December 2004 the CFEC classified Kuzmin's entry permit application at thirteen points. The CFEC credited Kuzmin with six points for harvesting at least 100 pounds but less than 5,600 pounds of crab in 1994 and seven points for commercially harvesting bairdi Tanner crab in one calendar year. The CFEC did not award Kuzmin points based on his claim that he had harvested at least 100 pounds of crab in 2001.

In January 2005 Kuzmin asked the CFEC for an administrative hearing. A hearing was held on May 19, 2005 with Kuzmin and his counsel appearing telephonically from Cordova. The only witnesses who testified about Kuzmin's 2001 fishing activities were Kuzmin and his son Romil. The hearing officer found that Kuzmin had "not shown with a preponderance of the evidence" that he was in joint control of Romil's 2001 fishing operation and therefore entitled to partnership participation points. Because Kuzmin "did not meet his burden to show the commission's determination was in error," his application was finally classified with thirteen points. Thirteen points was insufficient to qualify for a non-transferable permit, and Kuzmin's application was denied.

Kuzmin submitted to the CFEC a petition for administrative review of the hearing officer's decision. The CFEC denied Kuzmin's petition and "finally den[ied]" his entry permit application by affirming and adopting the hearing officer's decision as its own. Kuzmin requested reconsideration, but following reconsideration the CFEC again upheld the hearing officer's findings and "finally denied" Kuzmin's application.

In September 2006 Kuzmin appealed to the superior court, arguing that the CFEC erred by concluding that he was not entitled to a portion of the deliveries he and his son Romil made in 2001. In April 2008 the court held that substantial evidence supported the CFEC's conclusion that Kuzmin was participating as a crewmember, rather than as a partner, during the 2001 fishing season.

Kuzmin appeals.

III. DISCUSSION

A. Standard of Review

Kuzmin argues that this is a one-issue appeal focused on whether the CFEC erred in determining that he was not entitled to participation points based on the crab he and Romil harvested together in 2001. When a superior court acts as an intermediate court of appeal in an administrative matter, we independently review the merits of the agency's decision.⁶

When reviewing an agency decision based on factual findings, we apply the substantial evidence test.⁷ Whether Kuzmin fished in a partnership turns on whether he was in joint control of Romil's fishing operation, a question of fact to which we apply the substantial evidence test.⁸ Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion."⁹

When reviewing an agency's interpretation of its own regulation, we apply the reasonable basis standard of review.¹⁰ We will defer to the agency unless its "interpretation is plainly erroneous and inconsistent with the regulation."¹¹ This "deferential standard of review properly recognizes that the agency is best able to discern its intent in promulgating the regulation at issue."¹²

B. Whether the CFEC's Decision Not To Award Kuzmin Points Based on His 2001 Participation Was "Arbitrary, Capricious, an Abuse of Discretion, and Not Supported by Evidence"

The CFEC has promulgated specific regulations governing the permitting process for the Kodiak crab fishery under the Limited Entry Act.¹³ Per those regulations, an applicant is eligible to earn "past participation" points based on whether he or she commercially harvested Kodiak bairdi Tanner crab as a gear operator in 1993, 1994, 2001, or 2002.¹⁴ An applicant is also eligible to earn "consistent participation" points depending on whether he or she met certain poundage thresholds while working as a "gear operator" during one or more of those years.¹⁵

The regulations define "gear operator" as "an individual who was physically present on the vessel[,] who was in control or joint control of the commercial fishing operation, and who held a valid interim-use permit for the Kodiak bairdi Tanner crab pot fishery."¹⁶ The regulations adopt a rebuttable presumption that an applicant was a crewmember and not a gear operator for the purpose of awarding participation points if the applicant's commercial harvest was less than twenty percent of the "total commercial harvest taken in the fishery and delivered from the vessel during that year."¹⁷ An applicant can rebut the crewmember presumption by showing by a preponderance of the evidence either that "the applicant was the sole gear operator on the vessel at the time the Kodiak bairdi Tanner crab were harvested or that the applicant was a partner with one or more other gear operators on the vessel."¹⁸ The Kodiak crab pot fishery regulations also define "partners" to mean "co-owners of a fishing business for profit who participate as gear operators from the same vessel and are in joint control of the fishing operation."¹⁹

The hearing officer concluded that Kuzmin "ha[d] not shown with a preponderance of the evidence that he was in joint control of the [2001] fishing operation" and accordingly declined to award Kuzmin points for his participation that year. Kuzmin argues that the CFEC's decision was arbitrary, capricious, unsupported by evidence, and an abuse of discretion. He contends that he proved by a preponderance of the evidence that he was "at least in partnership" with his son Romil and that the CFEC "cannot reasonably believe" otherwise. He additionally argues that the CFEC failed to consider traditional partnership principles and thus was not applying the law "evenhandedly to all applicants."

1. Whether substantial evidence supports CFEC's finding that Kuzmin was not in joint control

Kuzmin argues that he was "at least" in joint control of Romil's 2001 commercial fishing operation. He contends that he owned the vessel, the gear, and the crab pots and could "hire, fire, direct[,] and control" Romil. He also asserts that he was teaching Romil how to skipper, operate crab gear, select a fishing site in Kodiak, and keep the crab alive for sale. Kuzmin argues he did everything except steer the boat and that Romil, possessing only "minimal skills," did not bring much of anything to the fishing operation. Although Romil may have referred to Kuzmin as a "deckhand," Kuzmin implies that Romil, a Russian-speaking Old Believer, misunderstood the meaning of that word. Kuzmin implicitly argues that his case is more analogous to several other CFEC decisions which found partnerships to exist.

The CFEC responds that Kuzmin did not meet his burden of...