Court Opinion

ID: 9782329
Source: CourtListenerOpinion
Date Created: 2023-08-30 18:21:56.744026+00
Date Added: 2024-06-11T12:15:49.310607
License: Public Domain

CARPENETI, Justice,
dissenting.
Faced with an economic crisis of historic proportions in the Chignik commercial salmon fishery,1 the Board of Fisheries acted to provide relief. Under its broad statutory authority, the board enacted a regulation allowing the establishment of a cooperative fishery. The great majority of Chignik fishers joined. The superior court upheld the board’s regulation against challenge. But today’s Opinion, misinterpreting the statute authorizing the regulation, looking to the wrong statute to assess the regulation’s consistency with its controlling statute, and ignoring the deference our case law requires us to afford to an agency’s expertise, strikes down the regulation. I respectfully dissent.
Today’s Opinion holds that the Board of Fisheries’ regulation exceeds the language of the board’s statutory authority (Part III.D.) and conflicts with the Limited Entry Act’s purposes and statutory provisions (Part III. E.). I would affirm the superior court’s holdings that the board acted within its statutory authority and that its regulation did not directly conflict with the Limited Entry Act.2
*937I. The Board Acted Within Its Authorized Powers in Adopting the Regulation.
A party challenging a regulation bears the burden of showing that adoption of the regulation is inconsistent with the adopting agency’s controlling statute.3 We presume that a regulation promulgated in accordance with the Administrative Procedure Act is valid,4 and we will uphold the regulation so long as it is “consistent with and reasonably necessary to implement the statutes authorizing [its] adoption” and it is “reasonable and not arbitrary.”5 Because Grunert does not claim that the regulation in question in this case, 5 AAC 15.359, was not promulgated in accordance with the APA, Grunert bears the burden of showing that it is inconsistent with the Fish and Game Code or is unreasonable and arbitrary.
The Board of Fisheries is governed by Article 2 of the Fish and Game Code, AS 16.05. The legislature created the board for the general purposes of “the conservation and development of the fishery resources of the state.”6 In Kenai Peninsula Fisherman’s Cooperative Association v. State,7 in determining that “conservation” and “development” allowed the board to regulate utilization of resources among various user groups, we held that “conservation laws such as fish and game laws should be liberally construed to achieve their intended purpose.” 8
Following our decision in Kenai Peninsula, the legislature broadly granted the board the authority in AS 16.05.251 to enact regulations concerning sixteen enumerated types of issues, including, for example: establishing open and closed seasons and areas; setting quotas and bag limits; and “establishing the means and methods employed in the pursuit, capture, and transport of fish.” Most relevant here, the legislature in AS 16.05.251(a)(12) granted the board the power to regulate “commercial, sport, guided sport, subsistence, and personal use fishing as needed for the conservation, development and utilization of fisheries.”9
Part III.C. of today’s Opinion correctly rejects Grunert’s argument that the co-op regulation pursues objectives not permitted by statute. In so doing, it concludes that the regulation properly concerns “development” and “utilization” of the resource. While I believe that this regulation also serves “conservation” objectives,10 I otherwise agree with this portion of the Opinion.
However, Part III.D. of the Opinion mistakenly accepts Grunert’s argument that the regulation nonetheless exceeds the board’s authority. The Opinion is based on a narrow reading of AS 16.05.251(e) (an allocation provision) and an incorrect interpretation of the statutory definition of the term “fishery.”
Alaska Statute 16.05.251(e) provides that the board, when regulating a permitted subject, “may allocate fishery resources among personal use, sport, guided sport, and commercial fisheries.” Because the Opinion concludes that the entire Chignik purse seine salmon fishery — cooperative and competitive *938fishers included — constitutes a single fishery under the statutory definition, it strikes down the regulation, reading AS 16.05.251(e) to permit allocations “between” fisheries, but not “within” a single fishery. This conclusion is misguided for several reasons.
First, the Opinion’s premise — that the “cooperative fishery” and the “competitive fishery” cannot constitute separate fisheries — -is clearly wrong. The Fish and Game Code, the board’s controlling statute, defines a “fishery” as “a specific administrative area in which a specific fishery resource is taken with a specific type of gear.”11 In fitting both groups into a single fishery, the majority ignores the fact — raised in the state’s briefing to this court — that the board has subsequently passed a regulation permitting the cooperative fishers to use types of gear otherwise denied to competitive fishers. Thus, because the two groups have access to differing types of gear, the language easily accommodates the conclusion that these are two fisheries.
Moreover, even ignoring the subsequent regulation, the differences in operation between the “cooperative fishery” and the “competitive fishery” are sufficient to qualify as different “types of gear.” The regulation defined “cooperative fishery” as “a commercial purse seine salmon fishery in which, by agreement of the participants, the number of fishing vessels may be reduced with the intent of decreasing overhead expenses associated with commercial fishing and controlling the rate of harvest to achieve a higher quality product.” While Grunert complains that the distinguishing trait relates only to business structure and not to tangible gear, the definition of fishery is not so restrictive. “[T]ype of gear” is defined broadly and includes, by way of example, such subclassifica-tions as that between “sport gear and guided sport gear.”12 Sport fisheries and guided sport fisheries use the same type of “gear” (hook and line) but have different economic purposes. In light of the liberal construction given to these statutes, such a difference should be sufficient to avoid striking down the regulation based on a definition.
Second, even accepting the notion that the cooperative fishery and the competitive fishery constitute only one fishery, the Opinion’s conclusion regarding permitted allocation is incorrect. It places too much weight on a questionable definition of the preposition “among” in AS 16.05.251(e). In reading “among” to permit allocations “between” the fisheries, but not “within” a single fishery, the Opinion conflates the terms “among” and “between.” Yet there is a distinction between these two words: “Between expresses one-to-one relations of many things, and among expresses collective and undefined relations.” 13 Thus, while “between” would apparently preclude different allocations to members of the same fishery (i.e., “within” a fishery), “among” could possibly lead to a different result. The legislature could have used the word “between” in this provision, but it did not.
This reading also conflicts with our case law. We have previously held that the board possesses broad allocation powers. Before there was a statutory allocation provision, we allowed the board to regulate the utilization of fishery resources “by various user groups.”14 Later, we upheld a regulation allocating resources between “two competing subgroups of commercial users.”15 We have also specifically rejected a lower court’s interpretation of AS 16.05.251(e) that prohibited intra-group allocations (that is, between two or more commercial fisheries), stating that “[t]he phrase ‘among personal use, sport, and commercial fishing’ does not on its *939face indicate any intent to exclude any subsets of the phrase, such as intra-commercial allocations.”16
Moreover, we have previously held that the board may allocate resources within subclasses of a fishery, just as the board did in the present case. In State v. Hebert,17 we adopted the reasoning of the court of appeals 18 in upholding a board regulation that created two “superexclusive” herring sac roe fisheries within a single management area and provided that a person who fished one “superexclusive” fishery could not fish another “superexclusive” fishery or a nonexclusive fishery within the same season.19 The regulation effectively discriminated between otherwise similarly situated commercial herring fishers in the same administrative area based on the size of the herring operation, with “superexclusive” areas favoring smaller operators.20 One of the board’s goals in passing this regulation was “to alleviate local economic distress.”21 We concluded that the board acted within its authority in passing this regulation.22 Additionally, we held it to be constitutional.23 Hebert, consequently, stands for two propositions relevant to this case. First, the board may make resource allocations within a single fishery (same administrative area, same fishery resource, and same gear). Second, the board may make such an allocation to assist economically marginal fishers. Today’s Opinion conflicts with both of these propositions.24
Finally, allocations within a single fishery are already authorized under other provisions governing the board. As the superior court pointed out below, the board could have elected, for example, to simply impose an equal-share quota system for each seiner in Chignik, and such an allocation would have been within the board’s authority.25 It is incongruous to hold that the “among” language precludes allocations “within” a fishery, where other provisions, such as the power to set quotas, already allows it.
For all of these reasons, I would hold that the board acted within its authority in adopting the regulation.
II. As the Limited Entry Act Is Not the Controlling Statute for the Board of Fisheries, the Proper Test Is Whether the Regulation Directly Conflicts with the Act; Because It Does Not, the Regulation Is Valid.
The Opinion, incorrectly assuming that the Limited Entry Act is the controlling statute for the Board of Fisheries, concludes that the regulation is inconsistent with the purposes and provisions of the Limited Entry Act. But because the Limited Entry Act is not the controlling statute, the proper question is whether the regulation directly conflicts with it. Because it does not directly conflict with *940the Limited Entry Act, I would not invalidate the regulation.
The Opinion begins with the observation that a “regulation may be invalid if it is fundamentally inconsistent with the legislative intent underlying its controlling statute.” 26 I agree with this legal proposition. But I disagree with the draft’s unspoken assumption that the Limited Entry Act is the controlling statute. The regulation at issue was adopted by the Board of Fisheries, whose controlling statute is AS 16.05. The Limited Entry Act, which established the Alaska Commercial Fisheries Entry Commission (CFEC), is found in AS 1643. Because the Limited Entry Act is not the board’s controlling statute, the Opinion misstates the required showing. In order to strike down a regulation based on a raora-controlling statute, as is the case here, a court must find the regulation to be in “direct conflict” with that statute.27
Moreover, this onerous burden is heightened by the specific statutory schemes in this case. As noted above, AS 16.05 grants the Board of Fisheries broad and extensive powers, which we have interpreted expansively.28 The legislature took pains to provide in the Limited Entry Act, AS 16.43.950, that “[njothing in this chapter limits the power of the Board of Fisheries.” (Emphasis added.) This language suggests that a regulation of the board could never be invalidated on grounds of conflict with the Limited Entry Act; or, if it could, that the conflict would need to be severe — for example, a regulation by the board that usurped the CFEC’s express authority by setting the terms or fees for interim-use or entry permits. Grunert cannot make such a showing of direct conflict in this case.
The Opinion incorrectly suggests that a conflict exists between the regulation and the purposes of the Limited Entry Act. Not only is the co-op regulation consistent with the Act, the regulation actually furthers two of its three purposes.29 One of the purposes— economic health and stability of the commercial fishery — is strongly enhanced by the regulation.30 A second purpose — conservation— is enhanced to a lesser degree.31 A third purpose — sustained yield — is not affected. It therefore cannot be said that the co-op regulation conflicts with any of the purposes behind the Limited Entry Act.
The approach of the Opinion is to take the Limited Entry Act’s qualifying factors for the CFEC’s permitting process and to transform them into restrictions on the Board of Fisheries. This approach is problematic because, as indicated above, the Act explicitly states that its provisions shall 'not limit the powers of the board.32 Moreover, the Opinion fails to identify any actual conflict with the CFEC’s qualifying factors. The co-op regulation simply does not intrude upon the CFEC’s regulatory authority. The regulation neither grants permits nor alters permitting rules. It does not change the requirement that all fishers — and all members of any co-op — properly obtain CFEC permits. Indeed, the record reflects that each member *941of the co-op, before joining the co-op, had successfully passed through the CFEC’s qualification process. Similarly, nothing in the Limited Entry Act prohibits cooperative or joint venture fishing efforts. To the extent that the co-op structure will incidentally affect the marketplace or business of the Chignik fishery at some unknown point in the future, the CFEC remains free to increase or decrease the “optimum” number of permits in that fishery.33 Any hypothetical, incidental economic effect cannot seriously be considered a “direct conflict” with the CFEC’s jurisdiction.34
The Opinion relies heavily on the argument that the cooperative approach is different from what it sees as the former competitive model. It implies that only the competitive model is authorized by the Limited Entry Act. But that is plainly not the case. The Limited Entry Act was drafted to make certain that those admitted into the system actually were individuals economically dependent upon the fishery, who had fished in the past, and who had the ability to fish. All of these requirements having been met, the CFEC issued permits. There is no suggestion, in either the Limited Entry Act or the Fish and Game Code, that the Limited Entry Act’s standards, used to determine entry into limited fisheries, constrain the power of the board in meeting developing crises in Alaska’s fisheries.
Finally, other policy concerns raised in the Opinion seem improper and overly static. It uses the regulation’s economic efficiency as an argument against it — for example, in complaining that even though the cooperative will obtain a higher quality product for a fraction of the cost and labor, some members of the cooperative will profit from the arrangement while “holding down an office job or sitting at home.” The Opinion prefers a wasteful state of affairs in which only a few fishers do better than break even and the cost of producing an inferior product is unnecessarily high. Similarly, its concern with the free-rider problem (in stating that the cooperative “actually discourages active participation”) is a red herring. Participation within the cooperative simply becomes a matter of contractual agreement. As the cooperative’s bylaws indicate, each member shares in leftover proceeds, but those who contract with the cooperative to actually fish will be compensated for that extra labor. In contrast to a free-rider problem, the individual members of the cooperative will mutually determine how their resources can be used most effectively.
The Opinion also contends that the cooperative members “may suffer greater economic distress as a result of the cooperative fishery,” putting forth a hypothetical scenario to that effect. Not only is such a consideration inapposite to the question of whether the regulation is in direct conflict with the Limited Entry Act, it is also improper given our standard of review. Where highly specialized agency expertise is involved, we will not substitute our own judgment for the board’s.35 Our role is to ensure only that the agency has taken a “hard look at the salient problems and has genuinely engaged in reasoned decision making.”36 If the board concluded after full administrative procedures that the co-op regulations would improve the economics of the Chignik fishery — as it did here — we should not second-guess that conclusion and hypothesize the opposite result.
*942The regulation also sought to protect the interests of the competitive fishers to the extent practicable. In instances where the membership of the co-op is less than eighty-five percent of the permitted fishers, the allocation to the co-op is 0.9% of the sockeye harvest per permit holder within the co-op.37 The facts of this case presented such an instance. As a result, the co-op fishers, though they represented seventy-seven percent of the permitted fishers, were allocated only sixty-nine percent of the fish. In contrast, the competitive fishers (twenty-three percent of the total fishers) were allocated thirty-one percent of the fish' — -a higher average allocation per individual.
For all these reasons, I respectfully dissent. I would find the regulation valid as within the board’s authority under its controlling statute and not in direct conflict with the Limited Entry Act.

.The problems facing Chignik fishers were set out to the Board of Fisheries in these terms:
Problem: The substantial downturn in the salmon market over the past decade has reduced fishing income drastically while operating expenses have continued to increase every year. Fuel, grocery, and insurance expenses have increased at or above inflation rates over tire past ten years while salmon prices have declined to less than 50% of what they were just over a decade ago. The current fishing fleet is overcapitalized and the competitive harvest system does not allow for real improvements in produce quality or flexibility in competing with farmed salmon in foreign or domestic markets. The lower salmon prices drop, the more pronounced these problems become.
What will happen if nothing is done?
1. Chignik Bay, Chignik Lagoon, Chignik Lake, Perryville, Ivanoff Bay residents, and all Chignik fishermen will continue to endure severe economic hardships as income from salmon fishing continues to decline due to poor prices and ever-increasing operating expenses.
2. Limited entry permits will continue their exodus from rural to urban interests.
3. Permit values will continue to plummet.
4. Safety will be compromised as fishermen are forced to take greater risks to try to make a living and to hire inexperienced crew members because no crew members are available.
Proposal 105 to the Board of Fisheries, Chignik Area Salmon Management Plan.

. Because I believe the regulation survives Gru-nert's challenges that its enactment exceeded the board's statutory authority and conflicts with the Limited Entry Act, I would reach his constitutional challenges.

. "When an agency has adopted regulations under a delegation of authority from the legislature and using the process prescribed by the Administrative Procedure Act, we presume that the regulations are valid and place the burden of proving otherwise on the challenging party.” Lakosh v. Alaska Dep't of Envtl. Conservation, 49 P.3d 1111, 1114 (Alaska 2002).

. Id.

. Interior Alaska Airboat Ass'n v. State, Bd. of Game, 18 P.3d 686, 689-90 (Alaska 2001) (citations omitted).

. AS 16.05.221(a).

. 628 P.2d 897 (Alaska 1981).

. Id. at 903.

. See id. at 902-03 & n. 9.

. We have defined "conserv[ation]” to imply "controlled utilization of a resource to prevent its exploitation, destruction or neglect.” Interior Alaska, 18 P.3d at 691 (citation omitted). The regulation was designed in no small part to improve the quality of fish being brought to market. Under the previous competitive harvest system, such quality was compromised by time and profit pressures, which caused, among other things, improper and excessive handling. The attempt to remedy such quality decline through the regulation was therefore a measure to prevent the "exploitation, destruction or neglect” of a fishery resource. In short, it served a conservation purpose.

. AS 16.05.940(14). While this definition is essentially the same as the definition of "fishery" in the Limited Entry Act, the Opinion errs in referring solely to the Limited Entry Act's definition. If Grunert's argument was based solely on that Act's definition — which it is not — he would be required to show that the regulation is in "direct conflict” with the Act, not just that it is inconsistent. See infra Part II.

. AS 16.05.940(14)(B).

. Bryan A. Garner, A Dictionary of Modern Legal Usage at 85 (1987).

. Kenai Peninsula Fisherman’s Coop. Ass'n v. State, 628 P.2d 897, 903 (Alaska 1981).

. Meier v. State, Bd. of Fisheries, 739 P.2d 172, 174 (Alaska 1987).

. Peninsula Mktg. Ass'n v. State, 817 P.2d 917, 920-22 (Alaska 1991).

. 803 P.2d 863, 865 (Alaska 1990).

. State v. Hebert, 743 P.2d 392 (Alaska App.1987).

. 803 P.2d at 864.

. Id. at 865, 869. Because the regulation prohibited a person from fishing in both a superex-clusive and a nonexclusive fishery, the board reasoned that there would be insufficient incentive for larger fishing boats to operate within the superexclusive areas while smaller boats would be able to thrive in the superexclusive areas absent competition from larger boats. Id. at 869.

. Id. at 865.

. See id.

. Id. at 865-67.

. There is an additional factual similarity between the co-op regulation and the regulation in Hebert. The co-op regulation expressly prohibits any co-op member from participating in any salmon fishery outside of Area L from June 1 to August 31 of each year. 5 AAC 15.359(b)(6). This restriction resembles the operation of the Hebert "superexclusive'' fisheries — while those who benefit from the regulation are treated favorably within a certain area, they are also restricted from fishing in all other areas. The fishers who decline membership in the co-op, in contrast, remain free to use permits to simultaneously conduct fishing operations in other areas.

. In support of this proposition, the court cited 5 AAC 28.170(f) (imposing individual annual equal-share amount limit for commercial sablefish in subdistricts of Eastern Gulf of Alaska). The board is explicitly authorized to impose quotas, among other things, by AS 16.05.251(a)(3).

. Citing Madison v. Alaska Dep't of Fish & Game, 696 P.2d 168, 178 (Alaska 1985) (setting forth required showing under controlling statute).

. State v. Anderson, 749 P.2d 1342, 1344 (Alaska 1988).

. See AS 16.05.251(a); Kenai Peninsula Fisherman's Coop. Ass'n v. State, 628 P.2d 897, 903 (Alaska 1981). Our broad interpretation includes, as discussed above, our holding in State v. Hebert, 803 P.2d 863, 865 (Alaska 1990), which upheld a regulation very similar in effect to the regulation at issue here.

. "It is the purpose of this chapter to promote the conservation and the sustained yield management of Alaska's fishery resource and the economic health and stability of commercial fishing in Alaska by regulating and controlling entry of participants and vessels into the commercial fisheries in the public interest and without unjust discrimination.” AS 16.43.010(a).

. For example, a study conducted by the McDowell Group during the administrative process concluded that a cooperative fishery would (1) reduce the costs of sockeye salmon harvest by eighty percent, (2) increase the average net income per permit holder by an average of one-hundred forty percent, (3) increase the overall quality to the harvest, and (4) enhance the market value for Chignik sockeye.

. See supra note 10.

. AS 16.43.950.

. See AS 16.43.300. This power of the CFEC erases the Opinion’s concern that the regulation interferes with permitting requirements such as the applicant being "presently able to engage actively in the fishery.” AS 16.43.330(a). Despite the regulation, the CFEC remains free to issue permits to only those people who best meet their qualifications. (All members of the cooperative here have met these qualifications.) In addition, the Opinion’s suggestion that the cumulative effect of the permitting requirements requires each permit holder to actually fish is without statutory support and defies common sense.

. It is also worth noting that, although Grunert complains that the CFEC’s jurisdiction is being intruded upon, we have heard no complaint from the CFEC itself regarding the regulation.

. Lakosh v. Alaska Dep’t of Envtl. Conservation, 49 P.3d 1111, 1114 (Alaska 2002); Meier v. State, Bd. of Fisheries, 739 P.2d 172, 174 (Alaska 1987); Kingery v. Chappie, 504 P.2d 831, 835 (Alaska 1972) (”[T]he ‘wisdom’ of a regulation is not a subject of review.”).

. Interior Alaska Airboat Ass’n v. State, Bd. of Game, 18 P.3d 686, 690 (Alaska 2001).

. 5 AAC 15.359(d).