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Fishermen v. Secretary of the United States Dep't of Commerce

April 14, 2010


The opinion of the court was delivered by: Cooper, District Judge


Plaintiffs, former general category scallop permit holders, brought this action against the Secretary of the United States Department of Commerce ("Secretary"), the National Oceanic and Atmospheric Administration ("NOAA"), and the National Marine Fisheries Service ("NMFS" and, collectively, "defendants"). (Dkt. entry no. 21, 2d Am. Compl. at 1.) Plaintiffs challenge a final rule issued by the NMFS on behalf of the Secretary, Amendment 11 to the Atlantic Sea Scallop Fishery Management Plan, 73 Fed. Reg. 20090 (Apr. 14, 2008) (codified at 50 C.F.R. pt. 648) ("Amendment 11"). (Id. at 2.) Plaintiffs allege that Amendment 11 violates, inter alia, the United States Constitution, the Administrative Procedures Act, and the Magnuson-Stevens Fishery Conservation and Management Reauthorization Act of 2006 ("Magnuson-Stevens Act").*fn1

Plaintiffs now move for summary judgment in their favor, pursuant to Federal Rule of Civil Procedure ("Rule") 56, seeking a judgment declaring Amendment 11 invalid and remanding Amendment 11 for development consistent with the law. (Dkt. entry no. 26, Pl. Mot. Summ. J.; dkt. entry no. 36, Pl. Notice of Re-filing; Pl. Br. at 4.) Defendants cross-move for summary judgment in their favor. (Dkt. entry no. 30, Defs. Cross Mot. Summ. J.; dkt. entry no. 37, Defs. Notice of Re-filing.) The Court held a hearing on January 27, 2010. The Court has reviewed the parties' written submissions, as well as the Administrative Record ("A.R."). For the reasons stated herein, the Court will deny the motion and grant the cross motion.


I. Magnuson-Stevens Act

The Magnuson-Stevens Act delegates authority to the NMFS and the Secretary to manage and conserve coastal fisheries. (Dkt. entry no. 30, Defs. Br. at 3; Pl. Br. at 3.) The Magnuson-Stevens Act created eight Regional Fishery Management Councils ("Councils"), which prepare fishery management plans ("FMP") or FMP amendments and recommend implementing regulations for each fishery under their authority. (Defs. Br. at 3; Pl. Br. at 3; dkt. entry no. 26, Joint Stmt. of Material Facts Not in Dispute at ¶ 2.) See 16 U.S.C. §§ 1852, 1854.

The New England Fishery Management Council ("NEFMC" or "Council") has responsibility for recommending management measures for the Atlantic sea scallop fishery ("fishery"). (Defs. Br. at 3; Pl. Br. at 4.)*fn2 See also 50 C.F.R. § 600.110(a); 69 Fed. Reg. 35194 (June 23, 2004). Councils transmit the FMPs or amendments and proposed regulations to the Secretary for review. (Defs. Br. at 4.) See 16 U.S.C. § 1854. After a public comment period, the Secretary, if appropriate, approves the FMP or amendment. (Defs. Br. at 5; Pl. Br. at 3.)

See 16 U.S.C. § 1854(a). The Secretary publishes proposed regulations in the Federal Register, and, after a public comment period, promulgates final regulations. (Defs. Br. at 5.) See 16 U.S.C. § 1854(b). FMPs, amendments, and rules implementing the same, must balance the needs of the fishery users against conservation goals, consistent with ten national standards listed in the Magnuson-Stevens Act. (Joint Stmt. at ¶ 3.) See 16 U.S.C. § 1851(a).

II. General Category Scallop Fishery Prior to Amendment 11

The management plan for the Atlantic Ocean scallop fishery was amended in 1994 to establish an "open access" scallop fishery. See Amendment 4 to Atlantic Sea Scallop FMP, 59 Fed. Reg. 2757 (Jan. 19, 1994). Under Amendment 4, the FMP provided for either a "limited access" or "open access general category" scallop permit, and it allowed holders of either type of permit to fish up to 400 pounds of Atlantic sea scallops per day. (Joint Stmt. at ¶ 7; Defs. Br. at 4-5.)*fn3

Vessels eligible for "limited access" permits under Amendment 4 were generally the large-scale scallop fishing boats, commonly referred to as "trip boats" because they remain at sea for several days at a time. (See Pl. Br. at 29 n.17.) Vessels eligible for "general category" permits under Amendment 4 were either small-scale scallop fishing vessels, or vessels holding non-scallop fishing permits that would harvest scallops as incidental to their fishing catch. See Advance Notice of Proposed Rulemaking, 69 Fed. Reg. 63341 (Nov. 1, 2004) (noting that the NEFMC's "original intent in establishing the general category scallop permit [program] implemented in 1994 . . . was to accommodate customary scallop bycatch in other fisheries and allow a flexible program for seasonal or opportunistic fisheries targeting inshore scallops"). Plaintiffs are all small-scale general category scallop fishermen who, prior to Amendment 11, were able to catch up to 400 pounds of scallops per day under their permits.

Participation levels in the general category scallop fishery rose under Amendment 4, and in response the NEFMC began to consider methods to limit that participation. Those potential methods included limiting the eligibility criteria for future permits. (Defs. Br. at 5-6.) A "Notice of a Public Meeting" was published in the Federal Register on August 31, 2004, advising that NEFMC would hold a three-day meeting on September 14-16, 2004, "to consider actions affecting New England fisheries in the exclusive economic zone (EEZ)." 69 Fed. Reg. 53045 (Aug. 31, 2004).*fn4 The notice advised that the scallop committee of the NEFMC would receive management advice on issues including "actions to cap or reduce general category scallop landings."

Id. The agenda for the September 14-16, 2004 meeting advised that with regard to the scallop fishery, "the following issues may be discussed . . . actions to address overfishing . . . [and] actions to cap or reduce general category scallop landings and/or improve reporting measures. . . ." (A.R. at 3165.)

During the NEFMC meeting, the vice-chairman of the NEFMC stated his intention "to propose a motion to establish a control date effective [on] publication of the Federal Register . . . that would freeze the number of permits in the fishery." (Pl. Br. at 8; A.R. at 3493.)*fn5 Although a participant at the meeting objected to the NEFMC's taking this action because the agenda for the meeting had not indicated that a control date would be considered, the vice-chairman responded that "it defeats the purpose of the control date if you notify in advance." (A.R. at 3593-94.) The NEFMC proceeded to vote on September 14, 2004, whether to publish a notice in the Federal Register. (A.R. at 3586-97.) The motion that the NEFMC request that a control date be published in the Federal Register for the general category permit scallop fishery passed 13-1, with two abstentions. (A.R. at 3600.)

NMFS published a notice in the Federal Register on November 1, 2004, at the recommendation of the NEFMC, informing the public that it was considering further regulation of the scallop fishery. (Defs. Br. at 5.) That "Advance Notice of Proposed Rulemaking" states in pertinent part:

NMFS announces that it is considering, and is seeking public comment on, proposed rulemaking to control future access to the open access vessel permit category (general category) Atlantic sea scallop fishery if a management regime is developed and implemented under the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) to limit the number of participants in this sector of the scallop fishery. This sector of the fishery includes vessels with general category permits, as well as vessels with limited access scallop permits that land scallops while not on a scallop day-at-sea (DAS). This announcement is intended, in part, to promote awareness of potential eligibility criteria for future access so as to discourage speculative entry into the fishery while the New England Fishery Management Council (Council) considers whether and how access to the general category sea scallop fishery should be controlled. The date of publication of this notice, November 1, 2004, shall be known as the "control date" and may be used for establishing eligibility criteria for determining levels of future access to the sea scallop fishery subject to Federal authority.

69 Fed. Reg. 63341 (Nov. 1, 2004) (emphasis added).

III. Amendment 11 to the Atlantic Sea Scallop FMP

Amendment 11 is an amendment to the FMP for the Atlantic Sea Scallop Fishery. (Defs. Br. at 6.) It "establishes criteria and authority for determining the percentage of scallop catch allocated to the general category fleet," and establishes an Individual Fishing Quota ("IFQ") permit system. 73 Fed. Reg. at 20090.

The NEFMC began to develop Amendment 11 in January 2006 to consider means of curtailing the amount of scallop landings by the general category fleet, and held 35 meetings between January 2006 and June 2007 to discuss alternatives to a limited access program for the general category vessels. Id. The NEFMC adopted a Draft Supplemental Environmental Impact Statement on April 11, 2007, which sets forth the proposed action and discussion of alternative actions considered, with rationales for preferred action. Id. (See A.R. at 12630 ("April 2007 DSEIS").) A Final Supplemental Environmental Impact Statement was submitted to NMFS on September 24, 2007. (A.R. at 13414 ("September 2007 FSEIS").)

The NEFMC adopted Amendment 11 on June 20, 2007, and a proposed rule for Amendment 11 was published in the Federal Register in December 2007 with a comment period ending in January 2008. (Joint Stmt. at ¶ 10.) See Proposed Rule and Request for Comments, 72 Fed. Reg. 71315 (Dec. 17, 2007). The NMFS approved Amendment 11 on February 27, 2008. (Joint Stmt. at ¶ 10.) On April 14, 2008, the NMFS published the final rule implementing Amendment 11 in the Federal Register. See 73 Fed. Reg. at 20090. Amendment 11 became effective on June 1, 2008. Id.

Amendment 11 decreases the number of vessels eligible to participate in the fishery by abolishing the open access general category fishery and replacing it with a "limited access general category" ("LAGC") fishery. See id. Under Amendment 11's restrictions, all vessels without a limited access permit must be issued an LAGC scallop permit in order to land scallops in the general category fishery. See id.; 50 C.F.R. § 648.4(a)(2)(ii) ("Any vessel of the United States that has not been issued a limited access scallop permit . . . that possesses, retains, or lands scallops in or from Federal waters, must be issued an LAGC scallop permit. . . .").

Amendment 11 provides for three types of LAGC scallop permits: individual fishing quota LAGC scallop permit ("IFQ scallop permit"); Northern Gulf of Maine LAGC scallop permit ("NGOM scallop permit"); and incidental catch LAGC scallop permit ("incidental catch permit"). See 73 Fed. Reg. at 20090-91; 50 C.F.R. § 648.4(a)(2)(ii)(A)-(C). An IFQ scallop permit allows its holder to land up to 400 pounds of shucked scallop meats per trip. 50 C.F.R. § 648.4(a)(2)(ii)(A). An NGOM scallop permit allows its holder to land up to 200 pounds of shucked scallop meats per trip within the demarcated NGOM Scallop Management Area. 50 C.F.R. § 648.4(a)(2)(ii)(B); id. at § 648.62. The incidental catch permit only allows landings of up to 40 pounds of shucked scallop meats per trip. 50 C.F.R. § 648.4(a)(2)(ii)(C).

A vessel is eligible for an IFQ scallop permit if NMFS records verify that the vessel landed at least 1000 pounds of scallop meats in any fishing year between March 1, 2000, and November 1, 2004, and a general category scallop permit had been issued to the vessel during the fishing year in which the landings were made. See 73 Fed. Reg. at 20091; 50 C.F.R. § 648.4(a)(2)(ii)(D). The IFQ is then calculated using a contribution factor that considers the vessel's best year of scallop landings during the qualification period and number of years active. 50 C.F.R. § 648.4(a)(2)(ii)(E).

Vessel owners who cannot qualify for IFQ scallop permits can apply for one of the other two types of LAGC scallop permits, which have different restrictions. See 73 Fed. Reg. at 20091; 50 C.F.R. § 648.4(a)(2)(ii)(F). A vessel must have been issued a general category scallop permit as of November 1, 2004, to qualify for either an NGOM or incidental catch scallop permit. Id.

Amendment 11 provides a process through which a vessel owner can administratively appeal denial of an LAGC scallop permit. See 73 Fed. Reg. at 20092; 50 C.F.R. § 648.4(a)(2)(ii)(O). The only basis for appeal is that the information used by the NMFS to determine eligibility was incorrect. 50 C.F.R. § 648.4(a)(2)(ii)(O)(1). A vessel denied an LAGC scallop permit may continue to fish for scallops, provided that the denial has been appealed, the appeal is pending, and the vessel has on board a letter from the NMFS authorizing the vessel to fish under the LAGC scallop permit category. See 73 Fed. Reg. at 20092; 50 C.F.R. § 648.4(a)(2)(ii)(O)(4). If the appeal is ultimately denied, the NMFS will send a notice of final denial to the vessel owner, and the letter of authorization becomes invalid. See id.

Amendment 11 also allocates the scallop resource between the limited access fleet and the newly-created LAGC category. The estimated scallop landings by vessels with incidental catch permits are first deducted from the annual projected scallop catch. 73 Fed. Reg. at 20093. Five percent of the resultant total projected annual scallop catch is allocated to vessels with IFQ scallop permits. Id. The IFQs are therefore calculated, using a contribution factor based on previous historical scallop landings, from this five percent allocation. Id. Half a percent of the total projected annual scallop catch is allocated to limited access vessels that also fish with IFQ scallop permits.

Id. The remaining 94.5 percent of the total projected annual scallop catch, after deduction of incidental catch, is allocated to the limited access scallop fishery. Id. The total allowable catch projected for the NGOM scallop management area is not included in the total allowable catch and allocations specified for the remainder of the fishery. See 50 C.F.R. § 648.53(a); 50 C.F.R. § 648.62(b).

Amendment 11 explains that the NGOM scallop management area, defined as waters north of 42§20' and within the boundaries of the Gulf of Maine Scallop Dredge Exemption Area, is "managed separately, because the Council clarified that the fishery there has unique characteristics":

The abundance of scallops in the NGOM fluctuates more widely, supporting sporadic fisheries, and scallops are confined to small "patchy" areas throughout the area. There are times and areas within the NGOM that have sufficient abundance of scallops in small areas to support a substantial fishery and other times and areas that do not.

73 Fed. Reg. at 20095; see also 50 C.F.R. § 648.62(a); 50 C.F.R. § 648.80(a)(11). The plaintiffs here have expressed that they do not fish in the NGOM scallop management area and thus are not interested in the NGOM scallop permit. (Dkt. entry no. 42, 1-27-10 Hr'g Tr. at 39:19-40:1.)

Most of the plaintiffs are ineligible for any LAGC scallop permit because they received their first general category scallop permit after the control date of November 1, 2004. (Defs. Br. at 8.) Thus, many of the plaintiffs have been unable to participate in the scallop fishery since the fishing year opened on March 1, 2010, for lack of an LAGC scallop permit.

IV. Plaintiffs' Causes of Action

The plaintiffs contend that "Amendment 11 contains narrowly drafted eligibility criteria requiring that a scallop permit holder before the control date (retroactively), have landed (harvested) at least 1,000 pounds of scallops in any year from March 1, 2000, through November 1, 2004" and that the use of this control date adversely impacted the plaintiffs, who do not qualify for LAGC permits under Amendment 11. (Pl. Br. at 10.) The plaintiffs argue that the lack of advance notice that the NEFMC was going to implement a control date, and subsequent adoption of the retroactive control date, violates the standards for rulemaking under the Magnuson-Stevens Act and the Administrative Procedures Act ("APA"), as well as the plaintiffs' procedural due process rights. (Id. at 11-15.) Count I alleges a due process violation under the Fifth Amendment. (2d Am. Compl. at ¶¶ 35-42.) Count II alleges a regulatory taking without just compensation, also in violation of the Fifth Amendment. (Id. at ¶¶ 43-49.) Counts III and IV allege that the defendants violated the Magnuson-Stevens Act's requirements for implementing an IFQ program. (Id. at ¶¶ 50-64.)

The plaintiffs also argue that the adoption of Amendment 11 violated the National Standards set forth in the Magnuson-Stevens Act, 16 U.S.C. § 1851(a), because the scallop resource is not overfished and because Amendment 11 favors fishermen in the Northern Gulf of Maine area over the rest of the fishery. (Pl. Br. at 17-29.) Count V alleges violation of National Standard 2, on the basis that Amendment 11 was not based on the "best scientific information available." (2d Am. Compl. at ¶¶ 65-71.) Count VI alleges violation of National Standard 3, in that Amendment 11 does not manage the scallop resource "as a single unit throughout its range." (Id. at ¶¶ 72-77.) Count VII alleges that Amendment 11 impermissibly discriminates among residents of different States, as prohibited by National Standard 4. (Id. at ¶¶ 78-84.) Count VIII alleges that Amendment 11 has "economic allocation as its sole purpose," in contravention of National Standard 5. (Id. at ¶¶ 85-89.)*fn6

To the extent the plaintiffs assert a takings claim seeking just compensation for their scallop dredging equipment under the Fifth Amendment, plaintiffs' counsel explained at oral argument that if Amendment 11 is remanded as invalid, the takings claims are moot, and if Amendment 11 is found to be valid, the plaintiffs would seek individual damages hearings under the Little Tucker Act, 28 U.S.C. § 1346(a)(2), which vests this Court with jurisdiction to adjudicate claims against the federal government for money damages up to $10,000. (1-27-10 Hr'g Tr. at 24:21-26:2; 2d Am. Compl. at ¶ 10 (invoking jurisdiction, inter alia, under 28 U.S.C. § 1346).)

We note that the defendants argue that various plaintiffs lack standing to assert these claims, or in the alternative that their claims are unripe, primarily because certain plaintiffs had not concluded administrative appeals of their permit denials. (Defs. Br. at 9-14.) However, it is apparent that the plaintiffs have standing to challenge Amendment 11 because they have alleged that it will cause them economic harm, and that this harm is caused by the defendants' enactment of Amendment 11. See N.C. Fisheries Ass'n, Inc. v. Gutierrez, 518 F.Supp.2d 62, 80-82 (D.D.C. 2007) ("[R]estrictions imposed in [an FMP amendment] harm [plaintiffs] economically by limiting the number of fish that they can catch and sell. Economic harm of this sort is a canonical example of injury in fact sufficient to establish standing."). Amendment 11 took effect on June 1, 2008, and so the plaintiffs' challenge to it is now ripe for review. The status of their administrative appeals is immaterial to their challenge to Amendment 11, because this action challenges the adoption and effect of Amendment 11 rather than the limited basis for administrative review of permit denials. We thus find that the plaintiffs have "asserted a present or expected injury that is legally cognizable and non-negligible." Huddy v. Fed. Commc'ns Comm'n, 236 F.3d 720, 722 (D.C. Cir. 2001).


I. Applicable Legal Standards

A. Summary Judgment Standard

The standard for a motion for summary judgment is well-settled and will be briefly summarized here. Rule 56(c) provides that summary judgment is proper if the pleadings, the discovery and disclosure materials, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In making this determination, the Court must "view[] the record in the light most favorable to the non-moving party and draw[] all inferences in that party's favor." United States ex rel. Josenske v. Carlisle HMA, Inc., 554 F.3d 88, 94 (3d Cir. 2009) (citing Abramson v. William Patterson Coll., 260 F.3d 265, 276 (3d Cir. 2001)). If the Court determines, upon review of a motion and a cross-motion for summary judgment, that no genuine issue of material fact exists, "judgment may be entered in favor of the deserving party in light of the law and undisputed facts." City of Millville v. Rock, No. 07-1073, 2010 WL 199618, at *5 (D.N.J. Jan. 12, 2010).

B. Judicial Review of Administrative Actions Taken Pursuant to the Magnuson-Stevens Act

16 U.S.C. § 1855(f) provides for judicial review of "actions that are taken by the Secretary under regulations which implement a fishery management plan." 16 U.S.C. § 1855(f)(2). Such actions, which undisputedly include the adoption of an FMP amendment such as Amendment 11, "shall be subject to judicial review to the extent authorized by, and in accordance with, chapter 7 of Title 5." Id. at § 1855(f)(1). Thus, the ...

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