October 24, 2024
This update was distributed to the Maritime Law Association and briefs recent noteworthy admiralty cases that involve fisheries-related issues, specifically decisions by the federal circuit courts as well as cases decided by the U.S. Supreme Court, including Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244 (2024), which overturned the landmark Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837 (1984) decision.
Lofstad v. Raimondo, No. 24-1420, 2024 U.S. App. LEXIS 24317 (3d Cir. Sep. 25, 2024)
FACTS: Plaintiffs, commercial fishermen, challenged the National Marine Fisheries Service’s (“NMFS”) promulgation of a final rule that altered the allocation of summer flounder, scup, and black sea bass between the recreational and commercial sectors. Plaintiffs alleged harm from this reallocation and objected to the constitutional composition of the Mid-Atlantic Fishery Management Council.
The Mid-Atlantic Fishery Management Council is just one of the eight regional fishery management councils in the United States, promulgated under the Magnuson-Stevens Act. In this case, the Mid-Atlantic Fishery Management Council proposed the rule and the Fishery Management Plan (“FMP”) that Plaintiffs challenged.
In short, Plaintiffs argued that the twenty-one members of the Mid-Atlantic Fishery Management Council exercised power of, but were not properly appointed as, “officers” under the Appointments Clause of the United States Constitution; therefore, the NMFS should not have promulgated the challenged rule.
The New Jersey District Court denied Plaintiffs’ Motion for Summary Judgment and granted the United States’ Motion. On appeal, the Third Circuit Court of Appeals reversed, rendering judgment in favor of Plaintiffs.
ISSUE: Whether the members of the Mid-Atlantic Fishery Management Council are “Officers of the United States” under U.S. Const. art. II, § 2, c. 2., the Appointments Clause, and whether the members of the Mid-Atlantic Council were properly appointed?
HOLDING: The members of the Mid-Atlantic Council were (and are) “Officers of the United States” under U.S. Const. art. II, § 2, c. 2., and they were not properly appointed. The Third Circuit severed the unconstitutional powers that the Mid-Atlantic Council members exercised.
REASONING: Plaintiffs argued that, by proposing the challenged rule, the Mid-Atlantic Fishery Management Council acted as “Officers of the United States” under U.S. Const. art. II, § 2, c. 2., and they had not been properly appointed. The Third Circuit agreed, noting the Constitution specified the procedure for appointing some federal officials. That is, “principal officers” must be nominated by the President and confirmed by the Senate. However, “inferior officers” may, with congressional approval, be appointed by the President, the Courts of Law, or the Heads of Departments of the executive branch. These procedures do not apply to the hiring of “mere employees.” To distinguish “officers” from “mere employees,” the United States Supreme Court provided two guideposts.
First, employees’ duties may be merely “occasional or temporary,” while officers’ duties must be “continuing and permanent.” Lucia v. SEC, 585 U.S. 237, 245 (2018) (quoting United States v. Germaine, 99 U.S. 508, 511-12 (1879)). The United States did not dispute this first guidepost, admitting that the Mid-Atlantic Council members’ duties were continuing.
Second, officers must “exercis[e] significant authority” under federal law. Lucia, supra. (quoting Buckley v. Valeo, 424 U.S. 1, 126 (1976)). That inquiry turns on how much “power an individual wields in carrying out his assigned functions.” Id. Having significant duties and discretion to carry them out is significant authority. Freytag v. Comm’r, 501 U.S. 868, 881-82 (1991). Power akin to a federal judge’s also suffices. Id.; Lucia, 585 U.S. at 246. So do “broad administrative powers” to make rules, issue advisory opinions, and decide who is eligible to get funds and to run for office without day-to-day supervision. Buckley, 424 U.S. at 140-41. Our inquiry also turns on whether another part of the federal executive, legislative, or judicial branch can “control or direct[]” how an official exercises her powers. Id. at 126. With respect to this second guidepost, the United States argued that the Mid-Atlantic Council’s role was purely advisory. However, the Third Circuit noted that some of the Council members’ powers went “well beyond advice” as such members could block some actions by the Secretary of Commerce (e.g., by withholding their assent to a limited access fishery system, the Mid-Atlantic Council members could ‘pocket-veto’ certain actions by the Secretary of Commerce). Thus, because those powers were considered significant, the Third Circuit found that the Mid-Atlantic Council members were officers, not just “mere employees.”
The Third Circuit further found that the Mid-Atlantic Council members were not only officers, but “principal officers.” To decide whether an officer is a “principal officer,” courts consider whether the officers have power to make final decisions of the United States. United States v. Arthrex, Inc., 594 U.S. 1, 13 (2021). That is, officers with “unreviewable authority” are principal officers. Id. The Third Circuit found that the Mid-Atlantic Council members held unreviewable authority since no principal officer at any level within the Executive Branch directed and supervised the Mid- Atlantic Council members’ pocket vetoes. Instead, these Council members actually exercised their pocket veto power over a “principal officer,” the Secretary of Commerce. Thus, the Third Circuit found that the Mid-Atlantic Council members were “principal officers” that should be appointed by the President and confirmed by the Senate. Since the Mid-Atlantic Council members were not so appointed, their appointments were unconstitutional.
The foregoing being the case, the Third Circuit severed the Mid-Atlantic Council’s pocket-veto powers in 16 U.S.C. § 1854(c)(3), 1854(h), and 1856 (a)(3)(B), stripping the Council of its significant authority.
Arnesen v. Raimondo, No. 24-60055, 2024 U.S. App. LEXIS 21451 (5th Cir. Aug. 23, 2024)
FACTS: Plaintiffs, commercial fishermen, challenged the constitutionality of the Gulf of Mexico Fishery Management Council on both removal and appointment grounds. The suit there arose from approval of an amendment to a final rule to that region’s FMP, recommended by the Gulf of Mexico Fishery Management Council, which significantly reduced the greater amberjack catch limit.
Plaintiffs argued that the rule was void because the Gulf of Mexico Fishery Management Council members were improperly appointed under U.S. Const. art. II, § 2, c. 2. The Southern District of Mississippi initially decided that six of the seventeen Council members were “inferior officers” whose appointments violated the Appointments Clause; however, the decision to implement the rule was not made by those Council members, it was instead made by the Secretary of Commerce’s designee, the NMFS’ Assistant Administrator. Moreover, according to the Southern District, the remaining eleven Council members were properly appointed. Therefore, the Southern District of Mississippi granted the United States’ Motion for Summary Judgment. On appeal, the Fifth Circuit Court of Appeals remanded the case to the Southern District of Mississippi.
ISSUE: Whether the members of the Gulf of Mexico Fishery Management Council were improperly appointed under U.S. Const. art. II, § 2, c. 2., the Appointments Clause, and whether they were unconstitutionally insulated from removal?
HOLDING: On appeal, the Fifth Circuit Court of Appeals remanded the case to the Southern District of Mississippi with instruction to address: 1) whether there was jurisdiction to consider the Plaintiffs’ requested relief, i.e., declaring the final rule itself void and enjoining the voting members of the Gulf of Mexico Fishery Management Council from developing further annual catch limits for the greater amberjack fishery in light of the United States’ contention that judicial review under 16 U.S.C. § 1655(f)(1)-(2) was limited to “regulation promulgated by the Secretary” and “actions that are taken by the Secretary under regulations which implement a fishery management plan;” and 2) whether the NMFS Assistant Administrator’s review and approval of the amendment functioned as a ratification of the Gulf of Mexico Fishery Management Council’s actions.
REASONING: The Fifth Circuit noted it was bound by its recent precedent in Braidwood Mgmt.
v. Becerra, 104 F.4th 930 (5th Cir. 2024), where a district court considered an Appointments Clause challenge to three bodies affiliated with the Department of Health and Human Services. As to one of those three bodies, the district court concluded that its members were “principal officers” who were improperly appointed. The Fifth Circuit affirmed. However, the district court in that case had rejected the Appointments Clause challenge to the two other bodies, and the Fifth Circuit, rather than consider whether those two bodies were constituted by individuals serving in violation of the Appointments Clause, remanded to the district court to allow that court to fully consider the challenges before review by the Fifth Circuit. Following its decision in Braidwood, the Fifth Circuit remanded to the Southern District of Mississippi with instructions to address the foregoing issues, noting that it would prefer to be the “court of review, not first view.”
A.P. Bell Fish Co. v. Raimondo, 94 F.4th 60 (D.C. Cir. 2024)
FACTS: The NMFS promulgated a final rule that implemented an amendment to the FMP for the Reef Fish Resources of the Gulf of Mexico, which modified/redistributed the allocation of red grouper between the commercial sectors (reducing) and recreational sectors (increasing). Plaintiff, commercial fishermen, challenged the rule, arguing that the NMFS relied upon inconsistent economic analyses, one of which the NMFS itself had previously rejected, and that the NMFS failed to comply with the Magnuson-Stevens Fishery Conservation and Management Act. Specifically, as to the latter contention, Plaintiffs argued that the final rule promulgated by the NMFS lacked the required catch limits and accountability measures and violated National Standards 4 and 9 under the Magnuson-Stevens Act. The United States District Court for the District of Columbia granted Summary Judgment to the NMFS. On appeal, the D.C. Circuit Court of Appeals affirmed, in part, and reversed, in part.
ISSUE: Whether the NMFS improperly applied an economic analysis that it had previously rejected when promulgating a prior rule modifying the allocation of red snapper in 2016 to the instant rule modifying the allocation of red grouper, and whether the NMFS complied with the Magnuson-Stevens Act when promulgating the instant rule under the Administrative Procedure Act (“APA”)?
HOLDING: The D.C. Circuit agreed with Plaintiffs in part, finding that the NMFS failed to adequately explain its reliance on the disputed economic analysis and that further analysis was needed to determine how the NMFS’ reliance upon an economic analysis it had previously rejected influenced the application of National Standards 4 and 9 to the instant rule allocating red grouper between the commercial and recreational sectors. However, the D.C. Circuit agreed with the district court that the promulgation of the rule complied with the Magnuson-Stevens Act’s requirement to establish a mechanism for specifying annual catch limits. As a result, the D.C. Circuit affirmed, in part, and reversed, in part, remanding the case without vacating the rule such that the NMFS could further explain its economic methodology, which would inform whether the rule actually complied with National Standards 4 and 9 under the Magnuson-Stevens Act.
REASONING: According to the D.C. Circuit, historically the NMFS allocated 76% of the annual catch limit for red grouper to the commercial sector and 24% to the recreational sector based upon data from landings collected between 1986 and 2005.
In 2007, Congress directed the NMFS to improve the quality and accuracy of its data collection, leading to the creation of a new survey methodology. In the rule promulgated by the Gulf of Mexico Fishery Management Council with respect to red grouper, the Gulf of Mexico Council recommended changing the commercial and recreational sector allocation to reflect updated data from the new surveys. Ultimately, six allocation alternatives were provided, and the Gulf of Mexico Council chose the third option because it ‘best reflected the historical participation by the commercial and recreational sectors, it fairly and equitably distributed the needed reduction in catch between the sectors and provided the greatest net economic benefits to the United States.’ Accordingly, the rule reduced the commercial sector’s allocation of red grouper from 76% to 59.3% and increased the recreational sector allocation from 24% to 40.7%.
With respect to the disputed economic analysis, the D.C. Circuit noted the NMFS had previously revised the commercial and recreational allocation for the red snapper in 2016. In short, when promulgating that prior rule, the NMFS discredited and rejected the “equimarginal principle,” which compared the marginal values of the commercial and recreational sectors to determine the level of allocation to each sector and to determine the greatest net economic benefits. The D.C. Circuit noted, however, the NMFS had essentially used that same principle to promulgate the instant rule redistributing the allocation of red grouper. Based on this apparent flaw, the D.C. Circuit remanded because the D.C. Circuit could not discern whether the NMFS would have reached the same result had it not relied upon an economic analysis that the NMFS had previously discredited.
With respect to National Standard 4, which provides that “[i]f it becomes necessary to allocate or assign fishing privileges among various United States fishermen, such allocation shall be . . . reasonably calculated to promote conservation” 16 U.S.C. § 1851(a)(4)(B), the D.C. Circuit found that it did not need to address Plaintiffs’ argument that the promulgated rule violated National Standard 4. Instead, the D.C. Circuit found that the rule may be sufficient to promote conservation by substantially reducing catch limits; however, that conclusion would depend on how the NMFS addressed/explained its reliance on the economic analysis it had previously rejected.
With respect to National Standard 9, which directs the NMFS “to the extent practicable,” to “minimize bycatch and[,] . . . to the extent bycatch cannot be avoided, [to] minimize the mortality of such bycatch” 16 U.S.C. § 1851(a)(9), the D.C. Circuit found that the NMFS did not consider measures to directly reduce the bycatch of red grouper and other species of fish. However, the
D.C. Circuit similarly refused to conclude that the NMFS violated National Standard 9, opting instead to remand.
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