Trawler Carolina Lady, Inc. v. Ross

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH CAROLINA

EASTERN DIVISION

NO. 4:19-CV-19-FL

TRAWLER CAROLINA LADY, INC., a )

North Carolina Corporation )

)

Plaintiff, )

)

v. ) ORDER

)

WILBUR ROSS, Secretary of Commerce; )

CHRIS OLIVER, National Oceanic and )

Atmospheric Administration Assistant )

Administrator for Fisheries; MICHAEL )

PENTONY, National Marine Fisheries )

Service Regional Administrator, Greater )

Atlantic Regional Fisheries Office; )

DAVID GOUVEIA, National Marine )

Fisheries Service Assistant Regional )

Administrator for Analysis and Program )

Support, Greater Atlantic Fisheries Office, )

)

Defendants. )

This matter, raising issues concerning federal management of scallop fishing, is before the

court on defendants’ motion for summary judgment (DE 49), plaintiff’s motion for preliminary

injunction (DE 1), plaintiff’s motion to strike correspondence beyond the scope of the administrative

record (DE 55), and defendants’ motion to seal (DE 43). Also before the court is defendants’ motion

seeking immediate clarification as to whether or not the court will allow evidence to be presented

July 19, 2019 (DE 62). For the following reasons, defendants’ motions for summary judgment and

to seal are granted, plaintiff’s motion for preliminary injunction is denied, and the motions to strike

and for clarification are denied as moot.

STATEMENT OF THE CASE

Plaintiff commenced this action January 31, 2019, against defendants Wilbur Ross, Secretary

of Commerce, and subordinate government agency officials in the National Marine Fisheries Service

(“NMFS”) (collectively, hereinafter, “defendants”), seeking judicial review of two separate

administrative decisions denying successive applications for scallop fishing permit replacements by

plaintiff for the 2018/2019 fishing season, ending March 31, 2019. In its first claim for relief,

plaintiff asserts defendants violated the Administrative Procedure Act (“APA”), 5 U.S.C. § 704, by

wrongfully denying plaintiff’s applications to transfer a scallop fishing permit from one vessel, the

F/V CAPT. JEFF, to another vessel, the F/V MISS TYLER (1), and then to another vessel, F/V

MISS TYLER (2).1 In its second claim for relief, for mandamus under 28 U.S.C. § 1361, plaintiff

seeks to compel defendants to approve its applications.

Plaintiff also requests through the vehicle of Rule 65 of the Federal Rules of Civil Procedure

an injunction requiring defendants to allow plaintiff to fish its allocated 2018/2019 “Days at Sea,”

its nearly ten days carried over from the previous scallop season, and its six allocated access trips,

“during the 2019/2020 Atlantic Sea Scallop season should it be unable to fish those allocated days

and trips during the 2018/2019 Atlantic Sea Scallop season.” (Compl. p. 18). After this suit was

filed, defendants reconsidered denial of plaintiff’s second application, and determined to issue the

requested permit for F/V MISS TYLER (2). Defendants filed notice of issuance of permit on

February 28, 2019, applying to both the “2018 Fishing Year,” expiring March 31, 2019, and the

1 As detailed herein, plaintiff was in possession of two vessels named “F/V MISS TYLER,” and, for

ease of reference, the court adds either designation (1) or (2) to differentiate them.

2

“2019 Fishing Year,” expiring March 31, 2020. (DE 15-2 at 1-2).2 On March 12, 2019, the court

entered the following show cause order:

TEXT ORDER regarding 1 MOTION for Preliminary Injunction. In response to

preliminary injunction motion, defendants state that they have provided the

preliminary relief requested rendering the motion moot. Defendants have filed

documentation thereof and notice of issuance of permits. Plaintiff filed no reply in

further support of its motion. Upon review of the motion, memorandum in support,

response in opposition, and the record in this matter, unless good cause is shown

within seven days hereof why the motion for preliminary injunction should not be

denied as moot, without more the clerk of court is directed then to terminate that

motion.

Plaintiff responded March 19, 2019, arguing that the case is not moot and the court still has authority

to order preliminary injunctive relief in the form of extension of the 2018 fishing season.

The court entered case management order, setting deadlines for filing of the administrative

record and dispositive motions, while maintaining setting for bench trial on July 19, 2019.

Defendants filed administrative record on April 29, 2019, with two supplements thereafter.3 The

court granted defendants’ motion to limit review to the administrative record and for protective order

on May 23, 2019.

In furtherance of the instant motion for summary judgment, defendants rely upon a statement

of material facts that cites to documents in the administrative record. Plaintiff’s opposition thereto

rests upon an opposing statement of facts, and sworn testimony of plaintiff’s counsel and Jonathan

Brent Fulcher, plaintiff’s president and sole shareholder. Additionally, plaintiff moves to strike two

2 Defendants contend that, under applicable regulations, plaintiff would be authorized to use “carryover

provisions” for the 2018 season, through the first 60 days of the 2019 fishing year. According to defendants, the

additional relief sought by plaintiff could “be extensively if not wholly redressed without judicial intervention within

the context of the applicable carryover regulations” and that other relief sought extending the fishing season is legally

unavailable and inequitable to other fishers. (DE 12 at 11).

3 In their motion to seal (DE 44), defendants request permanent sealing of an unredacted tax return filed

in the administrative record, and to file a redacted version thereof.

3

documents in the administrative record: 1) a February 2019 memorandum by defendant David

Gouveia (“Gouveia”), Assistant Regional Administrator, NMFS, and 2) an April 2019 letter by

defendant Michael Pentony (“Pentony”), Regional Administrator, NMFS.

STATUTORY AND REGULATORY BACKGROUND

To assist with presentation of the facts and claims in this case, the court sets forth below for

background purposes a summary of statutes and regulations bearing upon scallop fishing and

permitting.

“Pursuant to the Magnuson Fishery Conservation and Management Act of 1976, 16 U.S.C.

§§ 1801–1882, [the “Act”] Congress has delegated to the Commerce Department [and its delegate

officials, defendants here] broad authority to manage and conserve coastal fisheries.” Kramer v.

Mosbacher, 878 F.2d 134, 135 (4th Cir. 1989). “The Act creates independent bodies, Regional

Fishery Management Councils, which help the Department carry out specific management and

conservation duties.” Id. A “Council’s principal task is to prepare fishery management plans for

its area, which must ‘assess and specify the present and probable future condition of, and the

maximum sustainable yield’ of a fishery.” Id. (quoting 16 U.S.C. §§ 1852, 1853). “Council plans

are adopted or rejected by the Secretary.” Id. (citing 16 U.S.C. § 1854). “If adopted, a plan is put

into effect by regulations issued by the Secretary.” Id. (citing16 U.S.C. § 1855).

Under the Act, a fishery management plan must contain provisions “necessary and

appropriate for the conservation and management of the fishery, to prevent overfishing and rebuild

overfished stocks, and to protect, restore, and promote the long-term health and stability of the

fishery.” 16 U.S.C. § 1853(a)(1)(A). A fishery management plan must also “establish a mechanism

for specifying annual catch limits in the plan . . . , implementing regulations, or annual

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specifications, at a level such that overfishing does not occur in the fishery, including measures to

ensure accountability.” 16 U.S.C. § 1853(a)(15).

Under the Act, “[a]ny fishery management plan which is prepared by any Council, or by the

Secretary, with respect to any fishery, may . . . require a permit to be obtained from, and fees to be

paid to, the Secretary, with respect to . . . any fishing vessel of the United States fishing, or wishing

to fish, in the exclusive economic zone . . . [or] the operator of any such vessel. 16 U.S.C. § 1853(b).

A fishery management plan may also:

establish a limited access system for the fishery in order to achieve optimum yield

if, in developing such system, the Council and the Secretary take into account–

(A) present participation in the fishery;

(B) historical fishing practices in, and dependence on, the fishery;

(C) the economics of the fishery;

(D) the capability of fishing vessels used in the fishery to engage in

other fisheries;

(E) the cultural and social framework relevant to the fishery and any

affected fishing communities;

(F) the fair and equitable distribution of access privileges in the

fishery; and

(G) any other relevant considerations.

16 U.S.C. § 1853(b)(6) (emphasis added). In turn, “[t]he term ‘limited access system’ means a

system that limits participation in a fishery to those satisfying certain eligibility criteria or

requirements contained in a fishery management plan or associated regulation.” 16 U.S.C. §

1802(27) (emphasis added).

5

This case concerns scallop fishing under a fishery management plan, the Atlantic Sea Scallop

Fishery Management Plan, developed by the New England Fishery Management Council in

consultation with the Mid-Atlantic Fishery Management Council. “The Atlantic Sea Scallop Fishery

Management Plan was created in 1982, and since has been amended several times,” with

amendments implemented through regulations published by the NMFS. Conservation Law Found.

v. Evans, 360 F.3d 21, 24 n. 2 (1st Cir. 2004); see 58 Fed. Reg. 46606-01, 46607 (Proposed Rule,

Preamble, Sept. 2, 1993).

In 1994, in accordance with the Act and Amendment 4 of the Atlantic Sea Scallop Fishery

Management Plan, NMFS memorialized in regulations a “limited access” system, which has

continued to be refined through regulations to date, including the following features: (1)

requirements for carrying a “limited access scallop permit” on any vessel fishing more than a set

amount of scallops per trip; (2) “[a] moratorium on most new entrants into the scallop fishery”; (3)

“allocations of days-at-sea (DAS)4 that vessels may fish for scallops” using a limited access scallop

permit; (4) “a prohibition on acquiring more than a 5 percent ownership interest in the total number

of limited access scallop vessels”; (5) provisions for “eligibility,” “change in ownership,”

“replacement vessels,” and a “consolidation restriction.” See 59 Fed. Reg. 2757-01, 2758, 2764

(Final Rule, Jan. 19, 1994) (emphasis added).

The stated rationale behind these measures included considerations that “fishing mortality

(i.e. fishing effort) be controlled by placing limits on the number of days that vessels can spend at

sea fishing for scallops. Thus the number of vessels that will be allocated DAS must also be

4 A DAS is defined as “each 24-hour period of time during which a fishing vessel is absent from port

for purposes of scallop fishing.” 59 Fed. Reg. 2757-01, 2763 (Final Rule, Jan. 19, 1994).

6

controlled to ensure that the DAS limits are not exceeded.” 58 Fed. Reg. 46606-01, 46607

(Proposed Rule, Preamble, Sept. 2, 1993).

The court will set forth in further detail below analysis of current regulations pertaining to

these limited access system features, as pertinent here.

STATEMENT OF FACTS

The undisputed facts may be summarized as follows. Plaintiff is a North Carolina

corporation that owns the fishing vessel F/V CAPT JEFF (official No. 906996). (AR 3390 (DE 37-4

at 9)). On November 20, 2016, the F/V CAPT JEFF struck a rock or rocks in Buzzards Bay,

Massachusetts, and nearly sank. (AR 3848 (DE 41-34)). It suffered significant damage, and

plaintiff’s safety consultant at the time estimated that repairs would take four to six months. (Id.)

From March 2017 to November 2017, a different vessel owned by plaintiff, the F/V MISS

TYLER (1),5 fished for scallops for all the days at sea (DAS) allowed under its scallop fishing

permit, which permit is identified as No. 320857, and DAS allocation is identified as MRI 4797.6

(AR 3325 (DE 36-30 at 2)).

In late 2017, plaintiff sold the F/V MISS TYLER (1), “with the seller retaining the permits”

to BHG Scallop LLC, which used the F/V MISS TYLER (1) to fish under a different “DAS (MRI

4441)” designation, from January 2018 to May 2018. (Id.; see also AR 3358 (DE 36-38 at 5)). Also

in late 2017, plaintiff transferred F/V MISS TYLER (1)’s “permit and DAS (MRI 4797)” to the F/V

5 As noted previously, plaintiff has been in possession of two vessels named “F/V MISS TYLER,” and

for ease of reference the court adds either designation (1) or (2) to differentiate them. The F/V MISS TYLER (1) has

official number 651715. The F/V MISS TYLER (2) has official number 522950, and was formerly known as F/V LET

IT RIDE.

6 A “MRI” number is a “Moratorium Right Identification” number, which “is a unique NMFS-issued

number that identifies the unique permit history that qualifies for a specific Atlantic sea scallop permit and its DAS.”

(AR 3325 (DE 36-30 at 2)).

7

CAPT JEFF. (Id.). Plaintiff’s president and sole shareholder, Jonathan Brent Fulcher, has the same

last name as Gregory Fulcher,7 one of two members of BHG Scallop, LLC. (AR 3326 (DE 36-30

at 3); Pl’s Resp. to Stmt. of Facts ¶ 7).

At some point prior to June 12, 2018, plaintiff acquired back from BHG Scallop, LLC, the

vessel F/V MISS TYLER (1). (See AR 3358 (DE 36-38 at 5)). On June 12, 2018, plaintiff submitted

to NMFS an “application for a vessel permit transfer” from F/V CAPT JEFF to F/V MISS TYLER

(1). (AR 3382, 3389-3391 (DE 37-4)) (hereinafter, the “June 2018 application”). Plaintiff

represented in its June 12, 2018, application that it was the owner of the vessel F/V MISS TYLER

(1) and the F/V CAPT JEFF. (Id.).

Defendant Gouveia, on behalf of NMFS, sent plaintiff a letter on July 16, 2018, denying

plaintiff’s June 2018 application (hereinafter, the “July 2018 decision”) stating as follows:

7 According to defendants, Jonathan Brent Fulcher and Gregory Fulcher are brothers. (Defs’ Stmt. of Facts

(DE 50) ¶ 13). Plaintiff does not specifically address this assertion. (See Pl’s Stmt. of Facts (DE 56) ¶ 13).

8

1 am responding to your June 12, 2018, replacement application of the F/V Capt Jeff with the

FIV Miss Tyler. Federal regulations specify that a limited access scallop vessel owner may not,

“Combine, transfer, or consolidate DAS [days-at-sea] allocations, except as allowed for one-for-

one Access Area trip exchanges.” Because the F/V Capr Jeff □□□ already fished one DAS

allocation this year, and based on the information provided, it appears that granting this

replacement application would violate this regulation.

When reviewing applications of this nature, we consider the following criteria:

1) The buyer or seller may not derive any financial benefits from the operation of the vessel

after it is transferred;

2) the seller may not exercise any control over the activities or operation of the vessel after

it is transferred;

3) there are no common shareholders, partners, or investors with significant overlapping

ownership interests in the seller or buyer's business operations; and

4) the sale of the vessel is an arm’s length transaction and one that meets fair market value.

Based on our review of this application, the relationship between Jonathan Brent Fulcher and

Gregory Fulcher, the lack of consideration for the replacement and other factors, we have

concluded that this application is not based on an arm length’s transaction and would result in the

consolidation of DAS from two vessels on to one vessel intended to mutually benefit both parties

_ involved. Therefore, we cannot authorize this replacement.

(AR 3323 (DE 36-29)).

On July 17, 2018, plaintiff responded to defendant Gouveia, asking for the “section of the

Code of Federal Regulations where each of the four listed criteria may be found,” and asking for

identification of “all documents or evidence relied upon” to reach the decision denying the

application. (AR 3406 (DE 37-7 at 2)).

On August 3, 2018, Defendant Gouveia, on behalf of NMFS, responded by letter providing

a citation to a section of the Code of Federal Regulations, 50 C.F.R. 648.14()(2)(@v)(B), and

additional explanation of the factual basis for its July 2018 decision. After reviewing the history of

ownership and DAS use of F/V CAPT JEFF and F/V MISS TYLER (1), defendant Gouveia

explained: “In June 2018, we received the current replacement application, that is requesting to place

a second scallop DAS permit on the F/V MISS TYLER this year, reverse the original ownership of

the vessel back to [plaintiff] and to transfer back F/V MISS TYLER’s original permit and DAS

(MRI 4797).” (AR 3325-3326 (DE 36-30 at 2-3)). “This request for vessel replacement is the same

transaction in reverse as last year’s by the same owners using the same vessels and permits[,] and

requesting the combination of the same DAS on the same vessel for a second year in a row.” (AR

3326 (DE 36-30 at 3)). Defendant Gouveia continued:

This latest chapter in a very convoluted history of numerous replacements of the

same vessels and transferring of DAS permits onto these vessels more than once

brings into focus, for the first time, an apparent and deliberate pre-arranged

agreement between the Fulcher brothers to consolidate DAS from two vessels onto

one vessel in the same fishing years for their mutual benefit. Based on this historical

pattern of maneuvering of permits and DAS over the last three fishing years, the

familial relationship of the principal owners of the vessels involved, the apparent

lack of full consideration for these transactions, it appears that these two companies

are working together to share this vessel for their mutual financial benefit. Thus, it

appears that the requested transactions involving these companies would not truly

be ‘arm’s length,’ and, if the scallop DAS are fished, would result in a consolidation

of scallop DAS from two vessels onto one vessel in the same fishing year.

(Id.).

Plaintiff appealed the July 2018 decision to defendant Pentony, Regional Administrator for

NMFS. (AR 3354 (DE 36-38)). Defendant Pentony, on behalf of NMFS, further reviewed the

application and reiterated in letter dated September 5, 2018, the decision to deny the application,

including on the basis of a lack of documentation that any payment was made for the sales of F/V

MISS TYLER (1) to and from plaintiff and BHG Scallop LLC. (AR 3328 (DE 36-31)).

Later, on November 26, 2018, plaintiff submitted to NMFS a second “application for a vessel

permit transfer,” (hereinafter, the “November 2018 application”), this time from F/V CAPT JEFF

to a different vessel named “MISS TYLER,” designated herein as F/V MISS TYLER (2) (official

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number 522950). (AR 3336 (DE 36-36)). On December 10, 2018, plaintiff supplemented its

November 2018 application, including with a United States Coast Guard “Bill of Sale” stating that

vessel “LET IT RIDE” (with official number 522950) was sold from “Let It Ride Fishing Corp” to

plaintiff on November 6, 2018. (AR 3409 (DE 37-8) at 2).

Defendant Gouveia, on behalf of NMFS, responded to plaintiff’s second application on

December 20, 2018, (hereinafter, the “December 2018 decision”), stating as follows

am responding to the November 26th replacement application for the F/V Capt Jeff'and F/V

Miss Tyler. We cannot allow the consolidation of scallop permits and associated fishing rights of

the F/V Capt Jeff onto the F/V Miss Tyler this fishing year. The prohibition on consolidating

scallop permits is found at 50 CFR § 648.4(a)(2)(i)(G), cross-referencing the Northeast

multispecies regulation at 50 CFR § 648.4.(a)(1)(i)(G), and states that scallop limited access

permits and DAS allocations cannot be combined.

From April to July 2018, the F/V Ler it Ride fished in the scallop fishery under the ownership of

Let it Ride Fishing Corp. Then in August 2018, Let it Ride Fishing Corp submitted a request to

replace the F/V Let it Ride with the F/V Temptress. The F/V Let it Ride was then sold on

November 6, 2018 to Trawler Carolina Lady, Inc. On November 7, 2018, you asked us if the

F/V Let it Ride would be allowed to be issued another scallop permit this fishing year, On

November 9", we responded to you that the F/V Leg it Ride would not be able to be issued

another scallop this fishing year because the vessel had already fished DAS scallops this year,

This vessel replacement would result in the consolidation of two limited access scallop permits

fram two vessels on to one vessel in a single fishing year. Therefore, we cannot authorize this

replacement. If you have further questions about this matter or if you would like to resubmit this

application for the beginning of the 2019 Fishing Year, which begins on April 1, 2019, please

_ contact Ted Hawes at 978-281-9296,

(AR 3331 (DE 36-33).

§ As noted previously, plaintiff owned two vessels named “F/V MISS TYLER,” and for ease of

reference the court adds either designation (1) or (2) to differentiate them. The F/V MISS TYLER (1) has official

number 651715. The F/V MISS TYLER (2) has official number 522950, and was formerly known as F/V LET IT RIDE.

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On February 14, 2019, plaintiff sent to NMFS a copy of a certified check from plaintiff to

“Let It Ride Fishing Corp” for the purchase of F/V LET IT RIDE (since renamed F/V MISS TYLER

(2)). (AR 3694 (DE 41-3 at 4)). Eight days later, on February 22, 2019, defendant Gouveia, on

behalf of NMFS, reversed decision in a letter stating: “After further consideration of the facts and

circumstances of your November 26, 2018 [application]. . . we have decided to reverse our

December 20, 2018, denial of the [application].” (AR 3352 (DE 36-37)). Defendant Gouveia, on

behalf of NMFS, transmitted to plaintiff on February 27, 2019, a permit for F/V MISS TYLER (2),

for the 2018/2019 fishing season (authorizing plaintiff to fish for scallops for the remainder of the

2018 fishing season ending March 31, 2019) and for the 2019/2020 fishing season (authorizing

plaintiff to fish for scallops from April 1, 2019, to March 31, 2020). (AR 3332 (DE 36-34); AR

3401, 3403 (DE 37-5, 37-6)).

COURT’S DISCUSSION

A. Standard of Review

Summary judgment is appropriate where “the movant shows that there is no genuine dispute

as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a). The party seeking summary judgment “bears the initial responsibility of informing the district

court of the basis for its motion, and identifying those portions of [the record] which it believes

demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317,

323 (1986). Once the moving party has met its burden, the non-moving party must then “come

forward with specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus.

Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586–87 (1986) (internal quotation omitted).

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Only disputes between the parties over facts that might affect the outcome of the case

properly preclude entry of summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

247–48 (1986) (holding that a factual dispute is “material” only if it might affect the outcome of the

suit and “genuine” only if there is sufficient evidence for a reasonable jury to return a verdict for the

non-moving party). “[A]t the summary judgment stage the [court’s] function is not [itself] to weigh

the evidence and determine the truth of the matter but to determine whether there is a genuine issue

for trial.” Id. at 249. In determining whether there is a genuine issue for trial, “evidence of the

non-movant is to be believed, and all justifiable inferences are to be drawn in [non-movant’s] favor.”

Id. at 255; see United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (“On summary judgment the

inferences to be drawn from the underlying facts contained in [affidavits, attached exhibits, and

depositions] must be viewed in the light most favorable to the party opposing the motion.”).

Nevertheless, “permissible inferences must still be within the range of reasonable probability,

. . . and it is the duty of the court to withdraw the case from the [factfinder] when the necessary

inference is so tenuous that it rests merely upon speculation and conjecture.” Lovelace v.

Sherwin–Williams Co., 681 F.2d 230, 241 (4th Cir. 1982) (quotations omitted). Thus, judgment as

a matter of law is warranted where “the verdict in favor of the non-moving party would necessarily

be based on speculation and conjecture.” Myrick v. Prime Ins. Syndicate, Inc., 395 F.3d 485, 489

(4th Cir. 2005). By contrast, when “the evidence as a whole is susceptible of more than one

reasonable inference, a [triable] issue is created,” and judgment as a matter of law should be denied.

Id. at 489–90.

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B. Analysis

1. Mootness

“Federal courts lack jurisdiction to decide moot cases because their constitutional authority

extends only to actual cases or controversies.” Iron Arrow Honor Soc’y v. Heckler, 464 U.S. 67,

70 (1983). “[A] federal court has no authority to give opinions upon moot questions or abstract

propositions, or to declare principles or rules of law which cannot affect the matter in issue in the

case before it.” Church of Scientology of California v. United States, 506 U.S. 9, 12 (1992). “To

qualify as a case fit for federal-court adjudication, an actual controversy must be extant at all stages

of review, not merely at the time the complaint is filed.” Arizonans for Official English v. Arizona,

520 U.S. 43, 67 (1997).

“[I]f an event occurs while a case is pending . . . that makes it impossible for the court to

grant any effectual relief whatever to a prevailing party, the [case] must be dismissed.” Church of

Scientology, 506 U.S. at 12 (quotations omitted). By contrast, “[t]he availability of [a] possible

remedy is sufficient to prevent [a] case from being moot.” Id. at 13. “It is well settled that a

defendant’s voluntary cessation of a challenged practice does not deprive a federal court of its power

to determine the legality of the practice.” City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S. 283,

289 (1982). “Such abandonment is an important factor bearing on the question whether a court

should exercise its power to enjoin the defendant from renewing the practice, but that is a matter

relating to the exercise rather than the existence of judicial power.” Id.

In addition, courts “have recognized an exception to the general rule [of mootness] in cases

that are capable of repetition, yet evading review,” which occurs where “two elements combine[]:

(1) the challenged action was in its duration too short to be fully litigated prior to its cessation or

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expiration, and (2) there [is] a reasonable expectation that the same complaining party would be

subjected to the same action again.” Murphy v. Hunt, 455 U.S. 478, 482 (1982) (quotations

omitted). For this exception to apply, “there must be a reasonable expectation or a demonstrated

probability that the same controversy will recur involving the same complaining party.” Id.

Notwithstanding defendants’ protestations that all of plaintiff’s claims are mooted by

defendants’ reconsideration of the December 2018 decision and issuance of permit to plaintiff for

use by the F/V MISS TYLER (2) for the 2018/2019 fishing season and 2019/2020 fishing season,

this case as a whole is not moot. Rather, only certain claims and types of relief sought by plaintiff

are moot.

Plaintiff’s claim for mandamus relief, under 28 U.S.C. § 1361, seeks to compel defendant

Gouveia “to approve the Plaintiff’s Replacement Vessel Application and to transfer Northeast

Federal Fishing Permit 330626 from the F/V CAPT. JEFF to the F/V MISS TYLER, Official

Number 522950 for the 2018/2019 sea scallop season.” (Compl. ¶ 66). Plaintiff also seeks the same

relief in its motion for preliminary injunction. (Id. at pp. 16-17). Defendants awarded exactly this

relief sought during pendency of the action on February 27, 2019. (AR 3332 (DE 36-34); AR 3403

(DE 37-6)). Therefore, plaintiff’s claim for mandamus relief under 28 U.S.C. § 1361, and in this part

plaintiff’s preliminary injunction motion, must be denied as moot.

Plaintiff’s claim under the APA and request for prospective relief, by contrast, present a live

controversy unlike the mandamus claim or related request for injunctive relief. In its APA claim,

plaintiff seeks a declaration that defendants’ actions “in denying the Plaintiff’s replacement vessel

applications to replace the F/V CAPT. JEFF were arbitrary, capricious, an abuse of discretion and

not in accordance with law, were in excess of statutory authority or limitations and unwarranted by

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the facts.” (Compl. ¶ 55). This claim is not mooted in whole as they argue, by defendants’

reconsideration of the December 2018 decision because plaintiff allegedly “suffered . . . a legal

wrong” on account of the July 2018 decision, and defendants did not reconsider or grant the July

2018 decision in any part. (Id. ¶ 53). The fact that defendants ultimately reconsidered the December

2018 decision does not moot a clam for relief premised upon denial of the June 2018 application.

It is less clear whether the claim based upon the December 2018 decision is or is not moot. Out of

an abundance of caution, the court considers the merits of the claim, where the limited duration of

the scallop fishing season precluded review prior to its expiration. See, e.g., Kramer, 878 F.2d at

136 (finding claims not moot where “both the yearly reevaluation of catch limits and closure orders

present circumstances which are too short to be fully litigated prior to their cessation or

expiration.”).

In sum, plaintiff’s claims for mandamus and injunctive relief are denied as moot. Plaintiff’s

remaining claims are addressed in turn below.

2. APA Claim

Plaintiff contends that defendants’ July 2018 and December 2018 decisions were arbitrary

and capricious, in excess of authority, and unwarranted by the facts, in violation of the APA. The

court first sets forth below standards for evaluating an APA claim under the circumstances

presented. Then the court applies these standards in turn to defendants’ challenged decisions.

a. APA Standards

The APA “sets forth the full extent of judicial authority to review executive agency action

for procedural correctness.” F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 513 (2009).

Under the APA, as pertinent here, the court must “hold unlawful and set aside agency action,

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findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise

not in accordance with law; and . . . in excess of statutory jurisdiction, authority, or limitations, or

short of statutory right.” 5 U.S.C. § 706(2).

The court’s “determination naturally begins with a delineation of the scope of the Secretary's

authority and discretion.” Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 415-16

(1971). Then, “the court must consider whether the decision was based on a consideration of the

relevant factors and whether there has been a clear error of judgment.” Id. at 416. Under “this

‘narrow’ standard of review, we insist that an agency ‘examine the relevant data and articulate a

satisfactory explanation for its action.’” Fox Television Stations, 556 U.S. at 513 (quoting Motor

Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43

(1983)). The United States Supreme Court has “made clear, however, that a court is not to substitute

its judgment for that of the agency, and should uphold a decision of less than ideal clarity if the

agency’s path may reasonably be discerned.” Id. at 513-514 (quotations omitted).

Pursuant to the APA, “[i]n making the foregoing determinations, the court shall review the

whole record or those parts of it cited by a party, and due account shall be taken of the rule of

prejudicial error.” 5 U.S.C. § 706. As discussed in the court’s prior order, “the focal point for

judicial review should be the administrative record already in existence, not some new record made

initially in the reviewing court.” Camp v. Pitts, 411 U.S. 138, 142 (1973). According to

“fundamental principles of judicial review of agency action . . . [t]he task of the reviewing court is

to apply the appropriate APA standard of review, to the agency decision based on the record the

agency presents to the reviewing court.” Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 743-44

(1985).

17

“[W]hole record . . . review is to be based on the full administrative record that was before

the [decisionmaker] at the time he made his decision.” Overton Park, 401 U.S. at 420. “The whole

administrative record, therefore, consists of all documents and materials directly or indirectly

considered by agency decision-makers.” In re United States, 138 S.Ct. 371, 372 (2017) (quotations

omitted). “[C]onsideration of . . . post hoc documents in deciding [an] administrative appeal is

inappropriate.” Trinity Am. Corp. v. U.S. E.P.A., 150 F.3d 389, 401 n. 4 (4th Cir. 1998).

b. July 2018 Decision

Plaintiff’s APA claim based upon the July 2018 decision is without merit because the

decision was made within the scope of defendants’ authority, explained sufficiently, and based upon

consideration of relevant factors, for the reasons set forth below.

i. Authority

As an initial matter, defendants were acting within the scope of their authority in evaluating

and denying plaintiff’s June 2018 application. As set forth in the statutory and regulatory

background, above, the Act grants defendants “broad authority to manage and conserve coastal

fisheries,” and to adopt regulations for that purpose. Kramer, 878 F.2d at 135 (citing16 U.S.C. §

1855). The Act provides authority for “implementing regulations, or annual specifications, at a level

such that overfishing does not occur in the fishery, including measures to ensure accountability” and

requirements for permits. 16 U.S.C. § 1853(a)(15) & (b) (emphasis added). The Act authorizes

establishment of “a limited access system” “that limits participation in a fishery to those satisfying

certain eligibility criteria or requirements contained in a fishery management plan or associated

regulation,” 16 U.S.C. § 1802(27) (emphasis added), developed by taking into account a broad range

of considerations, including “historical fishing practices in, and dependence on, the fishery; the fair

18

and equitable distribution of access privileges in the fishery; and . . . any other relevant

considerations.” 16 U.S.C. § 1853(b)(6) (emphasis added).

Implementing regulations, in turn, provide authority to defendants to scrutinize and manage

vessel ownership, permitting, replacements, and other changes. “Any vessel of the United States that

fishes for, possesses, or lands Atlantic sea scallops . . . must have been issued and carry on board

a valid scallop vessel permit pursuant to this section.” 50 C.F.R. § 648.4(a)(2) (emphasis added).

The regulations set forth eligibility criteria, as well as restrictions and limitations on application

methods, qualification, change in ownership, percentage ownership restrictions, replacement vessels,

consolidation of limited access permits and DAS allocations. See 50 C.F.R. § 648.4(a)(2)(i). The

regulations also set forth procedural requirements for processing permit applications:

Applicants for a permit under this section must submit a completed application on

an appropriate form obtained from the Regional Administrator. The application must

be signed and submitted to the Regional Administrator at least 30 days before the

date on which the applicant desires to have the permit made effective. The Regional

Administrator will notify the applicant of any deficiency in the application pursuant

to this section. Vessel owners who are eligible to apply for limited access or

moratorium permits under this part shall provide information with the application

sufficient for the Regional Administrator to determine whether the vessel meets the

applicable eligibility requirements specified in this section.

50 C.F.R. § 648.4(c)(1) (emphasis added). In sum, the challenged July 2018 decision was well

within the authority of defendants to make.

ii. Explanation

Defendants, through defendant Gouveia, also sufficiently explained their July 2018 decision,

first, in an initial July 16, 2018, letter in response to the replacement application, (AR 3323 (DE

36-29)), and then in a detailed August 3, 2018, letter in response to questions by plaintiff. (AR 3325

(DE 36-30). In addition, defendants, through defendant Pentony, further explained the decision in

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a September 5, 2018, letter denying plaintiff’s further request for reconsideration, after receipt of

substantial documentary submissions by plaintiff. (AR 3328 (DE 36-31).

iii. Relevant Factors

The next and most disputed issue here is whether defendants considered and examined

“relevant factors” and “relevant data” in reaching the July 2018 decision. Overton Park, 401 U.S.

at 416; Fox Television Stations, 556 U.S. at 513. In the July 2018, letter explaining the decision,

one factor defendant Gouveia identifies is “that a limited access scallop vessel owner may not

[c]ombine, transfer, or consolidate DAS [days-at-sea] allocations.” (AR 3323 (DE 36-29)). This

factor is relevant for consideration and examination by defendants because it is one of the

prohibitions and restrictions in the limited access permit regulations. Indeed it is stated twice: first

as a general restriction on limited access permits, and second as a specific prohibition directed at a

vessel owner. See 50 C.F.R. § 648.4(a)(1)(i)(G) & (2)(i)(G) (“Consolidation restriction. . . . limited

access permits and DAS allocations may not be combined or consolidated. . . .”); 50 C.F.R. §

648.14(i)(2) (“It is unlawful for any person owning or operating a vessel issued a limited access

scallop permit . . . to do any of the following: . . . Combine, transfer, or consolidate DAS allocations.

. . .”).

Another factor defendant Gouveia identifies in the July 2018 letter is “that this application

is not based on an arm length’s [sic] transaction and would result in the consolidation of DAS from

two vessels on to one vessel intended to mutually benefit both parties involved.” (AR 3323 (DE 36-

29)). Related to ownership, Gouveia states that defendants considered the following criteria and

facts:

1) the buyer or seller may not derive any financial benefits from the operation of the

vessel after it is transferred;

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2) the seller may not exercise any control over the activities of the vessel after it is

transferred;

3) there are no common shareholders, partners, or investors with significant

overlapping ownership interests in the seller or buyer’s business operations; and

4) the sale of the vessel is an arm’s length transaction and one that meets fair market

value.

(Id.). In addition, defendant Gouveia states that defendants considered “the relationship between

Jonathan Brent Fulcher and Gregory Fulcher, the lack of consideration for the replacement and other

factors” related to ownership. (Id.). Discussion of these factors continues in defendant Gouveia’s

August 2018 letter and defendant Pentony’s September 2018 letter. (AR 3325 (DE 36-30); AR 3328

(DE 36-31)).

The factors of ownership, identity, and arm’s-length transaction are relevant to defendants’

decision because of the importance the regulations place on these factors for issuance of permits,

in particular, and management of the scallop fishery, in general. For example, determination of

ownership is a key component of a permit application, which “must contain at least the following

information, and any other information required by the Regional Administrator”:

if the owner is a corporation, a copy of the current Certificate of Incorporation or

other corporate papers showing the date of incorporation and the names of the

current officers of the corporation, and the names and addresses of all persons

holding any ownership interest in a NE multispecies permit or CPH or shareholders

owning 25 percent or more of the corporation's shares for other fishery permits; if the

owner is a partnership, a copy of the current Partnership Agreement and the names

and addresses of all partners.

50 C.F.R. § 648.4(c)(2)(i) (emphasis added). In addition, both the regulations and the Act define

ownership and identity of a “person” comprehensively and broadly:

Ownership interest, in the NE multispecies fishery, includes, but is not limited to

holding share(s) or stock in any corporation, any partnership interest, or membership

in a limited liability company, or personal ownership, in whole or in part, of a vessel

issued a limited access NE multispecies permit or confirmation of permit history

21

(CPH), including any ownership interest in any entity or its subsidiaries or partners,

no matter how far removed.

50 C.F.R. § 648.2 (emphasis added). Further, the regulations state for determining “[p]ercentage

ownership restrictions”:

Having an ownership interest includes, but is not limited to, persons who are

shareholders in a vessel owned by a corporation, who are partners (general or

limited) to a vessel owner, or who, in any way, partly own a vessel.

50 C.F.R. § 648.4(a)(2)(i)(M) (emphasis added). Under the Act:

The term “person” means any individual (whether or not a citizen or national of the

United States), any corporation, partnership, association, or other entity (whether or

not organized or existing under the laws of any State), and any Federal, State, local,

or foreign government or any entity of any such government.

16 U.S.C. § 1802(36).

In addition, with respect to management of the fishery in general, defining and determining

vessel ownership is a prominent feature in explaining the basis for the present limited access scallop

permit system first embodied in the 1994 regulations and carried forward to the regulations in their

present form:

Two individuals commented that vessel owners should be allowed to combine

limited access scallop permits and DAS allocations on [sic] one vessel and that

ownership interest should not be limited to 5 percent of the total number of scallop

vessels qualifying under the moratorium.

Response: National Standard 5, 16 U.S.C. 1851(a)(5), states that conservation and

management measures, where practicable, should promote efficiency. This standard

also provides, however, that the goals of efficiency may be balanced against other

factors such as social and biologic. In its deliberations, the Council explicitly

considered possible gains in efficiency in allowing DAS to be combined, but

ultimately rejected such a measure because of socioeconomic concerns of preserving

current fishing practices and traditions at the outset of the management program. The

Council was concerned that allowing combination or transfer of DAS allocations, at

this time, may precipitously lead to aggregation of fishing rights in the hands of a

few, thereby challenging the current type of fishing operations associated with the

northeast region. Moreover, it would be impracticable to allow such fishing rights

22

to be transferred, at this time, before the effectiveness of the management measures

could be assessed. The Council did provide, however, that measures that may

enhance efficiency can be considered and adopted through the framework procedure

specified in the rule. NMFS concurs in the Council’s deliberations and conclusions

concerning these measures.

59 Fed. Reg. 2757-01, 2760 (Final Rule, Jan. 19, 1994) (emphasis added).

In addition, concepts of corporate ownership, identity, and arm’s-length transactions are

interrelated with permit transfer restrictions, as illustrated in an example provided in the regulations.

Indeed, the regulations, in the separate context of “multispecies vessels” and permit ownership,

states that “[t]he transfer of a permit . . . rendered unusable shall be made through an arm’s-length

transaction (for example, to an independent and unrelated entity that does not share an ownership

interest with that person).” 50 C.F.R. § 648.4(a)(1)(i)(N) (emphasis added). This statement of an

example of an “arm’s-length transaction” illustrates the importance of considering ownership and

identity generally in evaluating permit transfers.

These factors also are consistent with the common law concepts of corporate ownership,

identity, and arm’s-length transactions. See, e.g., Sky Cable, LLC v. DIRECTV, Inc., 886 F.3d 375,

386–87 (4th Cir. 2018) (noting availability to “pierce a company’s veil if separate entities operate

as a single economic entity such that it would be inequitable . . . to uphold a legal distinction

between them.”) (quotations omitted) (emphasis added); DeWitt Truck Brokers, Inc. v. W. Ray

Flemming Fruit Co., 540 F.2d 681, 683 (4th Cir. 1976) (“[I]n an appropriate case and in furtherance

of the ends of justice, the corporate veil will be pierced and the corporation and its stockholders will

be treated as identical.”) (emphasis added); Inland Terminals, Inc. v. United States, 477 F.2d 836,

840 n. 4 (quotations omitted) (4th Cir. 1973) (“[T]he business of one corporation may be regarded

23

as including the business of another corporation if such other corporation is a mere instrumentality

of the first corporation.”) (emphasis added).

In sum, defendants considered relevant factors in reaching the July 2018 decision. In so

holding, the court emphasizes that it is not making its own independent determination that such

factors require the result reached by defendants to deny the June 2018 application. Rather, the

court’s holding is much more limited, under the requisite “narrow standard of review,” to ensure

defendants reviewed the “relevant data,” where the court does not “substitute [the court’s] judgment

for that of the agency.” Fox Television Stations, 556 U.S. at 513.

Plaintiff argues that the regulations plainly allow for transferring a vessel from one permit

holder to another permit holder, without implicating the restrictions on consolidation of DAS by one

owner or other ownership factors. In support of this interpretation of the regulations, plaintiff quotes

from a 1994 memorandum by counsel for NMFS, Gene S. Martin, Jr. (“Martin”), interpreting the

prohibition on DAS. (Pl’s Resp. (DE 55) at 25 (quoting AR 3691 (DE 37-35 at 3) (hereinafter, the

“1994 memorandum”)). In particular, plaintiff notes Martin states that the prohibition at § 50 C.F.R.

§ 648.14(i)(2) “adds clarification” to the more general restriction at § 648.4(a)(1)(i)(G). (Id.).

Plaintiff notes Martin reasons as follows, quoting the language in § 648.14:

[I]t is unlawful for any person owning or operating a vessel issued a limited access

scallop permit…to…[c]ombine, transfer, or consolidate DAS allocations. . . .

In light of this language, the restriction on consolidating DAS applies only when one

person consolidates or attempts to consolidates DAS. Therefore, if one person

consolidates or combines DAS onto one vessel from two or more vessels, by

replacing vessels or through other means, in the same fishing year, that person would

be violating the prohibition on such transactions.

But this prohibition does not prohibit a vessel from fishing under two DAS

allocations in one fishing year if the vessel, after using some or all of its DAS

allocation under one permit holder, is then transferred to another permit holder to

24

replace a vessel that has its own DAS allocation because one person would not be

consolidating the DAS.

(Pl’s Resp. (DE 55) at 25 (quoting AR 3691 (DE 37-35 at 3) (underlining in original, italics added

here)). Plaintiff suggests that the court’s inquiry should begin and end with the italicized language,

because plaintiff, as one person, did not fish under two allocations in one year, but only the vessel

MISS TYLER (1), under ownership of two different persons, fished two allocations. (See id.).

Neither the 1994 memorandum nor the regulations, however, support the bright-line

interpretation advanced by plaintiff. Rather, the memorandum continues by stating that the key

factor in making the determination of whether “one person” is consolidating DAS is the identity of

the permit holders, and whether the permit holders share an identity in fact. (AR 3691 (DE 37-35

at 3)). The memorandum goes on to identify multiple factors bearing upon the identity of a permit

holder and ownership of vessels using DAS allocations, including all of the factors identified by

defendants in the July 2018 decision. (Id. at 3-5; see AR 3323 (DE 36-29)).

Plaintiff suggests that the court should not defer to defendants’ interpretation of the

regulations, either as articulated in the 1994 memorandum or in the July 2018 decision. However,

the United States Supreme Court recently reiterated that “we presume that Congress intended for

courts to defer to agencies when they interpret their own ambiguous rules,” under the doctrine

referred to as “Auer deference.” Kisor v. Wilkie, 139 S. Ct. 2400, 2414 (2019) (citing Auer v.

Robbins, 519 U.S. 452, 462 (1997)). By contrast, “[i]f uncertainty does not exist, there is no

plausible reason for deference.” Id. at 2415. “The regulation then just means what it means—and

the court must give it effect, as the court would any law.” Id. In such a case, “courts should not give

deference to an agency’s reading, except to the extent it has the ‘power to persuade,’” a lesser

deferential standard in accordance Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). Id.

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Plaintiff’s argument challenging defendants’ interpretation of the regulations is unavailing

for several reasons. First, the court need not apply Auer deference to uphold defendants’ July 2018

decision under the circumstances of this case. The permit regulations give defendants broad

authority to scrutinize applications, “notify the applicant of any deficiency in the application,” and

“to determine whether the vessel meets the applicable eligibility requirements specified in this

section.” 50 C.F.R. § 648.4(c)(1). In turn, the regulations carry the “consolidation restriction” that

“DAS allocations may not be combined or consolidated. . . .” 50 C.F.R. § 648.4(a)(1)(i)(G) &

(2)(i)(G); and that “any person owning or operating a vessel” cannot “Combine, transfer, or

consolidate DAS allocations. . . .” 50 C.F.R. § 648.14(i)(2). These restrictions unambiguously give

defendants authority to decline to authorize a transfer application on the ground that it would involve

a consolidation of DAS allocations, as defendants stated here. (AR 3323 (DE 36-29)).

Second, additional provisions in the regulations cited by plaintiff do not unambiguously

require a different result, as plaintiff contends, but rather, at most, create a “genuine ambiguity.”

Kisor, 139 S. Ct. at 2415. For instance, the regulations provide that “[a]n owner of a vessel that has

been issued any limited access or moratorium permit under this section is limited to one vessel

replacement permit year” and “[t]he fishing and permit history of a vessel is presumed to transfer

with the vessel whenever it is bought, sold, or otherwise transferred.” 50 C.F.R. § 648.4(a)(1)(i)(D)

& (E). But these regulations do not address or cross-reference the prohibitions on consolidating

DAS, under 50 C.F.R. § 648.4(a)(1)(i)(G) & (2)(i)(G); 50 C.F.R. § 648.14(i)(2).

Third, plaintiff does not demonstrate how the pertinent regulations unambiguously foreclose

defendants’ interpretation or favor plaintiff’s interpretation. Plaintiff suggests that the court should

avoid any inquiry into the definition of “any person owning or operating a vessel” in the regulation,

26

50 C.F.R. § 648.14(i)(2) (emphasis added). The text, informed by its statutory and regulatory

context, does not support a limited definition of “any person owning or operating a vessel.” Id.

Rather, read in conjunction with the definitions set forth above, and the stated purposes of the

limited access system, the text supports a broad definition of person and ownership that takes into

consideration overlap in ownership and operation of vessels, inviting consideration of corporate

formalities and the nature of an “arm’s-length” transaction. See 50 C.F.R. § 648.4(c)(2)(i); 50 C.F.R.

§ 648.2; 50 C.F.R. § 648.4(a)(2)(i)(M) & (N); 16 U.S.C. § 1802(36); 59 Fed. Reg. 2757-01, 2760

(Final Rule, Jan. 19, 1994).

Plaintiff also argues that the court should not defer to defendants’ current interpretation of

the permit regulations because it conflicts with defendants’ “prior interpretation of the regulatons.”

(Pl’s Resp. (DE 55) at 27). The July 2018 decision, however, mirrors the interpretation set forth in

the 1994 memorandum. (Compare AR 3691 (DE 37-35 at 3-5) with AR 3323 (DE 36-29)). Indeed,

consistent with its July 2018 decision, the 1994 memorandum states that “[f]actors NMFS will look

at . . . include, but are not limited to, whether the transfer appears to be an ‘arm’s length’ transaction,

whether the transferor/seller derive any financial benefits from the operation of the vessel after it

is transferred, whether the seller/transferor exercises any control over the activities or operation of

the vessel after it is transferred, and whether there are any common shareholders, partners or

investors. . . .” (AR 3691 (DE 37-35 at 3-5); see AR 3323 (DE 36-29)). Thus, defendants have not

changed their interpretation from that originally stated in 1994.

Plaintiff appears to contend that defendants have not been enforcing the regulations

consistently over the years, and there have been instances where vessel transfer applications have

been approved without scrutiny of the factors articulated in the 1994 memorandum and the July

27

2018 decision.9 But, an agency’s change of enforcement practices and exercise of enforcement

discretion is treated differently from an agency’s change in interpretation of the law. On the one

hand, for example, an agency “should not change an interpretation in an adjudicative proceeding

where doing so would impose new liability on individuals for past actions which were taken in

good-faith reliance on agency pronouncements or in a case involving fines or damages.”

Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 157 (2012) (quotations omitted, emphasis

added). On the other hand, “an agency’s enforcement decisions are informed by a host of factors,

some bearing no relation to the agency’s views regarding whether a violation has occurred.” Id.

(emphasis added). “[A]n agency decision not to enforce often involves a complicated balancing of

a number of factors which are peculiarly within its expertise,” and is thus committed to the agency’s

discretion. Heckler v. Chaney, 470 U.S. 821, 831 (1985); see De Osorio v. U.S. I.N.S., 10 F.3d

1034, 1042 (4th Cir. 1993) (“[U]npublished precedent [of past agency decisions] is a dubious basis

for demonstrating the type of inconsistency which would warrant rejection of deference.”).

This case falls in the latter category. Indeed, defendant Gouveia, on behalf of NMFS,

highlighted that plaintiff had been granted several prior vessel replacement applications as a factor

in the exercise of enforcement discretion in further explaining decision on the June 2018 application

in the August 3, 2018, letter. Such prior granted applications do not preclude enforcement of the

9 Plaintiff argues that the “[a]dministrative record[] is incomplete” and that it cannot adequately respond to

summary judgment because, outside of the administrative record, plaintiff has identified 13 “different vessel transactions

involving the replacement of a scallop vessel by another scallop vessel that had already fished its DAS allocation,” as

well as a transcript of statements by an NMFS employee stating that there has been a change in interpretation of the

vessel replacement regulations. (Pl’s Resp. (DE 55) at 8). Nevertheless, “whole record . . . review is to be based on the

full administrative record that was before the [decisionmaker] at the time he made his decision.” Overton Park, 401 U.S.

at 420. Moreover, for the reasons explained above in the text, the fact that defendants may have allowed replacement

applications in the past does not preclude it from exercising its enforcement discretion under the circumstances presented

by plaintiff’s June 2018 application. Along these lines, statements by the NMFS employee, which are consistent with

the 1994 memorandum, do not reflect a change in interpretation but rather a change in enforcement approach. (See DE

55-2 at 19-21).

28

regulations in this instance; to the contrary, as explained in the August 3, 2018, letter, they serve as

a basis, in themselves, for denying the June 2018 application. (See, e.g., AR 3326 (DE 36-30 at 3)

(noting “numerous replacements of the same vessels and transferring of DAS permits onto these

vessels more than once brings into focus, for the first time, an apparent and deliberate pre-arranged

agreement” and a “historical pattern of maneuvering of permits”)). In sum, any change in

enforcement approach in the July 2018 decision was based upon a consideration of multiple factors

and explained in defendants’ decision. Therefore, a change of enforcement approach in this manner

does not provide a basis for setting aside the July 2018 decision as plaintiff contends.

Where the decision was within defendants’ authority, adequately explained, and based upon

consideration of relevant factors, plaintiff’s APA claim based upon the July 2018 decision must be

denied.

c. December 2018 Decision

Plaintiff’s APA claim based upon the December 2018 decision also is without merit. Many

of the same considerations set forth above with respect to defendants’ July 2018 decision also apply

to defendants’ December 2018 decision. In particular, the court’s determination that the action was

properly within defendants’ authority applies equally to defendants’ December 2018 decision, and

the court incorporates here its prior analysis (at section B.2.b.i., above) of statutory and regulatory

authority.

The court addresses separately the sufficiency of the explanation in the December 2018

decision letter.10 Defendant Gouveia explained, on behalf of NMFS: “This vessel replacement

10 Plaintiff has moved to strike a February 20, 2019, internal NMFS memorandum entitled “Clarification of

Criteria Used to Approve Applications to Replace Scallop Vessels . . . .” (AR 3415 (DE 37-10)) and an April 15, 2019,

letter from NMFS to the New England Fishery Management Council, (AR 3687, DE 37-24), both of which include

discussion of the reasons for the December 2018 decision. (DE 55). Plaintiff moves to strike these documents on the

29

would result in the consolidation of two limited access scallop permits from two vessels on to one

vessel in a single fishing year. Therefore, we cannot authorize this replacement.” (AR 3331 (DE

36-33)). Defendant Gouveia also references the “prohibition on consolidating scallop permits . . .

found at 50 CFR § 648.4(a)(2)(i)(G) . . . stat[ing] that scallop limited access permits and DAS

allocations cannot be combined.” (Id.).

Defendants Gouveia and Pentony, on behalf of NMFS, included this same reason in their

letters explaining the denial of plaintiff’s June 2018 application. (See AR 3323 (DE 36-29) (stating

application “would result in the consolidation of DAS from two vessels on to one vessel intended

to mutually benefit both parties involved”); AR 3326 (DE 36-30 at 3) (stating application “would

result in a consolidation of scallop DAS from two vessels onto one vessel in the same fishing year”);

AR 3329 (DE 36-31 at 2) (“The prohibition on consolidating scallop permits, which was not

specifically referred to in our earlier letter, is found at 50 CFR § 648.4(a)(2)(i)(G) . . . and states that

scallop limited access permits and DAS allocations cannot be combined.”).

In the December 2018 decision letter, defendant Gouveia does not provide a discussion of

factors related to ownership, identity, and arm’s-length transaction, as defendants Gouveia and

Pentony do in the July 2018 decision and related explanation letters. Nonetheless, “[w]hile we may

not supply a reasoned basis for the agency’s action that the agency itself has not given, we will

uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.”

Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285–86 (1974) (citation

omitted). Under the circumstances of this case, in light of the extensive discussion thereof in the

basis that they are post hoc rationalizations not proper for consideration on review of the December 2018 decision. The

court does not consider these documents in review of the December 2018 decision. However, they do provide

background context for defendants’ reconsideration of the December 2018 decision and they are relevant to the issue

of mootness. Accordingly, plaintiff’s motion to strike is DENIED AS MOOT.

30

July 2018 decision and related explanation letters, to the same applicant, based upon the same

regulatory prohibition, it is reasonable to infer that defendants considered those same factors in the

December 2018 decision.

Moreover, the available remedy for a lack of sufficient explanation – a remand to the agency

for further explanation, see Overton Park, 401 U.S. at 420 – would serve no purpose because

defendant Gouveia, on behalf of NMFS, already further explained defendants’ decision in the

February 22, 2019 reconsideration letter, including consideration of the “arm’s length transaction”

factor. (AR 3352 (DE 36-37)); see 5 U.S.C. § 706 (in undertaking review of an administrative

decision, “due account shall be taken of the rule of prejudicial error”).

In sum, defendants sufficiently explained the December 2018 decision through reference to

the prohibition on consolidating DAS allocations under 50 C.F.R. § 648(a)(2)(i)(G). The factors

included in considering this prohibition, ownership, identity, and arm’s-length transaction, are

relevant factors for consideration by defendants in making the decision, for the reasons stated by the

court in its above (subsection B.2.b.iii.) analysis of relevant factors for the July 2018 decision.

In addition to challenging defendants’ interpretation of their own regulations and criteria

employed, addressed by the court above with respect to the July 2018 decision, plaintiff suggests

that the bill of sale it provided with its November 2018, application, was sufficient to meet the

criteria for an arm’s-length transaction. However, plaintiff submitted a bill of sale with both the

June 2018 application and November 2018 application, and neither provided sufficient indicia in

itself of an arm’s-length transaction, because the amount of consideration was not specified. (See

AR 3385 (DE 37-4); AR 3410 (DE 37-8)). Accordingly, it was not unreasonable for defendants to

require further documentation confirming the sale, which plaintiff ultimately provided for the

31

November 2018 application but did not provide sufficiently for the June 2018 application. (See AR

3694 (DE 41-3); AR 3329 (DE 36-31 at 2)).

Thus, where the decision was within defendants’ authority, adequately explained, and based

upon consideration of relevant factors, plaintiff’s APA claim based upon the December 2018

decision also must be denied.

3. Preliminary and Permanent Injunction

Because the court has determined that all of plaintiff’s claims either must be dismissed as

moot or denied on the merits, plaintiff’s request for injunctive relief in the form of an extension of

the fishing season must be denied. Where plaintiff fails on the merits of its claims, preliminary and

permanent injunctive relief is not available. See Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7,

20 (2008); eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006).

In addition, without finding an unlawful agency action, the court lacks jurisdiction to award

in the abstract to plaintiff equitable relief. See 5 U.S.C. § 702. Moreover, the court lacks

jurisdiction to award the relief sought by plaintiff in the form of a modification of plaintiff’s permits

to allow an extension of the fishing season or DAS allocations, where plaintiff has not sought such

relief in the first instance from NMFS. See id.; see, e.g., Fed. Power Comm’n v. Transcon. Gas Pipe

Line Corp., 423 U.S. 326, 333-34 (1976) (“The Court, it is true, has power ‘to affirm, modify, or set

aside’ the order of the Commission ‘in whole or in part.’ But that authority is not power to exercise

an essentially administrative function.”).

Accordingly, plaintiff’s motion for preliminary injunction and request for permanent

injunctive relief is denied.

4. Motion to Seal

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Defendants seek to seal an unredacted tax form in the administrative record for BHG Scallop,

LLC (DE 37-15), containing personal identifying information, and to file on the public record a

redacted version thereof. Where the document for which filing under seal is requested contains

personal identifying information, for which redaction is required pursuant to 5 U.S.C. § 552a,

overcoming common law and First Amendment presumption to access, and where no objection to

the motion has been filed, the court finds good cause for sealing and filing a redacted version. See

Stone v. University of Maryland Medical System Corp., 855 F.2d 178, 180-81 (4th Cir. 1988).

Accordingly, the motion to seal is granted and the clerk is directed to file separately the

proposed redacted document lodged by defendants at DE 44.

CONCLUSION

Based on the foregoing, defendants’ motion for summary judgment (DE 49) is GRANTED,

plaintiff's motion for preliminary injunction (DE 1) is DENIED, and the motion to strike (DE 55)

is DENIED as MOOT. Defendants’ motion to seal (DE 43) is GRANTED and the clerk is

DIRECTED to file the proposed redacted document lodged by defendants at DE 44. Where there

are no remaining issues for decision, defendants’ motion for clarification as to whether or not the

court will allow evidence to be presented July 19, 2019 (DE 62), is DENIED as MOOT. Each party

shall bear its own costs. The clerk is DIRECTED to close this case.

SO ORDERED, this the 16th day of July, 2019.

United States District Judge

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