Pacific Choice Seafood Company v. Wilbur Ross

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

PACIFIC CHOICE SEAFOOD COMPANY; No. 18-15455
SEA PRINCESS, LLC; PACIFIC
FISHING, LLC, D.C. No.
Plaintiffs-Appellants, 4:15-cv-05572-
HSG
v.

WILBUR ROSS, U.S. Secretary of OPINION
Commerce; NATIONAL MARINE
FISHERIES SERVICE,
Defendants-Appellees.

Appeal from the United States District Court
for the Northern District of California
Haywood S. Gilliam, Jr., District Judge, Presiding

Argued and Submitted December 4, 2019
San Francisco, California

Filed September 25, 2020

Before: Sidney R. Thomas, Chief Judge, and William A.
Fletcher and Eric D. Miller, Circuit Judges.

Opinion by Judge Miller
2 PACIFIC CHOICE SEAFOOD V. ROSS

SUMMARY *

Magnuson-Stevens Fishery Conservation and
Management Act

The panel affirmed the district court’s summary
judgment entered in favor of the National Marine Fisheries
Service in an action brought by Pacific Choice Seafood
Company challenging the Service’s rule imposing a quota
system for the Pacific non-whiting groundwater fishery,
limiting the total allowable catch and prohibiting any one
entity from controlling more than 2.7 percent of the
outstanding quota share.

In 2015, the Service determined that Pacific Choice and
related entities together owned or controlled at least 3.8
percent of the quota share. Acting under the Magnuson-
Stevens Fishery Conservation and Management Act of 1976
(the “Act”), the Service ordered Pacific Choice to divest its
excess share.

The panel held that Pacific Choice’s suit was timely
because it was brought within 30 days of the Service’s
publication of the 2015 rule requiring divestiture. 16 U.S.C.
§ 1855(f)(1).

In challenging the 2.7 percent quota share limit, first,
Pacific Choice argued that the Service misinterpreted the
term “excessive share” in 18 U.S.C. § 1853a(c)(5)(D) by
sidelining considerations of market power in favor of per-

*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
 PACIFIC CHOICE SEAFOOD V. ROSS 3

vessel profitability. Because the Act was ambiguous as to
what factors the Service must consider in setting a maximum
share, the panel turned to step two of the framework set forth
in Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837 (1984),
and considered whether the Service adopted a “reasonable
interpretation” of the statute. The panel held that it was
reasonable for the Service to conclude that other factors can
dictate a lower maximum share than might be required by a
singular focus on preventing excessive market power.

Second, Pacific Choice argued that the Service acted
arbitrarily and capriciously by failing to consider all relevant
factors and relying on insufficient analysis in choosing the
2.7 percent limit. The panel held that the record showed that
the Service considered market power. The panel further held
that the Service engaged in a reasoned process from which
its path to the 2.7 percent limit may reasonably be discerned.
The panel held that Pacific Choice’s interpretation of the
administrative record was not persuasive. The panel
concluded that the Service did not act arbitrarily or
capriciously in setting the 2.7 percent maximum share.

The panel rejected Pacific Choice’s statutory and
Administrative Procedure Act challenges to the Service’s
control rule. The Act requires that the Service “establish []
a maximum share . . . that a [share] holder is permitted to
hold, acquire, or use.” 16 U.S.C. § 1853a(c)(5)(D)(i). The
Service interpreted “hold, acquire, or use” to include
“control” and defined “control” to include, among other
things, “the ability through any means whatsoever to control
or have a controlling influence over the entity to which
[quota share] is registered.” 50 C.F.R.
§ 660.140(d)(4)(iii)(H). The panel held that its review of the
Service’s interpretation of the rule was governed by Chevron
analysis, and the panel saw nothing in the statute that
4 PACIFIC CHOICE SEAFOOD V. ROSS

unambiguously foreclosed the Service’s approach. The
panel further held that the rule was not arbitrary or
capricious.

COUNSEL

Ryan P. Steen (argued) and Jason T. Morgan, Stoel Rives
LLP, Seattle, Washington, for Plaintiffs-Appellants.

David Gunter (argued) and Bridget Kennedy McNeil,
Attorneys; Eric Grant, Deputy Assistant Attorney General;
Jeffrey Bossert Clark, Assistant Attorney General;
Environment and Natural Resources Division, United States
Department of Justice; Maggie B. Smith, Office of the
General Counsel, National Oceanic and Atmospheric
Administration, Washington, D.C.; for Defendants-
Appellees.

OPINION

MILLER, Circuit Judge:

In 2010, the National Marine Fisheries Service
implemented a quota system for the Pacific non-whiting
groundfish fishery, one of several stocks of fish that the
Service administers in the Pacific Ocean. Acting under the
Magnuson-Stevens Fishery Conservation and Management
Act of 1976, 16 U.S.C. §§ 1801–1891d (the Magnuson-
Stevens Act or the Act), the Service imposed a quota limiting
the total allowable catch, divided it among the participants
in the fishery, and prohibited any one entity from “own[ing]
or control[ling]” more than 2.7 percent of the outstanding
quota share. 50 C.F.R. § 660.140(d)(4)(i). The Service
 PACIFIC CHOICE SEAFOOD V. ROSS 5

defined “control” to include “the ability through any means
whatsoever to control or have a controlling influence over”
an entity with quota share. Id. § 660.140(d)(4)(iii)(H).

In 2015, the Service determined that Pacific Choice
Seafood Company and related entities (collectively, Pacific
Choice) together owned or controlled at least 3.8 percent of
the quota share. After the Service ordered Pacific Choice to
divest its excess share, Pacific Choice brought this action,
alleging that the Service’s 2.7 percent maximum share and
its “control” rule exceeded its authority under the
Magnuson-Stevens Act and violated the Administrative
Procedure Act. The district court granted summary judgment
to the Service. We affirm.

I

Congress enacted the Magnuson-Stevens Act to prevent
overfishing and to ensure that “fisheries [are] conserved and
maintained so as to provide optimum yields on a continuing
basis.” 16 U.S.C. § 1801(a)(5). The Act establishes eight
regional fishery management councils, each of which is
charged with developing a “fishery management plan” for
the fisheries in its region. Id. § 1852(a)(1), (h)(1). A
management plan must prescribe measures “necessary and
appropriate for the conservation and management of the
fishery.” Id. § 1853(a)(1), (b)(3). Once a council develops a
plan, the Secretary of Commerce must evaluate it and either
approve or reject it. Id. § 1854(b)(1). The Secretary has
delegated that responsibility to the Service. See Pacific
Dawn LLC v. Pritzker, 831 F.3d 1166, 1170 (9th Cir. 2016).

In 1990, the regional fishery councils began to regulate
some fisheries by adopting quota programs under which the
councils divided up the total allowable catch and gave
participants in the fishery the right to harvest a specified
6 PACIFIC CHOICE SEAFOOD V. ROSS

quantity of fish. See Pacific Coast Fed’n of Fishermen’s
Ass’ns v. Blank, 693 F.3d 1084, 1087 (9th Cir. 2012). Such
programs proved controversial, and in 1996, Congress
imposed a temporary moratorium on new quota programs.
Sustainable Fisheries Act, Pub. L. No. 104-297, § 108(e),
110 Stat. 3559, 3576–77 (1996). In 2007, after the National
Academy of Sciences concluded that quota programs “can
be effective solutions to a host of fishery-related problems,
including economic inefficiency, overcapitalization . . . and
overfishing,” Congress reauthorized new quota programs,
which it called “limited access privilege programs.” Pacific
Coast, 693 F.3d at 1087–88; see Magnuson-Stevens Fishery
Conservation and Management Reauthorization Act of
2006, Pub. L. No. 109-479, § 106, 120 Stat. 3575, 3586
(2007).

Congress set out several requirements for limited access
privilege programs. Most relevant here, a council must
ensure that no one entity acquires “an excessive share” of the
total privileges. 16 U.S.C. § 1853a(c)(5)(D). To that end, a
council must establish “a maximum share, expressed as a
percentage of the total limited access privileges, that a
limited access privilege holder is permitted to hold, acquire,
or use,” along with “any other limitations or measures
necessary to prevent an inequitable concentration of limited
access privileges.” Id.

This case involves the limited access privilege program
for the Pacific non-whiting groundfish fishery. As their
name suggests, groundfish live near the bottom of the ocean.
See West Coast Groundfish, National Oceanic and
Atmospheric Administration, https://www.fisheries.noaa.gov/
species/west-coast-groundfish. The fishery consists of more
than 90 species of groundfish in the Pacific Ocean off the
coast of California, Oregon, and Washington, including
 PACIFIC CHOICE SEAFOOD V. ROSS 7

lingcod, sablefish, sole, and rockfish, but not including the
Pacific whiting, or hake, which is regulated separately. See
50 C.F.R. § 660.140, table 1 to paragraph (d)(1)(ii)(D). The
relevant regional council for the fishery is the Pacific Fishery
Management Council, which has representatives from
California, Oregon, Washington, and Idaho, as well as from
Indian tribes with federally recognized fishing rights in those
States. 16 U.S.C. § 1852(a)(1)(F).

Even before Congress reauthorized limited access
privilege programs in 2007, the Council had started to
implement a rationalization program for the Pacific fisheries
it manages. In this context, “rationalization” means avoiding
overcapacity—the presence of more fishing vessels than
necessary to catch a sustainable number of fish—by, among
other things, reducing the number of vessels operating in the
Council’s fisheries. In addition to reducing overfishing, the
Council aimed to “increase net economic benefits” from its
fisheries and to create “individual economic stability” for
vessels that operated within them. Pacific Coast, 693 F.3d
at 1089.

The Council’s years-long deliberative process began
with the Trawl Individual Quota Committee, a committee of
industry representatives formed to analyze possible quota
limits on both an aggregate and per-species level. In 2003,
relying on data from aggregate average catches from 1994 to
2003, the Quota Committee proposed several possible limits
on the aggregate quota share that could be held by any one
entity, ranging from 1.5 to 5 percent of the total allowable
catch.

After the Quota Committee completed its analysis, the
Groundfish Allocation Committee reviewed the
recommendations and “added three options for the Council’s
consideration,” ranging from the average maximum share
8 PACIFIC CHOICE SEAFOOD V. ROSS

for the 1994–2003 period to 1.5 times those limits. The
Allocation Committee’s report paid particular attention to
the “maximum fleet consolidation level” that each option
would create—in other words, how much market
concentration would result. Part of the Allocation
Committee’s analysis involved calculating a Herfindahl-
Hirschman index, or “HHI,” a measure of market
concentration commonly employed in the antitrust context.
See Saint Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke’s
Health Sys., Ltd., 778 F.3d 775, 786 (9th Cir. 2015). That
analysis suggested that the Council could set aggregate catch
limits up to about 18 percent without creating
anticompetitive effects in the fishery.

But after significant deliberation among the Quota
Committee, the Allocation Committee, and the Council, the
Allocation Committee failed to agree on a single
recommendation. After proposing two new options, the
Allocation Committee asked yet another committee—the
Groundfish Management Team—to evaluate all of the
options that had been proposed.

The Management Team began by noting that while
“[a]ntitrust concerns define the upper extreme of where
limits can be set,” fishing quotas are also “a tool for
balancing the Council’s social objectives against the
undesired effects of the . . . drive toward increased economic
efficiency.” In contrast to the Quota Committee and the
Allocation Committee, which had focused on aggregate
revenues, the Management Team focused on per-vessel
profitability. It analyzed historical data on a per-vessel basis
to determine the current profitability of the fishery. It then
projected profitability based on varying fleet sizes, and it
cautioned that “concerns about control” resulting from
higher quota share maximums “go beyond revenues” and
 PACIFIC CHOICE SEAFOOD V. ROSS 9

involve “other issues such as bargaining, market power, and
types of relationships that may influence the operation of the
fishery.” In light of its conclusion that a fleet size of 40 to
50 vessels would provide optimal profitability while
minimizing “control and consolidation of quota ownership,”
the Management Team presented possible maximum quota
shares ranging from approximately 1.3 to 3.8 percent but
ultimately recommended a limit of 2.3 to 2.7 percent
depending on the desired amount of consolidation.

The Management Team’s per-vessel approach mostly
won out. In March 2009, the Groundfish Advisory Subpanel
evaluated proposals from the Management Team and the
Allocation Committee and issued a brief report. The
Advisory Subpanel acknowledged the “trade-off”
recognized by the Management Team “between preventing
excessive market control . . . and the lower revenues and
efficiency associated with control limits that are set too low.”
It recommended a 2.7 percent maximum aggregate quota
share, which it noted was the “mid range of the data” in the
Management Team’s report. The Advisory Subpanel did not
completely adopt the Management Team’s
recommendations; some of its proposed limits for individual
species instead matched the Allocation Committee’s
recommendations, or proposed a limit not recommended by
either committee.

After further deliberation on several matters not at issue
here, the Council proposed Amendment 20 to the overall
fishery plan implementing the limited access privilege
program, including the 2.7 percent aggregate catch limit.
75 Fed. Reg. 53,380 (Aug. 31, 2010); 75 Fed. Reg. 32,994
(June 10, 2010). The Service approved the plan in August
2010 with some technical changes, and it finalized the
relevant rules in October and December of that year. See
10 PACIFIC CHOICE SEAFOOD V. ROSS

75 Fed. Reg. 78,344 (Dec. 15, 2010); 75 Fed. Reg. 60,868
(Oct. 1, 2013). The Service and the Council also jointly
published a final environmental impact statement containing
an extensive discussion of the agency’s development of the
limited access privilege program.

At the same time, the Service adopted a “control” rule to
enforce the provision of section 1853a that prohibits anyone
with limited access privileges from “hold[ing], acquir[ing],
or us[ing]” any quota share exceeding the regulatory
maximum. 16 U.S.C. § 1853a(c)(5)(D)(i); see 75 Fed. Reg.
at 60,954–55. In the final rule, the Service interpreted section
1853a as authorizing it to prohibit permit holders from
“own[ing] or control[ling]” quota share above the maximum.
50 C.F.R. § 660.140(d)(4)(i)(A). It then defined “control”
as, among other things, the “ability through any means
whatsoever to control or have a controlling influence” over
an entity holding quota share. 50 C.F.R.
§ 660.140(d)(4)(iii)(H).

Not everyone welcomed the new rule. Pacific Choice
operates a seafood-processing facility in Eureka, California,
and indirectly controls several vessels that participate in the
fishery. After significant delay while the Service worked out
divestiture procedures for entities holding excess share, the
Service eventually implemented the 2010 rule and notified
Pacific Choice that it held at least 3.8 percent of the fishery’s
quota share. That share exceeded the 2.7 percent maximum
and triggered the divestiture provisions. See 50 C.F.R.
§ 660.140(d)(4)(v). The Service issued various moratoria on
the requirement to transfer excess quota share after an initial
allocation, but in November 2015, it issued a final rule
requiring divestiture. See 80 Fed. Reg. 69,138 (Nov. 9,
2015).
 PACIFIC CHOICE SEAFOOD V. ROSS 11

Pacific Choice complied with the divestiture
requirement and brought this action against the Service soon
thereafter. On cross-motions for summary judgment, the
district court granted summary judgment for the Service,
concluding that Pacific Choice had not established that either
the 2.7 percent maximum share or the Service’s control rule
violated the Act or the APA.

II

We begin by considering whether we have jurisdiction
to hear this case. Neither party has raised the issue, but we
have a duty to determine whether we have jurisdiction, “even
though the parties are prepared to concede it.” Spencer
Enters., Inc. v. United States, 345 F.3d 683, 687 (9th Cir.
2003) (quoting Bender v. Williamsport Area Sch. Dist.,
475 U.S. 534, 541 (1986)).

The question is whether Pacific Choice’s suit was timely.
The Act requires any challenge to agency actions or
“[r]egulations promulgated by the Secretary” to be filed
within 30 days of “the date on which the regulations are
promulgated or the action is published in the Federal
Register.” 16 U.S.C. § 1855(f)(1). We have held that the
Act’s time limits are jurisdictional. See Sea Hawk Seafoods,
Inc. v. Locke, 568 F.3d 757, 765 (9th Cir. 2009). There is
reason to doubt whether that characterization is consistent
with more recent Supreme Court decisions, which have
clarified that filing deadlines are generally non-jurisdictional
claim-processing rules. See, e.g., Henderson ex rel.
Henderson v. Shinseki, 562 U.S. 428, 434–36 (2011). But
even under the Court’s newer, more restrictive approach, at
least some time limits for claims against the government
remain jurisdictional. See John R. Sand & Gravel Co. v.
United States, 552 U.S. 130, 139 (2008). Our prior cases are
not “clearly irreconcilable” with any intervening Supreme
12 PACIFIC CHOICE SEAFOOD V. ROSS

Court decision, and we remain bound by them. Miller v.
Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc).

Pacific Choice filed suit on December 4, 2015, which
obviously was more than 30 days after the Service’s 2010
rule. The lawsuit also came more than 30 days after the
Service enforced the 2010 rule against Pacific Choice
through its July 28, 2015 letter.

We nevertheless conclude that Pacific Choice’s suit was
timely because it was brought within 30 days of the Service’s
publication of the 2015 rule requiring divestiture. A timely
challenge to an agency’s action “may challenge both the
action and the regulation under which the action is taken.”
Oregon Troller’s Ass’n v. Gutierrez, 452 F.3d 1104, 1113
(9th Cir. 2006). The 2015 rule constituted an “action,” which
the Act defines to include any “actions . . . taken by the
Secretary under regulations which implement a fishery
management plan.” 16 U.S.C. § 1855(f)(2); see also Oregon
Troller’s Ass’n, 452 F.3d at 1115–16. And although Pacific
Choice does not reassert on appeal the challenges it raised
below to the 2015 rule, if it prevailed in this case, it could
regain the share it was required to divest. We therefore
conclude that Pacific Choice’s suit was timely under section
1855(f)(1). See Oregon Troller’s Ass’n, 452 F.3d at 1113–
14; see also California Sea Urchin Comm’n v. Bean,
828 F.3d 1046, 1049 (9th Cir. 2016).

III

Pacific Choice raises two challenges to the 2.7 percent
quota share limit. First, it argues that the Service
misinterpreted the term “excessive share” in section
1853a(c)(5)(D) by sidelining considerations of market
power in favor of per-vessel profitability. Second, it argues
that the Service acted arbitrarily and capriciously by failing
 PACIFIC CHOICE SEAFOOD V. ROSS 13

to consider all relevant factors and relying on insufficient
analysis in choosing the 2.7 percent limit. We review the
district court’s decision de novo, see Pacific Dawn, 831 F.3d
at 1173, and we reject both challenges.

A

We begin with Pacific Choice’s argument that the
2.7 percent maximum share contravenes the Magnuson-
Stevens Act. At the outset, we acknowledge some
uncertainty as to exactly what Pacific Choice believes the
Service’s interpretive error to be. In its opening brief, Pacific
Choice asserted that “‘[e]xcessive share,’ as used in
16 U.S.C. § 1853a(c)(5)(D) . . . means ‘conditions of
monopoly or oligopoly,’” and that the Service violated the
Act because it “relied on . . . factors outside the scope of
[section 1853a(c)(5)(D)] by setting a maximum share that
reflected ‘a chance of generating a reasonable profit.’” That
language suggests that it is improper for the Service to
consider any factors other than market power, or at least that
it is improper for the Service to consider whether a
maximum share will allow reasonable profits. But in its reply
brief, Pacific Choice rejected that suggestion as “a straw
man,” disclaiming the argument that the Service “may only
consider market power” and arguing instead that “market
power is an essential and indispensable factor” for
determining a maximum share, which the Service ignored by
“bas[ing] the limit solely on other factors.”

To the extent Pacific Choice means that market power is
one of many factors that the Service must consider, we do
not think the Service disagrees. To the contrary, when asked
at oral argument if the Service is required to consider market
power, counsel for the Service said yes. And in promulgating
the 2010 rule, the Service explained that the Council had
“considered a wide range of factors such as social benefits,
14 PACIFIC CHOICE SEAFOOD V. ROSS

impact on labor, impacts on processors, impacts on
harvesters, impacts on the public, the number and sizes of
firms, within-sector competition, market power, efficiency,
geographic distribution, communities, and fairness and
equity.” 75 Fed. Reg. at 33,004 (emphasis added). The
Service advanced a similar interpretation in a 2007 guidance
document instructing fishery councils to consider “market
power including monopoly . . . or monopsony” in designing
limited access privilege programs.

Pacific Choice appears to believe, however, that
considering market power as one of several factors is not
enough. Instead, we understand Pacific Choice’s statutory
argument to be that whatever limit the Service sets, it must
in some sense be “based on” market-power considerations.
In other words, Pacific Choice’s argument implies that it
would be improper for the Service to determine that a
particular limit would prevent any market participant from
exercising market power but then to set a lower limit that
reflects other considerations. We note that where, as here,
market power could be avoided with a higher limit than is
needed to achieve other objectives, Pacific Choice’s position
is not so different, in practice, from a rule that the Service
may consider only market power.

In assessing Pacific Choice’s statutory argument, we
apply the framework of Chevron U.S.A. Inc. v. NRDC, Inc.,
467 U.S. 837 (1984). “[W]hen an agency is authorized by
Congress to issue regulations and promulgates a regulation
interpreting a statute it enforces, the interpretation receives
deference if the statute is ambiguous and if the agency’s
interpretation is reasonable.” Encino Motorcars, LLC v.
Navarro, 136 S. Ct. 2117, 2124 (2016).

Our first step is to determine whether Congress has
“directly addressed the precise question at issue.” Chevron,
 PACIFIC CHOICE SEAFOOD V. ROSS 15

467 U.S. at 843. We conclude that it has not. The relevant
statutory text directs the Service to

(D) ensure that limited access privilege
holders do not acquire an excessive share
of the total limited access privileges in the
program by—

(i) establishing a maximum share,
expressed as a percentage of the total
limited access privileges, that a
limited access privilege holder is
permitted to hold, acquire, or use; and

(ii) establishing any other limitations or
measures necessary to prevent an
inequitable concentration of limited
access privileges.

16 U.S.C. § 1853a(c)(5)(D). That provision defines neither
“excessive share” nor “maximum share,” and it contains no
reference to market power. Other provisions of the same
section make clear that limited access privilege programs are
to serve a variety of objectives. Specifically, such programs
“shall . . . promote—(i) fishing safety; (ii) fishery
conservation and management; and (iii) social and economic
benefits.” Id. § 1853a(c)(1)(C).

Pacific Choice points to a separate section of the Act that
outlines standards for fishery management and instructs the
Service to ensure that allocations of quota share are “(A) fair
and equitable to all such fishermen; (B) reasonably
calculated to promote conservation; and (C) carried out in
such manner that no particular individual, corporation, or
other entity acquires an excessive share of such privileges.”
16 U.S.C. § 1851(a)(4). Like section 1853a(c)(5)(D),
16 PACIFIC CHOICE SEAFOOD V. ROSS

however, that provision does not say what Congress meant
by “excessive share.” And the next paragraph makes clear
that although the Service must “consider efficiency” in
developing fishery management measures, economic
efficiency is not the only goal: “no such measure shall have
economic allocation as its sole purpose.” Id. § 1851(a)(5).

Pacific Choice emphasizes that the Service previously
interpreted section 1851(a)(4)’s “excessive share” clause to
“imply conditions of monopoly or oligopoly.” 60 Fed. Reg.
61,200, 61,202 (Nov. 29, 1995). The Service’s prior
interpretations cannot transform otherwise ambiguous
statutory text into an unambiguous command because “the
whole point of Chevron is to leave the discretion provided
by the ambiguities of a statute with the implementing
agency.” Smiley v. Citibank (S.D.), N.A., 517 U.S. 735, 742
(1996). In any event, the Service’s belief that the term
“excessive share” “impl[ies]” market power is itself far from
an unambiguous statement that market power must have
singular importance—almost by definition, one cannot
“directly address[]” an issue by implication. Chevron,
467 U.S. at 843.

Pacific Choice also relies on the Act’s legislative history,
but legislative history cannot “supply mandatory
requirements not found within the [Magnuson-Stevenson
Act] itself.” Pacific Coast, 693 F.3d at 1093. Even if it could,
the legislative history here does not do so. Pacific Choice
points to two floor statements from individual
Representatives indicating that Congress was concerned
about preventing “excessive and inequitable consolidation at
the expense of small-scale fishermen,” 152 Cong. Rec.
23,359 (Dec. 8, 2006) (statement of Rep. Allen), and wanted
to “protect[] small fishermen from those who would like to
consolidate fisheries,” id. at 23,360 (statement of Rep.
 PACIFIC CHOICE SEAFOOD V. ROSS 17

Rahall). Those statements reflect a desire to protect small
fishing operations, but, like the statutory text, they do not
suggest that the maximum share must be no more restrictive
than necessary to avoid excessive concentration.

Because the Act is ambiguous as to what factors the
Service must consider in setting a maximum share, we turn
to step two of the Chevron framework: whether the Service
has adopted a “reasonable interpretation” of the statute.
467 U.S. at 844. We have previously held that the Act gives
the Service “broad discretion” to carry out its provisions.
Northwest Envtl. Def. Ctr. v. Brennan, 958 F.2d 930, 935 n.3
(9th Cir. 1992). Congress directed the Service to consider a
wide range of factors in establishing limited access privilege
programs, including “the basic cultural and social
framework of the fishery” and “the sustained participation of
small owner-operated fishing vessels and fishing
communities that depend on the fisheries.” 16 U.S.C.
§ 1853a(c)(5)(B). In light of those objectives, it was
reasonable for the Service to conclude that other factors can
dictate a lower maximum share than might be required by a
singular focus on preventing excessive market power—or,
in other words, that the Service may attempt to do something
more than act simply as a fishery-specific version of the
Federal Trade Commission or the Justice Department’s
Antitrust Division.

Pacific Choice suggests that the Service erred in
interpreting the Act to permit consideration of whether
vessels would have a “chance at generating a reasonable
profit.” We disagree. The Act requires the Service to
“include measures to assist, when necessary and appropriate,
entry-level and small vessel owner-operators, captains,
crew, and fishing communities.” 16 U.S.C.
§ 1853a(c)(5)(C). While Congress noted that those measures
18 PACIFIC CHOICE SEAFOOD V. ROSS

might “includ[e] . . . set-asides of harvesting allocations” or
“economic assistance,” it did not say that those actions were
the only such measures the Service could adopt. Id. Instead,
Congress left it to the Service to determine when and how
assisting small vessel owner-operators might be “necessary
and appropriate.” Id. Giving weight to the chance of
generating a profit was a reasonable way to implement
Congress’s directive.

B

Although the Service permissibly interpreted the Act, we
still must ensure that the 2.7 percent maximum share is not
“arbitrary, capricious, [or] an abuse of discretion.” 5 U.S.C.
§ 706(2)(A). That standard is deferential: as long as an
agency has “examine[d] the relevant data and articulate[d] a
satisfactory explanation for its action including a ‘rational
connection between the facts found and the choice made,’”
the Supreme Court has made clear that “a court is not to
substitute its judgment for that of the agency.” Motor Vehicle
Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines v.
United States, 371 U.S. 156, 168 (1962)); accord FCC v.
Fox Television Stations, Inc., 556 U.S. 502, 513–14 (2009).

As an initial matter, the Service asks us to disregard
Pacific Choice’s objections because Pacific Choice did not
raise them before the agency. Generally, a “party forfeits
arguments that are not raised during the administrative
process.” Lands Council v. McNair, 629 F.3d 1070, 1076
(9th Cir. 2010). But we will consider any issue that was
“raised with sufficient clarity to allow the decision maker to
understand and rule on the issue raised, whether the issue
was considered sua sponte by the agency or was raised by
someone other than the petitioning party.” Glacier Fish Co.,
LLC v. Pritzer, 832 F.3d 1113, 1120 n.6 (9th Cir. 2016)
 PACIFIC CHOICE SEAFOOD V. ROSS 19

(internal quotation marks and citation omitted). Because the
Service in fact examined the issues that Pacific Choice now
raises, including in response to other commenters during the
notice-and-comment period, we consider them on the merits.

In assessing the Service’s decision, we “review the
whole record,” 5 U.S.C. § 706, which includes “everything
that was before the agency pertaining to the merits of its
decision.” Portland Audubon Soc. v. Endangered Species
Comm., 984 F.2d 1534, 1548 (9th Cir. 1993). Pacific Choice
urges us to examine only the Service’s decision memoranda
while ignoring the Council’s materials, including analyses
by the Quota Committee, the Allocation Committee, the
Management Team, and the Advisory Subpanel. Although
the Act requires the Service to “evaluat[e]” the Council’s
proposed regulations to “determine whether they are
consistent with the fishery management plan” and with the
Act, it does not require the Service to engage in a lengthy
discussion of every aspect of the plan or to repeat points
already made by the Council and its committees. 16 U.S.C.
§ 1854(b)(1). Instead, when the Service finds that an
amendment is consistent with a fishery plan, the Act requires
it to do no more than “publish such regulations in the Federal
Register,” along with any “technical changes as may be
necessary for clarity and an explanation of those changes.”
Id. § 1854(b)(1)(A). Pacific Choice offers no authority
supporting its assertion that we should focus exclusively on
the Service’s memoranda from the very end of the
administrative process. To the contrary, we have previously
upheld the Service’s regulations on the basis of findings by
the Council and its committees. See Fisherman’s Finest, Inc.
v. Locke, 593 F.3d 886, 896 (9th Cir. 2010).

Pacific Choice contends that the Service’s decision-
making process was flawed in two ways: the Service “failed
20 PACIFIC CHOICE SEAFOOD V. ROSS

to consider an important aspect of the problem” by ignoring
market power altogether, State Farm, 463 U.S. at 43, and it
also failed to articulate “the methods by which, and the
purposes for which” it set the maximum share at 2.7 percent
rather than at some other percentage, San Antonio, Tex. ex
rel. City Pub. Serv. Bd. v. United States, 631 F.2d 831, 852
(D.C. Cir. 1980). We reject both of those arguments.

First, the record shows that the Service did consider
market power. After the Quota Committee completed its
initial analysis based on historical aggregate revenue, the
Allocation Committee examined the degree of concentration
within the fishery, calculating an HHI. Relying on
Department of Justice antitrust guidelines defining a
concentrated market based on HHI, the Allocation
Committee concluded that all of the options then under
consideration—ranging from 1.5 to 5 percent—were
“unlikely” to “affect market power.” With the conclusion in
hand that market-power considerations were unlikely to be
significant factors in establishing a maximum share, the
Service might have understandably decided to ignore market
power.

But contrary to Pacific Choice’s representations, market-
power considerations and economic analyses continued to
play a prominent role in the agency’s consideration of the
maximum share. Building on the Allocation Committee’s
analysis, the Management Team acknowledged the dual
purposes of setting maximum shares: the limits not only
serve as “preventative measures against anticompetitive
market conditions” but also “ensure that the benefits . . .
arising from the public fishery resource accrue to a minimum
number of [quota-share] owners.” The Management Team
then conducted an in-depth analysis of the degree of
concentration in the fishery, projecting vessel profitability
 PACIFIC CHOICE SEAFOOD V. ROSS 21

based on varying levels of market concentration. After
cautioning against the effect that higher quota-share
maximums might have on “bargaining, market power, and
. . . . undue influence over other aspects of the fishery,” the
Management Team presented a range of options from 1.3 to
3.8 percent depending on the Service’s desired degree of
“consolidation” within the fishery. While Pacific Choice
might prefer the higher limits suggested by the Allocation
Committee’s HHI analysis rather than the lower ones
suggested by the Management Team’s economist, we see no
reason to second-guess the Management Team’s economic
analysis.

Nor did the Management Team offer the final word on
market power—the Council itself detailed its reasoning in an
exhaustive overview in the 2010 environmental impact
statement, which it issued jointly with the Service. While it
is true that the Council stated that its quota-share limits were
“aimed at more than just preventing market power or other
anticompetitive situations,” that is not the same as ignoring
market power.

Second, we conclude that the agency engaged in a
reasoned process from which its path to the 2.7 percent limit
“may reasonably be discerned.” Alaska Dep’t of Envtl.
Conservation v. EPA, 540 U.S. 461, 497 (2004) (quoting
Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc.,
419 U.S. 281, 286 (1974)). Pacific Choice argues that the
Advisory Subpanel picked 2.7 percent only because it was
the “mid range of the data presented” in the Management
Team’s economic analysis. Even if that were an accurate
characterization of the Advisory Subpanel’s
recommendation, it would not necessarily establish that the
Service’s decision was unreasoned given the extensive
discussion of Act’s factors presented at each step of the
22 PACIFIC CHOICE SEAFOOD V. ROSS

rulemaking process. We have upheld similar determinations
in the past where the agency “had to choose some number
from a broad range” and selected “a reasonable figure.” San
Luis & Delta-Mendota Water Auth. v. Jewell, 747 F.3d 581,
616 (9th Cir. 2014); see Missouri Pub. Serv. Comm’n v.
FERC, 215 F.3d 1, 5–6 (D.C. Cir. 2000).

In any event, Pacific Choice’s interpretation of the
administrative record is not persuasive. Pacific Choice
misconstrues the Advisory Subpanel’s recommendation,
which did not state that the panel recommended 2.7 percent
because that figure was in the middle of the Management
Team’s recommendations. Instead, the Advisory Subpanel
adopted the Management Team’s recommendation because
it concluded that the “revenue-based approach . . . [was] a
useful conceptual approach” for setting a maximum share.
The Advisory Subpanel’s recommendation is brief, but it
reveals independent judgment on each aspect of the
recommendations from the Allocation Committee and the
Management Team, most notably on individual species
limits.

More generally, we see no reason to focus only on the
Advisory Subpanel’s memo when it constituted just one step
in the lengthy administrative process. Viewed as a whole, the
record contains extensive justification for the 2.7 percent
limit. As the Management Team concluded, that limit
accommodates a variety of the Council’s objectives for
setting a maximum share, including “cap[ping] the initial
allocation of quota share at a level that is consistent with”
historical quota distributions on the 2003 control date, and
allowing more consolidation in the fishery than a lower
limit—such as 2.3 percent—would accomplish. The
Service’s environmental impact statement fully explains
how the agency arrived at the 2.7 percent limit from the
 PACIFIC CHOICE SEAFOOD V. ROSS 23

Quota Committee’s initial recommendation of 1.5 to
5 percent.

Under the APA, “we will uphold a decision of less than
ideal clarity if the agency’s path may reasonably be
discerned.” Bowman, 419 U.S. at 286. We have no difficulty
in following the Service’s path to the 2.7 percent maximum
share, and we hold that the Service did not act arbitrarily or
capriciously in setting it.

IV

Pacific Choice also advances statutory and APA
challenges to the Service’s control rule. We reject both.

The Magnuson-Stevens Act requires that the Service
“establish[] a maximum share . . . that a [share] holder is
permitted to hold, acquire, or use.” 16 U.S.C.
§ 1853a(c)(5)(D)(i). According to Pacific Choice, the
Service exceeded the authority granted by that statute when
it interpreted “hold, acquire, or use” to include “control” and
proceeded to define “control” to include, among other
things, “the ability through any means whatsoever to control
or have a controlling influence over the entity to which
[quota share] is registered.” 50 C.F.R.
§660.140(d)(4)(iii)(H). Pacific Choice argues that the rule
“effectively re-writes Congress’s definition” by using the
word “control,” which does not appear in the statute. But the
word “acquire,” which does appear in the statute, means “to
come into possession, control, or power of disposal of.”
Webster’s Third New International Dictionary 18 (2002)
(emphasis added). If that were not enough, the word “use”
easily encompasses the concept of control. See Friends of
Animals v. United States Fish & Wildlife Serv., 879 F.3d
1000, 1006–09 (9th Cir. 2018). Beyond that, section
1853a(c)(5)(D)(ii) gives the Service even broader authority
24 PACIFIC CHOICE SEAFOOD V. ROSS

to establish “any other limitations or measures necessary to
prevent an inequitable concentration of limited access
privileges.” 16 U.S.C. § 1853a(c)(5)(D)(ii).

Pacific Choice responds that we must read the statute
against a background of ordinary corporate-law principles,
under which a corporation is a distinct entity from its
owners. We agree that Congress drafts laws while “aware of
settled principles of corporate law.” Dole Food Co. v.
Patrickson, 538 U.S. 468, 474 (2003). It is also true that
Congress defined the term “person” in the Act to mean “any
individual . . . corporation, partnership, association, or other
entity.” 16 U.S.C. § 1802(36). But the Service’s control rule
does not purport to redefine personhood. Instead, it defines
when a person “own[s] or control[s]” quota share nominally
held by other people. 50 C.F.R. § 660.140(d)(4)(i)(A). That
is in no way inconsistent with the common-law
understanding of corporate ownership.

Because the Service’s interpretation of “hold, acquire, or
use” represents an exercise of delegated authority, our
review of it is governed by Chevron, and we see nothing in
the statute that unambiguously forecloses the Service’s
approach. Instead, the Service’s rule represents a reasonable
implementation of Congress’s directive that quota
allocations be “fair and equitable” and be “carried out in
such manner that no particular individual, corporation, or
other entity acquires an excessive share of such privileges.”
16 U.S.C. § 1851(a)(4).

Nor are we persuaded that the rule is arbitrary and
capricious. Pacific Choice does not identify a deficiency in
the Service’s rulemaking process but instead argues that the
Service’s definition of “control” is so broad—and thus so
vague—that it constitutes an abuse of discretion. In limited
situations, we have recognized that an agency might act
 PACIFIC CHOICE SEAFOOD V. ROSS 25

arbitrarily and capriciously by “fail[ing] to properly specify”
its rules such that it leaves “no method by which” a regulated
party “can gauge [its] performance.” Arizona Cattle
Grower’s Ass’n v. United States Fish & Wildlife Serv.,
273 F.3d 1229, 1250–51 (9th Cir. 2001). This is not such a
situation.

The rule is indeed broad. Its broadest provision covers
any person who “has the ability through any means
whatsoever to control or have a controlling influence over”
an entity holding quota share. 50 C.F.R.
§ 660.140(d)(4)(iii)(H). But breadth is not the same thing as
vagueness. See Pennsylvania Dep’t of Corrections v. Yeskey,
524 U.S. 206, 212 (1998). The rule’s terms have clear
meanings sufficient to inform regulated entities about what
types of conduct the Service will prohibit: ownership or
control that evades the Service’s maximum share limits. For
example, clause (d)(4)(iii)(A) deems control satisfied when
a person “has the right to direct . . . the business of [an]
entity,” clause (d)(4)(iii)(B) when a person “has the right to
limit the actions of or replace” corporate officers, and clause
(d)(4)(iii)(C) when a person “has the right to direct . . . the
transfer of” quota share. It requires no great leap to read the
more general language of clause (d)(4)(iii)(H) as prohibiting
the same sort of thing. See Yates v. United States, 574 U.S.
528, 545 (2015).

Crucially, we see no ambiguity about whether Pacific
Choice “own[ed] or control[led]” the related entities at issue
here. Pacific Choice’s brief discloses that each of the six
entities that held quota share are wholly owned either by
Frank Dulcich or by a corporation that Dulcich owns. Under
any plausible definition of “control,” Dulcich controls the
Pacific Choice entities. Because Pacific Choice is subject to
the control rule even under its narrowest construction, we
26 PACIFIC CHOICE SEAFOOD V. ROSS

need not consider the rule’s outermost limits or whether, in
some other case, the Service might abuse its discretion by
applying the rule in a surprising or unforeseeable way. See
Village of Hoffman Estates v. Flipside, Hoffman Estates,
Inc., 455 U.S. 489, 495 (1982) (“A plaintiff who engages in
some conduct that is clearly proscribed cannot complain of
the vagueness of the law as applied to the conduct of
others.”).

AFFIRMED.