NOAA Proposes to Standardize Civil Penalties Under Fisheries Act, ESA, and Other Laws

The National Oceanic and Atmospheric Administration (“NOAA”) is requesting comments from the public by December 20, 2010 on a new “Policy for the Assessment of Civil Administrative Penalties and Permit Sanctions” (“the Draft Policy”),[1] which provides guidance on penalties under all of the major statutes enforced by NOAA, including the Magnuson-Stevens Fishery Conservation and Management Act, the Endangered Species Act and the Marine Mammal Protection Act. NOAA hopes it will “improve consistency at a national level, provide greater predictability for the regulated community and the public, improve transparency in enforcement, and more effectively protect natural resources.”[2] The Draft Policy is the latest of a number of steps being taken by NOAA to respond to a series of extremely critical reviews of NOAA fisheries enforcement programs by the Department of Commerce Inspector General.[3]

Background

In 2009 the Massachusetts congressional delegation requested the Inspector General to investigate allegations that the Northeastern Region of NOAA Fisheries (“NMFS”) was assessing excessive penalties and retaliating when fishermen contested the penalties. Dr. Jane Lubchenco, Under Secretary of Commerce for Oceans and Atmosphere and NOAA Administrator, then asked the Inspector General to conduct a national review of NOAA’s enforcement operations. The Inspector General reviewed agency enforcement records and interviewed over 255 individuals in the northeast, North Carolina, Florida, the west coast, and Alaska. The Inspector General “found systemic, nationwide issues adversely affecting NOAA’s ability to effectively carry out its mission of regulating the fishing industry. Those issues have contributed significantly to a highly-charged regulatory climate and dysfunctional relationship between NOAA and the fishing industry—particularly in the Northeast Region.”[4]

The Inspector General noted that 65% of the cases handled by the agency’s Office of Law Enforcement principally involved enforcement of the Magnuson-Stevens Act, and consisted of approximately 98% noncriminal violations. Fishing industry parties, while stating that they support fair and equitable prosecution of violators, complained that NOAA enforcement was arbitrary and lacked transparency, while at the same time fishing regulations are becoming increasingly complex and change with little or no advance notice, making good faith compliance challenging. The Inspector General validated industry’s perception of uneven enforcement, concluding that “a lack of management attention, direction, and oversight has lead to regional enforcement elements operating autonomously; in the Northeast Region, this has contributed to aggregate fine assessments that are inconsistent with those in the other five regions.”[5]

Among other findings, the Inspector General concluded that NOAA’s process for determining civil penalty assessments allowed significant discretion with minimal guidance on the part of individual enforcement attorneys and thus “we find it difficult to argue with those who view the process as arbitrary and in need of reform.”[6] Further, each region had developed its own detailed penalty schedule by specific types of violations with broad ranges for both penalty and permit sanctions. Among other recommendations, the Inspector General “identified a need for NOAA to undertake revisions to applicable procedural regulations and penalty schedules in order to provide greater consistency and clarity, and reduce confusion among affected industry parties.”[7] The Draft Policy responds to this recommendation.

The Draft Policy

The Draft Policy provides national guidance for assessing civil penalties brought under the seven statutes which give rise to the bulk of NOAA’s enforcement cases: the Magnuson-Stevens Act, the National Marine Sanctuaries Act, the Endangered Species Act, the Marine Mammal Protection Act, the Lacey Act, the North Pacific Halibut Act, and the Antarctic Marine Living Resources Convention Act. The current maximum statutory penalties under the seven statutes range from $140,000 per violation under the Magnuson-Stevens Act and National Marine Sanctuaries Act to $11,000 per violation under the Marine Mammal Protection Act and the Antarctic Marine Living Resources Conservation Act. Penalties and permit sanctions under each of the statutes are determined based on a number of common factors such as the nature, circumstances and gravity of the alleged violation, any prior offenses, and the alleged violator’s ability to pay.

The Draft Policy would establish one national matrix for each major statute that narrows the range of potential penalties and permit sanctions. Under the Draft Policy, penalties and permit sanctions under the statutes would be calculated using three criteria: (1) a base penalty amount and permit sanction reflective of the seriousness of the violation; (2) an adjustment of the specific violation upward or downward to reflect the circumstances; and (3) an addition to the adjusted base penalty to recoup the economic benefit of noncompliance. The base penalty amount would be established by considering the matrix for the particular statute, the potential for harm to the resource or regulatory program,[8] and the alleged violator’s degree of culpability—e.g., whether the violation was intentional or unintentional. The base penalty amount would then be adjusted upward or downward within the range on the matrix to reflect factors such as a history of non-compliance, whether the activity was commercial or recreational, and the degree of cooperation after the violation. An additional amount would then be added to remove any actual economic benefit and to prevent violations from continuing as a “cost of doing business.”

More detailed explanations of each of these factors and hypothetical examples of the application of the policy under the major statutes are included as appendices to the Draft Policy, along with the proposed matrices and schedules.

Request for Public Comments

NOAA is seeking public comment on all aspects of the Draft Policy, but also requested comments on several specific issues.[9] Those issues include (1) whether the agency should create separate matrices and schedules for recreational activities; (2) whether the agency should only consider prior offenses that have been fully adjudicated in adjusting penalties upward; (3) any additional upward or downward adjustment factors that should be considered; and (4) whether the matrices include an appropriate range of penalties and sanctions. When finalized, the Draft Policy will supersede all previous agency guidance regarding the assessment of civil penalties and permit sanctions under the statutes covered.

For more information, contact Linda Larson or any other member of Marten Law’s Natural Resources practice group.