The Unexpected Impact of a Supreme Court Ruling on Fishing for Herrings

Thayne Muthler

On January 17, 2024, the Supreme Court heard oral arguments in two cases concerning the regulation of the fishing industry, which could have significant implications for federal regulatory practices.

The central issue in the cases of Loper Bright Enterprises v. Raimondo and Relentless Incorporated v. Department of Commerce revolves around whether the Secretary of Commerce, guided by the National Marine Fisheries Service and the Magnuson-Stevens Fishery Conservation and Management Act, has the authority to impose financial responsibilities on commercial fishermen for the cost of onboard observers required during specific fishing trips. In both lawsuits, the plaintiffs argue that the Department has exceeded its legal authority. The strength of their argument hinges on the level of deference the court is willing to grant to agency interpretations of the Magnuson-Stevens Act.

The plaintiffs are challenging a longstanding rule in federal administrative law, known as Chevron deference, which originated from a 1984 case. This principle dictates that when a federal law is ambiguous or unclear on certain regulatory matters, courts should defer to the reasonable interpretation of the law provided by the responsible agency.

During the proceedings, judges raised concerns about legal consistency, precedent, and the appropriate relationship between federal courts and government agencies. They expressed varied perspectives on the practical application of statutory law in real-world scenarios. Some questioned whether overturning Chevron would reopen past decisions for new disputes.

Justice Neil Gorsuch, known for his staunch criticism of the Chevron doctrine, expressed concerns about the potential lack of legal uniformity if agencies are given too much latitude, as changes in presidential administrations could lead to fluctuating policies. Conversely, more liberal justices such as Sonia Sotomayor and Elena Kagan voiced strong support for deferring to agency expertise, particularly in complex technical matters.


Who pays for fishing monitors?

The Magnuson-Stevens Act establishes eight regional councils for Fishery Management, tasked with overseeing fishing activities in federal waters extending beyond 3 nautical miles from the coast. In cases where fish populations are at risk of overfishing or are already depleted, these councils develop management plans aimed at curbing excessive fishing and replenishing fish stocks. The National Marine Fisheries Service evaluates these proposals and issues regulations for those deemed appropriate, ensuring their proper enforcement.

One such regulation mandates that fishing vessels must carry onboard monitors to oversee fishing activities. These monitors are trained professionals responsible for collecting data on the fish caught, discarded, or released back into the sea, as well as monitoring their impact on protected marine species like dolphins and sea turtles.

However, the law does not specify whether the fishing industry should bear the costs associated with these monitors. Generally, federal regulations operate on the principle that regulated companies should cover the expenses necessary to comply with regulatory requirements. Since 1990, the North Pacific Fishery Management Council has implemented a rule requiring the fishing industry to contribute to the costs of its fish observation program, which covers groundfish and halibut.


Targeting Chevron deference

Loper Bright and Relentless Inc., owners of fishing boats, are challenging the implementation of new regulations set to take effect in 2020. These rules stipulate that individuals engaged in capturing Atlantic herring must bear a portion of the costs associated with maintaining observers on their vessels. The objective is to ensure that observers are present on at least fifty percent of all fishing trips targeting this species. While the National Marine Fisheries Service provides some financial assistance for this purpose, fishermen are still required to contribute financially.

Businesses argue that having observers onboard could incur costs as high as $710 per day, potentially reducing owners' profits by approximately 20%. In the case of Relentless Inc., they have equipment onboard to freeze fish, allowing them to extend their time at sea. However, this necessitates the employment of additional herring observers for longer trips, resulting in days where no herring is caught yet the cost for observer services still applies. Despite their objections, federal appeals courts have consistently ruled in favor of the National Marine Fisheries Service.

The businesses raised several concerns regarding various aspects of the 2020 regulations. However, the Supreme Court chose to focus on a single issue from each appeal: whether to reverse or clarify the Chevron ruling, and whether courts should refrain from deferring to agency interpretations of their regulatory authority when the law does not explicitly address such powers.


Who decides what the law means?

In 1984, a significant legal precedent was established in a case concerning air pollution, leading to the introduction of what is now known as Chevron deference by the Supreme Court. This development arose from uncertainty surrounding the interpretation of the term "stationary source" in the Clean Air Act, particularly in the case of Chevron USA Inc. v. Natural Resources Defense Council Inc., which also involved the U.S. Environmental Protection Agency's explanation of this term.

The EPA's interpretation suggested that the term "source" could encompass a location containing multiple distinct points of air pollution emission. For example, a facility with several chimneys might be considered a single source under this interpretation, akin to enclosing all chimneys within an invisible "bubble."

This approach proved advantageous for businesses, allowing them to reduce pollution from certain components economically while maintaining emissions from other costly-to-repair components as long as the overall pollution remained within the "bubble" limit set by the Clean Air Act. However, environmental advocates contested this interpretation in court, arguing for separate regulation of each chimney or pollution source.

In its decision supporting the EPA's interpretation, the court established a two-step process for evaluating an agency's interpretation of laws within its jurisdiction. The first step involves determining whether Congress has explicitly addressed the issue in its legislation, with both the court and the agency bound by congressional instructions.

If Congress has not provided clear guidance, the second step requires the court to defer to the agency's interpretation as long as it appears reasonable. This recognition is based on the understanding that agency personnel possess considerable expertise in their respective fields. Justice John Paul Stevens reportedly remarked to his colleagues that when he feels uncertain, he tends to defer to the agency's decision.