-
USCA1 Opinion
_________________________
No. 97-1327
ASSOCIATED FISHERIES OF MAINE, INC.,
Plaintiff, Appellant,
v.
WILLIAM M. DALEY, SECRETARY
OF THE UNITED STATES DEPARTMENT OF COMMERCE,
Defendant, Appellee.
_________________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, U.S. District Judge]
_________________________
Before
Selya, Circuit Judge,
Hill,* Senior Circuit Judge,
and Boudin, Circuit Judge.
_________________________
Gene R. Libby, with whom Michael W. MacLeod-Ball, Robert C.
Brooks, and Verrill & Dana were on brief, for appellant.
David E. Frulla , Stanley M. Brand , and Brand, Lowell & Ryan on
brief for Seafarers International Union of North America, amicus
curiae.
Andrew C. Mergen, Attorney, Environment & Natural Resources
Division, United States Department of Justice, with whom Lois J.
Schiffer, Assistant Attorney General, David C. Shilton and Lyn
Jacobs, Attorneys, and Gene Martin, Office of Regional Counsel,
National Oceanic and Atmospheric Administration, were on brief, for
appellee.
_________________________
September 16, 1997
_________________________
_______________
*Of the Eleventh Circuit, sitting by designation.
SELYA, Circuit Judge. Associated Fisheries of Maine
(AFM) and its amicus, the Seafarers International Union, warn that
the final version of a fishery management plan promulgated by the
Secretary of Commerce (the Secretary) could have significant
adverse effects on the fishing industry in the Northeast and that
fishermen caught in the regulatory net will not be able to survive
financially. They unsuccessfully asked the district court to
invalidate the Secretary's final rulemaking and thereby avert this
potential calamity. They now ask us for the same relief, urging
that the Secretary failed to comply with both the Magnuson Act, 16
U.S.C. SS 1801-1882 (1994), and the Regulatory Flexibility Act
(RFA), 5 U.S.C.A. SS 601-612 (1994 & Supp. 1997). Although we have
considerable empathy for the fishermens' concerns, we conclude,
after wading through an administrative record which comprises
roughly 30,000 pages, that the Secretary acted within his lawful
purview.
I. THE STATUTORY SCHEME
Responding to depletion of the nation's fish stocks due
to overfishing, Congress enacted the Magnuson Act in 1976 to
protect fishery resources. See 16 U.S.C. S 1801(a). The Act
created eight regional fishery management councils, each of which
has responsibility for fashioning a fishery management plan (FMP)
After this litigation had begun, Congress passed the
Sustainable Fisheries Act, which amended the Magnuson Act (referred
to now as the Magnuson-Stevens Act). See Pub. L. No. 104-297, 110
Stat. 3559 (Oct. 11, 1996). All references herein are to the
Magnuson Act, which was in effect when the challenged rules were
promulgated, not to the Magnuson-Stevens Act.
3
to regulate commercial fishing within a particular geographic
region. See id. SS 1852(a)(1)-(8), 1852(h)(1). When a proposed
FMP (or a plan amendment) is developed, the council must submit it
to the Secretary for review. See id. S 1853(c). The Secretary
then determines whether the proposed FMP is consistent not only
with the Magnuson Act's seven national standards for fishery
conservation and management, see id. S 1851(a)(1)-(7), but also
with other applicable law, including the RFA, see id. SS
1854(a)(1)(B), 1855(e). In making this determination, the
Secretary must publish an appropriate notice, see id. S
1854(a)(1)(C), consider the comments engendered in response
thereto, see id. S 1854(a)(2)(A), and consult with the Coast Guard
anent enforcement, see id. S 1854(a)(2)(C). If the Secretary
approves the amendment, he then promulgates final implementing
regulations, which are subject to judicial review. See id. S
1855(b).
II. THE COURSE OF EVENTS
The New England Fishery Management Council (the Council)
has authority over commercial fishing in the Atlantic Ocean off the
New England coast. See id. S 1852(a)(1). Under its aegis, the
management and conservation of the New England Groundfish Fishery
has had a tangled history. See generally Peter Shelley et al., The
New England Fisheries Crisis: What Have We Learned? , 9 Tul. Envtl.
L.J. 221, 223-33 (1996). When less intrusive efforts did not
Groundfish include cod, haddock, flounder, and other species
that dwell near the ocean floor. See Shelley, supra, 9 Tul. Envtl.
4
prevent overfishing, the Council developed the Northeast
Multispecies Fishery Management Plan in 1985. The Secretary
approved it only as a stopgap. Four amendments to the interim rule
followed, none of which proved adequate. See Conservation Law
Found. of New Eng., Inc. v. Franklin, 989 F.2d 54, 58 (1st Cir.
1993). Litigation over the last of these amendments resulted in a
consent decree. The decree established a timetable for adopting an
FMP that would reverse the continuing depletion of cod, flounder,
and haddock stocks within specified periods. See id.
In 1994, the Council recommended, and the Secretary,
acting through the National Marine Fisheries Service (NMFS) and the
National Oceanic and Atmospheric Administration, approved Amendment
5. This amendment sought to eliminate overfishing of cod, haddock,
and yellowtail flounder stocks by sharply reducing permissible
fishing over a five to seven year period. See 59 Fed. Reg. 9872
(1994) (final rule). To achieve this goal, the amendment proposed
a gradual reduction in the annual number of working days at sea
(DAS) for certain fishing vessels and created three classes of
permits. See 50 C.F.R. SS 651.22, 651.4 (1995). The class that is
relevant here comprises limited access multispecies permits (which,
in turn, are subdivided into fleet and individual permits).
Amendment 5 sets up a DAS notification program that requires
vessels covered by fleet permits to notify the NMFS of departure
and arrival times. See id. S 651.29. In addition, the amendment
L.J. at 223 & n.4 (listing the 13 species included in the
groundfish management plan).
5
establishes a vessel tracking system (VTS) that is intended to
function by means of electronic devices installed on board vessels
with individual permits. See id. S 651.28. Because the VTS is not
yet operational, both classes of permit holders must satisfy the
call-in requirements of the DAS notification program for the time
being. See id. S 651.29(a)(2).
Dismayed by the Secretary's handiwork, AFM challenged
Amendment 5 in Maine's federal district court. By that time,
however, haddock and yellowtail stocks had collapsed, and cod
stocks were near collapse. See NMFS, Report of the 18th Northeast
Regional Stock Assessment Workshop (18th SAW): The Plenary 53-54
(1994). In light of this troubling new information, Amendment 5
seemed inadequate either to protect or rebuild these stocks, and
NMFS's Stock Assessment Review Committee recommended that the
Council reduce ichthyic mortality to as low a level as possible.
See id. at 53. In response, the Council adopted Amendment 6 (an
emergency measure designed to protect haddock, see 59 Fed. Reg.
32,134 (1994)) and thereafter developed Amendment 7.
The Secretary promulgated Amendment 7 as a final rule
after notice and comment. See 61 Fed. Reg. 8540 (proposed rule) &
27,710 (1996) (final rule) (to be codified at 50 C.F.R. pt. 651).
Among other things, Amendment 7 seeks to reduce ichthyic mortality
rates and rebuild multispecies stocks by (1) setting annual
"allowable catch" targets for regulated species, (2) orchestrating
new area closures, and (3) implementing further DAS cutbacks
(including acceleration of the reduction schedule originally
6
established in Amendment 5). Although the Secretary acknowledged
the significant negative economic impacts (especially on trawl
vessels) which Amendment 7 would invite, he concluded that
conservation of the fishery would yield greater long-term benefits.
See 61 Fed. Reg. at 27,731.
Unmollified, AFM amended its pending judicial complaint
to challenge Amendment 7 as well as Amendment 5. It alleged, inter
alia, that both amendments violated the Magnuson Act and the RFA.
The parties filed cross-motions for summary judgment. The district
court then held a one-day informational hearing, during which the
parties' experts explained their respective positions on
scientific, economic, and ecological principles.
In the end, the court granted summary judgment in the
Secretary's favor. See Associated Fisheries of Me., Inc. v. Daley,
954 F. Supp. 383 (D. Me. 1997). As to issues that are relevant in
this appeal, the court held that the newly enacted judicial review
provisions of the RFA did not apply retroactively, and that, in all
events, the Secretary had complied with the RFA. See id. at 386-
87. The court also held that the Secretary's rulemaking did not
run afoul of the Magnuson Act. See id. at 388-90. AFM now
Because the Secretary recognized his inability to foresee the
effect of various measures with certitude, he inserted in Amendment
7, as in Amendment 5, a process that allows him to adjust DAS
allocations and requirements as stocks recover or as other
circumstances change. See 50 C.F.R. S 651.40.
7
appeals.
III. THE STANDARD OF REVIEW
We review a district court's grant of summary judgment de
novo. See Coyne v. Taber Partners I, 53 F.3d 454, 457 (1st Cir.
1995); Massachusetts Dept. of Pub. Welfare v. Secretary of Agric. ,
984 F.2d 514, 520 (1st Cir. 1993). This rubric has a special twist
in the administrative law context. The Magnuson Act incorporates
the familiar standard of review associated with the Administrative
Procedure Act (APA). See 16 U.S.C. S 1855(b). Where the APA
standard obtains, a court may set aside an administrative action
only if that action is arbitrary, capricious, or otherwise contrary
to law. See 5 U.S.C. S 706(2)(A)-(D). Because the APA standard
affords great deference to agency decisionmaking and because the
Secretary's action is presumed valid, judicial review, even at the
summary judgment stage, is narrow. See Citizens to Preserve
Overton Park, Inc. v. Volpe, 401 U.S. 402, 415-16 (1971); Sierra
Club v. Marsh, 976 F.2d 763, 769 (1st Cir. 1992). Consequently,
our brief _ like that of the district court _ is only to determine
whether the Secretary's decision to promulgate the fishery
regulation was consonant with his statutory powers, reasoned, and
In the district court, AFM advanced claims under various other
statutory provisions, as well as claims implicating constitutional
standards and executive orders. None was successful. See
Associated Fisheries, 954 F. Supp. at 385 & n.3. AFM does not
pursue any of these theories on appeal, and we express no opinion
on them.
We note, moreover, that in this court, as below, AFM
challenges Amendment 5, as modified by Amendment 7. For
simplicity's sake, we refer mainly to the latter.
8
supported by substantial evidence in the record. See Alliance
Against IFQs v. Brown, 84 F.3d 343, 345 (9th Cir. 1996), cert.
denied, 117 S. Ct. 1467 (1997); C & W Fish Co. v. Fox, 931 F.2d
1556, 1562 (D.C. Cir. 1991); Maine v. Kreps, 563 F.2d 1052, 1055
(1st Cir. 1977).
An agency rule is arbitrary and capricious if the agency
lacks a rational basis for adopting it _ for example, if the agency
relied on improper factors, failed to consider pertinent aspects of
the problem, offered a rationale contradicting the evidence before
it, or reached a conclusion so implausible that it cannot be
attributed to a difference of opinion or the application of agency
expertise. See Motor Vehicles Mfrs. Ass'n v. State Farm Mut. Ins.
Co., 463 U.S. 29, 43 (1983); Rhode Island Higher Educ. Assistance
Auth. v. Secretary of Educ., 929 F.2d 844, 855 (1st Cir. 1991).
Subject, of course, to statutory constraints, policy choices are
for the agency, not the court, to make. Even if a reviewing court
disagrees with the agency's conclusions, it cannot substitute its
judgment for that of the agency. See Overton Park, 401 U.S. at
416; Kreps, 563 F.2d at 1055.
Finally, when reviewing agency action, we apply the same
legal standards that pertain in the district court and afford no
special deference to that court's decision. See Massachusetts
Dept. of Pub. Welfare, 984 F.2d at 521 n.5. This approach is not
altered simply because the court held an informational hearing at
which experts testified. Although some degree of deference may be
appropriate if a district court's determination turns on factual
9
findings, evidence presented by witnesses, or "even upon lengthy
district court proceedings in which knowledgeable counsel explain
the agency's decisionmaking process in detail," Sierra Club v.
Marsh, 769 F.2d 868, 872 (1st Cir. 1985), this case does not
implicate that principle. The district judge made it pellucid that
the dissertations which he entertained "were not evidence, but
rather were advocacy presentations by non-lawyers skilled in their
respective areas and therefore better able to present the material
to [the court]." Associated Fisheries, 954 F. Supp. at 388 n.9.
A presentation which serves only to educate the district court, not
to enlarge the administrative record, does not affect the standard
of judicial review. See Fisherman's Dock Coop., Inc. v. Brown, 75
F.3d 164, 168 (4th Cir. 1996).
IV. CLAIMS IMPLICATING THE MAGNUSON ACT
AFM asseverates that Amendment 7 violates the Magnuson
Act because the regulation is unnecessary to achieve the
Secretary's stated goals and inconsistent with the national
standards embodied in the Act. Neither asseveration holds water.
A. The Need for Amendment 7.
The record contradicts AFM's assertion that Amendment 7
is not necessary to achieve a rebuilding of groundfish stock
because the status quo suffices. The Secretary was presented with
reliable scientific data indicating that stocks had collapsed; he
was advised that the prophylactic measures specified in Amendment
5 were clearly inadequate to alleviate the steadily worsening
plight; and he also was told that certain ichthyic mortality rates
10
ought to be reduced significantly. Responding to this influx of
new information, the Council conducted extensive scientific
analyses and devised Amendment 7 as a means of ensuring the long-
term stability of the fishery. The Secretary studied the data,
weighed plethoric comments, and decided to promulgate the rule.
Having carefully reviewed the record, we cannot say that
the Secretary exercised his discretion in an irrational, mindless,
or whimsical manner. When an agency is faced with conflicting
scientific views and chooses among them, its decision cannot be
termed arbitrary or capricious. Indeed, a reviewing court must
afford special deference to an agency's scientific expertise where,
as here, that expertise is applied in areas within the agency's
specialized field of competence. See Baltimore Gas & Elec. Co. v.
Natural Resources Defense Council, Inc., 462 U.S. 87, 103 (1983);
United States v. Members of Estate of Boothby, 16 F.3d 19, 21-22
(1st Cir. 1994).
B. Compliance with National Standards.
The Magnuson Act sets up a series of seven national
standards. See 16 U.S.C. S 1851(a)(1)-(7). To ensure compliance
with these standards, the responsible agency must perform a
cost/benefit analysis ancillary to the promulgation of an FMP.
Here, the analysis for Amendment 7 showed a projected net benefit
of $18 million over the ten-year rebuilding period. AFM insists
that the Secretary put his thumb on the scale when conducting this
analysis, and that Amendment 7 therefore fails to satisfy the
national standards. Specifically, AFM charges that the Secretary
11
arbitrarily disregarded certain enforcement and compliance expenses
which, when properly included, would demonstrate that the likely
costs of Amendment 7 substantially exceed the likely benefits.
The Magnuson Act defines "optimum yield" as the amount of
fish which will secure the greatest overall benefit to the nation
based on the maximum sustainable yield from a fishery, as modified
by relevant economic, social, or ecological factors. See id. S
1802(21). The bedrock principle of National Standard 1 is that
conservation and resource management measures, such as Amendment 7,
"shall prevent overfishing while achieving, on a continuing basis,
the optimum yield from each fishery for the United States fishing
industry." Id. S 1851(a)(1). Relatedly, National Standard 7
requires that "[c]onservation and management measures shall, where
practicable, minimize costs and avoid unnecessary duplication."
Id. S 1851(a)(7). In pursuance of his statutory duty, see id. S
1851(b), the Secretary established regulatory guidelines to assure
that FMPs would be developed in accordance with these national
standards. See 50 C.F.R. pt. 602 (1995). The regulatory
guidelines make it plain that the agency should weigh the costs
associated with an FMP (including industry compliance and
enforcement costs) against the forecasted benefits. See id. S
602.17(b)(2)(vii), (d).
In this case, the Secretary excluded Coast Guard
enforcement costs from the calculus. AFM terms this exclusion
arbitrary, but the administrative record belies that
characterization. The Secretary specifically addressed this issue
12
and the documentation supporting the final rules contains a
rational explanation for his decision. Although the Coast Guard
estimated that Amendment 7 would increase enforcement costs by
approximately $20,800,000 per year, its estimate assumed sea-based
enforcement whereas Amendment 7, as drafted, relied primarily on
land-based enforcement through the notification and tracking
systems. See 61 Fed. Reg. at 27,719. Even if certain sea-based
costs occurred under Amendment 7, the Secretary explained, they
would not comprise increases in overall costs because they would
"actually represent programmatic improvements that could also be
expected to be made in the out years of [Amendment 5]." Id. For
this reason, the Secretary's cost/benefit analysis explicitly
assumed that Amendment 7 would not yield enforcement costs greater
than those which would have been borne under Amendment 5. See 61
Fed. Reg. at 27,719, & 27,722.
In our view, this explanation is sufficiently logical,
and sufficiently rooted in the record, to dispose of AFM's argument
concerning Coast Guard enforcement costs. It also answers AFM's
additional argument that the Secretary improperly excluded the
costs of industry compliance with Amendment 7. The Secretary's
assumption _ that compliance costs will not vary materially as
Moreover, as alluded to in agency correspondence and further
explicated during the informational hearing held by the district
court, the Secretary considered the Coast Guard's estimate to be
budgetary in nature and not rooted in cost increases which were
likely to accompany the implementation of Amendment 7. The
Secretary must be accorded some latitude to make such judgment
calls. Cf. Sierra Club, 976 F.2d at 771.
13
between Amendment 5 and Amendment 7 _ flows rationally from
Amendment 7's retention of the enforcement mechanism established
under Amendment 5. See 50 C.F.R. S 651.29. Consequently, since
Amendment 7 does not alter the taxonomy that determines which
vessels will require VTS installations, AFM's claim that the new
regulation fails to account for added VTS-related costs lacks
force.
To recapitulate, the record reveals that the Secretary
carefully considered the enforcement measures associated with
Amendment 7 and, consistent with the evidence before him, concluded
(1) that the Coast Guard estimate was largely a figment of
bureaucratic imagination which did not track the actual enforcement
mechanism needed for the FMP, and therefore did not warrant
inclusion in the calculus of likely costs and benefits, and (2)
that compliance costs for the fishing industry would remain roughly
the same under Amendment 7. Whether or not we, if writing on a
pristine page, would have reached the same set of conclusions is
not the issue. What matters is that the administrative judgment,
right or wrong, derives from the record, possesses a rational
basis, and evinces no mistake of law. Consequently, it merits our
approbation. See State Farm, 463 U.S. at 43; Kreps, 563 F.2d at
1056.
The sockdolager, of course, is the enormous difficulty of
estimating enforcement costs in advance. Administrative
The agency discussed this difficulty in the final
environmental impact statement and noted that it was compounded
14
decisionmaking is not an exact science, and judicial review must
recognize that some arbitrariness is inherent in the exercise of
discretion amid uncertainty. Accordingly, courts reviewing this
type of administrative decision must leave room for a certain
amount of play in the joints. See Fisherman's Dock, 75 F.3d at
171-72; Alaska Factory Trawler Ass'n v. Baldridge, 831 F.2d 1456,
1460 (9th Cir. 1987) (per curiam). Here, the reasons offered to
explain the Secretary's determination that Amendment 7 is
consistent with the national standards reflect an understanding of
analytical factors and constitute a rational exercise of
deliberative decisionmaking. Hence, we cannot say that this
determination offends the applicable standard of review.
V. CLAIMS IMPLICATING THE REGULATORY FLEXIBILITY ACT
An FMP (or a plan amendment) promulgated pursuant to the
Magnuson Act must be consistent with the RFA. See 16 U.S.C. SS
1854(a)(1)(B), 1855(e). AFM next charges that the Secretary failed
to meet this obligation when promulgating Amendment 7.
Some background may prove helpful. Congress enacted the
RFA to encourage administrative agencies to consider the potential
impact of nascent federal regulations on small businesses. See
Pub. L. No. 96-354, S 2(b), 94 Stat. 1164, 1165 (1980) (statement
of purpose); see generally Paul R. Verkuil, A Critical Guide to the
Regulatory Flexibility Act, 1982 Duke L.J. 213, 215-26 (1982).
Under the RFA, an agency that publishes a notice of proposed
here because enforcement resources are shared among several
management plans.
15
rulemaking must prepare an initial regulatory flexibility analysis
(IRFA) describing the effect of the proposed rule on small
businesses and discussing alternatives that might minimize adverse
economic consequences. See 5 U.S.C. S 603. When promulgating a
final rule, the agency not only must prepare a final regulatory
flexibility analysis (FRFA) but also must make copies available to
members of the public and publish directions for obtaining such
copies. See id. S 604.
The Secretary promulgated Amendment 7 on May 31, 1996.
At that time, the law expressly prohibited judicial review of
agency compliance with sections 603 and 604. See id. S 611; see
also Thompson v. Clark, 741 F.2d 401, 404-05 (D.C. Cir. 1984).
Approximately two months earlier, however, Congress had amended the
RFA by enacting the Small Business Regulatory Enforcement Fairness
Act (SBREFA), Pub. L. No. 104-121, tit. II, 110 Stat. 857, 864-68
(1996). The 1996 Amendments reshaped the contours of the mandated
flexibility analysis and provided for judicial review of the
agency's product. See id. SS 241, 242, 110 Stat. at 864-66
(codified as amended at 5 U.S.C. SS 604(a), 611(a)(1) (Supp.
1997)). Because Congress delayed the effective date of these
amendments until ninety days after passage, see id. S 245, 110
Stat. at 868, they were not in effect when the Secretary
promulgated Amendment 7.
A. Judicial Review.
The threshold question is whether we have jurisdiction to
review AFM's claim under the RFA. This question depends on whether
16
the judicial review provision contained in the 1996 Amendments
applies retrospectively.
AFM argues that the judicial review provision should be
accorded retroactive application under Landgraf v. USI Film Prods. ,
511 U.S. 244 (1994). Judge Hornby concluded otherwise, remarking
the absence of any express legislative intent to apply the SBREFA
retroactively, and reasoning that, inasmuch as the 1996 Amendments
were "one legislative package," "[i]t would be anomalous to apply
the judicial review portion of the 1996 amendments to past agency
actions but at the same time not apply the substance of those
amendments." Associated Fisheries, 954 F. Supp. at 387.
The Supreme Court decision in Landgraf and, more
recently, the decisions in Lindh v. Murphy, 117 S. Ct. 2059 (1997),
and Hughes Aircraft Co. v. United States, 117 S. Ct. 1871 (1997),
provide a roadmap for deciding questions of retroactivity. The
roadmap is not easy to use, and in this case the guideposts point
in more than one direction. On one hand, the delayed effective
date points toward prospective application, see Wright v. FEMA, 913
F.2d 1566, 1572 & n.13 (11th Cir. 1990); Criger v. Becton, 902 F.2d
1348, 1351 (8th Cir. 1990), and the legislative history of the 1996
Amendments points the same way, see 142 Cong. Rec. E571, E574
(daily ed. Apr. 19, 1996) (statement of Rep. Hyde) (twice
indicating that judicial review would be available for rules
promulgated after the effective date). On the other hand, the new
judicial review provision does not affect substantive rights but
merely confers jurisdiction, and courts often give retroactive
17
effect to such statutes. See Landgraf, 511 U.S. at 274; but see
Hughes Aircraft , 117 S. Ct. at 1878 (drawing a distinction between
an amendment which merely allocates jurisdiction among fora and one
which creates jurisdiction where none previously existed, and
stating that the latter is subject to the presumption against
retroactivity). Moreover, the Third Circuit, contradicting Judge
Hornby's "one legislative package" rationale, recently held that
the 1996 Amendments were severable and that the judicial review
provision could be applied to a legislative rule promulgated before
their effective date. See Southwestern Pa. Growth Alliance v.
Browner, ___ F.3d ___, ___ (3d Cir. 1997) [No. 96-3364, 1997 WL
418420, at *15-16].
In the last analysis, it is unnecessary to decide the
retroactivity question here. We have long adhered to the practice
that, when an appeal presents a jurisdictional riddle, yet the
merits of the underlying issue are readily resolved in favor of the
party challenging jurisdiction, a court may sidestep the quandary
and simply dispose of the appeal on the merits. See United States
v. Stoller, 78 F.3d 710, 715 (1st Cir.) (collecting cases), cert.
denied, 117 S. Ct. 378 (1996). We follow that praxis today.
B. The Renovated Section 604.
By electing to reach the merits, we do not avoid the
Our task is made much easier because the lower court, though
concluding that the judicial review provision did not apply,
nonetheless proceeded to reach the merits and, in an alternate
holding, laid out a blueprint that makes very good sense. See
Associated Fisheries, 954 F. Supp. at 386-87. We commend Judge
Hornby for his prudent belt-and-suspenders approach.
18
question of retroactivity entirely. AFM contends that the
Secretary failed to comply with section 604 of the RFA both in its
original and renovated incarnations. As our next order of
business, we address whether the amended version applies
retroactively to this case.
We hold that the Secretary's compliance with the RFA
should be measured against the original requirements of section
604, that is, against the law as it read when the Secretary
promulgated Amendment 7. The 1996 Amendments substantively altered
section 604 by reformulating and augmenting the required content of
an FRFA. See 5 U.S.C.A. S 604(a) (Supp. 1997). The renovated
version now requires that an FRFA contain the following:
(1) a succinct statement of the need for,
and objectives of, the rule;
(2) a summary of the significant issues
raised by the public comments in response to
the initial regulatory flexibility analysis, a
summary of the assessment of the agency of
such issues, and a statement of any changes
made in the proposed rule as a result of such
comments;
(3) a description of and an estimate of
the number of small entities to which the rule
will apply or an explanation of why no such
estimate is available;
(4) a description of the projected
reporting, recordkeeping and other compliance
requirements of the rule, including an
estimate of the classes of small entities
which will be subject to the requirement and
the type of professional skills necessary for
preparation of the report or record; and
(5) a description of the steps the agency
has taken to minimize the significant economic
impact on small entities consistent with the
stated objectives of applicable statutes,
including a statement of the factual, policy,
and legal reasons for selecting the
alternative adopted in the final rule and why
each one of the other significant alternatives
19
to the rule considered by the agency which
affect the impact on small entities was
rejected.
5 U.S.C.A. S 604(a) (Supp. 1997).
A comparison of this iteration with the prior version, 5
U.S.C. S 604(a) (1994), reveals that subsections (3) and (4) are
brand new insofar as FRFAs are concerned, and that subsection (5),
modifying the former subsection (3), imposes more specific content
requirements. Since the Secretary completed the FRFA and
promulgated Amendment 7 before the effective date of the 1996
Amendments, applying the neoteric version of section 604 would
impose new strictures with respect to matters already completed,
and, thus, would contravene the rule against retroactivity. See
Landgraf, 511 U.S. at 280.
AFM offers only a weak rejoinder. It says that
retroactive application would not impose new duties because
Congress passed the 1996 Amendments before the agency prepared the
FRFA. That is so _ but it is beside the point. SBREFA's effective
date constitutes the cut-off point, and the Secretary had completed
and published both the FRFA and the final rule prior to that time.
Thus, imposing incremental requirements on these actions would have
an impermissible retroactive effect. See id.
C. The Original Section 604.
Having determined that the original version of section
604 governs our RFA-related review of Amendment 7, we turn to that
proviso. Under it, an FRFA must contain three elements:
(1) a succinct statement of the need for,
and the objectives of, the rule;
20
(2) a summary of the issues raised by the
public comments in response to the initial
regulatory flexibility analysis, a summary of
the assessment of the agency of such issues,
and a statement of any changes made in the
proposed rule as a result of such comments;
and
(3) a description of each of the
significant alternatives to the rule
consistent with the stated objectives of
applicable statutes and designed to minimize
any significant economic impact of the rule on
small entities which was considered by the
agency, and a statement of the reasons why
each one of such alternatives was rejected.
5 U.S.C. S 604(a) (1994). Congress designed this provision "to
assure that agencies engage in principled decision-making." 126
Cong. Rec. S21,448 & 21,459 (daily ed. Aug. 6, 1980). Legislative
history confirms that Congress, in enacting section 604, intended
to compel administrative agencies to explain the bases for their
actions and to ensure that alternative proposals receive serious
consideration at the agency level. See id. at S21,460; see also S.
Rep. No. 96-878, at 13-14 (1980), reprinted in 1980 U.S.C.C.A.N. at
2788, 2800-01.
Notwithstanding this intention, Congress emphasized that
the RFA should not be construed to undermine other legislatively
mandated goals. See 126 Cong. Rec. at S21,459-60; see also S. Rep.
RFA traveled a somewhat unconventional route in its march
towards passage. The Senate rejected the Senate bill, S. 299, as
reported by the Judiciary Committee, and adopted Senator Culver's
substitute bill. See 126 Cong. Rec. S21,449-51 (daily ed. Aug. 6,
1980). The House passed the bill without either amendment or
separate hearings, and endorsed the Senate's section-by-section
analysis. See Thompson, 741 F.2d at 406 (tracing legislative
history); see generally Verkuil, supra, at 226-27. We therefore
examine the substitute bill and its accompanying analysis as the
relevant guide to legislative intent.
21
No. 96-878, supra, at 10, 14, 1980 U.S.C.C.A.N. at 2797, 2801.
Thus, section 604 does not command an agency to take specific
substantive measures, but, rather, only to give explicit
consideration to less onerous options:
[T]his provision does not require that an
agency adopt a rule establishing differing
compliance standards, exemptions, or any other
alternative to the proposed rule. It requires
that an agency, having identified and analyzed
significant alternative proposals, describe
those it considered and explain its rejection
of any which, if adopted, would have been
substantially less burdensome on the specified
entities. Evidence that such an alternative
would not have accomplished the stated
objectives of the applicable statutes would
sufficiently justify the rejection of the
alternative.
126 Cong. Rec. at S21,459-60; see also S. Rep. No. 96-878, supra,
at 14, 1980 U.S.C.C.A.N. at 2801.
We think that a useful parallel can be drawn between RFA
S 604 and the National Environmental Protection Act, which furthers
a similar objective by requiring the preparation of an
environmental impact statement (EIS). See 42 U.S.C. S 4332 (1994).
The EIS requirement is meant to inform the agency and the public
about potential adverse ecological effects and about the
availability, if any, of less harmful alternatives prior to a final
decision on the fate of a particular project or rule. See
Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349
(1989); Valley Citizens for a Safe Env't v. Aldridge, 886 F.2d 458,
459-60 (1st Cir. 1989). In light of this purpose, courts do not
review challenges to the adequacy of an EIS under a standard of
mathematical exactitude but under a standard of reasonableness.
22
See Aldridge, 886 F.2d at 459; Conservation Law Found. of New Eng.,
Inc. v. Andrus, 623 F.2d 712, 719 (1st Cir. 1979). Recognizing the
analogous objectives of the two acts, we believe that the same rule
of reason should apply to judicial review of challenges under RFA
S 604. Thus, we proceed to examine whether the Secretary made a
reasonable, good-faith effort to carry out the mandate of section
604.
In this instance, NMFS prepared an FRFA consisting of its
initial workup (the IRFA) and its responses to submitted comments.
See 61 Fed. Reg. at 27,730-31; see also 59 Fed. Reg. 9872, 9883
(1994) (final rule, Amendment 5). AFM contends that this proffer
misfires for two reasons. First, AFM maintains that dressing up an
IRFA by tacking on responses to comments does not comply with the
statutory directive that the agency prepare an FRFA. Second, AFM
asserts that the Secretary failed sufficiently to identify, and
adequately to explain his rejection of, alternatives designed to
minimize deleterious economic effects on small businesses. We
address these objections in turn.
1.
We reject AFM's charge that the FRFA is inadequate on its
face. Section 604 prescribes the content of an FRFA, but it does
not demand a particular mode of presentation. To disregard
otherwise compliant analysis simply because it is not ensconced in
Since an EIS, unlike an FRFA, must contain a "detailed"
statement, 42 U.S.C. S 4332(2)(C), the analogy seems more than fair
to AFM.
23
a specific format would be inconsistent both with the RFA's
explicit authorization to avoid duplicative or unnecessary
analyses, see 5 U.S.C. S 605(a), and with the legislative
concession that an agency "may incorporate in a regulatory
flexibility analysis any data or analysis contained in any other
impact statement or analysis required by law," 126 Cong. Rec. at
S21,460. Accordingly, we hold that an agency can satisfy section
604 as long as it compiles a meaningful, easily understood analysis
that covers each requisite component dictated by the statute and
makes the end product _ whatever form it reasonably may take _
readily available to the public.
We do not mean to suggest that the combination of an IRFA
and responses to comments always _ or even often _ will pass
muster. But in the absence of a statutory or regulatory directive
specifying the form of document to be produced, the preparing
agency must be accorded ample latitude in making the choice. See
Town of Orangetown v. Gorsuch, 718 F.2d 29, 40 (2d Cir. 1983).
This precept is especially pertinent here, since the IRFA was
reasonably extensive, the wide range of comments anent the proposed
rule (many of which were submitted by small businesses or proxies
In pressing for a contrary result, the appellant relies
heavily on a letter written to NMFS by the Small Business
Administration (SBA) criticizing the agency's earlier efforts to
comply with the RFA in the development of Amendment 5. We give
little, if any, weight to the letter. For one thing, it is
directed only to compliance vis-a-vis Amendment 5. For another
thing, although the RFA authorizes the SBA to appear as an amicus
curiae, see 5 U.S.C.A. S 612(b) (1994 & Supp. 1997), the SBA has
chosen not to exercise that prerogative in respect to Amendment 7.
24
on their behalf) provided a natural forum for the Secretary in
striving to fulfill his section 604 obligation, and the agency
punctiliously complied with the notice requirements of RFA S
604(b). Under these circumstances, we conclude that the Secretary
acted within his proper province in designating the IRFA and the
responses to comments as the FRFA required by the statute.
2.
We turn now from form to substance and inspect the
adequacy of the FRFA's contents. We preface this discussion by
remarking two important considerations. First, section 604 does
not require that an FRFA address every alternative, but only that
it address significant ones. See 5 U.S.C. S 604(a)(3). Second,
the majority of commercial fishing vessels in the Northeast are
deemed small businesses for purposes of the RFA. See 5 U.S.C. S
601(3); 13 C.F.R. S 121.601 (1995); see also 61 Fed. Reg. at 27,731
(memorializing the Secretary's recognition of this reality). It
follows that any attempt to reduce the adverse economic impacts of
a regulation aimed at rebuilding stocks in this fishery is
necessarily an attempt to minimize the negative effects of the
regulation on small businesses. To that extent, Congress' desire
to have agencies write rules that distinguish (where desirable)
between big and small businesses has diminished relevance.
Citing 5 U.S.C. S 608(b), AFM argues that failure to prepare
a suitable FRFA caused Amendment 7 to lapse. This argument is
jejune. The lapse provision applies only to delayed compliance
following the promulgation of emergency rules. See Thompson, 741
F.2d at 407-08. That is not the situation here.
25
After poring over the FRFA, we conclude that the
Secretary fulfilled his substantive obligation under section 604.
The agency's reply to a comment which suggested that the final rule
violates the spirit of the RFA demonstrates a keen understanding of
the RFA's objectives and states the parameters of the Secretary's
obligation quite well:
The intent of the RFA is not to limit
regulations having adverse economic impacts on
small entities, rather the intent is to have
the agency focus special attention on the
impacts its proposed actions would have on
small entities, to disclose to the public
which alternatives it considered to lessen
adverse impacts, to require the agency to
consider public comments on impacts and
alternatives, and to require the agency to
state its reasons for not adopting an
alternative having less of an adverse impact
on small entities.
61 Fed. Reg. at 27,721. The analysis that the agency undertook is
fully consonant with this aspirational language.
To begin with, the IRFA (incorporated into the FRFA)
describes several possible alternatives and summarizes the
potential economic impact of each. The agency concluded that each
of these scenarios would have a greater negative impact on the
fishing industry than would the proposed rule. For example, the
agency rejected Alternative 1 (which included a ban on fishing with
certain gear until the spawning stock biomass reached a minimum
threshold level) because it would result in unacceptably high
levels of foregone income; it rejected Alternative 2 (which
proposed closing half of certain fishing areas and placing
restrictions in open areas) on the basis that it would be massively
26
inefficient and would dramatically increase vessel operating costs;
and it rejected Alternative 4 (which favored a quota system) for
much the same reasons.
The responses to submitted comments (which also form a
part of the FRFA) discuss and dismiss additional alternatives. For
example, responding to a comment that characterized closures in the
Gulf of Maine as detrimental to the industry, NMFS explained that
this was a temporary default measure to reduce ichthyic mortality
in situations where DAS reductions were insufficient. In that
regard, the FRFA noted that the Council had considered reducing DAS
allotments but declined to pursue that alternative after receiving
industry comment indicating a preference for flexibility. See 61
Fed. Reg. at 27,714-15. By like token, the agency explicated its
rejection of the status quo alternative, reiterating that Amendment
5 had been conceived as a means of arresting the decline in
spawning stock biomass, whereas Amendment 7 responded to a new,
emerging need and purposed to rebuild the biomass to levels which
would ensure stability. See id. at 27,721. The agency also
explained why some DAS exemptions under the status quo alternative,
which had the capacity partially to alleviate burdens on small
vessels, could not be retained under the more rigorous conservation
goals of Amendment 7. See id. at 27,715.
We think it is noteworthy, too, that the RFA identifies
steps taken for the express purpose of mitigating adverse economic
impacts on small fishing businesses. In this vein, the Secretary
eliminated a provision requiring layover days, thereby easing the
27
concerns of smaller vessels (which are more sensitive to inclement
weather). See 61 Fed. Reg. at 27,717. Similarly, the Secretary
phased in the DAS reduction schedule over two years instead of one
because, though conservationists recommended an 80 percent
reduction in mortality rates, the Secretary feared that vessels
could not financially weather a DAS reduction greater than 50
percent. The Secretary also moved to establish a vessel buyout
program reducing the socioeconomic burden on small entities. See
id. at 27,731.
We think that these selected examples convey the flavor
of the FRFA as a whole. The point is not whether the Secretary's
judgments are beyond reproach, but whether he made a reasonable,
good-faith effort to canvass major options and weigh their probable
effects. Here, the record reveals that the Secretary explicitly
considered numerous alternatives, exhibited a fair degree of
sensitivity concerning the need to alleviate the regulatory burden
on small entities within the fishing industry, adopted some
salutary measures designed to ease that burden, and satisfactorily
explained his reasons for rejecting others. The fact that AFM has
pointed to no significant alternative that escaped the Secretary's
notice attests to the thoroughness of the Secretary's efforts.
Because the Secretary's specification and discussion of significant
alternatives was reasonable, it fulfilled the substantive
requirements of section 604.
AFM makes one last-ditch argument in respect to section
604. It carps that the Secretary failed to develop an alternative
28
that substantially lessens the economic impact on small entities.
This puts the catch before the cast and, in the bargain, confuses
what the fishermen desire with what the statute obliges the
Secretary to do. An adequate discussion of alternatives in an FRFA
is context-specific. Of necessity, given the distressed condition
of groundfish stocks in this fishery, any alternative consistent
with the Secretary's conservation mandate under the Magnuson Act
will produce economic hardships for the industry. The FRFA reveals
that the Secretary assessed the potential impact of Amendment 7 on
small businesses, mulled other options in good faith, and sought to
strike the best available balance between conservation goals and
the legitimate concerns of the fishing community. No more is
exigible.
D. Section 609.
Section 609 of the RFA, 5 U.S.C. S 609, directs agencies
to assure that small entities are given an opportunity to
participate in the rulemaking process for any rule that is likely
to produce significant economic impacts. AFM claims that the
Secretary improperly limited participation in the process and
failed to provide adequate assistance to small entities in
The 1996 Amendments provide that agency compliance with
section 609 is subject to judicial review in conjunction with
judicial review of challenges under amended section 604. See 5
U.S.C.A. S 609 (Supp. 1997). Noting that the substantive
alterations to section 609 effected by the 1996 Amendments are of
little significance to this appeal, AFM does not pursue its
retroactivity argument with regard to section 609. Accordingly, we
test compliance against the language of the provision as it stood
on May 31, 1996 (the date the Secretary promulgated Amendment 7).
29
evaluating agency reports. We do not agree.
While section 609 instructs the Secretary to assure
participation, the method and manner of doing so is left primarily
to the Secretary's sound discretion. In this situation, we are
satisfied that the Secretary provided adequate participatory
opportunities for small businesses.
Council meetings were open to all interested parties and
were well-attended. Public hearings were held in six states.
Scientific data was broadly disseminated through open workshops and
otherwise. See, e.g., 61 Fed. Reg. at 27,714 & 27,720 & 27,723.
Several representatives of small entities participated in a
regional stock assessment workshop, at which scientific data was
presented and peer-reviewed. The nature and volume of the
submitted comments is emblematic of a very high level of public
participation. Furthermore, the substance of the comments leaves
no doubt but that small fishing businesses were intimately familiar
with the crisis and were well aware of the potential significance
of the management efforts that were being studied. See 61 Fed.
Reg. at 27,712-29.
To be sure, the development of Amendment 7 involved
daunting scientific complexities. That stems from the intrinsic
nature of the problem, not from some fault on the Secretary's part.
Since the Secretary provided repeated and varied opportunities for
meaningful participation by small entities, he met the relatively
modest demands that section 609 imposes.
The complaint that the Secretary did too little to assist
30
small entities wishing to participate in the process is equally
unavailing. Section 609 does not mandate specific types of
assistance. Rather, it offers a list of suggested techniques to
assure participation. The legislative history confirms the
purport of the statutory language; agencies have the discretion to
select among various methods of outreach. See 126 Cong. Rec. at
S21,460. Here, the record discloses that the Secretary handled the
matter in a perfectly reasonable way.
VI. CONCLUSION
To sum up, it is evident that rapidly deteriorating
conditions required the Secretary to fish in troubled waters. The
immediacy of the need to rebuild groundfish stocks left him no easy
way out. In the absence of a perfect (or even near-perfect)
solution, he reasoned his way to a decision that balanced the
significant adverse impacts that Amendment 7 would have on the
In pertinent part, the statute directs that the promulgating
agency
shall assure that small entities have been
given an opportunity to participate in the
rulemaking for the rule through techniques
such as _
(1) the inclusion in an advanced
notice of proposed rulemaking, if
issued, of a statement that the
proposed rule may have a significant
economic effect on a substantial
number of small entities;
. . .
(4) the conduct of open conferences
or public hearings concerning the
rule for small entities; and
. . . .
5 U.S.C. S 609 (1994).
31
industry against the severe depletion which plagued this fishery
and the legal obligation to develop an FMP that would eliminate
overfishing. Having carefully reviewed the administrative record,
we conclude that the product of his labors _ Amendment 7 _ is
rational and fairly supported by the record.
We need go no further. Although we are not unsympathetic
to the plight of the individuals who will suffer adverse
consequences from the choices embodied in the final rule, we must
uphold the balance struck by the Secretary among competing
concerns. See Strycker's Bay N'hood Council, Inc. v. Karlen, 444
U.S. 223, 227-28 (1980) (per curiam).
Affirmed.
32
Document Info
Docket Number： 97-1327
Filed Date： 9/16/1997
Precedential Status： Precedential
Modified Date： 9/21/2015