West Coast groundfish lawsuit

8/20/2019 West Coast groundfish lawsuit

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EDWARD C. DUCKERS (SB #242113)[email protected] RIVES LLP Three Embarcadero Center, Suite 1120San Francisco, CA 94111Telephone: (415) 617-8900Facsimile: (415) 617-8907

Attorneys for PlaintiffsSea Princess, LLC; Pacific Choice Seafood Company;Pacific Fishing, LLC

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

EUREKA DIVISION

PACIFIC CHOICE SEAFOOD COMPANY;SEA PRINCESS, LLC; PACIFIC FISHING,LLC,

Plaintiffs,

v.

PENNY PRITZKER, U.S. SECRETARY OFCOMMERCE; NATIONAL MARINEFISHERIES SERVICE,

Defendants.

Case No.

COMPLAINT

(5 U.S.C. §§ 701–706; 16 U.S.C. §§ 1801–1891d; 42 U.S.C. § 4321–4370h)

Administrative Procedure Act Case

I. INTRODUCTION

1. In this action, Pacific Choice Seafood Company (“Pacific Choice”), Sea Princess,

LLC (“Sea Princess”), and Pacific Fishing, LLC (“Pacific Fishing”) (collectively, “Plaintiffs”)

challenge an unlawful federal fisheries management program that threatens the ongoing viability

of important West Coast fisheries that support jobs, facilities, fishermen, and businesses in

California, Oregon, and Washington.

2. The negative effects of Defendants’ unlawful actions have been and will continue

to be felt along the entire West Coast. As one specific example, the Northern California

commercial groundfish fishing industry faces possible extinction if Defendants’ unlawful actions

are allowed to continue. Eureka, California was once the epicenter of a thriving commercial

Case 1:15-cv-05572-NJV Document 1 Filed 12/04/15 Page 1 of 18


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groundfish fishery, with a multitude of fishing vessels delivering locally caught groundfish to

several shoreside processors. This led to development of bustling harbors, job growth in fishing

and processing, and growth in related industries such as ship repair, navigation, maintenance,

fueling, and transportation.

3. Today, as a result of various historical economic and management factors, there is

only one shoreside processing facility in Eureka—owned by Pacific Choice—that processes

groundfish year-round. More than half of the groundfish delivered to Pacific Choice come from

only four fishing vessels, all of which are owned by Pacific Fishing. Without the Eureka facility

and these four vessels, groundfish processing opportunities in Eureka would be severely

diminished.

4.

The unlawful actions challenged in this Complaint have substantial negative

impacts on Plaintiffs and seriously threaten the ongoing viability of the shoreside groundfish

fishery all along the West Coast. As set forth below, Defendants’ actions violate federal law and

should be vacated by this Court.

II. SUMMARY OF ACTION

5. Plaintiffs challenge decisions of the National Marine Fisheries Service (“NMFS”)

that establish and implement an individual transferable quota program for the Pacific Coast

groundfish limited-entry trawl fishery (“IFQ Program”). Specifically, Plaintiffs challenge:

a. NMFS’s approval of Amendments 20 and 21 to the Pacific Coast

Groundfish Fishery Management Plan (“FMP”);

b. NMFS’s final rule, 80 Fed. Reg. 69,138 (Nov. 9, 2015), and associated

regulations (“November 2015 Rule”);

c. NMFS’s final rule, 75 Fed. Reg. 78,344 (Dec. 15, 2010), and associated

regulations (“December 2010 Rule”); and

d. NMFS’s final rule, 75 Fed. Reg. 60,868 (Oct. 1, 2010), and associated

regulations (“October 2010 Rule”).1

1 The November 2015 Rule, the December 2010 Rule, and the October 2010 Rule are

collectively referred to in this Complaint as the “Regulations.” The Regulations are promulgated



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6. Among other things, the IFQ Program establishes a system of allocating, limiting,

and providing for transfers of quota shares (“QS”) in the West Coast non-whiting, shorebased

groundfish trawl fishery (the “Fishery”).2 As relevant to this action, the IFQ Program establishes

an aggregate limit on the amount of total QS, across all applicable species fished in the Fishery,

that a “person” may own and “control.”

7. “Control” is expansively defined in the Regulations and includes “the ability

through any means whatsoever to control or have a controlling influence over [an] entity to which

QS . . . is registered.” Under the Regulations, “control” and ownership of QS are also implied by

the ownership of an economic or financial interest in a separate entity that owns or controls QS.

The specific regulations governing ownership and “control,” for purposes of administering the

IFQ Program, are set forth at 50 C.F.R. § 660.140(d)(4) and are referred to in this Complaint

collectively as the “Control Rule.”

8. A fundamental problem with the Control Rule is that it imputes to shareholders,

and others deemed to have “control” (no matter how remote), the ownership and control of assets

(i.e., QS) that are separately owned by corporations or other entities, in a manner that is

incompatible with well-established principles of corporate and agency law.

9.

The IFQ Program establishes the aggregate control limit to be 2.7% of all QS held

by all permit holders in the Fishery (the “Aggregate Limit”). See 50 C.F.R. §

660.140(d)(4)(i)(C). Any “person” (as defined in the Regulations) whose ownership or “control”

(also as defined in the Regulations) of QS exceeds the Aggregate Limit must divest itself of QS

so as not to exceed the limit by no later than November 30, 2015. Any QS not divested is

revoked by NMFS.

10. The IFQ Program has not performed as NMFS intended. Since the IFQ Program

was initiated, utilization rates in the Fishery have not improved, costs to harvesters have

at 50 C.F.R. part 660 and implement the IFQ Program, which is specifically promulgated at 50C.F.R. § 660.140.

2 The “Fishery,” as referenced in this Complaint, does not include halibut or Pacific

whiting.



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dramatically increased, and gross proceeds have remained stagnant, and in some cases, decreased.

As a result of the IFQ Program, a significant amount of fishing effort has transferred out of

California, further threatening the viability of the Northern California groundfish fishery. Indeed,

NMFS itself recently published a report finding that the efficient and effective operation of the

Fishery is unduly burdened by elements of the IFQ Program, such as the Aggregate Limit.3 Full

divestiture, effective as of November 30, 2015, will exacerbate these problems on a large scale.

In short, as has now been acknowledged by some of its strongest original proponents, the IFQ

Program is an economic failure. The IFQ Program seriously threatens the viability of the Fishery

11. As set forth in more detail in this Complaint, the Regulations, and Amendments 20

and 21, violate the Administrative Procedure Act (“APA”) (5 U.S.C. §§ 701-706) and the

Magnuson-Stevens Fishery Conservation and Management Act (“Magnuson Act”) (16 U.S.C. §§

1801-1891d) because (a) the Control Rule unlawfully supplants well-established common and

statutory law without statutory authority to do so and is, therefore, ultra vires; (b) the Aggregate

Limit is not supported by a rational explanation based on sufficient record evidence, and is

arbitrary and capricious; (c) NMFS’s decision to force divestiture of QS without giving credit to

those who were allocated QS based on catch landing history before the IFQ Program was

implemented (i.e., “grandfathering”), and without adequate notice, is arbitrary and capricious; (d)

the Regulations do not comply with the Magnuson Act’s National Standards and provisions

governing limited access privilege programs (“LAPPs”); and (e) the November 2015 Rule is

arbitrary and capricious for the additional reason that NMFS unlawfully refused to postpone the

divestiture period until after the reallocation for widow rockfish.

12. The Regulations, and Amendments 20 and 21, also violate the National

Environmental Policy Act (“NEPA”) (42 U.S.C. § 4331-4370h) because NMFS (a) did not give

the effects of the action, including socio-economic effects, the required “hard look” analysis and

(b) did not evaluate a reasonable range of alternatives.

3 See Holland, D.S., and K. Norman. 2015. The Anatomy of a Multispecies Individual

Fishing Quota (IFQ) “Market” in Development. U.S. Dept. of Commerce, NOAA. NOAA

Technical Memorandum NMFS-F/SPO-158, p. 30.



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13. Plaintiffs respectfully request that the Court declare the Regulations, and

Amendments 20 and 21, unlawful, and vacate and remand the Regulations, and Amendments 20

and 21, to NMFS for further consideration in compliance with all applicable law.

III. PARTIES

14. Pacific Choice is an Oregon corporation with its principal place of business in

Eureka, California. Pacific Choice operates the only remaining seafood processing facility in

Eureka that processes groundfish year-round. Pacific Choice’s Eureka facility has been in

operation since the 1940s. Pacific Choice maintains a vested interest in the sound management of

the Fishery, and is regulated under, and adversely affected by, the IFQ Program. The ongoing

viability of its Eureka facility is seriously threatened by the IFQ Program.

15.

Sea Princess is an Oregon limited liability company (“LLC”) that owns a fishing

vessel that participates in the Fishery. Sea Princess maintains a vested interest in the sound

management of the Fishery, and is regulated under, and adversely affected by, the IFQ Program.

As a result of the IFQ Program, Sea Princess was forced to divest a significant amount of QS

before November 30, 2015.

16. Pacific Fishing is an Oregon LLC that owns, among other things, six separate

LLCs, including Sea Princess, each of which owns a vessel that participates in the Fishery. These

vessels fish in Washington, Oregon, and California, and deliver to processing plants in Northern

California and Oregon. Pacific Fishing maintains a vested interest in the sound management of

the Fishery, and is regulated under, and adversely affected by, the IFQ Program. Under the

Regulations, Pacific Fishing is deemed to own and control the QS owned by Sea Princess and the

other separate LLCs owned by Pacific Fishing, as well as by other entities. Pacific Fishing has

been forced to make business decisions that are contrary to its interests as a result of the

substantial amount of QS that is imputed to Pacific Fishing under the Regulations. The LLCs

owned by Pacific Fishing are also regulated under, and adversely affected by, the IFQ Program,

and they have been forced to divest QS as a result of the IFQ Program.

17. On or about June 26, 2013, Defendant Penny Pritzker was sworn in as the current

Secretary of the United States Department of Commerce. Penny Pritzker, in her official capacity



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as Secretary of Commerce, directs all business of the Department of Commerce, including

NMFS. In her official capacity as Secretary of Commerce, Penny Pritzker is responsible for

NMFS’s approval of Amendments 20 and 21 and promulgation of the Regulations, and for the

associated statutory violations alleged in this Complaint.

18. NMFS is an agency of the National Oceanic and Atmospheric Administration of

the United States Department of Commerce. NMFS has been delegated the responsibility for

administering the provisions of the Magnuson Act, including the implementation of LAPPs, such

as the IFQ Program. The authority delegated to NMFS to administer and to implement the

Magnuson Act is subject to, and must be compliant with, the APA, NEPA, and all other

applicable law.

IV. JURISDICTION AND VENUE

19. This Court has jurisdiction over this action pursuant to 5 U.S.C. §§ 701-706

(APA), 16 U.S.C. § 1855(f) (Magnuson Act), 28 U.S.C. § 1331 (federal question), 28 U.S.C. §

2201 (declaratory judgments), and 28 U.S.C. § 2202 (injunctive relief).

20. Venue lies properly in this judicial district under 28 U.S.C. § 1391(e) because

NMFS maintains an office in this district and because Pacific Choice resides in and has its

principle place of business in this district.

V. INTRADISTRICT ASSIGNMENT

21. Assignment to the Eureka Division of the Northern District of California is proper

because Pacific Choice resides in and has its principle place of business in Eureka, California.

VI. STATUTORY FRAMEWORK

22. The APA provides for judicial review of final agency action. 5 U.S.C. § 702. The

APA requires courts reviewing agency action to “hold unlawful and set aside [final] agency

action, findings, and conclusions” that, among other things, are “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law”; “in excess of statutory jurisdiction,

authority, or limitations, or short of statutory right”; or “without observance of procedure required

by law.” 5 U.S.C. § 706(2)(A), (C), (D). Actions taken by NMFS under the Magnuson Act are

subject to judicial review under the APA. See 16 U.S.C. § 1855(f).



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23. The Magnuson Act creates a legal framework for “conserv[ing] and manag[ing]

the fishery resources found off the coasts of the United States” by providing for the “preparation

and implementation . . . of [FMPs].” 16 U.S.C. §§ 1801(a)(1), (b)(4), 1853-54. To develop and

implement FMPs, the Magnuson Act created eight Regional Fishery Management Councils, each

having fishery management responsibilities over an assigned geographic area. See id. § 1852(a),

(h). Each Council proposes FMPs, FMP amendments, and implementing regulations to govern

fishing activities within its region. See id. § 1853(a), (c).

24. Before FMPs, FMP amendments, and implementing regulations become effective,

NMFS must review and approve them. Id. § 1854(a)-(b). NMFS is only authorized to approve

FMPs, FMP amendments, and implementing regulations if they are consistent with applicable

law. See id. § 1854(a)(3), (b)(1)(B). Additionally, all implementing regulations must be

consistent with the FMP and FMP amendments. Id. § 1854(b)(1)(B).

25. All Magnuson Act actions must be consistent with the National Standards. Id. §

1853(a)(1)(C). These standards require, among other things, that Council and NMFS actions

under the Magnuson Act “achiev[e], on a continuing basis, the optimum yield from each fishery”

and “be based on the best scientific information available,” while “minimiz[ing] bycatch.” Id . §

1851(a)(1)-(2), (9). Additionally, such actions must “take into account the importance of fishery

resources to fishing communities by utilizing [the best available] economic and social data . . .

to… provide for the sustained participation of such communities, and . . . minimize adverse

economic impacts on such communities.” Id. § 1851(a)(8). When implementing LAPPs, such as

the IFQ Program, NMFS must also ensure that allocations and assignments of fishing privileges

are “(A) fair and equitable to all . . . fishermen; (B) reasonably calculated to promote

conservation; and (C) carried out in such manner that no particular individual, corporation, or

other entity acquires an excessive share of such privileges.” Id . § 1851(a)(4).

26. LAPPs are required to promote “fishery conservation and management” and

“social and economic benefits” as well as “specify the goals of the program.” Id . §

1853a(c)(1)(C)(ii)-(iii), (F). LAPPs also must establish “fair and equitable initial allocations” tha

include consideration of, among other things, “current and historical harvests,” “employment in



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the harvesting and processing sectors,” “investments in, and dependence upon, the fishery,” and

“the current and historical participation of fishing communities.” Id. § 1853a(c)(5)(A). At the

same time, LAPPs must ensure that no privilege holder acquires an “excessive share” of the total

privileges. Id. § 1853a(c)(5)(D).

27. NEPA requires federal agencies to carefully analyze the potential impacts of, and

alternatives to, all proposed major federal actions that significantly impact the environment in an

environmental impact statement (“EIS”). See 42 U.S.C. § 4332(C). This requires an agency to,

among other things, consider the direct, indirect, and cumulative impacts of its proposed action,

and “[r]igorously explore and objectively evaluate all reasonable alternatives, and . . . briefly

discuss the reasons” for eliminating other alternatives. See 40 C.F.R. §§ 1502.14, 1508.25(c),

1508.7.

VII. STATEMENT OF FACTS

28. On or about May 7, 2010, the Pacific Fishery Management Council (“Council”)

presented FMP Amendments 20 and 21 to NMFS for approval.

29. The primary stated goals of Amendment 20 are to:

Create and implement a capacity rationalization plan that increases

net economic benefits, creates individual economic stability,

provides for full utilization of the trawl sector allocation, considersenvironmental impacts, and achieves individual accountability of

catch and bycatch.

Additional stated objectives of Amendment 20 include: (1) to “[p]rovide for a viable, profitable,

and efficient groundfish fishery”; (2) to “[m]inimize adverse effects . . . on fishing communities”;

and (3) to “[p]romote measurable economic and employment benefits through the seafood

catching, processing, distribution elements, and support sectors of the industry.”

30. To accomplish these goals and objectives, Amendment 20, among other things,

instituted a LAPP, pursuant to 16 U.S.C. § 1853a, for the shorebased trawl fleet, applicable to the

whiting and non-whiting sectors. This action concerns only the portions of the LAPP applicable

to the non-whiting sector of the shorebased trawl fleet (i.e., the IFQ Program).



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31. Amendment 21 generally supplements Amendment 20 and establishes inter-sector

and intra-sector total allowable catch allocations among various fishery sectors.

32. In 2010, NMFS partially approved Amendments 20 and 21 and published

proposed rules to implement Amendments 20 and 21 by regulation. 75 Fed. Reg. 32,994 (June

10, 2010); 75 Fed. Reg. 53,380 (Aug. 31, 2010). NMFS subsequently finalized those proposed

rules and issued the October 2010 Rule and the December 2010 Rule to implement Amendments

20 and 21. On or about June 2010, NMFS issued the final EIS for Amendment 20 and the final

EIS for Amendment 21, both addressing the IFQ Program (collectively, the “FEIS”).

33. On September 2, 2015, NMFS published another proposed rule to further

implement the IFQ Program by setting specific divestiture-related deadlines, establishing a

process for revocation of QS, adding an option for the abandonment of QS, reaffirming that

excess QS would be proportionally revoked across fish species and permits, and reaffirming that

revoked QS would be proportionally distributed among the participants in the Fishery. 80 Fed.

Reg. 53,088 (Sept. 2, 2015). This proposed rule was finalized with the issuance of the November

2015 Rule. The November 2015 Rule is an “action,” as that term is used in 16 U.S.C. § 1855(f),

that implements the October 2010 Rule and the December 2010 Rule.

34.

Under the IFQ Program, QS permit owners are annually assigned a specific

amount of “quota pounds” (“QP”) for each fish species included in the Fishery. The amount of

annual QP assigned to a QS permit holder is based upon the QS percentages held by the QS

permit holder and the annual catch allocations made for each species covered by the IFQ

Program. QS may be bought and sold among QS permit holders. QP may also be bought and

sold, as well as leased, among QS permit holders. All transfers of QS and QP must be approved

by NMFS.

35. The IFQ Program sets individual QS control limits for each of the fish species

included in the Fishery. The IFQ Program also sets an aggregate QS control limit for the Fishery

(the Aggregate Limit), with which each participant in the IFQ Program must comply. This action

addresses the Aggregate Limit.



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36. The Aggregate Limit requires that any “person” (as defined in the Regulations)

may not own or “control” more than 2.7% of the total QS assigned, for all species combined, in

the Fishery.

37. Under the IFQ Program, and specifically the Control Rule, “control” is

expansively defined and includes “the ability through any means whatsoever to control or have a

controlling influence over [an] entity to which QS . . . is registered.” See 50 C.F.R. §

660.140(d)(4)(iii). In addition to this catchall definition for “control,” the Control Rule lists a

number of situations that establish “control” for purposes of the IFQ Program. Id . “Control” and

ownership of QS, for purposes of the Control Rule, is also implied by the ownership of an

economic or financial interest in a separate entity that owns or controls QS. Id . §

660.140(d)(4)(ii).

38. In 2010, initial allocations of QS were made to participants in the Fishery based

upon the catch landing history associated with limited-entry permits. Under the IFQ Program,

any participant whose ownership and control of QS exceeds the Aggregate Limit must divest

itself of the excess QS by no later than November 30, 2015. Excess QS that is not divested by

this deadline is revoked by NMFS.

39.

In a Federal Register notice dated January 9, 2004, NMFS purported to give notice

that NMFS was planning to institute a LAPP for the Fishery. See 69 Fed. Reg. 1563 (Jan. 9,

2004). This notice did not state that catch landing history associated with limited-entry permits

before the LAPP was established would not be “grandfathered,” or otherwise credited, after the

LAPP was established. As the Council and NMFS have recognized, this notice did not

sufficiently apprise participants in the Fishery that the IFQ Program would negatively affect a

participant’s interest in the Fishery before the IFQ Program was established.

40. NMFS’s failure to provide sufficient notice of the potential negative effects of the

IFQ Program was exacerbated by NMFS’s formal encouragement of consolidation in the Fishery

through the establishment of a fishing capacity reduction program for the Fishery (the “Buy-Back

Program”). See 68 Fed. Reg. 42,613 (July 18, 2003). Under the Buy-Back Program, certain

Fishery participants were paid to surrender their limited-entry permits and restrict their vessels. A



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loan, which was to be repaid by participants remaining in the Fishery (and is still being repaid),

financed the majority of the cost of the Buy-Back Program. The Buy-Back Program caused

further consolidation of the Fishery, which effectively resulted in larger proportionate interests in

the Fishery for the participants that remained in the Fishery.

41. As a result of the actions described above and below, Plaintiffs have suffered legal

wrongs and have been adversely affected and aggrieved within the meaning of 5 U.S.C. § 702.

Among other things, application of the Regulations, including the Aggregate Limit and the

Control Rule, has unlawfully required Plaintiffs to divest themselves of QS that they have been

deemed to own or “control,” and to otherwise act in a manner that is contrary to their rights and

interests. Continued application of the IFQ Program may also cause the partial or entire closure

of one or more groundfish processing operations, such as Pacific Choice’s Eureka facility.

VIII. FIRST CLAIM FOR RELIEF

42. Plaintiffs incorporate by reference all preceding paragraphs of this Complaint.

43. Under the APA, 5 U.S.C. § 706(2)(C), a reviewing court shall hold unlawful and

set aside agency action found to be in excess of the agency’s statutory authority or jurisdiction.

44. The Magnuson Act requires all FMP amendments and implementing regulations to

be consistent with applicable law. 16 U.S.C. § 1854(a)(3), (b)(1)(B). Common law and state

statutory law are “applicable law” as that term is used in the Magnuson Act.

45. Federal statutes are interpreted with the presumption that Congress intended to

retain the substance of the common law and to not preempt other state or federal laws. To

abrogate common law principles, a federal statute must speak directly to, and expressly supplant,

the common law principles that Congress intends to address.

46. Whether a person or entity owns or “controls” an asset (such as QS), whether an

entity owns another entity, and whether a person or entity controls another person or entity are

issues that are determined by long-established common law and statutory principles, such as

common law and statutes addressing corporations and agency.

47. By implementing Amendments 20 and 21 through the Regulations, and by

specifically promulgating the Control Rule, Defendants purport to regulate the control of assets,



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persons, and entities in a manner that is contradictory to and incompatible with long-established

common law principles addressing, among other subjects, ownership of corporate assets,

disregard of the corporate form, and agency, and with statutory corporate and agency principles

such as those set forth in California Corporations Code §§ 1-17713, California Civil Code Title 9

(Agency), Oregon Revised Statutes Title 7 (ORS §§ 56.006-70.990), and Revised Code of

Washington §§ 23-25.4

48. The Magnuson Act does not speak directly to, and does not expressly supplant,

any common law principles, including those referenced in paragraph 47. The Magnuson Act also

does not preempt state statutes addressing corporate and agency principles, including those

referenced in paragraph 47.

49.

By implementing Amendments 20 and 21 through the Regulations, and by

specifically promulgating the Control Rule, Defendants unlawfully abrogated and supplanted

Corporate and Agency Law without the statutory authority to do so.

50. Accordingly, Amendments 20 and 21, and the Regulations, violate the APA

because Defendants have acted in excess of their statutory authority and jurisdiction, and the

Magnuson Act because Amendments 20 and 21, and the Regulations, conflict with and are

incompatible with applicable law.

IX. SECOND CLAIM FOR RELIEF


52. NMFS purported to establish the Aggregate Limit “to prevent an inequitable

concentration of limited access privileges” and to prevent the acquisition of an “excessive share”

in the Fishery. See 16 U.S.C. § 1853a(c)(5). However, in establishing the Aggregate Limit,

NMFS relied on a study, Lian et al. (2008) (the “Study”), that bore no rational relationship to

these statutory provisions.

53. The Study was considered in a report (the “GMT Report”) that did not explain the

basis for the Study and expressly recognized that the Study’s framework arose from a “fuzzy

4 The common law and statutory principles referred to in this paragraph are collectively

referred to in this Complaint as “Corporate and Agency Law.”



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baseline.” As a result, the GMT Report tentatively provided NMFS with “observations,” not

recommendations.

54. In establishing the Aggregate Limit, NMFS did not account for, or explain the

deficiencies of, the Study or the GMT Report. NMFS did not sufficiently vet or consistently

apply the Study or the GMT Report. As expressly noted in the GMT Report, the Study’s model

was not used to assess results for other alternatives being considered.

55. NMFS did not explain its disparate treatment of the offshore and shorebased

sectors of the West Coast groundfish fishery, especially as related to NMFS’s setting of control

limits significantly higher for the offshore sector than for the shorebased sector.

56. NMFS did not articulate a rational connection between either the Study or the

GMT Report and NMFS’s decision to set the Aggregate Limit at 2.7%. NMFS did not otherwise

rationally explain, or support with sufficient record evidence, its decision to set the Aggregate

Limit at 2.7%.

57. Accordingly, NMFS’s decision to set the Aggregate Limit at 2.7% was arbitrary,

capricious, an abuse of discretion, and contrary to applicable law, in violation of the APA and the

Magnuson Act.

X. THIRD CLAIM FOR RELIEF


59. NMFS failed to sufficiently explain whether and how Amendments 20 and 21, and

the Regulations, including the Control Rule and NMFS’s decision to establish the Aggregate

Limit at 2.7%, would achieve optimum yield, minimize bycatch, impact fishing communities

(compared to the other alternatives being considered), efficiently utilize fishery resources,

minimize costs and avoid unnecessary duplication, be reasonably calculated to promote

conservation, be fair and equitable, prevent excessive shares, or be consistent with any other

National Standards. NMFS generally failed to sufficiently explain whether and how

Amendments 20 and 21, and the Regulations, are consistent with each of the Magnuson Act’s

National Standards, 16 U.S.C. § 1851(a), or with the goals and objectives of Amendment 20.



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60. NMFS did not sufficiently explain whether and how QS allocations made under

the IFQ Program were fair and equitable, why aggregate QS above 2.7% is “excessive,” and how

and why the Control Rule prevents excessive shares, and provides for fair and equitable

distribution of privileges, in a manner that is consistent with all applicable laws.

61. In approving Amendments 20 and 21, and in promulgating the Regulations,

particularly the Control Rule and the Aggregate Limit, NMFS failed to comply with the

Magnuson Act’s LAPP requirements, 16 U.S.C. § 1853a(c). Amendment 20 and 21, and the

Regulations, are not consistent with the National Standards or with the goals and objectives of

Amendment 20.

62. Accordingly, Amendments 20 and 21, and the Regulations, including the

Aggregate Limit and Control Rule, violate the Magnuson Act, and are arbitrary and capricious

and not in accordance with law in violation of the APA.

XI. FOURTH CLAIM FOR RELIEF


64. As described above, NMFS failed to give sufficient notice that the IFQ Program

would adversely affect the acquisition of permits or other interests in the Fishery before the IFQ

Program became effective. Additionally, in establishing the Buy-Back Program in 2003, NMFS

intentionally encouraged Fishery participants to take actions that would result in increased

consolidation of interests in the Fishery.

65. The IFQ Program was intentionally designed by NMFS to decrease consolidation

of interests in the Fishery.

66. NMFS’s encouragement of actions to consolidate interests in the Fishery, its

failure to provide sufficient notice that acquisition of interests in the Fishery would be adversely

affected by the IFQ Program, and its failure to sufficiently consider the LAPP requirements stated

in 16 U.S.C. § 1853a(c)(5)(A) renders its approval of Amendments 20 and 21 and its issuance of

the Regulations, without including a grandfather clause or another mechanism to preserve

interests in the Fishery acquired prior to implementation of the IFQ Program, arbitrary and

capricious and not in accordance with law in violation of the APA and the Magnuson Act.



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76. NMFS did not consider whether proportional revocation and other aspects of the

November 2015 Rule were consistent with the FMP’s mandates, including to (a) accommodate

existing fisheries sectors, (b) minimize bycatch and impact to habitat, (c) maintain stability in

landings, (d) avoid overfishing, and (e) take into account historical dependence on the Fishery.

77. NMFS also failed to consider whether proportional revocation and all other aspects

of the November 2015 Rule were consistent with the goals and objectives of Amendments 20 and

21, including to (a) increase net economic benefits, (b) create individual economic stability, (c)

provide for full utilization of the trawl sector allocation, (d) consider environmental impacts, (e)

achieve individual accountability of catch and bycatch, and (f) take into account historical

dependence on the Fishery.

78.

In promulgating the November 2015 Rule, NMFS did not consider whether

proportional revocation and all other aspects of the November 2015 Rule were consistent with

each of the Magnuson Act’s National Standards, 16 U.S.C. § 1851(a).

79. The November 2015 Rule, including the provisions for proportional revocation,

are not consistent with the Magnuson Act’s National Standards, including those that require

NMFS to use “the best scientific information available [which includes economic and social

data],” “achieve optimum yield,” “consider efficiency in the utilization of fishery resources,”

“minimize costs,” “minimize adverse impacts on fishing communities,” and “minimize bycatch.”

The November 2015 Rule is also not consistent with the goals and objectives of Amendment 20.

80. NMFS failed to perform the review required under NEPA to evaluate the

environmental impacts of the November 2015 Rule or to otherwise determine that any such

impacts were not “significant,” in violation of NEPA.

81. In promulgating the November 2015 Rule, NMFS refused to delay the divestiture

deadline until after the reallocation of widow rockfish, despite repeated requests that NMFS do

so. The reallocation of widow rockfish will significantly affect the calculation used to determine

whether a person or entity exceeds the Aggregate Limit. NMFS’s refusal to postpone the

divestiture deadline until after the reallocation of widow rockfish required certain participants,

including Pacific Fishing and Sea Princess, to divest of QS that is imputed to them under the



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Regulations before November 30, 2015, without the benefit or knowledge of how widow rockfish

will be reallocated and based upon calculations that do not consider the widow rockfish

reallocation. NMFS may reallocate additional species, with similar adverse results on Fishery

participants who had to divest of QS before November 30, 2015.

82. NMFS’s refusal to postpone the divestiture deadline until after the reallocation of

widow rockfish is inconsistent with the Magnuson Act’s National Standards, including those

requiring NMFS to “minimize costs” and “efficiently utilize fishery resources,” and therefore

violates the Magnuson Act. NMFS’s refusal is also arbitrary, capricious, and an abuse of

discretion in violation of the APA, 5 U.S.C. § 706(2)(A).

83. In issuing the November 2015 Rule, the Council did not consider, and NMFS did

not consider or acknowledge that the Council failed to consider, the implementation of an auction

system in lieu of a proportional redistribution scheme, in violation of the Magnuson Act, 16

U.S.C. § 1853a(d).

84. The November 2015 Rule unlawfully implements regulations (specifically, the

October 2010 Rule and the December 2010 Rule) that, as set forth above, violate the Magnuson

Act, NEPA, and the APA.

85.

Accordingly, the November 2015 Rule is arbitrary and capricious, in excess of

NMFS’s statutory authority, and not in accordance with applicable law, in violation of the APA

and the Magnuson Act.

XIV. RELIEF REQUESTED

WHEREFORE, Plaintiffs respectfully request that the Court:

A. Expedite consideration of this matter “in every possible way” in accordance with

16 U.S.C. § 1855(f)(4);

B. Declare that Defendants, in implementing the IFQ Program through the

Regulations and Amendments 20 and 21, violated the APA, the Magnuson Act, and NEPA;

C. Vacate and remand the Regulations and Amendments 20 and 21 to NMFS;

D. Reinstate any QS that was divested by any of the Plaintiffs;



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E. Award Plaintiffs reasonable attorney fees, costs, expenses, and disbursements,

including attorney fees associated with this litigation, as appropriate under applicable law; and

F. Award Plaintiffs such other and further relief as this Court may deem just and

equitable.

DATED: December 4, 2015.

STOEL RIVES LLP

By:/s/ Edward C. DuckersEDWARD C. DUCKERSAttorneys for PlaintiffsSea Princess, LLC; Pacific Choice Seafood

Company; Pacific Fishing, LLC


West Coast groundfish lawsuit

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