832 F.3d 1113
9th Cir.2016Background
- The Pacific Fishery Management Council adopted Amendment 20 (trawl rationalization) establishing an IFQ program for shoreside sector and a coop permit approach for the catcher-processor (C/P) sector; NMFS implemented regulations including a cost-recovery program.
- PWCC (a C/P cooperative) received a coop permit authorizing it to harvest the C/P sector allocation; members (including Glacier Fish Co.) continued to apportion catch internally.
- NMFS calculated the 2014 cost-recovery fee for the C/P sector by dividing 2013 “direct program costs” ($176,460) by 2013 C/P ex-vessel value ($16.76M) to yield a 1.1% fee; Glacier paid and sued challenging authority and methodology.
- Glacier argued (1) NMFS lacked authority to charge it because the coop permit is not a “limited access privilege” and Glacier is not a permit holder; (2) NMFS failed to follow the Council’s "incremental (with-and-without)" cost methodology; and (3) NMFS’s 2014 fee calculation violated its own regulations.
- The Ninth Circuit held NMFS properly treated the coop permit as a limited access privilege and coop members as holders (so NMFS had authority), and that NMFS adopted the Council’s definition of incremental costs, but reversed and remanded because NMFS’s actual 2014 cost allocation methods were inconsistent with its regulations (imprecise time accounting and failure to account for efficiencies).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a C/P coop permit qualifies as a "limited access privilege" under the MSA | Coop permit is not a permit to "harvest" and thus falls outside §1802(26) | NMFS: coop permit authorizes harvest of sector allocation and fits the statutory definition | Held: NMFS's interpretation reasonable; coop permit is a limited access privilege (deference under Chevron) |
| Whether individual coop members (e.g., Glacier) are "limited access privilege holders" subject to fees | Glacier: permit issued to PWCC, not Glacier, so Glacier is not a "holder" | NMFS: regulations treat the harvester group and its members jointly; members exercise coop rights and are jointly liable | Held: Reasonable to treat each coop member as a holder; NMFS may collect fees from members |
| Whether NMFS failed to follow the Council’s required cost-accounting methodology ("incremental with-and-without" approach) | Glacier: NMFS did not apply the Council’s "with-and-without" Appendix B method | NMFS: regulations incorporate Council’s definition of "actual incremental costs"; NMFS followed Council's approach in rulemaking | Held: NMFS adopted the Council’s incremental-cost definition in its regulations; no violation of statute in methodology adoption |
| Whether NMFS’s 2014 fee calculation complied with its own regulations | Glacier: NMFS used rough approximations, misallocated "general" hours, and failed to calculate efficiency savings | NMFS: defended its allocation and adjustments | Held: NMFS’s 2014 cost allocation was inconsistent with its regulations (failed to determine actual incremental costs and efficiencies); fee calculation reversed and remanded for recalculation |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (administrative deference framework)
- National Cable & Telecommunications Ass’n v. Brand X Internet Servs., 545 U.S. 967 (agency reasonable construction of ambiguous statute entitled to deference)
- United States v. Mead Corp., 533 U.S. 218 (when to defer to agency interpretations tied to formal procedures)
- Auer v. Robbins, 519 U.S. 452 (deference to agency interpretation of its own regulations)
- Bassiri v. Xerox Corp., 463 F.3d 927 (standard for deferring to agency interpretation of its regulations)
- Pacific Coast Fed’n of Fishermen’s Ass’ns v. Blank, 693 F.3d 1084 (context on LAPP/IFQ programs and regulatory background)