, Salem, MA

September 6, 2012

Lawyers argue city's case on fishery

By Richard Gaines
Staff Writer

---- — BOSTON — Lawyers for the region’s co-capitals of the fishing industry, New Bedford and Gloucester, yesterday urged the First U.S. Court of Appeals in Boston to direct a federal district court judge to assert control over what was described as the rampant consolidation of the groundfishery that risks destroying cultures linked to a way of life older than the nation itself.

The lead attorney for the cities and other fishing interests, James F. Kavanaugh Jr., told the three-judge panel that commodity trading of groundfish allocations — through the system known as catch shares — among members of fishing cooperatives known as sectors was introduced improperly and illegally in 2010 by denying the groundfishermen their statutory right to vote on the radical transformation of their industry.

But Kavanaugh said his clients — along with the region’s major fishing ports, dozens of fishing businesses, associations and individuals from New Hampshire to North Carolina — do not seek to have the catch share regimen halted or declared illegal.

In response to Chief Justice Sandra L. Lynch’s question — “Are you asking that the program be stopped in its tracks?” — Kavanaugh said, “No, that’s too draconian.”

He went on to explain that the plaintiffs want the Court of Appeals to remand the case back to U.S. District Judge Rya Zobel, and for her to require the National Oceanic and Atmospheric Administration (NOAA) to administer the regimen correctly, as Congress intended, with safeguards against economic destabilization and social dislocation.

Those safeguards hang on whether the sector system is defined to be a Limited Access Privileged Program or Individual Fishing Quotas — a dicey definition, even Judge Lynch acknowledged — that would include a referendum approval by two thirds of the affected fishermen. Judge Zobel had rejected that definition of the sector program last year, prompting the appeal, which contends the system is a limited access program because participants are limited in what they can catch and trade it.

Joan M. Pepin, attorney for the NOAA, and Peter Shelley, speaking for the Conservation Law Foundation, argued that a “poison pill” — essentially a way to prevent corporate misdeeds — was designed into the catch share system crafted by the New England Fishery Management Council and adopted and put into effect in May 2010 by NOAA.

It was not an LAPP or an IFQ because of the separation of powers, she argued; the sector fishing cooperatives had set the quotas, but the permitholders harvested the catch.

In addition, Pepin argued that the sector catch share system did not involve a permanent allocation of risk disfiguring the fishery, because unlike an LAPP or an IFQ, it could be voted out of existence by the New England Fishery Management Council. Moreover, she noted, the council had already addressed the potential problems of catch share trading by producing a fishery dominated by a small number of well-capitalized businesses.

Chief Judge Lynch and Judge Michael Boundin interjected probing questions.

“Why would Congress have concerns about individual permits,” Boundin asked, almost rhetorically, “but not be concerned about permits that are pooled?”

Lynch, meanwhile, asked the defendants why there were so many plaintiffs asking the court to act to stop rampant consolidation if the government was already addressing the problem.

Shelley, at the table with Pepin, argued that the catch share regimen was widely popular, citing the Cape Cod Commercial Hook Fishermen, who pioneered the sector concept in 2003.

Chief Judge Lynch ended the hour of oral arguments with the statement that “we are well aware of the importance of this case.”

Now, after the oral arguments spiced with dialogue between the lawyers and judges, the court will begin the private exercise of putting the briefs and arguments into the legal framework. It will use analysis of the clerks who sat along both sides of the courtroom taking copious notes, and finally the workproduct will go to the panel for its deliberations.

Eldon Greenberg, a former chief counsel at NOAA who wrote the amicus brief for Reps. Barney Frank and John Tierney, supporting the plaintiffs, said a decision might be ready by December or January. He also advised that oral comments by the judges are not necessarily suggestive.

The effort noted by Pepin to prevent control of the fishery by concentrations of capital is not yet formally adopted, or even drafted. The project is on the to-do list of the New England Fishery Management Council.

An arm of NOAA, the council has introduced the idea of a new level of regulatory law that would define limits on the accumulation of catch shares and possibly institute rules to protect fleet diversity and keep historic fishing ports active. The effort is in “a stage of limbo for now,” according to a spokeswoman for the council, due to a tangle of crises involving confiscatory catch limits looming for the groundfishery in 2012 and high priority efforts to update the map of closed areas — opening up some and possibly creating others.

The council had carried the idea or an amendment on “fleet diversity, allocation and excessive shares” as low priority in 2012, and the problem is expected to be discussed at the end of the upcoming September council meeting when it sets its priorities for 2013.

The catch share system went live just as the groundfishery was made to operate at a dramatic reduction in the allowable catch, from the interaction of two congressional acts — putting distressed stocks on 10-year rebuilding schedules and the first hard catch limits.

The interaction of the catch share sector system with the new conservation law brought about what the states of Massachusetts, New Hampshire and Maine have insisted is fishery failure.

NOAA has not responded to the filings which were made last November and this January, while New York joined the demand for a disaster declaration last month.

U.S. Sen. John Kerry, meanwhile, has instigated a letter for signatures by the senators and ocean district representatives for a $100 million bailout and $100 million loan for industry reimbursement to finance a buyback program — a proposal sparking fierce disagreement within the industry.

Richard Gaines can be reached at 978-283-7000, x3464, or at