FOR PUBLICATION



### UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

P A C I F I C D AW

N LLC; J E S S I E ’ S I L W A C O F I S H C O MP A

N Y , Plaintiffs-Appellants,

and

O C EA N G O L D S EAF O O D S , I N C .; C H E L L I S S A LLC, Plaintiffs,

v.

P E N N Y P R I TZ K E R , Secretary of the United States Departm ent of Comm erce; N A T I ON

AL O C EA

N I C
A ND A T M O S P H E R

I C A D MI N I S T R A T I ON ; N AT I ON

AL M AR I NE F I S H E R

I E S S E R VI C E , Defendants-Appellees,

M I D W A T E R T R

AW L E R S C O O P E R A T IVE ; T R

I D E N T S EAF O O D S G R

O UP ; D UL C I C H , I N C ., DBA Pacific Seafood Group; A RC T I C S T O R M M A N A GE ME N T G RO UP , L L C; E N VI RONME

N TAL D E F E

N S E F U ND , Intervenor-DefendantsAppellees. No. 14-15224

D.C. No. 3:13-cv-01419-TEH

OPINIONP A C I F I C D AW N V

. P R I TZ K E R 2

Appeal from

the United States District Court for the Northern District of California Thelton E. Henderson, Senior District Judge, Presiding

Argued and Subm itted May 10, 2016 San Francisco, California

Filed August 3, 2016

Before: Sandra S. Ikuta, and Paul J. W atford, Circuit Judges, and Derrick Kahala W atson, * District Judge.

Opinion by Judge Ikuta

SUMMARY * *

Magnuson-Fishery Conservation and Management Act

The panel affirm ed the district court’s summ ary judgm ent in favor of the National Marine F isheries Service and intervenors in an action brought by a fish harvester and a fish
processor, who are subject to a fishery m anagem ent program that lim its their share of the total allowable catch of Pacific whiti n g, challenging a 2013 decision by the Service to calculate the am ount of their ini tial share based on their

* The Honorable Derrick Kah a l a W a t so n, United States District Judge for the District of Hawaii, sitting by designation.

** This sum

m ary constitutes no p art o f th e o p i n i on of the court. It h as been prepared by court staff for the convenience of the reader.P A C I F I C D AW N V

. P R I TZ K E R 3

participation in the fishery prior to 2003 and 2004, respectively.

The p anel held that the Service’s 2013 deci s i o n was not arbitrary or capricious because the Service considered the required f

actors and m ade a reasonable decisi on t o u se the 2003 and 2004 dates.

The panel rejected plaintiffs’ claim th a t the S ervice’s 2013 decision to select a qualifying period ending in 2003 for h arvesters and 2004 for processors was arbitrary and capricious because it failed to t ake into account “present participa t i o n ” in the fishery as required by 16 U.S.C. § 1853(b)(6)(A) of the Magnuson-Stevens Conservation and Managem ent Act. T he panel held that the record m akes clear th e S erv ice c o n sid ered “p resen t p articipation,” but reaso n ab ly gave it less weight than other factors.

The panel also rejected p laintiffs’ claim that the S ervice’s 2013 d ecision was arbit r ary and capricious because it failed
to take into account dependence upon the fishery as required by § § 1853(b)(6)(B) and 1853a(c)(5)(A) of the MagnusonStevens Act.P A C I F I C D AW N V

. P R I TZ K E R 4

C OUNSEL

Tom Wyrwich (a r g ued), Davis Wright Trem aine LLP, Seattle, W ashington; Jam es P. W alsh and Gwe n L. Fanger, Davis Wright Trem aine L LP, San Francisco, Califo rnia; for Plaintiffs-Appellants.

Maggie B

. Sm ith (argued) and Bridget McNeil, Attorneys; Sam Hirsh, Acting A ssistant Attorney General; Environm ent and Natural Resources Division, United States Departm ent o f Justice, W ashington, D.C.; C hris McNulty, Mariam McCall, and R yan Couc h
, Office of the G eneral Counsel, N ational O cean ic & A tm o sp h eric A dm in istrat i o n , S e att l e , W a s h i n g t o n ; for Defendants-Appellees.

J

. Ti mothy Hobbs (argued) and Michael F. Scanlon, K&L Gates LLP, Seattle, W ashington, f or I nterv en o rs-D efendantsAppellees Midwater Trawlers Cooperative, Trident Seafoods Group, D ulcich, Inc., DBA Pacific Seafood Group and Arctic Storm Managem ent Group, LLC.

Mo n i ca Goldberg (argued), Environm ental Defense Fund, W ashington, D.C., for Intervenor-Defendant-Appe l lee Environm ental Defense Fund.

OPINION

IKUTA, Circuit Judge:

Pacific Dawn LLC and Jessie’s Ilwaco Fish Co., a fish harvester and a fish processor, are subject to a fishery

m anagem ent program th at lim its their share o f the total allowable catch of Pacific whiting. They challenge a decisionP A C I F I C D AW N V

. P R I TZ K E R 5

b y the N ational Marine Fisheries S erv ice (N MF S ) t o calculate
th e am ount of their initial share based on their participat i o n in the fishery prior to 2003 and 2004, respectively, rather than on their much greater participation in the years imm ediately b ef o re 2 0 10, when the regulations im plem enting th is p ro g ram

were issued. Because N MFS considered the required factors and m ade a reasonab l e de cision to use the 2003 and 2004 dates, its decision w as not arb i trary or capricious, and we affirm

.

I

The Magnuson-Stevens Fishery Conservation and Managem ent Act (M a g nuson-Stevens Act) created eight Regional F ishery Managem ent Councils. Each council m ust

cre a te a fishery m anagem ent plan, which m ust m eet a long list of statutory requirem ents. 16 U.S.C. § 1 853(a). Am ong other things, the plan m

ust be “consistent wi th the national standards” for fishery c o nservation and m anagem ent. Id. § 1853(a)(1)(C). Th e National Standards are com prised o f
ten broad guidelines, i ncluding the requirem ents that the

m anagem ent m easures “shall, where practicable, consider efficiency in the utilization of f ishery resources,” and “shall, where practicable, m ini m i ze costs and avoid unnecessary duplication.” Id. § 1851(5), (7).

Beginning in 1990, the councils were given the discretion
to use “a lim ited access syst e m for the fishery in order to achieve o ptimum yield.” Id. § 1853(b)(6). A lim ited access system is d efi ne d as “a system that lim its participation in a fishery to th o se satisfying certain eligibility criteria o r requi r e me n ts contained in a f ishery m anagem ent plan o r associated regulation.” Id. § 1802(27). It lim its the num ber of individuals who can enter and participate in the fisheries,P A C I F I C D AW N V

. P R I TZ K E R 6

and gives these favored participants “privileges to harvest a specific quantity of fish.” Pac. Coast Fed’n of Fishermen’s Ass’ns v. Blank
, 693 F.3d 1084, 1087 (9th Ci r

. 2012). In establishing a lim ited access system , councils m ust take into
account “present participation in the fi s h ery,” id. § 1853(b)(6)(A), “h i st o rical fishing practices in, and dependence on, the f

ishery,” id

. § 1 8 5 3 (b ) (6 )(B ), am o n g other considerations. 1

1 16 U.S.C § 1853(b)(6) provides:

Any fishery m anagem ent plan which is prepared by any Council
, or by the Secretary, with r espect to any fishery, m ay: . . .
(6) establish a lim ited access system for the f ish e ry i n ord e r to achieve optim

um yield if, in developing such system , the Council and the Secretary t ake into
account—

(A) present participation in the fishery;

(B) histori c a l f

ishing practices in, and dependence on, the fishery;

(C) the econom ics of the fishery;

(D) the capability of f

ishing vessels u sed in the fishery to engage in other fisheries;

(E) the cu ltural and social fram ework relevant t o the fishery and any affected fishing com m unities;

(F) the fair and equitable distributi o n of access privileges in the fishery; and

(G) any other relevant considerations.P A C I F I C D AW N V

. P R I TZ K E R 7

In 2007, Congress reauthorized the M agnuson-Stevens Act with am en dm ents th at, am o ng other things, were intended
to encourage m arket-based fishery managem ent through “lim ited access privilege program s.” Pac. Co a s t Fed’n of Fishermen’s A s s ’ ns , 6 93 F.3d at 1 088. Such a program ( wh i ch m ust be part of a lim ited access system ) allows a fishery participant “to harvest a certain portion o f the total catch allowed for a p articular species.” Id. O ne way t o distribute the allocated portion is through “individual fishing quota” (IFQ), or quota shares. 16 U.S. C. § 1802(23), (26). 2 In developing su c h a program , a council m ust consider “current and historical harvests,” as w ell as “investm ents in, and de p e n d e n ce on, the fishery,” am o ng other things. Id. § 1853a(c)(5)(A). 3

2 16 U.S.C. § 1802(23) provides:

Th e term “individual fishing q uota” m eans a Federa l
perm it under a lim ited access system to harvest a quantity of fi sh, expressed by a unit or units representing a percentage of the total allowable catch o f

a fishery that m ay be received o r held for exclusive u se by a person. S uch term does not include comm un i ty developm ent quotas as described i n section 1855(i) o f this title.

Section 1802(26) provides:

The term “lim ited access privilege”

. . . m eans a Federal
perm it, issued a s p art o f a lim ited access system

. . . [and] includes an individual fishing quota.

3 16 U.S.C. § 1853a(c)(5) states, in pertinent part:

In developing a l im ited access privilege p rogram to harvest fish a Council o r the Secretary shall– (A) establish procedures to ensure fair and equitable initialP A C I F I C D AW N V

. P R I TZ K E R 8

Once a regional council h as prepared a fi s hery

m anagem ent p lan for each fishery within its jurisdiction that requires such a plan, it subm its the plan (and any proposed regulations) to the Secretary of Comm erce, id. § 1852(h)(1), who has delegated her responsibilities under the A ct to the National Marine Fisheries Service (NMFS). 4 The Secretary

m ust review the plan to determ ine whether i t i s c onsistent with the National Standards and o ther statutory requirem ents, id. § 1854(a)(1)(A), as well as publish notice of proposed rulem aking in the Federal Register. This publication starts a public notice and comm ent period. Id. § 1854(a)(1)(B). If the Secretary approves the p lan, th e Secretary m u st review
th e c o uncil’s proposed regulations for consistency with the fishery m anagem ent plan and o ther law. Id. § 1854(b). The Secretary mu st p u

blish the regulations as well for public notice and comm ent. Id.

One of the eight r eg i on al councils is the Pacific Fishery Managem ent Council (Pacific Council), which consists o f California, Oregon, W ashing ton, and Idaho and covers the

allocations, including consideration of–

(i) current and historical harvests;

(ii) em p loym ent in t

he harvesting and p rocessing sectors;

(iii) investm ents in, and dependence upon, the fishery; and

(iv) the current and historical participation of fishing

comm unities.

4 NMFS is housed in t he N a t i o n a l Oceanic and Atm ospheric Adm inistration in the Departm ent of Comm erce.P A C I F I C D AW N V

. P R I TZ K E R 9

fisheries seaward of those states. Id. § 1852(a)(1)(F). One o f those fisheries is the Pacific g r o undfish fishery, which “extends 200 m iles into the P acific O cean, along the coasts o f California, Oregon, and W ashington, and includes m ore than 90 species of fish that dwell n ear the sea floor.” Pac. Coast Fed’n of Fishermen’s Ass’ns
, 693 F.3d at 1088. T he Pacific Council first developed the Pacific Coast Groundfish Fishery Managem ent P lan (Groundfish Managem ent Plan) in 1982. It c ov e rs Pacific whiting, the species of fish at issue here,

am ong other groundfis h
, and contains various goals and objectives. One of those objectives is Objective 14, which
states that when the Council is “co nsidering alternative

m anagem ent m easures to resolve an issue,” the Council should “choose the m easure that best accom plishes the change with th e l e a st disruption of current dom estic fishing practices.”

Prior to 2004, the Pacific Council established a yearly harvest lim it for whitin g and lim ited the num ber of fishing vessels by requiring ve s se l s to h ave a lim ited entry perm it, and parceling o ut only a lim ited num ber of such perm its. In add i t i o n , the Council established a short season for whiting and allowed p e rm itted vessels to harvest whiting only from the tim e the season o pened until the tim e the catch lim it was reached. This managem ent structure led to a so-called “derby-style fishery” and “a race for fish,” m eaning that the l im ited num

ber of perm it holders engaged in an intens e, concentrated effort at the beginning o f the season because o f the potentially short window.

Because this approach did not m eet the Pacific Council’s

m anagem ent goals, it b egan contem plating an am endm ent to the Groundfish Managem ent Plan in 2003. In January 2004, NMFS p ublished a notice of proposed rulem aking, whichP A C I F I C D AW N V

. P R I TZ K E R 10

stated that the Pacific Council was considering im plem enting

a l im ited access privilege program in the form of a “ tr awl rationalizati o n program ” for the Pacific groundfish fishery. Advance Notice of Proposed Rulem aking Regarding a Trawl Individual Quota Program and to Establish a Con trol Date, 6 9 Fe d

. Reg. 1563-01 (Jan. 9, 2004). For the shorebase d trawl sector (which consists o f vessels that catch and deliver
t o processors on land), the trawl rationalization pro g r a m would consist of a trawl IFQ p rogram , which is “a quota system where each quota share could be harvested at any tim e during an open season.” Id. at 156 3

. Pa rticipants in the fishery ( i

. e

. , those who already had a lim ited entry p erm it allowi ng them to fish) would need to o btain a quota share
perm it as well in order to receive a share of the allo wable catch. 16 U.S.C. §§ 1853a, 1 8 0 2(26). The Pacific Council believed this trawl rationalization p rogram would cau s e participants in the fishery to spread their fishing throughout the season and avoid the race for fish.

The p roposed rulem aking also explained that the Pacific Council w as considering basing the initial allocation of quota shar e s o n participants’ catch history in the fishery, m eaning that participants that had a larger catch history would be allocated a larger quota sha r e. Due to concerns that the

an n o uncem ent of this new program would create a perverse in centive by encouraging p articipants to increase their f ish in g

e ffo rts in o rder to q

ualify for a larger initial quota s har e, NMFS announ c e d “a control date of Novem ber 6
, 2003,” which would apply to “[p]e r s o ns p otentially eligible for [individual quota] shares,” including “vessel owners, p erm it
owners, vessel operators, and crew.” 69 Fed. Reg. 1563-01, 1563. A “control date announces to the public that the Pacific Council m ay d ecide not to count activities occurring after the

con tr ol date toward determ ining a person’s qualification forP A C I F I C D AW N V

. P R I TZ K E R 11

an initial allocation or determ ining the am ount of init i al allocation o f quota shares.” Id

. In 2005, NMFS clarified that
processors (in addition to harvesters) could also be eligible to obtain quota shares. Trawl Individual Quot a Pr o gram and Establishm ent of a C ontrol D ate, 70 Fed. Reg. 29, 7 13

- 0 1, 29,714 (May 24, 2005).

The Pacific Council then engaged in a lengthy process to develop an am endm ent to the Groundfish Managem ent Plan. Due to the com

plexi ty and controversial nature of the trawl
rat ionalization program , the process of analyzing data, obtaining input from stakeholders and the p ublic, and developing p rogram docum ents took over five years. In 2009, the Pacific Council finally subm itted the trawl rationalization program to the Secretary as Am endm ent 20 to the Groundfish Man a gem ent Plan. NMFS published the
propose d a mendm ent f o r comm ent in May 2010, Ame n dm ents 20 and 21, Trawl Rationalization P rogram, 75 F ed. Reg. 26,702-01 (May 1 2
, 20 10), and the proposed regulations for im

plem enting Am endm ent 20 in June 2010, Am endm ents 20 an d 21, Trawl Rationalization P rogram , 75 Fed. Reg. 32,994-01 (June 10, 2010).

After a round of notice and co mme n t , NMFS adopted Am e n dment 20 to the Groundfish Managem ent Plan and
prom ulgated im

plem enting regulations. Am endm ents 20 and 21, Trawl Rationalization Program
, 7 5 Fed. R eg. 60,868-01 (Oct. 1
, 2010). The program allocated quota share to v arious participants in th e fishery based on activity during a qualifying tim e period. The qualifying tim e period for harvesters ended in 2003, id. at 60,95 9 ( p rom ulgated as 50 C.F.R. § 660.140(d)(8)(iv)(C)(2)), while the qua l ifying tim e period for shoreside processors ended in 200 4
, i d. at 60,955 (promulgated as 50 C.F.R. § 660.140(d)(8)(iv)(G)).P A C I F I C D AW N V

. P R I TZ K E R 12

The selection of the 2003 and 2004 end dates w as a focus of comm ent an d c riticism
, and N MFS responded to these criticism s in d etail. NMFS noted tha t i t ha d set a 2003 control date i n order “to prevent future fishery disruptions” and to “discourage entry into a fishery and increased harvest while the Council goes through the process of developing the
program details.” 75 Fed. Reg. 6 0,868-01, 6 0
, 8 75. H aving
set a control d at e , NMFS deem ed it was im portant to

m aintain that date in setting the qualifying history period for
two reasons. F irst, the C ouncil would lose credibility if it did
not adhere to the control d ate: “If th e Co uncil develops a pattern of announcing and abandoning control dates, then the

an n o un cem ent of control dates w ill becom e a signal t o harve st er s to intensify their efforts to catch fish in order to increase their odds of qualifying for g reater initial allocations.” Id. Second, according to NMFS, “abandoning the original control date would reduce the perceived fairness of the p rogram by rewarding those who fished speculatively after the control date

. . . at the expense of those who heeded the control date.” Id.

After Am endm ent 20 (the trawl rationalization program ) b ec am e effective January 1, 2011, id. at 60,868, a group o f fishing com

p anies brought a lawsuit challenging NMFS’s initial allocation of quota share s fo r Pacific whiting. See Pacific Dawn, LLC v. Bryson
, 2011 W L 6748501 (N.D. Cal. Dec. 22, 2011) (Pacific D awn I ). Amo ng o ther claim s, the plaintiffs contended that the Pacific Council and NMFS erred in its selection of a qualifying period, and that it should have considered fishing h istory past the 2 003 and 2004 end dates. Id. at * 1. The d istrict court h eld that NMFS failed to provide

a reasonable explanatio n for why it relied on an end date o f 2003 for som e purposes and 2004 for other purposes, and the

c o urt granted plaintiffs’ m otion for summ ary judgm ent o nP A C I F I C D AW N V

. P R I TZ K E R 13

th a t i ssue. Id. at *6–8. The district court rem anded th e

m atter to NMFS for reconsiderat i o n an d set a deadline o f April 1, 2 013, for the agency’s decision, but it did not vacate the rule so as not to cause disruption duri ng the rem and period. Pac. Dawn, LLC v. B ryson , 2012 W L 554950 (N.D. Cal. Feb. 21, 2012).

On rem and, the Pacific Council considered fo ur

a l ternative date ranges for qualifying history, includi n g ranges that took m ore recent h istory into ac co unt (1 9 9 4

– 2 007 and 1994–2010), and a “no action” alternative, whic h ma i n t ained the end dates of 2003 for harvesters and 2 00 4 f or p rocessors. After three m eetings over six m onths,

m ore than seven hours of public testim ony, and num erous reports, the Pacific C ouncil recomm ended that NMFS adopt the no action alternative. Reconsideration of Allocation o f Whiting, 78 Fed. Reg. 72-01, 72 (Jan. 2, 2013). NMFS determ ined that the council’s reco m m en d atio n w as consistent with the Magnuson-Stevens Act and issue d notice of its decision to retain the original control dates for public

comm ent. Id

.

On Ma r c h 28, 2013, NMFS issued a response to the

comm ents and the final rulem aking, whi ch retained the original control dates. Recon sideration of Allocation o f Whiting
, 7 8 Fe d

. Reg. 18879-01 (Mar. 28, 2013). In sum , NMFS concluded that “there are fun d am ental and com pelling

reasons to m aintain the existing initial allocations o f whiting,” including “not rewarding increases in harvesting o r processing that occurred after th e e nd of the qualifying periods,” m aintaining the credibility of control dates “for this and f uture rationalization program s,” and “m inim iz[ing] the concentration of harvester quota.” Id. at 18880. NMFS also responded to the various com m ents in detail.P A C I F I C D AW N V

. P R I TZ K E R 14

After NMFS’s decision, two of the plaintiffs in Pa cific Dawn I
, P acific Dawn LLC (a f is h h arvester) and Jessie’s Ilwaco Fish Co

. ( a f

ish processor) (collectively referred to here as “Pacific Dawn”), brought this action in district court, alleging that N MFS failed to consider relevant factors under the Magnuson-Stevens Act and the Groundfish Managem ent Plan. A num

b er of harvesters and processors who participate in the fishery and the En v i r onm ental Defense Fund intervened as defendants. The district court rejected Pacific Dawn’s argum ents and granted summ ary judgm ent to NMFS and the defendants. Pacific Dawn appealed.

II

The district court had jurisdiction under 28 U.S.C. § 1331, and we have jurisdiction under 28 U.S.C. § 1291. W e review the dist r i ct court’s grant of summ ary judgm ent de novo. Fishermen’s Finest, Inc. v. Locke
, 5 93 F.3d 886, 894 (9th Cir. 2010).

Actions taken b y the Secretary under regulations imp l em enting fishery m anagem ent plans are “subject to judicial review to the extent authorized by, and in accordance with,” the Adm inistrative Pr o c e dure Act (APA). 16 U.S.C. § 1855( f). Judicial review under the APA allows courts to “hold unlawful and set aside age n cy action, findings, and conclusions found to be

. . . arbitrary, capricious, an abuse o f disc r e t i on, or otherwise not in accordance w ith law.” 5 U.S.C. § 706(2)(A). To determ ine whether the agency’s decision was arbitrary and capricious, the court m ust consider whether the d ecision was b ased on a c o nsideration of the relevant factors required by the statute, Citizens to Preserve Overton Park, Inc. v

. V olpe
, 401 U.S. 402, 416 (1971); Pension Benef

i t Gu a r. Corp. v. LTV Corp.
, 496 U.S. 633,P A C I F I C D AW N V

. P R I TZ K E R 15

645–46 (1990), but “the court is not em p owered to substitute its judgm ent for that of the agency,” O verton Park
, 401 U.S.
at 416; see also Alliance Against IFQs v. Brown
, 84 F .3d 343, 345 (9th Cir. 1996).

An agency’s decisio n may “be f ound to be arbitrary and capricious ‘if the agency has relied on factors which Congress had not intended it to consider, entirely failed to consider an im portant aspect o f the pr o b lem
, offered an explanation for its decision that runs counter to evidence before the agency,

or i s s o im

plausible that it could not be ascribed to a difference in view or the product of the agency’s expertise.’” Yakuta t
, I n c. v. Gutierrez
, 4 0 7 F.3d 1054, 1066 (9th Cir. 2005) (quoting Motor V

ehicle Mfrs. A ss’n v. State Farm Mut. Auto. Ins. Co.
, 463 U.S. 29, 43 (1983)). Bu t wh e r e the Secretary “has considered the relevant factors and articulated

a rational connection b etween the facts f ound and the choice

ma d e,” the decision is n ot arbitrary or capricious. Allianc e Against IFQs
, 84 F.3d at 345 (quoting Wash. Crab Producers, Inc. v. Mosbacher
, 924 F.2d 1438, 1440 (9th Cir. 1990)); Yakutat
, 407 F .3d at 1066. “This standard of review is highly deferential, presum ing the agency action to be valid and affirm ing the agency action if a reasonable basis e xi st s for its decision.” Pac. Coast Fed’n of Fishermen’s As s ’ns
, 6 93 F.3d at 1091 (internal quotation m arks and citations

om itted).

III

On appeal, Pacific Dawn argues th at NMFS’s 2013 decision to select a qualifying p eriod end i n g in 2003 for harvesters and 2004 for processors was arbitrar y and capricious because it failed to take into account “present
part i cipation in the fishery” as required by § 1853(b)(6)(A)P A C I F I C D AW N V

. P R I TZ K E R 16

and dependence u

pon the fishery as required by §§ 1853(b)( 6 )( B) and 1853a(c)(5)(A) of the MagnusonStevens Act. W e consider each of these argum ents in turn.

A

W e begin with Pacific Dawn’s argum ent th a t NMFS’s 2013 d ecision to retain 2003 and 2004 as the ending date for the qualifying period f

ailed to take in t o a c c ount “present participation in the f

ishery” as required b y § 1853(b)(6). W e

see no basis for this claim

. Rather, the record m ake s clear th at N MF S co n sid ered “p resent participation
, ” b ut reaso n ab ly gave it less weight than other factors.

NMFS first explained its analysis of th is issue in the
pream ble to the final rule im

plem enting Am endm ent 20 (the
tr awl r a t io n a l i z a t i o n p ro g r am) an d th e r e g u la t i o n s im plem enting th a t a me n dm ent in 2010. In its response to

comm ents, NMFS stated that the Pacific Council and NMFS had “analyzed and considered data including past and present participation,” am ong o ther relevant considerations. 75 Fed. Reg. 60,868-01, 60,885. Nevertheless, it explained that “the Council is required to consider and balance several factors, including current harvests and historic h a rv ests, wh en m akin g initial allocation decisions,” an d while “the C ouncil did

ex am in e p resent participation levels, the Council g ave greater weight to historic participation in determ ining the initial allocation.” Id.

NMFS’s 2013 d ecision again addressed th e comm ents that NMFS should “adopt a present participation requirem ent for the period of 2003–2010,” rather than retain the end dates of 2003 and 2004, and NMFS again found that other factors outwei g h e d the “present participation” concern. NMFSP A C I F I C D AW N V

. P R I TZ K E R 17

s tated that m aintaining the qualifying period end dates of 2003 and 2 0 04 “supports the Council’s and N MFS’ efforts to

r educe overcapitalization and end the race for f ish b y n o t rewarding increases in harvesting or processing that occurred after the end of the qualifying p eriods (i.e., after the 20 03 control date).” 78 Fed. R eg. 18,879-01, 18,8 8 0
, 18,884–85 (Mar. 28, 2013). 5 Further, m aintaining the qualifying period

was n ecessary to “support the im p ortance of the control date for this and f

uture rationalization pro gram s, m inim ize the

c oncentration of harvester quota, and provide for a wider initial geographic distribution of the program benefits along the coast and the corresponding fishing comm unities.” Id. at 18880. NMFS concluded that these “k ey f acto rs” o utweighed “the reasons supporting alternatives that favor m ore r e c e n t history.” Id

.

NMFS’s explanation fo r giving m ore weight to historic participation and m aintaining the 2003 and 2004 end dates for the qualifying peri o d is sim ilar to the reasoning we f ound persuasive in Allian c e Against IFQs v. Brown
, 84 F .3d 343 (9th Cir. 1996). In th a t c as e, the Secretary o f Comm erce im p l em ented a m anagem ent plan f or sablefish and Pacific halibut by regulation. Id. at 345. T he m ana g em ent plan required vessel owners who participated in those fisheries to obtain an IFQ perm it. Id. NMFS assigned to each owner o r lessee of a vessel that landed halibut or sablefish during 1988, 1989, o r 1990, a quota share based o n th e person’s “highest total legal landings” during 1984 to 1990. Id. The plaintiffs challenged these regulations, arguing that the 1990 end date failed to take into account “present part i c ipation in the

5 “Overcapitalization” in this context m eans “too m any resources directed at too few fish.” Pac. Coast Fed’n of Fishermen’s As s ’ns
, 693 F.3d at 1087.P A C I F I C D AW N V

. P R I TZ K E R 18

fishery,” 16 U.S.C. § 1853(b)(6)(A), because the final rule

was prom ulgated in 1993 and did n ot credit landings during 1991and 1992. Id. at 347. W e upheld the Secretary’s decision, in part becau se Congress listed “present participation” as “only one of m any factors which the Council and the Secretary m

ust ‘take int o ac c ount.’” Id. W e concluded that the Secretary “had a goo d reason for disregarding participation in the fishery during this lengthy
process, b e cause the alternative would encourage the speculative o ver-investm ent and overfishing which th e regulatory schem e was m eant to restrain.” Id. at 347–48.

Alliance Against IFQs also d eterm ined tha t the Secretary’s selection of the end d ates could be deem ed to be consistent with “present p articipation.” Id. at 347. W e noted that the term “present participation” w as not defined in the
statute. Id. Given the “substantial am ount of tim e” required
to com p lete the regulatory process, including the “process o f review, publication, public comm ents, r e v i ew of public

comm ents,” and the environm ental im pact review, we held that the Secret a ry could reasonably conclude that “present
part icipation” did not m ean “contem poraneous with the
prom ulgatio n o f the final regulations.” Id. W e concluded that “while the length o f tim e between th e end of the participation period considered and the prom ulg a t i o n o f the rule p ushed the lim its of reasonableness, ” e specially given that o ne of the reasons for the d e l ay wa s the Secretary’s failure to m eet regulatory de adlines, the use of the period from 1988 to 1990 was not “so far from ‘present participation’ when the regulation was prom ulgated in 1993 as to be ‘arbitrary or capricious.’” Id. at 347–48.

In this case, we are doubtful that in d iv id u als’ p articipation in the fisheries in 2003 o r 2004, which w as six or seven yearsP A C I F I C D AW N V

. P R I TZ K E R 19

b ef o re Am en dm ent 20 and the im plem entin g regu latio n s w ere prom ulgated in 2010, can b e deem ed to con s t itute “present participation.” Nor has the Secretary ma d e such an argum ent. 6 Nevertheless, the Secretary’s reasons for giving less weight to present participation, such as n ot rewarding i n c r e ases in f

ishery activity after the control date wa s announced and m aintaining the credibility of control dates in the future, are s u ffi cient to uphold the Secretary’s actions. The record shows th a t NMFS gave careful consideration to the “present participation” factor and acted reasonably in giving m ore weight to establishing and m aintaining a control date for reasons we upheld in Alliance Against IFQs
, 84 F.3d
at 347. Be c au se the Secretary “articulated a rational connection between the facts found and the choice m ade,” see id. at 350, w e conclude the decision to m aintain the 2003 and 2004 end dates was not arbitrary or capricious.

Pacific Dawn raises two argum ents against th i s conclusion. First, it challenges N MFS’s conclusion (set forth in the final envi r o n mental im pact statem ent that supported NMFS’s 2 013 dec i sion) that taking current participation in the fishery into account would have only a m inor im pact on the allocation of quota shares. See Final En v ironm ental Im pact Statem ent (“Wh ile a recent participation requirem ent mi ght be considered reasonable and responsive to th e [Magnus on-Stevens Act] direction to consider current and historic participation and to consider i n v e stm ent and dependence, the likely im pact s o n the initial [quota share] allocation appeared to b e m inim al with respect to their im pact

on the landing history b ased portion of the allocation.”) According to Pacific Dawn, because NMFS used a 2003 and

6 Further, th e p laintiffs do not argue that the developm ent process was unduly prolonged.P A C I F I C D AW N V

. P R I TZ K E R 20

2004 end date, 34 perm it holders who no longer p articipate in the fishery received a quota share, which constitutes alm ost 20 percent of the total num ber o f perm it holders that received
quo ta s hares. Pacific Dawn argues that this m eans a significant portion of the econom ic benefits of the trawl rationalization program were given to p erm it owners who are not participating in the f

ishery, which disadvantages current p articip ants wh o h av e m ad e sign if ican t eco n o m ic inv estm ents in the fishery. NMFS’s fa i l ur e to consider the significant fin an c ial im

pact of its decision to retain the 2003 and 2004 end d ates, P acifi c Dawn argues, m akes NMFS’s decision arbitrary and capricious.

W e reject this ar gum ent because NMFS considered the issue and reasonably determ ined that the financial im pact o f the end dates was not significant and did not outweigh other benefits. NMFS acknowledged that 34 perm it holders would receive quota share under Am endm ent 20 even though they had not actively participated in the f ishery since 2003, but it concluded that this fact di d not warrant “including m ore recent y ears in the qualifying period” because the m ajority o f these 3 4 perm it owners were far from inactive; rather, they had been “active in the whiting fishery during those y ears, participated in other f

isheries inc l ud ing other sectors of the whiting f

ishery, or held those inactive perm its as an investm ent.” 78 Fed. Re g. 18,879-01, 18,883. NMFS determ ined th a t o nl y 1.5 percent of the perm its (rather than 20 percent) were truly inacti v e

. I d

. at 18,884. Moreover, NMFS n oted that m a i n ta i ning the 2003 and 2004 end dates spread the benefits of the program m ore widely and avoided concentrating quota share in the hands of a few participants. Id. at 18,880. A ccording to NMFS, this goal outweighed the

reasons f or adopting alternatives “that favor mo r e recent history.” Id. Because NMFS considered this issue, weighedP A C I F I C D AW N V

. P R I TZ K E R 21

it against other factors that it mu s t take into account, and determ ined that the other factors outweighed Pacific Dawn’s
concerns, NMFS did not fail to “consider an im portant aspect of the p roblem ” or offer “an explanation for its decision that

runs counter to the evidence before the agency.” State F a rm , 463 U .S. at 43. Because we cannot substitute o ur judgm ent fo r the agency’s, Overton Park
, 401 U.S. at 416, an d m u s t only d eterm ine whether the agency “articulated a rati o n al connection betwee n the f acts found and the choice m ade,” Yakutat
, 407 F.3d at 1066, we conclude that NMFS’s determ ination on this point was not arbitrary or capricious.

Second, P acific Dawn argues that NMFS’s application o f “present participation” was ar bi trary because it adopted a 2004 end date for processor s r a th er than the 2003 end date ado p ted for harvesters. A ccording to P acific Dawn, NMFS failed to g i v e a satisfactory explanation for this inconsistency. Again, we disagree. N MFS explained its reasons for using a different end date for determ ining the eligibility of processors for quota share. First, NMFS explained that “it w as not clear until 2 005 th at the 2003 control date potentially applied to processors,” and NMFS concluded that the different end date

w as n ecessary to account “for processor investm ents th at to o k place prior to the announcem ent o f the control date but that did not begin to earn processing history until 2003 and 2004.” 78 Fed. Reg. 18,879-01, 1 8, 880–81. Second, because
processors h ave onshore facilities, and cannot “m ove into and
out o f v arious fisheries to g a in p otential fishing history” as easily as harveste r s, there was less danger of creating
perverse incentives by changing the control date. Id

. NMFS explained its reasoning and related its determ ination to other statutory factors, such as “the econom ics of the fishery” and

a “fair and equitable d istribution.” Id. at 18,889–91; se e 16 U.S.C § 1853(b)(6). W e therefore conclude that NMFS’sP A C I F I C D AW N V

. P R I TZ K E R 22

decision to apply the 2 004 control d ate to processors was not arbitrary or capricious.

B

Closely related to its argum ent that NMFS did not take into a ccount “present participation,” Pacific Dawn also
argues that NM FS’ s 2013 decision did not adequately consider “ d ependence” on the fishery. See 16 U.S.C. §§ 1853(b)(6)(B), 1853a(c)(5)(A). According to Pacific Dawn, NMFS’s 2013 decision to m aintain the 2003 and 2004 end dates did not give adequate w eight to current dependence

on the f ishery because it allocated quota shares to individuals who had not necessarily fished in the past ten years and therefore were not necessarily dependent on the fishery. This

e rr or, Pacific Dawn contends, m ade NMFS’s 2013 decisi o n i n c o n sisten

t w i th v ario u s p ro v isio n s o f th e Magnu so n

- S t e v e n s Act, Objective 1 4 o f the Groundfish Managem ent P lan, and NMFS’s past practices in other fisheries.

Again, we see no b asis for this claim

. In propo s i n g to retain the 2003 and 2 0 0 4 end dates, NMFS provided a thorough explanation of its m ethodology fo r evaluating “dependence.” 78 Fed. Re g. 7 2 -01, 7 4–76. Although the Magn u so n -S tev en s A ct d o es n ot def in e “d ep en d en ce, ” N MF S defin e d the term to m ean “the degree to which participants rely on the whiting fishery as a source of wealth, incom e, o r

em ploym ent to financially support their business.” Id. at 74. Further, “[c]urrent harvests, historical harvests, levels o f investm ent over t im e, and levels of participation over tim e

are all aspects of dependence, as they can all b e connected to the processes that f

ishers and processors us e to generate incom e.” Id. In addition, the proposed rule explained that it

wa s n o t N MFS’s policy “to use recent fishing as the onl yP A C I F I C D AW N V

. P R I TZ K E R 23

reflection of dependence o n the fishery,” nor was it NMFS’s policy “to u se recent fishing as the sole basis f or determ ining the allocation period; such a determ ination m ust al wa y s b e b ased on the specific f acts each tim e allocations ar e considered.” Id. at 75.

W ith respect to the proposed decision on the 2003 and 2004 end dates for allocating quota shares, NMFS explained its analysis o f dependence. F irst, NMFS stated that it gave weight to f

inancial de p e n dence in its “choice of ending the qualifying period for processors in 2004 rather than the 2003 control date,” because that chang e “was done to explicitly recognize investm ents in processing while still furthering the
purposes of Am endm ent 20.” Id. at 74–75. Seco nd, while recognizin g th a t its chosen end date for harvesters would result in allocating a sma ll percentage of quota shares to harvesters “without activity in the whiting fishery post 2003,” NMFS stated that awarding quota share in this sm all num ber of cases was o utweighed by the need to serve other g oals. Id.
at 75. After consid ering dependence upon the f ishery and weighing dependence against other factors, NMFS proposed
not to change its end dates because “the existing qualifying periods for h arv esters and processors result in a fair and equitable allocation.” Id. at 74.

In its final decision on this issue, NMFS reiterated that it had “thoroughly explored” the “issue of inv e s t me nt and dependence for m ore recent years.” 78 Fed. Reg. 18,879-01, 18,884. NMFS det e rm ined that retaining the qualifying period ending in 2003 o r 2004 would not un du l y affect
current dependence on the fishery becau s e “m o st current harvesters and processors in the fishery were a l s o h istorical participants during the qualifying periods for initial allocation, and the shifts in quota am ong the initial allocationP A C I F I C D AW N V

. P R I TZ K E R 24

alternatives co n sid ered were relatively m odest o v erall and for

a m ajority of the participants.” Id

. Moreover, NMFS repeated its conclusion that there w ere “valid policy reasons for excluding those years,” including the “fair and equitable” distribution of access privileges. Id

. at 1 8,885; see 16 U.S.C. § 1 853(b)(6). Because NMFS adequately took into accoun t “dependence o n the fishery” under § 1853(b)(6)(B) an d “investm ent s in, and dependence upon, the fishery” under § 1853a(c)(5)(A)(iii), its d ecision was not inconsistent with those statutory requirem ents. See Yakutat
, 407 F.3d at 1066.

Nor was NMFS’s d ecision inconsiste n t w ith the related standards identified by Pacific Da wn. First, Pacific Dawn
argues that NMFS’s 2013 d e c i sion was inconsistent with National St an d ards 5 and 7, 7 which require councils to, “where practicable, conside r e fficiency in the utilization o f fishery resources ” and “m inim ize costs and avoid
unnecessary duplication.” 16 U.S.C. §§ 1851(a)(5), (7). Pacific Dawn claim s that NMFS’s allocation of quota shares
to individuals who are not dependent on the fishery results in inefficiencies and creates additional costs and duplication o f
expenses for current participants who m ust purchase or lease additional quota shares. This claim is belied by th e record; NM FS reasonably concluded that the use o f the 2003 and 2004 end dates was consistent with National Standards 5 and 7 b ecause the trawl rationali z a t ion program as a whole

m inim ized costs and efficiently used f ishery resources to the

7 T he p laintiffs also argue that the agency violated National Standard 4, which states that allocation of fishing p rivileges should be “ f air and
equ i t ab l e , ” 16 U.S.C. § 1 851(a)(4). But the plaintiffs did not raise t hat
arg u m e n t t o t

he d istrict court in their m otion f or summ ary j udgm ent o r opposition to the defendants’ m ot i o n for summ ary judgm ent, so the
argum ent was waived. See Lan ds C o uncil v. McNair
, 629 F.3d 1070, 1079 n.4 (9th Cir. 2010).P A C I F I C D AW N V

. P R I TZ K E R 25

extent p ractical. 78 F ed. Reg. 18,879-01, 18,888. According
to NMFS, Am endm ent 20 was designed to m ake the
gr oundfish trawl fishery econom ically efficient by reducing

excess capacity and levels o f incidental catch, and the selection of the 2003 and 2004 end dates would n o t affect
th e se efficiency gains. Id

. NMFS acknowledged that th e initial allocation of quota sha r e s c ould result in “transition
costs and disruption to participants’ operations,” but the new costs w ou ld result in additional benefits to fishery participants, and the transaction costs would decrease “as the fishery m oves to its long-term
, m ore efficient state” because “operations will m ove, or quota will be traded, to the ports in which the highest profits can be earned.” Id.

Second, Pacific Dawn claim s that NMFS’s d ec ision to

r e t a i n the 2003 and 2 004 end dates was contrary to th e Groundfish Managem ent Plan’s direction in Objective 14 to “choose the m easure that best accom plishes the change with the least disruption of current fi s h ing practices.” Pacific Dawn ar gues that NMFS failed to provide a rational explanation for how th e e x c l u sion of ten years of fishing history m eets Objective 14 and argues at length that the 2003 and 2004 end dates d isrupt the activities of participants currently dependent on the fi s heries. W e again d isagree. NMFS considered Objective 14, 78 Fed. Reg. 72-01, 75, and reasonably determ ined that retaining the 2003 and 2 004 end dates would be the least disruptive to curr e n t fishing practices. NMFS explained that when it first announced the 2003 control date, participants were on notice that fishing activity after 2003 m ight not count toward allocation of quota share, and participants had the opportunity t o a c quire additional quota shares. 7 8 F ed. R eg. 18,87 9

- 0 1
, 18,881. Mai ntaining the o riginal control date in the final rule “rewards inve s tments and dependence consistent with theP A C I F I C D AW N V

. P R I TZ K E R 26

policies underlying announcing a control date, and m inim izes disruption to those participants that m ade business d ecisions based on the assum

ption that quota f

orm ulas were unlikely to include m ore recent years.” Id. at 18888. Be c ause NMFS reasonably determ ined that retaining the 2003 and 2004 end dates would be the l ea st disruptive to current fishing practices, its conclusion was not inconsistent with Objective 14 of the Groundfish Managem ent Plan.

Finally, P acific Dawn argues that N MFS’s decision was inconsistent w ith its practices in other fisheries, where NMFS had concluded that m ore recent p articipation reflected greater dependenc e o n the fishery. This argum ent fails. NMFS considered “the reasons supporting alternatives that favor

m ore recent history (e.g., recogniz i n g recent fishery participants ’ dependence and investm ents, reducing future quota leasing or acquisition costs, reducing quota to recent non-participants, an d reflecting m o re recent m arket and fishery conditions )
, ” b ut reasonably determ ined that they

wer e o utweighed by other f actors such as “reducing overcapitalization and ending the race for fish.” Id. at 18,880. NMFS reasonably relied on its policy to review the facts o f each case “ e a ch tim e allocations are considered.” 7 8 Fed. Reg. 72-01, 74. Its conclusion was thus not “arbit r ary , capricious, an abuse of discretio n , or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).

IV

W e conclude that NMFS properly considered the relevant factors and reasonably decided to m aintain the 2003 and 2004 end dates. See Alliance Against IFQs
, 84 F.3d at 3 45. W e therefore affirm th e d istrict court’s grant of summ ary judgm ent to the defendants.P A C I F I C D AW N V

. P R I TZ K E R 27

AFFIRMED

.