Pac. Choice Seafood Co. v. Pritzker

• Decision Date: 20 July 2016
• Docket Number: Case No. 15-cv-05572-HSG
• Parties: PACIFIC CHOICE SEAFOOD COMPANY, et al., Plaintiffs, v. PENNY PRITZKER, et al., Defendants.
• Court: U.S. District Court — Northern District of California

PACIFIC CHOICE SEAFOOD COMPANY, et al., Plaintiffs, v. PENNY PRITZKER, et al., Defendants.

Case No. 15-cv-05572-HSG

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

July 20, 2016

ORDER DENYING DEFENDANTS' MOTION TO DISMISS

Re: Dkt. No. 22

Pending before the Court is a motion to dismiss Plaintiffs' first amended complaint brought by Federal Defendants Penny Pritzker, in her official capacity as United States Secretary of Commerce, and the National Marine Fisheries Service. Dkt. No. 22 ("MTD"). For the reasons articulated below, the motion to dismiss is DENIED.

I. BACKGROUND

A. Regulatory Background

The Magnuson-Stevens Fishery Conservation and Management Act (the "Magnuson Act") was established in part "to take immediate action to conserve and manage the fishery resources found off the coasts of the United States." 16 U.S.C. § 1801(b)(1).¹ The Magnuson Act establishes eight Regional Fishery Management Councils that are each responsible for preparing a proposed fishery management plan ("FMP") and related amendments directed at the conservation and management of the fishery's resources. 16 U.S.C. § 1852(a),(h).

Each Council proposes FMPs, FMP amendments, and implementing regulations to the National Marine Fisheries Service ("NMFS") for review and approval. Dkt. No. 14 ("FAC")¶¶ 24-25. Upon receipt of a proposal, NMFS reviews the proposal to determine if it is consistent with national standards and applicable law, publishes the proposal, and requests public comment. 16 U.S.C. § 1854(1). After the public comment period, NMFS may approve, disapprove, or partially approve a proposed FMP, amendment, or regulation. 16 U.S.C. § 1854(2).

NMFS may approve a limited access privilege program ("LAPP") to achieve optimum yield for any fishery. 16 U.S.C. § 1853(b)(6); 16 U.S.C. § 1853a. LAPPs must promote "fishing safety," "fishery conservation and management," and "social and economic benefits." 16 U.S.C. § 1853a. They also must "establish procedures to ensure fair and equitable initial allocations" of fish harvests and "ensure that limited access privilege holders do not acquire an excessive share of the total limited access privileges in the program." Id.

B. Factual Background

In this action, Plaintiffs Pacific Choice Seafood Company, Sea Princess, LLC, and Pacific Fishing, LLC "challenge decisions of [NMFS] that establish and implement an individual transferable quota program (the 'IFQ Program') for the Pacific Coast shorebased groundfish limited-entry trawl fishery." FAC ¶¶ 5, 30-32.

In 2010, NMFS partially approved Amendments 20 and 21 to the Pacific Fishery Management Council's FMP (the "Pacific FMP") and published the associated implementing regulations. Id. ¶ 33. At that time, the IFQ Program established four regulatory components at issue in the current action: (1) a 2.7% aggregate limit on the amount of total quota share ("QS") of all non-whiting species fished in the Pacific Fishery that a person or entity may own or "control"; (2) a control rule that defines "control" as "the ability through any means whatsoever to control or have a controlling influence" over QS; (3) a divestiture rule that required any participant whose ownership or control of QS exceeded the 2.7% limit to divest his excess share by November 30, 2015; and (4) a revocation provision providing that excess QS not divested by the November 30, 2015, deadline would be automatically revoked by NMFS (together, the "2010 Regulations"). Id. ¶ 5; Dkt. No. 32 ("Opp'n") at 4-5. On September 2, 2015, NMFS published an additional proposed rule that set out specific divestiture-related deadlines, created a process for revocation of QS, added an option for the abandonment of QS, established that excess QS would beproportionally revoked across fish species and permits, and reaffirmed that revoked QS would be proportionally distributed among the Pacific Fishery participants. FAC ¶ 34 (citing 80 Fed. Reg. 53,088 (September 2, 2015) (to be codified at 50 CFR pt. 660)). On November 9, 2015, after the required public comment period, NMFS issued the proposed rule as a final rule (the "November 2015 Rule"). Opp'n at 7; FAC ¶ 34; 80 Fed. Reg. 53,088 (September 2, 2015) (to be codified at 50 CFR pt. 660); 80 Fed. Reg. 69,138 (November 9, 2015) (codified at 50 CFR pt. 660). The November 2015 Rule applied the IFQ Program's revocation provisions beyond the November 30, 2015, deadline into the future. FAC ¶ 34 (citing 80 Fed. Reg. 53,088 (September 2, 2015) (to be codified at 50 CFR pt. 660)); 80 Fed. Reg. 69,138 (November 9, 2015) (codified at 50 CFR pt. 660); Opp'n at 7-8.²

Plaintiffs filed their complaint within 30 days of the November 2015 Rule and articulate six claims for relief that can be summarized as follows: Claims one through four allege that substantive provisions of the IFQ Program established under the 2010 Regulations violate the Administrative Procedures Act ("APA") and the Magnuson Act. Claim five alleges that aspects of the 2010 Regulations violate the APA and the National Environmental Policy Act ("NEPA"). Finally, claim six asserts that the November 2015 Rule violates the APA, NEPA, and the Magnuson Act. See id. ¶¶ 43-86.

II. DISCUSSION

Defendants move to dismiss claims one through five as time-barred by the Magnuson Act's 30-day judicial review provision. See MTD at 10-11. Defendants further assert that claim six should be dismissed because (1) Plaintiffs lack Article III standing to challenge the November 2015 Rule and (2) Plaintiffs fail to state a claim upon which relief can be granted. Id. at 10, 19-25.

A. Rule 12(b)(1) Legal Standard

Rule 12(b)(1) allows a defendant to move for dismissal on grounds that a court lacks jurisdiction over the subject matter of an action. Fed. R. Civ. P. 12(b)(1). The plaintiff bears theburden of establishing a court's subject matter jurisdiction. See Assoc. of Am. Medical Colleges v. United States, 217 F.3d 770, 778-79 (9th Cir. 2000); Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 376-78 (1994).

"A complaint will be dismissed if, looking at the complaint as a whole, it appears to lack federal jurisdiction either 'facially' or 'factually.'" Thornhill Publishing Co., Inc. v. General Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979). In resolving a "facial" attack, a court limits its inquiry to a plaintiff's allegations, which are taken as true, and construes the allegations in the light most favorable to the plaintiff. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004); NL Indus. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).

B. Rule 12(b)(6) Legal Standard

Federal Rule of Civil Procedure 8(a) requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief[.]" A defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). "Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) motion, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 540, 570 (2007). A claim is facially plausible when a plaintiff pleads "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

In reviewing the plausibility of a complaint, courts "accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nonetheless, Courts do not "accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).

C. The 2010 Regulations (Claims One Through Five)

Plaintiffs' first five claims challenge provisions of the IFQ Program established under the2010 Regulations. See FAC ¶¶ 43-74. Defendants contend that claims one through five are time-barred by the Magnuson Act's statute of limitations because this action was "filed nearly five years after the closure of the Magnuson Act's 30-day review provision." MTD at 10. Further, Defendants assert that the November 2015 Rule "is not an 'action' as defined in the Magnuson Act." Id. at 12. Plaintiffs respond that the November 2015 Rule constitutes an "action" taken under regulations implementing the 2010 Regulations, and thus, by filing this action within thirty days of the November 2015 Rule, Plaintiffs can challenge both the November 2015 Rule and the 2010 Regulations. Opp'n at 11. The Court agrees with Plaintiffs at this stage.³

The Magnuson Act states:

(f) Judicial review

(1) Regulations promulgated by the Secretary under this chapter and actions described in paragraph (2) shall be subject to judicial review to the extent authorized by, and in accordance with, chapter 7 of Title 5, if a petition for such review is filed within 30 days after the date on which the regulations are promulgated or the action is published in the Federal Register, as applicable; except that--

(A) section 705 of such Title is not applicable, and

(B) the appropriate court shall only set aside any such regulation or action on a ground specified in section 706(2)(A), (B), (C), or (D) of such Title.

(2) The actions referred to in paragraph (1) are actions that are taken by the Secretary under regulations which implement a fishery management plan, including but not limited to actions that establish the date of closure of a fishery to commercial or recreational fishing.

16 U.S.C. § 1855(f) (emphasis added). The Ninth Circuit has held that "[t]he text of the amended § 1855(f)(1) provides that a...