Western Pioneer, Inc. v. U.S.

• Citation: 709 F.2d 1331
• Decision Date: 08 July 1983
• Docket Number: No. 82-3437,82-3437
• Parties: WESTERN PIONEER, INC., Marlin Fisheries, Inc., and Dolphin Fisheries, Inc., in personam, and M/V MARLIN, her engines, tackle, etc., and M/V DOLPHIN, her engines, tackle, etc., in rem, Defendants-Appellants/Cross-Appellees, v. UNITED STATES of America, Plaintiff-Appellee/Cross-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1331

709 F.2d 1331

WESTERN PIONEER, INC., Marlin Fisheries, Inc., and Dolphin

Fisheries, Inc., in personam, and M/V MARLIN, her engines,

tackle, etc., and M/V DOLPHIN, her engines, tackle, etc., in

rem, Defendants-Appellants/Cross-Appellees, v. UNITED STATES of America, Plaintiff-Appellee/Cross-Appellant.

No. 82-3437.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 10, 1983.

Decided July 8, 1983.

Warren A. Schneider, Dept. of Justice, Washington, D.C., for plaintiff-appellee/cross-appellant.

John H. Bradbury, Bradbury, Bliss & Riordan, Anchorage, Alaska, for defendants-appellants/cross-appellees.

On Appeal from the United States District Court for the District of alaska.

Before WALLACE, ANDERSON, and SCHROEDER, Circuit Judges.

J. BLAINE ANDERSON, Circuit Judge:

In this action we are called upon to interpret certain United States shipping laws. Three of Western Pioneer's vessels were cited or threatened with citation for violations of 46 U.S.C. Secs. 367, 404, 672, and 673, dealing with inspection of vessels and qualification of crew members. ¹ Western Pioneer's defense was based on exemptions from those statutes for "cannery tender" and "fishing tender" vessels. The Coast Guard and the district court characterized Western Pioneer's operations as falling outside the tender vessel exemptions. We affirm.

I. FACTS

Western Pioneer is a Washington corporation that operates a fleet of five vessels between ports in Washington and Alaska. On voyages south and east from Alaska, the vessels carry frozen and canned crab and salmon from Alaska processors to Seattle, Washington, or to points in Alaska where the product can be transferred to other carriers. On northbound voyages the vessels carry a variety of supplies and durable goods destined for fishery processors and the residents of villages and communities in Western Alaska, the Alaska Peninsula, and the Aleutian Islands.

All of Western Pioneer's vessels are former U.S. Navy yard oilers; Western Pioneer has expended considerable efforts and funds to convert them into "cannery tenders" or "fishing tenders." Western Pioneer's purpose in seeking to qualify its vessels as tenders has been to take advantage of exemptions from statutes that would otherwise closely regulate their operations. Two of the exemptions are contained in identical provisos of 46 U.S.C. Secs. 367 and 404, and exclude from those statutes' requirements

cannery tender or fishing tender vessels of not more than 500 gross tons used in the salmon or crab fisheries of the States of Oregon, Washington, and Alaska which are engaged exclusively in (1) the carriage of cargo to or from vessels in the fishery or a facility used or to be used in the processing or assembling of fishery products ....

Tender vessels, which are registered as "fishing vessels," have also historically been exempt from 46 U.S.C. Secs. 672 and 673, which apply by definition only to "merchant vessels."

There is no dispute that the physical rigging and outfitting of Western Pioneer's vessels brings them within the literal statutory requirements for tenders. They are all registered as fishing vessels. Moreover, during conversion of the vessels from yard oilers, their weight was deliberately kept within 500 gross tons to meet the weight limitations of Secs. 367 and 404. Western Pioneer also takes great pains to ensure that its cargo is closely connected to fishing vessels or facilities. Although the company does not publish schedules nor issue tariffs, it circulates vessel departure notices to interested parties. The notices expressly state that all cargo carried must be destined for or originate from fishery vessels or facilities. Shippers wishing to send cargo to Alaska deliver their goods to Western Pioneer's loading facilities in Washington, where the cargo is inspected to ensure that it is consigned directly to a fishing vessel or facility. Western Pioneer's longshoremen are also instructed not to load cargo unless it meets that qualification.

On separate occasions in 1977, two of Western Pioneer's vessels, the Marlin and the Dolphin, were boarded by the Coast Guard and cited for a long list of safety violations. Pertinent to this appeal are Western Pioneer's citations for violating 42 U.S.C. Secs. 367 and 404 (requiring vessels carrying freight for hire to have a certificate of inspection), and 42 U.S.C. Sec. 672(i) (requiring certification of seamen on merchant vessels). In the ensuing administrative proceedings, Western Pioneer defended on the ground its vessels were tenders and therefore exempt from the safety statutes. The hearing officer rejected Western Pioneer's defense and imposed $70,610 in penalties. On appeal to the Commandant of the Coast Guard, some charges were modified and the fine reduced to $68,950. The Commandant affirmed, however, the hearing examiner's holding that Western Pioneer's vessels were not exempt from the statutes.

The Commandant noted that the tender vessel exemptions in 46 U.S.C. Secs. 367 and 404 cover vessels "engaged exclusively in the carriage of cargo to or from vessels in the fishery or a [processing] facility." The parties stipulated that "cargo" referred only to "fisheries related cargo," and that "fisheries related cargo" meant "all goods utilized by and reasonably related to the fisheries industry as defined above or which are necessary or appropriate to the support of personnel directly engaged in the fisheries industry and which are consigned directly to a fishing vessel or fish processing facility."

The Commandant then focused on the nature of Western Pioneer's cargo and the parties to whom it was ultimately destined. Aboard the Marlin and Dolphin the Coast Guard had found a wide variety of durable goods, including liquor and beer for liquor stores, motorcycles for a general store, and building materials, equipment, and parts for local governments and construction companies. The Commandant determined that much of Western Pioneer's cargo was not fisheries related, and stated:

The unequivocal purpose of the tender exemption is to provide relief to a dedicated segment of the Northwest fishing industry, not to give relief to vessels such as the MARLIN, transporting general cargo, destined for other than the fishing industry, which incidentally is discharged at facilities primarily used to handle fishery products.

Because they were not engaged exclusively in carrying fisheries related cargo, Western Pioneer's vessels did not qualify for that exemption.

As to 46 U.S.C. Sec. 672(i), the Commandant noted that section applied only to merchant vessels. Although Western Pioneer's vessels were registered as fishing vessels, the Commandant referred to the Coast Guard's "consistent interpretation" that " 'merchant vessels' embraces all vessels engaged in trade or commerce and is not restricted to vessels carrying passengers or freight for hire." Since the Marlin and Dolphin were cargo carriers engaged in trade or commerce, they were merchant vessels regardless of their registry.

The United States filed the present action on October 10, 1979 to enforce the Coast Guard assessment. In March 1981, after cross-motions for summary judgment had been fully briefed, the Coast Guard boarded another Western Pioneer vessel, the Bowfin. The Coast Guard determined the Bowfin was not in compliance with the three-watch system requirement of 46 U.S.C. Sec. 673 or the 65% able-bodied seamen requirement of 46 U.S.C. Sec. 672(a). It also ordered Western Pioneer to modify its certificates of registry to show their service as "freight" instead of "fishing."

Western Pioneer responded by amending its answer to include a counterclaim for a declaratory judgment that its vessels were properly registered as fishing vessels and thus exempt from Secs. 672 and 673. It also moved for a preliminary injunction against enforcement of the statutes. After a hearing on the motion, the parties stipulated that judicial proceedings and Coast Guard enforcement would be suspended for four months, during which time Western Pioneer would modify its operating procedures and the government would file an amended complaint. The government's amended complaint alleged that Western Pioneer's vessels engaged in a regular freight service and were not covered by the statutory exemptions, and that they were improperly registered as fishing vessels.

The district court issued its memorandum and order in July 1982. It first held that the Coast Guard's interpretation of the relevant statutes and regulations was entitled to judicial deference unless it was unreasonable or a clear error of judgment. After reviewing the historical underpinnings of the tender exemptions, the court concluded that in light of the Coast Guard's expertise and the established policy of strictly construing exceptions to safety legislation, the Coast Guard's interpretation of the exemptions was reasonable. Western Pioneer filed a timely appeal.

II. STANDARD OF REVIEW

There are two parts to this appeal. First, we must review the district court's decision upholding the penalties against Western Pioneer. Resolution of that issue turns on whether Western Pioneer operates tender vessels and thus is exempt from 46 U.S.C. Secs. 367, 404, and 672(i). Second, we must review the district court's declaration that Western Pioneer's operations in general are not exempt from 46 U.S.C. Secs. 672 and 673. Resolution of that issue turns on whether Western Pioneer's vessels are merchant vessels.

Our standard of review over these questions of statutory interpretation is identical to the district court's. See Committee for an Independent P-I v. Hearst Corp., 704 F.2d 467, 472 (9th Cir.1983) ("[B]eing limited to the agency record, the district court is in no better position to review agency action than the appellate court."). The Administrative Procedure Act mandates that the reviewing court decide all relevant questions of law [and] interpret...