Fifth Circuit Finds National Marine Fisheries Service Has No Authority to Regulate Aquaculture

On August 3, 2020, the Fifth Circuit in a 2-1 split decision held that the National Marine Fisheries Service (NMFS) cannot regulate aquaculture in the Gulf of Mexico under the Magnuson-Stevens Fishery Conservation and Management Act of 1976. Gulf Fishermens Ass’n v. Nat’l Marine Fisheries Serv., No. 19-30006 (5th Cir. August 3, 2020). It is unclear whether the federal agencies involved will seek U.S. Supreme Court review. For now, the decision is a setback for the domestic aquaculture industry and signals a need for clarity from Congress.

Background

The Magnuson-Stevens Act is the primary federal authority for regulating fisheries and its stated purpose is to “conserve and manage the fishery resources found off the coasts of the United States. 16 U.S.C. § 1801(b)(1). Regional councils are tasked with drafting management plans, which are submitted for approval to NMFS. Id. §§ 1801(b)(5); 1852-55. If NMFS takes no action after a certain time then a proposed plan is deemed approved and NMFS may proceed and implement rulemaking based on the plan. Id. § 1854(a)(3).

In this case, the Gulf of Mexico Fishery Management Council consisting of Gulf States (Texas, Louisiana, Mississippi, Alabama, and Florida) proposed a “Plan for Regulating Offshore Marine Aquaculture in the Gulf of Mexico” in 2009. It was the first plan proposing to regulate aquaculture, defining aquaculture to mean “the cultivation of aquatic organisms . . . especially for food.” See Gulf Fishermens Ass’n v. NMFS, No. 19-30006, at 6. The Plan provided for the issuance of up to twenty permits to aquaculture operations over a ten-year period, conditioned on certain compliance criteria. NMFS did not act on the proposed Plan within the specified timeframe and, by operation of the Act, the proposed Plan was deemed approved in 2014.

NMFS then initiated rulemaking based on the Plan, and issued a final rule in 2016 (the Aquaculture Rule). See 79 Fed. Reg. 51,424 (Aug 28, 2014); 81 Fed. Reg. 1762 (Jan. 13, 2016), codified at 50 C.F.R. pts. 600 and 622. Sport fishing groups led a challenge to the Aquaculture Rule, asserting that NMFS did not have express authority pursuant to the Magnuson-Stevens Act to issue a rule permitting aquaculture operations in the first place. The U.S. District Court for the Eastern District of Louisiana agreed.

Summary of Fifth Circuit Opinion

NMFS appealed, arguing among other things that the Magnuson-Stevens Act fails to expressly communicate Congress’ “intent to foreclose the regulation of aquaculture.” The agency asserted it may fill this legal gap with its own regulations like the Aquaculture Rule.

But the judges issuing the majority opinion found that “Congress does not delegate authority merely by not withholding it.” They add that the Act is a “textual dead zone when it comes to aquaculture,” and legislative silence does not convey authority. Further interpreting terms in the Act, the majority held that “harvesting”—which the Act does regulate—contextually means seizing or fishing of wild fish, and cannot be interpreted to mean raising fish. The majority also contrasted “fishery” under the Act with “aquaculture,” explaining that an aquacultural facility is intended to be fully harvested and cannot face overfishing, while the Act requires plans to avoid overfishing of a fishery.

The lone dissenting judge offered a broader interpretation of the Magnuson-Stevens Act, particularly its term “fishery resources” which is defined to include “all fish.” He reasoned that the authority to regulate all fish as fishery resources would, arguably, include the regulation of fish that are initially bred to be harvested. Otherwise, the dissent suggests there is ambiguity in the Act and NMFS’s interpretation merits judicial deference. Noting the years of work that the Gulf States spent developing the Plan, the dissent found a regulatory gap and concludes that “modern methods of fishing fit vitally in, not out of, the Magnuson Act regime.”

Next Steps and Aquaculture Regulation

The split decision may be reheard en banc by the entire Fifth Circuit, or appealed to the Supreme Court. If the current decision stands, aquaculture regulation will solely be the purview of other authorities. In the near-term, there was one impending application under the Aquaculture Rule; the project may attempt to rely on permitting authority of the U.S. Environmental Protection Agency in the absence of any needed NMFS permit.

This case is just one of several recent aquaculture-related developments. With recent innovations in technology, and ever-increasing consumer demand on fisheries, there has been more focus on and debate about sustainable aquaculture. In a distinct lawsuit, the U.S. Northern District of California is considering whether the Food and Drug Administration (FDA) has the authority to regulate aquaculture for genetically modified salmon. See Inst. for Fisheries Res v. Hahn, No. 16-cv-01574-VC (N. Cal. Dist. Ct.). In December 2019, the court ruled that the FDA has such authority under the Food, Drug, and Cosmetic Act. Next, the court is considering whether the FDA properly exercised this authority and considered environmental impacts.

Separately, in May and June of this year, President Trump issued new directives to federal agencies to issue plans increasing and promoting aquaculture in federal waters. The administration has a clear goal to boost domestic fisheries and aquacultural operations. Critics are concerned that these executive orders and proclamations may instead create more regulatory inconsistencies—there are several federal agencies that oversee some aspect of federal waters. As evidenced by recent litigation, it is not always apparent what regulatory framework Congress intended to apply to aquacultural activities and more legislation may be necessary to yield a comprehensive national aquaculture regime.

Beveridge & Diamond's Fisheries and Aquaculture industry group advises on the broad range of environmental, health, and safety issues impacting the fishing and aquaculture industries’ facilities, operations, and products. A number of our lawyers have biology or ecology backgrounds, personal experience working with fisheries, and unique perspectives from years of government service. B&D offers a physical presence in major fishing markets, as well as experience with fisheries off all U.S. coasts and in major fresh water bodies across the country. For more information, please contact the authors.