Pac. Dawn LLC v. Pritzker, No. 14-15224

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: IKUTA, Circuit Judge
• Citation: 831 F.3d 1166
• Parties: Pacific Dawn LLC; Jessie's Ilwaco Fish Company, Plaintiffs–Appellants, and Ocean Gold Seafoods, Inc.; Chellissa LLC, Plaintiffs, v. Penny Pritzker, Secretary of the United States Department of Commerce; National Oceanic and Atmospheric Administration; National Marine Fisheries Service, Defendants–Appellees, Midwater Trawlers Cooperative ; Trident Seafoods Group; Dulcich, Inc., DBA Pacific Seafood Group ; Arctic Storm Management Group, LLC ; Environmental Defense Fund, Intervenor–Defendants–Appellees.
• Docket Number: No. 14-15224
• Decision Date: 03 August 2016

831 F.3d 1166

Pacific Dawn LLC; Jessie's Ilwaco Fish Company, Plaintiffs–Appellants,
and
Ocean Gold Seafoods, Inc.; Chellissa LLC, Plaintiffs,
v.
Penny Pritzker, Secretary of the United States Department of Commerce; National Oceanic and Atmospheric Administration; National Marine Fisheries Service, Defendants–Appellees,

Midwater Trawlers Cooperative ; Trident Seafoods Group; Dulcich, Inc., DBA Pacific Seafood Group ; Arctic Storm Management Group, LLC ; Environmental Defense Fund, Intervenor–Defendants–Appellees.

No. 14-15224

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 10, 2016 San Francisco, California
Filed August 3, 2016

Tom Wyrwich (argued), Davis Wright Tremaine LLP, Seattle, Washington; James P. Walsh and Gwen L. Fanger, Davis Wright Tremaine LLP, San Francisco, California; for Plaintiffs–Appellants.

Maggie B. Smith (argued) and Bridget McNeil, Attorneys; Sam Hirsh, Acting Assistant Attorney General; Environment and Natural Resources Division, United States Department of Justice, Washington, D.C.; Chris McNulty, Mariam McCall, and Ryan Couch, Office of the General Counsel, National Oceanic & Atmospheric Administration, Seattle, Washington; for Defendants–Appellees.

J. Timothy Hobbs (argued) and Michael F. Scanlon, K & L Gates LLP, Seattle, Washington, for Intervenors-Defendants-Appellees Midwater Trawlers Cooperative, Trident Seafoods Group, Dulcich, Inc., DBA Pacific Seafood Group and Arctic Storm Management Group, LLC.

Monica Goldberg (argued), Environmental Defense Fund, Washington, D.C., for Intervenor-Defendant-Appellee Environmental Defense Fund.

Before: Sandra S. Ikuta, and Paul J. Watford, Circuit Judges, and Derrick Kahala Watson,^** District Judge.

831 F.3d 1169

OPINION

IKUTA, Circuit Judge:

Pacific Dawn LLC and Jessie's Ilwaco Fish Co., a fish harvester and a fish processor, are subject to a fishery management program that limits their share of the total allowable catch of Pacific whiting. They challenge a decision by the National Marine Fisheries Service (NMFS) to calculate the amount of their initial share based on their participation in the fishery prior to 2003 and 2004, respectively, rather than on their much greater participation in the years immediately before 2010, when the regulations implementing this program were issued. Because NMFS considered the required factors and made a reasonable decision to use the 2003 and 2004 dates, its decision was not arbitrary or capricious, and we affirm.

I

The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) created eight Regional Fishery Management Councils. Each council must create a fishery management plan, which must meet a long list of statutory requirements. 16 U.S.C. § 1853(a). Among other things, the plan must be “consistent with the national standards” for fishery conservation and management. Id. § 1853(a)(1)(C). The National Standards are comprised of ten broad guidelines, including the requirements that the management measures “shall, where practicable, consider efficiency in the utilization of fishery resources,” and “shall, where practicable, minimize costs and avoid unnecessary duplication.” Id. § 1851(5), (7).

Beginning in 1990, the councils were given the discretion to use “a limited access system for the fishery in order to achieve optimum yield.” Id. § 1853(b)(6). A limited access system is defined as “a system that limits participation in a fishery to those satisfying certain eligibility criteria or requirements contained in a fishery management plan or associated regulation.” Id. § 1802(27). It limits the number of individuals who can enter and participate in the fisheries, and gives these favored participants “privileges to harvest a specific quantity of fish.” Pac. Coast Fed'n of Fishermen's Ass'ns v. Blank , 693 F.3d 1084, 1087 (9th Cir. 2012). In establishing a limited access system, councils must take into account “present participation in the fishery,” id. § 1853(b)(6)(A), “historical fishing practices in, and dependence on, the fishery,” id. § 1853(b)(6)(B), among other considerations.¹

In 2007, Congress reauthorized the Magnuson-Stevens Act with amendments that, among other things, were intended to encourage market-based fishery management through “limited access privilege programs.” Pac. Coast Fed'n of Fishermen's Ass'ns , 693 F.3d at 1088. Such a program (which must be part of a limited access system) allows a fishery participant “to harvest a certain portion of the total catch allowed for a particular species.” Id. One way to distribute the allocated portion

831 F.3d 1170

is through “individual fishing quota” (IFQ), or quota shares. 16 U.S.C. § 1802(23), (26).² In developing such a program, a council must consider “current and historical harvests,” as well as “investments in, and dependence on, the fishery,” among other things. Id. § 1853a(c)(5)(A).³

Once a regional council has prepared a fishery management plan for each fishery within its jurisdiction that requires such a plan, it submits the plan (and any proposed regulations) to the Secretary of Commerce, id. § 1852(h)(1), who has delegated her responsibilities under the Act to the National Marine Fisheries Service (NMFS).⁴ The Secretary must review the plan to determine whether it is consistent with the National Standards and other statutory requirements, id. § 1854(a)(1)(A), as well as publish notice of proposed rulemaking in the Federal Register. This publication starts a public notice and comment period. Id. § 1854(a)(1)(B). If the Secretary approves the plan, the Secretary must review the council's proposed regulations for consistency with the fishery management plan and other law. Id. § 1854(b). The Secretary must publish the regulations as well for public notice and comment. Id.

One of the eight regional councils is the Pacific Fishery Management Council (Pacific Council), which consists of California, Oregon, Washington, and Idaho and covers the fisheries seaward of those states. Id. § 1852(a)(1)(F). One of those fisheries is the Pacific groundfish fishery, which “extends 200 miles into the Pacific Ocean, along the coasts of California, Oregon, and Washington, and includes more than 90 species of fish that dwell near the sea floor.” Pac. Coast Fed'n of Fishermen's Ass'ns , 693 F.3d at 1088. The Pacific Council first developed the Pacific Coast Groundfish Fishery Management Plan (Groundfish Management Plan) in 1982. It covers Pacific whiting, the species of fish at issue here, among other groundfish, and contains various goals and objectives. One of those objectives is Objective 14, which states that when the Council is “considering alternative management measures to resolve an issue,” the Council should “choose the measure that best accomplishes the change with the least disruption of current domestic fishing practices.”

Prior to 2004, the Pacific Council established a yearly harvest limit for whiting and limited the number of fishing vessels by requiring vessels to have a limited entry permit, and parceling out only a limited

831 F.3d 1171

number of such permits. In addition, the Council established a short season for whiting and allowed permitted vessels to harvest whiting only from the time the season opened until the time the catch limit was reached. This management structure led to a so-called “derby-style fishery” and “a race for fish,” meaning that the limited number of permit holders engaged in an intense, concentrated effort at the beginning of the season because of the potentially short window.

Because this approach did not meet the Pacific Council's management goals, it began contemplating an amendment to the Groundfish Management Plan in 2003. In January 2004, NMFS published a notice of proposed rulemaking, which stated that the Pacific Council was considering implementing a limited access privilege program in the form of a “trawl rationalization program” for the Pacific groundfish fishery. Advance Notice of Proposed Rulemaking Regarding a Trawl Individual Quota Program and to Establish a Control Date, 69 Fed. Reg. 1563-01 (Jan. 9, 2004). For the shorebased trawl sector (which consists of vessels that catch and deliver to processors on land), the trawl rationalization program would consist of a trawl IFQ program, which is “a quota system where each quota share could be harvested at any time during an open season.” Id. at 1563. Participants in the fishery (i.e., those who already had a limited entry permit allowing them to fish) would need to obtain a quota share permit as well in order to receive a share of the allowable catch. 16 U.S.C. §§ 1853a, 1802(26). The Pacific Council believed this trawl rationalization program would cause participants in the fishery to spread their fishing throughout the season and avoid the race for fish.

The proposed rulemaking also explained that the Pacific Council was considering basing the initial allocation of quota shares on participants' catch history in the fishery, meaning that participants that had a larger catch history would be allocated a larger quota share. Due to concerns that the announcement of this new program would create a perverse incentive by encouraging participants to increase their fishing efforts in order to qualify for a larger initial quota share,...