Pacific Dawn LLC v. Penny Pritzker , 831 F.3d 1166 ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PACIFIC DAWN LLC; JESSIE’S No. 14-15224
ILWACO FISH COMPANY,
Plaintiffs-Appellants, D.C. No.
3:13-cv-01419-TEH
and
OCEAN GOLD SEAFOODS, INC.; OPINION
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.
2 PACIFIC DAWN V. PRITZKER
Appeal from the United States District Court
for the Northern District of California
Thelton E. Henderson, Senior District Judge, Presiding
Argued and Submitted May 10, 2016
San Francisco, California
Filed August 3, 2016
Before: Sandra S. Ikuta, and Paul J. Watford, Circuit
Judges, and Derrick Kahala Watson,* District Judge.
Opinion by Judge Ikuta
SUMMARY**
Magnuson-Fishery Conservation and Management Act
The panel affirmed the district court’s summary judgment
in favor of the National Marine Fisheries Service and
intervenors in an action brought by a fish harvester and a fish
processor, who are subject to a fishery management program
that limits their share of the total allowable catch of Pacific
whiting, challenging a 2013 decision by the Service to
calculate the amount of their initial share based on their
*
The Honorable Derrick Kahala Watson, United States District Judge
for the District of Hawaii, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
PACIFIC DAWN V. PRITZKER 3
participation in the fishery prior to 2003 and 2004,
respectively.
The panel held that the Service’s 2013 decision was not
arbitrary or capricious because the Service considered the
required factors and made a reasonable decision to use the
2003 and 2004 dates.
The panel rejected plaintiffs’ claim that the Service’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 16 U.S.C.
§ 1853(b)(6)(A) of the Magnuson-Stevens Conservation and
Management Act. The panel held that the record makes clear
the Service considered “present participation,” but reasonably
gave it less weight than other factors.
The panel also rejected plaintiffs’ claim that the Service’s
2013 decision was arbitrary and capricious because it failed
to take into account dependence upon the fishery as required
by §§ 1853(b)(6)(B) and 1853a(c)(5)(A) of the Magnuson-
Stevens Act.
4 PACIFIC DAWN V. PRITZKER
COUNSEL
Tom Wyrwich (argued), Davis Wright Tremaine LLP,
Seattle, Washington; James P. Walsh and Gwen L. Fanger,
Davis Wright Tremaine LLP, San Francisco, California; for
Plaintiffs-Appellants.
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.
OPINION
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
PACIFIC DAWN V. PRITZKER 5
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. 16 U.S.C. § 1853(a). Among
other things, the plan must be “consistent with the national
standards” for fishery conservation and management. Id.
§ 1853(a)(1)(C). The National Standards are comprised of
ten broad guidelines, including the requirements that the
management measures “shall, where practicable, consider
efficiency in the utilization of fishery resources,” and “shall,
where practicable, minimize costs and avoid unnecessary
duplication.” Id. § 1851(5), (7).
Beginning in 1990, the councils were given the discretion
to use “a limited access system for the fishery in order to
achieve optimum yield.” Id. § 1853(b)(6). A limited access
system is defined as “a system that limits participation in a
fishery to those satisfying certain eligibility criteria or
requirements contained in a fishery management plan or
associated regulation.” Id. § 1802(27). It limits the number
of individuals who can enter and participate in the fisheries,
6 PACIFIC DAWN V. PRITZKER
and gives these favored participants “privileges to harvest a
specific quantity of fish.” Pac. Coast Fed’n of Fishermen’s
Ass’ns v. Blank, 693 F.3d 1084, 1087 (9th Cir. 2012). In
establishing a limited access system, councils must take into
account “present participation in the fishery,” id.
§ 1853(b)(6)(A), “historical fishing practices in, and
dependence on, the fishery,” id. § 1853(b)(6)(B), among other
considerations.1
1
16 U.S.C § 1853(b)(6) provides:
Any fishery management plan which is prepared by any
Council, or by the Secretary, with respect to any
fishery, may: . . .
(6) establish a limited access system for the fishery in
order to achieve optimum yield if, in developing such
system, the Council and the Secretary take into
account—
(A) present participation in the fishery;
(B) historical fishing practices in, and dependence on,
the fishery;
(C) the economics of the fishery;
(D) the capability of fishing vessels used in the fishery
to engage in other fisheries;
(E) the cultural and social framework relevant to the
fishery and any affected fishing communities;
(F) the fair and equitable distribution of access
privileges in the fishery; and
(G) any other relevant considerations.
PACIFIC DAWN V. PRITZKER 7
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 is through “individual fishing
quota” (IFQ), or quota shares. 16 U.S.C. § 1802(23), (26).2
In developing such a program, a council must consider
“current and historical harvests,” as well as “investments in,
and dependence on, the fishery,” among other things. Id.
§ 1853a(c)(5)(A).3
2
16 U.S.C. § 1802(23) provides:
The term “individual fishing quota” means a Federal
permit under a limited access system to harvest a
quantity of fish, expressed by a unit or units
representing a percentage of the total allowable catch of
a fishery that may be received or held for exclusive use
by a person. Such term does not include community
development quotas as described in section 1855(i) of
this title.
Section 1802(26) provides:
The term “limited access privilege” . . . means a Federal
permit, issued as part of a limited access system . . .
[and] includes an individual fishing quota.
3
16 U.S.C. § 1853a(c)(5) states, in pertinent part:
In developing a limited access privilege program to
harvest fish a Council or the Secretary shall– (A)
establish procedures to ensure fair and equitable initial
8 PACIFIC DAWN V. PRITZKER
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, id. § 1852(h)(1),
who has delegated her responsibilities under the Act to the
National Marine Fisheries Service (NMFS).4 The Secretary
must review the plan to determine whether it is consistent
with the National Standards and other statutory requirements,
id. § 1854(a)(1)(A), as well as publish notice of proposed
rulemaking in the Federal Register. This publication starts a
public notice and comment period. Id. § 1854(a)(1)(B). If
the Secretary approves the plan, the Secretary must review
the council’s proposed regulations for consistency with the
fishery management plan and other law. Id. § 1854(b). The
Secretary must publish the regulations as well for public
notice and comment. Id.
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
allocations, including consideration of–
(i) current and historical harvests;
(ii) employment in the harvesting and processing
sectors;
(iii) investments in, and dependence upon, the fishery;
and
(iv) the current and historical participation of fishing
communities.
4
NMFS is housed in the National Oceanic and Atmospheric
Administration in the Department of Commerce.
PACIFIC DAWN V. PRITZKER 9
fisheries seaward of those states. Id. § 1852(a)(1)(F). One of
those fisheries is the Pacific groundfish fishery, which
“extends 200 miles into the Pacific Ocean, along the coasts of
California, Oregon, and Washington, and includes more than
90 species of fish that dwell near the sea floor.” Pac. Coast
Fed’n of Fishermen’s Ass’ns, 693 F.3d at 1088. The Pacific
Council first developed the Pacific Coast Groundfish Fishery
Management Plan (Groundfish Management Plan) in 1982.
It covers Pacific whiting, the species of fish at issue here,
among other groundfish, and contains various goals and
objectives. One of those objectives is Objective 14, which
states that when the Council is “considering alternative
management measures to resolve an issue,” the Council
should “choose the measure that best accomplishes the
change with the least disruption of current domestic fishing
practices.”
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 limited number of such permits. In
addition, the Council established a short season for whiting
and allowed permitted vessels to harvest whiting only from
the time the season opened until the time the catch limit was
reached. This management structure led to a so-called
“derby-style fishery” and “a race for fish,” meaning that the
limited number of permit holders engaged in an intense,
concentrated effort at the beginning of the season because of
the potentially short window.
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
10 PACIFIC DAWN V. PRITZKER
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. 16 U.S.C. §§ 1853a, 1802(26). The Pacific Council
believed this trawl rationalization program would cause
participants in the fishery to spread their fishing throughout
the season and avoid the race for fish.
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
PACIFIC DAWN V. PRITZKER 11
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).
After a round of notice and comment, NMFS adopted
Amendment 20 to the Groundfish Management Plan and
promulgated implementing regulations. Amendments 20 and
21, Trawl Rationalization Program, 75 Fed. Reg. 60,868-01
(Oct. 1, 2010). The program allocated quota share to various
participants in the fishery based on activity during a
qualifying time period. The qualifying time period for
harvesters ended in 2003, id. at 60,959 (promulgated as
50 C.F.R. § 660.140(d)(8)(iv)(C)(2)), while the qualifying
time period for shoreside processors ended in 2004, id. at
60,955 (promulgated as 50 C.F.R. § 660.140(d)(8)(iv)(G)).
12 PACIFIC DAWN V. PRITZKER
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.” Id. Second, according to NMFS, “abandoning
the original control date would reduce the perceived fairness
of the program by rewarding those who fished speculatively
after the control date . . . at the expense of those who heeded
the control date.” Id.
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
PACIFIC DAWN V. PRITZKER 13
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. Id.
On March 28, 2013, NMFS issued a response to the
comments and the final rulemaking, which retained the
original control dates. Reconsideration of Allocation of
Whiting, 78 Fed. Reg. 18879-01 (Mar. 28, 2013). In sum,
NMFS concluded that “there are fundamental and compelling
reasons to maintain the existing initial allocations of
whiting,” including “not rewarding increases in harvesting or
processing that occurred after the end of the qualifying
periods,” maintaining the credibility of control dates “for this
and future rationalization programs,” and “minimiz[ing] the
concentration of harvester quota.” Id. at 18880. NMFS also
responded to the various comments in detail.
14 PACIFIC DAWN V. PRITZKER
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 28 U.S.C. § 1331,
and we have jurisdiction under 28 U.S.C. § 1291. We review
the district court’s grant of summary judgment de novo.
Fishermen’s Finest, Inc. v. Locke, 593 F.3d 886, 894 (9th Cir.
2010).
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). 16 U.S.C.
§ 1855(f). Judicial review under the APA allows courts to
“hold unlawful and set aside agency action, findings, and
conclusions found to be . . . arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.”
5 U.S.C. § 706(2)(A). To determine whether the agency’s
decision was arbitrary and capricious, the court must consider
whether the decision was based on a consideration of the
relevant factors required by the statute, Citizens to Preserve
Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971);
Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633,
PACIFIC DAWN V. PRITZKER 15
645–46 (1990), but “the court is not empowered to substitute
its judgment for that of the agency,” Overton Park, 401 U.S.
at 416; see also Alliance Against IFQs v. Brown, 84 F.3d 343,
345 (9th Cir. 1996).
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 Fishermen’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 § 1853(b)(6)(A)
16 PACIFIC DAWN V. PRITZKER
and dependence upon the fishery as required by
§§ 1853(b)(6)(B) and 1853a(c)(5)(A) of the Magnuson-
Stevens Act. We consider each of these arguments in turn.
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 § 1853(b)(6). We
see no basis for this claim. Rather, the record makes clear
that NMFS considered “present participation,” but reasonably
gave it less weight than other factors.
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 participation in determining the initial
allocation.” Id.
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
PACIFIC DAWN V. PRITZKER 17
stated that maintaining the qualifying period end dates of
2003 and 2004 “supports the Council’s and NMFS’ efforts to
reduce overcapitalization 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).5 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.” Id. at
18880. NMFS concluded that these “key factors” outweighed
“the reasons supporting alternatives that favor more recent
history.” Id.
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 sablefish during 1988,
1989, or 1990, a quota share based on the person’s “highest
total legal landings” during 1984 to 1990. Id. The plaintiffs
challenged these regulations, arguing that the 1990 end date
failed to take into account “present participation in the
5
“Overcapitalization” in this context means “too many resources
directed at too few fish.” Pac. Coast Fed’n of Fishermen’s Ass’ns,
693 F.3d at 1087.
18 PACIFIC DAWN V. PRITZKER
fishery,” 16 U.S.C. § 1853(b)(6)(A), because the final rule
was promulgated in 1993 and did not credit landings during
1991and 1992. Id. at 347. We upheld the Secretary’s
decision, in part because Congress listed “present
participation” as “only one of many factors which the Council
and the Secretary must ‘take into account.’” Id. We
concluded that the Secretary “had a good reason for
disregarding participation in the fishery during this lengthy
process, because the alternative would encourage the
speculative over-investment and overfishing which the
regulatory scheme was meant to restrain.” Id. at 347–48.
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
PACIFIC DAWN V. PRITZKER 19
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 minimal with respect to their impact
on the landing history based portion of the allocation.”)
According to Pacific Dawn, because NMFS used a 2003 and
6
Further, the plaintiffs do not argue that the development process was
unduly prolonged.
20 PACIFIC DAWN V. PRITZKER
2004 end date, 34 permit holders who no longer participate in
the fishery received a quota share, which constitutes almost
20 percent of the total number of permit holders that received
quota shares. Pacific Dawn argues that this means a
significant portion of the economic benefits of the trawl
rationalization program were given to permit owners who are
not participating in the fishery, which disadvantages current
participants who have made significant economic investments
in the fishery. NMFS’s failure to consider the significant
financial impact of its decision to retain the 2003 and 2004
end dates, Pacific Dawn argues, makes NMFS’s decision
arbitrary and capricious.
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. Id. at 18,884. Moreover,
NMFS noted that maintaining the 2003 and 2004 end dates
spread the benefits of the program more widely and avoided
concentrating quota share in the hands of a few participants.
Id. at 18,880. According to NMFS, this goal outweighed the
reasons for adopting alternatives “that favor more recent
history.” Id. Because NMFS considered this issue, weighed
PACIFIC DAWN V. PRITZKER 21
it against other factors that it must take into account, and
determined that the other factors outweighed Pacific Dawn’s
concerns, NMFS did not fail to “consider an important aspect
of the problem” or offer “an explanation for its decision that
runs counter to the evidence before the agency.” State Farm,
463 U.S. at 43. Because we cannot substitute our judgment
for the agency’s, Overton Park, 401 U.S. at 416, and must
only determine whether the agency “articulated a rational
connection between the facts found and the choice made,”
Yakutat, 407 F.3d at 1066, we conclude that NMFS’s
determination on this point was not arbitrary or capricious.
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. Id. NMFS
explained its reasoning and related its determination to other
statutory factors, such as “the economics of the fishery” and
a “fair and equitable distribution.” Id. at 18,889–91; see
16 U.S.C § 1853(b)(6). We therefore conclude that NMFS’s
22 PACIFIC DAWN V. PRITZKER
decision to apply the 2004 control date to processors was not
arbitrary or capricious.
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 16 U.S.C.
§§ 1853(b)(6)(B), 1853a(c)(5)(A). According to Pacific
Dawn, NMFS’s 2013 decision to maintain the 2003 and 2004
end dates did not give adequate weight to current dependence
on the fishery because it allocated quota shares to individuals
who had not necessarily fished in the past ten years and
therefore were not necessarily dependent on the fishery. This
error, Pacific Dawn contends, made NMFS’s 2013 decision
inconsistent with various provisions of the Magnuson-Stevens
Act, Objective 14 of the Groundfish Management Plan, and
NMFS’s past practices in other fisheries.
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.” Id. at 74.
Further, “[c]urrent harvests, historical harvests, levels of
investment over time, and levels of participation over time
are all aspects of dependence, as they can all be connected to
the processes that fishers and processors use to generate
income.” Id. In addition, the proposed rule explained that it
was not NMFS’s policy “to use recent fishing as the only
PACIFIC DAWN V. PRITZKER 23
reflection of dependence on the fishery,” nor was it NMFS’s
policy “to use recent fishing as the sole basis for determining
the allocation period; such a determination must always be
based on the specific facts each time allocations are
considered.” Id. at 75.
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.” Id. at 74–75. Second, while
recognizing that its chosen end date for harvesters would
result in allocating a small percentage of quota shares to
harvesters “without activity in the whiting fishery post 2003,”
NMFS stated that awarding quota share in this small number
of cases was outweighed by the need to serve other goals. Id.
at 75. After considering dependence upon the fishery and
weighing dependence against other factors, NMFS proposed
not to change its end dates because “the existing qualifying
periods for harvesters and processors result in a fair and
equitable allocation.” Id. at 74.
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
24 PACIFIC DAWN V. PRITZKER
alternatives considered were relatively modest overall and for
a majority of the participants.” Id. Moreover, NMFS
repeated its conclusion that there were “valid policy reasons
for excluding those years,” including the “fair and equitable”
distribution of access privileges. Id. at 18,885; see 16 U.S.C.
§ 1853(b)(6). Because NMFS adequately took into account
“dependence on the fishery” under § 1853(b)(6)(B) and
“investments in, and dependence upon, the fishery” under
§ 1853a(c)(5)(A)(iii), its decision was not inconsistent with
those statutory requirements. See Yakutat, 407 F.3d at 1066.
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.” 16 U.S.C. §§ 1851(a)(5), (7).
Pacific Dawn claims that NMFS’s allocation of quota shares
to individuals who are not dependent on the fishery results in
inefficiencies and creates additional costs and duplication of
expenses for current participants who must purchase or lease
additional quota shares. This claim is belied by the record;
NMFS reasonably concluded that the use of the 2003 and
2004 end dates was consistent with National Standards 5 and
7 because the trawl rationalization program as a whole
minimized costs and efficiently used fishery resources to the
7
The plaintiffs also argue that the agency violated National Standard 4,
which states that allocation of fishing privileges should be “fair and
equitable,” 16 U.S.C. § 1851(a)(4). But the plaintiffs did not raise that
argument to the district court in their motion for summary judgment or
opposition to the defendants’ motion for summary judgment, so the
argument was waived. See Lands Council v. McNair, 629 F.3d 1070,
1079 n.4 (9th Cir. 2010).
PACIFIC DAWN V. PRITZKER 25
extent practical. 78 Fed. Reg. 18,879-01, 18,888. According
to NMFS, Amendment 20 was designed to make the
groundfish trawl fishery economically efficient by reducing
excess capacity and levels of incidental catch, and the
selection of the 2003 and 2004 end dates would not affect
these efficiency gains. Id. NMFS acknowledged that the
initial allocation of quota shares could result in “transition
costs and disruption to participants’ operations,” but the new
costs would result in additional benefits to fishery
participants, and the transaction costs would decrease “as the
fishery moves to its long-term, more efficient state” because
“operations will move, or quota will be traded, to the ports in
which the highest profits can be earned.” Id.
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 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 shares. 78 Fed. Reg. 18,879-01, 18,881.
Maintaining the original control date in the final rule
“rewards investments and dependence consistent with the
26 PACIFIC DAWN V. PRITZKER
policies underlying announcing a control date, and minimizes
disruption to those participants that made business decisions
based on the assumption that quota formulas were unlikely to
include more recent years.” Id. at 18888. Because NMFS
reasonably determined that retaining the 2003 and 2004 end
dates would be the least disruptive to current fishing
practices, its conclusion was not inconsistent with Objective
14 of the Groundfish Management Plan.
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.” Id. at 18,880.
NMFS reasonably relied on its policy to review the facts of
each case “each time allocations are considered.” 78 Fed.
Reg. 72-01, 74. Its conclusion was thus not “arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A).
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.
PACIFIC DAWN V. PRITZKER 27
AFFIRMED.