Opinion ID: 1405962
Heading Depth: 2
Heading Rank: 2

Heading: is the maximum number set by the cfec consistent with and reasonably related to the purposes of the limited entry act?

Text: Johns argues that even if the CFEC followed the right procedures in adopting the maximum number of permits for the fishery, the number adopted is inconsistent with and not reasonably necessary to carry out the purposes of the Limited Entry Act. Johns suggests the maximum number adopted is inconsistent with the legislature's intent to gradually limit fisheries by setting the maximum number of permits at a level approximating past participation. The maximum number established by the CFEC for this fishery was thirty-five. 20 AAC 05.320(b)(1) (eff. 2/25/77). This number was less than the number that had participated in the fishery prior to the fishery being limited. A maximum of forty-one purse seiners participated in the fishery in the four years prior to limitation. Johns argues that if the CFEC had followed the legislature's intent, the maximum number for this fishery would have been forty-one. In Rutter v. State, 668 P.2d 1343 (Alaska 1983), we had occasion to review the CFEC's action in setting the maximum number for another non-distressed fishery. We noted that [t]he act provides no guidelines for determining the appropriate number of permits for a non-distressed fishery, other than noting that the number selected should further the legislative purpose. Id. at 1346. We held that the appellant must establish that the number [set by the CFEC] was the expression of a whim, rather than a product of reason. Id. In Rutter, the appellant had argued that the maximum number set by the CFEC was too high. The number set by the CFEC had reflected present use. We concluded that the legislature intended the number of permits initially issued to reflect actual use and that therefore the number established by the CFEC was reasonable and in accord with the letter and spirit of the Limited Entry Act. Id. at 1347. We find, in this case, that the CFEC erred in establishing a maximum number which was lower than the highest number of units of gear fished in the four years prior to the limitation date. [T]he legislature intended the number of permits initially issued to reflect actual use... . The Act was designed to protect the reliance interests of all individuals using the fishery as well as aiding the dependent fishermen. Rutter, 668 P.2d at 1347. Thus, the CFEC was obligated to select the maximum number by reference to past participation at the fishery. Had it done so, the CFEC would have selected forty-one as the maximum number. [6] Although we conclude that the CFEC erred in setting a maximum number which is lower than the historic high for this fishery of forty-one, this error does not require reversal. Even though the maximum number was set at thirty-five, thus far, the CFEC has issued forty-four permits for the fishery. This is because the Act requires permits to be issued to those who would suffer significant economic hardship by exclusion from the fishery, regardless of whether the maximum number must be exceeded. AS 16.43.250(b), .270. In addition, it is possible another seven permits will be issued for the fishery to those who claim they fall into the significant hardship category. Thus, the number of permits already issued exceeds the number the CFEC should have set as a maximum. Johns claims, however, that had the CFEC properly set the maximum number for the fishery at forty-one, AS 16.43.270(b) would have required the Commission to actually issue fifty-one permits. Johns' reliance on AS 16.43.270 is misplaced. The CFEC is required to define priority classifications based upon the hardship of similarly situated applicants for permits. AS 16.43.250. The CFEC must then issue entry permits to qualified applicants in order of descending priority classification, until the number of entry permits issued equals the maximum number.... AS 16.43.270(a). In no event, however, may a permit be denied to one who falls in a priority category which would suffer significant economic hardship by exclusion from the fishery. Id. Alaska Statute 16.43.270(b) provides: If, within the lowest priority classification of qualified applicants to which some entry permits may be issued, there are more applicants than there are entry permits to be issued, then the allocation of entry permits within that priority classification shall be by lottery. However, the commission shall issue entry permits to all qualified applicants in that priority classification if the total number of permits issued for the fishery does not exceed the maximum number of entry permits established under AS 16.43.240 for that fishery by more than five percent or 10 permits, whichever is greater. A review of AS 16.43.270(b) indicates that it applies only where permits are available for some applicants in a particular priority classification, but issuance to all applicants in that priority classification would exceed the maximum number set for the fishery. AS 16.43.270 never applied to the fishery in question in this case. The CFEC adopted a nine point priority classification system for this fishery. 20 AAC 05.662 (eff. 2/25/77). It then determined that all applicants with six points or more would suffer significant economic hardship and pursuant to AS 16.43.270 could not be denied a permit. 20 AAC 05.666 (eff. 2/25/77). The Commission therefore issued permits to all those who had six points or more. This resulted in the issuance of forty-four permits. As the number of permits issued already exceeded the maximum number the CFEC should have set, no permits were available for lower priority classifications and thus the provisions of AS 16.43.270(b) are inapplicable. Since the number of permits actually issued by the CFEC exceeds the number of permits the CFEC should have set as a maximum, Johns was not prejudiced by the CFEC's failure to set the maximum number no lower than the historic high.
We now address the question of whether the maximum number set by the CFEC is in accord with the purposes of the Limited Entry Act. This point must be distinguished from the point we have discussed above that the Commission had a legal obligation to set the maximum number no lower than the historic high. We must now determine whether the CFEC's action in setting the maximum number at thirty-five is sustainable in light of the general purposes of the Limited Entry Act. The Limited Entry Act has two purposes: enabling fishermen to receive adequate remuneration and conserving the fishery. Art. VIII, § 15 Alaska Const.; AS 16.43.010; Commercial Fisheries Entry Comm'n v. Apokedak, 606 P.2d 1255, 1265 (Alaska 1980). [7] Prior to limiting this fishery, the CFEC consulted the Alaska Department of Fish and Game. The CFEC requested the Department to indicate its opinion as to the number of units of gear which could participate in the fishery from the standpoint of sound biological management. The Department of Fish and Game responded that the maximum number should be set so that twenty-five to thirty boats could participate at any opening. The Department also indicated to the CFEC that if the maximum was set above thirty-five it would probably have to close the fishery. The Department's estimate was based upon its belief that the 1977 roe herring take would be in the 1,000 to 1,500 ton range. It noted that it had no evidence that any major increase would occur in the near future. The CFEC had before it information indicating that the level of stocks in the fishery was low. Further, the CFEC had information from the Alaska Department of Fish and Game that they had no evidence that any major increase in the harvest would occur in the near future. Finally, the CFEC had the report of the Alaska Department of Fish and Game which indicated that it felt only twenty to thirty boats would be biologically manageable and that it would probably have to close the fishery if more than thirty-five boats participated. Under these circumstances, we cannot say that the CFEC's action in setting the maximum number at thirty-five was an expression of whim rather than a product of reason. Rutter, 668 P.2d at 1346. We find that the CFEC's action was in accord with the purposes of the Limited Entry Act.