Duckworth v. the United States of America ( 2010 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
GREGORY N. DUCKWORTH, F/V
REAPER, INC., and F/V TWISTER, INC.,
Plaintiffs,
v.
THE UNITED STATES OF AMERICA,
acting by and through GARY LOCKE, in his Civil Action No. 09–1387 (CKK)
official capacity as Secretary of the United
States Department of Commerce, THE
NATIONAL OCEANIC AND
ATMOSPHERIC ADMINISTRATION, and
THE NATIONAL MARINE FISHERIES
SERVICE,
Defendants.
MEMORANDUM OPINION
(April 15, 2010)
Plaintiffs Gregory N. Duckworth, F/V Reaper, Inc., and F/V Twister, Inc. (collectively,
“Plaintiffs”) bring this action against Defendants Gary Locke, in his official capacity as the
Secretary of the United States Department of Commerce, the National Oceanic and Atmospheric
Administration (“NOAA”), and the National Marine Fisheries Service (“NMFS”)1 (collectively,
“Defendants”) seeking to appeal a final decision of the Secretary regarding Notices of Violation
and Assessment (“NOVAs”) and Notices of Permit Sanction (“NOPSs”) issued to Plaintiffs for
alleged violations of the Magnuson-Stevens Fisher Conservation and Management Act
(“Magnuson-Stevens Act” or “MSA”), 16 U.S.C. §§ 1801-82. An administrative law judge held
1
The National Marine Fisheries Service is administratively part of the National Oceanic
and Atmospheric and Administration, which is housed within the U.S. Department of
Commerce. The Court shall generally use the term “agency” to refer to any of these entities.
a hearing on the matter and issued an initial decision and order affirming the violations, which
was modified in a final decision by the NOAA Administrator acting on behalf of the Secretary.
Presently pending before the Court are the parties’ cross-motions for summary judgment. In
addition, Plaintiffs have recently filed a [28] Motion for a Temporary Restraining Order and
Preliminary Injunction Seeking to Stay Judicial Decision-Making and to Stay Enforcement
Proceedings pending further investigation into Defendants’ alleged misconduct.2 For the reasons
explained below, the Court shall GRANT Defendants’ [24] Motion for Summary Judgment,
DENY Plaintiffs’ [22] Motion for Summary Judgment, and DENY Plaintiffs’ [28] Motion for a
Temporary Restraining Order and Preliminary Injunction.
I. BACKGROUND
Plaintiff Gregory Duckworth is a commercial fisherman who lives in Rhode Island. At
the time of the events giving rise to the alleged violations at issue here, Duckworth was the sole
owner of the fishing vessels Reaper and Twister, which he managed through wholly-owned
corporations F/V Reaper, Inc., and F/V Twister, Inc., respectively. On August 2, 2007, NOAA
issued Notices of Violation and Assessment and Notices of Permit Sanction against Plaintiffs
alleging nine violations of the Magnuson-Stevens Act, eight of which are the subject of this
appeal.3 The first of the eight counts at issue pertains to a claim that Duckworth and F/V
Twister, Inc. made a false statement in connection with a fishing permit application in violation
of 50 C.F.R. § 648.14 (the “False Statement Case”). The remaining seven counts pertain to
2
Plaintiffs earlier filed a [16] Motion for a Temporary Restraining Order and Preliminary
Injunction, but that motion was withdrawn.
3
The first count, which is not at issue in this action, was directed at F/V Reaper, Inc., and
the Reaper’s operator for failure to comply with certain “days at sea” call-in requirements.
2
allegations that Duckworth and F/V Reaper, Inc. unlawfully fished for lobster by leaving lobster
traps at sea after their fishing permits were suspended due to a prior federal fisheries violation
(the “Lobster Traps Case”).
Plaintiffs requested an administrative hearing on the alleged violations, and a three-day
hearing was commenced in Boston, Massachusetts, on May 6, 2008. See Admin. Record (“AR”)
Ex. 58 (Initial Decision and Order) at 3. During the hearing, Defendants presented testimony
from eleven witnesses and introduced forty-nine exhibits; Plaintiffs offered testimony from four
witnesses and introduced seventeen exhibits into evidence. See id. at 3-4. The case was heard by
Administrative Law Judge (“ALJ”) Michael Devine, who issued an Initial Decision and Order on
October 6, 2008, finding that NOAA had established by a preponderance of reliable and credible
evidence that Plaintiffs had violated federal fisheries laws and regulations by submitting a false
statement in a permit application and by fishing for lobsters without a valid permit. See id. at 4.
On November 24, 2009, the NOAA Administrator issued an order affirming the violations but
modifying the ALJ’s initial decision regarding the sanctions and penalties imposed. See AR Ex.
79 (Final Decision). The final decision of the agency is to impose a $50,000 fine for both the
False Statement Case and the Lobster Traps Case and to suspend Plaintiffs’ operating and vessel
permits for a period of 48 months. See id.The facts surrounding Plaintiffs’ alleged violations are largely undisputed. The facts
described below are derived from the evidence presented at the administrative hearing, the
administrative record, and the parties’ submissions to this Court.
A. The False Statement Case
Defendants issued a NOVA and NOPS against Plaintiffs Duckworth and F/V Twister,
3
Inc. for making a false statement in the process of applying for a permit by submitting an altered
“Certificate of Documentation” for the Twister. The deadline for Duckworth to renew his 2005
fishing permits for the Twister was May 1, 2006. Defs.’ Stmt.4 ¶ 1. In order to renew his fishing
permits, Duckworth was required to submit, inter alia, a “current copy of the vessel’s current
USCG [U.S. Coast Guard] documentation.” See 50 C.F.R. § 648.4(c)(2)(i) (2006).5 A new
Certificate of Documentation (“CD”) had recently been issued for the Twister, but Duckworth
had not yet received a physical copy of the new CD from the Coast Guard’s National Vessel
Documentation Center. Defs.’ Stmt. ¶ 3. Apparently anxious about missing the approaching
deadline, Duckworth went ahead and submitted his application package on April 24, 2006. Id.
¶ 4. Because he did not have the new CD for the Twister, Duckworth altered an electronic copy
of an old CD for the Twister to include the current information and submitted the altered CD
with his permit application. Id. ¶ 5. Specifically, Duckworth modified the CD to identify the
correct corporate owner, change the spelling of a street name, and change the date of issuance
and expiration date to reflect the information for the new CD. Pls.’ Stmt. ¶ 10. Duckworth
obtained the current information by telephone from the National Vessel Documentation Center.
4
The Court strictly adheres to the text of Local Civil Rule 7(h) (formerly Rule 56.1 when
resolving motions for summary judgment). See Burke v. Gould, 286 F.3d 513, 519 (D.C. Cir.
2002) (finding district courts must invoke the local rule before applying it to the case). The
Court has advised the parties that it strictly adheres to Rule 7(h) and has stated that it “assumes
facts identified by the moving party in its statement of material facts are admitted, unless such a
fact is controverted in the statement of genuine issues filed in opposition to the motion.” [11]
Order at 1 (July 29, 2009). Thus, in most instances the Court shall cite only to one party’s
Statement of Material Facts (“Stmt.”) unless a statement is contradicted by the opposing party.
The Court shall also cite directly to evidence in the record, where appropriate.
5
The Court shall refer to the regulations in effect at the time of the alleged misconduct,
i.e., April 2006 for the False Statement Case and August-October 2006 for the Lobster Traps
Case.
4
See AR Ex. 81 (Admin. Hr’g Tr.) at 257. Duckworth testified at the hearing that he submitted a
cover letter along with his application describing the altered CD as a “simulated sample draft” of
the new documentation. Defs.’ Stmt. ¶ 5; AR Ex. 85-H (Resp. Hr’g Ex. H). One version of this
cover letter was introduced into evidence at the hearing as Respondent’s Exhibit H. The
document is unsigned and bears a date stamp reading “RECEIVED BY . . . PERMITS” with the
date April 24, 2006, in the middle. See AR Ex. 85-H.
Defendants received Duckworth’s permit application on April 24, 2006. Defs.’ Stmt. ¶ 6.
At the hearing, Ms. Pamela Thames, who initially reviewed Duckworth’s application, and her
supervisor, Mr. Ethan Hawes, both testified that when the permit office receives an application, it
is immediately date-stamped, stapled together, placed in a processing bin, and remains intact
(i.e., never separated) throughout the entire review process. Id. Ms. Thames and Mr. Hawes also
testified that if an application is incomplete, the permit office makes a copy for its files, and then
returns the original package in its entirety to the applicant. Id. Both Ms. Thames and Mr. Hawes
testified that they did not see any cover letter in Duckworth’s application package and stated that
if such a letter existed, they would have kept a copy of it for their records pursuant to standard
office procedure. Id. ¶ 7. Upon examining Duckworth’s application, Ms. Thames noticed
several oddities with the CD that was enclosed, such as an unusual font type and size and the
processing initials “RAJ,” which were the same initials included on a previous CD submitted for
the Twister. See AR Ex. 81 (Admin. Hr’g Tr.) at 195-96, 205-06, 301-05. Ms. Thames brought
the application to the attention of Mr. Hawes, and they called the Coast Guard to inquire about
the CD and when it was issued. See id. at 194-98. The Coast Guard informed them that no such
document with processing initials “RAJ” and an expiration date of April 30, 2007, existed. Id. at
5
198.
Because Duckworth’s application was incomplete, the NMFS permit office returned the
entire package to him. Defs.’ Stmt. ¶ 8. The permit office included a cover letter indicating that
the CD did not appear to be a copy of the current documentation for the Twister. See AR Ex. 84-
25 (4/27/2006 Letter from Northeast Permit Operations to Duckworth). At the hearing,
Duckworth testified that he was not sure if his explanatory cover letter regarding the altered CD
was returned to him with the rest of his application. See AR Ex. 81 (Admin. Hr’g Tr.) at 271.
Duckworth telephoned Mr. Hawes a few days after receiving the returned application and
informed him that he had received the new CD from the Coast Guard. Id. Duckworth then
resubmitted his initial application with the new CD, which was received in the mail by the permit
office and date-stamped on May 1, 2006, the deadline for submitting a renewal application.
Defs.’ Stmt. ¶ 8; 50 C.F.R. § 648.4(a)(1)(i)(B). NMFS deemed him to be in compliance and
processed his permit application.
On May 11, 2006, Special Agents Todd Nickerson and Sean Eusebio from NOAA went
to speak to Duckworth about his permit application. Defs.’ Stmt. ¶ 9. The agents explained to
Duckworth that the CD he originally submitted looked suspicious and asked him why the altered
certificate was submitted. Id. Duckworth first replied that his stepdaughter was playing with the
scanner and may have accidentally changed certain fields on the certificate. Id. ¶ 10. Duckworth
further claimed he was not aware of the change and he did not know how the form was submitted
with his initial application package. Id. Upon further questioning, Duckworth changed his
explanation to state that while changes were made on a scanner by his stepdaughter, the changes
were made at his direction. Id. ¶ 11. Duckworth also testified at the hearing that he sent a copy
6
of the explanatory cover letter he submitted with his initial application to Agent Nickerson after
their conversation. Id. ¶ 12; AR Ex. 85-I. A copy of this forwarded letter was introduced into
evidence at the hearing as Respondent’s Exhibit I. The document is unsigned, bears no date
stamp, and contains a footer indicating that it was sent to Agent Nickerson by certified mail on
August 3, 2006. See AR Ex. 85-I.
B. The Lobster Traps Case
In 2004, in an earlier enforcement case by Defendants, Duckworth was found liable for
unlawfully catching and possessing monkfish in federal waters and was assessed a monetary
penalty of $50,000. Defs.’ Stmt. ¶ 14. Duckworth was required to pay the civil penalty on or
before August 1, 2006. Id. Duckworth was on notice that if the fine was not paid in full (or a
mutually acceptable settlement reached) by August 1, 2006, his operator and vessel permits
would be sanctioned and he would not be permitted to fish for federally regulated species. Defs.’
Stmt. ¶ 15. Duckworth was unable to reach a settlement or pay his fine by the August 1, 2006,
deadline, and the permit sanctions became effective on that date, leaving Duckworth and Plaintiff
F/V Reaper, Inc. without valid permits. Id. ¶¶ 17-18, 20.
In late July, before the permits were sanctioned, Duckworth set approximately 800 lobster
traps in the Exclusive Economic Zone (“EEZ”).6 Defs.’ Stmt. ¶ 16. Under federal fisheries
regulations, all vessels fishing for American lobsters in the EEZ must hold a valid permit. Id.
¶ 19. On August 7, 2006, Special Agents Troy Audyatis and Kevin Flanagan went to collect
Duckworth’s fishing and operator permits, but he told them that he was too busy and would not
6
The Exclusive Economic Zone extends 200 nautical miles seaward from the territorial
coast. See Proclamation No. 5030, 48 Fed. Reg. 10605 (Mar. 10, 1983).
7
talk to them. Defs.’ Stmt. ¶ 22. Later that day, the agents learned from an informant that
Duckworth was still fishing in the EEZ. Id. ¶ 23. At the hearing, Duckworth testified that he
mailed Defendants a letter on August 7, 2006, giving Defendants notice that he had left 800
lobster traps deployed in the EEZ. Id. ¶ 21. A copy of this letter was introduced into evidence as
Respondent’s Exhibit M. See AR Ex. 85-M. The letter was not addressed to any particular
individual or specific department or office, but rather to “NMFS.” Id.Between August 9, 2006, and August 24, 2006, the agents investigated further and
conducted operations to locate, haul, and seize Duckworth’s fixed gear deployed in the EEZ.
Defs.’ Stmt. ¶ 24. During this time, Defendants recovered 268 lobster traps with identification
tags belonging to Duckworth. Id. Some of the recovered lobster traps were freshly baited and
other traps contained approximately 270 live lobsters which were removed and returned to sea.
Id. On August 22, 2006, the agents were finally able to meet with Duckworth and collect his
vessel and operator permits. Id. ¶ 25. On October 2, 2006, the agents returned to Duckworth’s
home, informed him that they had received information that he had been fishing in the EEZ, and
asked for his trap tags to account for his equipment. Id. ¶ 26. Duckworth then told the agents
that he had 800 lobster traps deployed in the EEZ and further indicated that his brother, Eddy
Duckworth, had conducted “buoy checks” on his gear to ensure that the traps were still set and in
their present location. Id. The agents told Duckworth that Defendants had recently hauled and
seized 268 of his traps and asked Duckworth to explain the presence of fresh bait. Id.Duckworth grew angry and demanded that the agents leave his property. Id.On October 5, 2006, Special Agent Audyatis called Duckworth and again requested that
he produce his lobster trap tags and inquired as to the location of the lobster traps. Defs.’ Stmt.
8
¶ 27. On October 12, 2006, Duckworth drove to Agent Audyatis’s office and delivered the trap
tags. Id. ¶ 28. Duckworth agreed to help Defendants locate the lobster trap gear in the EEZ. Id.
¶ 29. On October 19, 2006, Defendants recovered several strings of lobster gear in the EEZ with
the help of Duckworth. Id. ¶ 30. On November 6, 2006, an additional string of traps was
recovered. Id. ¶ 31. Defendants recovered approximately 462 of the 800 lobster traps owned by
Duckworth. Id. ¶ 32.
By November 15, 2006, Duckworth had paid the remainder of his $50,000 fine (with
interest) and was legally permitted to resume fishing in the EEZ. See AR Ex. 81 (Admin. Hr’g
Tr.) at 367-68, 406, 408.
C. The ALJ’s Decision
Following a three-day hearing and extensive briefing from the parties, the ALJ issued an
Initial Decision and Order with findings of fact and conclusions of law. The ALJ found that,
given the numerous discrepancies found in Duckworth’s testimony at the hearing, his statements
regarding the explanatory cover letter allegedly sent with his permit application were not
credible. See AR Ex. 58 (Initial Decision and Order) at 21. Specifically, the ALJ found that
Duckworth’s testimony that there were two versions of the cover letter, one with and one without
a date stamp from the permits office, was not credible. See id. The ALJ also discredited
Duckworth’s testimony concerning the forwarding of the explanatory cover letter to Special
Agent Nickerson because it was allegedly sent on August 3, 2006, several months after their
initial conversation. See Defs.’ Stmt. ¶ 13. Moreover, the ALJ deemed the testimony of the
permit office personnel regarding their handling of Duckworth’s application and their office
procedures to be credible. See AR Ex. 58 (Initial Decision and Order) at 21. The ALJ found that
9
Duckworth had intentionally forged a document with his permit application, and the law required
him to submit an authentic copy of the current Certificate of Documentation. See id. at 20.
Accordingly, the ALJ concluded that NOAA established by a preponderance of the evidence that
Duckworth and F/V Twister, Inc. submitted a false statement when they included an altered
document in a permit application in violation of 50 C.F.R. §§ 648.14(a)(3), 648.4(c)(2)(i), and
648.14(a)(79).
The ALJ also deemed Duckworth’s testimony regarding the August 7, 2006, letter
informing Defendants of the lobster traps at sea to be not credible. See AR Ex. 58 (Initial
Decision and Order) at 21. The ALJ noted that Duckworth had multiple direct contacts with
NMFS agents and never asserted the existence of such a letter. See id. Moreover, the evidence
produced by Duckworth at the hearing showed only that he had mailed some type of document to
Defendants’ general address on August 7, 2006. See id. at 39. An NMFS official testified that
his office received several trip reports from Duckworth on August 7, 2006, but he did not recall
ever seeing a copy of the alleged letter, which as a matter of policy, would have been forwarded
to him for review. See id. The ALJ heard testimony regarding NOAA’s document intake
procedures, which he deemed credible. See id. at 39-40. The ALJ concluded that Duckworth’s
testimony that he mailed NMFS a letter regarding his 800 lobster traps on August 7, 2006, was
not credible. Id. at 40. The ALJ further concluded that the manner in which Duckworth
attempted to send it would render any such letter insufficient to constitute proper notice of the
existence of traps in light of Duckworth’s more direct involvement with enforcement agents and
the NOAA General Counsel’s Office during this time period. See id. at 40. Accordingly, the
ALJ found that NOAA had established by a preponderance of the evidence that Duckworth and
10
F/V Reaper, Inc. unlawfully fished for lobster by leaving their traps in the EEZ without a valid
permit in violation of 50 C.F.R. §§ 697.4(a), 697.5(a), and 697.7(c)(1)(xxvi).
The ALJ weighed the factors to be considered in deciding an appropriate penalty under
the MSA and its regulations. See AR Ex. 58 (Initial Decision and Order) at 40-44. For the False
Statement Case, the ALJ found the sanctions proposed by Defendants—a civil penalty of
$130,000 and a revocation of operator and vessel permits for Duckworth and F/V Twister,
Inc.—to be appropriate. Id. at 41. The ALJ deemed deliberate forgery of documentation to be a
serious matter that undermined federal fisheries regulations and that harsh sanctions were
necessary to deter unlawful conduct. Id. at 41-42. The ALJ also found Defendants’ proposed
sanctions for the Lobster Traps Case—a $910,000 civil penalty against Duckworth and F/V
Reaper, Inc. and a revocation of operator and vessel permits—to be appropriate. Id. at 42. The
ALJ found that Duckworth’s conduct was deliberate and that Duckworth had a history of prior
offenses that justified a severe sanction. Id. at 42-43. The ALJ also rejected Plaintiffs’ argument
that the sanctions should be reduced due to an inability to pay, finding that Duckworth had sold
his fishing vessels to family members at substantial discounts, suggesting he was trying to shield
his assets. Id. at 43-44.
D. Final Agency Decision
Plaintiffs submitted a discretionary petition to the NOAA Administrator seeking review
of the ALJ’s decision. See AR Ex. 59 (Petition for Reconsideration). On April 1, 2009, the
NOAA Administrator issued an Order granting in part and denying in part Plaintiffs’ petition for
review, asking the parties to address whether the fines and permit sanctions imposed by the ALJ
were excessive and whether the ALJ adequately considered Plaintiffs’ ability to pay the fines.
11
See AR Ex. 71 (4/1/2009 Order). On November 24, 2009, NOAA Administrator Jane
Lubchenco issued an Order Modifying Initial Decision and Denying Motion to Stay (“final
decision”).7 See AR Ex. 79 (Final Decision). In the Order, the Administrator held that the fines
imposed by the ALJ did not violate the Eighth Amendment to the U.S. Constitution or the
Magnuson-Stevens Act or its regulations. See id. at 4-8. However, the Administrator concluded
that the ALJ had not given adequate consideration to Plaintiffs’ ability to pay the fines. Id. at 8-
9. After considering Plaintiffs’ ability to pay and the magnitude of the offenses, the
Administrator reduced the monetary penalty to $50,000 for the False Statement Case and
$50,000 for the Lobster Traps Case. Id. at 9-10. The Administrator also reduced the permit
revocations imposed by the ALJ to permit suspensions for a period of 48 months. Id. at 9; AR
Ex. 80 (Correction to Order Modifying Initial Decision and Denying Motion to Stay).
II. LEGAL STANDARD
A. Summary Judgment Under Federal Rule of Civil Procedure 56
The parties have filed cross motions for summary judgment pursuant to Federal Rule of
Civil Procedure 56. Summary judgment is proper when “the pleadings, the discovery [if any]
and disclosure materials on file, and any affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(c). Under the summary judgment standard, the moving party bears the “initial responsibility
of informing the district court of the basis for its motion, and identifying those portions of the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the
7
Plaintiffs had filed a motion to stay the Administrator’s decision until they could obtain
responses to Freedom of Information Act requests that had been filed, but the Administrator
denied Plaintiffs’ motion. See AR Ex. 79 (11/24/2009) at 3 n.1.
12
affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). In
response, the non-moving party must “go beyond the pleadings and by [its] own affidavits, or by
the depositions, answers to interrogatories, and admissions on file, designate specific facts
showing that there is a genuine issue for trial.” Id. at 324 (internal quotation marks omitted). All
underlying facts and inferences are analyzed in the light most favorable to the non-moving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Where there are no disputed facts
and review is based solely on the administrative record, summary judgment is appropriate for the
party entitled to judgment as a matter of law. Young v. Gen. Servs. Admin., 99 F. Supp. 2d 59, 65
(D.D.C.), aff’d, 11 F. App’x 3 (D.C. Cir. 2000).
B. Review of Agency Decisions Under the Magnuson-Stevens Act
The standard of review for agency decisions under the Magnuson-Stevens Act is
borrowed from the Administrative Procedure Act (“APA”). See 16 U.S.C. § 1858(b) (“The
findings and order of the Secretary shall be aside by such court if they are not found to be
supported by substantial evidence, as provided in section 706(2) of [the APA].”) The APA
provides in pertinent part that a reviewing court shall “hold unlawful and set aside agency action,
findings, and conclusions found to be . . . unsupported by substantial evidence.” 5 U.S.C. §
706(2). The APA also provides that courts should set aside decisions that are “arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law.” Id. The
“substantial evidence” standard and the “arbitrary and capricious” standard “require equivalent
levels of scrutiny.” Mem’l Hosp./Adair County Health Ctr., Inc. v. Bowen, 829 F.2d 111, 117
(D.C. Cir. 1987). The Supreme Court has explained that “substantial evidence” means “more
13
than a mere scintilla.” Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol. Edison
Co. v. NLRB, 305 U.S. 197, 229 (1938)). “It means such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.” Id. The D.C. Circuit has recognized that, in
applying the substantial evidence test, an agency decision “may be supported by substantial
evidence even though a plausible alternative interpretation of the evidence would support a
contrary view.” Morall v. Drug Enforcement Admin., 412 F.3d 165, 176 (D.C. Cir. 2005).
Normally, a decision will be reversed for lack of substantial evidence “only when the record is so
compelling that no reasonable factfinder could fail to find to the contrary.” Orion Reserves Ltd.
P’ship v. Salazar, 553 F.3d 697, 704 (D.C. Cir. 2009) (citation and quotation marks omitted).
“[J]udicial review under the substantial evidence test is ultimately deferential.” Indus. Union
Dep’t, AFL-CIO v. Am. Petroleum Inst., 448 U.S. 607, 705 (1980). The agency’s decision is
presumptively valid, and the court is not authorized to substitute its own judgment for that of the
agency. Id. The Court’s review is limited to the administrative record. Bloch v. Powell, 227 F.
Supp. 2d 25, 30 (D.D.C. 2002).
In reviewing agency decisions, the court “must give substantial deference to an agency’s
interpretation of its own regulations.” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512
(1994). The court’s “task is not to decide which among several competing interpretations best
serves the regulatory purpose.” Id. Rather, the agency’s interpretation is controlling “unless it is
plainly erroneous or inconsistent with the regulation.” Id. (citations omitted).
III. DISCUSSION
Plaintiffs argue that the decision of the ALJ as modified by the NOAA Administrator
should be reversed because the findings are not supported by substantial evidence and the
14
conclusions involve misapplications of the MSA and its regulations. Plaintiffs believe the ALJ
erred with respect to both the False Statement Case and the Lobster Traps Case and argue that the
penalties imposed by the NOAA Administrator are excessive. The Court shall evaluate each of
these contentions.
A. The Magnuson-Stevens Act
The Magnuson-Stevens Fishery Conservation and Management Act was enacted as a
remedial effort to protect the nation’s fisheries from overfishing. See 16 U.S.C. § 1801. The
MSA directs the Secretary of Commerce to approve, implement, and enforce fishery
management plans “to prevent overfishing, and to protect, restore, and promote the long-term
health and stability” of American fisheries. See id. § 1853(a). To aid in the management of
fishery resources, the MSA provides that it is unlawful for any person to violate any provision of
the MSA or any regulation or permit issued pursuant to the MSA. See id. § 1857(1)(A). Any
person who is found to have committed an act prohibited by the MSA may be held liable to the
United States for a civil penalty. Id. § 1858(a). In determining the amount of a penalty, the
Secretary must “take into account the nature, circumstances, extent, and gravity of the prohibited
acts committed and, with respect to the violator, the degree of culpability, any history of prior
offenses, and such other matters as justice may require.” Id. In addition to civil penalties, the
MSA provides that the Secretary may revoke any permit issued to a vessel or a person involved
in a violation of the MSA. Id. § 1858(g).
The Secretary has promulgated regulations to implement the mandates of the MSA.
Regulations codified at 50 C.F.R. Part 648 govern the fisheries of the Northeastern United States
and impose general prohibitions and restrictions on all those who participate in the fishery. See
15
50 C.F.R. § 648.14. Procedures for applying and obtaining a federal vessel permit are set forth in
50 C.F.R. § 648.4. The regulations specify that, when applying for a federal vessel permit, an
applicant must provide, inter alia, “USCG documentation number and a copy of the vessel’s
current USCG documentation.” 50 C.F.R. § 648.4(c)(2)(i). The regulations provide that it is
unlawful for a person to “[m]ake any false statement in connection with an application,
declaration, or report under [50 C.F.R. Part 648].” 50 C.F.R. § 648.14(3) (2006).8
The regulations codified at 50 C.F.R. Part 697 impose prohibitions and restrictions on all
those who participate in the American lobster fishery. Specifically, the regulations provide that it
is unlawful for any vessel owner or operator to fish, possess, or land American lobster in the EEZ
without obtaining and carrying on board the vessel a valid federal limited access lobster permit
and a valid operator’s permit. See 50 C.F.R. §§ 697.4(a), 697.5(a). The regulations also provide
that it is unlawful for any person owning or operating a vessel to “possess, deploy, fish with,
haul, harvest lobster from, or carry aboard a vessel any trap gear on a fishing trip in the EEZ from
a vessel any trap gear in or from the management areas . . . unless such fishing vessel has been
issued . . . a valid limited access American lobster permit . . . .” See id. § 697.7(c)(1)(xxvi).
B. The False Statement Case
Plaintiffs contend that the ALJ made four errors in its Initial Decision and Order finding
that Plaintiffs had violated MSA regulations by submitting an altered Certificate of
Documentation along with his permit application for the F/V Twister.9 First, Plaintiffs contend
8
This language has since been recodified at 50 C.F.R. § 648.14(5).
9
Plaintiffs also argue a fifth error with respect to the penalties imposed, which shall be
discussed below with Plaintiffs’ other arguments about penalties.
16
that the ALJ erred by failing to credit Duckworth’s evidence that he had submitted a cover letter
with his application explaining the altered CD. Second, Plaintiffs contend it was error not to
accept as credible evidence the copy of that letter that was allegedly forwarded to Special Agent
Nickerson. Third, Plaintiffs contend that it was error for the ALJ not to credit Duckworth’s
evidence that he had called the National Vessel Documentation Center to obtain information
about the current documentation so as to ensure that the altered CD reflected accurate
information. Fourth, Plaintiffs contend that it was error to find that Duckworth made a false
statement because the corrections to the CD contained true information and Duckworth lacked an
intent to deceive. The Court shall address each of these purported errors and determine whether
the ALJ’s decision is supported by substantial evidence.
1. The Explanatory Cover Letters
The first two alleged errors both pertain to Duckworth’s explanation that he submitted an
explanatory cover letter regarding the altered CD, which the ALJ found not credible. Plaintiffs
argue that the date stamp on the first copy of the cover letter (introduced into evidence at the
hearing as Exhibit H) proves that it was received by the NMFS permit office on April 24, 2006,
the same day the rest of his permit application was received. See Pls.’ Mem. at 11-13. Plaintiffs
also argue that any irregularities in the processing of the mail should be construed in Plaintiffs’
favor because Defendants had the burden of proof at the hearing. Id. at 13. With respect to the
second copy of the cover letter (introduced into evidence at the hearing as Exhibit I), which was
allegedly forwarded to Special Agent Nickerson in August 2006, Plaintiffs argue that the proof of
delivery from the United States Postal Service established that this letter was delivered to
Nickerson and it was error for the ALJ to conclude otherwise. See id. at 14-15. Plaintiffs invoke
17
the “common law mailbox rule,” which states that proof that a letter has been properly addressed,
stamped, and deposited in the mail gives rise to a rebuttable presumption that the letter was
delivered in a timely fashion to its intended recipient. See Legille v. Dann, 544 F.2d 1, 4 (D.C.
Cir. 1976).
Ultimately, the question is whether there was substantial evidence in the record to support
the ALJ’s conclusion that Duckworth’s cover letter story was not credible. The ALJ heard
testimony from officials in the NMFS permit office who received Duckworth’s permit
application but did not recall seeing any cover letter and who testified that all parts of a permit
application remain together during processing, making it unlikely that a cover letter would be
lost. Plaintiffs argue that the cover letter was likely received, date-stamped, and returned to
Duckworth with the rest of his rejected application. See Pls.’ Mem. at 13. However, Duckworth
testified at the hearing that he could not recall if it was returned with his application package.
See AR Ex. 81 (Admin. Hr’g Tr.) at 271. Moreover, even if the date-stamped cover letter was in
fact received by the permit office and returned to Duckworth, he failed to explain at the hearing
why the version he purportedly sent Special Agent Nickerson did not have a date stamp. As the
ALJ wrote, “[i]f [Duckworth] sent Agent Nickerson the letter without a date stamp from the
Agency because that was the only one he had at the time, why does he own two distinct versions
now?” AR Ex. 58 at 35. The circumstances surrounding the second version of the letter are also
suspect. The letter was purportedly forwarded to Agent Nickerson to prove that Duckworth had
not been trying to mislead NMFS, yet it was not sent until nearly three months after Nickerson
first contacted Duckworth. In addition, Duckworth purportedly sent the letter by certified mail to
confirm that it was received by Nickerson, but the certified mail receipt indicates only that it was
18
sent on August 3, 2006, and delivered in New Bedford, MA on August 4, 2006. See AR Ex. 85-
I. Duckworth could have obtained the recipient’s signature from the U.S. Postal Service website,
but he failed to do so before the hearing. See AR Ex. 58 at 33.
The evidence in the record is substantial enough to support the ALJ’s conclusion that
Duckworth’s story about the cover letter was not credible. Although the date stamp on the first
version of the unsigned cover letter strongly implies that it was in fact received at the NMFS
permit office on April 24, 2006, the existence of the second version of the letter purportedly sent
to Agent Nickerson, the testimony of the NMFS officials that no cover letter was received, and
Duckworth’s inability to explain how he obtained two versions of the cover letter significantly
undermine the persuasiveness of that documentary evidence. Moreover, because the ALJ directly
heard conflicting testimony in the record, he was in the best position to evaluate the credibility of
the witnesses and make findings of fact. Accordingly, his findings are entitled to great deference.
See Nat’l Ass’n of Recycling Indus., Inc. v. Fed. Maritime Comm’n, 658 F.2d 816, 824 (D.C. Cir.
1980) (“The importance of testimonial evidence and witness credibility to the factual findings in
the instant litigation endow the ALJ’s vision with particular acuity.”) This Court sees no flaw in
the logic of the ALJ’s assessment in light of the evidence in the record.
The “common law mailbox rule” cited by Plaintiffs does not change the analysis. As an
initial matter, that rule provides only a rebuttable presumption of delivery upon proof of mailing
and the absence of evidence to the contrary. See Legille, 544 F.2d at 5-6. With respect to the
cover letter accompanying the permit application, there was no proof that the cover letter was
actually mailed and there was evidence in the record to suggest that in fact it was not received.
With respect to the letter allegedly sent to Nickerson, there was some evidence suggesting that
19
the letter was sent by certified mail, but that evidence was discredited as insufficient. Even if the
letter to Agent Nickerson were presumed to have been received in August 2006, however, there
remain significant doubts as to whether that unsigned letter, with no date stamp, was a true copy
of the letter allegedly sent to the permit office in April 2006. Accordingly, the common law
mailbox rule does not eliminate the existence of substantial evidence in the record to support the
ALJ’s conclusions.
Plaintiffs’ third assertion of error is the ALJ’s purported failure to credit a hearing exhibit
corroborating Duckworth’s testimony that he made telephone calls to the National Vessel
Documentation Center to obtain current information about the Certificate of Documentation to
include in his permit application. See Pls.’ Mem. at 16-17. The exhibit in question is a log of
telephone activity that was introduced as exhibit G at the hearing. See AR Ex. 85-G. However,
the ALJ’s Initial Decision and Order does not specifically address exhibit G, and the ALJ did not
find that Duckworth’s testimony was not credible on this subject, nor did he find that
Duckworth’s alterations asserted false information. Rather, the ALJ’s conclusion that a false
statement had been made was based on Duckworth’s admission that he had altered the CD and
the factual finding that Duckworth had not notified Defendants of the alterations when the permit
application was submitted. Therefore, Plaintiffs’ third asserted basis for error is without merit.
2. Alleged Lack of a “False Statement”
Plaintiffs argue that the ALJ erred in finding that Duckworth and F/V Twister, Inc. made
a “false statement” under the MSA regulations because the information that was altered on the
Certificate of Documentation was not false and it was not submitted with an intent to deceive.
As explained above, however, the ALJ’s decision was not dependent on the falsity of the
20
alterations to the CD. Rather, the ALJ found that the MSA regulations required Plaintiffs to
submit a copy of the current USCG documentation for the vessel, and Plaintiffs made a false
statement by passing off an altered Certificate of Documentation as a true copy. Thus, the
question is whether the ALJ has properly interpreted the MSA regulations.
The MSA regulations provide that it is unlawful to “[m]ake a false statement in
connection with an application, declaration, or report under [50 C.F.R. Part 648].” 50 C.F.R.
§ 648.14(a)(3) (2006). In applying for a vessel permit, a party must provide certain information,
including “USCG documentation number and a copy of the vessel’s current USCG
documentation.” 50 C.F.R. § 648.4(c)(2)(i). In accordance with the regulations, NMFS requires
that permit applicants provide a current copy of a vessel’s valid USCG documentation. By
signing a permit application, an applicant agrees to “affirm, subject to the penalties provided in
18 USC 1001, that all information I have given in obtaining this permit is true and correct.” See
AR Ex. 84-25 (Initial Permit Application) at 5. Below the signature line on the application is a
statement that reads “You must complete and sign the application and include a copy of vessel’s
valid registration or USCG Documentation.” Id. At the bottom of the newly-issued CD that was
eventually sent to NMFS, it reads, “Previous Edition Obsolete. This Certificate May Not Be
Altered.” See AR Ex. 84-26 (Certificate of Documentation). Based on the foregoing, the ALJ
concluded that in signing the permit application with the altered CD enclosed, Plaintiffs falsely
stated to NMFS that the document was a valid copy of the USCG CD for the F/V Twister. As
the ALJ explained, “[t]he document was not a copy of anything, let alone a copy of his official
certificate of documentation.” AR Ex. 58 (Initial Decision and Order) at 31. Moreover, the ALJ
found that Duckworth included the document in the package intentionally for the specific
21
purpose of obtaining a permit, and therefore his actions were intentionally designed to deceive
NMFS. See id.The Court finds no fault with the ALJ’s findings with respect to the false statement claim.
Duckworth does not dispute that he altered an official USCG Certificate of Documentation and
submitted it to NMFS for the purpose of renewing the permit for the F/V Twister. The fact that
he altered it in a way that reflected current information does not change the fact that he attempted
to pass off an altered document as a copy of the current documentation, which it was not.
Therefore, there was substantial evidence to support the ALJ’s finding that a false statement was
made in applying for a permit in violation of MSA regulations.
Plaintiffs next argue that the inclusion of truthful information shows there was no intent
to deceive, which they claim is a required element of the offense of making a false statement.
However, the ALJ did find that there was intent to deceive. He rejected Duckworth’s claims that
he sent a cover letter explaining his changes, which is the primary basis for Plaintiffs’ argument.
Moreover, NMFS requires permit applicants to provide a valid copy of the vessel’s
documentation regardless of whether the information could be provided by other means, such as
a letter from the applicant. Therefore, it was reasonable for the ALJ to conclude that Duckworth
intended to deceive the NMFS by altering the CD rather than simply providing the current
information by letter. In addition, Defendants cite case law indicating that state of mind need not
be proven to enforce civil penalties under the MSA. See, e.g., Northern Wind, Inc. v. Daley, 200
F.3d 13, 19 (1st Cir. 1999) (explaining that offenses under the MSA are strict liability and thus
scienter is not a required element). Plaintiffs cite Lobsters, Inc. v. Evans, 346 F. Supp. 2d 340(D. Mass. 2004), for the proposition that intent to deceive is a required element of the offense of
22
making a false statement. However, the Lobsters, Inc. court did not decide whether scienter is a
required element because it found that the statement at issue was not false. See 346 F. Supp. 2d
at 347. Therefore, the Court finds that the ALJ did not err in concluding that Plaintiffs made a
false statement in violation of the MSA regulations.
C. The Lobster Traps Case
Plaintiffs make several arguments regarding alleged errors by the ALJ in determining that
Plaintiffs unlawfully fished for lobster by leaving their traps at sea after their permits were
sanctioned. Plaintiffs’ primary argument is that leaving their traps within the EEZ without
further activity does not constitute “fishing” within the meaning of the MSA or its regulations.
Plaintiffs also argue that the ALJ erred by discrediting the evidence suggesting that Duckworth
mailed a letter to NMFS in August 2006 regarding the outstanding traps. Finally, Plaintiffs argue
that the ALJ erred by failing to permit cross-examination regarding the information given by
informants about Plaintiffs’ fishing.10 The Court shall address each of these contentions.
1. “Fishing” for Lobster
Plaintiffs argue that they did not violate any federal regulations by fishing without a
license because they set their lobster traps at sea while their permits were valid and did not
engage in further fishing activity after their permits were revoked. However, under MSA and its
regulations, “fishing” is not limited to the actual catching, taking, or harvesting of fish.
Specifically, “fishing” is defined in the statute as:
(A) the catching, taking, or harvesting of fish;
(B) the attempted catching, taking, or harvesting of fish;
10
Plaintiffs also assert various claims of error with respect to the assessment of penalties,
which shall be addressed below.
23
(C) any other activity which can reasonably be expected to result in the catching,
taking, or harvesting of fish; or
(D) any operations at sea in support of, or in preparation for, any activity described
in subparagraphs (A) through (C).
16 U.S.C. § 1802(16); see also 50 C.F.R. § 600.10 (applying same definition for regulations).
Lobsters are included within the definition of “fish” under the MSA. See 16 U.S.C. § 1802(12)
(“The term ‘fish’ means finfish, mollusks, crustaceans, and all other forms of marine animal and
plant life other than marine mammals and birds.”)
The ALJ concluded that Plaintiffs were “fishing” within the meaning of the MSA’s
regulations by leaving their lobster traps in the EEZ at a time when they did not possess valid
permits.11 The ALJ noted that fixed gear such as lobster traps are specifically designed to be left
at sea and checked periodically to collect any catch. See AR Ex. 58 at 37. The ALJ further
explained that even without live bait, lobster traps continue to catch lobster unless wired shut or
otherwise rendered inoperable. See id. In this case, several hundred live lobsters were found
inside Plaintiffs’ traps throughout Defendants’ recovery operations. In addition, Duckworth
testified at the hearing that on a couple of occasions, he had his brother conduct buoy checks on
Plaintiffs’ gear. See AR Ex. 82 (Admin. Hr’g Tr.) at 547. The ALJ found that this maintenance
of traps in the form of buoy checks was an operation at sea both in support of and in preparation
of fishing activity. AR Ex. 58 at 37. The ALJ also concluded that Plaintiffs were not legally
permitted to leave their lobster traps at sea once the permit sanction took effect. Id. at 38. The
11
Plaintiffs suggest in their brief that the ALJ’s conclusion that there was unlawful
fishing was based on the hauling of traps conducted by enforcement officials. See Pls.’ Mem. at
26. However, that is clearly not the basis for the ALJ’s conclusions. It is true that Plaintiffs were
charged with seven counts, one for each set of traps that were hauled by NMFS enforcement
officials. But the ALJ concluded that the violation was not the hauling of the traps, but rather
their existence in the water after permit sanctions became effective.
24
ALJ found that Plaintiffs had advance notice that their permits would be suspended August 1,
2006, and they had ample time to haul the traps before that date. Id. Thus, the ALJ concluded
that Plaintiffs should have removed their traps before August 1, 2006, or in the alternative,
provided notice of the outstanding traps to NMFS. Id.The ALJ’s interpretation of the MSA regulations is a reasonable one. If Plaintiffs were
allowed to leave their lobster traps at sea while their permits were sanctioned, nothing would
prevent them from hauling the traps and harvesting lobsters the first day their permits became
valid again, in this case, on November 15, 2006 (assuming there are no seasonal or other
restrictions). Such an outcome would significantly undermine the effectiveness of the
Magnuson-Stevens Act’s regulatory regime. The ALJ’s conclusion is also consistent with prior
administrative case law treating unattended or lost traps as fishing and resulting in harm to the
fishery. See, e.g., In re Etchells, 6 O.R.W. 219, 1990 WL 322720 (N.O.A.A. Oct. 30, 1990)
(finding violation for failure to submit lost trap report). Plaintiffs argue that this definition of
fishing is inconsistent with instructions provided by NMFS to fishermen regarding the
completion of fishing vessel trip reports (“FVTRs”). See Pls.’ Mem. at 26-27; AR Ex. 85-B
(“Fishing Vessel Trip Report” Reporting Instructions). Those instructions indicate that “FVTRs
do not have to be completed if the vessel only sets gear [or] returned to port prior to engaging in
any fishing activity.” AR Ex. 85-B at 3. Plaintiffs interpret this sentence as meaning that setting
gear does not constitute fishing activity for purposes of MSA enforcement. However, the FVTR
instructions do not purport to define “fishing” for purposes of the MSA or its regulations; rather,
they are written for the purpose of aiding fishermen in completing their FVTRs. This informal
agency guidance document does not supersede the definition of “fishing” that is clearly stated in
25
the statutes and regulations themselves. Accordingly, the Court finds no error in the agency’s
interpretation of the unlawful fishing regulations as applying to Plaintiffs’ traps, and there was
substantial evidence to support the ALJ’s finding that there was fishing activity.
2. Plaintiffs’ Letter to NMFS Providing Notice of the 800 Lobster Traps
Plaintiffs argue that the ALJ erred by discrediting the evidence that Duckworth sent a
notice letter to NMFS in early August 2006 indicating that he had 800 lobster traps in the EEZ.
Plaintiffs contend that the letter should have been presumed delivered to NMFS because it bears
a delivery confirmation from the U.S. Postal Service. See AR Ex. 85-M at 3. However, the
document shows only that some type of document was delivered to NMFS at One Blackburn
Drive, Goucester, MA on August 7, 2006. See id. At the hearing, an NMFS official, Barry
Clifford, testified that correspondence received with trip reports would be sent to him for review,
and Mr. Clifford testified that he never saw a notice letter from Duckworth and that he likely
would have remembered it if he had. See AR Ex. 83 (Admin. Hr’g Tr.) at 564-70. The ALJ
credited Mr. Clifford’s testimony as more credible than Duckworth’s. The ALJ also found it
suspicious that Duckworth never mentioned the outstanding traps to the NMFS officials with
whom he was negotiating regarding his permit sanctions, but instead sent a letter that was neither
addressed to any particular individual or a specific NMFS department or office. See AR Ex. 58
at 38-39. Duckworth also did not mention the traps to the NMFS agents who contacted him after
the permit sanctions went into effect until they confronted him with evidence that he was still
fishing in the EEZ.
As explained above, the ALJ is in the best position to observe the demeanor of the
witnesses and to evaluate the credibility of conflicting witness testimony and any inconsistencies.
26
His findings in that regard are subject to a heightened degree of deference. The circumstances
surrounding Duckworth’s purported notice letter and the testimony from Mr. Clifford provide
substantial evidence to support the ALJ’s conclusion that adequate notice was not given to cure
Plaintiffs’ fishing for lobsters without a permit.
On a related note, Plaintiffs argue that Defendants should not be permitted to sanction
them because NMFS failed to take steps to mitigate the harms when they were notified, first by
Duckworth and second by an informant, that Plaintiffs’ lobster traps were left at sea. See Pls.’
Mem. at 29-30. However, civil enforcement actions under the Magnuson-Stevens Act are not
like tort claims where damages must be proven. The MSA imposes obligations on fishermen to
retrieve their fishing gear; it does not impose a tort-like duty on NMFS to mitigate the harms
caused by violators so as to minimize possible sanctions against them. Thus, the fact that NMFS
might have been able to act more quickly—at its own expense—to retrieve Plaintiffs’ lobster
traps does not have any bearing on whether Plaintiffs violated federal regulations. To the extent
this may be considered at all, it is only relevant to the assessment of penalties and sanctions.
3. Use of a Secret Informant
Plaintiffs claim that the ALJ erred when he failed to allow Plaintiffs’ counsel to cross-
examine Special Agents Audyatis and Flanagan about information provided by informants
regarding Plaintiffs’ lobster traps. The record shows that the ALJ limited the questioning of
these witnesses so as to avoid revealing the identity of the informants. See AR Ex. 82 (Admin.
Hr’g Tr.) at 439-41. Plaintiffs thus claim they were unable to ask questions regarding the identity
of the informant and how the informant came across information that Plaintiffs had fishing gear
at sea. However, Plaintiffs have not shown that this “error” was prejudicial. The ALJ’s decision
27
does not explicitly rely on the existence of information provided by an informant, as there was
testimony from the agents as to what they observed as well as Plaintiffs’ own admissions. At
most, the informants prompted the agents to investigate the alleged violations. Therefore,
Plaintiffs have failed to explain how this information would be relevant to the ALJ’s evaluation
of the facts. Moreover, the ALJ has discretion to limit the testimony received at an
administrative hearing, and Plaintiffs have not shown that the ALJ abused that discretion.
Accordingly, this claim of error has no merit.
D. Penalties
Plaintiffs complain that the penalties assessed by the ALJ and the NOAA Administrator
are excessive and in violation of the MSA, its regulations, and the Eighth Amendment to the
Constitution. Specifically, Plaintiffs argue that the penalties were not assessed in accordance
with NOAA’s penalty schedule guidelines, are grossly disproportionate given the nature of the
violations, and do not adequately take into account Plaintiffs’ ability to pay. The MSA provides
that in assessing penalties, “the Secretary shall take into account the circumstances, extent, and
gravity of the prohibited acts committed and, with respect to the violator, the degree of
culpability, any history of prior offenses, and such other matters as justice may require.” 16
U.S.C. § 1858(a). The MSA also authorizes the Secretary to consider evidence of ability to pay.
Id.Plaintiffs argue that the fines imposed are excessive in violation of the Eighth
Amendment’s Excessive Fines Clause, citing United States v. Hosep Krikor Bajakajian, 524 U.S.
321 (1998). In Bajakajian, the Supreme Court held that a punitive fine violates the Excessive
Fines Clause if it is grossly disproportional to the gravity of the offense that it is designed to
28
punish. 524 U.S. at 332. Plaintiffs argue that the $100,000 total fine is excessive in light of the
fact that Duckworth’s false statement involved only truthful information and that Duckworth did
not harvest or take lobsters from the sea without a permit. Plaintiffs also argue that the penalty is
excessive because Duckworth will be deprived of his livelihood if his permits are suspended.
However, ability to pay is not a component of the Eighth Amendment proportionality analysis.
See United States v. Emerson, 107 F.3d 77, 81 (1st Cir. 1997) (“[T]he ‘touchstone’ is the value
of the fine in relation to the particular offense, not the defendant’s means.”) Moreover, the fines
imposed are well within the range allowed by the Magnuson-Stevens Act. See 16 U.S.C. §
1858(a) (providing for civil penalties up to $130,000 for each violation, with each day of a
continuing violation constituting a separate offense).12 The Supreme Court has explained that the
“judgments about the appropriate punishment for an offense belong in the first instance to the
legislature.” Bajakajian, 524 U.S. at 336.
Both the ALJ and the NOAA Administrator enumerated reasons why the record supports
a substantial fine. Duckworth intentionally forged official U.S. Coast Guard documentation for
the purpose of obtaining a permit renewal. This is a serious offense that must be deterred in
order to preserve the integrity of the MSA regulatory regime. The ALJ also found that the
preponderance of reliable evidence showed that Plaintiffs intentionally tried to circumvent the
law by deploying lobster gear in federally regulated waters while permit sanctions went into
effect. The NOAA Administrator found that Duckworth’s action in these cases, combined with
his record of three prior offenses which incurred increasingly severe penalties, demonstrates a
12
The original statutory maximum was $100,000 per violation, but it was raised to
$130,000 pursuant to the Debt Collection Improvement Act. See 69 Fed. Reg. 74416 (Dec. 14,
2004).
29
“cavalier attitude toward the agency’s regulations and enforcement processes.” AR Ex. 79 at 6.
Accordingly, the Administrator found that the substantial penalties proposed by Defendants were
warranted. The Court agrees with the Administrator’s and the ALJ’s assessment of penalties and
sanctions and finds that a $100,000 fine is not grossly disproportionate to the gravity of the
offenses. Indeed, the fine imposed for each case is $50,000, the same amount as Duckworth’s
most recent prior violation. Therefore, Plaintiffs’ Eighth Amendment challenge must fail.13
Plaintiffs also argue that the ALJ and the Administrator erred by failing to follow the
NOAA’s Penalty Schedule, which is “a compilation of internal guidelines used by NOAA
enforcement attorneys in assessing penalties for violations of statutes and regulations that NOAA
enforces.” See AR Ex. 84-6(d) (Penalty Schedule) at i. The guidelines call for the weighing of
fourteen aggravating or mitigating factors in assessing penalties, such as the gravity of the
violation, the harm to the resource, whether there are multiple violations, the degree of
cooperation, acceptance of responsibility, history of past offenses, and deterrence of future
violations. See id. at ii-iii. The aim of these guidelines is to promote uniformity in penalties
assessed for similar violations nationwide. However, they are not binding on ALJs, and therefore
Defendants have no obligation to justify any departures from them. See Pharaon v. Bd. of
Governors of Fed. Reserve System, 135 F.3d 148, 156 (D.C. Cir. 1998) (rejecting claim that
agency’s failure to follow advisory guidelines rendered action arbitrary and capricious).
Moreover, although the ALJ and the NOAA Administrator did not explicitly mention the Penalty
13
Plaintiffs also cite Exxon Shipping Co. v. Baker, 128 S. Ct. 2605 (2008), for the
proposition that a 1:1 ratio of punitive to compensatory damages is appropriate in maritime cases.
See 128 S. Ct. at 2633. However, Exxon Shipping involved punitive damages under the federal
maritime law, not civil enforcement penalties, and has no applicability here.
30
Schedule in their decisions, their analyses show that they did consider many of the factors
enumerated in the guidelines.
Plaintiffs also argue that the 4-year permit suspensions and the $100,000 fine will have a
significant impact on Duckworth’s livelihood and that the Administrator failed to completely
take into account Duckworth’s ability to pay. See Pls.’ Mem. at 37. However, the NOAA
Administrator clearly gave detailed consideration to Duckworth’s ability to pay and reduced the
total fine from over $1 million to $100,000. Duckworth submitted financial information to the
Administrator showing that he had current assets of $343,914 and current liabilities of $331,913
and expected to earn $40,800 in 2008 with annual living expenses of $49,076. See AR Ex. 79
(Final Decision) at 8. While these figures suggest that paying a $100,000 fine will be
burdensome, Defendants are not required to impose penalties that can be easily paid out of
pocket. The Court also notes that Duckworth was able to pay the $50,000 fine that was imposed
for a prior violation. The Administrator concluded, based on all the evidence in the record, that
$100,000 as a total fine was justified and appropriate. Plaintiffs have not shown that the
Administrator’s assessment of penalties is arbitrary, capricious, or unsupported by substantial
evidence.14
In their reply brief, Plaintiffs attach a report from the Department of Commerce’s Office
of Inspector General (“OIG”) reviewing NOAA’s enforcement of fisheries regulations. See Pls.’
14
Plaintiffs also argue that the 48-month permit suspensions for Plaintiffs’ three fishing
vessels, which have since been sold to Duckworth’s relatives, “imposes penalties on individuals
that had no part in the offenses and have not had their day in court.” Pls.’ Reply at 9. However,
the current owners of the vessels are not parties to this action, and the MSA clearly states that
transfer of ownership of a vessel does not extinguish any permit sanctions in effect or pending at
the time of transfer. See 16 U.S.C. § 1858(g)(3).
31
Reply, Ex. P-1 (OIG Report). The OIG Report involved a review of the agency’s enforcement
operations from June through December 2009. See id. at 1. The OIG Report concludes that
NOAA needs to strengthen its control over enforcement operations to address an industry
perception that its civil penalty assessment process is arbitrary and unfair. See id. at 3. The OIG
Report also makes a number of other recommendations to address problems it identified with the
enforcement of fisheries violations. Plaintiffs argue that the OIG Report shows that Defendants’
assessment of penalties are excessive, citing language from the Report showing that aggregate
fine assessments in the Northeast region are inconsistent with other regions. See Pls.’ Reply at
10 (citing OIG Report at 13). However, the OIG Report focuses only on the agency’s overall
management of enforcement operations, not on individual allegations of mistreatment.
Moreover, the OIG’s investigation was limited to June-December 2009, several years after
Plaintiffs were charged with the violations at issue and after the ALJ’s Initial Decision and Order
was issued. Therefore, the OIG Report provides no information directly relevant to Plaintiffs’
case.
In addition, Defendants point out that the OIG Report is extra-record evidence that should
not be considered in a review of agency decision-making. See IMS, P.C. v. Alvarez, 129 F.3d
618, 623 (D.C. Cir. 1997) (“It is a widely accepted principle of administrative law that the courts
base their review of an agency’s actions on the materials that were before the agency at the time
its decision was made.”) Exceptions to this principle may be made in limited circumstances
where an agency fails to explain its actions so as to frustrate judicial review or there is a “strong
showing of bad faith or improper behavior” that justifies further explanations. Id. at 624 (citing
Camp v. Pitts, 411 U.S. 138, 142-43 (1973) (per curiam) and Citizens to Preserve Overton Park
32
v. Volpe, 401 U.S. 402, 420 (1971)). However, Plaintiffs have not shown that the agency acted
in bad faith or that the administrative record does not fully reflect the agency’s decision-making
process. Accordingly, the Court shall disregard the OIG Report as presenting evidence outside
the record.
E. Temporary Restraining Order & Preliminary Injunction
Shortly after the agency issued its final decision, Plaintiffs filed a Motion for a Temporary
Restraining Order and Preliminary Injunction seeking to enjoin Defendants from enforcing the
permit sanctions and civil penalties assessed for Plaintiffs’ violation of fisheries regulations.
After this Court explained to the parties that preliminary injunctions are generally not appropriate
when a party seeks review of agency action under the APA and that decisions on the merits are
preferable, see Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 & n.7 (D.C. Cir. 2001),
Defendants agreed to stay enforcement of the civil penalties and permit sanctions through April
15, 2010, and Plaintiffs agreed to withdraw their motion for emergency relief. The parties filed
their briefs on an expedited schedule so as to enable the Court to rule on the merits by the April
15, 2010, deadline.
On April 7, 2010, Plaintiffs filed a second Motion for a Temporary Restraining Order and
Preliminary Injunction Seeking to Stay Judicial Decision-Making and to Stay Enforcement
Proceedings. As grounds for their motion, Plaintiffs allege that OIG is currently investigating
three federal employees who were involved in the prosecution of Plaintiffs’ case, and OIG
officials have been in contact with Duckworth regarding the circumstances surrounding this
enforcement matter. See Pls.’ Mot. for TRO & Prelim. Inj. at 1-2. The OIG’s investigation is
alleged to be a follow-up to the OIG Report that Plaintiffs attached to their reply brief. In
33
response to Plaintiffs’ motion, Defendants have produced a declaration from Scott Berenberg,
Assistant Inspector General for Investigations at OIG. See Defs.’ Opp’n to Pls.’ Mot. for TRO &
Prelim. Inj., Decl. of S. Berenberg. Mr. Berenberg declares that he oversaw the OIG’s
investigation into the agency’s enforcement operations and that he is familiar with Duckworth’s
case. See id. ¶¶ 4-6. Mr. Berenberg explained that while OIG is conducting a review of some
specific cases, Duckworth’s case is not part of the ongoing investigation by OIG. Id. ¶ 8.
Plaintiffs argue that Duckworth’s case may become part of the investigation in the future.
The Court finds that there is presently no investigation by the OIG into the circumstances
directly relevant to Duckworth’s case. It is purely speculative to assume that the OIG will
uncover evidence of bad faith or improper conduct by Defendants regarding the handling of
Plaintiffs’ violations. Moreover, Plaintiffs have failed to allege that documents are missing from
the administrative record in this case or that the record does not reflect the entire basis for the
agency’s decision-making. Therefore, the OIG’s ongoing investigation has no bearing on the
appeal presently before the Court.
It is well established that to prevail on a motion for a temporary restraining order or a
preliminary injunction, the moving party must show (1) a substantial likelihood of success on the
merits, (2) that it would suffer irreparable injury if the injunction were not granted, (3) that an
injunction would not substantially injure other interested parties, and (4) that the public interest
would be furthered by the injunction. Chaplaincy of Full Gospel Churches v. England, 454 F.3d
290, 297 (D.C. Cir. 2006); Hall v. Daschle, 599 F. Supp. 2d 1, 6 n.2 (D.D.C. 2009) (“[t]he same
standard applies to both temporary restraining orders and to preliminary injunctions”). As
explained above in this Memorandum Opinion, the Court has conducted a full review of the
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merits and determined that Plaintiffs are not entitled to the relief requested. Accordingly,
Plaintiffs cannot meet the first prong required for injunctive relief, and the Court shall DENY
Plaintiffs’ motion for a temporary restraining order and preliminary injunction.
IV. CONCLUSION
For the foregoing reasons, the Court shall GRANT Defendants’ [24] Motion for
Summary Judgment, DENY Plaintiffs’ [22] Motion for Summary Judgment, and DENY
Plaintiffs’ [28] Motion for a Temporary Restraining Order and Preliminary Injunction. An
appropriate Order accompanies this Memorandum Opinion.
Date: April 15, 2010
/s/
COLLEEN KOLLAR-KOTELLY
United States District Judge
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