The Boat Company v. Pritzker et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
THE BOAT COMPANY, )
)
Plaintiff, )
)
and )
)
THE FIXED GEAR ALLIANCE, )
)
Intervenor-Plaintiff, )
)
vs. )
)
PENNY PRITZKER, in her official capacity as )
Secretary of the United States Department of )
Commerce, et al., )
) No. 3:12-cv-0250-HRH
Defendants. )
__________________________________________)
O R D E R
Cross-Motions for Summary Judgment re The Boat Company’s Claims
Plaintiff moves for summary judgment.1 This motion is opposed and defendants
cross-move for summary judgment.2 Oral argument was requested and has been heard.
1Docket No. 35. Amicus curiae Oceana filed a brief in support of The Boat
Company’s motion for summary judgment at Docket No. 43, which the court has
considered.
2Docket No. 51.
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FACTS/BACKGROUND
The Parties
Plaintiff is The Boat Company, which is a non-profit corporation which operates
multi-day tours in southeast Alaska.3 Defendants are Penny Pritzker, in her official
capacity as Secretary of the United States Department of Commerce; James Basinger, in his
official capacity as the Alaska Regional Administrator for the National Marine Fisheries
Service; the National Marine Fisheries Service (NMFS);4 and the National Oceanic and
Atmospheric Administration (NOAA).5 Defendants manage domestic marine fisheries
pursuant to the Magnuson-Stevens Act, primarily through the regulation of commercial
fishing. 16 U.S.C. § 1801(b).
The Fishery Management Plan for Groundfish of the Gulf of Alaska
Plaintiff commenced this action to challenge a Final Rule promulgated by
defendants which implemented Amendment 76 to the Fishery Management Plan (FMP)
for Groundfish of the Gulf of Alaska (GOA). “The domestic groundfish fishery off Alaska
3Complaint for Declaratory and Injunctive Relief at 9, ¶ 22, Docket No. 1.
4Attached as an appendix to this order is a Table of Acronyms.
5NMFS is a sub-agency of NOAA, which is a branch of the Department of
Commerce.
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is the largest fishery by volume in the U.S.”6 The groundfish fisheries target pollock, cod,
various types of flatfish, sablefish, rockfish, and Atka mackerel. More than 90% of the
annual groundfish catch is taken by trawlers.7 Most trawlers are high horsepower vessels
between 80 and 150 feet in length that drag huge, conical nets through the water and across
the ocean floor.8 Fixed-gear vessels take the remainder of the annual catch. Many of these
vessels are shorter than 60 feet and use pots and longlines to catch crab and groundfish.9
The GOA Groundfish Fishery is managed by the Northern Pacific Fishery
Management Council (referred to herein as “the Council”).10 The Council developed11 the
6Admin. Rec. at REF_0008700, Vol. 4.
7Admin. Rec. at REF_0008714, Vol. 4.
8Admin. Rec. at REF_00000628-29 & 845-51, Vol. 2B.
9Admin. Rec. at RuleFMP_0006941 & 6943, Vol. 8.
10The Magnuson-Stevens Act created eight regional fishery management councils,
which are quasi-legislative bodies made up of federal, state, and territorial fishery
management officials, participants in commercial and recreational fisheries, and other
individuals with scientific experience or training in fishery conservation and management.
16 U.S.C. § 1852(a), (b). The Council is composed of 15 members; 11 voting and 4
non-voting. Seven of the voting members are appointed by the Secretary of Commerce
upon the recommendation of the governors of Alaska and Washington. There are four
mandatory voting members, one of whom is the Alaska Regional Director for NMFS.
11The Secretary of Commerce, acting through NMFS, reviews FMPs and any
amendments thereto that are developed by the Council. Natural Resources Defense
Council, Inc. v. Evans, 316 F.3d 904, 906 (9th Cir. 2003). If the FMP or amendment is
approved, “the Secretary publishes notice of the FMP or amendment in the Federal
Register and promulgates regulations implementing the plan after a 60–day statutory
(continued...)
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GOA Groundfish FMP12 which was implemented on December 1, 1978 and which has been
amended multiple times.
FMPs must address fifteen mandatory statutory criteria, including conservation,
catch limits, vessel types, data collection, bycatch reduction, economic impacts, and fish
habitat protection. 16 U.S.C. § 1853(a). FMPs may also address any of thirteen discretion-
ary criteria. 16 U.S.C. § 1853(b). “Any fishery management plan prepared, and any
regulation promulgated to implement any such plan” must also “be consistent with” the
Magnuson-Stevens Act’s ten “national standards for fishery conservation and manage-
ment[.]” 16 U.S.C. § 1851(a). Of import here is National Standard 9, which was added to
the Magnuson-Stevens Act in 1996 when Congress enacted the Sustainable Fisheries Act,
Pub. L. No. 104-297, 110 Stat. 3559 (1996).
National Standard 9 provides that “[c]onservation and management measures shall,
to the extent practicable, (A) minimize bycatch and (B) to the extent bycatch cannot be
avoided, minimize the mortality of such bycatch.” 16 U.S.C. § 1851(a)(9). Bycatch is “fish
11(...continued)
comment period.”Id.
12The Secretary of Commerce, acting through NMFS, reviews FMPs and any
amendments thereto that are developed by the Council. Natural Resources Defense
Council, Inc. v. Evans, 316 F.3d 904, 906 (9th Cir. 2003). If the FMP or amendment is
approved, “the Secretary publishes notice of the FMP or amendment in the Federal
Register and promulgates regulations implementing the plan after a 60–day statutory
comment period.” Id.
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which are harvested in a fishery, but which are not sold or kept for personal use, and
includes economic discards and regulatory discards.” 16 U.S.C. § 1802(2). “Bycatch can,
in two ways, impede efforts to protect marine ecosystems and achieve sustainable fisheries
and the full benefits they can provide to the Nation.” 50 C.F.R. § 600.350(b).
First, bycatch can increase substantially the uncertainty
concerning total fishing-related mortality, which makes it more
difficult to assess the status of stocks, to set the appropriate OY
[optimum yield] and define overfishing levels, and to ensure
that OYs are attained and overfishing levels are not exceeded.
Second, bycatch may also preclude other more productive uses
of fishery resources.
Id. The Fisheries Act also required that the Secretary, “in conjunction with eight regional
councils, ... ‘establish a standardized reporting methodology to assess the amount and type
of bycatch’ in each fishery in each region.” Oceana, Inc. v. Locke, 670 F.3d 1238, 1239
(C.A.D.C. 2011) (quoting 16 U.S.C. § 1853(a)(11)). “The councils then use the reports to
develop policies to minimize bycatch and bycatch mortality.”13 Id.
13“For the BSAI and GOA fisheries as a whole, the annual discard rate for groundfish
[was] 7.0% in 2004,” which was approximately 39.6 million pounds. Admin. Rec. at
REF_0008210 & 0008230, Vol. 4. Trawlers are responsible for almost all Chinook salmon
bycatch, Admin. Rec. at REF_0007202, Vol. 3, and in 2010, the Council “determined that
levels of Chinook salmon PSC [prohibited species catch] in the pollock trawl fisheries in the
GOA ... were unacceptably high....” Admin. Rec. at REF_0012547, Vol. 6. Trawlers are also
responsible for most of the halibut bycatch in the GOA. 77 Fed. Reg. 15,194, 15,210 (March
14, 2012). Halibut bycatch in the GOA is approximately 2,000 metric tons per year. Admin.
Rec. at REF_539-40, Vol. 2B & REF_8748, Vol. 4.
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“Bycatch in the ... GOA groundfish fish[ery] is estimated through the Catch
Accounting System (CAS)....”14 The CAS is the NMFS Alaska Region’s standardized
bycatch reporting methodology.”15
In addition to the general requirements for an FMP, Section 313 of the Magnuson-
Stevens Act provides that the Council
may prepare ... a fisheries research plan for any fishery under
the Council’s jurisdiction except a salmon fishery which ...
(1) requires that observers be stationed on fishing vessels
engaged in the catching, taking, or harvesting of fish and on
United States fish processors fishing for or processing species
under the jurisdiction of the Council, including the Northern
Pacific halibut fishery, for the purpose of collecting data
necessary for the conservation, management, and scientific
understanding of any fisheries under the Council’s jurisdic-
tion;[16] and
(2) establishes a system ... of fees, which may vary by fishery,
management area, or observer coverage level, to pay for the
cost of implementing the plan.
16 U.S.C. § 1862(a).
Any FMP or amendment prepared pursuant to Section 313
shall be reasonably calculated to--
14Admin. Rec. at RuleFMP_0004828, Vol. 7.
15Id.
16On-board observers collect biological data such as species composition, fish
weights and lengths, marine mammal and seabird interactions, and tissue samples.
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(A) gather reliable data, by stationing observers on all or a
statistically reliable sample of the fishing vessels and United
States fish processors included in the plan, necessary for the
conservation, management, and scientific understanding of the
fisheries covered by the plan;
(B) be fair and equitable to all vessels and processors;
(C) be consistent with applicable provisions of law; and
(D) take into consideration the operating requirements of the
fisheries and the safety of observers and fishermen.
16 U.S.C. § 1862(b). Any system of fees that the Council develops to pay for the observer
program must “be expressed as a fixed amount reflecting actual observer costs ... or a
percentage, not to exceed 2 percent, of the unprocessed ex-vessel value of fish and shellfish
harvested under the jurisdiction of the Council, including the Northern Pacific halibut
fishery[.]” 16 U.S.C. § 1862(b)(2)(E).
After the Council amends an FMP containing an observer program, it is forwarded
to the Secretary, who, acting through NMFS, then has 60 days to
review such plan or plan amendment and either (A) remand
such plan or plan amendment to the Council with comments
if it does not meet the requirements of this section, or (B)
publish in the Federal Register proposed regulations for
implementing such plan or plan amendment.
16 U.S.C. § 1862(c)(1). Any proposed amendment is then subject to a 60-day comment
period, during which time, “public hearing[s] in each State represented on the Council”
must be held “for the purpose of receiving public comments on the proposed regulations.”
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16 U.S.C. § 1862(c)(2). “Within 45 days of the close of the public comment period, the
Secretary, in consultation with the Council, shall analyze the public comment received and
publish final regulations for implementing such plan.” 16 U.S.C. § 1862(c)(3).
The 1990 Observer Program
In 1989, pursuant to Section 313 of the Magnuson-Stevens Act, the Secretary
authorized the first human observer program for the GOA Groundfish fishery by
approving Amendment 18 to the GOA Groundfish FMP.17 The observer program was then
implemented by NMFS in 1990.18 The “1990 Observer Plan based coverage levels on vessel
length and processing volume for catcher vessels and processors of BSAI and GOA
groundfish fisheries.”19 “Under the plan, groundfish vessels under 60‘ length overall
(LOA) [were] not required to carry observers; groundfish vessels longer than 60‘ but
shorter than 125‘ [were] required to carry observers 30% of their fishing time; and
groundfish vessels 125‘ and longer [were] required to carry observers 100% of their fishing
time.”20 “The original coverage requirements were changed to reduce coverage from 100%
17Admin. Rec. at RuleFMP_0006915, Vol. 8.
18Id.
19Id.
20Id.
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to 30% for vessels > 125‘ using pot gear to fish groundfish.”21 “Shoreside processors that
process[ed] 1,000 mt [metric tons] or more of groundfish in a calendar month [were]
required to have observers 100% of the days that they receive[d] or process[ed]
groundfish.”22 “[V]essels fishing for halibut ... [were] exempt from observer coverage.”23
In sum, the 1990 Observer Program divided the GOA groundfish fleet into three categories:
1) no coverage, 2) partial coverage, and 3) full coverage.
The 1990 Observer Program required that “vessels and processors ... arrange for
observer services from an observer provider certified by NMFS.”24 This was referred to as
the “pay-as-you-go” system.25 The “pay-as-you-go” system was intended to be an interim
system that would be replaced with a fee-based program under which “NMFS would
contract directly for observer services, thereby eliminating the potential for conflict of
interest generated by the direct contractual arrangement between the industry and the
observer providers, and establishing arrangements under which observer companies
21Id.
22Id.
23Admin. Rec. at RuleFMP_0004822, Vol. 7.
24Admin Rec. at RuleFMP_0006915, Vol. 8.
25Admin. Rec. at REF_0009517, Vol. 4.
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would be directly accountable to NMFS for data quality.”26 The “pay-as-you-go” system,
however, remained in effect until the Final Rule being challenged here was promulgated.
Restructure of the Observer Program
In December 2008, the Council voted to restructure the Observer Program. The
following problem statement was approved by the Council:
The North Pacific Groundfish Observer Program (Observer
Program) is widely recognized as a successful and essential
program for management of the North Pacific groundfish
fisheries. However, the Observer Program faces a number of
longstanding problems that result primarily from its current
structure. The existing program design is driven by coverage
levels based on vessel size that, for the most part, have been
established in regulation since 1990 and do not include
observer requirements for either the <60‘ groundfish sector or
the commercial halibut sector. The quality and utility of
observer data suffer because coverage levels and deployment
patterns cannot be effectively tailored to respond to current
and future management needs and circumstances of individual
fisheries. In addition, the existing program does not allow
fishery managers to control when and where observers are
deployed. This results in potential sources of bias that could
jeopardize the statistical reliability of catch and bycatch data.
The current program is also one in which many smaller vessels
face observer costs that are disproportionately high relative to
their gross earnings. Furthermore, the complicated and rigid
coverage rules have led to observer availability and coverage
compliance problems. The current funding mechanism and
program structure do not provide the flexibility to solve many
of these problems, nor do they allow the program to effectively
26Id. When the observer program was established in 1990, the Magnuson-Stevens
Act did not permit the collection of fees to pay for observer costs.
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respond to revolving and dynamic fisheries management
objectives.[27]
The Council developed five possible alternatives for restructuring the Observer
Program. Alternative 1 was the status quo alternative and the other four alternatives
restructured the Observer Program. “The four restructuring alternatives [were]
distinguished primarily by which fisheries or sectors would be included in the restructured
program and the structure of the fee mechanism used.”28 In June 2010, “[t]wo options were
... added ... which [were] applicable under any of the action alternatives....”29
On October 8, 2010, the Council adopted Alternative 3 with a modified version of
Option 2 as its preferred alternative.30 Under Alternative 3, “[a]ll vessels and processors
in the groundfish and halibut fisheries off Alaska would be placed into one of two
observer coverage categories.”31 These two categories were 1) “the ‘greater than or equal
to 100% (> 100%) coverage category” and 2) “the ‘less than 100 percent’ (<100%) coverage
category.”32 “Vessels and processors in the >100% coverage category would not be
27Admin. Rec. at RuleFMP_0006900, Vol. 8.
28Admin. Rec. at RuleFMP_0006925, Vol. 8.
29Admin. Rec. at NPFMC_0001076, Vol. 1.
30Admin. Rec. at RuleFMP_0006886, Vol. 7.
31Id.
32Id.
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included under the ex-vessel fee-based program and would continue to obtain observers
by contracting directly with observer providers (‘status quo’).”33 “Observer coverage for
vessels and processors in the <100% category would be managed under an ex-vessel fee
based observer service delivery model....”34 “The fee percentage would be set in regulation
at 1.25% of the ex-vessel value of groundfish and halibut.”35 “The selection of vessels and
processors that must carry an observer under the restructured program would be
determined through a sampling and deployment plan. Observer coverage rates (trips or
vessels) would not be in regulation.”36 Rather, “NMFS will release an observer report by
September 1 of each year. The report will contain the proposed stratum and coverage rates
for the deployment of observers in the following calendar year[.]”37 “NMFS also would
prepare an annual report on the observer program for presentation to the Council each
year.... As part of this annual report, the 1.25% fee percentage would be reviewed by the
33Id.
34Id.
35Id.
36Id.
37Admin. Rec. at RuleFMP_006888, Vol. 7.
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Council after completion of the second year of observer deployment in the restructured
program.”38
After the Council adopted its preferred alternative, NMFS prepared a draft
Environment Assessment/Regulatory Impact Review/Initial Regulatory Flexibility Analysis
(the EA). The EA was prepared, in part, to satisfy the requirements of the National
Environmental Policy Act (NEPA). NEPA “requires federal agencies to consider the
environmental impact of ‘major Federal actions significantly affecting the quality of the
human environment.’” Oceana, Inc. v. Locke, 831 F. Supp. 2d 95, 101 (D.D.C. 2011)
(quoting 42 U.S.C. § 4332(C)). “Under NEPA, an agency planning an action may use an
Environmental Assessment (“EA”) to determine whether the proposed action ... would
have a significant environmental impact.” Alaska v. Lubchenco, 723 F.3d 1043, 1048 (9th
Cir. 2013). An EA is a concise public document that briefly describes the proposal,
examines alternatives, considers environmental impacts, and provides a list of individuals
and agencies consulted. 40 C.F.R. § 1508.9. “If the agency concludes there is no significant
effect associated with the proposed project, it may issue a FONSI [finding of no significant
impact] in lieu of preparing an EIS [environmental impact statement].” Envtl. Protection
Information Ctr. v. U.S. Forest Srvc., 451 F.3d 1005, 1009 (9th Cir. 2006).
38Id.
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The EA prepared by NMFS in this case “examine[d] the environmental and
economic effects of ... Amendment 76 [to] the Fishery Management Plan for Groundfish of
the Gulf of Alaska to change the service delivery model for the ... Observer Program[].....”39
In the EA, NMFS considered the economic and socioeconomic effects of the preferred
Alternative 3 and explained that
the 1.25% fee was determined by balancing the need for
revenue to support the observer program with the need to
minimize impacts on the industry sectors included in the
restructured program. A 1.25% fee was estimated to generate
about $4.2 million, based on the mean estimate of average 2005
- 2008 revenues, and fund over 9,000 observer days. The
amount of revenue needed to support the proposed perfor-
mance standard (P2 coverage levels) of 30% observer coverage
is estimated as $3.8 million, which would fund 8,093 observer
days. ... Thus, the Council determined that a 1.25% fee would
fund the necessary observer days to reach the target perfor-
mance standard, with a small buffer equal to roughly 10% of
the estimated revenue....[40]
More specifically, in the EA, NMFS estimated that the 1.25% ex-vessel value fee would
generate approximately $4.2 million, which was sufficient revenue to fund 9,027 days of
observer coverage,41 “[a]ssuming that an observer day costs $467[.]”42
39Admin. Rec. at RuleFMP_0006521, Vol. 7.
40Admin. Rec. at RuleFMP_0006639, Vol. 7.
41Admin. Rec. at RuleFMP_0006746, Vol. 7.
42Admin. Rec. at RuleFMP_0006645, Vol. 7.
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On December 1, 2011, which was after the EA had been prepared, NMFS became
aware that the $467 observer day cost had increased. NMFS learned that, based on more
recent estimates, the cost of an observer day was now $872.43
On March 14, 2012, the Council published a scope notice, in which it advised that
the proposed Amendment 76 had been submitted to NMFS for review.44 The notice
explained that Amendment 76
add[s] a funding and deployment system for observer cover-
age to the existing North Pacific Groundfish Observer Program
... and amend[s] existing observer coverage requirements for
vessels and processing plants at 50 CFR 679.50. The new
funding and deployment system would allow NMFS to
determine when and where to deploy observers according to
management and conservation needs, with funds provided
through a system of fees based on the ex-vessel value of
groundfish and halibut in fisheries covered by the new system.
This action is necessary to resolve data quality and cost equity
concerns with the Observer Program’s existing funding and
deployment structure.[45]
The Notice provided for a 60-day comment period and NMFS held three public hearings
on the proposed changes.
43Admin. Rec. at Email_0022838, Vol. 1.
44Admin. Rec. at RuleFMP_0005892, Vol. 7.
45Admin. Rec. at RuleFMP_0005892, Vol. 7.
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On April 18, 2012, the Secretary published the proposed rule.46 The Executive
Summary of the proposed rule explained that the Observer Program would be divided
into two observer coverage categories–partial and full.... The
partial observer coverage category would include fishing
sectors (vessels and processors) that would not be required to
have an observer at all times and the full observer coverage
category would include fishing sectors required to have all of
their operations observed.[47]
The proposed rule “retain[ed] the existing funding and deployment system for operations
in the full coverage category. Vessels and processors in the partial coverage category
would pay to NMFS an observer fee based upon the ex-vessel value of fish landed ... for
their observer coverage[.]”48 “An observer fee equal to 1.25 percent of the fishery ex-vessel
value would be assessed on partial coverage category participants to fund their observer
coverage....”49 The Executive Summary for the proposed rule explained the annual
deployment process (ADP), stating that
NMFS would release a completed report by September 1 of
each year. The annual report would contain detailed informa-
tion on the financial aspects of the program and the annual
deployment plan–the proposed stratum and coverage rates for
the deployment of observers in the following calendar year.
46Admin. Rec. at RuleFMP_0006286, Vol. 7.
47Admin. Rec. at RuleFMP_0006287, Vol. 7.
48Id.
49Id.
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Prior to September, the Council may request its Observer
Advisory Committee, Groundfish Plan Teams, or Scientific and
Statistical Committee to review and comment on a draft of the
annual report.[50]
“The Council would not formally approve or disapprove the annual report, including the
deployment plan, but NMFS would consult with the Council on the annual report to
provide an opportunity for Council input.”51
On June 1, 2012, NMFS issued an FONSI because it “determined that Amendment[]
... 76 will not significantly impact the quality of the human environment.... In addition, all
beneficial and adverse impacts of the proposed action have been addressed to reach the
conclusion of no significant impacts. Accordingly, preparation of an EIS for this action is
not necessary.”52
The Draft 2013 ADP
In October 2012, NMFS published a draft 2013 Annual Deployment Plan (ADP).53
The draft ADP used data from 2011 as a proxy to determine observer coverage rates for
2013. Using this data, the draft ADP achieved an observer coverage rate for 2013 of 13%
50Admin. Rec. at RuleFMP_0006304, Vol. 7.
51Admin. Rec. at RuleFMP_0006305, Vol. 7.
52Admin. Rec. at RuleFMP_0006282, Vol. 7.
53Admin. Rec. at ADP_0000434, Vol. 1.
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for the partial coverage fleet.54 The data showed that in 2011, 147 vessels in the partial
coverage fleet of 187 vessels were observed and those vessels harvested 53,888.46 metric
tons of groundfish on observed days.55 The draft ADP called for 345 vessels out of 787
vessels in the restructured partial coverage fleet to be observed and it was estimated that
they would harvest 30,917.43 metric tons of groundfish on observer days.56
The Final Rule
On November 21, 2012, the Final Rule was published.57 The Executive Summary
explained that the Final Rule
will reduce bias in observer data, authorize the collection of
observer data in sectors that do not currently have any
observer coverage requirements, allow fishery managers to
provide observer coverage to respond to the management
needs and circumstances of individual fisheries, and assess a
broad-based fee which reflects the value a vessel or processor
extracts from the fishery.
First this final action expands the Observer Program to
include groundfish vessels less than 60 ft. LOA and halibut
vessels that have not been previously required to carry an
observer.
54Admin. Rec. at ADP_0000456, Vol. 1. In September 2012, NMFS contracted for
approximately 4,500 observer days at a cost of $4.4 million. Admin. Rec. at Email_0008553,
Vol. 1.
55Admin. Rec. at ADP_0000456, Vol. 1.
56Id.
57Admin. Rec. at RuleFMP_0004822, Vol. 7.
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Second, this final action restructures the observer
deployment system by establishing two observer coverage
categories: Partial and full. All groundfish and halibut vessels
and processors will be included in one of these two
categories.[58]
The Final Rule is codified primarily at Title 50, Part 679, of the Code of Federal
Regulations. Section 679.51(d) provides that owners of vessels and processors in the full
coverage category still “must arrange and pay for required observer coverage from a
permitted observer provider.” 50 C.F.R. § 679.51(d)(1). In other words, “the [F]inal [R]ule
does not change the observer deployment or funding system for operations in the full
coverage category.”59 But, the Final Rule does redefine the full coverage category to
include “catcher/processors, motherships, and catcher vessels participating in a catch share
program with a transferable prohibited species catch [PSC} ... limit.”60
“The partial observer coverage category includes fishing sectors ... that will not be
required to have an observer at all times.”61 “The partial coverage category includes
catcher vessels, shoreside processors, and stationary floating processors when not
58Admin. Rec. at RuleFMP_0004823, Vol. 7.
59Id.
60Id.
61Id.
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participating in a catch share program with a transferable PSC limit.”62 Vessels and
processors included in this category “will pay a fee ... to NMFS to fund the deployment of
observers” and NMFS will “contract[] with observer providers and determine[] when and
where observers are deployed, based on a scientifically sound sampling design.”63
The Final Rule divides the partial coverage group into two selection pools: a “vessel
selection” pool and a “trip selection” pool. 50 C.F.R. § 679.51(a)(1)(C) & (D). The “vessel
selection” pool consists of “[v]essels fishing hook-and-line and pot gear between 40 and
57.5 feet in length overall....”64 Observer coverage is assigned to vessels in this pool at
random if a vessel is selected. “NMFS w[ill] randomly choose a subset of vessels ... to
observe for a predetermined time period.65 “[T]he time period for which a selected vessel
would be required to carry an observer would be specified in the annual deployment
plan[.]”66
The “trip selection” pool includes all remaining vessels in the partial coverage
category. “Initially, trips taken by hook-and-line and pot vessels 57.5 feet LOA or greater
and all trawl vessels in the partial coverage category w[ill] comprise the trip selection pool.
62Id.
63Id.
64Admin. Rec. at ADP_0000440, Vol. 1.
65Admin. Rec. at RuleFMP_0006293, Vol. 7.
66Id.
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NMFS w[ill] further subdivide the trip selection pool into groups with similar traits
(sampling strata) and assign a specific sampling rate to each stratum to minimize the
variance, and thus increase certainty, in observer-derived catch estimates.”67 Observer
coverage in this pool is on a trip-by-trip basis.68 Vessels in the “trip selection” pool register
their planned fishing trips and NMFS randomly assigns observers to trips.69
The ADP process was described in the preamble to the Final Rule:
The annual deployment plan will describe the sampling design
NMFS uses to generate unbiased estimates of total and
retained catch, and catch composition in the groundfish and
halibut fisheries. The annual deployment plan also will
describe how NMFS will deploy observers to shoreside
processing plants or stationary floating processors in the
partial coverage category. Adjustments to the annual deploy-
ment plan would be made each year after a scientific evalua-
tion of data collected under the restructured Observer Program
to evaluate the impact of changes in observer deployment and
identify areas where improvements are needed to collect the
data necessary to conserve and manage the groundfish and
halibut fisheries.[70]
67Admin. Rec. at RuleFMP_0006292, Vol. 7.
68Id.
69Id.
70Admin. Rec. at RuleFMP_0004823, Vol. 7.
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NMFS explained that “[t]he annual deployment plan process provides flexibility to adjust
scientific sampling methods from one year to the next as new information is acquired and
management needs change.”71
One of the public comments NMFS addressed when the Final Rule was promulgated
was that the “rule[] and the analysis are not consistent with the requirements of section
303(a)(11) of the MSA that the FMPs establish a standardized bycatch reporting
methodology.”72 NMFS replied that the SBRM “is unaffected by this action and is outside
the scope of this rulemaking” but that the Final Rule will “improve NMFS’ ability to
estimate bycatch, strengthen the standardized bycatch reporting methodology, and support
the intent of section 303(a)(11) of the MSA.”73
The Final 2013 ADP
In January 2013, NMFS issued the final 2013 ADP, in which NMFS
made the following changes to the 2013 Draft ADP (Chapter 2):
1. NMFS increased the anticipated coverage rate
for the trip selection pool and decreased the
anticipated coverage rate for the vessel selection
pool. The vessel selection pool is anticipated to
have a deployment rate of approximately 11%,
although deviations from the rate [are] expected
71Admin. Rec. at RuleFMP_0004826, Vol. 7.
72Admin. Rec. at RuleFMP_0004828, Vol. 7.
73Id.
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due to differences in fishing effort between the
2011 landing information used in the simulations
and what will be realized in 2013. The rest of the
available coverage days will be placed into the
trip selection pool. NMFS anticipates that the
coverage rate in the trip selection pool will be
between 14-15%.
2. NMFS changed the deployment period for
vessels in the vessel selection pool to 2-months,
rather than 3-months.... A 2-month selection
period conforms more closely to fishery open-
ings than quarterly durations of coverage and
will improve data collection for the vessel selec-
tion pool.[74]
In January 2013, NMFS also issued a Supplementary Information Report (SIR) for
the 2103 ADP which “analyz[ed] the information contained in the 2013 ADP to determine
whether the EA should be supplemented.”75 The SIR noted that “[t]he 2013 ADP used
some information that was not available for the EA analysis.”76
Specifically, the ADP uses the federal start-up funds of $4.48
million ... as the amount of funding available for deploying
observers in 2013. In future years, the funds available for
observer coverage will be the amount collected from the fees.
The 2013 ADP uses the observer cost estimates from the
confidential contract information, the available federal funds,
and the 2011 number of vessel days at-sea as a proxy for the
anticipated 2013 vessel days at-sea, to estimate the total
74Admin. Rec. at ADP_0000031-32, Vol. 1.
75Admin. Rec. at ADP_0000020, Vol. 1.
76Admin. Rec. at ADP_0000021, Vo1. 1.
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coverage rate of 13 percent for the partial coverage
category....[77]
The SIR further noted that
this type of new information was anticipated in the design of
the new Observer Program and the ADP process is a flexible
process designed to adjust to new information. The preferred
Observer Program analyzed in the EA anticipated that NMFS
would use the best available information on funding, costs, and
vessel days at-sea in the ADP for the upcoming year. The EA
explains that the cost of observer coverage and the amount of
funding available for observer coverage would change over
time. The EA recognized that the coverage rate for any given
year would be dependent on available revenue and anticipated
costs and vessel days at-sea. The analysis recognized annual
changes in revenue and costs were inherent in the program
and therefore established the ADP process to ensure that the
best available information was used to deploy observers each
year.[78]
NMFS concluded that this new information about the cost of an observer day did “not
indicate that there are significant new circumstances or information relevant to environ-
mental concerns and bearing on the proposed action or its impacts. Therefore, supplemen-
tal NEPA documentation is not necessary to implement the 2013 ADP.”79
77Admin. Rec. at ADP_0000021-22, Vol. 1.
78Admin. Rec. at ADP_0000022, Vol. 1.
79Admin. Rec. at ADP_0000023, Vol. 1.
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This Litigation
The Boat Company commenced this action on December 21, 2012, and on December
26, 2012, filed a first amended complaint. The Boat Company’s primary contention is that
the Final Rule does not provide adequate means to monitor bycatch in the GOA
Groundfish Fishery.
In its first and second claims for relief, The Boat Company asserts that defendants
violated the Magnuson-Stevens Act and the APA because the CAS is an inadequate SBRM
and because defendants failed to consider the standards for SBRMs when they adopted the
Final Rule.80 In its third, fourth, and fifth claims for relief, the Boat Company asserts that
defendants violated the Magnuson-Stevens Act, the APA, and NEPA because the
restructured Observer Program failed to achieve NMFS’s 30% observer coverage
performance standard because of the increased cost for an observer day.81 In its sixth claim
for relief, The Boat Company alleges that it was arbitrary and capricious under NEPA and
the APA for NMFS to not supplement the EA when the proposed observer coverage levels
changed from 30% to 13%.82 In its seventh claim for relief, The Boat Company alleges that
80Complaint for Declaratory and Injunctive Relief at 23-24, ¶¶ 74-83, Docket No. 1.
81Id. at 25-27, ¶¶ 84-95.
82Id. at 27-28, ¶¶ 96-100.
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NMFS violated NEPA by not preparing an EIS.83 And, in its eighth claim for relief, The
Boat Company alleges an APA claim based on allegations that it was arbitrary and
capricious for NMFS to publish the 2013 ADP prior to the Final Rule being promulgated.84
The Boat Company requests that the court declare that “the Final Rule and the ADP
violated the Magnuson-Stevens Act and the APA and that the EA/FONSI violated NEPA
and the APA” and that the court “[r]emand the Final Rule and the EA/FONSI to [NMFS]
to develop a standardized bycatch reporting methodology, an adequate funding
mechanism for the observer program, and a NEPA analysis that complies with the court’s
order.”85
STANDARD OF REVIEW
Summary judgment is appropriate if “there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “In
reviewing an administrative agency decision, ‘summary judgment is an appropriate
mechanism for deciding the legal question of whether the agency could reasonably have
found the facts as it did.’” City & County of San Francisco v. United States, 130 F.3d 873,
877 (9th Cir. 1997) (quoting Occidental Eng’g Co. v. INS, 753 F.2d 766, 770 (9th Cir. 1985)).
83Id. at 28, ¶¶ 101-103.
84Id. at 28-29, ¶¶ 104-107.
85Id. at 29.
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“‘[T]he function of the district court is to determine whether or not as a matter of law the
evidence in the administrative record permitted the agency to make the decision it did.’”
Id. (quoting Occidental Eng’g Co., 753 F.2d at 769).
“Under section 305(f) of the Magnuson-Stevens Act, 16 U.S.C. § 1855(f), which
adopts the standard of review set forth in the APA at 5 U.S.C. § 706, regulations
promulgated by the Commerce Secretary may be set aside only if they are ‘arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law.’” Midwater
Trawlers Cooperative v. Dep’t of Commerce, 393 F.3d 994, 1002 (9th Cir. 2004) (quoting 5
U.S.C. § 706(2)(A)). “‘The arbitrary and capricious standard is narrow, and [the court] may
not substitute [its] judgment for that of the agency.’” Id. (quoting Washington v. Daley, 173
F.3d 1158, 1169 (9th Cir. 1999)). “Rather, in reviewing such regulations, [the court’s] only
task is to determine whether the Secretary ‘has considered the relevant factors and
articulated a rational connection between the facts found and the choices made.’” Id. at
1002-03 (quoting Daley, 173 F.3d. at 1069). “A regulation will be found to be arbitrary and
capricious ‘if the agency has relied on factors which Congress has 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 the evidence before the agency, or is so
implausible that it could not be ascribed to a difference in view or the product of agency
expertise.’” Southeastern Fisheries Ass’n, Inc. v. Mosbacher, 773 F. Supp. 435, 439 (D.D.C.
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1991) (quoting Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Auto. Ins. Co., 463
U.S. 29, 43 (1983)). “The court conducts [its] review with due deference to the Secretary’s
expertise in making fishery conservation and management policy decisions and will only
set aside the Secretary’s actions if the administrative record indicates [s]he has acted in
derogation of h[er] Congressionally delegated authority.” Connecticut v. Daley, 53 F.
Supp. 2d 147, 158 (D. Conn. 1999). “[I]n conducting this review, the court looks to the
National Standards for Fishery Conservation Management, established by Congress and
set forth at 16 U.S.C. § 1851(a), as a guide for determining whether the Secretary exercised
h[er] authority rationally and consistently within the parameters set by Congress.” Id.
The court also “review[s] substantive agency decisions concerning NEPA under the
‘arbitrary and capricious’ standard of the Administrative Procedure Act[.]” Assoc. of
Public Agency Customers, Inc. v. Bonneville Power Admin., 126 F.3d 1158, 1183 (9th Cir.
1997) (quoting 5 U.S.C. § 706(2)(A)). The court’s “task ‘is simply to ensure that the agency
has adequately considered and disclosed the environmental impact of its actions and that
its decision is not arbitrary or capricious.’” Id. (quoting Baltimore Gas & Elec. Co. v.
Natural Resources Defense Council, Inc., 462 U.S. 87, 97–98 (1983)). “Alternatively phrased,
the task is to ensure that the agency has taken a ‘hard look’ at the potential environmental
consequences of the proposed action.” Klamath-Siskiyou Wildlands Center v. Bureau of
Land Mgmt., 387 F.3d 989, 993 (9th Cir. 2004).
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DISCUSSION
NEPA Standing
Defendants argue that The Boat Company lacks prudential standing to bring its
NEPA claims. In an APA case such as this, “in addition to demonstrating constitutional
standing, a plaintiff ‘must assert an interest arguably within the zone of interests to be
protected or regulated by the statute or constitutional guarantee in question.’” Wild Fish
Conservancy v. Jewell, 730 F.3d 791, 796 (9th Cir. 2013) (quoting Nev. Land Action Ass’n
v. U.S. Forest Serv., 8 F.3d 713, 716 (9th Cir. 1993)). “The purpose of this prudential
standing requirement is ‘to exclude those plaintiffs whose suits are more likely to frustrate
rather than to further statutory objectives.’” Id. at 797 (quoting Nev. Land Action Ass’n,
8 F.3d at 716). “NEPA ... is directed at environmental concerns[.]” Ashley Creek Phosphate
Co. v. Norton, 420 F.3d 934, 939 (9th Cir. 2005). Purely economic or financial concerns do
not fall within NEPA’s zone of interest. Id. at 940.
Defendants argue that while The Boat Company describes itself as a non-profit with
a “charitable mission to protect and conserve southeast Alaska’s natural resources, in
particular its fisheries,”86 its actual interest in this litigation is purely economic in nature.
For example, The Boat Company’s chairman of the board avers that its “economic interests
are directly injured when there are reductions in the allowable recreational catch of fish
86Declaration of Mike McIntosh [etc.] at 2, ¶ 2, Docket No. 37.
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populations that” The Boat Company “targets” on its charter fishing trips.87 He also avers
that NMFS “does not have a handle on the true level of removals of halibut from its trawl
fisheries and the true extent to which those removals are responsible for significant
downstream economic losses.”88 He further avers that the
restructured observer program carries a substantial risk of
immediate and severe harm to the business, charitable, and
conservation interests of The Boat Company. The Service’s
deficient observer program harms our sport fishing business,
causes us to divert resources to advocating for adequate
bycatch monitoring and improving fish stocks, and frustrates
our broader mission of sustaining marine resources for all
Alaskans and particularly southeast Alaska’s coastal fishing
communities.[89]
Joel Hanson, who is a captain for The Boat Company, avers that
The Boat Company is being negatively affected by the observer
program restructuring because the decision impairs the ability
of NMFS to collect the bycatch data necessary to manage its
fisheries and to develop bycatch control measures necessary to
ensure the availability of halibut and chinook to The Boat
Company’s clients and other resource users. This in turn will
cause economic harm to The Boat Company because customer
satisfaction is linked to successful halibut and chinook catches
and to good referrals and strong bookings.[90]
87Id. at 10, ¶ 30.
88Id. at 14, ¶ 39.
89Id. at 14-15, ¶ 42.
90Declaration of Captain Joel Hanson [etc.] at 8, ¶ 20, Docket No. 38.
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“A plaintiff can, however, have standing under NEPA even if his or her interest is
primarily economic, as long as he or she also alleges an environmental interest or economic
injuries that are ‘causally related to an act within NEPA’s embrace.’” Ranchers Cattlemen
Action Legal Fund United Stockgrowers of Amer. v. U.S. Dep’t of Agric., 415 F.3d 1078,
1103 (9th Cir. 2005) (quoting Port of Astoria, Or. v. Hodel, 595 F.2d 467, 476 (9th Cir. 1979)).
While The Boat Company’s interest here is basically economic, it has also alleged an
environmental interest. The Boat Company alleges that its “‘mission is to assist and
support in protecting the natural environment of Southeast Alaska by engaging in and
sponsoring charitable, educational and scientific programs aimed at natural resource
conservation.’”91 The Boat Company also alleges that it is a not-for-profit company that
“reinvests all residual income beyond general overhead operating expenses back into
conservation, education, and other programs....”92 These allegations are sufficient to give
The Boat Company prudential standing under NEPA.
The NEPA Claims
The Boat Company contends that defendants violated NEPA because NMFS, when
preparing the EA, relied on a flawed cost assumption as to the cost of an observer day and
91Supplemental Declaration of Mike McIntosh at 2, ¶ 3 (quoting The Boat Company’s
Restated Articles of Incorporation), Exhibit 1, Plaintiff The Boat Company’s Reply in
Support of Motion for Summary Judgment and Opposition to Defendants’ Motion for
Summary Judgment, Docket No. 67.
92Id. at 2, ¶ 4.
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also failed to consider the possibility of a substantial reduction in the observer coverage
rate under the Council’s preferred alternative, a reduction that would greatly impact
defendants’ ability to manage bycatch. At the very least, The Boat Company contends that
NMFS should have prepared a supplemental EA when it became aware that the cost of an
observer day had significantly increased.
As stated in the EA, “[t]he mission of the observer program is to provide the highest
quality data to promote stewardship of the North Pacific living marine resources for the
benefit of the Nation.”93 “This goal is supported by objectives that include “[p]rovid[ing]
accurate and precise catch, bycatch, and biological information for conservation and
management of groundfish resources and the protection of marine mammals, seabirds, and
protected species.”94 Yet, in the EA, NMFS did not consider whether it would still be
getting high quality data if observer costs significantly increased and observer coverage
substantially decreased as a result. In the January 2013 SIR, NMFS acknowledges that
while the EA did not analyze the environmental impacts of
specific coverage rates, it did analyze the probable environ-
mental impacts of using a scientifically-based sampling design
to deploy observers, collecting observer data in sectors that
have never had any observer coverage requirements, and
allowing fishery managers to provide observer coverage to
93Admin. Rec. at RuleFMP_0006921, Vol. 8.
94Id.
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respond to the management needs and circumstances of
individual fisheries....[95]
It is well and good that NMFS and the Council used scientific-based sampling to design the
plan for deploying observers and that the Council and NMFS resolved some of the defects
with the 1990 Observer Program by adding coverage for vessels in the fleet that had not
previously carried observers and by allowing fishery managers flexibility in deploying
observers. But that does not mean that there is no problem here. What NMFS failed to do
was analyze the environmental impacts of specific observer coverage rates. While
flexibility in management is desirable, NMFS and the Council had to consider what would
happen to the quality of the data being gathered if observer coverage rates significantly
decreased from those projected or assumed in the EA. NMFS could not ignore the fact that
if costs of the observer program doubled without an offsetting change in the ex-vessel
value fee, the quantity of data being collected would decrease, and that this decrease could
lead to a reduction in the quality of the data being collected. At some point, coverage rates
will drop too low to generate quality data, but the EA is silent as to when this might occur.
The risk presented by the restructured Observer Program arises because, as NMFS
recognized, revenues generated in one year are employed to fund the program for the
following year, and those revenues may increase or decrease. Additionally, and as NMFS
also recognized, the costs of the Observer Program could (and did) increase from one year
95Admin. Rec. at ADP_000022, Vol. 1.
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to the next. The restructured Observer Program may be sufficiently robust that it could
survive one or both of increased costs and decreased revenues. But, the EA prepared by
NMFS did not consider that risk. NMFS did not consider whether the restructured
Observer Program would still yield reliable, high quality data given likely variations in
costs and revenues.
That the ADP process was intended to deal with these likely variations does not
resolve the problem. By the time the Final 2013 ADP was issued, NMFS knew that the cost
of an observer day had almost doubled and that the observer coverage rate for the partial
coverage fleet had dropped from the 30% projected in the EA to approximately 13%. Yet,
NMFS determined that it was not necessary to supplement the EA in order to implement
the 2013 ADP. This was arbitrary and capricious. The new observer cost information was
significant new information that required further NEPA analysis. When confronted with
a significant increase in costs and a substantial decrease in observer coverage, NMFS was
required to take a hard look at the effect that these changes would have on the reliability
of the data collected, which it did not do.
In sum, the EA prepared by NMFS was inadequate because it failed to address the
risk to data quality that may result from increased observer costs and decreased observer
coverage. Nowhere in the EA does NMFS discuss the rate at which observer coverage
would be too low to generate high quality, reliable data. NMFS also acted arbitrarily and
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capriciously by not supplementing the EA when it knew that the cost of an observer day
had substantially increased and the rate of observer coverage for the partial coverage fleet
had significantly decreased.96
Magnuson-Stevens Act Reduced Observer Coverage Claim
The Boat Company argues that NMFS acted arbitrarily and capriciously because
observer coverage under the Final Rule was substantially reduced from the status quo, a
reduction that will affect the statistical reliability of the observer data collected, particularly
bycatch data. The Boat Company argues that the record indicates that NMFS recognized
that for observer data to be statistically reliable, it must be collected at a coverage rate of
no less than 30%; yet, NMFS then adopted a Final Rule that provided for less than half that
much coverage.
Before the Final Rule was promulgated, NMFS knew that the cost of observers had
approximately doubled and NMFS had to know that this would mean that observer
96The Boat Company also argued that it was arbitrary and capricious for NMFS to
issue a FONSI, rather than preparing an EIS, because the proposed action had a significant
effect on the human environment. “[I]f there is uncertainty over whether [a] proposed
project may have a significant impact, including uncertainty caused by ... an inadequate
EA, the court should ordinarily remand for the agency to either prepare a revised EA or
reconsider whether an EIS is required.” Ctr. for Biological Diversity v. Nat'l Highway
Traffic Safety Admin., 538 F.3d 1172, 1179 (9th Cir. 2008). The court leaves it to the agency
to reconsider, once an adequate EA has been prepared, whether an EIS will be required.
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coverage for the partial coverage fleet would be significantly reduced. Section 313 of the
Magnuson-Stevens Act requires that the Observer Program
be reasonably calculated to--
(A) gather reliable data, by stationing observers on all or a
statistically reliable sample of the fishing vessels and United
States fish processors included in the plan....
16 U.S.C. § 1862(b)(1). There is no indication in the administrative record that NMFS or the
Council considered whether they would get reliable data at coverage levels below 30%.
If the quality of the data being collected ceases to be reliable, then the Observer Program
does not comply with Section 313 of the Magnuson-Stevens Act.
The court is mindful that defendants contend that NMFS never adopted a 30%
requirement for observer coverage and thus any argument that the Final Rule was arbitrary
and capricious because it did not achieve 30% observer coverage fails. Defendants contend
that in developing the restructured Observer Program, NMFS considered the inflexible
standard in the existing program which required that the partial coverage fleet carry
observers 30% of the time and discerned, based on published literature, that “the [observer]
coverage required for any ... performance standard varies widely between the species, in
a fishery, with common species requiring less coverage than rare species.”97 The literature
also revealed that the observer coverage levels necessary to reach certain performance
97Admin. Rec. at RuleFMP_0006709, Vol. 7.
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standards varied widely from study to study, even with respect to the same species.98
Defendants contend that NMFS and the Council, having considered the available scientific
information, reasonably decided against setting a specific across-the-board coverage level,
in part because there was no prior data available from either vessels under 60‘ LOA or the
halibut fleet.99 Defendants insist that the available data did not permit NMFS to
definitively link observer coverage rates to statistical performance standards.
Defendants also dispute that the EA states that a 30% coverage rate is the “minimum
standard” for observer coverage. The portion of the EA which refers to the 30% minimum
standard was discussing a deployment formula called “P2” in which defendants contend
fishery managers choose a given minimum coverage standard, for example 30%, and the
system100 works backwards from there to determine the number of observer days
required.101 Defendants contend that the Council did not choose the P2 deployment
formula, but rather chose the P1 deployment formula, under which fishery managers begin
98Id.
99Admin. Rec. at RuleFMP_0006716-17, Vol. 7.
100The “system” is presumably some kind of computer software that can run
calculations.
101Admin. Rec. at RuleFMP_0007092, Vol. 8.
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with a fixed budget amount and the system uses that amount to determine the number of
observer days.102
Contrary to defendants’ contention, the Council appears to have adopted the P2
deployment formula, which was based on the 30% coverage rate, as part of its preferred
alternative. The EA, in discussing why the Council chose the 1.25% ex-vessel value fee,
states that “[t]he amount of revenue needed to support the proposed performance standard
(P2 coverage levels) of 30% observer coverage is estimated at $3.8 million[.]”103 This seems
to indicate that the Council had selected a 30% performance standard, at least in the context
of determining what the ex-vessel value fee should be.
That said, whether the Council and NMFS selected a 30% performance standard
really makes little difference. The restructured Observer Program has costs and generates
revenue. These costs and revenues are going to fluctuate. The Final Rule fixed the ex-
vessel value fee at a rate that was projected to fund 30% coverage for the partial coverage
fleet, but in developing the Final Rule, as discussed above, NMFS and the Council did not
address the question of how much (or how little) coverage is necessary to obtain reliable
data. Defendants may be correct that there is no evidence that statistically reliable data is
achieved with a 30% performance standard and the restructured Observer Program clearly
102Id.
103Admin. Rec. at RuleFMP_0007018, Vol. 8.
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addressed some of the defects with the 1990 Observer Program. But, that does not
necessarily mean that the restructured Observer Program will generate statistically reliable
data at all cost/revenue levels. NMFS and the Council were not required to fix an observer
coverage rate for the partial coverage fleet, but NMFS and the Council were required by
the Magnuson-Stevens Act to develop an observer program that was reasonably calculated
to gather reliable data. It is not possible to determine whether the restructured Observer
Program does so because, as discussed above, NMFS and the Council never considered
what minimum level of coverage was necessary to ensure that the data being collected was
reliable.
The CAS/SBRM Claims
The Boat Company argues that defendants violated the Magnuson-Stevens Act and
the APA because the CAS, which The Boat Company contends was first adopted as the
SBRM for the GOA Groundfish Fishery in the Final Rule, is not an adequate SBRM. This
argument fails because the CAS was not first adopted as the SBRM in the Final Rule, but
rather was added to the GOA Groundfish FMP via rulemaking that concluded on October
6, 2010. See 75 Fed. Reg. 61,639. Any challenges to the adequacy of the CAS would have
had to have been brought within 30 days of that rulemaking.
The Boat Company also contends that defendants were required to consider the
standards for SBRMs when the Final Rule was adopted because the CAS and the Observer
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Program are deeply interrelated. The CAS “is described in Section 3.2.4.2 of ... the GOA
FMP.”104 The subsections to Section 3.2.4 of the GOA FMP “describe some of the
accountability measures in place for the GOA groundfish fishery.”105 Accountability
measures ensure that overfishing does not occur in the fishery.106 Subsection 3.2.4.1
describes the Observer Program and Subsection 3.2.4.2. describes the CAS. The CAS is
described as follows:
Each year, accounts are established in the Alaska Catch
Accounting System (CAS) that match[] the categories listed in
the annual harvest specification tables. A combination of
observer data, dealer landing reports, and at-sea production
reports are used to provide an integrated source for fisheries
monitoring and in-season decision making. The purposes of
the CAS are to: manage the groundfish fishery, establish
accounts that match the annual harvest specification tables,
allow catch reporting from multiple data sources without
duplication, debit reported catch from the appropriate account,
and estimate prohibited species catch and at-sea discards.[107]
104Admin. Rec. at RuleFMP_0004828, Vol. 7.
105Admin. Rec. at NPFMC_0003640, Vol. 2A.
106Id.
107Admin. Rec. at NPFMC_0003641, Vol. 2A.
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The Boat Company argues that because the CAS relies heavily on observer data,108
the SBRM for the GOA Groundfish Fishery should be understood to be a combination of
the CAS and the Observer Program. The Boat Company points out that even NMFS has
stated that “[t]he at-sea observer program has been a critical element of the bycatch
management regime for the Alaska groundfish fisheries for almost 30 years.” 68 Fed. Reg.
11,501, 11,510 (Mar. 11, 2003). Thus, The Boat Company argues that, contrary to NMFS’s
contention that the Final Rule had no impact on the SBRM for the GOA Groundfish fishery,
the Final Rule must meet the Magnuson-Stevens Act’s standards for SBRMs, which it does
not do.
The CAS and the Observer Program are plainly related. The latter feeds into the
former. The Observer Program provides data for the SBRM, but the CAS is the actual
methodology that NMFS uses to assess bycatch in the GOA Groundfish Fishery. The Boat
Company does not appear to take issue with the reporting methodology itself or even with
the reporting requirements that are set forth in 50 C.F.R. § 679.5.109 Rather, the crux of The
Boat Company’s challenge to the Final Rule concerns the substance of the restructured
108See Admin. Rec. at REF_0006418, Vol. 2B (“[m]ore than half of the estimates of
retained catch and groundfish discarded at sea are derived exclusively from observer data”
and “[e]stimates of at-sea discard of prohibited species catch (PSC) are based either entirely
on observer data, or if observer data are not available for a specific trip, on at-sea discard
rates from observer data that are applied to industry reports of retained catch”).
109These reporting requirements were largely unaffected by the Final Rule. The Final
Rule only revised paragraph (1)(7)(i) of the Section 679.5.
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Observer Program. The Boat Company’s legitimate concern is with the validity of the
bycatch data that is gathered and not with how the data is analyzed. That concern has been
addressed above in connection with The Boat Company’s claims regarding reduced
observer coverage. Nonetheless, the court will briefly address The Boat Company’s
arguments that the Final Rule failed to meet the standards for SBRMs.
The Boat Company first argues that the Final Rule fails to meet the standards for
SBRMs because it illegally gives NMFS total discretion to allocate observer resources each
year by deferring critical observer deployment decisions to the ADP process. This
argument fails because the observer allocation method established by the Final Rule is
rational, supported by the record, and not impermissibly discretionary. The Final Rule
establishes two observer categories (full and partial) and sub-categories (trip selection and
vessel selection) and explains which vessels fall within each. The fact that specific
assignment probabilities within these fixed categories and strata may fluctuate from year
to year based on real-time data does not make the allocation system arbitrarily discretion-
ary. Rather, this system will allow NMFS to “evaluate the impact of changes in observer
deployment and identify areas where improvements are needed to collect the data
necessary to conserve and manage the groundfish and halibut fisheries.”110 This will help
110Admin. Rec. at RuleFMP_0004823, Vol. 7.
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NMFS obtain “the best available scientific information....”111 In short, while the Final Rule
gives NMFS some discretion as to the deployment of observers in the partial coverage fleet,
it does not give NMFS unfettered discretion. Although NMFS does get to decide when and
where observers are deployed within the partial coverage fleet, it does so “based on a
scientifically sound sampling design.”112
The Boat Company next argues that the Final Rule fails to comply with the
standards for SBRMs because it improperly ties observer deployment to a funding
mechanism rather than a deliberate and rational determination of observer needs. But, a
linkage between funding and observer coverage is in fact contemplated by Section 313 of
the Magnuson-Stevens Act. Section 313 authorizes the Council to “establish[] a system ...
of fees, which may vary by fishery, management area, or observer coverage level, to pay
for the cost of implementing the plan.” 16 U.S.C. § 1862(a)(2). Section 313 further provides
that
[a]ny system of fees established ... shall ... be expressed as a
fixed amount reflecting actual observer costs as described in
subparagraph (A) or a percentage, not to exceed 2 percent, of
the unprocessed ex-vessel value of fish and shellfish harvested
under the jurisdiction of the Council, including the Northern
Pacific halibut fishery.
111Admin. Rec. at RuleFMP_0004826, Vol. 7.
112Admin. Rec. at RuleFMP_0004823, Vol. 7.
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Id. § 1862(b)(2)(E). Thus, it was not improper for defendants to link observer coverage to
a fee system.
The Boat Company also argues that the Final Rule does not comply with the
standards for SBRMs because it fails to establish a prioritization process for observer
deployment if there are funding constraints. But, the problem with the restructured
Observer Program is not so much of a revenue shortfall, but the potential for a decrease in
observer coverage, which in turn will affect the quality, or statistical reliability, of the data
being collected. That problem has been discussed above and it is the problem that
defendants will have to confront on remand.
Finally, The Boat Company argues that the Final Rule fails to comply with the
standards for SBRMs because NMFS failed to undertake an analysis of bycatch reporting
needs by specific gear types and bycatch species. The Boat Company contends that NMFS
ignored the national bycatch guidance which provides that “[a]n optimum allocation
scheme would entail identification of strata within which high variability in bycatch occurs
and placing additional sampling effort in these strata to minimize the variance for a
specified funding level.”113
The Boat Company’s assertion that NMFS did not consider specific observer
coverage needs by gear type or bycatch species is incorrect. The Final Rule divides vessels
113Admin. Rec. at ADP_0009739-9740, Vol. 4.
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into full and partial coverage categories based on gear type and the partial coverage
category is further divided into the vessel selection pool and the trip selection pool. The
trip selection pool is comprised mainly of trawl vessels and the vessel selection pool is
comprised mainly of hook-and-line vessels. Vessels in the trip selection pool have a higher
probability of being selected compared to vessels in the vessel selection pool, in order to
increase coverage in fisheries that have prohibited species catch limits.114 The type of sub-
stratification that The Boat Company is urging is known as “probabilities proportional to
size”, which NMFS did consider. In the 2013 ADP, NMFS noted that
[i]t may seem intuitive to adjust the probability of observer
coverage to reflect the relative size of the fleet, either in terms
of effort (trip length, vessel size) or impact to the marine
resources.... However in studies that have compared catch
estimates resulting from sampling with probabilities propor-
tional to size (PPS) to those obtained through equal probability
sampling (as proposed here), it has been found that equal
probability sampling was preferable given the relatively
marginal estimation benefits (if any) and greater logistical
complexities that arise from implementing PPS....[115]
The analytic problem with The Boat Company’s preferred approach arises whether
probability of observer assignment is varied by gear or by species:
if the population of ... a special species is large, and encounter
rates by fishers is common, then the bycatch amounts obtained
from observers deployed with equal probability sampling will
114Admin. Rec. at ADP_000031-32, Vol. 1.
115Admin. Rec. at ADP_000043, Vol. 1.
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be unbiased and sampling will be robust enough to capture
such events without compromising the catch estimates of
other, more abundant species. If however, the bycatch rates for
a special species are low, and/or fishing encounters infrequent,
then it is possible that a sample may not capture the rare event
or if the event is captured, the variance in the resulting catch
estimate may be high.[116]
NMFS reasonably concluded that the presently available data does not permit scientists to
know which of these situations will occur.117
RELIEF
Defendants violated NEPA and the Magnuson-Stevens Act by failing to consider the
point at which the observer coverage rate becomes too low to generate reliable, high
quality data. Thus, the court must determine what relief is appropriate. “A flawed rule
need not be vacated.” Calif. Communities Against Toxics v. U.S. E.P.A., 688 F.3d 989, 992
(9th Cir. 2012). “Vacatur is a species of equitable relief.” Sierra Forest Legacy v. Sherman,
951 F. Supp. 2d 1100, 1105 (E.D. Cal. 2013).
“Although the district court has power to do so, it is not
required to set aside every unlawful agency action. The court’s
decision to grant or deny injunctive or declaratory relief under
the APA is controlled by principles of equity.”
Id. (quoting Nat’l Wildlife Fed’n v. Espy, 45 F.3d 1337, 1343 (9th Cir. 1995) (emphasis
omitted)). “It is well established in this Circuit that a [c]ourt is not mechanically obligated
116Id.
117Id.
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to vacate an agency decision that it finds invalid.” Id. at 1105-06 (citing Humane Soc'y v.
Locke, 626 F.3d 1040, 1053 n.7 (9th Cir. 2010) (“stating that a court may remand without
vacatur to allow the agency action to remain in force until the action can be considered or
replaced”); Pit River Tribe v. U.S. Forest Serv., 615 F.3d 1069, 1080–81 (9th Cir. 2010) (“Our
courts have long held that relief for a NEPA violation is subject to equity principles.”);
Idaho Farm Bureau Fed'n v. Babbitt, 58 F.3d 1392, 1405 (9th Cir. 1995) (“[W]hen equity
demands, the regulation can be left in place while the agency follows the necessary
procedures.”); W. Oil and Gas Ass’n v. EPA, 633 F.2d 803, 813 (9th Cir. 1980) (“[G]uided
by authorities that recognize that a reviewing court has discretion to shape an equitable
remedy, we leave the challenged designations in effect.”). “Nothing in the Administrative
Procedure Act, which provides the basis for review of the” restructured Observer Program,
“restricts the range of equitable remedies available to the [c]ourt, including the issuance of
declaratory relief without setting aside the agency action.” Id. at 1106.
Here, vacature is neither necessary nor appropriate. Fishing for groundfish within
the GOA will go on, and this fishing must be observed, in part to address the serious
problem of bycatch. The Final Rule has been demonstrated to incorporate significant
improvements with respect to how observers are deployed, and those improvements
should be allowed to stand. However, the problem with the reliability of data as it relates
to increased observer costs and decreased observer coverage must be addressed. Thus, the
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appropriate remedy here is a remand for preparation of a supplemental EA. NMFS must
prepare a supplemental EA that addresses the question of when data being gathered by the
restructured Observer Program ceases to be reliable, or of high quality, because the rate of
observer coverage is too low.
CONCLUSION
The motions for summary judgment as to The Boat Company’s claims118 are granted
in part and denied in part. Summary judgment is granted in favor of The Boat Company
on its claims that defendants violated the Magnuson-Stevens Act, NEPA, and the APA by
failing to consider whether the data collected by observers would still be reliable in the face
of significant observer cost increases. Summary judgment is granted in favor of the
defendants on all of The Boat Company’s other claims. Defendants’ motion to strike119 is
also granted.
This matter is remanded to defendants to prepare a supplemental environmental
assessment consistent with this order and the law.
DATED at Anchorage, Alaska, this 6th day of August, 2014.
/s/ H. Russel Holland
United States District Judge
118Docket Nos. 35 & 51.
119Docket No. 49.
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TABLE OF ACRONYMS
ADP Annual Deployment Plan
APA Administrative Procedure Act
BSAI Bering Sea and Aleutian Islands
CAS Catch Accounting System
EA Environmental Assessment
EIS Environmental Impact Statement
FMP Fishery Management Plan
FONSI Finding of No Significant Impact
GOA Gulf of Alaska
LOA Length Overall
MSA Magnuson-Stevens Act
NEPA National Environmental Policy Act
NOAA National Oceanic and Atmospheric Administration
NMFS National Marine Fisheries Service
OY Optimum Yield
PPS probabilities proportional to size
PSC Prohibited Species Catch
SBRM Standardized Bycatch Reporting Methodology
SIR Supplementary Information Report
SSC Statistical and Scientific Committee for the Council
TAC Total Allowable Catch
TBC The Boat Company
Case 3:12-cv-00250-HRH Document 102 Filed 08/06/14 Page 49 of 49