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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. State, Alaska Board of Fisheries v. Grunert (04/21/2006) sp-6006
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
| STATE OF ALASKA, ALASKA | ) |
| BOARD OF FISHERIES, and | ) Supreme Court Nos. S- 11951/11991 |
| ALASKA DEPARTMENT OF FISH | ) |
| AND GAME, | ) Superior Court No. 3AN-05- 7909 CI |
| ) | |
| Appellants/Cross-Appellees, | ) O P I N I O N |
| ) | |
| v. | ) No. 6006 - April 21, 2006 |
| ) | |
| MICHAEL GRUNERT, JIM | ) |
| ROCKOM, MORI JONES, PAUL | ) |
| JOHNSON, ANDY SHANGIN, | ) |
| HARVEY KALMAKOFF, | ) |
| CLEMENT SHANGIN, MARVIN | ) |
| YAGI, BERNARD SKONBERG, | ) |
| JOHN JONES, FRANK GRUNERT, | ) |
| CLEMENS GRUNERT, ANDY | ) |
| STEPANOFF, CLIFFORD | ) |
| BRANDAL, ALEC BRANDAL, and | ) |
| AL ANDERSON, | ) |
| ) | |
| Appellees/Cross-Appellants. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, William F. Morse, Judge.
Appearances: Lance B. Nelson, Senior
Assistant Attorney General, Anchorage, and
David W. M rquez, Attorney General, Juneau,
for Appellants/Cross-Appellees. Arthur S.
Robinson, Robinson & Associates, Soldotna,
for Appellees/Cross-Appellants. Gregory F.
Cook, Douglas, for Amici Curiae Chignik
Seiners Association and Chignik Seafood
Producers Alliance.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
EASTAUGH, Justice.
CARPENETI, Justice, dissenting.
I. INTRODUCTION
We consider here the validity of a 2005 emergency
regulation creating a cooperative Chignik purse seine salmon
fishery. In Grunert v. State (Grunert I), we invalidated former
5 Alaska Administrative Code (AAC) 15.359 (2002), an Alaska Board
of Fisheries regulation that created a cooperative fishery within
the Chignik purse seine salmon fishery. In response to Grunert
I, the board in 2005 adopted an emergency regulation that
retained the basic cooperative scheme but that required each
permit holder in the cooperative to actively participate in the
fishery by making at least ten deliveries during the fishing
season. When Michael Grunert and other commercial fishers
brought suit, the superior court held the emergency regulation
invalid per Grunert I. The board appealed. After hearing oral
argument on February 3, 2006, we issued a dispositive order on
February 9. Our opinion today explains our reasoning more
thoroughly. We hold that the board exceeded its authority by
promulgating the 2005 emergency regulation, former 5 AAC 15.358,
because the cooperative fishery created by the emergency
regulation was fundamentally at odds with the Limited Entry Act,
AS 16.43. We also hold that the emergency regulation employed
means outside the boards authorized powers to allocate fishery
resources within a single fishery. Although the emergency
regulation has now expired, we consider these and other issues
raised by the cooperative scheme under the public interest
exception to the mootness doctrine.
II. FACTS AND PROCEEDINGS
Many of the facts underlying this case were set out in
our opinion in Grunert v. State (Grunert I).1 In 2002, in
response to declining salmon prices in the Chignik commercial
salmon fishery, the Board of Fisheries (board) promulgated
regulations authorizing a majority of Chignik salmon purse seine
permit holders to apply to fish as a cooperative.2 After more
than the minimum number of permit holders applied to participate,
the board issued a single cooperative fishery permit to the
cooperative (Chignik Seafood Producers Alliance) and allocated to
the cooperative a percentage of the harvestable surplus of
Chignik sockeye salmon based on the number of permit holders
participating in the cooperative.3 The cooperative fishery had
goals of decreasing overhead expenses and improving fish quality
by controlled harvesting.4 Both goals would be advanced by
reducing the number of fishing vessels in the fishery.5
Michael Grunert, a high-earning Chignik salmon purse
seine fisher and permit holder, did not participate in the 2002
cooperative and instead filed a complaint in superior court in
April 2002 challenging the validity of the cooperative
regulation.6 One other Chignik salmon purse seine permit holder
joined Grunert in the litigation.7
While the Grunert lawsuit was pending, the board made
minor changes to the cooperative regulation, 5 AAC 15.359, in
20038 and changed the allocation formula in 2004.9 The board
also amended the regulation to allow cooperative fishers to use
equipment different from that open fishers were permitted to use
under 5 AAC 15.330, 15.332, 39.240, and 39.260.10
The superior court rejected Grunerts challenge and held
that the cooperative regulation was statutorily and
constitutionally valid.11 Grunert appealed and on March 17, 2005
we reversed the superior court judgment and held that the
regulation was fundamentally at odds with the Limited Entry Act.12
The intervenor, Chignik Seiners Association, petitioned for
rehearing and moved for a stay of our decision until after the
2005 salmon fishing season. We denied both the petition and the
motion on April 22, 2005.
In response to our decision in Grunert I, the Chignik
Seafood Producers Alliance (the Alliance) petitioned the board to
adopt an amended version of the cooperative regulation as an
emergency regulation. The board met on May 2 and May 4, 2005 in
response to the Alliances petition and voted to take no action on
the petition. Instead, the board considered whether to find an
emergency under AS 44.62.250, which gives agencies authority to
promulgate an emergency regulation upon making a written finding
that the regulation is necessary for the immediate preservation
of the public peace, health, safety, or general welfare. After
considering the comments of board members about the detrimental
effects potentially resulting from the unavailability of a
cooperative for the 2005 Chignik salmon season, the board voted
to find an emergency under AS 44.62.250. The board then
considered and adopted Emergency Regulation 5 AAC 13.358, an
amended version of the invalidated cooperative regulation. The
board did not intend to make the regulation permanent, and it
expired on September 2, 2005.
The emergency regulation differed from the original
cooperative regulation in a number of ways. The emergency
regulation required cooperative participants to actively
participate in the fishery as a prerequisite to any remuneration:
[A] CFEC permit holder who participates in
the annual cooperative fishery . . . (C) must
actively participate in the cooperative
fishery to receive any economic benefit; for
the purposes of this subparagraph, actively
participate means to make at least 10
deliveries of salmon to a buyer using the
participants CFEC permit card; it does not
mean a CFEC permit holder has to participate
in the cooperative fishery from season
opening to season closing, and it does not
mean that every boat registered for the
Chignik salmon fishery be used in the
cooperative fishery.[13]
The emergency regulation prohibited multiple permit holders from
splitting deliveries: All fish from each delivery must be
attributed to only one CFEC permit holder on an [Alaska
Department of Fish and Game] fish ticket; no split deliveries may
be made.14 The emergency regulation also incorporated those 2005
amendments to the former regulation that permitted different
types of equipment to be used in the cooperative fishery:
(f) The participants in the cooperative
fishery may operate a fixed lead only under
the conditions of a commissioners permit.
Notwithstanding 5 AAC 39.260, a vessel
attached to a fixed lead or to a seine
attached to a fixed lead may be allowed to go
dry or be anchored without the vessel engine
running in the waters of the Chignik Bay
District from Mensis Point to Pillar Rock, as
long as the lead and seine are not configured
to form a fish trap prohibited under AS
16.10.070 and 16.10.100.
(g) Notwithstanding 5 AAC 39.240, and only
under the conditions of a commissioners
permit, a vessel may have on board a purse
seine or hand purse seine and up to two fixed
leads.
(h) The participants in the cooperative
fishery may use net pens to hold live salmon
until processing, only under the conditions
specified in a commissioners permit.[15]
On May 16, 2005 Grunert and other Chignik commercial
fishers and fish tenders (collectively, Grunert) challenged the
validity of the emergency regulation by filing a superior court
complaint against the State of Alaska, Alaska Board of Fisheries,
and Alaska Department of Fish and Game (collectively, the board)
for declaratory and injunctive relief. Grunert alleged that the
board did not have authority to adopt the emergency regulation
without legislative approval of cooperative salmon fisheries and
that no emergency existed to justify the board adopting the
emergency regulation. Grunert simultaneously moved for summary
judgment and requested a speedy hearing and advancement on the
courts calendar. The board timely opposed and cross-moved for
summary judgment.
Superior Court Judge William F. Morse heard oral
argument on the cross-motions for summary judgment on June 1,
2005 and promptly announced the superior courts decision the next
day.16 First, the court concluded that the timing of the
publication of our Grunert I decision created an emergency and
that the board met the procedural requirements for promulgating a
regulation in response to that emergency. It found that the
general welfare of the fishery was at stake because permit
holders who had previously fished in the cooperative fishery and
who wanted to fish during the 2005 season did not have enough
time to deal with all of the financial, logistical, personnel,
personal, and equipment arrangements necessary to participate in
the fishery. Second, it found that the cooperative and open
fisheries are two distinct fisheries. Third, it found that the
emergency regulation was invalid because it exceeded the
statutory authority of the board. The court noted that Grunert I
made clear that the Limited Entry Act restricts eligibility for
permits to natural persons who are economically dependent on and
actively participating in fishing. The court found that the
cooperative regime under the emergency regulation was still
dramatically different from the regime envisioned by the Limited
Entry Act. The court noted that the cooperative system changes
the distribution of profit, reduces competition, permits
different timing and pace of participation, allows some
cooperative members to maintain alternative primary occupations,
changes the amount of risk involved in commercial fishing,
changes the economic model of commercial fishing, and encourages
less equipment and a smaller support system. The court concluded
that the emergency regulation did not satisfy the problems
identified in Grunert I and that the regulation was therefore
invalid.
The superior court entered final judgment for the
Grunert plaintiffs. The board immediately filed an emergency
motion for stay of the judgment. We granted the stay through the
end of the 2005 Chignik salmon season and stated that we would
consider any appeal of the final judgment on an expedited basis.
The board appealed that part of the superior courts
decision that declared the emergency regulation inconsistent with
the Limited Entry Act and Grunert I. Grunert cross-appealed the
superior courts approval of the boards finding of an emergency
and the superior courts conclusion that the cooperative fishery
and the open fishery are two different fisheries.
On November 16, 2005, after the opening briefs had
already been filed in this appeal, the board voted to adopt a
permanent regulation for a Chignik cooperative fishery similar to
that permitted by the 2005 emergency regulation.17 Among other
things, this conditionally approved regulation will retain the
ten-delivery requirement, but will restrict the total number of
deliveries a cooperative participant may make in a season to
thirty-five.18
We heard oral argument on February 3, 2006 and issued a
dispositive order on February 9.19
III. DISCUSSION
A. Standard of Review
We review a superior courts grant of summary judgment
de novo.20
We review emergency regulations in the same way we
review other agency regulations.21 We presume that a regulation
promulgated under the Alaska Administrative Procedures Act (APA)
is both procedurally and substantively valid and place the burden
of proving otherwise on the challenging party.22 Grunert argues
that the board bears the burden of proving the regulations
validity because the regulation was promulgated as an emergency
regulation, bypassing the notice and comment procedures of the
APA. We disagree. Emergency regulations promulgated in
accordance with AS 44.62.250 enjoy the same presumption of
validity as regulations promulgated after a notice and comment
process.23 We presume that the emergency regulation was valid,
and that Grunert bears the burden of demonstrating that it was
not.
We will uphold a regulation so long as it is consistent
with and reasonably necessary to implement the statutes
authorizing its adoption. As we explained in Grunert I, our
review of agency regulations involves the following analyses:
[W]e consider first whether the board
exceeded its statutory mandate in
promulgating the regulation, either by
pursuing impermissible objectives or by
employing means outside its powers.
Determining the extent of an agencys
authority involves the interpretation of
statutory language, a function uniquely
within the competence of the courts and a
question to which we apply our independent
judgment. Second, we consider whether the
regulation is reasonable and not arbitrary.
Where highly specialized agency expertise is
involved, we will not substitute our own
judgment for the boards. Our role is to
ensure only that the agency has taken a hard
look at the salient problems and has
genuinely engaged in reasoned decision
making. And third, we consider whether the
regulation conflicts with any other state
statutes or constitutional provisions.[24]
B. We Review the Validity of the Emergency Regulation
Under the Public Interest Exception to the Mootness
Doctrine.
Because the emergency regulation has expired and no
relief can be granted to reverse its effect on the 2005 Chignik
purse seine salmon season, the question of the regulations
validity is technically moot.25 Although we generally refrain
from deciding questions when events have rendered the legal
issues moot, we may consider certain issues if they fall within
the public interest exception to the mootness doctrine.26
We consider three factors in determining whether an
issue falls within the public interest exception: (1) whether the
disputed issues are capable of repetition, (2) whether the
mootness doctrine, if applied, may cause review of the issues to
be repeatedly circumvented, and (3) whether the issues presented
are so important to the public interest as to justify overriding
the mootness doctrine.27 None of these factors is dispositive;
each is an aspect of the question of whether the public interest
dictates that a court review a moot issue.28
All three factors support present review. First, the
disputed issues are capable of repetition and indeed have already
repeated themselves. On November 16, 2005 the board voted to
adopt a permanent regulation similar to the 2005 emergency
regulation. In addition, the board informed us at oral argument
that it has established cooperative regimes in other fisheries
around the state. Second, because the publication of a judicial
decision regarding a permanent regulation might unavoidably occur
shortly before a new Chignik purse seine salmon season, the board
might again feel compelled to promulgate another short-term
emergency regulation, potentially preventing effective judicial
review. Moreover, because the board has already voted to adopt a
substantially similar permanent regulation, failing to review the
now-expired emergency regulation will merely delay judicial
review of the essence of the cooperative scheme. Dismissing the
appeal as moot will not advance issue finality or judicial or
party economy. Third, the board argues that the validity of the
cooperative regime is of great public interest. We agree. That
great public interest is evidenced by the numerous meetings of
the board to consider regulatory changes to the Chignik fishery
as well as by the outcry of members of the public both opposing
and supporting the states motion to stay Grunert I. Because the
emergency regulation was similar to the recently proposed
regulation, because the board has dedicated a substantial amount
of time to the cooperative program, and because many people have
an interest in the outcome, we will consider whether the
emergency regulation was valid under the public interest
exception.
But we decline to consider the reasonableness of the
boards finding of an emergency.29 A finding of emergency follows
a fact-intensive inquiry into a set of events unlikely to be
repeated, and the prospect of a permanent regulation reduces the
likelihood of another emergency regulation for a Chignik
cooperative fishery. The public interest exception does not
justify review of this moot issue.
C. The Chignik Cooperative Fishery Scheme Permitted by
Former 5 AAC 15.358 Was Fundamentally at Odds with the
Limited Entry Act.
In Grunert I, we stuck down former 5 AAC 15.359 (2002)
because it was fundamentally at odds with the Limited Entry Act.30
We explained that a central premise of the limited entry system
is that permit holders are individuals who actively fish.31 We
also explained that the Limited Entry Act was enacted to protect
economically dependent fisher[s].32 Our main concern with the
cooperative regime created under former 5 AAC 15.359 was that it
did not require active participation of all Chignik salmon purse
seine permit holders.33 The Chignik cooperative fishery scheme
was incompatible with the limited entry system because it
allow[ed] people who [were] not actually fishing to benefit from
the fishery resource.34
Although the lack of an active participation
requirement was the flaw on which we focused the most attention
in Grunert I, we expressed concern with other aspects of the
cooperative regime as well. For example, we expressed concern
with the reduced number of crew members necessary under the
cooperative regime.35 We noted that the cooperative regulation
may interfere with the ability of the Commercial Fisheries Entry
Commission (CFEC) to determine the optimum number of permits
because the regulation destroys any relation between the number
of permits issued per fishery and the ultimate number of
participating vessels and units of gear.36 And we criticized the
corporate-like nature of the cooperative regime: the cooperative
regulation . . . transforms the limited entry permit from what
used to be a personal gear license into a mere ownership share in
a cooperative organization.37
We directed the board to seek legislative approval:
Before this regulatory scheme accomplishes such radical departure
from the historical model of limited entry fisheries in Alaska
and the spirit of the Limited Entry Act, . . . we conclude that
the legislature must first authorize the board to approve
cooperative salmon fisheries.38 We repeat that command here.
The emergency regulation was not a valid exercise of
the boards authority. Although the ten-delivery requirement
mandated some significant participation by each participating
permit holder, the emergency regulation still allowed permit
holders in the cooperative to benefit economically from the work
of others. As long as the cooperative fishers made ten
deliveries, they received the same profit as cooperative fishers
who made more than ten deliveries. It is this aspect of the
Chignik cooperative scheme that is so contradictory to the
Limited Entry Act.
The emergency regulation also did not resolve the
problem of interference with the CFECs ability to determine the
optimum number of permits per fishery.39 The CFEC determines the
optimum number of permits, in part, based on time spent fishing
and investment in vessels and gear.40 But the emergency
regulation, like the predecessor regulation, did not require each
fisher to operate his or her own gear and vessel and it minimized
the amount of time many of the cooperative fishers needed to
spend fishing.41
The board urges us to read Grunert I narrowly, and
suggests that Grunert I only identified one fatal flaw the lack
of meaningful, active participation by all fishers in an
otherwise valid regulatory regime. The board argues that in
Grunert I we held that the board does not have authority to
promulgate a cooperative fishery regulation that does not require
active participation. It argues that by requiring significant
participation in the cooperative fishery it has satisfied our
holding. Likewise, the dissenting opinion attached to our
February 9, 2006 order suggested that Grunert I never signaled
complete rejection of a cooperative fishery and impliedly
condoned a cooperative fishery in which permit holders had
significant active participation even if they did not make every
delivery that directly benefitted them. Todays dissenting
opinion repeats that argument here.42 But nothing we said in
Grunert I expressed a notion that cooperative participants could
be active participants if they derived benefit from deliveries
they did not make. And nothing in Grunert I implied as much,
either.
It was not necessary in Grunert I to decide whether a
partial participation scheme such as that allowed by the
emergency regulation might satisfy the Limited Entry Act. The
emergency regulation had not yet been adopted when we issued
Grunert I and the state never contended in Grunert I that a
partial participation scheme might satisfy the Limited Entry Act.
There was therefore no reason for us to anticipate future
promulgation of a partial participation scheme. But even if we
had anticipated that possibility, it would not have been
necessary to address its validity; the only question before us
was the validity of the 2002 regulation then in litigation.
Although the ten-delivery requirement softened the
distinction between the cooperative model and the model of the
economically dependent fisher whom the Limited Entry Act was
intended to protect,43 the two models still fundamentally differ.
The emergency regulation still allowed cooperative fishers to
benefit economically from the work of other fishers.44 The
legislature might conclude that such a cooperative fishery is
desirable and that the board should have authority to approve a
Chignik cooperative commercial fishery.45 But because it has not
yet done so, the emergency regulation was not authorized by the
Limited Entry Act.46
D. The Chignik Cooperative Fishery Scheme Permitted by
Former 5 AAC 15.358 Impermissibly Allocated Within a
Single Fishery.
The emergency regulation, former 5 AAC 15.358, allowed
cooperative participants to use fixed leads and net pens, as well
as longer seines, tools not available to the open fishers under
the code provisions applicable to them, including 5 AAC 15.330,
15.332, 39.240, and 39.260.47 The superior court determined that
the board could reasonably conclude that the cooperative fishery
and open fishery were different fisheries because they use
different gear types. We disagree.
The Chignik commercial salmon fishery has been a purse
seine fishery for over one hundred and twenty years.48 Since
implementation of the Limited Entry Act, commercial fishers in
the Chignik salmon fishery have held Chignik CFEC salmon purse
seine permits.49 The part of the boards Chignik area regulation
entitled Gear has been in effect since before 1988.50 It states
that salmon may be taken only by purse seine or hand purse seine.51
It is against this background that the board contends that the
regulation created two fisheries in the Chignik area: a purse
seine fishery in which the open fishers used the traditional gear
purse seines and leads and a purse seine plus fishery in which
the cooperative fishers used the traditional gear plus longer
seines, fixed leads, and net pens. But these differences in gear
and gear size, although potentially dramatically different in
efficiency, did not fundamentally alter the fact that all holders
of CFEC purse seine permits continued to harvest Chignik salmon
with purse seine gear.
Alaska Statute 16.05.251(e) authorizes the board to
allocate fishery resources among personal use, sport, guided
sport, and commercial fisheries. We explained in Grunert I that
among means between, not within, the fisheries.52 The boards
authorizing statute defines fishery as a specific administrative
area in which a specific fishery resource is taken with a
specific type of gear.53 That statute also defines gear and type
of gear as follows:
(A) gear means the specific apparatus used
in the harvest of a fishery resource; and
(B) type of gear means an identifiable
classification of gear and may include
(i) classifications for which separate
regulations are adopted by the Board of
Fisheries or for which separate gear licenses
were required by former AS
16.05.55016.05.630; and
(ii) distinct subclassifications of gear such
as power troll gear and hand troll gear or
sport gear and guided sport gear.[54]
The differences in equipment the board authorized for
open and cooperative fishers did not create two distinct
fisheries under AS 16.05.940(14). The words of both the boards
authorizing statute and the Limited Entry Act make it clear that
the legislature intended to distinguish between types of gear
based on broad methodological differences.55 The definitions of
gear and types of gear distinguish between power troll and hand
troll gear and refer to historical distinctions, for example,
between set and long lines, drift, set and stake gill nets, and
purse and hand purse seines, suggesting real-world,
methodological, gross differences between equipment types.56 But
the alterations in equipment the board authorized for open and
cooperative fishers did not change the fundamental method by
which Chignik salmon are harvested. The Chignik salmon are
harvested by purse seine, whether open or cooperative fishers
harvest them. Cooperative fishers used fixed leads before the
salmon were harvested and used net pens after harvesting the
salmon. These additional tools were thus incidental to the type
of gear the purse seines actually used to harvest the Chignik
salmon.
The statutory definition of type of gear includes
classifications for which separate regulations are adopted by the
Board of Fisheries.57 But the board has not adopted separate
regulations classifying net pens or fixed leads as distinct types
of gear. The board regulation that lists legal types of gear
does not even mention net pens or fixed leads.58 And although we
are not required to decide here whether the board could adopt a
regulation classifying a net pen or a fixed lead as a type of
gear within the meaning of the statute, we note that doing so
would not necessarily resolve Grunerts contention the board
cannot do so legally.
The statutory definition of type of gear also includes
classifications . . . for which separate gear licenses were
required by former AS 16.05.55016.05.630.59 Former AS
16.05.550.630 did not require separate gear licenses for fixed
leads or net pens, nor did those provisions require separate gear
licenses for purse seiners using fixed leads or net pens, nor,
indeed, did they even mention fixed leads or net pens.60
Historically there is no sign that the legislature, the board, or
the CFEC distinguished between those fishers who were using net
pens and fixed leads and those who were not.
Moreover, net pens are not gear. A net pen is not a
specific apparatus used in the harvest of salmon,61 but is a
device used to store live salmon after they are harvested and
before they are transferred to processors. And the only apparent
difference between leads and fixed leads is that fixed leads may
be operated unattached to the purse seine and affixed to the
bottom of the sea by anchors. Fixed leads and leads are
therefore not distinct subclassification[s] of gear when they are
used in conjunction with a recognized method, e.g., by purse
seine, of harvesting the fish.62
Finally, the board argues that the combination of fixed
leads, longer seines, and net pens allows cooperative fishers to
operate a materially different type of fishery. It asserts that
the pace of a cooperative fishery is slower and that the fishery
is directed by only a few experienced fishers. It argues that
the legislature intended that methodological differences in the
way actual mechanical gear is used to take fish would be
considered in differentiating between fisheries. The board
contends that AS 16.05.940(14)(B)(ii) contemplates distinctions
between fisheries such as those that exist between cooperative
and competitive fisheries, just as it does for sport and guided
sport fisheries.
We assume the cooperative fishers did or could fish at
a slower pace than those operating in the open fishery. But we
do not believe that this distinction made the cooperative fishery
a separate fishery under AS 16.05.940(14). As discussed above,
the legislature apparently intended to distinguish between gear
types that function differently. We disagree with the boards
argument that the differences between open and cooperative gear
are analogous to the differences between sport gear and guided
sport gear. Sport fisheries and guided sport fisheries are
already distinct fisheries under the boards authorizing statute.63
The distinction between sport and guided sport gear in the
boards authorizing statute reflects the legislatures intention
that the board distinguish between sport and guided sport
fisheries in general. The legislature has not distinguished
between open and cooperative fisheries.64
For these reasons, we conclude that the Chignik purse
seine salmon fishery was a single fishery, and that the board did
not alter that fact by making detail changes to the type of
equipment used by the cooperative fishers. Both cooperative and
open fishers captured the same species of salmon common to the
fishery with purse seine gear. The board cannot divide what has
historically been a single fishery by simply tinkering with
ancillary apparatus and seine dimensions. The emergency
regulation therefore authorized the board to allocate fishery
resources within a single fishery, in violation of the
authorizing statute, AS 16.05.251(e).
We note that the boards allocation of the harvestable
salmon between the cooperative and the open fishers was
potentially arbitrary and capricious. Allowing some, but not
all, Chignik salmon purse seine permit holders to operate
different types and amounts of fishing equipment potentially
raises questions of efficiency, arbitrary decision making, and
equal protection.65 The allocation may be vulnerable to attack on
the theory that under a two-subfishery system, the open fishers
only have access to a small percentage of the allocation for the
whole Chignik fishery.66 Grunert contends that allowing open and
cooperative fishers to use different amounts and types of
equipment may violate subsection .150(a) of the Limited Entry
Act. That subsection provides that an entry permit authorizes
the permittee to operate a unit of gear within a specified
fishery.67 Unit of gear is defined by the Limited Entry Act as
the maximum amount of a specific type of gear that can be fished
by a person under regulations established by the Board of
Fisheries defining the legal requirements for that type of gear.68
Because only some of the Chignik permit holders could operate the
maximum amount of gear, Grunert contends, the regulation
unlawfully discriminated. We do not need to consider these
contentions, however, because we conclude that the emergency
regulation authorized an allocation of fishery resources within a
single fishery in violation of the authorizing statute.
E. We Address Other Arguments Raised on Appeal To Inform
the Parties of Other Concerns We Have Regarding the
Cooperative Scheme.
1. The emergency regulation authorized a legal entity
other than a natural person to operate gear in a
Commercial Fishing Entry Commission administration
area.
Grunert argues that the emergency regulation
impermissibly authorized the commissioner to issue permits to the
Chignik cooperative corporation. Grunert claims this
authorization conflicts with the Limited Entry Act because the
Limited Entry Act only allows natural persons to operate gear.
The board does not refute this argument. This contention was not
squarely made below, although the superior court commented on the
issue without resolving it.69 Given the likelihood the issue will
arise if the legislature approves cooperative fisheries and the
commissioner again issues a permit to an association and given
the disruption likely to occur if a court were to hold invalid a
cooperative permit issued to an entity that is not a natural
person, we address the issue now.
The emergency regulation authorized the commissioner to
issue permits to a non-person in violation of AS 16.43.140. That
statute states: After January 1, 1974, a person may not operate
gear in the commercial taking of fishery resources without a
valid entry permit or a valid interim-use permit issued by the
commission. We have read that provision to mean that the Limited
Entry Act limits operation of gear to persons with valid entry
permits.70 The Limited Entry Act defines person as a natural
person; person does not include a corporation, company,
partnership, firm, association, organization, joint venture,
trust, society, or other legal entity other than a natural
person.71 The emergency regulation authorized cooperative permit
holders to operate fixed leads and use net pens under the
conditions imposed by the commissioners permits.72 The
commissioners permits were issued to the cooperative as a whole,
not to individual Chignik salmon purse seine permit holders.73
Thus, fixed lead, purse seine, and net pen permits were issued to
the Alliance. Although it is unclear from the record what type
of organizational entity the Alliance is, it is not a natural
person.74 Because the emergency regulation authorized the
commissioner to issue a permit to operate gear to the Alliance,
the emergency regulation impermissibly conflicted with AS
16.43.140.
2. The emergency regulation did not require permit
holders to pledge their permits.
Grunert argues that the emergency regulation required
pledging of permits in violation of AS 16.43.150(g). Although
this claim was not presented or considered below, we could choose
to consider it if it offered an alternative basis for affirming
the superior courts ruling.75 But we instead choose to consider
it because both parties have briefed the issue on appeal and it
seems inevitable that it will be raised again should the
legislature grant the board authority to create cooperative
fisheries.
Alaska Statute 16.43.150(g) prohibits an entry permit
from being pledged, mortgaged, leased, or encumbered in any way
except as provided in certain subsections dealing with loans.
The statute does not define pledge. Grunert argues that we
should read pledge to mean to promise solemnly or to put under
obligation or commitment by or as if by a pledge. The board
responds that pledge is a legal term of art that refers to
personal property transferred as security for a debt, engagement,
or the performance of an act.76
We have previously stated that AS 16.43.150(g) was
intended to allow fishermen to take advantage of the value of
their permits if they no longer wish to participate in the
fishery, but to prevent the forced loss of livelihood that would
result from court-ordered sales of permits.77 The emergency
regulation did not require permit holders to put up their permits
as security. Although there was the possibility of criminal
sanctions if a permit holder fished in another fishery,78 permit
holders always retained ownership of their permits. The
emergency regulation did not require illegal pledging of permits.
3. It would be inappropriate to decide here whether
the emergency regulation permitted cooperative
fishers to operate fish traps.
Grunert argues that fixed leads take on the character
of fish traps, when unattached to purse seines and vessels which
are prohibited in Alaska waters. Whether fixed leads take on the
character of fish traps is a fact-intensive inquiry that was
never presented to the superior court. We therefore decline to
consider it here on appeal.
IV. CONCLUSION
We conclude that promulgating former 5 AAC 15.358 was
not a valid exercise of the boards authority. We therefore
AFFIRM that portion of the superior courts decision that held
that the emergency regulation was invalid. But we REVERSE that
portion of the superior courts decision that held that the
emergency regulation did not involve an impermissible allocation
within a single fishery. The Board of Fisheries must obtain
legislative approval before adopting another cooperative scheme
in the Chignik purse seine salmon fishery.
CARPENETI, Justice, dissenting.
In Grunert I, the court majority struck down a Board of
Fisheries regulation allowing a cooperative salmon fishery in
Chignik designed to address an economic crisis. For the reasons
set out in my dissenting opinion in that case1 that this court
misinterpreted the statute authorizing the regulation in
question,2 looked to the wrong statute to assess the regulations
consistency with its controlling statute,3 and ignored the
deference our case law requires us to afford to an agencys
expertise4 I believe that Grunert I was incorrectly decided by
this court. For the reasons set out below, I believe that even
Grunert I does not require todays result. For both of these
reasons, I respectfully dissent.
In Grunert I the court focused almost exclusively on
what it deemed the problem of a lack of active participation by
co-op members:
$ it pointed to features of the Limited Entry Act that it said
reflect an intention that permit holders be, at minimum,
individuals who were actively fishing;5
$ $ it looked to Limited Entry ranking factors and said
they were designed to protect those who actually take fish;6
$ it said [a]ctual participation also matters when it comes to
the issuance of subsequent . . . permits;7
$ it pointed to other provisions in the Limited Entry Act that
emphasize participation, concluding that these provisions in the
Act contemplate economically dependent individuals who invest
time and money in actually fishing;8
$ it found that a central premise of the statutory scheme is
that the permit holder is an individual who will fish.9
With this backdrop, the court in Grunert I concluded
that [p]articipation by the individual is inherent in the limited
entry permit system. The Chignik cooperative fishery scheme is
fundamentally at odds with this premise because it allows people
who are not actually fishing to benefit from the fishery
resource.10
In response to this apparently clear set of signals,
the Board of Fisheries took great pains to structure a program in
which people must actually fish in order to participate. It
required that each cooperative member must make at least ten
landings of fish.11 Moreover, the regulation had the intended
effect: The number of cooperative members actively participating
in the fishery rose from an average of twenty-one for the
previous three years to seventy-six last year. Fifty of those
fishers had at least fifteen landings.
But now the court subtly but drastically changes the
discussion. Now the essential flaw of the cooperative system is
not that fishers may be members without doing any fishing at all.
Now the flaw is that the regulation still allow[s] permit holders
in the cooperative to benefit economically from the work of
others.12 Any board-authorized sharing of effort, pooling of
resources, or cooperative venture is now deemed forbidden by the
Limited Entry Act.
The court today justifies this change from Grunert I
by the observation true but irrelevant that nothing we said in
Grunert I expressed a notion that cooperative participants could
be active participants if they derived benefit from deliveries
they did not make.13 In Grunert I the court strongly implied
that active participation actively fishing; actually take fish;
actually fishing; an individual who will fish was the necessary
but missing ingredient. Contrary to todays bald assertion that
nothing in Grunert I implied as much,14 each of the quotations
set out above, and others, very strongly implied that the
critical flaw in the earlier regulation was the lack of active
participation. That flaw unquestionably having been remedied by
the regulation under consideration in todays opinion, the
regulation should have been upheld.
For these reasons that Grunert I was wrongly decided
and that, even if Grunert I was correctly decided, it does not
require todays result I respectfully dissent.
DECISION ON RECORD
BEFORE THE HONORABLE WILLIAM F. MORSE
Superior Court Judge
Anchorage, Alaska
June 2, 2005
11:04 oclock a.m.
APPEARANCES:
FOR THE PLAINTIFFS:
(Telephonically)
ARTHUR S. ROBINSON
Attorney at Law
35401 Kenai Spur Highway
Soldotna, Alaska
FOR THE DEFENDANTS:
LANCE B. NELSON
STEVEN A. DAUGHERTY
Assistant Attorney Generals
Natural Resources Section
1031 West 4th Avenue
Suite 200
Anchorage, Alaska
P R O C E E D I N G S
3AN6105-92
[11:04:59]
THE COURT: All right, we are on record in Grunert v.
State, 3AN-05-07909 Civil. Mr. Nelson is present and with --
I'm sorry, with his associate. I apologize I can't remember
your name.
MR. DAUGHERTY: Mr. Daugherty.
THE COURT: All right. And, Mr. Robinson, can you
hear me?
MR. ROBINSON: Yes, I can, Your Honor.
THE COURT: And I know that there are a number of
other people listening in telephonically. I know that there
was
a news reporter or media person from Dillingham. Is that
person connected?
UNIDENTIFIED FEMALE SPEAKER: Yes, I am.
THE COURT: you -- could you -- I couldn't hear you.
UNIDENTIFIED FEMALE SPEAKER: Yes, I am.
THE COURT: Okay.
UNIDENTIFIED FEMALE SPEAKER: My name is Jody
(indiscernible).
THE COURT: All right. This is the time set for the
announcement of the findings after yesterday's oral argument.
The first question is whether or not the regulation that the
Board of Fisheries promulgated in response to the Supreme
Court's decision on March 17, 2005, was a valid emergency
regulation. AS 44.62.250 requires that there be a written
finding that includes a statement of facts describing the
emergency and articulating why the particular regulation is
needed and would support the public peace, health, safety, or
general welfare. It's clear that there was a written finding,
there is clearly a statement of facts, and the only question
is whether or not the articulation of those facts truly
constituted an emergency. And we are also guided by another
state statute -- I think it's .70 or .270 -- that articulates
a
policy to limit the number of emergencies that should be
found.
The emergency was created by the -- or the purported
emergency -- was created by the timing of the Supreme Court's
decision in Grunert that had been in litigation for several
years and in front of the Supreme Court for approximately a
year, which would at least suggest that the opinion was coming
down, and I would perhaps surmise that the Supreme Court
probably thought that it ought to get its decision out before
the 2005 season, but I don't think anyone could reasonably
rely on that, although that was a -- would be a rational
expectation that it was coming.
I think that the timing of the decision does
constitute an emergency. I think that the general welfare
standard is not restricted to the interests of the entire
state
but can be interest -- can be the general welfare for a
more narrow entity, in this instance the fishery which is the
scope of the regulation at question, and it clearly affected
everybody inside that fishery as well as the larger community
that would be impacted by the regulation and that had an
economic interest in the fishery itself. It's clear that the
fishers reasonably assumed that the cooperative regulation
was -- that was in place at the time of the decision would
likely be in place at the time of the fishery, given that it
was opening in the first week of June or close to that time
period. And it is clear that a variety of financial,
logistical, personnel, personal, and equipment arrangements
would have to made by anyone who wanted to participate in the
fishery. The fact that the decision came down two days after
the deadline for the election to participate or not in the
cooperative -- it's not the fact that it came down two days
after that, but the fact that that's -- the deadline was
March 15th suggests that the Board understood the amount of
preparation that would reasonably be necessary for any
participant in the fishery to plan, to get ready. I mean it
takes time to make those arrangements. You can't do things
quickly.
No matter what happened -- no matter how the Board acted,
it had to act quickly after March 17th because it had to have
something in place for the June opening, and whether that was
the -- you know, to tweak the co-op or to replace it entirely
with some other regulation, it had to act quickly. And while
it might have done various other things regarding legislation
prior to the Supreme Court's decision, or regulate or to
attempt to get regulation during the brief period between
March 17th and the expected end of the legislative session, it
wasn't reasonable -- I mean it was a reasonable thing to
decide that was unlikely to occur. And I think that anyone
who's familiar with the end of a typical legislative session
knows that it is unlikely to get controversial new legislation
passed so quickly, and this particular experience this session
sort of proves out the general rule.
This is a contentious issue that applied -- legislation
that would permit the co-op would be legislation that would
impact potentially the entire -- all fisheries across the
state, and that would be extremely contentious. It would
require a lot of thought, a lot of effort, a lot of political
machinations, pushing and pulling before an end legislative
product would come out and likely would have resulted in a
less than nuanced one. So the regulation was limited to a
particular fishery that had some experience with a co-op, and
the Board had experienced with the co-op, so I think it was a
wiser effort on the Board's part to pass a focused regulation
that would be in place for one season and one fishery rather
than to seek legislative option at that late date.
Now, on the other hand, it could have had other non co-op
regulations in hand in expectation of an adverse decision, it
could
have had a variety of different flavor co-op regulations in
anticipation, but the Board, like any agency, has scarce
resources, and those efforts would have been speculative and
perhaps would have been prescient and accurate but more likely
would have been a fair waste of time. And also given the fact
that even if they had gone through the formal process, they
could have gotten a regulation out only, you know, in June on
time. I think the additional delay of the formalized process
would have simply hurt both sides by increasing uncertainty.
So I think that there was a legitimate emergency, and I
think that the procedural requirements of the regulatory
process were met. As a consequence, I think the new
regulation is presumed valid, and it is incumbent upon the
challenger to overcome that presumption.
There are two portions of the new regulation that were --
that need to be compared to the Grunert decision. The first
is the sort of one- or two-fisheries issue that depends on the
definition and nature of the gear. AS 16.43.994 defines
fishery in terms of a single resource, a single area, and a
single type gear. And, paraphrasing, essentially the
regulatory and statutory scheme says that if the same gear is
being used in that resource in that area, then there needs to
be regulatory -- uniform regulations for the use of that gear
set. And the question here is whether or not the use of the
leads by the co-op and not by the -- the permitted use of
leads by the co-op and not by the open fishers, whether that's
a
sufficient change in gear to allow there to be disparate
regulations applicable to the two groups. And I don't think
this is a statutory construction issue. I think this is a
sophisticated fishing decision where the administrative
agency's expertise should be given deference by a court. It's
not merely a matter of defining the word gear. That's not the
issue. The real issue is the practical on-water, you know,
during the fishing experience difference between the types of
equipment and the impact that equipment has.
Frankly, it seems to me that much of the equipment is
identical. I mean, a purse seine is a purse seine, but that's
too superficial of an analysis. The real reality is with the
use of the leads, various things change. There is a slower
pace. The consequences of leads is that fish which are
normally
traveling from point A to point B and need to be located,
tracked,
followed, chased, and fished during movement instead are
located, at least temporarily, in a relatively
small, confined space where people can fish them using the
same techniques but at a different pace altogether. You can
fish more slowly, you can fish more carefully, both in terms
of safety, and you can fish in a way that even if you are
using a purse seine in both circumstances, you're probably
incurring or inflicting less damage on the product during the
course of the fishing. It seems to me that the Board could
rationally understand that fishing at a high pace with
equipment, a purse seine, is a lot different than fishing at a
more measured, leisurely pace in a restricted area. And more
importantly, this gear change is not essential to, but
certainly permits the cooperative fishing process that the
regulations are intended to allow and encourage. It's not
necessary but it certainly does allow a more cooperative
fishing style.
And I think that the -- essentially this regulation
passes muster. I don't think that the Grunert decision itself
forces a ruling -- a contrary ruling. My read of the opinion
is that the Supreme Court was uncertain as to the record
before it -- not uncertain, they knew what the record was, but
the record itself was not particularly complete because there
had been an amendment sort of mid-litigation, so I don't think
that the decision itself precludes me at this point from
finding that the regulation is acceptable or at least passes
muster on that particular grounds.
That leads us to the final and critical issue, which is
whether or not the Board of Fisheries exceeded its statutory
authority by enacting this modified cooperative fishing
regulatory scheme. I've read Grunert several times since oral
argument yesterday, and I think that the -- and I'll cut to
the chase: I mean I think that the decision profoundly limits
the ability of the Board to create a cooperative fishery. And
I think that, ironically, all of the reasons that the Board
opted for a cooperative fishery argues against the Board's
authority to do it. It is a profoundly different style of
fishing, a different arrangement, a different economic
arrangement, a different -- it has different impacts on the
community, both the local fishers -- you know, the actual
permit holders themselves and the fishing community itself.
And that's the exact reason why the Board thought it was
necessary to enact it. The very need and success of the
regulation proves that it is dramatically different than what
the Act itself permits. And I will try and be more specific.
There are several things.
Clearly in the old regulation, that regulatory scheme
allowed a certain number of cooperative members to not fish at
all, to simply stay at home and not fish. The new regulations
require all the co-op members to fish a minimum of ten
deliveries, and the relationship of that ten deliveries to the
total number of deliveries remains to be seen. And it's --
can only be sort of predicted, but we -- you know, until it
actually happens, we don't really know because we won't know
the size of specific deliveries, we won't know the size of the
run, we won't know the size of the escapement needs until the
fishery actually takes place. But nonetheless, to the extent
that there is more than ten deliveries times the number of co-
op members, the more deliveries that take place the more
likely you are going to have some number of people not
exceeding ten deliveries and be essentially passive and non-
participatory for a greater and greater portion of the
particular fishery -- the particular opening.
The Supreme Court clearly read the Limited Entry Act to
reflect two basic criteria. One is to restrict eligibility
for permits to those who would be actually fishing, and
they -- that's sort of the source of their description of what
is active fishing and what is active participation. And also,
those people who have a dependence on fishing, that's a factor
in the assignment originally and, you know, sort of post-
creation of the whole limited entry scheme. The point seems
to be that the Act prefers to have people actively participate
and be economically dependent, not necessarily exclusively,
but be economically more dependent than less, and to require
active participation. And I think it's significant that the
Act requires -- defines permit holders in terms of persons and
defines persons to be natural persons, not a variety of
artificial and associational or cooperative groups.
AS 16.43.140(b) points out that -- just a moment here --
the number -- the people who can't participate would be
corporations -- who can't be permit holders: corporations,
companies, partnerships, firms, associations, organizations,
joint ventures, trusts, societies, or any other legal entity
other than an actual person. And the -- another aspect that I
think is significant is that it requires the holder to be the
principal and to fish through his or her own efforts rather
than through some sort of representational activity by another
entity, with the exception of the crew, and that crew can only
work when the permit holder is actually physically present on
the boat and actively participating, doesn't necessarily have
to be operating the gear, but has to be actively
participating. And the difference that is wrought by the
cooperative scheme is that these to the -- once you get beyond
an average of ten deliveries per co-op holder or co-op member,
once you get a certain number of people who are going to
choose not to do more than ten deliveries -- and even if they
choose to do fifty -- whenever they stop fishing, whenever
that
group stops fishing, then they're not only absent from the
boat, they are not actively participating, and they look like
exactly the kind of thing that the act prohibits, which is a
passive sort of financially-interested-only participant. And
that's -- I think that's not what the Act permits under the
Grunert decision.
It does a number of things. The co-op system changes the
distribution of profit and the mechanism of the sharing of
profit. It constitutes a reduction of competition both within
the co-op and with the non co-op members. It permits
different timing of participation in the fishery by the co-op
members versus the open fishers. And it permits -- let me --
timing is not quite the right word -- a different style and
pace
of fishing from the limited entry model of frankly frenzied,
nearly chaotic at times, competition for the fish, and whether
that's wise or not it's not for me to say, but that's clearly
the model the limited entry system encourages if not requires;
whereas the cooperative system, which is exactly why the Board
and the co-op members like it, allows for a slower paced, a
more careful, less frenzied, fishing style that has a variety
of other impacts downstream which hopefully require -- will
permit a higher -- better product and a higher price. It may
well be a saner system. And I mean by sane, I mean less
insane system. But that's a policy decision that I am not
sure the Board gets to make given the constructs of this
statutory scheme.
And it also permits different openings, not only permits,
it requires different openings. Because of the allocation
between the open fishers and the co-op fishers, the two groups
go out at different times. That's a dramatically different
change than under the limited entry -- any other limited entry
system.
I think also the Act's use of economic dependence or
anticipation of economic dependence on a fishery means that
while permit holders dont have to do nothing but fish, they
clearly can do things during the off-season, but during the
fishing season, I think, the expectation is that will be their
primary economic focus, not exclusive, but primary economic
focus. The cooperative system allows some number of co-op
members to essentially not fish during the season, and that's
exactly the point, allowing them to be teachers, be -- you
know, do anything else, whatever that might be. And that
clearly distorts the allocation model under the limited entry
system.
It also -- this co-op system also changes the risk that
a permit holder has when he or she goes out to fish. Just
using some rough examples that coincidentally are fairly close
to the actual situation in this particular fishery, assuming
that there is 100 fishers in the fishery and 80 co-op members
and 20 open fishers, and because of the skewed number -- the
skewed allocation percentage, let's say 75 percent of the fish
are guaranteed to the co-op members and 25 to the open
members. No matter what the pace, no matter what their
participation, assuming that they've delivered over 10, every
co-op member is going to be, as I understand it guaranteed 75
over 80 because they're going to be sharing that regardless of
their actual participation in the fishery. Once they get over
the minimum, they're going to share the profits at that
percentage, and everyone sort of knows that, and there is a
real advantage to that. There's a -- I mean, that's part of
the goal of the co-op. On the other hand, the -- and there is
a guarantee that the 75 percent of the fish are delivered by
the co-op. Within -- so there is an allocation both between
co-op and the open folks.
Within the open group, none of those members has any
guarantee whatsoever, yet they are limited to a smaller total
catch, probably a fewer number of deliveries, and a smaller
number of -- lesser opportunity to average out the impact of
any particular, you know, good days and bad days. In the open
world if they had access to 100 percent of the catch, they
could have couple of bad days and some good days, and it
would
average out, and they would get a varied percentage of the
total catch. But now those 20 open fishers are going to be
competing for a smaller total pot, there is a greater chance
that they won't move to an average, and there is an increased
risk of great disparity within those 20. Somebody is going
to
hit a home run in that open group and catch a lot of fish on
a
couple of -- you know, on one day or a couple of sets and is
going to pull a large percentage of the open allocation to
that one boat or the one holder and limit the opportunity of
the remaining open people, thus restricting their ability to
fish even more than the allocation between the co-op and the
open fishers does already.
I think that it changes sort of the economic model in
another sort of more fundamental way as well. Under the
limited entry system, holders who don't do well for whatever
reason -- bad luck, bad judgment, bad finances, bad
equipment,
who knows -- are going to economically suffer, and ultimately
their option is to -- you know, their end game is to sell the
permit, get out of the fishery, and some new entrant will
arrive on the scene. Under the co-op system, those who for
whatever set of reasons are less able to succeed economically
will rationally opt to participate as minimally as possible.
Ten deliveries only and then they stop. That permit remains
in their hands and new people don't come in, whether those
are
new people from the local community or from Anchorage or from
Seattle, that doesn't matter, but there is going to be less
turnover. That may be a wiser system. I'm not making a
judgment as to which is better, but they are clearly
different, and the first is the one that is set up by the
Act,
and I think the second system is not permitted by the Act.
Perhaps that should be changed, but that's not my call.
The old system also encourages more boats, more
equipment, a greater, more expanded support system of
equipment providers, bankers, people who sell food, people
who
ship stuff to the Bush so that they can feed the crew
members,
probably a greater number of crew members as well. It is
also
true that that support system is probably more fragile and
more prone to collapse because there's a lot of credit out
there, there is a lot of risk being taken, and somebody's
going to fail and the system will tumble, and that's clearly
why the co-op system is being sought as a response to the
problems that have already been faced, not only by the permit
holders who have opted for the co-op system, but also for the
Chignik community in general.
And again, it may be a rational way to spread the
economic risk, but given the Supreme Court's decision in
Grunert and its articulation of the requirements, policies,
goals, participatory, and economic model of the limited entry
system, I do not -- I cannot find that the modifications to
the co-op regulations -- that this new reg to the co-op
system that this new regulation has enacted satisfies the
problems identified in Grunert. So I find that the new
regulation exceeds the authority of the Board of Fisheries
and
is invalid.
. . . .
END OF REQUESTED PORTIONS
In the Supreme Court of the State of Alaska
State of Alaska, Alaska Board of )
Fisheries, and Alaska Department of ) Supreme
Court Nos. S-11951/11991
Fish and Game, )
)
Appellants/Cross-Appellees, ) Order
)
v. )
) Date of Order: 2/9/06
Michael Grunert, et al., )
)
Appellees/Cross-Appellants. )
)
)
Trial Court Case # 3AN-05-07909CI
Before: Bryner, Chief Justice, Matthews, Eastaugh,
Fabe, and Carpeneti, Justices.*
The court, having considered the arguments on appeal
and cross-appeal, and having heard oral arguments on February 3,
2006, and having previously ordered that the appeal and cross-
appeal be expedited,
It Is Ordered:
1. We issue this order now so the parties can guide
themselves accordingly prior to the 2006 Chignik commercial
salmon season. An opinion will follow.
2. In Grunert v. State (Grunert I), we struck
down former 5 Alaska Administrative Code (AAC) 15.359 (2002), a
Board of Fisheries regulation that created a cooperative fishery
within the Chignik salmon fishery.1 Following publication of
Grunert I in March 2005, the board, invoking its authority under
AS 44.62.250, found that the timing of the publication of our
decision created an emergency because some of the cooperative
fishery members did not have enough time to prepare for the 2005
fishing season. The board then promulgated an emergency
regulation that maintained the cooperative fishery scheme but
required each cooperative permit holder to actively participate
in the fishery by making at least ten deliveries during the
fishing season.2 The emergency regulation also permitted the
cooperative fishers to use types and amounts of equipment
different from those which open fishers could use in the Chignik
salmon fishery.3 Grunert and other commercial fishers
(collectively, Grunert) brought suit in the superior court
against the State of Alaska, Alaska Board of Fisheries, and
Alaska Department of Fish and Game (collectively, the board). In
his oral decision, Superior Court Judge William F. Morse decided
that (a) the timing of our decision in Grunert I created an
emergency; (b) the board met the procedural requirements for
promulgating a regulation in response to that emergency; (c) the
cooperative and open Chignik salmon fisheries are two distinct
fisheries because they operate with different types of gear; and
(d) per Grunert I, the emergency regulation was invalid because
it exceeded the boards statutory authority. Judge Morse reasoned
that, even with the ten-delivery requirement, the emergency
regulation was still dramatically different from the fishery
regime envisioned by the Limited Entry Act as Grunert I described
it.
3. On appeal, the board argues that Grunert I only
identified one fatal flaw in the cooperative scheme the lack of
any requirement of meaningful, active participation by each
member of the cooperative fishery. The board maintains that the
emergency regulation adequately addressed that flaw by requiring
all cooperative fishers in the Chignik salmon fishery to make at
least ten deliveries during the commercial fishing season. The
board also argues that even though the emergency regulation has
expired, we should consider these issues under the public
interest exception to the mootness doctrine.
4. On cross-appeal, Grunert argues that the
cooperative and open fisheries are not distinct fisheries, and
that the emergency regulation therefore impermissibly allocates
fishery resources within a single fishery. Grunert also argues
that the emergency regulation is invalid because it allows
cooperative fishers to operate fish traps; it requires permit
holders to pledge their permits in violation of AS 16.43.150(g);
and it authorizes a legal entity other than a natural person to
operate gear in violation of AS 16.43.140(a). Grunert also
argues that the timing of our decision in Grunert I did not
justify the boards finding of an emergency.
5. Because the 2005 emergency regulation has expired,
whether there was an emergency is now a moot issue. We decline
to invoke the public interest exception to review this issue.
But we do find the public interest exception applicable to the
remaining issues raised on appeal and therefore address them on
the merits.
6. The Board of Fisheries emergency regulation,
former 5 AAC 15.358, was not a valid exercise of the boards
authority. The Chignik cooperative fishery scheme permitted by
the emergency regulation was fundamentally at odds with the
Limited Entry Act. Although the ten-delivery requirement
mandated some significant participation by each participating
permit holder, the emergency regulation still allowed permit
holders in the cooperative to benefit economically from the work
of others. If the board wants to implement a cooperative regime,
it must seek legislative approval first. Our instruction in
Grunert I to this end is applicable here: Before this
regulatory scheme accomplishes such radical departure from the
historical model of limited entry fisheries in Alaska and the
spirit of the Limited Entry Act, . . . we conclude that the
legislature must first authorize the board to approve cooperative
salmon fisheries.4 The legislature might conclude that a
cooperative Chignik salmon fishery is desirable and that the
board should have authority to approve cooperative commercial
fisheries. But because it has not yet done so, the emergency
regulation was not authorized by the Limited Entry Act.
7. We address more briefly these other issues:
(a) The emergency regulation authorized a legal entity
other than a natural person to operate gear in a Commercial
Fishing Entry Commission administration area, in violation of AS
16.43.140.5 Under the Limited Entry Act, only natural persons
with valid entry permits may operate gear.6
(b) At oral argument on appeal, Grunert asserted that
the boards cooperative system arbitrarily allocates the Chignik
salmon catch between the open and cooperative fishers. The
superior court suggested that, under the cooperative system, the
open fishers only have access to a small percentage of the
allocation to the whole Chignik fishery. But this issue has not
been squarely addressed by the parties briefs. We therefore will
not decide it here.
(c) We conclude that the cooperative system does not
require pledging of permits, and that it therefore does not
violate AS 16.43.150(g).
8. In conclusion, we AFFIRM that portion of the
superior courts decision that held former 5 AAC 13.358 invalid,
and therefore AFFIRM the judgment. An opinion of the court will
follow.
Entered by direction of the court.
Clerk of the Appellate Courts
Marilyn May
CARPENETI, Justice, dissenting.
In response to this courts decision in Grunert I, an
opinion that contained no explicit prohibition on all cooperative
fisheries,7 the board drastically restructured the Chignik
cooperative. It did so to meet this courts stated concern that a
central premise of the statutory scheme is that the permit holder
is an individual who will fish. The board established a program
that requires every co-op member, in order to share in the co-ops
proceeds, to fish: In order to qualify, a member must make at
least ten landings. The change had dramatic effect: In 2005,
under the new regulation, seventy-six co-op members made
deliveries of fish, and fifty of them had at least fifteen
deliveries.8
Now this court says that this dramatic change is not
enough. In a decision that will probably doom several other
cooperative fisheries (though without any briefing by the parties
or consideration by the court at all), the court utterly strips
the board of power to use a proven and effective tool in dealing
with the critical problems it faces in managing Alaskas
fisheries. I previously expressed my disagreement with the
courts earlier decision that the former co-op regulation violated
the Limited Entry Act.9 I adhere to those views now. But even
assuming that Grunert I was correctly decided, it should not be
read to require todays decision. I respectfully dissent.
cc: Supreme Court Justices
Judge Morse
Trial Court Clerk
Distribution (by fax & mail):
Lance B Nelson fax: 279-2834
Asst Attorney General
1031 West Fourth Avenue, Suite 200
Anchorage AK 99501
Arthur S Robinson fax: (907)262-7034
Robinson & Associates
35401 Kenai Spur Highway
Soldotna AK 99669
Gregory F Cook fax: (907)463-5848
Attorney at Law
P O Box 240618
Douglas AK 99824
_______________________________
1 Grunert v. State (Grunert I), 109 P.3d 924, 926-28
(Alaska 2005).
2 Id. at 927; see also former 5 AAC 15.359 (2002). The
board regulations distinguished between the cooperative fishery
and the open fishery. Cooperative fishery was defined as a
commercial purse seine salmon fishery in which, by agreement of
the participants, the number of fishing vessels may be reduced
with the intent of decreasing overhead expenses associated with
commercial fishing and controlling the rate of harvest to achieve
a higher quality product. Former 5 AAC 15.358(j)(1) (emergency
regulation expiring 9/2/05); see also former 5 AAC 15.359(g)(1)
(2002). Open fishery was defined as a commercial purse seine
fishery conducted by CFEC permit holders who did not participate
in the cooperative fishery. Former 5 AAC 15.358(j)(2); see also
former 5 AAC 15.359(g)(2).
3 See former 5 AAC 15.359(c) & (d) (2002); Grunert I, 109
P.3d at 927.
4 Former 5 AAC 15.359(g)(1) (2002).
5 See id.
6 Grunert I, 109 P.3d at 928.
7 Id.
8 See former 5 AAC 15.359 (2003).
9 See former 5 AAC 15.359(d) (2004).
10 Compare former 5 AAC 15.359(c) (2005) (allowing
cooperative permit to contain gear specifications other than
those specified in 5 AAC 15.332), (f)(g) (notwithstanding 5 AAC
39.240 and .260, allowing cooperative fishers to use two fixed
leads), (h) (allowing cooperative fishers to use net pens) with 5
AAC 15.330(a) (mandating that salmon in Chignik area only be
taken by purse seine and hand purse seine), 15.332(c)
(prohibiting use of seines more than 125 fathoms in length in
Chignik Bay District), 15.332(e) (allowing purse seines in
Chignik area to be operated in conjunction with leads), 39.240
(describing general gear specifications), 39.260 (prescribing how
leads and seines may be operated together).
11 Grunert I, 109 P.3d at 928.
12 Id. at 926.
13 Former 5 AAC 13.358(b)(7).
14 Former 5 AAC 13.358(i).
15 Former 5 AAC 13.358(f)(h); see former 5 AAC
13.359(f)(h) (2005).
16 We attach the superior courts thoughtful and insightful
opinion as Appendix A.
17 The board explains on appeal that [t]he stated intent
of the Board on the record was that it intends the new regulation
to be implemented only if this appeal upholds the validity of the
substance of the 2005 emergency regulation.
18 The existence of the conditionally approved permanent
regulation is relevant to the mootness issue discussed in Part
III.B, but we do not consider the validity of the conditionally
approved regulation here. We consider only the adequacy of the
emergency regulation.
19 We attach our February 9, 2006 order as Appendix B.
20 Sengupta v. Wickwire, 124 P.3d 748, 752 (Alaska 2005).
21 See N. Slope Borough v. Sohio Petroleum Corp., 585 P.2d
534, 54344 (Alaska 1978) (reviewing emergency regulation to
ensure that regulation is consistent with and reasonably
necessary to carry out purposes of authorizing statute and to
ascertain whether regulation is reasonable and not arbitrary).
22 Union Oil Co. of Cal. v. State, Dept of Natural Res.,
574 P.2d 1266, 1271 (Alaska 1978); see also Koyukuk River Basin
Moose Co-Mgmt. Team v. Bd. of Game, 76 P.3d 383, 38990 (Alaska
2003) (holding that challengers had not met their burden of
showing that Board of Games decision not to manage moose as a
distinct game population was unreasonable); Gilbert v. State,
Dept of Fish & Game, Bd. of Fisheries, 803 P.2d 391, 394 (Alaska
1990) (noting that Board of Fisheries regulation is considered
procedurally presumptively valid once a certified copy has been
filed and that challenger must show a substantial failure to
comply with the APA in order to rebut the presumption of
procedural validity).
23 Per AS 44.62.250, pre-adoption notice and public
comment procedures do not apply when an agency promulgates an
emergency regulation. Grunert has not alleged that the board did
not follow the procedures required by AS 44.62.250 for
promulgating an emergency regulation.
24 Grunert I, 109 P.3d at 929 (internal quotation marks
and citations omitted).
25 See Akpik v. State, Office of Mgmt. & Budget, 115 P.3d
532, 535 (Alaska 2005) (explaining that a claim is moot if it has
lost its character as a present, live controversy) (quoting
Kodiak Seafood Processors Assn v. State, 900 P.2d 1191, 1195
(Alaska 1995)); OCallaghan v. State, 920 P.2d 1387, 1388 (Alaska
1996) (explaining that a case is moot if the party bringing the
action would not be entitled to any relief even if [it]
prevail[s]) (quoting Maynard v. State Farm Mut. Auto Ins. Co.,
902 P.2d 1328, 1329 n.2 (Alaska 1995)).
26 Akpik, 115 P.3d at 535.
27 Id. (quoting Kodiak Seafood Processors, 900 P.2d at
1195).
28 Kodiak Seafood Processors, 900 P.2d at 1196.
29 Our decision not to reach the question whether an
emergency existed will not foreclose procedural or substantive
challenges to the new permanent regulation if it takes effect.
30 Grunert I, 109 P.3d at 926.
31 See id. at 934; see also id. at 933 ([F]eatures of the
limited entry system reflect an intention that permit holders be,
at minimum, individuals who were actively fishing.); id. at 934
(noting that factors used by Commercial Fisheries Entry
Commission (CFEC) to issue initial limited entry permits protect
those who actually take fish); id. at 934 (noting that subsequent
limited entry permits are issued to those presently able to
engage actively in fishery); id. at 934 (noting that CFEC
establishes optimum number of permits by considering economic
dependence of individuals on fishery and time and money those
individuals have invested in actually fishing); id. at 935
(Participation by the individual is inherent in the limited entry
permit system.).
32 Id. at 935.
33 Id.
34 Id. (also stating that Limited Entry Act was not
intended to protect individuals who indirectly fish while holding
down an office job or sitting at home).
35 Id.
36 Id. at 935 n.61.
37 Id. at 936.
38 Id. at 936. The cooperative regulation under review in
Grunert I was also challenged as being violative of the Alaska
Constitutions common use and equal access clauses, article VIII,
sections 3 and 17, respectively. It was unnecessary in Grunert I
to consider those claims, nor is it necessary here. But we note
that to the extent a program has the practical effect of
transferring to a single entity the exclusive exploitative rights
to a substantial portion of a fishery, it may present questions
of validity under these sections. See Grunert I, 109 P.3d at 932-
33.
39 Id. at 935 n.61.
40 AS 16.43.290.
41 For example, although seventy-seven Chignik purse seine
permit holders participated in the cooperative fishery in 2002,
only eighteen boats were used. Grunert I, 109 P.3d at 928.
42 Dissent at 32.
43 See Grunert I, 109 P.3d at 935.
44 The dissenting opinion suggests that we are drastically
chang[ing] the discussion by identifying a new flaw in the
cooperative scheme the fact the emergency regulation allowed
permit holders to benefit economically from the work of others.
Dissent at 32. But in Grunert I we stated that the Chignik
cooperative fishery scheme is fundamentally at odds with [the
idea of active individual participation] because it allows people
who are not actually fishing to benefit from the fishery
resource. 109 P.3d at 935 (emphasis added). The cooperative
scheme addressed in Grunert I differed from the cooperative
scheme we consider here, but our conclusion is the same: The
legislature must give the board statutory authority to create a
fishery scheme in which permit holders profit from the harvests
of other permit holders.
45 We were informed at oral argument that our decision may
affect other cooperative fisheries. We express no opinion about
those fisheries. We have been given no specific information
about those fisheries and at oral argument it appeared there were
disputes about how each of those fisheries should be defined,
such as whether any of them involves a single fishery.
46 The dissenting opinion suggests that our holding here
forbids [a]ny board-authorized sharing of effort, pooling of
resources, or cooperative venture. Dissent at 32. But we here
address only a board-promulgated regulation that gave to the
cooperative fishers rights and benefits that differed from those
available to fishers who did not choose to participate in the
cooperative fishery; we express no opinion about voluntary
cooperative efforts of individual fishers.
47 Compare 5 AAC 15.330(a) (mandating that salmon in
Chignik area only be taken by purse seine and hand purse seine),
15.332(c) (prohibiting the use of seines more than 125 fathoms in
length in Chignik Bay District), 15.332(e) (allowing purse seines
in Chignik area to be operated in conjunction with leads), 39.240
(describing general gear specifications), 39.260 (prescribing how
leads and seines may be operated together) with former 5 AAC
15.358(c) (allowing cooperative permit to contain gear
specifications other than those specified in 5 AAC 15.332), (f)-
(g) (notwithstanding 5 AAC 39.240 and .260, allowing cooperative
fishers to use two fixed leads), (h) (allowing cooperative
fishers to use net pens). It appears from the record that in
certain portions of the Chignik Bay District, cooperative fishers
were allowed to use seines longer than those used by the open
fishers. In the Chignik Bay District, open fishers may only use
seines 100-125 fathoms long. 5 AAC 15.332(c). But the record
indicates that the cooperative permit allowed cooperative fishers
to use seines 225 fathoms long within certain portions of the
Chignik Bay District.
48 Grunert I, 109 P.3d at 926.
49 Id.
50 5 AAC 15.330.
51 Id.
52 Grunert I, 109 P.3d at 931. In Grunert I, we stated
that if the cooperative fishery and the open fishery use the same
type of gear, an allocation of resources to the cooperative would
entail an impermissible allocation within a single fishery. Id.
at 932. But we left open the question whether there was a
substantive difference between cooperative and open fishery gear.
Id. at 932, 931 n.24.
53 AS 16.05.940(14). The Limited Entry Acts definition of
fishery is functionally identical to that in AS 16.05. See AS
16.43.990(4) (defining fishery as the commercial taking of a
specific fishery resource in a specific administrative area with
a specific type of gear). In Grunert I, we referred to the
Limited Entry Acts definition of fishery in discussing the single-
fishery issue. Grunert I, 109 P.3d at 931-32. The correct
reference should have been AS 16.05.940(14), the statute directly
governing the board.
54 AS 16.05.940(14)(A)(B). The Limited Entry Act defines
gear as the specific apparatus used in the commercial harvest of
a species, including but not limited to purse seines, drift gill
nets, set gill nets, and troll gear. AS 16.43.990(5). The
Limited Entry Act defines type of gear as
a customary and identifiable classification
of gear [that] include[s]:
(A) those classifications for which separate
regulations were adopted by the Board of
Fisheries and for which separate gear
licenses were required by former AS
16.05.55016.05.630; and
(B) distinct subclassifications of gear such
as power troll gear and hand troll gear.
AS 16.43.990(10).
55 See AS 16.05.940(14)(A), (B); AS 16.43.990(5), (10).
56 See AS 16.05.940(14)(B) (referring to former AS
16.05.55016.05.630); see also AS 16.43.990(10)(B) (referring to
former AS 16.05.55016.05.630), .990(5) (listing purse seines,
drift gill nets, set gill nets, and troll gear as gear).
57 AS 16.05.940(14)(B)(i); see also AS 16.43.990(10).
58 5 AAC 39.105(d). Although 5 AAC 39.105(d)(18) includes
a lead as a legal type of gear, it does not distinguish between
un-fixed and fixed leads.
59 AS 16.05.940(14)(B)(i); see also AS 16.43.990(10).
60 See former AS 16.05.550.630 (1973). Before 1977,
separate gear licenses were required for troll lines, set or long
lines, drift gill nets, set or stake gill nets, beach or drag
seines, purse and hand purse seines, beam and otter trawls,
dredges for scallops, and shellfish pots. Id.
61 See AS 16.05.940(14)(A).
62 See AS 16.05.940(14)(B).
63 See AS 16.05.251(e) (The Board of Fisheries may
allocate fishery resources among personal use, sport, guided
sport, and commercial fisheries.).
64 See id.
65 The board claims that the different equipment used by
the cooperative fishers carries important management and
conservation benefits. It is not self-evident that limiting the
use of net pens, fixed leads, and longer seines to cooperative
fishers and denying their use to open fishers added to those
management and conservation benefits. But we express no opinion
about the wisdom of the boards choice to allow only some of the
Chignik purse seine permit holders to use this different
equipment.
66 This issue has not been squarely raised by the parties,
although the superior court stated that the skewed allocation
percentage dedicated to the cooperative fishers changes the risk
for permit holders. Amici argue that it is axiomatic in Alaska
fisheries law that the Board has the authority to determine
relevant distinctions and allocate between competing subgroups of
users. Amici are correct to the extent we have recognized that
the board may allocate between commercial and sport fishers,
Rutter v. State, 963 P.2d 1007, 1008 (Alaska 1998); Kenai
Peninsula Fishermans Coop Assn, Inc. v. State, 628 P.2d 897, 901-
04 (Alaska 1981), driftnetters and setnetters, Meier v. State,
739 P.2d 172, 174 (Alaska 1987), and between resident and non-
resident herring sac roe fishers in a recently developed fishery,
State v. Hebert, 803 P.2d 863, 865 (Alaska 1990). But we have
never stated that the board may divide what has historically been
a single commercial fishery and allocate fish between fishers who
have traditionally been treated as a single user group.
67 AS 16.43.150(a).
68 AS 16.43.990(11).
69 The court stated: I think its significant that the Act
requires defines permit holders in terms of persons and defines
persons to be natural persons, not a variety of artificial and
associational or cooperative groups. It cited AS 16.43.140(b) in
support.
70 Grunert I, 109 P.3d at 934.
71 AS 16.43.990(7).
72 Former 5 AAC 15.358(f) & (h).
73 See former 5 AAC 15.358(b).
74 See AS 16.43.990(7).
75 See Dawson v. Temanson, 107 P.3d 892, 896 & n.10
(Alaska 2005).
76 See Blacks Law Dictionary 1153 (6th ed. 1990).
77 Brown v. Baker, 688 P.2d 943, 948 (Alaska 1984)
(emphasis in original).
78 See AS 16.05.722 (strict liability commercial fishing
penalties for violation of regulation of board of fisheries); AS
16.05.723 (misdemeanor commercial fishing penalties).
1 Grunert v. State, 109 P.3d 924, 936 (Alaska 2005)
(Carpeneti, J., dissenting).
2 Id. at 937-39.
3 Id. at 939-41.
4 Id. at 941.
5 Id. at 933 (emphasis added).
6 Id. at 934 (emphasis added).
7 Id. (emphasis added).
8 Id. (emphasis added).
9 Id. (emphasis added).
10 Id. at 935 (emphasis added).
11 Former 5 AAC 15.358(b)(7)(C).
12 Slip Op. at 15.
13 Id. at 16.
14 Id.
* Carpeneti, Justice, dissents from this order. His
dissent is attached.
1 Grunert v. State (Grunert I), 109 P.3d 924 (Alaska
2005).
2 Former 5 AAC 15.358(b)(7).
3 Compare former 5 AAC 15.358(f)-(h) and 2005 Chignik
Management Area Commissioners Permit Cooperative Salmon Fixed
Leads, 4(a) with 5 AAC 39.260, 39.240, 15.332(c).
4 Grunert I, 109 P.3d at 936.
5 See id. at 934 (explaining that AS 16.43.140(a) limits
operation of gear to persons with valid entry permits).
6 AS 14.43.990(7).
7 Nowhere in the opinion did the court in Grunert I hold
all co-op forms to violate the Limited Entry Act. Rather,
Grunert I, in its holding, stated:
The co-op regulation . . . transforms the
limited entry permit from what used to be a
personal gear license into a mere ownership
share in a cooperative organization. . . .
Before this regulatory scheme accomplishes
such radical departure from the historical
model of limited entry fisheries in Alaska
and the spirit of the Limited Entry Act,
however, we conclude that the legislature
must first authorize the board to approve
cooperative salmon fisheries.
109 P.3d at 936 (emphasis added). Because the new regulatory
scheme has completely abandoned the mere ownership share model
that Grunert I found lacking, the new scheme is consistent with
Grunert I.
8 Only an average of twenty-one co-op members made
deliveries in the three previous years, when the former
regulation was in effect.
9 Grunert I, 109 P.3d at 936-42 (Carpeneti, J.,
dissenting).
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