Home » Case Summaries » 2016 » Pacific Dawn, LLC v. Pritzker, 831 F.3d 1166 (9th Cir. 2016)

 
 

Pacific Dawn, LLC v. Pritzker, 831 F.3d 1166 (9th Cir. 2016)

 

 

Pacific Dawn, LLC, a fish harvester, and Jessie’s Ilwaco Fish Co., a fish processor, (collectively, Plaintiffs)[1] brought this action against Penny Pritzker, the Secretary of the United States Department of Commerce and the National Marine Fisheries Service (NMFS) (collectively, Defendants)[2] after a 2013 NMFS decision involving catch quotas for Pacific whiting.[3] Plaintiffs argued that NMFS’s 2013 decision to allocate quotas based on fishing practices prior to 2003 and 2004 was arbitrary and capricious.[4] Specifically, Plaintiffs asserted that NMFS failed to take into account present participation and dependence upon the fishery, as required by the Magnuson-Stevens Fishery Conservation and Management Act[5] (MSA). The Ninth Circuit held that NMFS’s decision was not arbitrary and capricious because NMFS gave careful consideration to all relevant factors and justified its decision for affording present participation and dependence less weight.

The MSA requires that the regional fisheries management councils create a Fishery Management Plan (FMP) for each fishery within its zone of operation.[6] FMPs must be consistent with both statutory requirements and national standards found in the MSA.[7] In 1982, the Pacific Fishery Council, which regulates fisheries in California, Oregon, Washington, and Idaho, promulgated its Groundfish Management Plan (GMP) in order to manage more than ninety species of fish, including the Pacific whiting. Objective 14 of the GMP directed that the council should, when considering a change in fishery management practices, “choose the [management] measure that best accomplishes the change [in management practice] with the least disruption of current domestic fishing practices.”[8]

From 1982 until 2004, the Pacific Council set annual total allowable catch (TAC) limits for the Pacific whiting fishery, allowing fishers to fish until the TAC was reached. In 2004, the Pacific Council announced via a proposed rulemaking that it was considering an Individual Fishing Quota (IFQ), which would allocate the annual TAC between permit holders. Each permitee would have the ability to catch its designated share of the TAC at any time during an open season. The Pacific Council further announced that the initial quota allocation would be divided up based on each current participant’s catch history in the fishery, such that fishers with larger catch histories would receive a larger share of the initial quota. In order to avoid a sudden increase in fishing efforts while the rulemaking process was ongoing, NMFS announced that only the catch record prior to 2003 would be analyzed for the initial quota share allocation. In 2005, NMFS clarified that the 2003 control date would apply to fish harvesters, while fish processors would have a 2004 control date.

In 2009, NMFS submitted the IFQ fishery plan—GMP Amendment 20— to the Secretary of Commerce. After a notice and comment period, Amendment 20 was adopted and went into effect on January, 1, 2011. Thereafter, a group of fishing companies brought suit in the United States District Court for the Northern District of California challenging NMFS’s initial allocation based on the 2003/2004 control dates. The district court agreed with Plaintiffs and remanded the matter back to the agency for further consideration.[9]

On remand, NMFS and the Pacific Council considered alternative control dates but ultimately published a second proposed rule maintaining the initial 2003/2004 control dates. Soon thereafter, this suit was commenced in the United States District Court for the Northern District of California. Plaintiffs alleged that NMFS had acted arbitrarily and capriciously by failing to consider relevant factors under the MSA and the GMP. Various fish harvesters and processors intervened as defendants.[10] The district court rejected the Plaintiffs’ arguments, and granted the Defendants’ motion for summary judgment.[11] This appeal followed.

Plaintiffs presented two main arguments as to why NMFS’s 2013 decision was arbitrary and capricious. First, they argued that NMFS failed to take into account present participation in the fishery. Second, they argued that NMFS failed to account for dependence upon the fishery. The Ninth Circuit disagreed with Plaintiffs on both counts and upheld the district court’s grant of summary judgment.

The court held that the record clearly established that NMFS had adequately considered present participation in the fishery when it decided to keep the 2003/2004 control dates. The court found that NMFS gave present participation less weight than other relevant factors, which was justified because NMFS had carefully explained its process on multiple occasions. Therefore, the court concluded that NMFS’s decision was not arbitrary and capricious because NMFS had “articulated a rational connection between the facts found and the choice made.”[12]

Plaintiffs challenged NMFS’s conclusion that current participation would only have a minor impact on quota allocations because, in Plaintiffs’ view, 20% of the permit holders eligible to receive a quota no longer participated in the fishery. The Ninth Circuit rejected this argument because NMFS had determined that, in actuality, only 1.5% of the permit holders were truly inactive, while the other 18.5% had been participating in other sectors or were holding permits as investments until fishing improved.

Plaintiffs further challenged NMFS’s decision to adopt a different end date for processors and harvesters. The court deferred to NMFS for two main reasons. The court noted that it was not clear to NMFS until 2005 if the 2003 control date would also apply to processors at all. Therefore, NMFS had reasonably concluded that the 2004 control date was necessary to account for the increased investments processors had put into the Pacific whiting fishery that had not manifested itself as qualifying history until after 2003.

Plaintiffs’ second main argument was that NMFS failed to account for dependence on the fishery, as required by the MSA. Plaintiffs argued that because NMFS’s decision allocated quotas to fishers who had not fished for years, its decision was arbitrary and capricious. The Ninth Circuit disagreed with the Plaintiffs and held that NMFS had provided a thorough explanation of its decision-making process. NMFS explicitly recognized that a small percent of quotas would go to harvesters who had left the fishery since 2003, but determined that this was outweighed by other factors. Finally, the court found that NMFS had reasonably determined that the proposed allocation was fair and equitable for both processors and harvesters.

To counter NMFS’s arguments, Plaintiffs raised three further points. First, they argued that NMFS’s decision was inconsistent with National Standards 5 and 7 of the MSA, which require fishery councils to “consider efficiency in the utilization of fishery resources” and “minimize costs and avoid unnecessary duplication,” respectively.[13] The Ninth Circuit rejected this argument after concluding that NMFS had reasonably determined that the proposed program, as a whole, minimized cost and efficiently used fishery resources. Second, Plaintiffs argued that NMFS’s decision was contrary to objective 14 of the GMP, which requires fishery councils to “choose the measure that best accomplishes the change with the least disruption to current fishing practices.”[14] Here, Plaintiffs argued that the 2003/2004 control dates would disrupt current fishing practices. This argument failed before the Ninth Circuit because the court found that NMFS had rationally concluded that the 2003/2004 control dates provided the least disruptive option. Finally, Plaintiffs argued that NMFS’s decisions were contrary to its practices in other fisheries. This argument failed because the court determined that NMFS had adequately justified its decision to deviate from its practice in other fisheries.

In sum, the Ninth Circuit affirmed the district court’s decision granting summary judgment to the Defendants. The court upheld NMFS’s 2013 decision to maintain its 2003/2004 qualifying period control dates for quota allocations in the Pacific whiting fishery based largely on the highly deferential standard afforded to agency decisions. The court found that NMFS had established a rational connection between the facts found and the choice made, and that the record showed that NMFS had adequately considered the relevant factors required by the MSA and the GMP.

 

 

Footnotes    (↵ returns to text)

  1. Plaintiffs included Pacific Dawn LLC, Jessie’s Ilwaco Fish Company, Ocean Gold Seafoods, and Chellissa LLC.
  2. Defendants for this matter were Penny Pritzker, Secretary of the United States Department of Commerce; National Oceanic and Atmospheric Administration; and National Marine Fisheries Service.
  3. Fisheries Off West Coast States; Pacific Coast Groundfish Fishery Management Plan; Trawl Rationalization Program; Reconsideration of Allocation of Whiting, 78 Fed. Reg. 72, 72 (Jan. 2, 2013) (to be codified at 50 C.F.R. pt. 660).
  4. Administrative Procedure Act, 5 U.S.C. § 706(2)(A) (2012).
  5. 16 U.S.C. §§ 1801–1891d (2012).
  6. Id. § 1853(b)(1)(A).
  7. Id. § 1853(a)(1)(C).
  8. Pac. Fishery Mgmt. Council, Pacific Coast Groundfish Fishery Management Plan 9 (2016), https://perma.cc/4JWL-LJDQ (describing how the Council develops decisions for management of the groundfish fishery).
  9. Pac. Dawn, LLC v. Bryson, No. C10-4829 TEH, 2012 WL 554950, at *4 (N.D. Cal. Feb. 21, 2012).
  10. Intervenors in this matter were Midwater Trawlers Cooperative; Trident Seafoods Corporation; Dulcich, Inc. doing business as Pacific Seafood Group; Arctic Storm Management Group, LLC; and Environmental Defense Fund.
  11. Pac. Dawn, LLC v. Pritzker, No. C13-1419 TEH, 2013 WL 6354421, at *17 (N.D. Cal. Dec. 5, 2013).
  12. Pac. Dawn, LLC v. Pritzker, 831 F.3d 1166, 1173 (9th Cir. 2016).
  13. MSA, 16 U.S.C. § 1851(a)(5)–(7) (2012).
  14. Pac. Fishery Mgmt. Council, supra note 137.
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