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Crivello v. Alaska Commercial Fisheries Entry Commission (12/6/2002) sp-5649
Crivello v. Alaska Commercial Fisheries Entry Commission (12/6/2002) sp-5649
Notice: This opinion is subject to correction before publication
in the Pacific Reporter. Readers are requested to bring errors to
the attention of the Clerk of the Appellate Courts, 303 K Street,
Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
JOHN N. CRIVELLO, )
) Supreme Court No. S-
9871
Appellant, )
) Superior Court No.
3HO-99-159 CI
v. )
) O P I N I O N
STATE OF ALASKA, )
COMMERCIAL FISHERIES ENTRY ) [No. 5649 - December 6, 2002]
COMMISSION, )
)
Appellee. )
________________________________)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Homer, Harold M. Brown, Judge.
Appearances: Louis James Menendez, Juneau, for Appellant. John
T. Baker, Assistant Attorney General, Anchorage, and Bruce M.
Botelho, Attorney General, Juneau, for Appellee.
Before: Fabe, Chief Justice, Matthews, Eastaugh, Bryner, and
Carpeneti, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
I.
The Commercial Fisheries Entry Commission (CFEC)
rejected John Crivello?s limited entry salmon permit application
because it found that he had insufficient points. Crivello
appeals the CFEC?s denial of a third hearing and argues that he
was entitled to more points for gear ownership and income
dependence. Because the CFEC reasonably interpreted its
regulation and disallowed the points Crivello?s partner tried to
cede to Crivello and because substantial evidence supported the
CFEC?s findings regarding Crivello?s independent ownership of
gear, we affirm the superior court?s affirmance of the CFEC
decision denying Crivello?s application.
II. FACTS AND PROCEEDINGS
John Crivello fishes commercially in Bristol Bay.
In April 1977 Crivello applied for a Bristol Bay drift gillnet
limited entry salmon permit.1 He claimed a total of twelve
points: eight for his past participation in the fishery as a
crewman from 1965 until 1972 and four for ownership of a vessel
and gear. From 1961 until 1972 Crivello?s partner, Vince Aiello,
held the gear license and Crivello held the commercial license.
Crivello obtained a gear license in 1973. As of January 1, 1973
Crivello and Aiello jointly owned the vessel used in their
commercial fishing operation. The CFEC, per AS 16.43.240 and
16.43.250(a), determined that applicants with seventeen points and
higher would be issued permits for the Bristol Bay drift gillnet
fishery. In March 1979 the CFEC classified Crivello as eligible
for twelve points but denied him a permit because he had
insufficient points. Crivello promptly requested an
administrative hearing. The CFEC initially denied review but,
after Crivello filed a notice of appeal and a motion for remand,
the superior court remanded the case to the CFEC for a
determination whether Crivello was entitled to more points under
our decision in State, Commercial Fisheries Entry Commission v.
Templeton.2
The CFEC held the first hearing on Crivello?s
application on December 19, 1980. Crivello was represented by
counsel. Crivello and Aiello testified. Aiello testified that he
would relinquish to Crivello the net ownership points to which
Aiello was entitled but which Aiello did not need to obtain his
own fishing permit.
The hearing officer rendered her decision in June
1982. She awarded Crivello four out of a possible six points for
vessel and gear ownership for his one-half interest in the
partnership?s boat and gear. She rejected Crivello?s argument
that he be awarded the two points that Aiello did not need in this
category. She determined that simply being the partner of a gear
license holder from 1969 to 1972 did not entitle Crivello to
points for holding a gear license under Templeton.3 Finally, the
hearing officer reviewed the settlement sheet, partnership tax
return, and Social Security Earnings Record Crivello submitted and
awarded Crivello two points for income dependence for 1971.4
After adding the eight points he received for past participation
as a crew member, she recommended that the CFEC classify Crivello
at fourteen points and deny him a permit for insufficient points.
The CFEC granted Crivello, at his request, an
opportunity to make an oral presentation to challenge the hearing
officer?s decision. Crivello appeared with counsel before the
CFEC in May 1983 to challenge the decision. The CFEC reduced
Crivello?s vessel and gear award from four to three points because
his one-half ownership in the boat and gear only entitled him to
one half of the six possible ownership points.5 It added three
points for income dependence for 1972. These changes gave
Crivello up to sixteen points, still one short of the seventeen
points needed for a permit for this fishery.6 The CFEC advised
Crivello?s attorney to develop the record as thoroughly as
possible and gave him more time to produce evidence of, among
other things, investment credit.
Crivello then submitted two affidavits ? one from
himself and one from Aiello ? discussing the partnership and the
joint ownership of the vessel and gear. He submitted the
partnership?s 1966, 1967, and 1969 state and federal Return of
Income and his 1966 and 1967 individual state tax returns.
The CFEC issued its final decision in May 1999.7
This decision awarded him three points for vessel and gear
ownership for his one-half ownership interest. It cited Chocknok
v. State, Commercial Fisheries Entry Commission8 to support its
policy not to distribute points between partners. It calculated
Crivello?s income dependence using the total gross earnings
attributable to the partnership in 1971 and 1972 and awarded him
two points for 1971 and three for 1972. It denied him a permit
because his final point total was sixteen, one less than the
seventeen required for a permit for this fishery.
Crivello petitioned for reconsideration and
supported his petition with his 1999 affidavit. In the affidavit
he claimed points for ownership of gear independent of the
partnership and alleged not to have understood the need to make
the claim for independent gear ownership points earlier. He also
alleged that the CFEC miscalculated his non-fishing occupational
income and awarded him too few points for income dependence. He
requested a third hearing.
On reconsideration, the CFEC reevaluated Crivello?s
income dependence for 1971 and 1972 and revoked the five points he
had previously received in that category. It determined that ?the
record fail[ed] to provide the commission with sufficient
information to establish the amount of the applicant?s nonfishing
occupational income.?9 The CFEC also determined that the reason
Crivello gave for his prior failure to include evidence of his
individual gear ownership ? that he did not think he needed the
extra points the evidence could have afforded him ? was
unpersuasive. The CFEC reasoned that Crivello had the incentive
and the opportunity to present any useful evidence before his
petition for reconsideration because he had lacked sufficient
points for a permit since he first applied. The CFEC ultimately
decided that this issue was moot, however, because in light of the
five income dependence points the CFEC had just revoked, the three
disputed points for individual gear ownership would not bring
Crivello?s point total to seventeen and therefore would not make
him eligible for a permit. The CFEC denied his application,
concluding that Crivello had only eleven points, six less than
required.
The CFEC also rejected Crivello?s request for
another hearing because, unlike the appellants in Forquer v.
State, Commercial Fisheries Entry Commission,10 Crivello was ?now
well beyond the initial application stage and ha[d] already had
two hearings.? It concluded that Crivello?s petition had not
established a genuine issue about which to hold a hearing. It
stated that if Forquer required a third hearing at the
reconsideration stage, ?the commission could never reach finality
on an application unless it turned back all such evidence without
comment.?
Crivello appealed to the superior court, which
affirmed the CFEC?s decision on the three issues Crivello
contested: income dependence, due process, and vessel and gear
ownership. On income dependence the court held that ?there is
simply no evidence presented that Crivello?s non-fishing income
was low enough to produce the income percentages required for an
award of points? and that such an award ?would not have been
supported by substantial evidence and would therefore have been
erroneous.? The court rejected Crivello?s due process argument and
agreed with the CFEC that the two hearings Crivello had received
were sufficient to allow him to be heard. Finally, the court
agreed with the CFEC that the issue whether Crivello owned gear
independent of the partnership was moot because the extra points
would not be sufficient for a permit. The superior court affirmed
the CFEC in all respects.
Crivello appeals.
III. DISCUSSION
A. Standard of Review
When the superior court acts as an intermediate
court of appeal, we review the underlying administrative decision
independently.11 We review an agency?s interpretation of its
regulations under the reasonable basis standard.12 We review the
agency?s factual findings under the substantial evidence
standard.13 Substantial evidence is ?such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.?14
B. The Superior Court Did Not Err by Affirming the CFEC?s
Decision.
The 1973 Limited Fisheries Entry Act established the
Commercial Fisheries
Entry Commission (CFEC) and ?charged it with protecting distressed
fisheries by granting a limited number of access permits to
commercial fishers.?15 Alaska Statute 16.43.260(a) limits permit
eligibility to fishers who hold a gear license as of the
qualification date, January 1, 1973, and the CFEC determines
further eligibility based on economic dependence on the fishery
for which the fisher seeks the permit and the hardship the fisher
would endure if denied the permit.16 Crivello applied in 1977 for
a permit for the Bristol Bay drift gillnet fishery. The CFEC
denied him a permit because he had insufficient points.
To receive the seventeen points needed for this
permit, Crivello must prevail on his appellate claims for both
additional gear ownership and income dependence points. As it
stands, he has eight undisputed past participation points and
three undisputed gear ownership points. He therefore needs at
least six more points to receive a permit. It is clear that
Crivello is arguing on appeal that he is entitled to five income
dependence points. Even if he receives those five income
dependence points, he also needs at least one gear ownership point
in addition to the three he has already received. We do not need
to decide whether Crivello is entitled to any income dependence
points, because we uphold the superior court?s affirmance of the
CFEC?s denial of Crivello?s claim for additional gear ownership
points. Our ruling on this issue moots Crivello?s claims
regarding income dependence points.
Crivello argues that he should have been awarded
more points for vessel and gear ownership under 20 AAC
05.630(b)(3).17 The interpretation of this regulation ?implicates
agency expertise of the determination of fundamental policies
within the scope of the agency?s statutory functions?; therefore
we apply the reasonable basis standard to review the agency?s
decision.18
The CFEC awarded Crivello three out of an available
six points19 for vessel and gear ownership.20 Crivello argues
that he is entitled to six. First, Crivello argues that he should
have been awarded the full six points available in this category
because his partner was willing to cede his partnership interest
in the vessel and gear to Crivello to make Crivello eligible for a
permit. Crivello asserts that the CFEC unreasonably interpreted
its regulations to preclude giving Crivello credit for full
ownership of the partnership?s vessel and gear. He claims the
partnership would not fare better if he were allotted these extra
points because the partners would still be limited to distributing
only the available six points between themselves.21 He asserts
that it is unreasonable for the CFEC not to allow partners to
distribute among themselves their ownership interests in jointly
owned gear. He argues that because Aiello does not need these
points to obtain his own permit, Aiello should be able to donate
his unneeded partnership interest in the vessel and gear to
Crivello.
The CFEC argues that it properly denied Crivello the
three additional points and that its interpretation of its
regulation was reasonable. It concedes that it had previously
allowed spouses to distribute ownership points between themselves,
but asserts that this court, in Chocknok, upheld the change to a
policy of treating every partnership equally and disallowing point
distribution among partners.22 The CFEC characterizes Crivello as
arguing that ?a literal interpretation of the regulation is
unreasonable,? because as the CFEC observes, it is undisputed that
Crivello only owned fifty percent of the vessel and gear at the
qualification date and therefore should only be entitled to half
of the available points. It argues that Crivello and Aiello did
not have an understanding as to ownership interest distribution
before the qualification date, as 20 AAC 05.620(2) requires. It
contends that Crivello?s interpretation of Chocknok would result
in partners faring better than individuals because it would
?creat[e] two units of gear where only one existed in the fishery
prior to the qualification date, the precise result the
regulations were designed to avoid.?
We affirm the superior court and the CFEC?s decision
on this issue. We held in Chocknok that in discontinuing its
practice of allowing spouses to distribute ownership interest
between themselves and in prohibiting partners who were not
spouses ever to distribute interest between themselves, ?[t]he
Commission ha[d] not changed a regulation, but ha[d] corrected a
policy.?23 That ruling is dispositive on this issue. The CFEC
did not err in interpreting its regulation to preclude Aiello from
donating his interest to Crivello.
Crivello next argues that he should have been
awarded the full six ownership points because he owned gear
independent of the partnership. Crivello first claimed points for
separate gear ownership in his 1999 reconsideration petition. The
CFEC dismissed Crivello?s individual ownership claim in its Final
Commission Decision on Reconsideration for two reasons: it
surmised that Crivello had used this gear illegally, given his
testimony that he used it in Aiello?s absence before Crivello was
a gear license holder; and it was not persuaded by Crivello?s
argument that he first mentioned this individually owned gear in
his petition for reconsideration because he did not realize he
needed these points until the reconsideration stage.
Crivello argues that he testified that he had used
the gear only when ?it was acceptable? to the Alaska Department of
Fish and Game (ADF&G). He asserts that there was substantial
evidence that he owned the gear by the qualification date, when he
was a gear license holder, and that the regulation only requires
that the gear is ?to be used in the fishery,?24 regardless of the
use he had made of the gear before he applied for the permit.
The CFEC asserts that Crivello waived this claim to
ownership of separate gear because he failed to preserve it before
the superior court. The CFEC contends that he raised this claim
for the first time on reconsideration of the CFEC?s final decision
and abandoned it in his superior court brief. CFEC argues that it
is relevant that he used the gear illegally and that there is no
evidence that the ADF&G condoned Crivello?s use of the gear or
gave Crivello reason to believe that he could fish alone without a
gear license. It also contends that, regardless of Crivello?s use
of the gear, the CFEC was entitled to find that there was
substantial evidence that Crivello did not in fact own any
separate gear independent of the partnership. It relies on
testimony in which Crivello only referred to gear the partnership
owned and his emphasis on that joint ownership.
Crivello replies that if there is contradictory
evidence in the record whether Crivello owned separate gear, a
hearing is needed. He asserts that he did not waive this
argument. He contends instead that the CFEC and the superior
court both addressed it and both found it a moot point because
even if he were awarded these points he would not have reached the
requisite seventeen points.
We agree with Crivello that he did not waive his
claim for independent gear ownership points. The superior court
actually addressed that claim, (although that court determined
that the issue was moot because the extra points would not have
given Crivello the requisite seventeen).
We nonetheless affirm the decision not to grant
Crivello more points for independent gear ownership and the
decision not to grant him a new hearing under AS 16.43.260(c).25
We hold that there was substantial evidence that Crivello was not
using his own gear. This evidence consisted of testimony by
Crivello and his partner that referred to all gear as jointly
owned.
We also agree with the CFEC?s interpretation of AS
16.43.260(c) and hold that the CFEC was not required to grant
Crivello a third hearing. In Forquer we held that ?[b]y extending
a new opportunity to submit additional evidence to [the]
applicants . .. the Commission was then required to conform to the
mandate of the statute and its hearing requirement.?26 To hold
that Crivello is entitled to a new hearing on reconsideration
after he had two previous hearings would mean that the CFEC is
required to hold a hearing whenever it accepts any new evidence,
regardless of the applicant?s opportunity to present the evidence
in previous hearings. It was Crivello?s burden from the outset to
establish his eligibility for as many points as he could. He was
on notice from the beginning that his application lacked the
requisite points to make him eligible for a permit. The hearing
officer initially found him eligible for fourteen points and the
CFEC never awarded him enough points to obviate an independent
gear ownership claim. He had ample opportunity to present any
evidence of individual gear ownership, and the CFEC even advised
him to develop the record for investment credit. ?Whether to
consider a new issue raised for the first time in a petition for
reconsideration can properly be committed to the agency?s
discretion.?27 We uphold the superior court?s affirmance of the
CFEC?s denial of more points for vessel and gear ownership.
IV. CONCLUSION
For these reasons we AFFIRM the superior court?s
affirmance of the CFEC?s decision to deny Crivello?s limited entry
permit application.
1 In 1973 the Alaska Legislature found that
commercial fishing had reached levels of participation that had
impaired or threatened to impair fishery resources. AS 16.43.010.
It created the CFEC to determine fishers? eligibility for limited
entry permits to fish protected fisheries based on economic
dependence on and past participation in the fishery. AS
16.43.020, .250. A fisher proves economic dependence by, among
other things, establishing how much income the fisher derives from
the fishery as opposed to non-fishing occupations, and how great
an investment the fisher has made in gear ownership. AS
16.43.250; 20 Alaska Administrative Code (AAC) 05.630(b)(3)
(2000).
2 598 P.2d 77, 81 (Alaska 1979) (?[A]llocating one
permit between two partners solely on the fortuitous circumstances
of which one held the gear license in two given years does not
realistically weigh the relative hardship which each partner would
suffer by denial of a permit.?) (footnote omitted).
3 Crivello does not appeal the CFEC?s decision to
deny him points for past participation as a gear license holder.
4 At that time, Crivello derived non-fishing income
from his part ownership of a restaurant in Monterey, California.
5 See 20 AAC 05.630(b)(3).
6 There was brief confusion over one 1969
participation point that was eventually settled in Crivello?s
favor.
7 The CFEC explained in its decision and in its brief
for this court why its final decision was delayed. Crivello does
not argue that the delay caused him prejudice. Crivello has
fished under an interim permit in the intervening years.
8 696 P.2d 669, 676 n.10 (Alaska 1985).
9 The CFEC determined that it would not rely on the
evidence that it previously used to calculate Crivello?s income
dependence, such as Social Security earnings.
10 677 P.2d 1236, 1242 (Alaska 1984) (holding that
CFEC must conduct hearing when it accepts new evidence before it
may reject entry permit application due to applicant?s failure to
establish qualifications).
11 Leuthe v. State, Commercial Fisheries Entry Comm?n,
20 P.3d 547, 550 (Alaska 2001).
12 Bartlett v. State, Commercial Fisheries Entry
Comm?n, 948 P.2d 987, 990 (Alaska 1997).
13 Jones v. Commercial Fisheries Entry Comm?n, 649
P.2d 247, 249 n.4 (Alaska 1982).
14 Commercial Fisheries Entry Comm?n v. Baxter, 806
P.2d 1373, 1374 (Alaska 1991) (citation and internal quotations
omitted).
15 Leuthe, 20 P.3d at 548; see also AS 16.43.010-.990.
16 AS 16.43.250.
17 20 AAC 05.630(b) (2000) sets out the following
relevant points schedule:
Up to a maximum of 20 points will be awarded an applicant for
economic dependence on a fishery based on . . .
(3) investment as of the qualification date in vessel,
gear or setnet site used or to be used in the fishery for which
application is being made. . . .
(A) owns vessel . . . 6 points; .. .
(C) owns gear . . . 3 points.
18 Matanuska-Susitna Borough v. Hammond, 726 P.2d 166,
175 (Alaska 1986).
19 See 20 AAC 05.630(b)(3).
20 20 AAC 05.620(2) reads in part:
[T]he commission will rank an applicant based on the
factor of investment in vessels, gear and setnet sites if the
applicant, on the qualification date, was the owner of a vessel,
gear or setnet site used or to be used in the fishery for which he
is applying. . . . In cases where a vessel, gear or setnet site
was owned jointly or in a corporate capacity, an applicant?s
points will be determined by multiplying his percentage of
ownership interest times the total number of points possible.
21 See Chocknok v. State, Commercial Fisheries Entry
Comm?n, 696 P.2d 669, 676 n.10 (Alaska 1985) (holding that ?two
people co-owning a vessel and gear should not fare better than one
person?) (citing Rose v. Commercial Fisheries Entry Comm?n, 647
P.2d 154, 161 (Alaska 1982)).
22 Id. (?The Commission has not changed a regulation,
but has corrected a policy. It is well established that the
choice between modifying an existing agency policy by rule or by
individual ad hoc litigation is one that lies in the informed
discretion of the agency.?) (citation omitted).
23 Id.
24 20 AAC 05.630(b)(3).
25 AS 16.43.260(c) reads:
When an applicant is unable to establish qualifications for an
entry permit by submitting the specific verified evidence required
in the application by the commission, the applicant may request
and obtain an administrative adjudication of the application
according to the procedures established in AS 16.43.110(b). At the
hearing the applicant may present alternative evidence of
qualifications for an entry permit.
26 677 P.2d 1236, 1242 (Alaska 1984).
27 Jones v. Commercial Fisheries Entry Comm?n, 649
P.2d 247, 250 (Alaska 1982).
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