PACIFIC DAWN LLC; Jessie‘s Ilwaco Fish Company, Plaintiffs-Appellants, and Ocean Gold Seafoods, Inc.; Chellissa LLC, Plaintiffs, v. Penny PRITZKER, Secretary of the United States Department of Commerce; National Oceanic and Atmospheric Administration; National Marine Fisheries Service, Defendants-Appellees, Midwater Trawlers Cooperative; Trident Seafoods Group; Dulcich, Inc., DBA Pacific Seafood Group; Arctic Storm Management Group, LLC; Environmental Defense Fund, Intervenor-Defendants-Appellees.
No. 14-15224
United States Court of Appeals, Ninth Circuit.
Argued and Submitted May 10, 2016 San Francisco, California Filed August 3, 2016
831 F.3d 1166
To give proper effect to the carefully struck balance between protecting grantors’ rights and providing a streamlined process with finality, “a post-sale challenge must be based on lack of notice or on some other fundamental flaw in the foreclosure proceedings, such as the sale being completed without the borrower actually being in default.” Angels Alliance Group, LLC v. ReconTrust Co., NA, 617 Fed.Appx. 740, 742 (9th Cir. 2015) (unpublished decision). Technical defects that do not have a substantial impact on grantors’ rights—as in this case, where the trustee‘s sale notice lists the wrong beneficiary6—are not significant enough to warrant upsetting the finality of a trustee‘s sale. In contrast, violations of subsections that grant substantive rights—such as the right to personal service and advance notice—can support post-sale challenges. This rule hews more closely to the intent of the Oregon legislature revealed by the context of the OTDA and the history surrounding the passage of the statute.
Conclusion
The only defect in the foreclosure process identified by Appellants has to do with the content of the notice. The defect is the incorrect listing of the beneficiary in the notice they received. However, Appellants do not dispute that: (1) they were in default; (2) they were served in the manner required by
The District Court‘s dismissal is AF-FIRMED.
Maggie B. Smith (argued) and Bridget McNeil, Attorneys; Sam Hirsh, Acting Assistant Attorney General; Environment and Natural Resources Division, United States Department of Justice, Washington, D.C.; Chris McNulty, Mariam McCall, and Ryan Couch, Office of the General Counsel, National Oceanic & Atmospheric Administration, Seattle, Washington; for Defendants-Appellees.
J. Timothy Hobbs (argued) and Michael F. Scanlon, K & L Gates LLP, Seattle, Washington, for Intervenors-Defendants-Appellees Midwater Trawlers Cooperative, Trident Seafoods Group, Dulcich, Inc., DBA Pacific Seafood Group and Arctic Storm Management Group, LLC.
Monica Goldberg (argued), Environmental Defense Fund, Washington, D.C., for Intervenor-Defendant-Appellee Environmental Defense Fund.
Before: SANDRA S. IKUTA, and PAUL J. WATFORD, Circuit Judges, and DERRICK KAHALA WATSON,** District Judge.
Hawaii, sitting by designation.
IKUTA, Circuit Judge:
Pacific Dawn LLC and Jessie‘s Ilwaco Fish Co., a fish harvester and a fish processor, are subject to a fishery management program that limits their share of the total allowable catch of Pacific whiting. They challenge a decision by the National Marine Fisheries Service (NMFS) to calculate the amount of their initial share based on their participation in the fishery prior to 2003 and 2004, respectively, rather than on their much greater participation in the years immediately before 2010, when the regulations implementing this program were issued. Because NMFS considered the required factors and made a reasonable decision to use the 2003 and 2004 dates, its decision was not arbitrary or capricious, and we affirm.
I
The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) created eight Regional Fishery Management Councils. Each council must create a fishery management plan, which must meet a long list of statutory requirements.
Beginning in 1990, the councils were given the discretion to use “a limited access system for the fishery in order to achieve optimum yield.”
In 2007, Congress reauthorized the Magnuson-Stevens Act with amendments that, among other things, were intended to encourage market-based fishery management through “limited access privilege programs.” Pac. Coast Fed‘n of Fishermen‘s Ass‘ns, 693 F.3d at 1088. Such a program (which must be part of a limited access system) allows a fishery participant “to harvest a certain portion of the total catch allowed for a particular species.” Id. One way to distribute the allocated portion
Once a regional council has prepared a fishery management plan for each fishery within its jurisdiction that requires such a plan, it submits the plan (and any proposed regulations) to the Secretary of Commerce,
One of the eight regional councils is the Pacific Fishery Management Council (Pacific Council), which consists of California, Oregon, Washington, and Idaho and covers the fisheries seaward of those states.
Prior to 2004, the Pacific Council established a yearly harvest limit for whiting and limited the number of fishing vessels by requiring vessels to have a limited entry permit, and parceling out only a limit-
Because this approach did not meet the Pacific Council‘s management goals, it began contemplating an amendment to the Groundfish Management Plan in 2003. In January 2004, NMFS published a notice of proposed rulemaking, which stated that the Pacific Council was considering implementing a limited access privilege program in the form of a “trawl rationalization program” for the Pacific groundfish fishery. Advance Notice of Proposed Rulemaking Regarding a Trawl Individual Quota Program and to Establish a Control Date, 69 Fed. Reg. 1563-01 (Jan. 9, 2004). For the shorebased trawl sector (which consists of vessels that catch and deliver to processors on land), the trawl rationalization program would consist of a trawl IFQ program, which is “a quota system where each quota share could be harvested at any time during an open season.” Id. at 1563. Participants in the fishery (i.e., those who already had a limited entry permit allowing them to fish) would need to obtain a quota share permit as well in order to receive a share of the allowable catch.
The proposed rulemaking also explained that the Pacific Council was considering basing the initial allocation of quota shares on participants’ catch history in the fishery, meaning that participants that had a larger catch history would be allocated a larger quota share. Due to concerns that the announcement of this new program would create a perverse incentive by encouraging participants to increase their fishing efforts in order to qualify for a larger initial quota share, NMFS announced “a control date of November 6, 2003,” which would apply to “[p]ersons potentially eligible for [individual quota] shares,” including “vessel owners, permit owners, vessel operators, and crew.” 69 Fed. Reg. 1563-01, 1563. A “control date announces to the public that the Pacific Council may decide not to count activities occurring after the control date toward determining a person‘s qualification for an initial allocation or determining the amount of initial allocation of quota shares.” Id. In 2005, NMFS clarified that processors (in addition to harvesters) could also be eligible to obtain quota shares. Trawl Individual Quota Program and Establishment of a Control Date, 70 Fed. Reg. 29,713-01, 29,714 (May 24, 2005).
The Pacific Council then engaged in a lengthy process to develop an amendment to the Groundfish Management Plan. Due to the complexity and controversial nature of the trawl rationalization program, the process of analyzing data, obtaining input from stakeholders and the public, and developing program documents took over five years. In 2009, the Pacific Council finally submitted the trawl rationalization program to the Secretary as Amendment 20 to the Groundfish Management Plan. NMFS published the proposed amendment for comment in May 2010, Amendments 20 and 21, Trawl Rationalization Program, 75 Fed. Reg. 26,702-01 (May 12, 2010), and the proposed regulations for implementing Amendment 20 in June 2010, Amendments 20 and 21, Trawl Rationalization Program, 75 Fed. Reg. 32,994-01 (June 10, 2010).
The selection of the 2003 and 2004 end dates was a focus of comment and criticism, and NMFS responded to these criticisms in detail. NMFS noted that it had set a 2003 control date in order “to prevent future fishery disruptions” and to “discourage entry into a fishery and increased harvest while the Council goes through the process of developing the program details.” 75 Fed. Reg. 60,868-01, 60,875. Having set a control date, NMFS deemed it was important to maintain that date in setting the qualifying history period for two reasons. First, the Council would lose credibility if it did not adhere to the control date: “If the Council develops a pattern of announcing and abandoning control dates, then the announcement of control dates will become a signal to harvesters to intensify their efforts to catch fish in order to increase their odds of qualifying for greater initial allocations.”
After Amendment 20 (the trawl rationalization program) became effective January 1, 2011, id. at 60,868, a group of fishing companies brought a lawsuit challenging NMFS‘s initial allocation of quota shares for Pacific whiting. See Pacific Dawn, LLC v. Bryson, 2011 WL 6748501 (N.D. Cal. Dec. 22, 2011) (Pacific Dawn I). Among other claims, the plaintiffs contended that the Pacific Council and NMFS erred in its selection of a qualifying period, and that it should have considered fishing history past the 2003 and 2004 end dates. Id. at *1. The district court held that NMFS failed to provide a reasonable explanation for why it relied on an end date of 2003 for some purposes and 2004 for other purposes, and the court granted plaintiffs’ motion for summary judgment on that issue. Id. at *6-8. The district court remanded the matter to NMFS for reconsideration and set a deadline of April 1, 2013, for the agency‘s decision, but it did not vacate the rule so as not to cause disruption during the remand period. Pac. Dawn, LLC v. Bryson, 2012 WL 554950 (N.D. Cal. Feb. 21, 2012).
On remand, the Pacific Council considered four alternative date ranges for qualifying history, including ranges that took more recent history into account (1994-2007 and 1994-2010), and a “no action” alternative, which maintained the end dates of 2003 for harvesters and 2004 for processors. After three meetings over six months, more than seven hours of public testimony, and numerous reports, the Pacific Council recommended that NMFS adopt the no action alternative. Reconsideration of Allocation of Whiting, 78 Fed. Reg. 72-01, 72 (Jan. 2, 2013). NMFS determined that the council‘s recommendation was consistent with the Magnuson-Stevens Act and issued notice of its decision to retain the original control dates for public comment.
On March 28, 2013, NMFS issued a response to the comments and the final rulemaking, which retained the original control dates. Reconsideration of Alloca-
After NMFS‘s decision, two of the plaintiffs in Pacific Dawn I, Pacific Dawn LLC (a fish harvester) and Jessie‘s Ilwaco Fish Co. (a fish processor) (collectively referred to here as “Pacific Dawn“), brought this action in district court, alleging that NMFS failed to consider relevant factors under the Magnuson-Stevens Act and the Groundfish Management Plan. A number of harvesters and processors who participate in the fishery and the Environmental Defense Fund intervened as defendants. The district court rejected Pacific Dawn‘s arguments and granted summary judgment to NMFS and the defendants. Pacific Dawn appealed.
II
The district court had jurisdiction under
Actions taken by the Secretary under regulations implementing fishery management plans are “subject to judicial review to the extent authorized by, and in accordance with,” the Administrative Procedure Act (APA).
An agency‘s decision may “be found to be 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.‘” Yakutat, Inc. v. Gutierrez, 407 F.3d 1054, 1066 (9th Cir. 2005) (quoting Motor Vehicle Mfrs. Ass‘n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)). But where the Secretary “has considered the relevant factors and articulated a rational connection between the facts found and the choice made,” the decision is not arbitrary or capricious. Alliance Against IFQs, 84 F.3d at 345 (quoting Wash. Crab Producers, Inc. v. Mosbacher, 924 F.2d 1438, 1440 (9th Cir. 1990)); Yakutat, 407 F.3d at 1066. “This standard of review is highly deferential, presuming the agency action to be valid and affirming the agency action if a reasonable basis exists for its decision.” Pac. Coast Fed‘n of Fish-ermen‘s Ass‘ns, 693 F.3d at 1091 (internal quotation marks and citations omitted).
III
On appeal, Pacific Dawn argues that NMFS‘s 2013 decision to select a qualifying period ending in 2003 for harvesters and 2004 for processors was arbitrary and capricious because it failed to take into account “present participation in the fishery” as required by
A
We begin with Pacific Dawn‘s argument that NMFS‘s 2013 decision to retain 2003 and 2004 as the ending date for the qualifying period failed to take into account “present participation in the fishery” as required by
NMFS first explained its analysis of this issue in the preamble to the final rule implementing Amendment 20 (the trawl rationalization program) and the regulations implementing that amendment in 2010. In its response to comments, NMFS stated that the Pacific Council and NMFS had “analyzed and considered data including past and present participation,” among other relevant considerations. 75 Fed. Reg. 60,868-01, 60,885. Nevertheless, it explained that “the Council is required to consider and balance several factors, including current harvests and historic harvests, when making initial allocation decisions,” and while “the Council did examine present participation levels, the Council gave greater weight to historic partic-ipation in determining the initial allocation.”
NMFS‘s 2013 decision again addressed the comments that NMFS should “adopt a present participation requirement for the period of 2003–2010,” rather than retain the end dates of 2003 and 2004, and NMFS again found that other factors outweighed the “present participation” concern. NMFS stated that maintaining the qualifying period end dates of 2003 and 2004 “supports the Council‘s and NMFS’ efforts to reduce overcapitalization5 and end the race for fish by not rewarding increases in harvesting or processing that occurred after the end of the qualifying periods (i.e., after the 2003 control date).” 78 Fed. Reg. 18,879-01, 18,880, 18,884-85 (Mar. 28, 2013). Further, maintaining the qualifying period was necessary to “support the importance of the control date for this and future rationalization programs, minimize the concentration of harvester quota, and provide for a wider initial geographic distribution of the program benefits along the coast and the corresponding fishing communities.”
NMFS‘s explanation for giving more weight to historic participation and maintaining the 2003 and 2004 end dates for the qualifying period is similar to the reasoning we found persuasive in Alliance Against IFQs v. Brown, 84 F.3d 343 (9th Cir. 1996). In that case, the Secretary of Commerce implemented a management plan for sablefish and Pacific halibut by regulation. Id. at 345. The management plan required vessel owners who participated in those fisheries to obtain an IFQ permit. Id. NMFS assigned to each owner or lessee of a vessel that landed halibut or
Alliance Against IFQs also determined that the Secretary‘s selection of the end dates could be deemed to be consistent with “present participation.” Id. at 347. We noted that the term “present participation” was not defined in the statute. Id. Given the “substantial amount of time” required to complete the regulatory process, including the “process of review, publication, public comments, review of public comments,” and the environmental impact review, we held that the Secretary could reasonably conclude that “present participation” did not mean “contemporaneous with the promulgation of the final regulations.” Id. We concluded that “while the length of time between the end of the participation period considered and the promulgation of the rule pushed the limits of reasonableness,” especially given that one of the reasons for the delay was the Secretary‘s failure to meet regulatory deadlines, the use of the period from 1988 to 1990 was not “so far from ‘present participation’ when the regulation was promulgated in 1993 as to be ‘arbitrary or capricious.‘” Id. at 347-48.
In this case, we are doubtful that individuals’ participation in the fisheries in 2003 or 2004, which was six or seven years before Amendment 20 and the implementing regulations were promulgated in 2010, can be deemed to constitute “present participation.” Nor has the Secretary made such an argument.6 Nevertheless, the Secretary‘s reasons for giving less weight to present participation, such as not rewarding increases in fishery activity after the control date was announced and maintaining the credibility of control dates in the future, are sufficient to uphold the Secretary‘s actions. The record shows that NMFS gave careful consideration to the “present participation” factor and acted reasonably in giving more weight to establishing and maintaining a control date for reasons we upheld in Alliance Against IFQs, 84 F.3d at 347. Because the Secretary “articulated a rational connection between the facts found and the choice made,” see id. at 350, we conclude the decision to maintain the 2003 and 2004 end dates was not arbitrary or capricious.
Pacific Dawn raises two arguments against this conclusion. First, it challenges NMFS‘s conclusion (set forth in the final environmental impact statement that supported NMFS‘s 2013 decision) that taking current participation in the fishery into account would have only a minor impact on the allocation of quota shares. See Final Environmental Impact Statement (“While a recent participation requirement might be considered reasonable and responsive to the [Magnuson-Stevens Act] direction to consider current and historic participation and to consider investment and dependence, the likely impacts on the initial [quota share] allocation appeared to be
We reject this argument because NMFS considered the issue and reasonably determined that the financial impact of the end dates was not significant and did not outweigh other benefits. NMFS acknowledged that 34 permit holders would receive quota share under Amendment 20 even though they had not actively participated in the fishery since 2003, but it concluded that this fact did not warrant “including more recent years in the qualifying period” because the majority of these 34 permit owners were far from inactive; rather, they had been “active in the whiting fishery during those years, participated in other fisheries including other sectors of the whiting fishery, or held those inactive permits as an investment.” 78 Fed. Reg. 18,879-01, 18,883. NMFS determined that only 1.5 percent of the permits (rather than 20 percent) were truly inactive.
Second, Pacific Dawn argues that NMFS‘s application of “present participation” was arbitrary because it adopted a 2004 end date for processors rather than the 2003 end date adopted for harvesters. According to Pacific Dawn, NMFS failed to give a satisfactory explanation for this inconsistency. Again, we disagree. NMFS explained its reasons for using a different end date for determining the eligibility of processors for quota share. First, NMFS explained that “it was not clear until 2005 that the 2003 control date potentially applied to processors,” and NMFS concluded that the different end date was necessary to account “for processor investments that took place prior to the announcement of the control date but that did not begin to earn processing history until 2003 and 2004.” 78 Fed. Reg. 18,879-01, 18,880–81. Second, because processors have onshore facilities, and cannot “move into and out of various fisheries to gain potential fishing history” as easily as harvesters, there was less danger of creating perverse incentives by changing the control date.
B
Closely related to its argument that NMFS did not take into account “present participation,” Pacific Dawn also argues that NMFS‘s 2013 decision did not adequately consider “dependence” on the fishery. See
Again, we see no basis for this claim. In proposing to retain the 2003 and 2004 end dates, NMFS provided a thorough explanation of its methodology for evaluating “dependence.” 78 Fed. Reg. 72-01, 74-76. Although the Magnuson-Stevens Act does not define “dependence,” NMFS defined the term to mean “the degree to which participants rely on the whiting fishery as a source of wealth, income, or employment to financially support their business.”
With respect to the proposed decision on the 2003 and 2004 end dates for allocating quota shares, NMFS explained its analysis of dependence. First, NMFS stated that it gave weight to financial dependence in its “choice of ending the qualifying period for processors in 2004 rather than the 2003 control date,” because that change “was done to explicitly recognize investments in processing while still furthering the purposes of Amendment 20.”
In its final decision on this issue, NMFS reiterated that it had “thoroughly explored” the “issue of investment and dependence for more recent years.” 78 Fed. Reg. 18,879-01, 18,884. NMFS determined that retaining the qualifying period ending in 2003 or 2004 would not unduly affect current dependence on the fishery because “most current harvesters and processors in the fishery were also historical participants during the qualifying periods for initial allocation, and the shifts in quota among the initial allocation alter-
Nor was NMFS‘s decision inconsistent with the related standards identified by Pacific Dawn. First, Pacific Dawn argues that NMFS‘s 2013 decision was inconsistent with National Standards 5 and 7,7 which require councils to, “where practicable, consider efficiency in the utilization of fishery resources” and “minimize costs and avoid unnecessary duplication.”
Second, Pacific Dawn claims that NMFS‘s decision to retain the 2003 and 2004 end dates was contrary to the Groundfish Management Plan‘s direction in Objective 14 to “choose the measure that best accomplishes the change with the least disruption of current domestic fishing practices.” Pacific Dawn argues that NMFS failed to provide a rational explanation for how the exclusion of ten years of fishing history meets Objective 14 and argues at length that the 2003 and 2004 end dates disrupt the activities of participants currently dependent on the fisheries. We again disagree. NMFS considered Objective 14, 78 Fed. Reg. 72-01, 75, and reasonably determined that retaining the 2003 and 2004 end dates would be the least disruptive to current fishing practices. NMFS explained that when it first announced the 2003 control date, participants were on notice that fishing activity after 2003 might not count toward allocation of quota share, and participants had the opportunity to acquire additional quota
Finally, Pacific Dawn argues that NMFS‘s decision was inconsistent with its practices in other fisheries, where NMFS had concluded that more recent participation reflected greater dependence on the fishery. This argument fails. NMFS considered “the reasons supporting alternatives that favor more recent history (e.g., recognizing recent fishery participants’ dependence and investments, reducing future quota leasing or acquisition costs, reducing quota to recent non-participants, and reflecting more recent market and fishery conditions),” but reasonably determined that they were outweighed by other factors such as “reducing overcapitalization and ending the race for fish.”
IV
We conclude that NMFS properly considered the relevant factors and reasonably decided to maintain the 2003 and 2004 end dates. See Alliance Against IFQs, 84 F.3d at 345. We therefore affirm the district court‘s grant of summary judgment to the defendants.
AFFIRMED.