West Coast Groundfish Lawsuit

Case 1:15-cv-05572-NJV Document 1 Filed 12/04/15 Page 1 of 18
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EDWARD C. DUCKERS (SB #242113)

ed.duckers@stoel.com
STOEL RIVES LLP
Three Embarcadero Center, Suite 1120
San Francisco, CA 94111
Telephone: (415) 617-8900
Facsimile: (415) 617-8907
Attorneys for Plaintiffs
Sea Princess, LLC; Pacific Choice Seafood Company;
Pacific Fishing, LLC
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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
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EUREKA DIVISION
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PACIFIC CHOICE SEAFOOD COMPANY;

SEA PRINCESS, LLC; PACIFIC FISHING,
LLC,
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Case No.
COMPLAINT
Plaintiffs,
(5 U.S.C. 701706; 16 U.S.C. 1801

1891d; 42 U.S.C. 43214370h)
v.
Administrative Procedure Act Case
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PENNY PRITZKER, U.S. SECRETARY OF

COMMERCE; NATIONAL MARINE
FISHERIES SERVICE,
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Defendants.
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I. INTRODUCTION
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1.
In this action, Pacific Choice Seafood Company (Pacific Choice), Sea Princess,
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LLC (Sea Princess), and Pacific Fishing, LLC (Pacific Fishing) (collectively, Plaintiffs)
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challenge an unlawful federal fisheries management program that threatens the ongoing viability
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of important West Coast fisheries that support jobs, facilities, fishermen, and businesses in
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California, Oregon, and Washington.
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2.
The negative effects of Defendants unlawful actions have been and will continue
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to be felt along the entire West Coast. As one specific example, the Northern California
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commercial groundfish fishing industry faces possible extinction if Defendants unlawful actions
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are allowed to continue. Eureka, California was once the epicenter of a thriving commercial
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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 Eurekaowned by Pacific Choicethat 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
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diminished.
4.
The unlawful actions challenged in this Complaint have substantial negative
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impacts on Plaintiffs and seriously threaten the ongoing viability of the shoreside groundfish
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fishery all along the West Coast. As set forth below, Defendants actions violate federal law and
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should be vacated by this Court.
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II. SUMMARY OF ACTION

5.
Plaintiffs challenge decisions of the National Marine Fisheries Service (NMFS)
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that establish and implement an individual transferable quota program for the Pacific Coast
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groundfish limited-entry trawl fishery (IFQ Program). Specifically, Plaintiffs challenge:
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a.
Groundfish Fishery Management Plan (FMP);
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b.
c.
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NMFSs final rule, 75 Fed. Reg. 78,344 (Dec. 15, 2010), and associated
regulations (December 2010 Rule); and
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NMFSs final rule, 80 Fed. Reg. 69,138 (Nov. 9, 2015), and associated
regulations (November 2015 Rule);
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NMFSs approval of Amendments 20 and 21 to the Pacific Coast
d.
NMFSs final rule, 75 Fed. Reg. 60,868 (Oct. 1, 2010), and associated
regulations (October 2010 Rule). 1

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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.
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The specific regulations governing ownership and control, for purposes of administering the
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IFQ Program, are set forth at 50 C.F.R. 660.140(d)(4) and are referred to in this Complaint
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collectively as the Control Rule.
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8.
A fundamental problem with the Control Rule is that it imputes to shareholders,
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and others deemed to have control (no matter how remote), the ownership and control of assets
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(i.e., QS) that are separately owned by corporations or other entities, in a manner that is
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incompatible with well-established principles of corporate and agency law.
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9.
The IFQ Program establishes the aggregate control limit to be 2.7% of all QS held
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by all permit holders in the Fishery (the Aggregate Limit). See 50 C.F.R.
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660.140(d)(4)(i)(C). Any person (as defined in the Regulations) whose ownership or control
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(also as defined in the Regulations) of QS exceeds the Aggregate Limit must divest itself of QS
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so as not to exceed the limit by no later than November 30, 2015. Any QS not divested is
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revoked by NMFS.
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10.
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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
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at 50 C.F.R. part 660 and implement the IFQ Program, which is specifically promulgated at 50
C.F.R. 660.140.
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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
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and 21, violate the Administrative Procedure Act (APA) (5 U.S.C. 701-706) and the
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Magnuson-Stevens Fishery Conservation and Management Act (Magnuson Act) (16 U.S.C.
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1801-1891d) because (a) the Control Rule unlawfully supplants well-established common and
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statutory law without statutory authority to do so and is, therefore, ultra vires; (b) the Aggregate
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Limit is not supported by a rational explanation based on sufficient record evidence, and is
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arbitrary and capricious; (c) NMFSs decision to force divestiture of QS without giving credit to
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those who were allocated QS based on catch landing history before the IFQ Program was
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implemented (i.e., grandfathering), and without adequate notice, is arbitrary and capricious; (d)
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the Regulations do not comply with the Magnuson Acts National Standards and provisions
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governing limited access privilege programs (LAPPs); and (e) the November 2015 Rule is
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arbitrary and capricious for the additional reason that NMFS unlawfully refused to postpone the
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divestiture period until after the reallocation for widow rockfish.
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12.
The Regulations, and Amendments 20 and 21, also violate the National
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Environmental Policy Act (NEPA) (42 U.S.C. 4331-4370h) because NMFS (a) did not give
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the effects of the action, including socio-economic effects, the required hard look analysis and
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(b) did not evaluate a reasonable range of alternatives.
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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.
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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 Choices 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
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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
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vessel that participates in the Fishery. Sea Princess maintains a vested interest in the sound
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management of the Fishery, and is regulated under, and adversely affected by, the IFQ Program.
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As a result of the IFQ Program, Sea Princess was forced to divest a significant amount of QS
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before November 30, 2015.
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Pacific Fishing is an Oregon LLC that owns, among other things, six separate
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LLCs, including Sea Princess, each of which owns a vessel that participates in the Fishery. These
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vessels fish in Washington, Oregon, and California, and deliver to processing plants in Northern
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California and Oregon. Pacific Fishing maintains a vested interest in the sound management of
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the Fishery, and is regulated under, and adversely affected by, the IFQ Program. Under the
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Regulations, Pacific Fishing is deemed to own and control the QS owned by Sea Princess and the
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other separate LLCs owned by Pacific Fishing, as well as by other entities. Pacific Fishing has
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been forced to make business decisions that are contrary to its interests as a result of the
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substantial amount of QS that is imputed to Pacific Fishing under the Regulations. The LLCs
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owned by Pacific Fishing are also regulated under, and adversely affected by, the IFQ Program,
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and they have been forced to divest QS as a result of the IFQ Program.
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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
NMFSs 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
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applicable law.
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IV. JURISDICTION AND VENUE

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This Court has jurisdiction over this action pursuant to 5 U.S.C. 701-706
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(APA), 16 U.S.C. 1855(f) (Magnuson Act), 28 U.S.C. 1331 (federal question), 28 U.S.C.
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2201 (declaratory judgments), and 28 U.S.C. 2202 (injunctive relief).
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20.
Venue lies properly in this judicial district under 28 U.S.C. 1391(e) because
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NMFS maintains an office in this district and because Pacific Choice resides in and has its
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principle place of business in this district.
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V. INTRADISTRICT ASSIGNMENT
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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.
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VI. STATUTORY FRAMEWORK

22.
The APA provides for judicial review of final agency action. 5 U.S.C. 702. The
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APA requires courts reviewing agency action to hold unlawful and set aside [final] agency
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action, findings, and conclusions that, among other things, are arbitrary, capricious, an abuse of
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discretion, or otherwise not in accordance with law; in excess of statutory jurisdiction,
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authority, or limitations, or short of statutory right; or without observance of procedure required
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by law. 5 U.S.C. 706(2)(A), (C), (D). Actions taken by NMFS under the Magnuson Act are
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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).
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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
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FMPs, FMP amendments, and implementing regulations if they are consistent with applicable
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law. See id. 1854(a)(3), (b)(1)(B). Additionally, all implementing regulations must be
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consistent with the FMP and FMP amendments. Id. 1854(b)(1)(B).
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All Magnuson Act actions must be consistent with the National Standards. Id.
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1853(a)(1)(C). These standards require, among other things, that Council and NMFS actions
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under the Magnuson Act achiev[e], on a continuing basis, the optimum yield from each fishery
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and be based on the best scientific information available, while minimiz[ing] bycatch. Id.
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1851(a)(1)-(2), (9). Additionally, such actions must take into account the importance of fishery
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resources to fishing communities by utilizing [the best available] economic and social data . . .
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to provide for the sustained participation of such communities, and . . . minimize adverse
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economic impacts on such communities. Id. 1851(a)(8). When implementing LAPPs, such as
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the IFQ Program, NMFS must also ensure that allocations and assignments of fishing privileges
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are (A) fair and equitable to all . . . fishermen; (B) reasonably calculated to promote
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conservation; and (C) carried out in such manner that no particular individual, corporation, or
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other entity acquires an excessive share of such privileges. Id. 1851(a)(4).
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26.
LAPPs are required to promote fishery conservation and management and
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social and economic benefits as well as specify the goals of the program. Id.
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1853a(c)(1)(C)(ii)-(iii), (F). LAPPs also must establish fair and equitable initial allocations that
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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
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discuss the reasons for eliminating other alternatives. See 40 C.F.R. 1502.14, 1508.25(c),
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1508.7.
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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:
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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, considers
environmental impacts, and achieves individual accountability of
catch and bycatch.
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Additional stated objectives of Amendment 20 include: (1) to [p]rovide for a viable, profitable,
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and efficient groundfish fishery; (2) to [m]inimize adverse effects . . . on fishing communities;
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and (3) to [p]romote measurable economic and employment benefits through the seafood
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catching, processing, distribution elements, and support sectors of the industry.
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30.
To accomplish these goals and objectives, Amendment 20, among other things,
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instituted a LAPP, pursuant to 16 U.S.C. 1853a, for the shorebased trawl fleet, applicable to the
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whiting and non-whiting sectors. This action concerns only the portions of the LAPP applicable
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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).
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On September 2, 2015, NMFS published another proposed rule to further
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implement the IFQ Program by setting specific divestiture-related deadlines, establishing a
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process for revocation of QS, adding an option for the abandonment of QS, reaffirming that
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excess QS would be proportionally revoked across fish species and permits, and reaffirming that
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revoked QS would be proportionally distributed among the participants in the Fishery. 80 Fed.
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Reg. 53,088 (Sept. 2, 2015). This proposed rule was finalized with the issuance of the November
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2015 Rule. The November 2015 Rule is an action, as that term is used in 16 U.S.C. 1855(f),
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that implements the October 2010 Rule and the December 2010 Rule.
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34.
Under the IFQ Program, QS permit owners are annually assigned a specific
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amount of quota pounds (QP) for each fish species included in the Fishery. The amount of
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annual QP assigned to a QS permit holder is based upon the QS percentages held by the QS
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permit holder and the annual catch allocations made for each species covered by the IFQ
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Program. QS may be bought and sold among QS permit holders. QP may also be bought and
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sold, as well as leased, among QS permit holders. All transfers of QS and QP must be approved
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by NMFS.
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35.
The IFQ Program sets individual QS control limits for each of the fish species
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included in the Fishery. The IFQ Program also sets an aggregate QS control limit for the Fishery
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(the Aggregate Limit), with which each participant in the IFQ Program must comply. This action
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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
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economic or financial interest in a separate entity that owns or controls QS. Id.
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660.140(d)(4)(ii).
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38.
In 2010, initial allocations of QS were made to participants in the Fishery based
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upon the catch landing history associated with limited-entry permits. Under the IFQ Program,
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any participant whose ownership and control of QS exceeds the Aggregate Limit must divest
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itself of the excess QS by no later than November 30, 2015. Excess QS that is not divested by
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this deadline is revoked by NMFS.
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39.
In a Federal Register notice dated January 9, 2004, NMFS purported to give notice
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that NMFS was planning to institute a LAPP for the Fishery. See 69 Fed. Reg. 1563 (Jan. 9,
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2004). This notice did not state that catch landing history associated with limited-entry permits
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before the LAPP was established would not be grandfathered, or otherwise credited, after the
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LAPP was established. As the Council and NMFS have recognized, this notice did not
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sufficiently apprise participants in the Fishery that the IFQ Program would negatively affect a
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participants interest in the Fishery before the IFQ Program was established.
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40.
NMFSs failure to provide sufficient notice of the potential negative effects of the
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IFQ Program was exacerbated by NMFSs formal encouragement of consolidation in the Fishery
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through the establishment of a fishing capacity reduction program for the Fishery (the Buy-Back
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Program). See 68 Fed. Reg. 42,613 (July 18, 2003). Under the Buy-Back Program, certain
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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
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interests. Continued application of the IFQ Program may also cause the partial or entire closure
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of one or more groundfish processing operations, such as Pacific Choices Eureka facility.
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VIII. FIRST CLAIM FOR RELIEF
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42.
Plaintiffs incorporate by reference all preceding paragraphs of this Complaint.
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43.
Under the APA, 5 U.S.C. 706(2)(C), a reviewing court shall hold unlawful and
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set aside agency action found to be in excess of the agencys statutory authority or jurisdiction.
44.
The Magnuson Act requires all FMP amendments and implementing regulations to
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be consistent with applicable law. 16 U.S.C. 1854(a)(3), (b)(1)(B). Common law and state
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statutory law are applicable law as that term is used in the Magnuson Act.
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45.
Federal statutes are interpreted with the presumption that Congress intended to
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retain the substance of the common law and to not preempt other state or federal laws. To
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abrogate common law principles, a federal statute must speak directly to, and expressly supplant,
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the common law principles that Congress intends to address.
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46.
Whether a person or entity owns or controls an asset (such as QS), whether an
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entity owns another entity, and whether a person or entity controls another person or entity are
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issues that are determined by long-established common law and statutory principles, such as
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common law and statutes addressing corporations and agency.
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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
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referenced in paragraph 47.

49.
By implementing Amendments 20 and 21 through the Regulations, and by
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specifically promulgating the Control Rule, Defendants unlawfully abrogated and supplanted
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Corporate and Agency Law without the statutory authority to do so.
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50.
Accordingly, Amendments 20 and 21, and the Regulations, violate the APA
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because Defendants have acted in excess of their statutory authority and jurisdiction, and the
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Magnuson Act because Amendments 20 and 21, and the Regulations, conflict with and are
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incompatible with applicable law.
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IX. SECOND CLAIM FOR RELIEF
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51.
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52.
NMFS purported to establish the Aggregate Limit to prevent an inequitable
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concentration of limited access privileges and to prevent the acquisition of an excessive share
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in the Fishery. See 16 U.S.C. 1853a(c)(5). However, in establishing the Aggregate Limit,
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NMFS relied on a study, Lian et al. (2008) (the Study), that bore no rational relationship to
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these statutory provisions.
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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 Studys framework arose from a fuzzy
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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 Studys 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 NMFSs setting of control
limits significantly higher for the offshore sector than for the shorebased sector.
10
56.
NMFS did not articulate a rational connection between either the Study or the
11
GMT Report and NMFSs decision to set the Aggregate Limit at 2.7%. NMFS did not otherwise
12
rationally explain, or support with sufficient record evidence, its decision to set the Aggregate
13
Limit at 2.7%.
14
57.
Accordingly, NMFSs decision to set the Aggregate Limit at 2.7% was arbitrary,
15
capricious, an abuse of discretion, and contrary to applicable law, in violation of the APA and the
16
Magnuson Act.
17
X. THIRD CLAIM FOR RELIEF
18
58.
19
59.
NMFS failed to sufficiently explain whether and how Amendments 20 and 21, and
20
the Regulations, including the Control Rule and NMFSs decision to establish the Aggregate
21
Limit at 2.7%, would achieve optimum yield, minimize bycatch, impact fishing communities
22
(compared to the other alternatives being considered), efficiently utilize fishery resources,
23
minimize costs and avoid unnecessary duplication, be reasonably calculated to promote
24
conservation, be fair and equitable, prevent excessive shares, or be consistent with any other
25
National Standards. NMFS generally failed to sufficiently explain whether and how
26
Amendments 20 and 21, and the Regulations, are consistent with each of the Magnuson Acts
27
National Standards, 16 U.S.C. 1851(a), or with the goals and objectives of Amendment 20.
28
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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 Acts 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.
10
62.
Accordingly, Amendments 20 and 21, and the Regulations, including the
11
Aggregate Limit and Control Rule, violate the Magnuson Act, and are arbitrary and capricious
12
and not in accordance with law in violation of the APA.
13
XI. FOURTH CLAIM FOR RELIEF
14
63.
15
64.
As described above, NMFS failed to give sufficient notice that the IFQ Program
16
would adversely affect the acquisition of permits or other interests in the Fishery before the IFQ
17
Program became effective. Additionally, in establishing the Buy-Back Program in 2003, NMFS
18
intentionally encouraged Fishery participants to take actions that would result in increased
19
consolidation of interests in the Fishery.
20
21
22
65.
The IFQ Program was intentionally designed by NMFS to decrease consolidation
of interests in the Fishery.

66.
NMFSs encouragement of actions to consolidate interests in the Fishery, its
23
failure to provide sufficient notice that acquisition of interests in the Fishery would be adversely
24
affected by the IFQ Program, and its failure to sufficiently consider the LAPP requirements stated
25
in 16 U.S.C. 1853a(c)(5)(A) renders its approval of Amendments 20 and 21 and its issuance of
26
the Regulations, without including a grandfather clause or another mechanism to preserve
27
interests in the Fishery acquired prior to implementation of the IFQ Program, arbitrary and
28
capricious and not in accordance with law in violation of the APA and the Magnuson Act.
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XII. FIFTH CLAIM FOR RELIEF
67.
68.
The FEIS did not evaluate alternatives in which the Aggregate Limit would be set
4
5
at greater than 3% of the total Fishery QS.

69.
The FEIS also did not sufficiently consider the direct, indirect, and cumulative
effects of selecting 2.7% as the Aggregate Limit, including effects on existing retailer and
consumer markets, delivery patterns pre- and post-processing, cost structures, socio-economic
effects generally, and the groundfish market overall.
70.
Although the FEIS identified multiple factors as relevant to the assessment of the
10
impacts of Amendments 20 and 21, and the Regulations, it did not consistently address all of the
11
factors for each alternative considered. These factors include conservation, net benefits,
12
disruption, excessive shares, fairness and equity, harvest and processor health, labor,
13
communities, small entities and new entrants, general public, and program performance.
14
71.
The FEIS fails to consider and analyze all reasonable alternatives, and specifically
15
fails to consider and analyze reasonable alternatives that include setting the Aggregate Limit at
16
percentages greater than 3%.
17
18
19
72.
The FEIS fails to provide a hard look analysis of the effects of Amendments 20
and 21, and of the Regulations, as required by NEPA.

73.
Accordingly, NMFS violated NEPA when it approved Amendments 20 and 21,
20
and when it issued the Regulations. NMFS therefore violated the APA by taking action that is
21
arbitrary and capricious and not in accordance with the law.
22
XIII. SIXTH CLAIM FOR RELIEF
23
74.
24
75.
The November 2015 Rule is an action under the Magnuson Act that implements
25
the October 2010 Rule and the December 2010 Rule. The November 2015 Rule requires that any
26
revocation of QS exceeding individual species control limits or the Aggregate Limit is to be
27
accomplished proportionally across individual fish species.
28
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76.
NMFS did not consider whether proportional revocation and other aspects of the
November 2015 Rule were consistent with the FMPs 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
10
11
dependence on the Fishery.

78.
In promulgating the November 2015 Rule, NMFS did not consider whether
12
proportional revocation and all other aspects of the November 2015 Rule were consistent with
13
each of the Magnuson Acts National Standards, 16 U.S.C. 1851(a).
14
79.
The November 2015 Rule, including the provisions for proportional revocation,
15
are not consistent with the Magnuson Acts National Standards, including those that require
16
NMFS to use the best scientific information available [which includes economic and social
17
data], achieve optimum yield, consider efficiency in the utilization of fishery resources,
18
minimize costs, minimize adverse impacts on fishing communities, and minimize bycatch.
19
The November 2015 Rule is also not consistent with the goals and objectives of Amendment 20.
20
80.
NMFS failed to perform the review required under NEPA to evaluate the
21
environmental impacts of the November 2015 Rule or to otherwise determine that any such
22
impacts were not significant, in violation of NEPA.
23
81.
In promulgating the November 2015 Rule, NMFS refused to delay the divestiture
24
deadline until after the reallocation of widow rockfish, despite repeated requests that NMFS do
25
so. The reallocation of widow rockfish will significantly affect the calculation used to determine
26
whether a person or entity exceeds the Aggregate Limit. NMFSs refusal to postpone the
27
divestiture deadline until after the reallocation of widow rockfish required certain participants,
28
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.
NMFSs refusal to postpone the divestiture deadline until after the reallocation of
widow rockfish is inconsistent with the Magnuson Acts National Standards, including those
requiring NMFS to minimize costs and efficiently utilize fishery resources, and therefore
violates the Magnuson Act. NMFSs refusal is also arbitrary, capricious, and an abuse of
discretion in violation of the APA, 5 U.S.C. 706(2)(A).
10
83.
In issuing the November 2015 Rule, the Council did not consider, and NMFS did
11
not consider or acknowledge that the Council failed to consider, the implementation of an auction
12
system in lieu of a proportional redistribution scheme, in violation of the Magnuson Act, 16
13
U.S.C. 1853a(d).
14
84.
The November 2015 Rule unlawfully implements regulations (specifically, the
15
October 2010 Rule and the December 2010 Rule) that, as set forth above, violate the Magnuson
16
Act, NEPA, and the APA.
17
85.
Accordingly, the November 2015 Rule is arbitrary and capricious, in excess of
18
NMFSs statutory authority, and not in accordance with applicable law, in violation of the APA
19
and the Magnuson Act.
20
XIV. RELIEF REQUESTED
21
WHEREFORE, Plaintiffs respectfully request that the Court:
22
A.
23
24
25
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;
26
C.
Vacate and remand the Regulations and Amendments 20 and 21 to NMFS;
27
D.
Reinstate any QS that was divested by any of the Plaintiffs;
28
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1
2
E.
Award Plaintiffs reasonable attorney fees, costs, expenses, and disbursements,
including attorney fees associated with this litigation, as appropriate under applicable law; and
F.
equitable.
Award Plaintiffs such other and further relief as this Court may deem just and
5
DATED: December 4, 2015.
6
STOEL RIVES LLP
7
8
By:/s/ Edward C. Duckers
EDWARD C. DUCKERS
Attorneys for Plaintiffs
Sea Princess, LLC; Pacific Choice Seafood
Company; Pacific Fishing, LLC
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
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West Coast Groundfish Lawsuit

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

EDWARD C. DUCKERS (SB #242113)

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

PACIFIC CHOICE SEAFOOD COMPANY;

(5 U.S.C. 701706; 16 U.S.C. 1801

PENNY PRITZKER, U.S. SECRETARY OF

California, Oregon, and Washington.

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Case 1:15-cv-05572-NJV Document 1 Filed 12/04/15 Page 2 of 18

fueling, and transportation.

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

only one shoreside processing facility in Eurekaowned by Pacific Choicethat processes

The unlawful actions challenged in this Complaint have substantial negative

should be vacated by this Court.

II. SUMMARY OF ACTION

Plaintiffs challenge decisions of the National Marine Fisheries Service (NMFS)

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

Groundfish Fishery Management Plan (FMP);

regulations (December 2010 Rule); and

regulations (November 2015 Rule);

NMFSs approval of Amendments 20 and 21 to the Pacific Coast

regulations (October 2010 Rule). 1

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Case 1:15-cv-05572-NJV Document 1 Filed 12/04/15 Page 3 of 18

that a person may own and control.

Control is expansively defined in the Regulations and includes the ability

collectively as the Control Rule.

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

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

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divestiture period until after the reallocation for widow rockfish.

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

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

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

before November 30, 2015.

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

associated statutory violations alleged in this Complaint.

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

IV. JURISDICTION AND VENUE

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

principle place of business in this district.

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

VI. STATUTORY FRAMEWORK

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

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

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

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

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

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

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

LAPPs are required to promote fishery conservation and management and

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privileges. Id. 1853a(c)(5)(D).