Home » Case Summaries » 2005 » Yakutat, Inc. v. Gutierrez


Yakutat, Inc. v. Gutierrez



Yakutat, Inc. (Yakutat), the owner of a fishing vessel which did not qualify for a license to fish for Pacific Cod in the Bering and Aleutian Seas, brought an action against the Secretary of Commerce (Secretary) charging that the failure of the National Marine Fisheries Service (NMFS) to include 1995-1998 but not 1999 as a past qualifying year for granting fishing licenses under the amended Bering Sea and Aleutian Islands (BSAI) fishery management plan was unfair and inequitable pursuant to the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson Act).[1] Yakutat also challenged the rule as arbitrary and capricious under the Administrative Procedure Act (APA)[2]. The Ninth Circuit affirmed the lower court’s decision to uphold the Secretary’s decision to exclude 1999 as a qualifying year in obtaining a Pacific cod fishing license under the BSAI management plan.

To prevent the over fishing of Pacific cod in the BSAI fishery off of the coast of Alaska the NMFS implemented a plan to limit the number of boats that were granted licenses to fish based on which boats caught a minimum amount of fish during any two years between 1995 and 1998. The F/V Blue North, which is owned by Yakutat, Inc., only qualified for 1997 and 1999. Had 1999 been a qualifying year the vessel would have received a license. The district court dismissed Yakutat’s claims and granted the Secretary’s summary judgment motion. The Ninth Circuit reviewed the lower court’s decision under a de novo standard of review, such that all facts were interpreted most favorably to the non-moving party.[3] Precedent required that the Ninth Circuit, when reviewing decisions under the Magnuson Act, only determine whether the Secretary “considered the relevant factors and articulated a rational connection” between the facts and the decision[4] and whether the Secretary acted in an arbitrary and capricious manner.[5] Similarly, under the APA an agency action may only be reversed if the action is arbitrary, capricious, an abuse of discretion or otherwise contrary to the law.[6]

In Alaska, Washington, and Oregon, the Northern Pacific Fishery Management Council has authority over fisheries in the exclusive economic zone which includes the Arctic Ocean, Bering Sea, and the Pacific Ocean off of Alaska.[7] The Council must prepare Fishery Management Plans and amendments when necessary for fisheries in its area.[8] After the Secretary receives the Fishery Management Plan from the Council, the Secretary is responsible for reviewing it to ensure that it is consistent with the Magnuson Act.[9]

The Ninth Circuit held that the final rule was not arbitrary and capricious. Yakutat argued that the exclusion of 1999 as a qualifying year did not comply with National Standard 4[10] and failed to articulate a valid motive for an allocation of fishing rights in violation of the Magnuson Act. Furthermore, Yakutat alleged that the Secretary’s actions were arbitrary and capricious because he did not establish a connection between the facts and the Final Rule.

The Ninth Circuit relied upon the administrative record to show a rational connection between the Magnusson Act and the exclusion of 1999 as a qualifying year. The record indicated that the decision was motivated by the Secretary’s concern over the conservation and management of the Pacific cod resources[11] and the Secretary’s concern about protecting the interests of fishermen who had made long-term investments in the industry and had long catch histories in the sector.[12] The record further indicated that the Secretary and Council considered alternatives to the rule, including the viability of using 1999 as a qualifying year. The Council decided not to include 1999 as a qualifying year because boats that did not qualify when 1999 was not included were not historically dependent on the fishery and received the majority of their income from other fisheries. Public testimony, industry experience and data analysis were all taken into consideration when the Council established a standard for measuring historical dependence and the Ninth Circuit held that the record clearly provided a rational basis for the Secretary’s decision to adopt the Council’s recommendation.

An agency decision is arbitrary and capricious:

if the agency has relied on factors which Congress had not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of the agency’s expertise.[13] 

There may be some discriminatory impact if the regulations are fashioned to solve a gear conflict problem and promote the conservation of the fish in question.[14] Further, as long as the Secretary has considered the relevant factors and made a rational connection between the facts and the decision, the Secretary’s decision does not lack a rational basis.[15]

The Ninth Circuit held that the Secretary did not “run afoul of these considerations.”[16] First, there was not any reliance on factors which Congress did not intend the agency to consider. The Secretary is required to take six factors into consideration.[17] Only one factor was not fully considered, and the Court explained that the omission was not fatal to the decision.[18] Second, the record shows that the Secretary responded to public comments on all ten national standards and thus made an effort to comply with the standards as required.[19] Third, because the Secretary independently considered using 1999 as a qualifying year as well as analyzed the Council’s recommendation, the Secretary did not fail to consider an important aspect of the agency action.[20] Finally, nothing in the record suggests that the Secretary or Council offered an explanation which did not agree with the evidence or acted in such a way that was not attributable to agency
expertise. The Secretary responded to public comments and explained his rationale. [21] Thus, the Ninth Circuit did not hold the agency action to be arbitrary or capricious.

Next, the Court considered whether the final rule was unfair or inequitable and determined that because the Secretary took present participation into account[22] and did not violation National Standard 4[23] that it was neither unfair nor inequitable. The Ninth Circuit held that the Secretary had a rational basis for not including 1999. In a prior case, this court concluded that the Secretary had a good reason for not including the most recent years because if fishermen knew that the current year would be considered for future allocation of fishing privileges, people would have fished and invested in boats to gain quota shares which would have resulted in overfishing.[24] The Court noted that the same was true in this case because the Council gave notice that 1999 would not qualify to discourage new entrants based on speculation.[25] Despite this, the Council still considered 42 out of 106 alternatives which included 1999 as a qualifying year and eventually adopted the Council’s recommendation.[26] Therefore, the Ninth Circuit concluded that the Council had a reasonable basis for excluding 1999 as a qualifying year.

Finally, the Court found that the Final Rule did not violate National Standard 4 which guarantees fishery allocation is allocated in a fair and equitable manner. Yakutat argued that the Final Rule unfairly excluded Yakutat’s boat while including two boats that had left the industry, and that this would not have occurred if 1996 through1999 had been used as qualifying years. However, the Ninth Circuit points out that the Secretary and Council directly addressed and considered the issues that Yakutat raised and that the Council did not include 1999 to ensure that vessels which had historically and consistently participated in the fishery were granted licenses.[27] The Ninth Circuit added that Congress permits the secretary to use discretion in weighing the national standards and that the reasons articulated for the rule were consistent with the relevant statutory standards.[28] When investigating the option of including 1999, the Council found that including 1999 would not benefit vessels that were historically dependent on the Pacific cod fishery. Although Yakutat argued that the Council did not seriously consider the inclusion of 1999, the Ninth Circuit emphasized that Yakutat must show irregularities in the Secretary’s actions or that the Secretary followed incorrect procedures to prove a violation of National Standard Four.[29] Thus, the Ninth Circuit held that because the Council and Secretary considered historical dependence and consistent participation in the industry while creating the amendment, the court cannot find that the result was unfair and inequitable.

In conclusion, the Ninth Circuit affirmed the district court’s grant of summary judgment to the defendants, holding that the Secretary’s Final Rule did not violate the Magnuson Act or the Administrative Procedure Act and was neither arbitrary and capricious, nor unfair and inequitable.

[1] 16 U.S.C. §§ 1801-1883 (2000).

[2] 5 U.S.C. §§ 551-559, 701-706, 1305, 3105, 3344, 4301, 5335, 5372, 7521 (2000).

[3] Covington v. Jefferson County, 358 F.3d 626, 641 n.22 (9th Cir. 2004).

[4] Alliance Against IFQs v. Brown, 84 F.3d 343, 345 (9th Cir. 1996) (quoting Wash. Crab Producers, Inc. v. Mosbacher, 924 F.2d 1438, 1440-41 (9th Cir. 1990)).

   [5] Id.

   [6] See 5 U.S.C. § 706(2) (2000); Lands Council v. Powell, 379 F.3d 738, 743 (9th Cir. 2004), amended by 395 F.3d 1019 (9th Cir. 2005).

[7] 16 U.S.C. § 1852(b) (2000).

   [8] Id. § 1852(h)(1).

   [9] Id. § 1854(a)(1).

[10] “Conservation and management measures shall not discriminate between residents of different States. If it becomes necessary to allocate or assign fishing privileges among various United States fishermen, such allocation shall be (A) fair and equitable to all fishermen; (B) reasonably calculated to promote conservation; and (C) carried out in such manner that no particular individual, corporation, or other entity acquires an excessive share of such privileges.” Id. § 1851(a)(4).

[11] Magnuson-Stevens Act Provisions, 67 Fed. Reg. 18,117, 18,120 (Apr. 15, 2002) (to be codified at 50 C.F.R. pt. 660).

[12] Fisheries of the Exclusive Economic Zone Off Alaska, 67 Fed. Reg. 18,129, 18,130 (Apr. 15, 2002) (to be codified at 50 C.F.R. pt. 679).

[13] Yakutat, Inc. v. Gutierrez, 407 F.3d 1054, 1067 (9th Cir. 2005) (quoting Motor Vehicle Mfs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

[14] Alliance Against IFQs v. Brown, 84 F.3d 343, 350 (9th Cir. 1996) (quoting Alaska Factory Trawler Ass’n v. Baldridge, 831 F.2d 1456, 1460 (9th Cir. 1987)).

[15] Wash. Crab Producers, Inc. v. Mosbacher, 924 F.2d 1438, 1441 (9th Cir. 1990).

[16] Yakutat, Inc., 407 F.3d at 1067.

[17] See 16 U.S.C. § 1853(b)(6) (2000); Alliance Against IFQs, 84 F.3d at 346 (holding that under 16 U.S.C. § 1853(b)(6) (2000), the Council and Secretary consider “(A) present participation in the fishery, (B) historical fishing practice, and dependence on, the fishery, (C) the economics of the fishery, (D) the capability of fishing vessels used in the fishery to engage in other fisheries, (E) the cultural and social framework relevant to the fishery, and (F) any other relevant considerations”).

[18] Alliance Against IFQs, 84 F.3d at 347 (noting that the Secretary did not consider “present participation” as including participation while the Secretary was promulgating the final regulations).

[19] 16 U.S.C. §1851(a) (2000).

[20] See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 43 (1983).

[21] Fisheries of the Exclusive Economic Zone Off Alaska, 67 Fed. Reg. 18,129, 18,134 (Apr. 15, 2002) (to be codified at 50 C.F.R. pt. 679).

[22] See 16 U.S.C. § 1853(b) (2000).

[23] Id. § 1851(a)(4) (2000).

[24] Alliance Against IFQs v. Brown, 84 F.3d 343, 346 (9th Cir. 1996).

[25] Advance Notice of Proposed Rulemaking: Fisheries of the Exclusive Economic Zone Off Alaska, 64 Fed. Reg. 2,870, 2,870 (Jan. 19, 1999).

[26] 67 Fed. Reg. at 18,134.

[27] Id.

[28] Alliance Against IFQs, 84 F.3d at 350.

[29] See Alaska Factory Trawler Ass’n v. Baldridge, 831 F.2d 1456, 1460 (9th Cir. 1987) (“In order for a court to overturn a Secretary’s decision, it must be shown that alleged irregularities . . . affected such decision.”).

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