, Gloucester, MA

February 19, 2009


Agency issues 'notice' of $335K in fines, 120-day shutdown

By Richard Gaines

The National Marine Fisheries Service has renewed a longstanding and bitter legal campaign against the Gloucester Seafood Display Auction.

By letter dated last Friday, NMFS informed the Ciulla family that founded and owns the auction — an essential shoreside service for the commercial fishing fleet and the linchpin of the Gloucester's marine industrial economy — it was being fined $335,200 and its license suspended for 120 days for a variety of alleged violations of the fishery regulation act.

An earlier case that the Ciullas won in an administrative trial remains unsettled.

In addition to the alleged 59 counts against the auction, NMFS is also bringing under- and non-reporting charges against 24 fishing boats, primarily from Gloucester, but also Rockport, Manchester, Marblehead and Newburyport.

Andy Cohen, NMFS' regional law enforcement chief, declined to identify the boats yesterday because the charges had not been formally issued.

The case burst forth to the surprise of the Ciulla family — and permit-holding fishermen identified as the source of the allegedly illegal fish brokered by the auction — who received the letter Monday amid a growing schism between the regulators and the regulated.

In recent days, a federal judge in Boston has chastised NMFS for paying lip service to the interests of the fishing industry.

Judge Edward Harrington negated core elements of its regulatory scheme while hearing a case brought by the states of Massachusetts and New Hampshire against NMFS. "Administrative agencies," he wrote, "are expected to approach their work carefully and thoroughly."

On Wednesday, seven of the region's coastal states' U.S. senators challenged the regulatory direction of the agency, arguing that NMFS was "pushing the industry off a cliff."

"We will not permit NMFS to regulate our nation's first fishery out of existence," wrote Sens. Edward M. Kennedy and John Kerry, Democrats of Massachusetts, Olympia Snow and Susan Collins, Republicans of Maine, Jack Reed and Sheldon Whitehouse, Democrats of Rhode Island, and Jeanne Shaheen, D-N.H., to James Balsiger, NMFS' acting administrator.

Being forced to close for 120 days "would definitely be detrimental to the auction, to the fishing community and the entire community," auction President Larry Ciulla said yesterday. He asserted company's innocence and said his family would fight the charges, which include technical violations and alleged involvement in selling illegally caught and undersized fish brought in by the boats.

Monitoring permits?

Ciulla also said he could not understand how NMFS could expect and require him to monitor the complex permit histories of hundreds of fishermen to ascertain if and when any particular fish was one too many.

That's NMFS' job, he said.

"Of course we're appealing. We intend to defend vigorously against the government's allegation," Ciulla said. "We've been scrupulous to ensure that we're in compliance with the law. We asked (NMFS) to be in here full-time and part-time, in both formal and informal meetings and writing," he added.

The new case overlaps an earlier one which has dragged on for years. That matter began with an allegation that the auction had brokered fish that represented a catch in excess of the limit allowed on a permit.

In that regard, the first case parallels one line of accusations in the new case.

"It was about one fish too many," Ciulla said.

According to Ciulla, the family business was exonerated at a trial by an administrative law judge, but NMFS decided to appeal, giving the case life.

Like the first case, the new one began with an investigation and presentation by the Marine Fisheries' law enforcement office to its own general counsel's office.

"Based on a review of that report," Dierde Casey, an attorney in the office of the general counsel of the National Oceanic and Atmospheric Administration, NMFS' parent, wrote in her letter to the auction, "this office has determined that you violated the Magnuson-Stevens Act."

Casey did not return phone calls, nor did Stuart Corey, the law enforcement division's spokesman at NMFS' headquarters in Silver Spring, Md.

Burden of proof

Technically, the burden of proof is the agency's, but in practice in administrative law, the scales of justice tilt against the accused.

According to Stephen Ouellette, an attorney with a fishing industry practice who once but no longer represents the auction or the Ciullas, administrative law judges find for their agency "probably exceeding 98 percent of the time."

In a lengthy letter last February to U.S. Rep. John Tierney about a client — fishing boats' owner Richard Burgess of Manchester — Ouellette explained that "in those few instances where a fisherman prevails before an administrative law judge, the agency can appeal to is own administrator" — as NMFS did after the judge found for the auction in the first case.

"Fines are set by agency attorneys," Ouellette wrote, "so the basis of the fine is ... non-discoverable ... which makes a challenge difficult, and the fisherman has the burden at hearing of persuading the judge that the fine is not appropriate."

Lost appeals almost always are punished with fines that are multiplied.

Most of the time, fishermen accede bitterly to NMFS' allegations, pay up and move on.

Only after many years inside the Department of Commerce's administrative law system can an appellant break into the actual federal court system.

Ciulla said his battle against NMFS in the first case has taken "six figures."

Now, he said he expects fighting the new case will do the same.

The latest series of accusations revolve around a number of routine off-loadings from 2004 through 2006 at the Ciullas' piers. These are connected to the cold storage, office and computerized auction facility at the eastern shoulder of Harbor Loop. Just to the right is Capt. Carlo's Restaurant, which is also owned and operated by the Ciullas — Rose and son Larry and named for Larry Ciulla's fisherman grandfather and family patriarch.

All employees are or say they feel like family.

Storing of records

According to the National Marine Fisheries' NOVA — or Notice of Violation and Assessment of Administrative Penalty — the Ciulla family and their employees, violated provisions of the Magnuson-Stevens Act by maintaining records offsite, making false statements about the whereabouts of the records, and brokering illegally landed and undersized fish.

Each count involves multiple days of transactions with the same boat, and alleges precise details.

Ciulla notes that the facts that form the basis of the NOVA were reported to NMFS by the auction itself, through a system the business and the federal agency worked out voluntarily to provide NMFS with transaction data.

"We created that system to make sure our reporting was impeccable," he said.

For some of the counts, the NOVA alleges the auction took in more cod than the permit authorized the fishing boat to catch. For many others, NMFS alleges that the auction took in yellowtail flounder that the boat with the federal permit was not authorized to catch.

For example, Count 30 (a) alleges that on July 16, 2005, the (auction) "unlawfully processed, had custody or control of or offered for sale 95 pounds of yellowtail flounder landed by the fishing vessel Ocean Reporter when the vessel was not authorized to land yellow tail founder."

A prominent figure who operates a professional underwater photographic business from the Ocean Reporter, Bill Lee of Rockport, and Burgess, who owns and operates multiple boats, both told the Times their violations, as detailed in the NOVA, were the result of confused and contradictory notifications by NMFS about the "yellowtail flounder possession/landing authorization letter."

That phrase is found in a great many of the alleged violations.

Coast Guard apology

Lee, who was authorized by the Coast Guard to photograph the wreck of the lost fishing boat Patriot last month, said NMFS issued multiple advisories about the flounder letter — indicating "No you don't need it, yes you do," he recalled.

He also said he got a letter from the Coast Guard apologizing for writing him up based on his not having had a flounder possession/authorization letter.

"It cost nothing, it wasn't inconvenient," he said.

"They told us we needed it, and then they told us we didn't," said Burgess.

"I cannot hold a year's worth of permit holder letters in my office," said Ouellette. He described the bureaucratic demands made by NMFS as "astounding."

The final count against the auction accuses it of taking in short cod on or about Aug. 1,7 and short dabs (flounder) on or about Nov. 9. NMFS alleges that the auction had 11 cod that measured no more than 21 1/2 inches (with the limit at 22) and 13 dabs of no more than 13 1/2 inches (with the limit at 14 inches.

Ciulla recalled the measuring was begun because the agent misunderstood the legal size for cod, thinking it was 24 inches for commercial fish when it was 22 for commercial and 24 for recreational cod.

Agents are at the auction about half the time, Ciulla said. Most of the fish from among 15,000 to 20,000 pounds of cod and 10,000 pounds of flounder, were too close to call and could have as well be considered legal sized, he said.

The auction is the most important brokerage operation along the coast of New England, with prestigious buyers, including Legal Seafoods and Capt. Marden's and less well known but bigger institutional buyers meeting daily at the computer terminals in the auction to bid on the harvests of local and out-of-state boats.

The auction brokers about 15 million pounds of fish a year. With three dozen regular buyers including the largest in the region, the competition typically pushes the price to up to the satisfaction of the fishermen and their dependents and associated shoreside service providers.

Once and long the world's legendary and leading fishing port, Gloucester's industry has been shrinking and struggling to hold on, while NMFS, interpreting the Magnuson-Stevens Fishery Conservation and Management Act, imposed a series of quick-changing control programs that have left the boat-owning small businessmen who make up the industry in the lurch.

The approach long has been to control and limit fishing effort. This is accomplished by shaving days at sea off permits, closing rich grounds and instituting differential counting where a day worked counts for two against the limit.

The core of these controls, however, were suspended in late January by Judge Harrington, leaving the industry nonplussed and uncertain.

Intense enforcement

A byproduct of the effort to nurture the fishery back to health has been a series of intense enforcement practices that include using the Coast Guard as police officers to board boats and oversea the landings. The Coast Guard announced last week that it boarded more than 500 fishing boats in the waters of New England last year.

The actions come at a moment of broad aversion to the fishery and industry management policies of NMFS, which last fall moved with its staff of 250 into a new $12.5 million facility in Gloucester's Blackburn Industrial Park.

NMFS' proposed emergency regulatory scheme for the next year involved closing southern New England waters to almost all fishing and halving the fishing time value of permits for the Gulf of Maine.

By all accounts, the effect of the rule would be to force much of the New Bedford fleet either far into the southeastern corner of Georges Bank or up into the inshore waters of the Gulf of Maine and much closer to Gloucester where, if with a NMFS' win, the port would be without its main brokerage operation for an extended period of time.

The Gloucester Seafood Display Auction is not the only place where fishermen can sell, but it is by far the largest. A new outlet of the Boston Seafood Display Auction was opened late last year in Gloucester and remains active. In addition, a handful of fish processors also buy from the boats.

Richard Gaines can be reached at