United States District Court, D. Alaska
MOTHERSHIP FLEET COOPERATIVE, a Washington nonprofit corporation, on its own behalf and on behalf of its members; JAMES MIZE, in his capacity as designated representative of Mothership Fleet Cooperative for purposes of 50 C.F.R. § 679.66a1iii; MEDDAR CORPORATION, a Washington corporation; and F/V WESTERN DAWN L.L.C., a Washington limited liability company, Plaintiffs,
v.
WILBUR ROSS, JR., Secretary of Commerce for the United States; NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION; and NATIONAL MARINE FISHERIES SERVICE, Defendants.
ORDER ON DEFENDANTS' MOTION TO DISMISS (DKT.
18)
TIMOTHY M. BURGESS UNITED STATES DISTRICT JUDGE.
I.
INTRODUCTION
The
matter comes before the Court on Defendants Wilbur Ross, Jr.,
National Oceanic and Atmospheric Administration
(“NOAA”), and National Marine Fisheries
Service's (“NMFS”) Motion to Dismiss and
Memorandum in Support (“Motion to
Dismiss”).[1] Defendants move to Dismiss the
Complaint[2] by Plaintiffs Mothership Fleet
Cooperative, James Mize, Meddar Corporation, and F/V Western
Dawn L.L.C. on the basis that Plaintiffs' claims are moot
and time- barred.[3] The Motion to Dismiss was fully
briefed.[4] Plaintiffs requested oral argument and a
hearing was held on November 13, 2019.[5] Upon
consideration of the Parties' briefings, oral arguments,
and court records, and for the reasons stated below,
Defendants' Motion to Dismiss at docket 18 is
GRANTED.
II.
BACKGROUND
Plaintiffs
represent or own catcher vessels eligible to harvest pollock
for processing by motherships in an offshore component of the
pollock fishery (“mothership sector”) of the
American Fisheries Act (“AFA”).[6] Defendants are
federal agents and agencies tasked with overseeing and
regulating the nation's fisheries.[7]
A.
Statutory Background
In
1976, Congress enacted the Magnuson-Stevens Fishery
Conservation and Management Act (“MSA”), 16
U.S.C. §§ 1801-1884, “to take immediate
action to conserve and manage the fishery resources found off
the coasts of the United States, ” among other
objectives.[8] In 2007, Congress amended the MSA to, in
part, provide that the Secretary of Commerce “is
authorized and shall collect a fee to recover the actual
costs directly related to the management and enforcement of
any limited access privilege program.”[9] A “limited
access privilege” was then defined as “a Federal
permit, issued as part of a limited access system under
section 1853a of this title to harvest a quantity of fish
expressed by unit or units representing a portion of the
total allowable catch of the fishery that may be received or
held for exclusive use by a person.”[10]
On
January 5, 2016, Defendant NMFS published a final rule in the
Federal Register regarding the cost recovery authority under
the MSA (“2016 Final Rule”).[11] The 2016
Final Rule designated the AFA pollock fishery a limited
access privilege program. As such, the mothership sector of
the pollock fishery under the AFA-i.e.
Plaintiffs-was held responsible for the payment of annual MSA
recovery fees.[12]
B.
Factual and Procedural Background
Plaintiffs
allege that on or about November 27, 2018, Plaintiff James
Mize received, in his capacity as the designated
representative of the Mothership Fleet Cooperative, a 2018
AFA Program Fee Liability Summary directed to the Mothership
Cooperative.[13] Plaintiffs further allege that, on
November 30, 2018, Defendants published a notice in the
Federal Register with the 2018 cost recovery fee amount for
the mothership sector but failed to disclose all information
and calculations Defendants were required to perform to
determine that fee amount.[14]
On
December 26, 2018, Plaintiffs filed the instant Complaint
challenging Defendants' authority to collect cost
recovery fees from the mothership sector.[15] Plaintiffs
raise two claims for relief, as follows:
1. Defendants do not have the authority to collect cost
recovery fees from Plaintiffs because the mothership sector
is not a limited access privilege program;[16] and
2. Even if Defendants were authorized to collect the fees,
they did not provide any basis supporting the amount of the
cost recovery fee assessed for 2018.[17]
Based
on these two claims, Plaintiffs request that the Court issue
a judicial declaration that the mothership sector of the AFA
pollock fishery is not a limited access privilege program and
the MSA's cost recovery regulations are inapplicable to
the mothership sector.[18] Plaintiffs further seek a judicial
declaration setting aside Defendants' cost recovery
regulations to the extent they apply to the mothership sector
and requiring Defendants to refund the 2018 fee as well as
all cost recovery fees previously collected from
Plaintiffs.[19] Finally, Plaintiffs request a court
order awarding them costs of suit, other expenses,
attorneys' fees, and other and further relief as the
Court may deem necessary.[20]
On June
20, 2019, Defendants filed the Motion to
Dismiss.[21] Defendants argue that Plaintiffs'
claims with respect to the 2018 cost recovery fee are moot
because Defendants refunded the 2018 fee and sent Plaintiffs
a letter committing to “permanently suspend collection
of cost recovery fees from the Mothership Fleet Cooperative
under the current regulations.”[22] As for
Plaintiffs' request for the refund of prior cost recovery
fees, Defendants argue that Plaintiffs failed to sufficiently
plead a claim for such fees and, in any event, the claim is
time-barred.[23]Accordingly, Defendants conclude that the
Complaint should be dismissed under Federal Rules of Civil
Procedure 12(b)(1) and 12(b)(6).[24]
Plaintiffs
filed their Memorandum in Opposition to Defendants'
Motion to Dismiss (“Opposition”) on July 18,
2019.[25] Plaintiffs acknowledge that Defendants
refunded the 2018 fee and issued the letter permanently
suspending further cost recovery fees.[26] However,
Plaintiffs argue that Defendants' voluntary cessation
does not render the Complaint moot because Defendants'
actions “do not afford the complete relief
Plaintiffs are entitled to in this action . . .
.”[27]Plaintiffs specifically argue that
Defendants' letter at docket 18-2 “is not the
equivalent of a judicial decree from this Court declaring the
2016 Rule unlawful and setting it aside as applied to the
mothership sector.”[28] Plaintiffs also argue that,
because their challenge to the 2016 Final Rule is timely and
meritorious, the Court has the authority to grant Plaintiffs
complete relief, including ordering the refund of monies
wrongfully collected pursuant to the allegedly invalid 2016
Rule.[29]Plaintiffs further argue that, to the
extent their claim for the 2016 and 2017 cost recovery fee
refund has not been adequately pleaded, they should be
granted leave to amend the Complaint.[30] Finally,
Plaintiffs contend that their attorneys' fees, expenses,
and costs of suit remain a “present
controversy.”[31] In conclusion, Plaintiffs believe that
the Motion to Dismiss should be denied in its entirety
because there is additional relief the Court may grant
Plaintiffs, notwithstanding Defendants' voluntary
actions.
On
August 6, 2019, Defendants filed their Reply in Support of
Their Motion to Dismiss (“Reply”).[32] Defendants
reiterate that their voluntary refund of the 2018 cost
recovery fee and commitment to suspend collection of further
cost recovery fees from Plaintiffs under the 2016 Final Rule
moot the instant action.[33] Defendants also reallege that
Plaintiffs' claims and requested relief for the cost
recovery fees paid in 2016 and 2017 are time-barred because
they were paid under separate federal actions subject to
separate judicial review.[34] Defendants further argue that
Plaintiffs should not be granted leave to amend the Complaint
to plead additional facts concerning the 2016 and 2017 cost
recovery fees because they are time-barred and amendment
would be futile.[35] As for Plaintiffs' requests for
attorneys' fees, Defendants contend that the Equal Access
to Justice Act (“EAJA”) and Federal Rule of Civil
Procedure 54 allow parties to seek fees within a certain time
after final judgment-which has now passed.[36] For those
reasons, Defendants believe the case should be
dismissed.[37]
III.
LEGAL STANDARD
A.
Federal Rule of Civil Procedure 12(b)(1)
Defendants
have moved to dismiss the Complaint, in part, because they
argue the Court lacks subject matter jurisdiction under
Federal Rule of Civil Procedure 12(b)(1). “[I]n
reviewing a Rule 12(b)(1) motion to dismiss for lack of
jurisdiction, [courts] take the allegations in the
plaintiff's complaint as true.”[38] “Once
challenged, the party asserting subject matter jurisdiction
has the burden of proving its existence.”[39] “A
federal court is presumed to lack jurisdiction in a
particular case unless the contrary affirmatively
appears.”[40] Moreover, a Rule 12(b)(1) jurisdictional
attack may be facial or factual, depending on whether the
challenger asserts that the complaint, on its face, is
insufficient to invoke federal jurisdiction or whether the
challenger disputes the truth of the allegations
themselves.[41] When faced with a challenge to its
subject matter jurisdiction under Rule 12(b)(1), the court
must resolve that issue before determining whether the
complaint states a claim under Rule 12(b)(6).[42]
B.
Federal Rule of Civil Procedure 12(b)(6).
Defendants
also move under Federal Rule of Civil Procedure 12(b)(6) to
dismiss Plaintiffs' claims for failure to state a claim
upon which relief can be granted.[43] In order to survive a
motion to dismiss, a complaint must set forth “a short
and plain statement of the claim showing that the pleader is
entitled to relief, ”[44] and “contain sufficient
factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its
face.'”[45] In ruling on a 12(b)(6) motion, the
Court must “accept all factual allegations of the
complaint as true and draw all reasonable inferences in favor
of the nonmoving party.”[46]
In
determining whether a complaint pleads sufficient facts to
cross “the line between possibility and plausibility,
” “[t]hreadbare recitals of the elements of a
cause of action” and “conclusory
statements” do not suffice.[47] However, a plaintiff need
not plead “all facts necessary to carry” his or
her burden.[48] “Determining whether a complaint
states a plausible claim for relief . . . [is] a
context-specific task that requires the reviewing court to
draw on its judicial experience and common
sense.”[49] So long as plaintiffs meet this standard
of plausibility, their claim survives a 12(b)(6) motion even
if defendants present a similarly plausible description of
the disputed events.[50] “A dismissal for failure to state
a claim is proper only if it appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim
which would entitle him to relief.”[51]
Generally,
the court should not consider materials outside of the
pleadings when ruling on a motion to dismiss for failure to
state a claim.[52] Courts may consider materials submitted
with or relied on by the pleading at issue where the
complaint “necessarily relies” on those documents
and their authenticity is not disputed.[53]
IV.
ANALYSIS
Plaintiffs
raise two claims for relief: (1) Defendants do not have the
authority to collect cost recovery fees from Plaintiffs
because the mothership sector is not a limited access
privilege program; and (2) even if Defendants were authorized
to collect the fees, they did not provide any basis
supporting the amount of the cost recovery fee assessed for
2018.[54] Plaintiffs argue that in either
circumstance, Defendants' collection of the 2018 cost
recovery fee violates the MSA and the Administrative
Procedure Act (“APA”), is arbitrary, capricious,
an abuse of discretion, and not in accordance with the law,
and is in excess of statutory jurisdiction, authority or
limitations, and short of statutory right.[55] As such
Plaintiffs seek declaratory and injunctive relief, as well as
the refund of any and all previously collected cost recovery
fees and costs of suit and attorneys' fees.[56]
The
Court will address whether dismissal is proper for each of
Plaintiffs' arguments in turn.
A.
Whether Plaintiffs' Challenge of the 2016 Final Rule and
2018 Cost Recovery Fee Is Moot Because Defendants Returned
the 2018 Cost Recovery Fee and Committed to Suspend
Collection of Future Recovery Fees
Defendants
have moved to dismiss the Complaint, in part, because they
allege this Court lacks jurisdiction since Plaintiffs'
claims were rendered moot by Defendants' refund of the
2018 cost recovery fee and commitment to permanently suspend
collection of cost recovery fees from the mothership
sector.[57] Plaintiffs oppose by arguing that
Defendants have not met their heavy burden and that
Defendants' voluntary actions leave further relief for
the Court to grant.[58]
Article
III of the Constitution limits the jurisdiction of federal
courts to “Cases” and
“'Controversies.”[59] To satisfy the
case-and-controversy requirement, “an actual, ongoing
controversy [must] exist at all stages of federal court
proceedings.”[60] Without a present controversy as to
which effective relief can be granted, a case becomes moot
and the court is divested of jurisdiction.[61]
There
are exceptions to the mootness doctrine.[62] A
defendant's “voluntary cessation of the challenged
conduct does not ordinarily render a case moot because
dismissal for mootness would permit a resumption of the
challenged conduct as soon as the case is
dismissed.”[63] However, voluntary cessation may
nonetheless yield mootness if “subsequent events made
it absolutely clear that the allegedly wrongful behavior
could not reasonably be expected to
recur.”[64] A government entity is presumed to act
in good faith when it changes policies and asserts mootness
based on such a change.[65] It is the government's burden to
show that the challenged conduct “cannot reasonably be
expected to start up again.”[66]
In
Rosebrock v. Mathis, the Ninth Circuit considered
five factors to determine whether a voluntary policy change,
though not rooted in statute, ordinance, or regulation, may
moot a case.[67]The Court of Appeals “indicated
that mootness is more likely if (1) the policy change is
evidenced by language that is broad in scope and unequivocal
in tone; (2) the policy change fully addresses all the
objectionable measures that the Government officials took
against the plaintiffs in the case; (3) the case in question
was the catalyst for the agency's adoption of the new
policy; (4) the policy has been in place for a long time when
we consider mootness; and (5) since the policy's
implementation the agency's officials have not engaged in
conduct similar to that challenged by the
plaintiff.”[68] Ultimately, the question is whether the
new policy can be easily abandoned or altered in the future
and whether the government has met its heavy burden of
proof.[69]
Here,
the Court finds that Defendants' actions and repeated,
express commitments to the new policy render the
Plaintiffs' claims moot. At oral argument, Plaintiffs
referenced additional Ninth Circuit authority[70] and took the
position that there was no evidence on the record to show how
Defendants reached their decision to cease collection from
the mothership sector or whether any procedural safeguards
would protect their decision from reversal or abandonment.
The Court disagrees.
First,
the May 28, 2019 letter memorializing Defendants' return
of the 2018 cost recovery fees collected from Plaintiffs and
Defendants' commitment to “permanently suspend
collection of cost recovery fees” from Plaintiff
clearly stated a policy change using language broad in scope
and unequivocal in tone.[71] In addition, Defendants restate in
the Motion to Dismiss that they have voluntarily
“commit[ted] to permanently cease cost recovery efforts
under the 2016 Rule as applied to the mothership
sector.”[72] Then, in Defendants' Reply, they
recognize that this Court, in CP Salmon v. Ross,
[73]
had found the 2016 Final Rule invalid with respect to the
catcher/processor sector and Defendants acknowledge that the
mothership sector is similarly situated to the
catcher/processor sector.[74] Moreover, in light of this
Court's precedent and its application to the mothership
sector, Defendants assert that the “annual fee
collection from the mothership sector cannot reasonably be
expected to recur.”[75] Finally, at oral argument,
Defendants were questioned by the Court and in response made
assurances that any reversal of the letter's commitment
would be “very, very, very unlikely” in light of
their prior statements on the record. The repeated emphasis
of Defendants' policy change throughout this litigation
makes it “absolutely clear that the allegedly wrongful
behavior could not reasonably be expected to
recur.”[76]
Second,
the May 28, 2019 letter addressed the challenged conduct and
offered relief equivalent to the declaratory and injunctive
relief Plaintiffs seek in their Complaint.[77] Plaintiffs
seek a court order declaring the mothership sector is not a
limited access privilege program, setting aside the 2016
Final Rule as applied to the mothership sector, and refunding
the cost recovery fees collected under the 2016 Final
Rule.[78] Defendants refunded the 2018 fee,
committed to permanently suspending collection of future
fees, and explicitly recognized that Plaintiffs are
“similarly situated to the plaintiffs in CP Salmon
v. Ross, No. 3:16-cv-00031-TMB” in that Plaintiffs
here were not issued a “permit” under the
Court's CP Salmon ruling.[79] On this
point, Plaintiffs contend that the letter “is simply
not the equivalent of a judicial
decree.”[80] However, Defendants' voluntary
refund and letter effectuated the same desired results as
would a judicial decree: Plaintiffs recovered their 2018
payment and the 2016 Final Rule will no longer be applied to
the mothership sector. Consequently, Defendants' actions
afforded Plaintiffs the requested relief without a judicial
declaration.
Third,
Defendants also acknowledged at oral argument that this case
was, in part, the catalyst for the policy change. The refund
and May 28, 2019 letter were issued to Plaintiffs after their
Complaint was filed and served as the basis for
Defendants' Motion to Dismiss. Furthermore, Defendants
voluntarily dismissed their appeal of this Court's CP
Salmon v. Ross decision.[81] The record indicates that
Defendants adopted the new policy as a result of the present
litigation and the Court's decision in CP Salmon v.
Ross.
Finally,
the short time frame since Defendants' policy changed may
weigh against mootness under the fourth and fifth
Rosebrock factors. However, Defendants represented
at oral argument that they had already drafted the 2019 fee
notice and it does not reference the mothership
sector.[82] Defendants argued that excluding
Plaintiffs from the 2019 fee collection is action consistent
with their commitment to the change in policy. Again,
Defendants' policy change remains clear and unequivocal.
Defendants will not collect future cost recovery fees from
Plaintiffs under the 2016 Final Rule.
In
considering the Rosebrock factors, the Court finds
that Defendants have met their burden and Plaintiffs'
request for declaratory and injunctive relief is
moot.[83] It is not reasonably likely that
Defendants will attempt again to collect a cost recovery fee
under 2016 Final Rule from Plaintiffs.
Furthermore,
Defendants, as government entities, are presumed to act in
good faith. In the event Defendants modify their stance on
the 2016 Final Rule as applied to Plaintiffs, Plaintiffs will
be well-armed by this record in pursuit of a renewed
action.[84]
B.
Whether Plaintiffs' Attempts to Recover Past Fees
Collected Under the 2016 Final Rule and Claims for Costs of
Suit and Attorneys' Fees Present a Live Issue to Satisfy
the Case- and-Controversy Requirement
Because
Defendants challenge the Court's jurisdiction, it is now
Plaintiffs' burden to assert jurisdiction
exists.[85] Plaintiffs argue that Defendants'
voluntary cessation does not render their challenge moot
because Defendants “do not afford the complete
relief Plaintiffs are entitled to in this
action.”[86] Specifically, Plaintiffs argue that the
matter of past fees collected under the 2016 Final Rule is
still at issue and Plaintiffs' request for attorneys'
fees remains to be adjudicated.[87] Defendants contend that
Plaintiffs failed to plead sufficient facts to challenge the
past fees-i.e. the cost recovery fees collected in
2016 and 2017-but amendment is futile because any such
challenge is now time-barred.[88] Defendants also contend that
Plaintiffs' claims for attorneys' fees and costs do
not prevent dismissal for mootness.[89]
1.
Plaintiffs' Request for Cost Recovery Fees Collected
in 2016 and 2017 Is Time-Barred
Plaintiffs
argue that because the 2016 Final Rule was inapplicable to
the mothership sector, Defendants “have no lawful basis
to retain any of the cost recovery fees they
previously collected from Plaintiffs, no matter when the
collection of such fees occurred.”[90] Defendants
assert that Plaintiffs did not plead sufficient facts related
to the 2016 and 2017 cost recovery fees.[91] Defendants
further argue that amendment to include more allegations
related to the 2016 and 2017 fees would be futile because
those cost recovery fees were paid under separately
reviewable federal actions, and the time to challenge those
payments has passed.[92]
The MSA
permits judicial review of agency actions “if a
petition for such review is filed within 30 days after the
date on which the regulations are promulgated or the action
is published in the Federal Register.”[93] An
“action” is defined as “actions that are
taken by the Secretary under regulations which implement a
fishery management plan.”[94] “The conjunctive
‘and' . . . indicates that both regulations
and actions are reviewable in a timely filed
petition.”[95] As such, under 16 U.S.C. § 1855(f),
a plaintiff's suit filed within 30 days of the
publication of an “action” is timely to challenge
both the action and underlying regulation, even if the
regulation is decades old.[96]
In this
case, Plaintiffs' argument that §1855(f) is silent
on “actions not challenged within 30
days” is not persuasive.[97] Plaintiffs construe the APA
and § 1855(f) to leave open the possibility of
challenging actions after 30 days if the underlying
regulation is subsequently vacated.[98] Their reading of §
1855(f) is counterintuitive in light of the explicit 30-day
deadline. There is no dispute that the publication of a cost
recovery fee constitutes an “action” and that the
2016 Final Rule is a regulation under which the fees are
collected.[99] Therefore, Plaintiffs filed a timely
challenge to the 2018 cost recovery fee and the 2016
Final Rule.[100]
However,
if the publication of the 2018 cost recovery fee is by itself
an action, then by that logic, the publications of the 2016
and 2017 cost recovery fees are separate actions independent
of each other and of the 2018 cost recovery fee. Plaintiffs
could have brought this action within 30 days of the
publication of the 2016 cost recovery fee or within 30 days
of the publication of the 2017 cost recovery fee. However,
Plaintiffs did not do so and the 30-day statute of
limitations elapsed. Because any challenges to the 2016 and
2017 fees are now time-barred, it would be futile to allow
Plaintiffs to amend the Complaint. Therefore, Plaintiffs'
claims to the past collected fees do not present a live
controversy to establish jurisdiction in this Court.
2.
Plaintiffs' Request for Attorneys' Fees Does Not
Circumvent Mootness
Plaintiffs
also argue that their request for an award of attorneys'
fees, expenses, and costs pursuant to EAJA constitutes a
still-pending issue that Defendants' voluntary cessation
did not remedy.[101] Defendants rebut by stating language
from EAJA and Federal Rule of Civil Procedure 54(d) that set
...