Slip Op. 06-29
UNITE D STATES COURT OF I NTERNATI ONAL TRADE

__________________________________________ : THAN VIET DO AN

D BINH THI

NGUYEN, :

: Before: Chief Judge Restani Plaintiff s, : : v. : Court No. 05-00062 : UNITED STATES SE CRETARY OF : AGRICUL TURE, : : Defend ant. : __________________________________________: [Plaintiffs’ motion for judgment on the agency record as to eligibility

for trade adjustment assistance DENIED.] Dated: February 28, 2006 Hays, McConn, Rice &

Pickering ( John R. Walker ) for the plaintiff s. Peter D. Keisler , Assistant Attorney Gene ral, David M. Cohen , Direct or; Patricia

M. McCarthy , Assistant Director, Commercial Litiga tion Branch, Civil Division, United States Department of Justice ( Delfa Ca stillo ); Jeffrey Ka hn , Office

of the Ge neral Cou nsel, International Affa

irs & Commodity Progra

ms Division, United States Department of Agriculture, of counsel, for the defendant

. OPINION Restani, Chief Judge: This matter is before the court on the motion for judgment on the
agenc y r ecord br ought by Plaintiff s Than Vie

t Do and B inh Thi Ng

uye n pursuan t to USCI T R. 56.1. Plaintiffs contest the United States Secretary of Agriculture’s (“Ag

riculture”) determination denying

their application for trade adjustment assistance (“TAA”). Agric ulture de nied Plain

tiffs’ a pplication for TAA

because their net fishing

income di d not decline from 2001 to 2002. Specifically , Plaintiffs’ fishing business lost less money in 2002 than it did in 2001. Plaintiffs do not contend that their net fishing income, as defined byC OURT N O
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Agriculture, did not decline but instead arg ue that Agriculture should consider how the sale of one of Plaintiffs’ vessels affected their net fishing income. Specifically, Plaintiffs a rgue that Agriculture erred in its determination for two re asons: 1) Agriculture should have treated e ach of their vessels as a producer entitled to TAA under 19 U.S.C. § 2401e (Supp. I I 2002), and 2) Agriculture’s definition of “net fishing income ” is unreasonable. Plaintiffs ask the court to grant their moti on for jud

gment on the age ncy record or, in the alterna tive, for “good c ause” shown, to remand the determination to Agriculture for r econsideration of their TAA eligibility

. Agriculture argues tha

t Plaintiffs’ vessels are not considered producers for pur poses of obtaining TAA and t

hat it prop erly

examined Pl aintiffs ’ agg regat e income from thei r two vess els as reflected on their I

nternal Revenue Service (“I RS”) Tax Form 1040 (“1040”). Agric ulture ma intains tha

t it reasonably

defined net fishin

g income and prop erly

applied i ts regula tion. Ag ricultur e argu es that be cause Pla

intiffs suffere d a gre ater loss in 2001 tha

n in 2002, their net fishing income did not decrease. The c ourt agrees and denies Plaintiffs’ motion for judgment on the agency record. FACTUAL & PROCEDURAL BACKG ROUND Than Viet Do (“Do”) and his wife, Binh Thi Ng uyen (“Nguye

n”), own and operate a shrimping business in Palacios, Texas. Prior to 2002, Plaintiffs’ shrimping business had two vessels, the Master Francis and the Master Jimmy . At the end of 2001, Plaintiffs sold the Master Francis because it was unprofitable. On December 11, 2003, Plaintiffs responded to a notice by the Foreign AgricultureC OURT N O
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1 On October 21, 2003, the Texas Shrimp Association petitioned the FAS for certification of TAA eligibility on be

half of Texas shrimp producers. See Trade Adjustment Assistance for Farmers, 68 Fed. Reg. 65,239 (D ep’t of Agric. Nov. 19, 2003). On November 19, 2003, the FAS certified their eligibility

for TAA, finding “that increased imports of f armed shrimp contributed importantly to a decline in the lande d prices of shrimp in Texas by 27.8 per cent during January 2002 through December 2002, when compa red with the previous 5-y ear average.” Id. To qualify for benefits under this certification, shrimp producers had to a pply for bene fits with their local FSA office by

February 9, 2004. Id.

2 The record contains two TAA applications, Number 746 and 1785, both da ted December 11, 2003. Application Number 746 bears the name and signa tures of both Do and Nguy en. TAA Applicat ion, Pls.’ A

pp. Tab 2. Applicat

ion Numbe

r 1785 lists

Do and Ng

uye n, but is sig

ned only by Do. Trade

Adjustment Assistance for Individual Producers, Pls.’ App. Ta b 3. It appears that the two ap

plication s were c onsolidat ed. The a pplications did not lis t Plaintiff s’ boats.

3 The TAA application requires that applicants submit verifiable documenta tion of: 1) the production of the commodity and the a mount produced; 2) a decline in net fishing income from the latest year

in which no TAA payme nt was received; 3) technical assistance r eceived from the Cooperative State Research, Education, and Extension Service of the United States De partment of Agriculture; and if requested, 4) Adjusted Gross Income in accor dance with other USDA regulations. See TAA Application, Pls.’ App. Tab 2. Plaintiffs satisfied the TAA requirement of technical assistance by

receiving training on January 27, 2004. Trade Adjustment Assistance, Technical Assistance Certification Form, Pls.’ App. Tab 8, Tab 9. Service (“FAS”) certify

ing Texas shrimp producers as eligible for trade adjustment assistance, 1 and filed an application for TAA with the Farm Servic e Agency (“FSA”) office in Matag orda County , Texas. 2 Trade Adjustment Assistance for I ndividual Producers, Pls.’ App. Tab 2 [hereinafter TAA

Applicat ion]. Base d on TAA r

equirem ents, 3 Plaintiffs submitted copies of their 2001 and 2002 Individual Tax Returns. Form 1040, U.S. I ndividual Income Tax Return, 2001, Pls.’ App. Tab

1; Form 1040, U.S. Individual I ncome Tax Return, 2002, Pls.’ App. Tab. 7. Plaintiffs’ 2001 tax return contained two Schedule Cs (Profit or Loss from B usiness), one for each of their two ships. Form 1040, U.S. I ndividual Income Tax Return, 2001, Pls.’ App. Tab 1, at 3–4. The 2001 tax return listed an adjusted gross income of $49,228 and a business loss ofC OURT N O
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$77,504. Id. at 1. Of this loss, $44,534 stemmed from the Master Francis and $32,970 stemmed from the Master Jimmy. Id. at 2-3. Furthermore, the 2001 tax return listed $126,405 from “[o]ther gains or losses.” Id. at 1. Although the record does not conclusively establish the source of this item, it is noted that Plaintiffs sold the Master Francis in late 2001. Plaintiffs’ 2002 tax return contained one Schedule C for the Master Jimmy and none for the Master Francis. The 2002 tax return also listed an adjusted g ross income of negative $47,849 and a business loss of $48,137. Form 1040, U.S. Individual I ncome Tax Return, 2002, Pls.’ App. Tab. 7. The business loss was attributed entirely to the Master Jimmy. Id. at 3. The record shows tha t Agric ulture de nied Plain

tiffs’ c laim afte

r examining

their 104 0s and co mparing their $77,504 bu siness loss

in 2001 with

their $48 ,137 busin ess loss in 2 002. For m 1040, U.S. Indiv idual I ncome Ta x Return, 20 01, Pls.’ A

pp. Tab 1; Form 1040, U.S. Individual I ncome Tax Return, 2002, Pls.’ App. Tab. 7. On August 14, 2004, Plaintiffs wrote a letter to the National Appeals Division (“NAD ”) “asking for an appeal bec ause [they were ] denied . . . TAA payment.” Letter from Than Viet Do to Office of the Area Supervisor, Nat’l Appe als Div., W. Reg’l Office (Aug. 14, 2004), Pls.’ App. Tab 17. On November 1, 2004, Plaintiffs received a letter from NAD stating that the Texas FSA was withdrawing the adverse de cision in their case and that Plaintiffs’ appeal was moot. Letter from Patricia Leslie, Assistant Dir., Office of the Sec’y, Nat’l Appeals Div., U.S. Dep’t of Agric., to Than Viet Do and Binh T. Ng uyen (Nov. 1, 2004) , Pls.’ App. Tab 20. The letter further advised Plaintiffs that the NAD appeal would be dismissed unless a letter wa s received from them within five days e xplaining why the appea

l should not be dismissed. Id. On November 23, 2004, Plaintiffs received notification from the FSA that it had re ferredC OURT N O
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the appeal to the FAS who made a final determination that Plaintiffs wer e ineligible for TAA payment. L etter from Ronald Lord, Deputy Dir., Imp. Policies & Progra ms Divs., Foreign Agric. Serv., & Grady Bilberr y, D ir., Pric e Support D iv., Far m Serv. Ag ency , U.S. Dep ’t of Ag ric., to Than Viet Do and Binh T. Nguy en (Nov. 23, 2004), Pls.’ App. Tab 21. The letter stated that the “application was disapproved because [Plaintiffs’] net fishing income for 2002 did not decline from 2001.” Id. The letter also informed Plaintiffs that they could appeal the determination by contacting the United States Court of I nternational Trade within 60 day s. Id. Plaintiffs filed a timely appeal of the f

inal determination. JURISDIC TION & STAND ARD OF R EVIEW The cou rt has juris dicti on pur suant to 19 U.S. C. § 2 395(c ) (200 0). In rev iewin g a challenge to Agriculture’ s determinations regarding eligibility for trade adjustment assistance , the court will uphold the determination “if the factual findings are supported by substantial evidenc e on the record and its legal determinations are otherwise in accordance with the law.” Trinh v. U.S. Sec’y of Ag

ric. , 395 F. Supp. 2d 1259, 1265 (CIT 2005). Substantial evidence is “more than a ‘mere scintilla,’ but sufficient evidence to re asonably support a c onclusion.” Former Employees of Shaw Pipe, I nc. v. United States Sec’y of Labor , 21 CIT 1282, 12 84–85, 988 F. Supp. 588, 590 (1997) (citation omitted). DISCUSSION In the present case , the only issue is whether Plaintiffs satisfied the r equirements of 19 U.S.C. § 240 1e(a)( 1)(C) an d 7 C.F.R. § 1580.301( e)(4) ( 2005). I n pertine nt part, 1 9 U.S.C. § 2401e(a)(1)(C) requires that “[t]he producer’ s net farm income (as determined by the Secretary ) for the most recent y

ear is less than the producer’s net farm income for the latest ye arC OURT N O
. 05-00062 P AGE 6

4 Agriculture further defined pe rson as “an individual, partnership, joint stock owner, corporation, association, trust, estate, or any other legal entity

as defined in 7 C.F.R. 1400.3 .” 7 C.F.R. § 1580.102

. 7 C.F.R. § 1 400.3 pro vides in r elevant part tha t: in which no adjustment assistance was received by the producer under this part.” Id. Agriculture implemented this provision through 7 C.F.R. § 1580.301(e)(4), which requires “[c]ertifica tion that net farm or fishing income was less than that during the producer’s pre-adjustment y ear.” Id. Here, Plaintiffs argue that 1) a ve ssel is entitled to TAA under Agriculture’s own regulations, and 2) Agriculture ha s unreasonably de fined “net fishing income.” I. A vessel is not entitled to TAA First, the court addresses whether a ve ssel is entitled to cash benefits under the TAA statutes and regulations. 19 U.S.C. § 2401e(a)(1) provides that a “ [p]ayment of a trade ad ju st me nt al lo wa nc e s ha ll be ma de to an ad ve rs el y af fe ct ed ag ri cu lt ur al co mm od it y producer ,” but does not specifically de fine “producer.” Id. (emphasis added). Rather, Agriculture defined producer as “a person who is either an ow ner, operator, landlord, tenant, or sharec ropper, who shares in the risk of producing a crop a nd who is entitled to share in the crop available for marketing from the farm, or a qualified fisherman .” 7 C.F.R. § 1580.102 (emphasis added). In this case, Agr

iculture did not interpret its definition of producer to encompass vessels. Plaintiff s, howeve r, arg ue that a vessel is a

produce r under A gricul ture’s o wn reg

ulations b ecause it is a qualified fisherman. A qualified fisherman is “a person whose catch competes in the marketp lace wit

h like or d

irectly competiti

ve aqua culture products and repo rt net fis hing inc ome to the Internal Revenue Ser vice on Schedules C or C-EZ (Form 1040).” 4 7 C.F.R. § 1580.102C OURT N O
. 05-00062 P AGE 7

(1) A person

is: (i) Anindivid

ual, including any

ind ividual pa

rticipat ing in a farming operation as a partner in a gener

al partnership, a

participant in a

joint ve nt ur e, or a p ar ti ci pa nt in a s im il ar en ti ty; (ii) A corporation, joint stock company , association, limited partnership, limited liability

partnership, limite d liability company

, irrevo cable trust, revoca

ble trust c ombined withthe grantor of the trust, estate, or charita ble organization, includinga ny such entity or organization particip a ting in the farming operation as a partner in a general partnership, a participant in a joint venture, a gran tor of a r evocab le trust, or as a participant in a similar entity

. . . (2) Inorder for an individual or entity, other than a n individual or entity

that is a member of a joint operation, to be considered a separate person for the purposes of this part, in addition to other provisions of t his part, the individua l or entity must: (i) Have a separate and distinct in

terest in the land or the crop involved; (ii) Exercise separate responsibility for such interest; and (iii) Maintain funds or accounts separate from that of a ny other individual or entity for such interest

.
5 As indicated, in 2001, the net income from the Master Jimmy wa s negative $32,970, while its net income in 2002 was negative $48,137. Form 1040, U.S. I ndividual Income Tax (emphasis added). Therefore, ther e are two requirements for a vesse l to be considered a qualifie d fisher

man: firs t, the ves sel must be consider ed a per son, and s econd, the vessel must have a catch that competes in the marketplac e and must report income to the IRS. Id. Plaintiff s claim tha

t a vesse l is “‘a pe

rson’ in th e ey

es of the law” by resortin g to admiralty law dea

ling with in rem

procedu re. Pls.’ Br. 15. Pl aintiffs argue that a ve ssel is a person because it may

be sued as a “wrongdoer” for the purposes of in rem jurisdiction. Plaintiffs then argue that because a ve ssel owns its catch, it is a qualified fisherman and therefore, a producer entitled to a TA A claim. Thus, Plaintiffs contend that they should re ceive TAA for the Master Jimmy beca use the net fishing income for Master Jimmy was less in 2002 than it was in 2001. 5 The court concludes that a vessel is not a person and thus not a produc er forC OURT N O
. 05-00062 P AGE 8

Return, 2 001, Pls.’ A

pp. Tab 1; Form 1040, U.S. Individual I ncome Tax Return, 2002, Pls.’ App. Tab. 7.

6 Agriculture argues tha

t the court should not consider whether a vessel is a person or produ cer beca use Do list ed him self a nd hi s wife , not their vesse ls, as the pr oduce rs. Al thou gh the record reflects that Plaintiffs did not list their boats as the producers, the r ecord does reflect the fact that Plaintiffs operated two separate fishing vessels. Thus, if a vessel is a person and a producer for purposes of TAA, then Ag riculture should not allow a minor mistake in filing procedures to prevent it from fulfilling the remedia l nature of trade adjustment assistance and properly a

warding benefits. See 19 U.S.C. § 2401e(a)(1)(C). Accordingly ,the form of the Plaintiff s’ claim d oes not pr event the court fr om conside

ring Pla intiffs’ argume

nt that a v essel is a producer. the purposes of TAA. 6 In reviewing

Agriculture’s determination, the court is mindful that “[a]n agenc y’s interpretation of its own regulations is normally entitled to considerable deference.” Data Gen. Corp. v. Johnson , 78 F. 3d 155 6, 156 1 (Fed. Cir. 1996) (quot ing Perry v. Mar tin Marietta Corp. , 47 F.3d 1134, 1137 (Fed. Cir. 1995) (citation omitted)) . That inte rpreta tion is “or

dinarily accepted ‘unless it is plainly erroneous or inconsistent with the regulation.’” Id. at 1561 (quoting Honeywe ll Inc. v. United States , 661 F.2d 182, 186 (Ct. Cl. 1981)). Here, it is not erroneous or inconsistent for Agriculture to interpret “qualified fisherman” as excluding vessels, because a vessel is not a “person” for purposes of TAA. The treatment of a vessel a s a fictit

ious pers on in admir

alty law does not estab lish that it may

be compe

nsated with TAA as a real person. First, there is no indication that Cong ress intended to apply a

dmiralty law to TAA claims or that Congress intended to benefit vessels, rather than fishermen, with TAA. See 19 U.S.C. § 2401; H.R. Rep. No. 107-624 (2002) (Conf. Rep.); H. R. Rep. No. 107-290 (2001); S. Rep. No. 107-126 (2001). The final statute and the Congressional de bates do not mention the applicability of admiralty law or the possibility that vessels may be beneficiaries ofC OURT N O
. 05-00062 P AGE 9

7 Plaintiff s analogize the ve ssel to another fic tional leg al entity

, a corpo ration, b ecause

it incurs le gal obli gations . Plaintiff s, howeve r, do not de

monstrate that a ve ssel is re cognize d as a legal e ntity outside a dmiralty and mari time law, as a cor

poration is. TAA. See 19 U.S.C. § 2 401; 148 Cong. Rec. S3530, 3536 (2002); 147 Cong. Rec. E2156, 2157 (2001). Instead, members of Congress mentioned real persons – farmers, ranchers, and fisherme n – as the b enefic iaries of TAA, not f

ictional l egal e

ntities use d exclusive ly in admiralt y law. See 148 Cong. Rec. S3530, 3536 (statement of Sen. Wellstone) (referring to the beneficiaries of TAA as “family farmers, ranchers and independe nt fishermen”); 147 Cong. Rec. E2156, 215 7 (statement of Rep . Bentse n) (also refer ring to t he bene ficiari es of TAA

as “fam ily farmers, ranchers and independe nt fishermen”). Moreover, if a vessel is considere d a qualified fisherma n and a pr oducer, then a TA

A applica nt could su

ccessf ully make as m any

TAA clai ms as he has vessels. This conflicts with the legislative intent to limit cash benefits to $10,000 per farmer or fisherman. See 19 U.S.C. § 2401e(c) (“The maximum amount of cash benefits . . . shall not exceed $10,000.”); 145 Cong. Rec. S13657, 13667 (1999) (statement of Sen. Conrad) (TAA was “limited to $10,000 per farmer per yea r) (emphasis added); 145 Cong. Rec. S 13657, 13668–69 (statement of Sen. Murkowski) (“The cash benef its would be capped at $10,000 per fisherman .”) (em

phasis ad ded). Th us, there is no indic ation tha

t the leg islature

intended to rely upon admiralty law to trea t a vessel as a person or producer and the reby allow f

ishermen to have multiple TA

A claims. Second, t he propo sition that

a vessel is a pers on is a leg al fictio n that is pa rticular to admiralt y la w and is no t gener

ally applica ble in othe

r contexts. 7 See Homer Ramsdell Transp. Co. v. LA Compagnie Gener ale Transatlantique , 182 U.S. 406, 414 (1901) (stating that theC OURT N O
. 05-00062 P AGE 10

8 Plaintiff s also fa il to addre ss how a ve ssel satis fies the d efinition of personhood stat

ed in 7 C.F.R. § 1400.3, requiring that a person must: “(i) [h]ave a separate a nd distinct interest in the land or th e crop in

volved, ( ii) [e]xerci se separ ate res ponsibility

for such interest ; and (iii) [m]aintain funds or accounts separate from that of any other individual or entity for such interest.” 7 C.F.R. § 1400.3.

9 Additionally, as Defe

ndant suggests in its brief, a vessel may be better described as equipmen t. “Equipment is the machiner y a nd impleme

nts neede d by

the far ming ope ration to concept that a vessel is considered the wrong doer is “a distinct principle of the maritime law”) (citi ng Ralli v. Troop , 157 U.S. 386, 402 (1895)). Courts created this legal fiction to allow an injured party to “pr

oceed in rem directly

against the vessel.” Ventura Packers , Inc . v. F/V Jeanine Kathleen (In re

Her Tackle) , 424 F .3d 85 2, 858 (9th C ir. 20 05) (q uoti ng Chugach Timber Corp. v. N. Stevedoring & Handling Corp. (I n re Chugach Forest Prod., I nc.) , 23 F.3d 241, 245 (9th Cir. 1994)). In doing so, cour ts were affording security to an injured person in the event of a successful judgment. See Baker v. Ray mond Int’l, I

nc. , 656 F.2d 173, 183 (5th Cir. 1981) (stating that an injured party “was not confined to exploring the potentially empty purse of the charterer but could secure re dress by af fixing a lien to the vessel”) ; see also Cargill B.V. v. S/ S “Ocean Traveller ,” 726 F. Supp. 56, 61 (S.D.N.Y. 1989) (stating that the lega l fiction of a vessel’s liability saves the injured pa rty from having

to “circle the globe in efforts to sue and collect from the owner”) . The reason for using this legal fiction in admiralty cases is simply not applicable in the context of TAA, where a fishing vesse l owner is obtaining a benefit rather than incurring a legal obliga

tion. 8 In sum, a vessel is not a person and thus, not a produc er for purposes of TAA. Therefor e, Agriculture’s treatment of vessel owne rs, not vessels, as producers is not plainly erroneous or inconsiste nt with its r

egulat ions. 9 Accordingly , Plaintiffs do not have separate TAA claims forC OURT N O
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conduct a ctivities of the fa rming op eration

. . . .” 7 C.F .R. § 1400. 3. Here , a fishe rman use s a vessel in order to conduct b

usiness. each of their ve ssels and

Agric ulture c orrect

ly u sed the a

ggre gate in

come fr om their ve ssels to determine their net fishing income. II. Agriculture reasonably defined “net fishing income” Plaintiff s also cha llenge Agric ulture’s definition of “net

fishing income” as unrea sonable for fail ing to ta

ke into ac count the

sale of a fishing vessel. H ere, Ag

ricultur e was spe cifical ly granted the authority

to define net fishing income. 19 U.S.C. § 2401e(a)(1)(C) ( “The producer’s net farm income ( as determined by the Secretary

) . . . .”) (emphasis added). Agric ulture, in turn, defined net fishin

g income as “net profit or l oss, exclud ing pay ments unde

r this par t, repor ted to the IRS for the tax y

ear that most closely c orresponds with the marketing y ear under consideration.” 7 C.F.R. § 1580.102. In calculating ne

t profit or loss, Agriculture excluded the gains or losses from the sa le of business a ssets. Ag

ricultur e examine d Line

12 of Plain

tiffs’ 10 40 from y

ear 2001 and 2002 t

o determine that Plaintiffs’ net fishing income had not declined. See Form 1040, U.S. Individual Inc ome Tax Retu

rn, 2001, Pls.’ App. Tab 1; Form 1040, U.S. Individual I ncome Tax Return, 2002, Pls.’ App. Tab. 7. Line 12 of the 1040, titled “[b]usiness income or (loss),” is derived from Line 31, titled “[n]et profit or (loss),” on the Schedule C, which does not include the sale of business assets in its calculation of net profit or loss. See Form 104 0, U.S. I ndividual Inc ome Tax Return ; Form 1040, U.S. Individual I ncome Tax Return, Schedule C. Plaintiffs contend that Agriculture should include the sale of their vesse l in its calculation of their net fishing

income. Pl aintiffs

argue that Ag ricultur e should de

rive net fishing incomeC OURT N O
. 05-00062 P AGE 12

10 Plaintiff

s do not expla

in, nor do t

hey provide e vidence of, the so urce of this amoun

t; however , the sour

ce is like ly f

rom the sa

le of the Master F rancis b ecause

they claim tha t their entire income came from fishing and fur thermore, that they

sold their vessel in 2001.

11 Plaintiffs’ adjusted gross income in 2001 is the sum of positive $126,405, positive $327 from interest pay

ments, and negative $77,504 in business losses. Form 1040, U.S. I ndividual Income Tax Return, 2001, Pls.’ App. Tab 1. from their 1040's adjusted gross income, which include s income from the sale of business assets. Plaintiff s argue that the sa

le of the ir fishing

vessel should be inc luded in ne t fishing income because their entire income stems from fishing. Plaintiffs’ a djusted gross income in 2001 includes income from “[o]ther gains or (losses)” in the amount of $126,405. 10 Form 104 0, U.S. Indiv idual I ncome Ta x Return, 20 01, Pls.’ A

pp. Tab 1. Plaintiff

s’ adjuste d gross i

ncome al so decreased from $49,228 in 2001 11 to nega tive $47,8 49 in 2002, ostensibly because the sale
procee ds of the M aster F rancis w as acco unted for in 2001. F orm 1040, U .S. In dividual I ncome Tax Return , 2001, Pls. ’ App. Ta b 1; Form 1040, U.S. Individual I ncome Tax Return, 2002, Pls.’ App. Tab. 7. Essentially, Plaintiffs arg ue that Agriculture unreasonably defined net fishing income because net profit or loss from fishing should include the g ains or losses from the sale of business a ssets. The

court dis agree s. In de termining whether an age ncy properl y in terpreted and a

pplied a s tatute, c ourts

un de rt ak e a tw o- st ep an al ysi s p re sc ri be d b y Chevron U .S.A. I nc. v. Na tural Res . Def. Cou

ncil Inc. , 467 U.S. 837 (1984). The first step examines whether Congress has spoken dire ctly on the issue by examining the text of the statute, the canons of statutory construction, and the le gislative history. Id. at 842. If the statute is silent or ambiguous as to the issue, the court examines whether the agency ’s interpretation is permissible. Id. at 843. I f the ag ency has acte d reasonablyC OURT N O
. 05-00062 P AGE 13

and rationally, the c ourt may not substitute its own judgment for the a gency ’s. Steen v. United States , 395 F . Sup p. 2d 1 345, 1 349 (C IT 2005) (citi ng Koyo Seiko Co. v. United States , 36 F.3d 1565, 1570 (Fed. Cir. 1994)). Here, Agriculture’s def

inition of “net fishing income” is reasonable. I n general, net income is the “[t]otal income from all sources minus deductions, exemptions, and other tax reductions.” Black’s Law Dictionary

767 (7th e d. 1999). Congre ss, howev er, has s pecific ally limited “net income” to net income from fishing. See 19 U.S.C. § 2 401e(a) (1)(c) . It is reasonable for Agriculture to interpret Congress’ “fishing” re striction as including only the ne t profit or loss from o

peratin g a fish ing business and excluding i ncome fr om the sale

of a business asset. If Ag

riculture included the sale of business assets within the definition of net fishing income, then TAA may

be given to producers whose income dec reased because the sale of business a ssets infl ated the ir income in one y ear and the lack of such sa

les decr eased in come in the next year, and not because the producers were adversely

affected by

trade. Thus, it was reasonable for Agriculture to define net fishing income as net profit or loss excluding the g ain or loss from the sale of business assets. The court has also implicitly approved Agriculture’s definition of net fishing income as net profit or loss as reported to the I RS on a Schedule C. See Rood v. U.S. Sec’y of Ag ric. , Sli p Op. 0 5-112 , 2005 Ct. Int ’l Trad e LEXIS 120 , *5 (C IT Aug. 29, 20 05) (ex amini ng “fis hing businessloss” from applicant’s Schedule C to determine if net fishing income had declined) (emphasis added) . Thus, the court upholds Agriculture’s definition of net fishing income as a reasonable inter pretation of the statute. Further more, Ag ricultur e corre ctly

used information de duced fr om Plaintif

fs’ Sche dule Cs to deter

mine their

net fishin

g income . Contrar

y to Plaintiff s’ arg ument, Ag

ricultur e shouldC OURT N O
. 05-00062 P AGE 14

not have u sed adjus ted gro ss income to deter mine net f

ishing in come bec ause adj usted gr oss income includes the sale of business assets in Line 14, titled “[o]ther ga ins or (losses).” Form 1040, U.S. Individual I

ncome Tax Return. Thus, because net fishing income does not include income from the sale of a business asset, Agric ulture conducted a reasonable inquiry and correctly compared Plaintiffs’ net business income from their Schedule Cs to determine their net fishing income. Here, Plaintiffs’ business losses decrea sed from 2001 to 2002. Therefore, there was no decline in net fishing income. Accordingly , Agriculture’s denial of Plaintiffs’ TAA claim for failure to demonstrate a decline in net fishing income is supported by substantial evidence and is in accordance with the law. CONCLUSION For the foregoing r

easons, Plaintiffs’ motion for judgment on the agency record is denied and judgment will enter for Defendant pursua nt to USCIT R. 56.2(b).

/s/ Jane A. Re stani Jane A. Restani CHIEF JUDGE Dated: New York, New York This 28th day of Fe

bruary, 2006.