U.S. v. Approximately 64,695 Pounds of Shark Fins

Decision Date17 March 2008
Docket NumberNo. 05-56274.,05-56274.
PartiesUNITED STATES of America, Plaintiff-Appellee, Tai Loong Hong Marine Products, Limited, Claimant-Appellant, v. APPROXIMATELY 64,695 POUNDS OF SHARK FINS, Defendant-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Bryan Y.Y. Ho, Esq., Honolulu, HI, for the defendant-appellant.

Carol C. Lam, Esq., Roger W. Haines, Jr., Esq., Mary C. Lundberg, Esq., United States Department of Justice, San Diego, CA, for the plaintiff-appellee.

Appeal from the United States District Court for the Southern District of California; Barry T. Moskowitz, District Judge, Presiding. D.C. No. CV-03-00594-BTM.

Before: STEPHEN REINHARDT, RAYMOND C. FISHER, and RICHARD R. CLIFTON, Circuit Judges.

REINHARDT, Circuit Judge:

This case arises from a civil complaint brought by the U.S. Government for the forfeiture of 64,695 pounds of shark fins found on board the King Diamond II ("KD II"), a United States vessel. Claimant-Appellant Tai Loong Hong Marine Products, Ltd. ("TLH") owned the shark fins. TLH, a Hong Kong company, had chartered the KD II and ordered it to meet foreign fishing vessels on the high seas, purchase shark fins from those vessels, transport the fins to Guatemala, and deliver them to TLH. The Government seized the fins pursuant to the Shark Finning Prohibition Act ("SFPA"), which makes it unlawful for any person aboard a U.S. fishing vessel to possess shark fins obtained through prohibited "shark finning." 16 U.S.C. § 1857(1)(P)(ii). TLH does not contest that, on its behalf, the KD II purchased the fins at sea from foreign vessels that engaged in shark finning. Instead, it argues that the KD II is not a fishing vessel under 16 U.S.C. § 1802(18)(B), and for that reason the forfeiture of the shark fins it possessed would violate due process. We agree that neither the statute nor the regulations provided fair notice to TLH that it would be considered a fishing vessel under § 1802(18)(B). We therefore reverse the judgment of forfeiture and remand for further proceedings consistent with this opinion.

I. Background

In 1976, Congress passed the Magnuson-Stevens Fishery Conservation and Management Act ("Magnuson Act"), 16 U.S.C. § 1801 et seq., to conserve and manage fishery resources. 16 U.S.C. § 1801(b)(1). In 2000, Congress enacted the Shark Finning Prohibition Act, which amended the Magnuson Act in an attempt to eliminate the practice of shark finning. Pub.L. No. 106-557, 114 Stat. 2772 (2000), 16 U.S.C. § 1857(1)(P).

The SFPA makes it unlawful:

(I) to remove any of the fins of a shark (including the tail) and discard the carcass of the shark at sea;

(ii) to have custody, control, or possession of any such fin aboard a fishing vessel without the corresponding carcass; or

(iii) to land any such fin without the corresponding carcass.

16 U.S.C. § 1857(1)(P) (emphasis added).1

The Magnuson Act, in turn, defines a fishing vessel to include

"any vessel, boat, ship, or other craft which is used for, equipped to be used for, or of a type which is normally used for —

(A) fishing; or

(B) aiding or assisting one or more vessels at sea in the performance of any activity relating to fishing, including, but not limited to, preparation, supply, storage, refrigeration, transportation, or processing."

16 U.S.C. § 1802(18).

The question we must resolve is whether TLH had notice that the KD II's activities would fall within the definition of fishing vessel in § 1802(18)(B) and thus render it subject to the prohibition on possessing shark fins under the SFPA. The KD II is a United States vessel owned and operated by Tran & Yu, a Hawaii corporation. Tran & Yu purchased the KD II in January 2001. Although Tran & Yu initially registered the vessel with a "Fishery" endorsement,2 the company redocumented the vessel with a "Registry" endorsement, which "entitles a vessel to employment in the foreign trade ... and any other employment for which a coastwise, Great Lakes, or fishery endorsement is not required." 46 C.F.R. § 67.17(a). During the time of the transactions at issue in this case, the KD II operated under this registry endorsement.

TLH is a Hong Kong company that purchases and sells seafood products, including shark fins. TLH chartered the KD II and ordered it to make a voyage in which it would rendezvous with foreign fishing vessels on the high seas, purchase shark fins from those vessels, and transport the fins to Guatemala, where TLH would accept delivery.

In June 2002 the KD II left Honolulu, Hawaii, to begin the charter trip for TLH. During the next two months, the KD II met with over 20 vessels on the high seas and purchased approximately 64,695 pounds of shark fins. On August 14, 2002, United States Coast Guard officials boarded the KD II approximately 250 miles off the coast of Guatemala. On board, they discovered the shark fins but no shark carcasses. The SFPA establishes a rebuttable presumption that shark fins landed or found on board a fishing vessel without corresponding shark carcasses were obtained through prohibited shark finning. 16 U.S.C. § 1857(1)(P). Acting on this presumption, the Coast Guard detained the KD II and escorted it to San Diego. On August 23, 2002, the Government seized the shark fins.

On March 26, 2003, the Government filed a civil complaint for forfeiture of the shark fins. The complaint alleged that the fins were subject to forfeiture pursuant to the Magnuson Act, 16 U.S.C. § 1860(a), because they were taken or retained in violation of the SFPA, 16 U.S.C. § 1857(1)(P)(ii), and its implementing regulations at 50 C.F.R. § 600.1203(a)(2) (formerly 50 C.F.R. § 600.1202(a)(2)). This is referred to herein as the "possession" prohibition. The landing prohibition, set forth in the following subsection of the statute, subsection (iii), is not at issue here, because "landing" applies only to landings at U.S. ports.

The issue in dispute is whether the KD II was a fishing vessel within the meaning of the SFPA and the Magnuson Act. The district court ruled on two separate arguments advanced by TLH. It first held that there was a genuine issue of material fact about whether the KD II was "used for, equipped to be used for or of a type which is normally used for ... fishing" as defined in § 1802(18)(A), and it therefore denied summary judgment as to that ground. The court then held that the KD II was a fishing vessel as a matter of law under § 1802(18)(B) because it aided or assisted fishing vessels at sea in the performance of activities related to fishing, including "purchase, storage, and transportation." As a result, the court granted the government's motion for summary judgment on that basis. See United States v. Approximately 64,695 Pounds of Shark Fins, 353 F.Supp.2d 1095 (S.D.Cal.2005). The parties then filed an Amended Stipulated Facts and Legal Conclusion "for the purpose of saving the time anal cost of litigating the fair market value of the shark fins, as well as to expedite TLH's appeal of an order forfeiting the fair market value of the shark fins to the Ninth Circuit Court of Appeals." The parties stipulated that the fair market value of the fins at the time of the seizure was $618,956 and that an order forfeiting this amount was a legal consequence of the district court's summary judgment order.

The district court entered a judgment of forfeiture on June 6, 2005. TLH timely appealed.

II. The statutes and regulations did not provide TLH with notice that the prohibition on possessing shark fins aboard a fishing vessel as defined in 16 U.S.C. § 1802(18)(B) applied to the KD II

TLH challenges the district court's ruling, arguing both that the KD II was not a fishing vessel within the meaning of 16 U.S.C. § 1802(18)(B), and that application of that provision of the SFPA to the KD II violated due process. Even if the KD II were a fishing vessel within the meaning of § 1802(18)(B), we conclude that the provision in question would not provide fair notice to TLH that it was such a vessel and was subject to the possession prohibition. As a result, we agree that application of that sub-section of the SFPA to the KD II violated due process.

A. Fair notice

Due process requires that an agency provide "fair notice of what conduct is prohibited before a sanction can be imposed." Stillwater Mining Co. v. Federal Mine Safety & Health Review Comm'n, 142 F.3d 1179, 1182 (9th Cir.1998) (quoting Newell v. Sauser, 79 F.3d 115, 117 (9th Cir.1996)). As the D.C. Circuit has explained, "[i]n the absence of notice — for example, where the regulation is not sufficiently clear to warn a party about what is expected of it — an agency may not deprive a party of property by imposing civil or criminal liability." Trinity Broadcasting of Florida, Inc. v. Federal Commc'n Comm'n, 211 F.3d 618, 628 (D.C.Cir.2000) (quoting General Elec. Co. v. EPA, 53 F.3d 1324, 1328-29 (D.C.Cir.1995)) (alteration in original).

To provide sufficient notice, a statute or regulation must "give the person of ordinary intelligence a reasonable opportunity to know what is prohibited so that he may act accordingly." Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972). We agree with TLH that a reasonable owner of a cargo vessel engaged in at-sea purchase and transfer of shark fins would not anticipate that its ship could be deemed a fishing vessel under § 1802(18)(B).

1. Plain Language of the Statute

In determining the meaning of a statute, we first look to the language of the statute itself. See Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir.2006) ("The starting point for [the] interpretation of a statute is always its language.") (quoting Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 739, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989)). In this case, we find nothing in the plain meaning of § 1802(18)(B) that would provide notice to the owners of the KD II that its activities would render it a fishing...

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