, Gloucester, MA

November 29, 2012

City loses bid to have catch share tossed

By Richard Gaines
Staff Writer

---- — Finding the catch share trading system for groundfishermen working in voluntary cooperatives to be legal and proper, the U.S. First Circuit Court of Appeals in Boston has rejected “all” the challenges to the arrangement brought by a large group of industry plaintiffs led by Gloucester and New Bedford, New England’s major fishing ports.

But in its ruling the three-judge panel presumed the completion of a regulatory action, now in a formative stage, that would control excess consolidation of the fishery, which was a core concern of many of the plaintiffs, fishermen and businesses from Maine to North Carolina.

The plaintiffs included U.S. Congressmen John Tierney, whose district includes Gloucester, and Barney Frank, who represents New Bedford.

The Conservation Law Foundation was allowed to intervene, allied with the government.

The 68-page ruling effectively ends the legal assault on Amendment 16, which instituted a radical change to the Northeast fishing industry, based on an allocation of the allowable catch to a limited number of participants who, if members of a cooperative or sector, can trade from their portfolio with other sectors to increase the value and efficiency of their effort.

A core complaint by the plaintiffs, rejected by the court, was the adoption of the catch share system without putting the regimen to a binding referendum.

“Not allowing a referendum on such a measure effectively leaves the fishery up for grabs to the highest bidder,” said Tierney in an email. “This isn’t in the best interest of fishermen.”

One attorney on the team that brought the suit, speaking anonymously, said the plaintiffs had exhausted their resources, so an appeal to the U.S. Supreme Court was unlikely.

The court affirmed a lower ruling made in 2011 by U.S. District Court Judge Rya Zobel, who found that the National Oceanic and Atmospheric Administration had followed the dictates of Congress embedded in the re-authorization of the Magnuson-Stevens Fishery Conservation and Management Act. Both Zobel and the Court of Appeals found that NOAA’s interpretations of the act warranted legal deference as defined in the Administrative Practices Act.

Quoting from the Chevron case, which established the deference principle, the Court of Appeals wrote, “When a challenge to an agency construction of a statutory provision, fairly conceptualized, really centers on the wisdom of the agency’s policy ... the challenge must fail.”

“Form over substance” was the reaction of Scott Lang, who was instrumental in launching the case in 2010 when he was in his last term as New Bedford’s mayor. “The fishing industry is collapsing before our eyes.”

“This is one venue of a broader fight,” said New Bedford Mayor Jon Mitchell. He said the court’s referring to the writing of quota accumulation limits and fleet diversity protections by the New England Fishery Management Council was a bright spot.

Gloucester Mayor Carolyn Kirk, who partnered with Lang to give the plaintiffs a municipal legal team to propel the action, said the ruling will hold the council’s feet to the fire to write an amendment limiting consolidation and protecting fleet diversity; also, Kirk said, “we have to redouble our efforts to get disaster relief funding for the industry.”

The catch share system connected with sectors, three years in the making, was approved by the New England Fishery Management Council in 2009, and went into effect in May 2010, but was unpopular for many reasons; central to the opposition was the tendency of catch share trading to fuel consolidation, leaving participants with lesser allocations vulnerable.

But the judges found that consolidation caused by catch share trading by sector members was a disputed outcome. “Some contend that it provides greater protection against both than the alternatives,” wrote Chief Judge Sandra L. Lynch for the court.

Still, consolidation, which had been occurring for many years, seemed to accelerate under Amendment 16, the catch share system for sectors.

Extreme cutbacks in the allocation of the groundfishing fleet beginning in 2010 brought the industry economic disaster, a condition affirmed legally and in writing by the acting Secretary of Commerce in September. The declaration did not come with any aid.

The judges panel found that a clause written into the law exempted from the referendum individual fishing quota programs that were based on a “sector allocation,” a core element in the construction of Amendment 16.

Just before the final sentence of the ruling written by Chief Judge Lynch, the statement “ we reject all of the challenges to (Amendment 16) and affirm entry of judgment for defendants,” Lynch quotes from the Dec. 21, 2011, announcement by the New England Fishery Management Council that it intends to develop an action after “examining potential rules to reduce the likelihood that groundfish permit holders will acquire or control excessive shares or fishing privileges ... and that over-consolidation will occur within the fleet.”

Richard Gaines may be contacted at 978-283-7000 x3464 or