Associated Fisheries of Maine, Inc. v. Daley

No. 97-1327

ASSOCIATED FISHERIES OF MAINE, INC.,
Plaintiff, Appellant,

v.

WILLIAM M. DALEY, SECRETARY
OF THE UNITED STATES DEPARTMENT OF COMMERCE,
Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE

[Hon. D. Brock Hornby, U.S. District Judge]

Before

Selya, Circuit Judge,

Hill,* Senior Circuit Judge,

and Boudin, Circuit Judge.

Gene
R.
Libby, with whom Michael
W.
MacLeod-Ball, Robert
C.
Brooks, and Verrill & Dana were on brief, for appellant.
David E. Frulla
,
Stanley M. Brand
, and
Brand, Lowell & Ryan
on
brief for Seafarers International Union of North America, amicus
curiae.
Andrew
C.
Mergen, Attorney, Environment & Natural Resources
Division, United States Department of Justice, with whom Lois
J.
Schiffer, Assistant Attorney General, David
C.
Shilton and Lyn
Jacobs, Attorneys, and Gene
Martin, Office of Regional Counsel,
National Oceanic and Atmospheric Administration, were on brief, for
appellee.

September 16, 1997

*Of the Eleventh Circuit, sitting by designation.

SELYA, Circuit
Judge. Associated Fisheries of Maine

(AFM) and its amicus, the Seafarers International Union, warn that

the final version of a fishery management plan promulgated by the

Secretary of Commerce (the Secretary) could have significant

adverse effects on the fishing industry in the Northeast and that

fishermen caught in the regulatory net will not be able to survive

financially. They unsuccessfully asked the district court to

invalidate the Secretary's final rulemaking and thereby avert this

potential calamity. They now ask us for the same relief, urging

that the Secretary failed to comply with both the Magnuson Act, 16

U.S.C. SS 1801-1882 (1994), and the Regulatory Flexibility Act

(RFA), 5 U.S.C.A. SS 601-612 (1994 & Supp. 1997). Although we have

considerable empathy for the fishermens' concerns, we conclude,

after wading through an administrative record which comprises

roughly 30,000 pages, that the Secretary acted within his lawful

purview.

I. THE STATUTORY SCHEME

Responding to depletion of the nation's fish stocks due

to overfishing, Congress enacted the Magnuson Act in 1976 to

protect fishery resources. See 16 U.S.C. S 1801(a). The Act

created eight regional fishery management councils, each of which

has responsibility for fashioning a fishery management plan (FMP)

After this litigation had begun, Congress passed the
Sustainable Fisheries Act, which amended the Magnuson Act (referred
to now as the Magnuson-Stevens Act). See Pub. L. No. 104-297, 110
Stat. 3559 (Oct. 11, 1996). All references herein are to the
Magnuson Act, which was in effect when the challenged rules were
promulgated, not to the Magnuson-Stevens Act.

3

to regulate commercial fishing within a particular geographic

region. See id. SS 1852(a)(1)-(8), 1852(h)(1). When a proposed

FMP (or a plan amendment) is developed, the council must submit it

to the Secretary for review. See id. S 1853(c). The Secretary

then determines whether the proposed FMP is consistent not only

with the Magnuson Act's seven national standards for fishery

conservation and management, see id. S 1851(a)(1)-(7), but also

with other applicable law, including the RFA, see id. SS

1854(a)(1)(B), 1855(e). In making this determination, the

Secretary must publish an appropriate notice, see id. S

1854(a)(1)(C), consider the comments engendered in response

thereto,
see
id. S 1854(a)(2)(A), and consult with the Coast Guard

anent enforcement, see id. S 1854(a)(2)(C). If the Secretary

approves the amendment, he then promulgates final implementing

regulations, which are subject to judicial review. See id. S

1855(b).

II. THE COURSE OF EVENTS

The New England Fishery Management Council (the Council)

has authority over commercial fishing in the Atlantic Ocean off the

New England coast. See id. S 1852(a)(1). Under its aegis, the

management and conservation of the New England Groundfish Fishery

has had a tangled history. See
generally Peter Shelley et al.,
The

New England Fisheries Crisis:

What Have We Learned?
, 9 Tul. Envtl.

L.J. 221, 223-33 (1996). When less intrusive efforts did not

Groundfish include cod, haddock, flounder, and other species
that dwell near the ocean floor.
See Shelley,
supra, 9 Tul. Envtl.

4

prevent overfishing, the Council developed the Northeast

Multispecies Fishery Management Plan in 1985. The Secretary

approved it only as a stopgap. Four amendments to the interim rule

followed, none of which proved adequate. See Conservation
Law

Found.
of
New
Eng.,
Inc. v. Franklin, 989 F.2d 54, 58 (1st Cir.

1993). Litigation over the last of these amendments resulted in a

consent decree. The decree established a timetable for adopting an

FMP that would reverse the continuing depletion of cod, flounder,

and haddock stocks within specified periods. See id.

In 1994, the Council recommended, and the Secretary,

acting through the National Marine Fisheries Service (NMFS) and the

National Oceanic and Atmospheric Administration, approved Amendment

5. This amendment sought to eliminate overfishing of cod, haddock,

and yellowtail flounder stocks by sharply reducing permissible

fishing over a five to seven year period. See 59 Fed. Reg. 9872

(1994) (final rule). To achieve this goal, the amendment proposed

a gradual reduction in the annual number of working days at sea

(DAS) for certain fishing vessels and created three classes of

permits. See 50 C.F.R. SS 651.22, 651.4 (1995). The class that is

relevant here comprises limited access multispecies permits (which,

in turn, are subdivided into fleet and individual permits).

Amendment 5 sets up a DAS notification program that requires

vessels covered by fleet permits to notify the NMFS of departure

and arrival times. See id. S 651.29. In addition, the amendment

L.J. at 223 & n.4 (listing the 13 species included in the
groundfish management plan).

5

establishes a vessel tracking system (VTS) that is intended to

function by means of electronic devices installed on board vessels

with individual permits. See
id. S 651.28. Because the VTS is not

yet operational, both classes of permit holders must satisfy the

call-in requirements of the DAS notification program for the time

being. See id. S 651.29(a)(2).

Dismayed by the Secretary's handiwork, AFM challenged

Amendment 5 in Maine's federal district court. By that time,

however, haddock and yellowtail stocks had collapsed, and cod

stocks were near collapse. See NMFS,
Report of the 18th Northeast

Regional Stock Assessment Workshop (18th SAW): The Plenary 53-54

(1994). In light of this troubling new information, Amendment 5

seemed inadequate either to protect or rebuild these stocks, and

NMFS's Stock Assessment Review Committee recommended that the

Council reduce ichthyic mortality to as low a level as possible.

See id. at 53. In response, the Council adopted Amendment 6 (an

emergency measure designed to protect haddock, see 59 Fed. Reg.

32,134 (1994)) and thereafter developed Amendment 7.

The Secretary promulgated Amendment 7 as a final rule

after notice and comment. See 61 Fed. Reg. 8540 (proposed rule) &

27,710 (1996) (final rule) (to be codified at 50 C.F.R. pt. 651).

Among other things, Amendment 7 seeks to reduce ichthyic mortality

rates and rebuild multispecies stocks by (1) setting annual

"allowable catch" targets for regulated species, (2) orchestrating

new area closures, and (3) implementing further DAS cutbacks

(including acceleration of the reduction schedule originally

6

established in Amendment 5). Although the Secretary acknowledged

the significant negative economic impacts (especially on trawl

vessels) which Amendment 7 would invite, he concluded that

conservation of the fishery would yield greater long-term benefits.

See 61 Fed. Reg. at 27,731.

Unmollified, AFM amended its pending judicial complaint

to challenge Amendment 7 as well as Amendment 5. It alleged, inter

alia, that both amendments violated the Magnuson Act and the RFA.

The parties filed cross-motions for summary judgment. The district

court then held a one-day informational hearing, during which the

parties' experts explained their respective positions on

scientific, economic, and ecological principles.

In the end, the court granted summary judgment in the

Secretary's favor. See
Associated Fisheries of Me., Inc.
v.
Daley,

954 F. Supp. 383 (D. Me. 1997). As to issues that are relevant in

this appeal, the court held that the newly enacted judicial review

provisions of the RFA did not apply retroactively, and that, in all

events, the Secretary had complied with the RFA. See id. at 386-

87. The court also held that the Secretary's rulemaking did not

run afoul of the Magnuson Act. See id. at 388-90. AFM now

Because the Secretary recognized his inability to foresee the
effect of various measures with certitude, he inserted in Amendment
7, as in Amendment 5, a process that allows him to adjust DAS
allocations and requirements as stocks recover or as other
circumstances change. See 50 C.F.R. S 651.40.

7

appeals.

III. THE STANDARD OF REVIEW

We review a district court's grant of summary judgment de

novo. See Coyne v. Taber
Partners
I, 53 F.3d 454, 457 (1st Cir.

1995);
Massachusetts Dept. of Pub. Welfare
v.
Secretary of Agric.
,

984 F.2d 514, 520 (1st Cir. 1993). This rubric has a special twist

in the administrative law context. The Magnuson Act incorporates

the familiar standard of review associated with the Administrative

Procedure Act (APA). See 16 U.S.C. S 1855(b). Where the APA

standard obtains, a court may set aside an administrative action

only if that action is arbitrary, capricious, or otherwise contrary

to law. See 5 U.S.C. S 706(2)(A)-(D). Because the APA standard

affords great deference to agency decisionmaking and because the

Secretary's action is presumed valid, judicial review, even at the

summary judgment stage, is narrow. See Citizens
to
Preserve

Overton
Park,
Inc. v. Volpe, 401 U.S. 402, 415-16 (1971); Sierra

Club v. Marsh, 976 F.2d 763, 769 (1st Cir. 1992). Consequently,

our brief like that of the district court is only to determine

whether the Secretary's decision to promulgate the fishery

regulation was consonant with his statutory powers, reasoned, and

In the district court, AFM advanced claims under various other
statutory provisions, as well as claims implicating constitutional
standards and executive orders. None was successful. See
Associated
Fisheries, 954 F. Supp. at 385 & n.3. AFM does not
pursue any of these theories on appeal, and we express no opinion
on them.
We note, moreover, that in this court, as below, AFM
challenges Amendment 5, as modified by Amendment 7. For
simplicity's sake, we refer mainly to the latter.

8

supported by substantial evidence in the record. See Alliance

Against
IFQs v. Brown, 84 F.3d 343, 345 (9th Cir. 1996), cert.

denied, 117 S. Ct. 1467 (1997); C
&
W
Fish
Co. v. Fox, 931 F.2d

1556, 1562 (D.C. Cir. 1991); Maine v. Kreps, 563 F.2d 1052, 1055

(1st Cir. 1977).

An agency rule is arbitrary and capricious if the agency

lacks a rational basis for adopting it for example, if the agency

relied on improper factors, failed to consider pertinent aspects of

the problem, offered a rationale contradicting the evidence before

it, or reached a conclusion so implausible that it cannot be

attributed to a difference of opinion or the application of agency

expertise. See
Motor Vehicles Mfrs. Ass'n
v.
State Farm Mut. Ins.

Co., 463 U.S. 29, 43 (1983); Rhode Island Higher Educ. Assistance

Auth. v. Secretary
of
Educ., 929 F.2d 844, 855 (1st Cir. 1991).

Subject, of course, to statutory constraints, policy choices are

for the agency, not the court, to make. Even if a reviewing court

disagrees with the agency's conclusions, it cannot substitute its

judgment for that of the agency. See Overton
Park, 401 U.S. at

416; Kreps, 563 F.2d at 1055.

Finally, when reviewing agency action, we apply the same

legal standards that pertain in the district court and afford no

special deference to that court's decision. See Massachusetts

Dept. of Pub. Welfare, 984 F.2d at 521 n.5. This approach is not

altered simply because the court held an informational hearing at

which experts testified. Although some degree of deference may be

appropriate if a district court's determination turns on factual

9

findings, evidence presented by witnesses, or "even upon lengthy

district court proceedings in which knowledgeable counsel explain

the agency's decisionmaking process in detail," Sierra
Club v.

Marsh, 769 F.2d 868, 872 (1st Cir. 1985), this case does not

implicate that principle. The district judge made it pellucid that

the dissertations which he entertained "were not evidence, but

rather were advocacy presentations by non-lawyers skilled in their

respective areas and therefore better able to present the material

to [the court]." Associated
Fisheries, 954 F. Supp. at 388 n.9.

A presentation which serves only to educate the district court, not

to enlarge the administrative record, does not affect the standard

of judicial review. See
Fisherman's Dock Coop., Inc.
v.
Brown, 75

F.3d 164, 168 (4th Cir. 1996).

IV. CLAIMS IMPLICATING THE MAGNUSON ACT

AFM asseverates that Amendment 7 violates the Magnuson

Act because the regulation is unnecessary to achieve the

Secretary's stated goals and inconsistent with the national

standards embodied in the Act. Neither asseveration holds water.

A. The Need for Amendment 7.

The record contradicts AFM's assertion that Amendment 7

is not necessary to achieve a rebuilding of groundfish stock

because the status quo suffices. The Secretary was presented with

reliable scientific data indicating that stocks had collapsed; he

was advised that the prophylactic measures specified in Amendment

5 were clearly inadequate to alleviate the steadily worsening

plight; and he also was told that certain ichthyic mortality rates

10

ought to be reduced significantly. Responding to this influx of

new information, the Council conducted extensive scientific

analyses and devised Amendment 7 as a means of ensuring the long-

term stability of the fishery. The Secretary studied the data,

weighed plethoric comments, and decided to promulgate the rule.

Having carefully reviewed the record, we cannot say that

the Secretary exercised his discretion in an irrational, mindless,

or whimsical manner. When an agency is faced with conflicting

scientific views and chooses among them, its decision cannot be

termed arbitrary or capricious. Indeed, a reviewing court must

afford special deference to an agency's scientific expertise where,

as here, that expertise is applied in areas within the agency's

specialized field of competence. See
Baltimore Gas & Elec. Co.
v.

Natural Resources Defense Council, Inc., 462 U.S. 87, 103 (1983);

United
States v. Members
of
Estate
of
Boothby, 16 F.3d 19, 21-22

(1st Cir. 1994).

B. Compliance with National Standards.

The Magnuson Act sets up a series of seven national

standards. See 16 U.S.C. S 1851(a)(1)-(7). To ensure compliance

with these standards, the responsible agency must perform a

cost/benefit analysis ancillary to the promulgation of an FMP.

Here, the analysis for Amendment 7 showed a projected net benefit

of $18 million over the ten-year rebuilding period. AFM insists

that the Secretary put his thumb on the scale when conducting this

analysis, and that Amendment 7 therefore fails to satisfy the

national standards. Specifically, AFM charges that the Secretary

11

arbitrarily disregarded certain enforcement and compliance expenses

which, when properly included, would demonstrate that the likely

costs of Amendment 7 substantially exceed the likely benefits.

The Magnuson Act defines "optimum yield" as the amount of

fish which will secure the greatest overall benefit to the nation

based on the maximum sustainable yield from a fishery, as modified

by relevant economic, social, or ecological factors. See id. S

1802(21). The bedrock principle of National Standard 1 is that

conservation and resource management measures, such as Amendment 7,

"shall prevent overfishing while achieving, on a continuing basis,

the optimum yield from each fishery for the United States fishing

industry." Id. S 1851(a)(1). Relatedly, National Standard 7

requires that "[c]onservation and management measures shall, where

practicable, minimize costs and avoid unnecessary duplication."

Id. S 1851(a)(7). In pursuance of his statutory duty, see id. S

1851(b), the Secretary established regulatory guidelines to assure

that FMPs would be developed in accordance with these national

standards. See 50 C.F.R. pt. 602 (1995). The regulatory

guidelines make it plain that the agency should weigh the costs

associated with an FMP (including industry compliance and

enforcement costs) against the forecasted benefits. See id. S

602.17(b)(2)(vii), (d).

In this case, the Secretary excluded Coast Guard

enforcement costs from the calculus. AFM terms this exclusion

arbitrary, but the administrative record belies that

characterization. The Secretary specifically addressed this issue

12

and the documentation supporting the final rules contains a

rational explanation for his decision. Although the Coast Guard

estimated that Amendment 7 would increase enforcement costs by

approximately $20,800,000 per year, its estimate assumed sea-based

enforcement whereas Amendment 7, as drafted, relied primarily on

land-based enforcement through the notification and tracking

systems. See 61 Fed. Reg. at 27,719. Even if certain sea-based

costs occurred under Amendment 7, the Secretary explained, they

would not comprise increases in overall costs because they would

"actually represent programmatic improvements that could also be

expected to be made in the out years of [Amendment 5]." Id. For

this reason, the Secretary's cost/benefit analysis explicitly

assumed that Amendment 7 would not yield enforcement costs greater

than those which would have been borne under Amendment 5. See 61

Fed. Reg. at 27,719, & 27,722.

In our view, this explanation is sufficiently logical,

and sufficiently rooted in the record, to dispose of AFM's argument

concerning Coast Guard enforcement costs. It also answers AFM's

additional argument that the Secretary improperly excluded the

costs of industry compliance with Amendment 7. The Secretary's

assumption that compliance costs will not vary materially as

Moreover, as alluded to in agency correspondence and further
explicated during the informational hearing held by the district
court, the Secretary considered the Coast Guard's estimate to be
budgetary in nature and not rooted in cost increases which were
likely to accompany the implementation of Amendment 7. The
Secretary must be accorded some latitude to make such judgment
calls. Cf. Sierra Club, 976 F.2d at 771.

13

between Amendment 5 and Amendment 7 flows rationally from

Amendment 7's retention of the enforcement mechanism established

under Amendment 5. See 50 C.F.R. S 651.29. Consequently, since

Amendment 7 does not alter the taxonomy that determines which

vessels will require VTS installations, AFM's claim that the new

regulation fails to account for added VTS-related costs lacks

force.

To recapitulate, the record reveals that the Secretary

carefully considered the enforcement measures associated with

Amendment 7 and, consistent with the evidence before him, concluded

(1) that the Coast Guard estimate was largely a figment of

bureaucratic imagination which did not track the actual enforcement

mechanism needed for the FMP, and therefore did not warrant

inclusion in the calculus of likely costs and benefits, and (2)

that compliance costs for the fishing industry would remain roughly

the same under Amendment 7. Whether or not we, if writing on a

pristine page, would have reached the same set of conclusions is

not the issue. What matters is that the administrative judgment,

right or wrong, derives from the record, possesses a rational

basis, and evinces no mistake of law. Consequently, it merits our

approbation. See State
Farm, 463 U.S. at 43; Kreps, 563 F.2d at

1056.

The sockdolager, of course, is the enormous difficulty of

estimating enforcement costs in advance. Administrative

The agency discussed this difficulty in the final
environmental impact statement and noted that it was compounded

14

decisionmaking is not an exact science, and judicial review must

recognize that some arbitrariness is inherent in the exercise of

discretion amid uncertainty. Accordingly, courts reviewing this

type of administrative decision must leave room for a certain

amount of play in the joints. See Fisherman's
Dock, 75 F.3d at

171-72; Alaska Factory Trawler Ass'n v. Baldridge, 831 F.2d 1456,

1460 (9th Cir. 1987) (per curiam). Here, the reasons offered to

explain the Secretary's determination that Amendment 7 is

consistent with the national standards reflect an understanding of

analytical factors and constitute a rational exercise of

deliberative decisionmaking. Hence, we cannot say that this

determination offends the applicable standard of review.

V. CLAIMS IMPLICATING THE REGULATORY FLEXIBILITY ACT

An FMP (or a plan amendment) promulgated pursuant to the

Magnuson Act must be consistent with the RFA. See 16 U.S.C. SS

1854(a)(1)(B), 1855(e). AFM next charges that the Secretary failed

to meet this obligation when promulgating Amendment 7.

Some background may prove helpful. Congress enacted the

RFA to encourage administrative agencies to consider the potential

impact of nascent federal regulations on small businesses. See

Pub. L. No. 96-354, S 2(b), 94 Stat. 1164, 1165 (1980) (statement

of purpose);
see
generally Paul R. Verkuil,
A Critical Guide to the

Regulatory
Flexibility
Act, 1982 Duke L.J. 213, 215-26 (1982).

Under the RFA, an agency that publishes a notice of proposed

here because enforcement resources are shared among several
management plans.

15

rulemaking must prepare an initial regulatory flexibility analysis

(IRFA) describing the effect of the proposed rule on small

businesses and discussing alternatives that might minimize adverse

economic consequences. See 5 U.S.C. S 603. When promulgating a

final rule, the agency not only must prepare a final regulatory

flexibility analysis (FRFA) but also must make copies available to

members of the public and publish directions for obtaining such

copies. See id. S 604.

The Secretary promulgated Amendment 7 on May 31, 1996.

At that time, the law expressly prohibited judicial review of

agency compliance with sections 603 and 604. See id. S 611; see

also Thompson v. Clark, 741 F.2d 401, 404-05 (D.C. Cir. 1984).

Approximately two months earlier, however, Congress had amended the

RFA by enacting the Small Business Regulatory Enforcement Fairness

Act (SBREFA), Pub. L. No. 104-121, tit. II, 110 Stat. 857, 864-68

(1996). The 1996 Amendments reshaped the contours of the mandated

flexibility analysis and provided for judicial review of the

agency's product. See id. SS 241, 242, 110 Stat. at 864-66

(codified as amended at 5 U.S.C. SS 604(a), 611(a)(1) (Supp.

1997)). Because Congress delayed the effective date of these

amendments until ninety days after passage, see id. S 245, 110

Stat. at 868, they were not in effect when the Secretary

promulgated Amendment 7.

A. Judicial Review.

The threshold question is whether we have jurisdiction to

review AFM's claim under the RFA. This question depends on whether

16

the judicial review provision contained in the 1996 Amendments

applies retrospectively.

AFM argues that the judicial review provision should be

accorded retroactive application under
Landgraf v.
USI Film Prods.
,

511 U.S. 244 (1994). Judge Hornby concluded otherwise, remarking

the absence of any express legislative intent to apply the SBREFA

retroactively, and reasoning that, inasmuch as the 1996 Amendments

were "one legislative package," "[i]t would be anomalous to apply

the judicial review portion of the 1996 amendments to past agency

actions but at the same time not apply the substance of those

amendments." Associated Fisheries, 954 F. Supp. at 387.

The Supreme Court decision in Landgraf and, more

recently, the decisions in
Lindh v.
Murphy, 117 S. Ct. 2059 (1997),

and Hughes Aircraft Co. v. United States, 117 S. Ct. 1871 (1997),

provide a roadmap for deciding questions of retroactivity. The

roadmap is not easy to use, and in this case the guideposts point

in more than one direction. On one hand, the delayed effective

date points toward prospective application,
see
Wright v.
FEMA, 913

F.2d 1566, 1572 & n.13 (11th Cir. 1990);
Criger v.
Becton, 902 F.2d

1348, 1351 (8th Cir. 1990), and the legislative history of the 1996

Amendments points the same way, see 142 Cong. Rec. E571, E574

(daily ed. Apr. 19, 1996) (statement of Rep. Hyde) (twice

indicating that judicial review would be available for rules

promulgated after the effective date). On the other hand, the new

judicial review provision does not affect substantive rights but

merely confers jurisdiction, and courts often give retroactive

17

effect to such statutes. See Landgraf, 511 U.S. at 274; but see

Hughes Aircraft
, 117 S. Ct. at 1878 (drawing a distinction between

an amendment which merely allocates jurisdiction among fora and one

which creates jurisdiction where none previously existed, and

stating that the latter is subject to the presumption against

retroactivity). Moreover, the Third Circuit, contradicting Judge

Hornby's "one legislative package" rationale, recently held that

the 1996 Amendments were severable and that the judicial review

provision could be applied to a legislative rule promulgated before

their effective date. See Southwestern
Pa.
Growth
Alliance v.

Browner, F.3d , (3d Cir. 1997) [No. 96-3364, 1997 WL

418420, at *15-16].

In the last analysis, it is unnecessary to decide the

retroactivity question here. We have long adhered to the practice

that, when an appeal presents a jurisdictional riddle, yet the

merits of the underlying issue are readily resolved in favor of the

party challenging jurisdiction, a court may sidestep the quandary

and simply dispose of the appeal on the merits. See
United States

v. Stoller, 78 F.3d 710, 715 (1st Cir.) (collecting cases), cert.

denied, 117 S. Ct. 378 (1996). We follow that praxis today.

B. The Renovated Section 604.

By electing to reach the merits, we do not avoid the

Our task is made much easier because the lower court, though
concluding that the judicial review provision did not apply,
nonetheless proceeded to reach the merits and, in an alternate
holding, laid out a blueprint that makes very good sense. See
Associated
Fisheries, 954 F. Supp. at 386-87. We commend Judge
Hornby for his prudent belt-and-suspenders approach.

18

question of retroactivity entirely. AFM contends that the

Secretary failed to comply with section 604 of the RFA both in its

original and renovated incarnations. As our next order of

business, we address whether the amended version applies

retroactively to this case.

We hold that the Secretary's compliance with the RFA

should be measured against the original requirements of section

604, that is, against the law as it read when the Secretary

promulgated Amendment 7. The 1996 Amendments substantively altered

section 604 by reformulating and augmenting the required content of

an FRFA. See 5 U.S.C.A. S 604(a) (Supp. 1997). The renovated

version now requires that an FRFA contain the following:

(1) a succinct statement of the need for,
and objectives of, the rule;
(2) a summary of the significant issues
raised by the public comments in response to
the initial regulatory flexibility analysis, a
summary of the assessment of the agency of
such issues, and a statement of any changes
made in the proposed rule as a result of such
comments;
(3) a description of and an estimate of
the number of small entities to which the rule
will apply or an explanation of why no such
estimate is available;
(4) a description of the projected
reporting, recordkeeping and other compliance
requirements of the rule, including an
estimate of the classes of small entities
which will be subject to the requirement and
the type of professional skills necessary for
preparation of the report or record; and
(5) a description of the steps the agency
has taken to minimize the significant economic
impact on small entities consistent with the
stated objectives of applicable statutes,
including a statement of the factual, policy,
and legal reasons for selecting the
alternative adopted in the final rule and why
each one of the other significant alternatives

19

to the rule considered by the agency which
affect the impact on small entities was
rejected.

5 U.S.C.A. S 604(a) (Supp. 1997).

A comparison of this iteration with the prior version, 5

U.S.C. S 604(a) (1994), reveals that subsections (3) and (4) are

brand new insofar as FRFAs are concerned, and that subsection (5),

modifying the former subsection (3), imposes more specific content

requirements. Since the Secretary completed the FRFA and

promulgated Amendment 7 before the effective date of the 1996

Amendments, applying the neoteric version of section 604 would

impose new strictures with respect to matters already completed,

and, thus, would contravene the rule against retroactivity. See

Landgraf, 511 U.S. at 280.

AFM offers only a weak rejoinder. It says that

retroactive application would not impose new duties because

Congress passed the 1996 Amendments before the agency prepared the

FRFA. That is so but it is beside the point. SBREFA's effective

date constitutes the cut-off point, and the Secretary had completed

and published both the FRFA and the final rule prior to that time.

Thus, imposing incremental requirements on these actions would have

an impermissible retroactive effect. See id.

C. The Original Section 604.

Having determined that the original version of section

604 governs our RFA-related review of Amendment 7, we turn to that

proviso. Under it, an FRFA must contain three elements:

(1) a succinct statement of the need for,
and the objectives of, the rule;

20

(2) a summary of the issues raised by the
public comments in response to the initial
regulatory flexibility analysis, a summary of
the assessment of the agency of such issues,
and a statement of any changes made in the
proposed rule as a result of such comments;
and
(3) a description of each of the
significant alternatives to the rule
consistent with the stated objectives of
applicable statutes and designed to minimize
any significant economic impact of the rule on
small entities which was considered by the
agency, and a statement of the reasons why
each one of such alternatives was rejected.

5 U.S.C. S 604(a) (1994). Congress designed this provision "to

assure that agencies engage in principled decision-making." 126

Cong. Rec. S21,448 & 21,459 (daily ed. Aug. 6, 1980).
Legislative

history confirms that Congress, in enacting section 604, intended

to compel administrative agencies to explain the bases for their

actions and to ensure that alternative proposals receive serious

consideration at the agency level. See
id. at S21,460;
see
also S.

Rep. No. 96-878, at 13-14 (1980),
reprinted
in 1980 U.S.C.C.A.N. at

2788, 2800-01.

Notwithstanding this intention, Congress emphasized that

the RFA should not be construed to undermine other legislatively

mandated goals. See 126 Cong. Rec. at S21,459-60;
see
also S. Rep.

RFA traveled a somewhat unconventional route in its march
towards passage. The Senate rejected the Senate bill, S. 299, as
reported by the Judiciary Committee, and adopted Senator Culver's
substitute bill. See 126 Cong. Rec. S21,449-51 (daily ed. Aug. 6,
1980). The House passed the bill without either amendment or
separate hearings, and endorsed the Senate's section-by-section
analysis. See Thompson, 741 F.2d at 406 (tracing legislative
history); see generally Verkuil, supra, at 226-27. We therefore
examine the substitute bill and its accompanying analysis as the
relevant guide to legislative intent.

21

No. 96-878, supra, at 10, 14, 1980 U.S.C.C.A.N. at 2797, 2801.

Thus, section 604 does not command an agency to take specific

substantive measures, but, rather, only to give explicit

consideration to less onerous options:

[T]his provision does not require that an
agency adopt a rule establishing differing
compliance standards, exemptions, or any other
alternative to the proposed rule. It requires
that an agency, having identified and analyzed
significant alternative proposals, describe
those it considered and explain its rejection
of any which, if adopted, would have been
substantially less burdensome on the specified
entities. Evidence that such an alternative
would not have accomplished the stated
objectives of the applicable statutes would
sufficiently justify the rejection of the
alternative.

126 Cong. Rec. at S21,459-60; see also S. Rep. No. 96-878, supra,

at 14, 1980 U.S.C.C.A.N. at 2801.

We think that a useful parallel can be drawn between RFA

S 604 and the National Environmental Protection Act, which furthers

a similar objective by requiring the preparation of an

environmental impact statement (EIS). See 42 U.S.C. S 4332 (1994).

The EIS requirement is meant to inform the agency and the public

about potential adverse ecological effects and about the

availability, if any, of less harmful alternatives prior to a final

decision on the fate of a particular project or rule. See

Robertson v. Methow
Valley
Citizens
Council, 490 U.S. 332, 349

(1989);
Valley Citizens for a Safe Env't
v.
Aldridge, 886 F.2d 458,

459-60 (1st Cir. 1989). In light of this purpose, courts do not

review challenges to the adequacy of an EIS under a standard of

mathematical exactitude but under a standard of reasonableness.

22

See
Aldridge, 886 F.2d at 459;
Conservation Law Found. of New Eng.,

Inc. v.
Andrus, 623 F.2d 712, 719 (1st Cir. 1979). Recognizing the

analogous objectives of the two acts, we believe that the same rule

of reason should apply to judicial review of challenges under RFA

S 604. Thus, we proceed to examine whether the Secretary made a

reasonable, good-faith effort to carry out the mandate of section

604.

In this instance, NMFS prepared an FRFA consisting of its

initial workup (the IRFA) and its responses to submitted comments.

See 61 Fed. Reg. at 27,730-31; see also 59 Fed. Reg. 9872, 9883

(1994) (final rule, Amendment 5). AFM contends that this proffer

misfires for two reasons. First, AFM maintains that dressing up an

IRFA by tacking on responses to comments does not comply with the

statutory directive that the agency prepare an FRFA. Second, AFM

asserts that the Secretary failed sufficiently to identify, and

adequately to explain his rejection of, alternatives designed to

minimize deleterious economic effects on small businesses. We

address these objections in turn.

1.

We reject AFM's charge that the FRFA is inadequate on its

face. Section 604 prescribes the content of an FRFA, but it does

not demand a particular mode of presentation. To disregard

otherwise compliant analysis simply because it is not ensconced in

Since an EIS, unlike an FRFA, must contain a "detailed"
statement, 42 U.S.C. S 4332(2)(C), the analogy seems more than fair
to AFM.

23

a specific format would be inconsistent both with the RFA's

explicit authorization to avoid duplicative or unnecessary

analyses, see 5 U.S.C. S 605(a), and with the legislative

concession that an agency "may incorporate in a regulatory

flexibility analysis any data or analysis contained in any other

impact statement or analysis required by law," 126 Cong. Rec. at

S21,460. Accordingly, we hold that an agency can satisfy section

604 as long as it compiles a meaningful, easily understood analysis

that covers each requisite component dictated by the statute and

makes the end product whatever form it reasonably may take

readily available to the public.

We do not mean to suggest that the combination of an IRFA

and responses to comments always or even often will pass

muster. But in the absence of a statutory or regulatory directive

specifying the form of document to be produced, the preparing

agency must be accorded ample latitude in making the choice. See

Town
of
Orangetown v. Gorsuch, 718 F.2d 29, 40 (2d Cir. 1983).

This precept is especially pertinent here, since the IRFA was

reasonably extensive, the wide range of comments anent the proposed

rule (many of which were submitted by small businesses or proxies

In pressing for a contrary result, the appellant relies
heavily on a letter written to NMFS by the Small Business
Administration (SBA) criticizing the agency's earlier efforts to
comply with the RFA in the development of Amendment 5. We give
little, if any, weight to the letter. For one thing, it is
directed only to compliance vis-a-vis Amendment 5. For another
thing, although the RFA authorizes the SBA to appear as an amicus
curiae, see 5 U.S.C.A. S 612(b) (1994 & Supp. 1997), the SBA has
chosen not to exercise that prerogative in respect to Amendment 7.

24

on their behalf) provided a natural forum for the Secretary in

striving to fulfill his section 604 obligation, and the agency

punctiliously complied with the notice requirements of RFA S

604(b). Under these circumstances, we conclude that the Secretary

acted within his proper province in designating the IRFA and the

responses to comments as the FRFA required by the statute.

2.

We turn now from form to substance and inspect the

adequacy of the FRFA's contents. We preface this discussion by

remarking two important considerations. First, section 604 does

not require that an FRFA address every alternative, but only that

it address significant ones. See 5 U.S.C. S 604(a)(3). Second,

the majority of commercial fishing vessels in the Northeast are

deemed small businesses for purposes of the RFA. See 5 U.S.C. S

601(3); 13 C.F.R. S 121.601 (1995);
see
also 61 Fed. Reg. at 27,731

(memorializing the Secretary's recognition of this reality). It

follows that any attempt to reduce the adverse economic impacts of

a regulation aimed at rebuilding stocks in this fishery is

necessarily an attempt to minimize the negative effects of the

regulation on small businesses. To that extent, Congress' desire

to have agencies write rules that distinguish (where desirable)

between big and small businesses has diminished relevance.

Citing 5 U.S.C. S 608(b), AFM argues that failure to prepare
a suitable FRFA caused Amendment 7 to lapse. This argument is
jejune. The lapse provision applies only to delayed compliance
following the promulgation of emergency rules. See Thompson, 741
F.2d at 407-08. That is not the situation here.

25

After poring over the FRFA, we conclude that the

Secretary fulfilled his substantive obligation under section 604.

The agency's reply to a comment which suggested that the final rule

violates the spirit of the RFA demonstrates a keen understanding of

the RFA's objectives and states the parameters of the Secretary's

obligation quite well:

The intent of the RFA is not to limit
regulations having adverse economic impacts on
small entities, rather the intent is to have
the agency focus special attention on the
impacts its proposed actions would have on
small entities, to disclose to the public
which alternatives it considered to lessen
adverse impacts, to require the agency to
consider public comments on impacts and
alternatives, and to require the agency to
state its reasons for not adopting an
alternative having less of an adverse impact
on small entities.

61 Fed. Reg. at 27,721. The analysis that the agency undertook is

fully consonant with this aspirational language.

To begin with, the IRFA (incorporated into the FRFA)

describes several possible alternatives and summarizes the

potential economic impact of each. The agency concluded that each

of these scenarios would have a greater negative impact on the

fishing industry than would the proposed rule. For example, the

agency rejected Alternative 1 (which included a ban on fishing with

certain gear until the spawning stock biomass reached a minimum

threshold level) because it would result in unacceptably high

levels of foregone income; it rejected Alternative 2 (which

proposed closing half of certain fishing areas and placing

restrictions in open areas) on the basis that it would be massively

26

inefficient and would dramatically increase vessel operating costs;

and it rejected Alternative 4 (which favored a quota system) for

much the same reasons.

The responses to submitted comments (which also form a

part of the FRFA) discuss and dismiss additional alternatives. For

example, responding to a comment that characterized closures in the

Gulf of Maine as detrimental to the industry, NMFS explained that

this was a temporary default measure to reduce ichthyic mortality

in situations where DAS reductions were insufficient. In that

regard, the FRFA noted that the Council had considered reducing DAS

allotments but declined to pursue that alternative after receiving

industry comment indicating a preference for flexibility. See 61

Fed. Reg. at 27,714-15. By like token, the agency explicated its

rejection of the status quo alternative, reiterating that Amendment

5 had been conceived as a means of arresting the decline in

spawning stock biomass, whereas Amendment 7 responded to a new,

emerging need and purposed to rebuild the biomass to levels which

would ensure stability. See id. at 27,721. The agency also

explained why some DAS exemptions under the status quo alternative,

which had the capacity partially to alleviate burdens on small

vessels, could not be retained under the more rigorous conservation

goals of Amendment 7. See id. at 27,715.

We think it is noteworthy, too, that the RFA identifies

steps taken for the express purpose of mitigating adverse economic

impacts on small fishing businesses. In this vein, the Secretary

eliminated a provision requiring layover days, thereby easing the

27

concerns of smaller vessels (which are more sensitive to inclement

weather). See 61 Fed. Reg. at 27,717. Similarly, the Secretary

phased in the DAS reduction schedule over two years instead of one

because, though conservationists recommended an 80 percent

reduction in mortality rates, the Secretary feared that vessels

could not financially weather a DAS reduction greater than 50

percent. The Secretary also moved to establish a vessel buyout

program reducing the socioeconomic burden on small entities. See

id. at 27,731.

We think that these selected examples convey the flavor

of the FRFA as a whole. The point is not whether the Secretary's

judgments are beyond reproach, but whether he made a reasonable,

good-faith effort to canvass major options and weigh their probable

effects. Here, the record reveals that the Secretary explicitly

considered numerous alternatives, exhibited a fair degree of

sensitivity concerning the need to alleviate the regulatory burden

on small entities within the fishing industry, adopted some

salutary measures designed to ease that burden, and satisfactorily

explained his reasons for rejecting others. The fact that AFM has

pointed to no
significant alternative that escaped the Secretary's

notice attests to the thoroughness of the Secretary's efforts.

Because the Secretary's specification and discussion of significant

alternatives was reasonable, it fulfilled the substantive

requirements of section 604.

AFM makes one last-ditch argument in respect to section

604. It carps that the Secretary failed to develop an alternative

28

that substantially lessens the economic impact on small entities.

This puts the catch before the cast and, in the bargain, confuses

what the fishermen desire with what the statute obliges the

Secretary to do. An adequate discussion of alternatives in an FRFA

is context-specific. Of necessity, given the distressed condition

of groundfish stocks in this fishery, any alternative consistent

with the Secretary's conservation mandate under the Magnuson Act

will produce economic hardships for the industry. The FRFA reveals

that the Secretary assessed the potential impact of Amendment 7 on

small businesses, mulled other options in good faith, and sought to

strike the best available balance between conservation goals and

the legitimate concerns of the fishing community. No more is

exigible.

D. Section 609.

Section 609 of the RFA, 5 U.S.C. S 609, directs agencies

to assure that small entities are given an opportunity to

participate in the rulemaking process for any rule that is likely

to produce significant economic impacts. AFM claims that the

Secretary improperly limited participation in the process and

failed to provide adequate assistance to small entities in

The 1996 Amendments provide that agency compliance with
section 609 is subject to judicial review in conjunction with
judicial review of challenges under amended section 604. See 5
U.S.C.A. S 609 (Supp. 1997). Noting that the substantive
alterations to section 609 effected by the 1996 Amendments are of
little significance to this appeal, AFM does not pursue its
retroactivity argument with regard to section 609. Accordingly, we
test compliance against the language of the provision as it stood
on May 31, 1996 (the date the Secretary promulgated Amendment 7).

29

evaluating agency reports. We do not agree.

While section 609 instructs the Secretary to assure

participation, the method and manner of doing so is left primarily

to the Secretary's sound discretion. In this situation, we are

satisfied that the Secretary provided adequate participatory

opportunities for small businesses.

Council meetings were open to all interested parties and

were well-attended. Public hearings were held in six states.

Scientific data was broadly disseminated through open workshops and

otherwise. See, e.g., 61 Fed. Reg. at 27,714 & 27,720 & 27,723.

Several representatives of small entities participated in a

regional stock assessment workshop, at which scientific data was

presented and peer-reviewed. The nature and volume of the

submitted comments is emblematic of a very high level of public

participation. Furthermore, the substance of the comments leaves

no doubt but that small fishing businesses were intimately familiar

with the crisis and were well aware of the potential significance

of the management efforts that were being studied. See 61 Fed.

Reg. at 27,712-29.

To be sure, the development of Amendment 7 involved

daunting scientific complexities. That stems from the intrinsic

nature of the problem, not from some fault on the Secretary's part.

Since the Secretary provided repeated and varied opportunities for

meaningful participation by small entities, he met the relatively

modest demands that section 609 imposes.

The complaint that the Secretary did too little to assist

30

small entities wishing to participate in the process is equally

unavailing. Section 609 does not mandate specific types of

assistance. Rather, it offers a list of suggested techniques to

assure participation. The legislative history confirms the

purport of the statutory language; agencies have the discretion to

select among various methods of outreach. See 126 Cong. Rec. at

S21,460. Here, the record discloses that the Secretary handled the

matter in a perfectly reasonable way.

VI. CONCLUSION

To sum up, it is evident that rapidly deteriorating

conditions required the Secretary to fish in troubled waters. The

immediacy of the need to rebuild groundfish stocks left him no easy

way out. In the absence of a perfect (or even near-perfect)

solution, he reasoned his way to a decision that balanced the

significant adverse impacts that Amendment 7 would have on the

In pertinent part, the statute directs that the promulgating
agency

shall assure that small entities have been
given an opportunity to participate in the
rulemaking for the rule through techniques
such as
(1) the inclusion in an advanced
notice of proposed rulemaking, if
issued, of a statement that the
proposed rule may have a significant
economic effect on a substantial
number of small entities;
. . .
(4) the conduct of open conferences
or public hearings concerning the
rule for small entities; and
. . . .

5 U.S.C. S 609 (1994).

31

industry against the severe depletion which plagued this fishery

and the legal obligation to develop an FMP that would eliminate

overfishing. Having carefully reviewed the administrative record,

we conclude that the product of his labors Amendment 7 is

rational and fairly supported by the record.

We need go no further. Although we are not unsympathetic

to the plight of the individuals who will suffer adverse

consequences from the choices embodied in the final rule, we must

uphold the balance struck by the Secretary among competing

concerns. See Strycker's Bay N'hood Council, Inc. v. Karlen, 444

U.S. 223, 227-28 (1980) (per curiam).

Affirmed.

32