On December 18, 2007, the U.S. Court of Appeals for the District of Columbia (the “Court”) ruled in favor of The Fishing Company of Alaska, Inc., reversing a March 2007 U.S. District Court for the District of Columbia judgment. Supporting the Fishing Company of Alaska’s argument, the Court ruled that three significant management requirements proposed to monitor and enforce a conservation measure designed to reduce unwanted catch were unlawfully adopted and should be vacated.

With extensive fisheries experience, David E. Frulla, attorney with Kelley Drye & Warren’s Washington, DC office, represented the Fishing Company of Alaska (“FCA”), an operator of commercial fishing vessels in the Bering Sea and Aleutian Islands region.

The rules at issue were part of a program recommended by the North Pacific Fishery Management Council, a state/federal body with authority to recommend fishery management measures in federal waters to the U.S. Secretary of Commerce, that calls for increasingly higher levels of retained catch over a period of years. The three measures challenged by FCA were ancillary monitoring and enforcement (“M&E”) provisions the Secretary unlawfully added to the Council’s recommended conservation and monitoring program. FCA supports the bycatch reduction program, which was never at issue in the case.

Rather, FCA made two basic claims regarding these three specific M&E requirements: (1) the National Marine Fisheries Service (the “Service” or “NMFS”), the Department of Commerce agency responsible for managing U.S. fisheries, failed to follow procedures required by the Magnuson-Stevens Fishery Conservation and Management Act (“MSA”) for developing such regulations; and (2) these costly and unjustified measures did not meet the MSA’s substantive standards for fisheries management measures. The Court of Appeals only reached the former issue, apparently believing it unnecessary to decide if the vacated rules also violated the MSA.

The decision relied on the unique regulatory structure created by the MSA, which empowers regional fisheries management councils, like the North Pacific Council, to recommend fisheries management measures and implementing regulations that the Service may only approve or disapprove. Disapprovals can only be based on inconsistencies with the MSA and/or other law. The Service may not alter the regulations, but instead must send infirm recommendation back to the Council for revision. In this case, however, the Service added the three M&E requirements to the proposed regulations with no Council recommendation or input, which the Court found illegal.

“At issue here is the fact that the M&E requirements were material additions made by the Service without any regard for the procedural requirements of the law,” said Mr. Gehan. “The measures were not insubstantial and required FCA to completely retrofit each of its vessels at a cost of $5 to $10 million, and change their fishing operations in ways that could reduce annual productivity by 30 percent or more.” He went on to note that all fisheries in which FCA participates are healthy and sustainably managed.

In reversing the District Court’s judgment, the Court remanded that the three disputed M&E requirements should be vacated.

“This is not only a victory for FCA, but is also a victory for the fishing industry. The Court’s ruling sets an important firewall against unilateral agency action in the process by which fisheries regulations are developed and finalized,” said Mr. Frulla.

During the pendency of this case, however, the Service and North Pacific Council adopted another rule affecting FCA which instituted a substantially similar set of M&E requirements. Those are subject to a separate legal challenge in a case being heard in the Federal District Court for the Western District of Washington. FCA hopes for a favorable decision in that case some time next year.

Kelley Drye Wins Appeal on Behalf of the Fishing Company of Alaska