Fishermen's Dock Cooperative, Inc. v. Brown

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

FISHERMEN'S DOCK COOPERATIVE,

INCORPORATED, of Point Pleasant

Beach, New Jersey; BELFORD

SEAFOOD COOPERATIVE, of Belford,

New Jersey; WANCHESE FISH

COMPANY, of Virginia, North

Carolina and Massachusetts;

SEAFARERS INTERNATIONAL UNION,

Plaintiffs-Appellees,

v.

RONALD H. BROWN, Secretary of

Commerce,

Defendant-Appellant,

No. 95-1002

NATURAL RESOURCES DEFENSE

COUNCIL, INCORPORATED; AMERICAN

SPORTFISHING ASSOCIATION; CENTER

FOR MARINE CONSERVATION;

CHESAPEAKE BAY FOUNDATION;

COASTAL CONSERVATION ASSOCIATION;

CONSERVATION LAW FOUNDATION,

INCORPORATED; ENVIRONMENTAL

DEFENSE FUND, INCORPORATED; LONG

ISLAND SOUNDKEEPER FUND;

NATIONAL AUDUBON SOCIETY; TROUT

UNLIMITED,

Amici Curiae.

Appeal from the United States District Court

for the Eastern District of Virginia, at Norfolk.

Robert G. Doumar, District Judge.

(CA-94-338-2)

Argued: October 30, 1995

Decided: February 2, 1996

Before NIEMEYER and MICHAEL, Circuit Judges, and

PHILLIPS, Senior Circuit Judge.

_________________________________________________________________

Reversed by published opinion. Senior Judge Phillips wrote the opin-

ion, in which Judge Niemeyer and Judge Michael joined.

_________________________________________________________________

COUNSEL

ARGUED: Jonathan Flint Klein, UNITED STATES DEPART-

MENT OF JUSTICE, Washington, D.C., for Appellant. David Earl

Frulla, BRAND, LOWELL & RYAN, P.C., Washington, D.C., for

Appellees. ON BRIEF: Lois J. Schiffer, Assistant Attorney General,

Robert L. Klarquist, Charles W. Brooks, UNITED STATES

DEPARTMENT OF JUSTICE, Washington, D.C.; Helen F. Fahey,

United States Attorney, George M. Kelley, III, Assistant United

States Attorney, Norfolk, Virginia; Mariam McCall, Joel G. MacDon-

ald, Office of the General Counsel, NATIONAL OCEANIC AND

ATMOSPHERIC ADMINISTRATION, Silver Spring, Maryland, for

Appellant. Stanley M. Brand, BRAND, LOWELL & RYAN, P.C.,

Washington, D.C., for Appellees. Peter Lehner, Sarah Chasis, Wil-

liam Schrenk, NATURAL RESOURCES DEFENSE COUNCIL,

INC., New York, New York, for Amici Curiae.

_________________________________________________________________

OPINION

PHILLIPS, Senior Circuit Judge:

The Secretary of Commerce (the Secretary) appeals a district court

order that invalidated the Department of Commerce's commercial

catch quota for summer flounder for 1994 and that imposed another

quota in its place. Because the district court misapplied the statutory

2

requirement that the Department set the quota in accord with the "best

scientific information available," and consequently erred in invalidat-

ing the agency-set quota, we reverse.

I

This case involves a challenge by a coalition of commercial fishers

(the Coalition) to the 1994 commercial catch quota for summer floun-

der promulgated by the Department of Commerce (the Department).

The Department sets the quota every year through a complex process

mandated by the Magnuson Fishery Conservation and Management

Act, 16 U.S.C. § 1801 et seq., and by federal regulations, 50 C.F.R.

Part 625. Within the Department of Commerce are eight regional fish-

ery management councils, established by the Act, whose job it is to

develop plans for the conservation and management of the fish in

each council's respective section of the American coastal waters.

Among these bodies is the Mid-Atlantic Fishery Management Council

("the Council"), which has among its responsibilities the management

of the summer flounder fishery, including the annual setting of the

commercial catch quota.

Before it could set annual quotas, the Council was required to

develop a Fishery Management Plan for Summer Flounder, which it

did in 1992. Amendments to the plan were promulgated in 1993 and

1994 as well. As part of this Plan, the Council had to set for each of

several years a "target fishing mortality rate." The fishing mortality

rate is a statistic called F that expresses the depletion of the stock of

fish attributable to fishers, whether by capture or by discard of fatally

wounded fish or otherwise, in a given year. For 1994, the Fishery

Management Plan set a target F of 0.53 and thus required that the

commercial catch quota for 1994 be set at a level that would ensure

that the actual F would not exceed 0.53. See 50 C.F.R.

§ 625.20(b)/(c).

The process of setting the quota began, for present purposes, with

the holding of a Stock Assessment Workshop, a gathering of marine

scientists whose mission it was to estimate the size, age structure, and

any other relevant characteristics of current populations of various

species of fish off the Atlantic coast. The numbers produced by the

Workshop for summer flounder were then presented to the Summer

3

Flounder Monitoring Committee (the Monitoring Committee), a sub-

unit of the Council, on September 1, 1993 with recommendations

from Council staff. The Monitoring Committee is a group of scientists

constituted by the Department who are required to recommend,

among other things, a commercial catch quota. The quota for 1994

was to be based on the scientific information from the Workshop and

was to be designed to ensure that the "fishing mortality rate," F, did

not exceed the 0.53 level previously announced as the 1994 target by

the Fishery Management Plan. The Monitoring Committee recom-

mended a quota of 16,005,560 pounds. That recommendation then

went to the Demersal Species Committee of the Council and to the

Atlantic States Marine Fisheries Commission, an interstate organiza-

tion with which the Council cooperates. Those two bodies, meeting

jointly on September 23, approved the Monitoring Committee's rec-

ommendation and passed it on to the Council which, in turn, recom-

mended it to the Regional Director for approval. After the requisite

notice and comment, during which no objections pertinent to this

appeal seem to have been filed, the quota became final in early 1994.

At the heart of the case is the way the Monitoring Committee used

the Workshop's data regarding the "recruitment" of summer flounder

--that is, the number of new flounder expected to appear in the popu-

lation in 1994. At the Committee's annual quota-setting meeting, staff

member Wendy Gabriel had presented the Committee with the geo-

metric mean of the previous five years' estimated recruitments and

the values one standard deviation above and below that mean. Then,

on recommendation of Council staff, and specifically following the

lead of Gabriel's presentation of the recruitment statistics to the Com-

mittee, the Committee chose to recommend that the quota be set on

the basis of a conservative estimate of recruitment. In particular, the

staff had recommended, and the Committee then chose to use, an esti-

mate of recruitment equal to the figure one standard deviation below

the geometric mean rather than a recruitment estimate equal to that

geometric mean. As a direct consequence, the Committee recom-

mended that the previous year's quota be increased for 1994 only to

about 16 million pounds (a 28% increase) whereas incorporation of

the geometric-mean estimate would have boosted the quota to about

19 million pounds.

The lower quota was ratified at every step of review and published

in the Federal Register accompanied by four justifications that closely

4

reflected those articulated in the original staff recommendation. As

articulated in the Federal Register, the four reasons for using the

lower estimate were the following: First, the summer flounder popula-

tion was composed mainly of fish aged 2 and under; so an overesti-

mate in recruitment would have great power to cause an overestimate

in overall stock size and thus "would result in quotas that would

exceed the target fishery mortality rate (F level)." Second, "the proba-

bility of achieving the target F level is higher at the lower harvest

level" with staff estimating an 80% probability that the proposed

quota would keep actual F under target F. Third, three risky

assumptions--that the previous year's quota would prove to have

been adhered to, that all landings get reported, and that discard rates

would not increase--underlay the estimate of the stock size and sug-

gested that the stock-size curve might be overly optimistic. Fourth,

since the target F was scheduled to decrease dramatically for 1996,

it was better to err on the safe side now so as to minimize the chances

of having to reduce the 1996 quota even more than was already antici-

pated. J.A. 350. In short, the Council believed that the uncertainty in

the recruitment estimates was so great and the long-term flounder

population so fragile a resource for the fishers, especially in light of

a coming reduction in the target fishing mortality rate for 1996, that

a low estimate of recruitment was the prudent estimate.

In challenging the quota, the Coalition argued that use of the lower

estimate rather than the geometric mean in calculating the quota con-

stituted a failure to use the best scientific information available as

required by 16 U.S.C. § 1851(a)(2). After holding a three-day hearing

to have the administrative record explained, the district court agreed

and held that the quota, therefore, represented an arbitrary and capri-

cious decision on the part of the Department. The court concluded

that only the geometric-mean estimate could constitute the best scien-

tific information available in this case. On this basis, the court held

that "the 1994 commercial catch quota is invalidated to the extent that

it deviates downward from the figure reached using the best scientific

information available, which was 19.05 million pounds for 1994,"

Fishermen's Dock Cooperative v. Brown, 867 F. Supp. 385, 386

(E.D. Va. 1994), and ordered that the quota be reset at that figure. The

key parts of the district court's opinion read as follows:

The Court finds that the use of figures one standard devia-

tion below the mean was arbitrary and capricious. The use

5

of a figure one standard deviation below the mean was cho-

sen not because it was the best scientific information avail-

able, but solely because it increased the percentages of

reaching not a balanced result but a result which protected

the summer flounder stock to the detriment of the fishermen.

....

. . . The Council chose to implement a quota one standard

deviation below the geometric mean, resulting in a quota of

16.005 million pounds rather than a quota of 19.05 million

pounds, a sixteen percent difference. Defendant's designees

explained that using the lower figure increased the probabil-

ity of reaching 0.53, the target fishing mortality for 1994,

from 59% at the geometric mean to 81% with the lower fig-

ure.

This Court finds that the Council's decision to implement

a quota one standard deviation below the geometric mean

failed to utilize the best scientific information available, and

therefore was arbitrary and capricious.

....

. . . The commercial catch quota . . . should be reset using

the figure derived from the best scientific information

available--19.05 million pounds, the geometric mean,

replacing the quota set at one standard deviation below the

mean, or 16.005 million pounds.

. . . Accordingly, this Court . . . ORDERS that the 1994

summer flounder commercial catch quota be invalidated to

the extent that it is less than 19.05 million pounds.

Fishermen's Dock, 867 F. Supp. at 396-97.

This appeal by the Secretary followed. A number of environmental

organizations and recreational fishers' organizations have filed an

amicus brief in support of the Secretary's position.

6

II

In view of the nature of the district court's proceedings in this case,

it is important that we define at the outset the standard under which

we review its decision. We start with the standard under which the

district court reviewed the agency action. It is prescribed in the

Administrative Procedure Act (APA) and incorporated by the Magnu-

son Act at 16 U.S.C. § 1855(b)(1)(B):

The reviewing court shall--

....

(2) hold unlawful and set aside agency action, findings,

and conclusions found to be--

(A) arbitrary, capricious, an abuse of discre-

tion, or otherwise not in accordance with law;

(B) contrary to constitutional right, power,

privilege, or immunity;

(C) in excess of statutory jurisdiction, author-

ity, or limitations, or short of statutory right;

(D) without observance of procedure required

by law; . . . .

5 U.S.C. § 706(2)(A)-(D).

Our review of district court decisions made in review of agency

action is generally de novo. Thus, we generally review the agency's

action from the same position as that of the district court and seek to

determine, as did the district court, whether on the administrative

record the agency action was arbitrary and capricious or otherwise

illegal under the statutory standards quoted above. Virginia Agricul-

tural Growers Ass'n v. Donovan, 774 F.2d 89, 93 (4th Cir. 1985)

("The trial court was obligated to look to the administrative record

and its view of the record is not entitled to deference."); Natural

7

Resources Defense Council v. United States Environmental Protec-

tion Agency, 16 F.3d 1395, 1400-01 (4th Cir. 1993) (court of appeals

review looks to the agency's action "to determine whether the record

reveals that a rational basis exists for its decision").

The Coalition points out, however, that where a district court has

legitimately expanded the administrative record by holding a supple-

mentary hearing, its decision might then be entitled to some unspeci-

fied degree of deference from our court in review. It relies on then-

Judge Breyer's exploration of the intricacies of judicial review under

the APA in Sierra Club v. Marsh, 769 F.2d 868, 871-72 (1st Cir.

1985):

We should be more willing, or be less willing, to differ with

a district court about the `reasonableness' or`arbitrariness'

of an agency decision, depending upon the particular fea-

tures of the particular case that seem to make a more inde-

pendent, or a less independent, appellate court scrutiny of

the administrative record appropriate. Where, for example,

the district court's judgment turns on matters of fact that it

has determined, or upon evidence presented by witnesses in

court, or even upon lengthy district court proceedings in

which knowledgeable counsel explain the agency's

decision-making process in detail, we will show appropriate

hesitation to overturn that judgment. [Citations omitted.]

But, where the district court simply reviews a set of agency

documents and, applying the same legal standard as we

apply here, reaches a particular legal conclusion about the

`reasonableness' of an agency's action, we have greater

legal freedom to differ with the district court's ultimate

characterization of agency behavior.

Countering the suggestion that any deference is owed here, the Secre-

tary challenges the propriety of the district court's expansion of the

record, contending that its three-day hearing and ensuing expansion

of the record was not warranted.

Whatever the propriety of conducting such a hearing, we do not

think it need have any effect on our review process. We have care-

fully reviewed the record of that hearing and are satisfied that none

8

of the testimony received actually had the effect of substantively

expanding the factual record before the agency. The testimony

received essentially served only to educate the district court in the

complexities of geometric means, standard deviations and

probabilities--an education equally available to us. Because we are

therefore satisfied that the district court reached its decision wholly

on the basis of the administrative record itself and its own ad hoc self-

education in statistics, we owe its decision no special deference deriv-

ing from the extended hearing it conducted. Consequently, we will

proceed to conduct our own independent review of the administrative

record as being effectively the unexpanded record reviewed by the

district court.

III

The district court held that, at least in the circumstances of this

case, the statutory requirement that the agency use the "best scientific

information available" translated to a rule of law that the agency use

the geometric mean as its estimate of recruitment in setting the com-

mercial catch quota for 1994. The Secretary argues on appeal that the

agency's action in this case was in no way arbitrary, capricious, or

otherwise illegal and that, even if it was, the district court overreached

its authority in imposing a new quota rather than remanding to the

agency.

We agree with the essentials of the Secretary's primary argument.

In explaining why, it is important at the outset to point out the limited

scope of the Coalition's challenge to the agency action. It does not

challenge the Fishery Management Plan or its target fishing mortality

rate for 1994. It does not challenge the procedures used in producing

the quota or the scientific validity of the data underlying the quota.

It challenges only the Department's choice to rely on one estimate of

recruitment rather than another, and contends that the district court

was correct to hold that there was only one estimate consistent with

use of the best scientific information available as required by 16

U.S.C. § 1851(a)(2). We disagree on that basic point. The district

court's holding that the available scientific information on recruitment

dictated one and only one possible quota reveals a critical misunder-

standing of the nature of the information available.

9

The Act mandates that the agency conform to several"national

standards," including the following:

Any fishery management plan prepared, and any regula-

tion promulgated to implement any such plan, pursuant to

this subchapter shall be consistent with the following

national standards for fishery conservation and manage-

ment:

(1) Conservation and management measures shall pre-

vent overfishing while achieving, on a continuing basis, the

optimum yield from each fishery for the United States fish-

ing industry.

(2) Conservation and management measures shall be

based upon the best scientific information available.

....

(6) Conservation and management measures shall take

into account and allow for variations among, and contingen-

cies in, fisheries, fishery resources, and catches.

16 U.S.C. § 1851(a).

No one contends that the Council's Fishery Management Plan is

inconsistent with the above statutory standards. That Plan is imple-

mented by 50 C.F.R. Part 625, which provides, in pertinent part, as

follows:

§ 625.20 Catch Quotas and Other Restrictions

(a) Annual Review. The Summer Flounder Monitoring

Committee will review [certain data including"recent esti-

mates of recruitment"] . . . to determine the allowable levels

of fishing and other restrictions necessary to result in a fish-

ing mortality rate of 0.53 in 1993 through 1995, and a fish-

ing mortality rate of 0.23 in 1996 and thereafter . . . .

10

(b) Recommended Measures. Based on this review, the

Summer Flounder Monitoring Committee will recommend

. . . the following measures to assure that the fishing mortal-

ity rate specified in paragraph (a) of this section is not

exceeded:

(1) The commercial quota will be set from a

range of 0 to the maximum allowed to achieve the

fishing mortality rate specified in paragraph (a) of

this section; . . . .

Next, in subsection (c), the regulations call for the Demersal Species

Committee, the Council, and the Regional Director (both before and

after public comment), each in turn, to consider what quota is "neces-

sary to assure that the applicable fishing mortality rate specified in

paragraph (a) of this section is not exceeded ." (Emphasis added.) This

quoted language appears four separate times in that subsection.

The sum of these provisions is that the Monitoring Committee is

required to seek a fairly high level of confidence that the quota it rec-

ommends will not result in an F greater than 0.53, even as it must be

equally concerned to provide the fishing industry with an "optimum

yield" both in the current year and over the long term. Although the

regulatory language repeatedly calls for the Council to "assure" that

the target F is "not exceeded," it cannot be taken to require 100%

assurance. If taken literally, that language could mean that the Moni-

toring Committee would have to recommend something close to clos-

ing of the fishery to "assure" an acceptable F. But, of course, the

statute does not contemplate regulatory overkill. It anticipates an "op-

timum yield" for the fishing industry that is consistent with reason-

able assurance that the actual F will be less than or equal to the target

F.

Also, while the language assumes that such a quota can be estab-

lished on the basis of the "best scientific information available"--and

so requires that the quota be set on that basis--it appears to say noth-

ing about how that term is to be defined. It only mandates the consti-

tution of committees of scientists to provide and evaluate such

information.

11

In this case, the Monitoring Committee had before it, among other

things, three estimates or predictions of recruitment for 1994 that

were derived from research that, at least for purposes of this appeal,

everyone agrees constituted the best scientific information available.

One of the estimates was the geometric mean of the estimated recruit-

ments for the years 1988 through 1992; that is, the midpoint of the

probability curve of all possible recruitment estimates for 1994 as

derived from the estimated actual recruitments of the previous five

years. The other two estimates for 1994 were produced by traveling

one standard deviation above and below the geometric mean along the

curve of 1994 recruitment estimates. As is always true of the single-

standard-deviation points along a normal curve, these high and low

estimates represented the upper and lower limits of a range of esti-

mates within which there was a 68% probability that the true recruit-

ment would eventually lie. The geometric mean was just the middle

value in that range, and the single-standard-deviation values were

simply standard statistical markers for indicating the degree of uncer-

tainty in the data.

Thus, to illustrate, if the geometric mean were about 30 million fish

with a standard deviation of about 10 million, all the Monitoring

Committee would know from the three estimates presented to it was

that the best science available predicted a 68% chance that the actual

recruitment for 1994 would be somewhere between 20 million and 40

million fish. No single point estimate on the curve had any assigned

probability of being the ultimately correct one. But any range of esti-

mates on the curve had a particular and easily derived probability of

containing the ultimately correct number.

One of the properties of the curve, then, was that it could provide

the scientists and the administrators with the available research's best

conclusions as to the ranges within which the actual 1994 recruitment

was likely to lie. But another even more important property was that

that curve apparently implied another curve; and this second curve

provided, for any chosen point estimate of recruitment, the probability

that the quota derived from that point estimate would ultimately pro-

duce an actual F for 1994 of 0.53 or less. Crucially for this case, that

latter curve in fact indicated that the 19-million-pound quota, derived

from the estimate at the geometric mean, carried a 59% chance of

eventually producing a 1994 F of 0.53 or less, whereas the 16-

12

million-pound quota, derived from the estimate one standard devia-

tion below the mean, carried an 81% chance of eventually producing

a 1994 F of 0.53 or less. And no one disputes the validity of these

probabilities; no one suggests that they rested on anything but the best

scientific information available.

On the basis of this best available scientific information, then, the

Monitoring Committee had to estimate what the true recruitment

would be. If it estimated too high and set the quota accordingly high,

then the smaller actual recruitment would be decimated by fishers

operating under the high quota, with the result that F would exceed

0.53. Alternatively, the Monitoring Committee could estimate that

actual recruitment would be low and thereby increase its chances of

not exceeding target F. Since the Fishery Management Plan called for

assurance that target F would not be exceeded but not such absolute

assurance as would result in grievously undershooting target F and

denying the fishing industry its "optimum yield," the Agency's deci-

sionmakers necessarily had some discretion to decide what precise

degree of assurance it would seek within the uncertainty of the data.

In exercising that discretion, these decision-makers consistently

offered the four reasons recited above for recommending use of the

lower of the two recruitment estimates and thus the lower of the two

quotas that they had considered in light of the data presented: first, the

truncated age structure of the summer flounder population, which

magnified the risk to target F involved in any overestimate of the size

of the recruitment class; second, the general proposition that a lower

recruitment estimate provided a higher probability of assuring that

actual F would turn out to be less than or equal to target F; third, the

recognition that certain assumptions underlying the estimate of the

flounder stock size might be overly optimistic; and, fourth, the belief

that, since target F was to decrease significantly in 1996, it was better

to deal with the current uncertainty in recruitment estimates by erring

on the conservative side rather than risking an exacerbation of the

painful quota decrease that had to come soon in any case.1 J.A. 350.

_________________________________________________________________

1 The Coalition argues in passing that this last justification is an unau-

thorized acceleration of the Fishery Management Plan's call for a reduc-

tion in target F in 1996 (not in 1994). That argument is correct as far as

13

These reasons do not justify the precise choice of an 81% probabil-

ity of success or the choice to plug into the formula the specific

recruitment estimate located at the one-standard-deviation-below-the-

geometric-mean mark. See Brief of Appellee-Coalition at 36-39. Nor

do they consistently explain why the choice of a conservative

recruitment estimate was the best way to modify the quota rather than

using a higher recruitment estimate but then simply lowering the

quota itself to take account of all the uncertainties in the data. But

they do reflect the Monitoring Committee's understanding that the

recruitment estimate was the main source of uncertainty along the

way to making a stock-size estimate and then setting a quota; and they

do justify setting a quota that, taking that uncertainty into account,

offered a high probability--if not 100% assurance--of achieving the

regulatory goal of not exceeding target F. Moreover, at the Monitor-

ing Committee's meeting and later in the process, the point was made

that, "happenstantial" as the lower figure might be, it had the benefit

of both providing a high probability of staying under target F and still

allowing a substantial (28%) increase in the quota from the year

before. It thus showed commercial fishers that the Department's mea-

sures were not simply relentless attacks on the industry but beneficial

over the long term for all concerned as the Act contemplated. J.A.

189, 193, 325-27. The option of setting the quota so as to provide a

90% or 95% probability of success was also considered but rejected

as too heavy a short-term burden on the fishing industry. J.A. 325,

193.

In this situation, to assert, as the district court did, that the "best sci-

entific information" required use of the geometric-mean estimate to

dictate a quota that had only a 59% chance of not causing F to be

exceeded, rather than use of an estimate that would provide an 81%

chance of not causing F to be exceeded, is to misconstrue what the

_________________________________________________________________

it goes. But the Department's mandate in setting quotas is to manage

great uncertainties in the data as best it can while taking the long view

of the state of the fishery and its users, whether fishers or conservation-

ists or anyone else. In that context, it seems fair to allow the Department

to bolster its decision to err on the safe side with its observation that, if

in fact its estimate proved to be low, it would at least have the benefit

of easing the transition to the new target F in 1996.

14

best scientific information really shows in the context of the statute

and regulations. A quota "based on" that information and designed to

"assure" that the target F was not exceeded while still providing the

fishing industry with an "optimum yield" could not properly be deter-

mined by a court in judicial review to be, as a matter of law, only one

that happened to provide a 59% chance of not exceeding F. The dis-

trict court was correct that the specific choice of an 81% probability

largely because it happened to correspond to one of the three recruit-

ment estimates presented to the committee--when those three esti-

mates were presented merely as indicators of the degree of

uncertainty in the data--was, in a sense, arbitrary. But, within the

terms of the statute and regulations, so would have been the choice

of a 59% probability. See Brief of Amici Curiae at 27-28.

When the regulations say that the Committee's recommendation

should "assure" that target F is not exceeded, they do not say what

probability of success (as derived from the best scientific information

available) constitutes "assurance" of success. As long as everyone

agrees, as everyone does, that the regulations do not require 100%

assurance, the choice of how much assurance to indulge in must be

a policy choice left to the reasonable exercise of the discretion of the

statutorily authorized decision-makers. And that choice inevitably

contains a degree of arbitrariness.

In the event, those decisionmakers seem to have allowed them-

selves to gravitate to a specific number--within the general range

suggested by their reasoning--largely because that number happened

to have been on the table as a standard deviation. If allowing them-

selves to gravitate in that way constituted arbitrariness in the selection

of the final number within the acceptable range of assurance, then the

Monitoring Committee indulged only in the kind of arbitrariness that

is inherent in the exercise of discretion amid uncertainty and not in

the kind of arbitrariness that the statute condemns when it exists in

tandem with capriciousness.

To dispute this conclusion, the Coalition cites a handful of cases

for the proposition that the APA requires a tighter connection than the

agency has articulated here between the specific regulation adopted

and the regulation's justifications. But evaluation of agency reasoning

is inevitably an ad hoc enterprise, and the Coalition's cited cases sim-

15

ply do not present factual situations similar enough to our case to sug-

gest that the agency failed to justify itself adequately. In fact, these

cases do little but reaffirm the requirement that the agency have

engaged in reasoned decision-making within the specific regulatory

context.

Thus, in Gas Appliance Mfrs. Ass'n v. Department of Energy, 998

F.2d 1041, 1047 (D.C. Cir. 1993), the court found a Department of

Energy cost-benefit analysis inadequate because the Department had

offered no information at all on how private companies might be able

to conform to the assumptions of the analysis, much less what the

costs of conforming might be or how those costs might compare to

the benefits to be had. In Parravano v. Babbitt , 837 F.Supp. 1034,

1046 (N.D. Cal. 1993), similarly, the court found no record basis at

all for the Secretary of Commerce's increase in a"salmon escapement

floor." In Chemical Mfrs. Ass'n v. Environmental Protection Agency,

28 F.3d 1259, 1265 (D.C. Cir. 1994), the court rejected the EPA's use

of a model when the agency failed to respond meaningfully to a chal-

lenger's "specific detailed evidence of a poor fit between the agency's

model and that party's reality"; but, of course, the Coalition in this

appeal does not even challenge the Council's model. Finally, in Motor

Vehicle Mfrs. Ass'n of the United States v. State Farm Mut. Auto. Ins.

Co., 463 U.S. 29, 43 (1983), the Supreme Court said that usually "an

agency rule would be arbitrary and capricious if the agency has relied

on factors which Congress has not intended it to consider, entirely

failed to consider an important aspect of the problem, offered an

explanation for its decision that runs counter to the evidence before

the agency, or is so implausible that it could not be ascribed to a dif-

ference in view or the product of agency expertise." The Court then

went on to invalidate the agency's action on the basis of its utter fail-

ure to consider obvious alternative actions. State Farm, 463 U.S. at

46-51, 54-57. And it reminded those who would challenge agency

action that often "the available data do not settle a regulatory issue,

and the agency must then exercise its judgment in moving from the

facts and probabilities on the record to a policy conclusion." State

Farm, 463 U.S. at 52. Far from supporting the Coalition's position,

State Farm offers a description of legitimate exercise of agency dis-

cretion that neatly suggests the Council's actions in this case. In sum,

these cases actually require an agency to do what the Council did here

--that is, reason its way to a decision without pretending that that

16

decision reflected some degree of rational perfection beyond what the

inherent uncertainties of the available data permitted. See Leather

Industries of America v. Environmental Protection Agency, 40 F.3d

392, 409 (D.C. Cir. 1994) ("Where the agency's line-drawing does

not appear irrational and the [challenger] has not shown that the con-

sequences of the line-drawing are in any respect dire . . . we will leave

that line-drawing to the agency's discretion."); see also 1 Kenneth C.

Davis and Richard J. Pierce, Jr., Administrative Law Treatise, § 7.5,

at 326-332 3d ed. (1994) (citing cases and arguing the futility of

courts' expecting agencies to reduce every exercise of discretion to

precise argument).

IV

Our independent review of the record satisfies us that the agency's

process of setting the 1994 quota was conducted in good faith, pur-

sued with a proper understanding of the law, based on the best scien-

tific information available, and adequately justified by the agency. If

there was an inevitable element of arbitrariness in the decision, there

was not the least caprice. The district court could not properly hold

that the quota was not based on the best scientific information avail-

able where, as we hold, the record demonstrates that the agency fully

understood the meaning of the data before it and chose to adopt a

quota that, on the basis of that information, offered a high probability

of meeting its regulatory mandate while also allowing the fishing

industry to increase its harvest for 1994 over that of 1993. Accord-

ingly, we will reverse the district court's judgment, uphold the

17

Department's 1994 commercial catch quota, and dismiss the Coali-

tion's action.2

REVERSED

_________________________________________________________________

2 We recognize, but need not further address, the practical problem of

adjusting the ongoing annual quota-setting process to accommodate our

decision upholding the Department's 1994 quota. The cyclical adminis-

trative process of course has had to continue while this litigation pro-

ceeded. The problem of adjusting it to successive decisions made in

judicial review originated with the district court's decision which, in late

1994, effectively increased the agency's 1994 quota by 3 million pounds.

About six weeks later, responding to a show cause order as to why the

court's order had not been implemented, the Department agreed to a con-

sent order to control the matters at issue pending this appeal. Under that

order, the Department was required to apply to 1995 the 3-million pound

quota increase originally ordered for 1994. In its brief to this court, the

Department indicated that were it to prevail, it would accommodate our

decision in its favor by rescinding the 3-million pound increase of the

1995 quota. With 1995 now past, that particular accommodation of

course is no longer possible. We need not attempt to direct just how our

invalidation of the judicially-ordered increase should now be worked into

the process. It suffices to reject, as we do, the Coalition's argument that

because the consent order was not appealed by the Secretary, the 3-

million pound increase it ordered cannot be rescinded. That argument is

without merit; the consent order specifically recited that it was entered

without prejudice to the Department's "pursuing an appeal from the

court's prior orders." Fishermen's Dock Cooperative, et al. v. Brown,

No. 2:94cv338 (E.D.Va. Dec. 19, 1994) (consent order). With that

decided, we may leave to the Department's properly exercised discretion

the matter of how the invalidated increase is to be accommodated in the

ongoing quota-setting process.

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