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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Kuzmin v. State, Commercial Fisheries Entry Commission (12/11/2009) sp-6439
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
| FEDOR Z. KUZMIN, | ) |
| ) Supreme Court No. S- 13115 | |
| Appellant, | ) |
| ) Superior Court No. 3HO-06-201 CI | |
| v. | ) |
| ) O P I N I O N | |
| STATE OF ALASKA, | ) |
| COMMERCIAL FISHERIES | ) No. 6439 December 11, 2009 |
| ENTRY COMMISSION, | ) |
| ) | |
| Appellee. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District, Homer,
William F. Morse, Judge.
Appearances: Michael Hough, Homer, for
Appellant. Vanessa M. Lamantia, Assistant
Attorney General, and Richard A. Svobodny,
Acting Attorney General, Juneau, for
Appellee.
Before: Fabe, Chief Justice, Eastaugh,
Carpeneti, Winfree, and Christen, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
The Commercial Fisheries Entry Commission (CFEC) denied
Fedor Kuzmins limited entry crab permit application because it
found that he had insufficient points. Kuzmin appeals, arguing
that the CFEC abused its discretion by refusing to credit him
points based on crab deliveries he allegedly made as a partner in
his son Romils 2001 fishing operation. Because substantial
evidence supported the CFECs finding that Kuzmin was not in joint
control of Romils 2001 fishing operation, as 20 Alaska
Administrative Code (AAC) 05.834(c) required, we affirm the
superior court order affirming the CFEC decision that denied
Kuzmins entry permit application.
II. FACTS AND PROCEEDINGS
In 2004 Fedor Kuzmin applied to Alaskas Commercial
Fisheries Entry Commission for an entry permit to the Kodiak
bairdi Tanner crab pot fishery. This permit was required because
the Limited Entry Act, which promotes the conservation and
sustained yield management of Alaskas fisheries,1 designates the
Kodiak crab fishery as one that requires limitation of entry.2
The CFEC allocates a maximum of 180 entry permits to the Kodiak
bairdi Tanner crab pot fishery each year, ranking applicants
according to their degree of economic dependence on the fishery
and the extent of their past participation in the fishery.3
The CFEC has established a zero-to-sixty point scale
for the Kodiak crab fishery.4 An applicant can claim a maximum
of twenty points for past participation in the fishery, thirty-
five points for consistent participation in the fishery, and five
points for economic dependence.5
When Kuzmin applied for an entry permit to the Kodiak
crab fishery in 2004, he indicated that he had harvested at least
100 pounds of crab in 2001 and more than 5,600 pounds of crab in
1994 from the fishery. Based on the amount he had harvested,
Kuzmin claimed that he should be awarded nineteen points for
consistent participation. Because he had harvested crab in two
separate calendar years, Kuzmin claimed that he should be awarded
an additional thirteen points for past participation.
In October 2004 the CFEC sent Kuzmin a letter stating
that additional information was needed to classify his
application. Despite Kuzmins claim that he harvested at least
100 pounds of crab in 2001, the letter stated that CFEC did not
have any landings attributed to Kuzmins permit in 2001.
Kuzmin submitted a statement alleging that he went crab
fishing in January 2001 with his son Romil. Kuzmin stated that
they used Kuzmins crab pots and fished off Romils boat as
partners, splitting in half both income and expenses. Romil
submitted an affidavit stating that Kuzmin worked as a deckhand
on Romils boat in 2001 and was paid in cash. Although Romil
stated that he used Kuzmins pots that year, he referred to Kuzmin
as his deckhand and did not refer to him as his partner.
In December 2004 the CFEC classified Kuzmins entry
permit application at thirteen points. The CFEC credited Kuzmin
with six points for harvesting at least 100 pounds but less than
5,600 pounds of crab in 1994 and seven points for commercially
harvesting bairdi Tanner crab in one calendar year. The CFEC did
not award Kuzmin points based on his claim that he had harvested
at least 100 pounds of crab in 2001.
In January 2005 Kuzmin asked the CFEC for an
administrative hearing. A hearing was held on May 19, 2005 with
Kuzmin and his counsel appearing telephonically from Cordova.
The only witnesses who testified about Kuzmins 2001 fishing
activities were Kuzmin and his son Romil. The hearing officer
found that Kuzmin had not shown with a preponderance of the
evidence that he was in joint control of Romils 2001 fishing
operation and therefore entitled to partnership participation
points. Because Kuzmin did not meet his burden to show the
commissions determination was in error, his application was
finally classified with thirteen points. Thirteen points was
insufficient to qualify for a non-transferable permit, and
Kuzmins application was denied.
Kuzmin submitted to the CFEC a petition for
administrative review of the hearing officers decision. The CFEC
denied Kuzmins petition and finally den[ied] his entry permit
application by affirming and adopting the hearing officers
decision as its own. Kuzmin requested reconsideration, but
following reconsideration the CFEC again upheld the hearing
officers findings and finally denied Kuzmins application.
In September 2006 Kuzmin appealed to the superior
court, arguing that the CFEC erred by concluding that he was not
entitled to a portion of the deliveries he and his son Romil made
in 2001. In April 2008 the court held that substantial evidence
supported the CFECs conclusion that Kuzmin was participating as a
crewmember, rather than as a partner, during the 2001 fishing
season.
Kuzmin appeals.
III. DISCUSSION
A. Standard of Review
Kuzmin argues that this is a one-issue appeal focused
on whether the CFEC erred in determining that he was not entitled
to participation points based on the crab he and Romil harvested
together in 2001. When a superior court acts as an intermediate
court of appeal in an administrative matter, we independently
review the merits of the agencys decision.6
When reviewing an agency decision based on factual
findings, we apply the substantial evidence test.7 Whether
Kuzmin fished in a partnership turns on whether he was in joint
control of Romils fishing operation, a question of fact to which
we apply the substantial evidence test.8 Substantial evidence is
such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.9
When reviewing an agencys interpretation of its own
regulation, we apply the reasonable basis standard of review.10
We will defer to the agency unless its interpretation is plainly
erroneous and inconsistent with the regulation.11 This
deferential standard of review properly recognizes that the
agency is best able to discern its intent in promulgating the
regulation at issue.12
B. Whether the CFECs Decision Not To Award Kuzmin Points
Based on His 2001 Participation Was Arbitrary,
Capricious, an Abuse of Discretion, and Not Supported
by Evidence
The CFEC has promulgated specific regulations governing
the permitting process for the Kodiak crab fishery under the
Limited Entry Act.13 Per those regulations, an applicant is
eligible to earn past participation points based on whether he or
she commercially harvested Kodiak bairdi Tanner crab as a gear
operator in 1993, 1994, 2001, or 2002.14 An applicant is also
eligible to earn consistent participation points depending on
whether he or she met certain poundage thresholds while working
as a gear operator during one or more of those years.15
The regulations define gear operator as an individual
who was physically present on the vessel[,] who was in control or
joint control of the commercial fishing operation, and who held a
valid interim-use permit for the Kodiak bairdi Tanner crab pot
fishery.16 The regulations adopt a rebuttable presumption that an
applicant was a crewmember and not a gear operator for the
purpose of awarding participation points if the applicants
commercial harvest was less than twenty percent of the total
commercial harvest taken in the fishery and delivered from the
vessel during that year.17 An applicant can rebut the crewmember
presumption by showing by a preponderance of the evidence either
that the applicant was the sole gear operator on the vessel at
the time the Kodiak bairdi Tanner crab were harvested or that the
applicant was a partner with one or more other gear operators on
the vessel.18 The Kodiak crab pot fishery regulations also define
partners to mean co-owners of a fishing business for profit who
participate as gear operators from the same vessel and are in
joint control of the fishing operation.19
The hearing officer concluded that Kuzmin ha[d] not
shown with a preponderance of the evidence that he was in joint
control of the [2001] fishing operation and accordingly declined
to award Kuzmin points for his participation that year. Kuzmin
argues that the CFECs decision was arbitrary, capricious,
unsupported by evidence, and an abuse of discretion. He contends
that he proved by a preponderance of the evidence that he was at
least in partnership with his son Romil and that the CFEC cannot
reasonably believe otherwise. He additionally argues that the
CFEC failed to consider traditional partnership principles and
thus was not applying the law evenhandedly to all applicants.
1. Whether substantial evidence supports CFECs
finding that Kuzmin was not in joint control
Kuzmin argues that he was at least in joint control of
Romils 2001 commercial fishing operation. He contends that he
owned the vessel, the gear, and the crab pots and could hire,
fire, direct[,] and control Romil. He also asserts that he was
teaching Romil how to skipper, operate crab gear, select a
fishing site in Kodiak, and keep the crab alive for sale. Kuzmin
argues he did everything except steer the boat and that Romil,
possessing only minimal skills, did not bring much of anything to
the fishing operation. Although Romil may have referred to
Kuzmin as a deckhand, Kuzmin implies that Romil, a Russian-
speaking Old Believer, misunderstood the meaning of that word.
Kuzmin implicitly argues that his case is more analogous to
several other CFEC decisions which found partnerships to exist.
The CFEC responds that Kuzmin did not meet his burden
of proving that he was in joint control of the fishing operation
as required under 20 AAC 05.834(c). It argues that Kuzmins
claims that he supervised Romil and had the ability to hire,
fire, direct, and control Romil are unsupported by the record.
The CFEC contends that, although Kuzmin now claims to have done
all the work, Romils testimony before the hearing officer
suggested otherwise. The CFEC argues that the cases Kuzmin
relies on to support his arguments do not apply here and are
otherwise factually distinguishable.
After considering the totality of the circumstances,
the hearing officer concluded that Kuzmin had failed to
demonstrate by a preponderance of the evidence that he was in
joint control of Romils fishing operation. The hearing officer
stated that she based her decision on the following: (1) neither
Kuzmin nor Romil testified that Kuzmin was in joint control of
the operation; (2) Romil consistently referred to [Kuzmin] as
the deckhand; (3) there was no evidence Kuzmins previous season
of experience added to the operation given that Romil had
previous experience using the boat and pots to fish cod and knew
what to expect with the weather; (4) Kuzmin never claimed to
perform work equally with Romil and admitted that Romil did most
of the work to get ready; (5) Romil testified that he did most of
the work on board; and (6) Kuzmin acknowledged that he was
probably in the bunk each day when the boat made delivery to the
tender.
To support its determination in this case, the hearing
officer relied on two prior administrative decisions: Clark and
Martin.20 Both cases involved entry permit applications to the
Kodiak crab fishery. In Martin, the hearing officer noted that
the applicant had helped to get the operation ready for fishing
and contributed some of his own gear to the operation.21 Martin
and the two other men he fished with each testified that they all
did the same jobs on board.22 The hearing officer concluded that
the preponderance of the evidence showed that Martin was equally
in control of the fishing operation and equally split the
landings.23
In contrast to Martin, the applicant in Clark was
denied participation points for the year in which he landed only
thirty-three percent of his vessels catch.24 He appealed the
denial of points, arguing that he was the co-skipper of the
vessel.25 Even though Clark taught the crew how to size and sex
the crab, the hearing officer concluded that his participation
sounded more like that of an experienced crewman than that of a
partner with joint control.26 The hearing officer noted that
Clark never claimed he was in joint control of the operation and
that his testimony was that he was there to help.27
In this case, Kuzmin had no recorded landings from
Romils vessel in 2001. Because his commercial harvest was less
than twenty percent of the total commercial harvest taken in the
fishery and delivered from the vessel during that year, there was
a rebuttable presumption that he was a crewmember and not a gear
operator for the purpose of awarding participation points.28
We must next consider whether the CFEC erred in
concluding that Kuzmin had failed to rebut that presumption.
Although Kuzmin testified that he and Romil were partners,
neither one ever testified that Kuzmin was in joint control of
the fishing operation. Romil instead referred to his father as a
deckhand in his testimony at the hearing. Although it is
conceivable that someone working the deck may also be in joint
control with the person running the boat, Romil never indicated
that this was the case here. Moreover, although Kuzmin testified
that he was supposed to be paid for half of the crab delivery,
Romil testified that he did not think the money was split fifty-
fifty. Romil testified that he and his father had differing
ideas about where best to fish, but that they ultimately went
where he (not his father) wanted to go.
Although Kuzmin claims on appeal that he taught Romil
how to skipper, operate the crab gear, select a fishing site, and
keep the crabs alive, these assertions are largely unsupported by
the record. Romil testified at the hearing that, although it was
his first time crab fishing, he knew what to expect and that his
father wasnt really much of a help.
Kuzmin testified that Romil was the one operating the
boat and that Kuzmin was much like the applicant in Clark just
helping Romil. Kuzmin did not testify that he contributed equal
parts labor with Romil and conceded that Romil did most of the
work switching the pots over so they could be used for crab.
Romil similarly testified that he did most of the work getting
ready to fish.
Although Kuzmin cites several cases in which the CFEC
found partnerships to exist, those cases did not involve the
Kodiak crab fishery. Those cases involved either the Bristol Bay
salmon drift gill net or the Prince William Sound salmon purse
seine fisheries.29 Because partners is not a defined term for
those fisheries, the determinations in those cases did not turn
on whether there was joint control.
We hold that the CFECs determination that Kuzmin failed
to demonstrate joint control was supported by substantial
evidence.
2. Whether the CFEC applied erroneous standards in
deciding the case
Kuzmin argues that the CFEC determined the partnership
questions in this case under erroneous standards. He contends
that the CFEC failed to consider traditional partnership
principles and thus did not apply the law evenhandedly to all
applicants. He argues that we have expressly disapproved of
using joint decision-making as a factor in the partnership test
and that the CFEC should have applied the four-factor test we
used in Chocknok v. State to determine when a partnership exists
between spouses.30
The CFEC does not explicitly argue that the Chocknok
factors are inapplicable in this case. It argues that, to get
points for Romils landings, Kuzmin was required to both (1)
satisfy the four-part Chocknok test, and (2) additionally prove
under 20 AAC 05.834(c) that he was in joint control of Romils
fishing operation. The CFEC contends that Kuzmin did neither of
these two things.
In Chocknok, the CFEC denied two women entry permits to
the Bristol Bay drift gill net fishery.31 The issue on appeal was
whether the CFEC applied improper standards in determining that
the women were not partners in their husbands respective fishing
ventures and therefore not entitled to income dependence points
under 20 AAC 05.630(b)(2).32 In reversing the CFECs decision, we
declined to adopt the five-factor test the CFEC used to determine
that the applicants in that case had not been in a fishing
partnership with their spouses.33 We reasoned that adopting the
CFECs test, which considered among other things joint decision-
making between the spouses, would exclude the majority of married
women from consideration for special circumstances income
dependence points.34 We stated that, although joint decision-
making authority was an important attribute of a typical business
partnership, the absence of joint control d[id] not necessarily
disprove the existence of a partnership, since one partner may be
given exclusive management of a partnership by agreement.35
We then identified four factors that could be validly
considered in determining the existence of a business partnership
between married persons.36 Those factors were: (1) whether there
was an agreement, express or implied, to combine the spouses
property, money, effects, skills, and knowledge to carry out a
business enterprise; (2) whether the partners were co-owners of a
business who shared in its profits and who had a right, either
express or implied, to exercise authority in the management of
the enterprise; (3) whether the partners were in business; and
(4) whether the business was intended to make a profit.37 We
observed that determinations of partnership between spouses will
depend on the particular facts of each case. . . . The Commission
must consider the traditional partnership factors and apply them
evenhandedly to all applicants, making sure that the criteria
used are not unjustly discriminatory in intent or impact.38
Although Chocknok specifically addressed spousal partnerships,
the CFEC has since indicated it would apply the Chocknok factors
to any claim for income dependence points based on an alleged
partnership.39
Furthermore, although Chocknok involved the calculation
of income dependence points, its reasoning would also apply to
claims for participation points based on an alleged partnership.
The CFEC has also developed a more specific and more rigorous
test to determine whether an applicant to the Kodiak crab fishery
is entitled to participation points based on his or her alleged
partnership with another fisherman.40 Under that test, co-owners
of a fishing business for profit who participate as gear
operators from the same vessel and are in joint control of the
fishing operation are entitled to participation points based on a
partners landings.41 Although Kuzmin suggests otherwise, this
definition does incorporate some of the traditional partnership
factors addressed in Chocknok, including the co-ownership, in
business, and for-profit requirements.42 But subsection .836(4)
also requires the applicant to prove he or she was in joint
control. Because the CFEC found Kuzmin had failed to meet his
burden of proof on the joint control requirement, any
consideration of the traditional partnership factors was
unnecessary.
Kuzmin may also be implicitly arguing that joint
control is not a valid criterion on which to base a partnership
determination. He contends that the CFEC has adopted a
requirement that partners be in joint control of the fishing
operation even though we explicitly questioned in Chocknok the
validity of imposing such a requirement in a different context.
We have held that, if the legislature delegates its
authority to an agency to formulate policies and to act in the
place of the legislature and the agency adopts a regulation under
that delegation of authority, we should not examine the content
of the regulation to judge its wisdom, but should exercise a
scope of review not unlike that exercised with respect to a
statute.43 If a state agency has authority to adopt a regulation
to implement, interpret, make specific[,] or otherwise carry out
the provisions of the statute, no regulation adopted is valid or
effective unless consistent with the statute and reasonably
necessary to carry out the purpose of the statute.44 Because
regulations are presumptively valid, the burden of proving
invalidity is on the party challenging it.45
Kuzmin has not satisfied his burden proving the
invalidity of the CFECs regulation defining a partner as one who
is in joint control. He does not argue either that a joint-
control requirement is inconsistent with legislative intent or
that it is not reasonably necessary to carry out the purpose of
the statute. We therefore assume that the regulation is valid
and hold that the CFEC did not act arbitrarily in declining to
award Kuzmin participation points based on his alleged
partnership with Romil.
IV. CONCLUSION
Because substantial evidence supports the CFECs finding
that Kuzmin was not in joint control of Romils 2001 fishing
operation, we AFFIRM the superior court order affirming the CFEC
decision that denied Kuzmins entry permit application.
_______________________________
1 AS 16.43.010-.990.
2 AS 16.43.100 (delegating power to designate . . .
particular species for which . . . entry permits will be issued
to CFEC); 20 AAC 05.310(e)(3) (2008).
3 AS 16.43.250 (instructing CFEC to adopt regulations for
ranking applicants for entry permits); 20 AAC 05.320 (2008)
(setting maximum number of permits); 20 AAC 05.834 (2008)
(establishing point system for ranking permit applications for
Kodiak bairdi Tanner pot fishery).
4 20 AAC 05.833(b) (2008).
5 20 AAC 05.834.
6 South Anchorage Concerned Coal., Inc. v. Municipality
of Anchorage Bd. of Adjustment, 172 P.3d 774, 780 (Alaska 2007)
(citing Williams v. Abood, 53 P.3d 134, 139 (Alaska 2002)).
7 Copeland v. State, Commercial Fisheries Entry Commn,
167 P.3d 682, 683 (Alaska 2007) (citing Jones v. Commercial
Fisheries Entry Commn, 649 P.2d 247, 249 n.4 (Alaska 1982)).
8 Id. at 683; see also Kuzmin v. State, Commercial
Fisheries Entry Commn, No. S-10947, 2004 WL 595608 at *4 (Alaska,
March 24, 2004).
9 Nelson v. State, Commercial Fisheries Entry Commn, 186
P.3d 582, 585 (Alaska 2008) (quoting Cleaver v. State, Commercial
Fisheries Entry Commn, 48 P.3d 464, 467 (Alaska 2002)).
10 Copeland, 167 P.3d at 683 (citing Simpson v. State,
Commercial Fisheries Entry Commn, 101 P.3d 605, 609 (Alaska
2004)).
11 Id. (internal quotation marks omitted) (quoting
Simpson, 101 P.3d at 609).
12 Rose v. Commercial Fisheries Entry Commn, 647 P.2d 154,
161 (Alaska 1982) (citing K. Davis, Administrative Law Treatise
7.22, at 105-08 (2d ed., 1979)).
13 20 AAC 05.834(b).20 AAC
14 5.836(3).20 AAC
15 20 AAC 05.834(b).
16 20 AAC 05.836(3).
17 20 AAC 05.834(c).
18 Id.
19 20 AAC 05.836(4) (emphasis added).
20 Clark, CFEC File No. 05-007-A (2005); Martin, CFEC File
No. 04-033-A (2005).
21 Martin, CFEC File No. 04-033-A at 2.
22 Id.
23 Id. at 3.
24 Clark, CFEC File No. 05-007-A at 1.
25 Id.
26 Id. at 1, 4.
27 Id. at 4.
28 20 AAC 05.834(c).
29 See, e.g., Merritt, CFEC No. 75-758 (involving dispute
with Prince William Sound salmon purse seine fishery); Petticrew,
CFEC No. 75-374 (involving dispute with Southeast drift gill
net); Kitchok, CFEC No. 75-335 (involving dispute with Bristol
Bay salmon drift gill net); Balestreri, CFEC No. 75-233 (same);
Derania, CFEC No. 75-211 (same); Nanalook, CFEC No. 75-670
(same); Aliotti, CFEC No. 75-584 (same); Golia, CFEC No. 75-692
(same).
30 Chocknok v. State, Commercial Fisheries Entry Commn,
696 P.2d 669, 675-76 (Alaska 1985).
31 Id. at 672-73.
32 Id. at 671. An applicant may be awarded up to ten
points based on the percentage of income derived from harvesting
the fishery resource while participating as a gear license holder
in 1971 and 1972. 20 AAC 05.630(b)(1) (2008). But if special
circumstances exist to indicate that this percentage does not
realistically reflect the applicants income dependence, the CFEC
may award up to ten points based on the applicants special
showing of income dependence. 20 AAC 05.630(b)(2). We have held
that being a partner with a gear license holder is a special
circumstance justifying an award of income dependence points
under 20 AAC 05.630(b)(2). State v. Templeton, 598 P.2d 77, 81
(Alaska 1979) (recognizing right of applicant to be considered
for income dependence points under special circumstance
provisions of 20 AAC 05.630(b)(2) when he or she did not hold
gear license but fished as business partner with gear license
holder).
33 Chocknok, 696 P.2d at 673-75. The CFEC developed the
five factor-test in an administrative decision. See Brandon,
CFEC File No. 75-326 (1980). The five factors were: (1) whether
the partners exercised joint decision-making authority; (2)
whether the spouses drew income separate and distinct from the
other; (3) whether the couple filed a partnership tax return; (4)
whether each partner held a commercial fishing license; and (5)
whether each partner held a gear license. Chocknok, 696 P.2d at
672.
34 Id. at 673.
35 Id.
36 Id. at 675-76.
37 Id. We reasoned that the last factor will usually be
satisfied because virtually all fishing ventures, whether or not
they are partnerships, aim to make sufficient profit . . . to
survive the off-season. Id. at 676 n.8.
38 Id. at 676.
39 Merritt, CFEC No. 75-758 at 22 (stating that, although
Chocknok was decided in context of spousal partnership, there is
no reason to believe that [the supreme court] would not apply the
same test to any alleged partnership (emphasis in original)).
40 20 AAC 05.834(c), .836(4).
41 Id.
42 Chocknok, 696 P.2d at 675-76.
43 Kelly v. Zamarello, 486 P.2d 906, 911 (Alaska 1971).
44 Id. (quoting AS 44.62.030).
45 State v. Alyeska Pipeline Serv. Co., 723 P.2d 76, 78
(Alaska 1986) (citing Union Oil Co. v. State, Dept of Natural
Res., 574 P.2d 1266, 1271 (Alaska 1978)).
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