Pacific Dawn LLC v. Penny Pritzker
2016 U.S. App. LEXIS 14126
| 9th Cir. | 2016Background
- The Pacific Fishery Management Council developed Amendment 20 (trawl rationalization) to replace a derby-style Pacific whiting fishery with an individual fishing quota (IFQ) program; NMFS issued proposed rules in 2010 and implemented the program effective Jan. 1, 2011.
- NMFS had announced a control date of November 6, 2003 (later clarified to potentially include processors in 2005); initial quota-share allocations were based on qualifying catch history ending in 2003 for harvesters and 2004 for processors.
- Plaintiffs (Pacific Dawn LLC and Jessie’s Ilwaco Fish Co.) challenged NMFS’s use of the 2003/2004 end dates, arguing the agency failed to account for "present participation" and "dependence" and should have included more recent years up through 2010.
- A district court earlier held NMFS had not adequately explained using different end dates and remanded; on remand, the Council recommended retaining the original end dates and NMFS issued a detailed final rule in 2013 reaffirming 2003/2004.
- The district court granted summary judgment to NMFS on reconsideration; the Ninth Circuit reviewed de novo whether NMFS’s decision was arbitrary and capricious under the APA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NMFS failed to consider "present participation" (16 U.S.C. §1853(b)(6)(A)) | The 2003/2004 cutoffs ignored more recent participation and disadvantaged current participants. | NMFS considered present participation but reasonably gave greater weight to historic participation and the integrity of the control date. | Court: NMFS considered the factor and reasonably prioritized control-date objectives; not arbitrary or capricious. |
| Whether NMFS failed to consider "dependence" and investments (16 U.S.C. §§1853(b)(6)(B),1853a(c)(5)(A)) | Retaining old end dates allocated shares to people not currently dependent, harming dependent current participants. | NMFS analyzed dependence (harvests, investments, participation), treated processors differently for valid reasons, and concluded impacts were modest. | Court: NMFS adequately defined and weighed dependence; decision upheld. |
| Whether use of different end dates (2003 for harvesters, 2004 for processors) was unexplained or inconsistent | Inconsistent treatment lacked rational explanation. | Processors were treated differently because their eligibility was clarified later and because processors’ fixed investments made perverse incentive risk lower. | Court: NMFS gave reasonable, statutory-factor–based reasons for the discrepancy; upheld. |
| Whether NMFS’s choice violated National Standards or Groundfish Management Plan Objective 14 | The allocation was inefficient, increased costs, and disrupted current fishing practices. | Retaining control dates promoted efficiency goals (reduced overcapitalization, ended race for fish) and minimized disruption to those who relied on the control date. | Court: NMFS reasonably reconciled the Plan and National Standards with its policy; no arbitrary or capricious action. |
Key Cases Cited
- Alliance Against IFQs v. Brown, 84 F.3d 343 (9th Cir. 1996) (upholding use of historical qualification periods despite delay because agency balanced factors and avoided perverse incentives)
- Pac. Coast Fed’n of Fishermen’s Ass’ns v. Blank, 693 F.3d 1084 (9th Cir. 2012) (describing limited access privilege programs and IFQs)
- Yakutat, Inc. v. Gutierrez, 407 F.3d 1054 (9th Cir. 2005) (review standard for arbitrary and capricious under APA)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. 1983) (standards for arbitrary and capricious review)
- Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (U.S. 1971) (agency must consider relevant factors and may not substitute court’s judgment)
- Wash. Crab Producers, Inc. v. Mosbacher, 924 F.2d 1438 (9th Cir. 1990) (agency articulation of rational connection between facts and choice)