Cruz v. Zapata Ocean Resources, Inc.

695 F.2d 428
CourtCourt of Appeals for the Ninth Circuit
DecidedDecember 29, 1982
DocketNos. 79-3701 and 79-3704 to 79-3708
StatusPublished
Cited by8 cases

This text of 695 F.2d 428 (Cruz v. Zapata Ocean Resources, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cruz v. Zapata Ocean Resources, Inc., 695 F.2d 428 (9th Cir. 1982).

Opinion

BROWNING, Chief Judge:

The question presented is whether the Secretary of Commerce (the Secretary) acted lawfully in issuing regulation 50 C.F.R. § 258.8(g) barring consideration of claims submitted by non-resident alien crew members under section 7 of the Fishermen’s Protective Act, 22 U.S.C. § 1977, for losses resulting from seizure of a fishing vessel by a foreign nation. We conclude that the Secretary exceeded his authority, and the regulation is therefore void.

The Fishermen’s Protective Act (the Act) was enacted in 1954 in response to the seizure of privately owned vessels of the United States by foreign countries asserting claims to territorial waters or the high seas not recognized by the United States. S.Rep.No. 2214, 83d Cong., 2d Sess., reprinted in 1954 U.S.Code Cong. & Ad.News 3382. Section 2 of the Act, 22 U.S.C. § 1972, directed the Secretary of State to secure the prompt release of any such vessel and its crew. Section 3, 22 U.S.C. § 1973, provided for the reimbursement of the owners of the vessel by the Secretary of State for fines paid to secure such releases. Section 4, 22 U.S.C. § 1974, excepted seizures made by a country at war with the United States, or made in accordance with a treaty to which the United States is a party. Section 5, 22 U.S.C. § 1975, directed the Secretary of State to make claims against the foreign countries for amounts expended under the Act because of the seizure of a United States vessel. This provision was added “for the purpose of letting the Secretary of State know that the Congress expects him, [430]*430eventually, to recover from the foreign country any money expended by the United States under this bill .... ” S.Rep.No. 2214, supra, 1954 U.S.Code Cong. & Ad. News at 3385.

The Act proved inadequate. Only a small part of the losses suffered by the owners and crews of seized vessels was reimbursed by the Secretary of State and the amounts paid were not recovered from the seizing nations. Meron, The Fishermen’s Protective Act: A Case Study in Contemporary Legal Strategy of the United States, 69 Am.J.Int’l L. 290, 292 (1975).

The Act was amended in 1968 to correct these deficiencies. Section 3, 22 U.S.C. § 1973, was expanded to provide for the reimbursement not only of fines but also of any “license fees or regulation fee or any other direct charge actually paid to secure release of the vessel and crew.” Section 5, 22 U.S.C. § 1975, was amended to require the Secretary of State to immediately notify the foreign country of any payment made under the Act as a result of a seizure, and make claim for the amount paid. If the claim was not paid within 120 days, the Secretary of State was directed to transfer an amount equal to the unpaid claim from funds appropriated for assistance to that country under the Foreign Assistance Act of 1961.

A new section, section 7, 22 U.S.C. § 1977, was added authorizing voluntary agreements between the Secretary of Commerce1 and owners of commercial fishing vessels providing that if a vessel was seized, the Secretary would guarantee the owner all actual costs incurred during seizure-and detention, and would guarantee the “owner of such vessel and its crew” the value of fish confiscated and 50 percent of the gross income lost as a result of detention and seizure.2 The Secretary was to establish fees to be paid by vessel owners at a level adequate to cover costs of administration and one-third of the payments made by the Secretary under the guarantee agreements, the balance to be contributed by the government.

Shortly after passage of the 1968 amendments, the Secretary issued regulations implementing Section 7. 50 C.F.R. part 258. The regulations include the following provision: “No claim of any crew member who is not a citizen or an alien legally domiciled in the United States will be considered.” 50 C.F.R. § 258.8(g). This limitation was incorporated in guarantee agreements entered into between the Secretary and vessel owners under section 7. .

In 1975, the Republic of Ecuador seized four American vessels fishing for tuna approximately 100 miles off the Ecuadorian coast. Ecuador claimed a 200-mile fishing limit which was not then recognized by the United States. The seizures resulted in substantial losses to the owners and crews of the vessels through the confiscation of their catches of tuna and the loss of fishing time.

[431]*431Fifteen non-resident alien crew members of the four vessels sued Zapata Ocean Resources, Inc., parent of the four corporations that owned the seized vessels, for the alien crew members’ share of these losses. Because the vessel owners had entered into guarantee agreements with the Secretary under section 7 of the Act, Zapata, joined by the four vessel owners, filed third-party claims against the United States for reimbursement.

Several alien crew members prevailed against Zapata on motion for summary judgment and Zapata settled the claims of the others. The district court granted summary judgment for the United States on Zapata’s reimbursement claim, concluding that it was barred by regulation 50 C.F.R. § 258.8(g), quoted above, because the underlying claims were not made by citizens or domiciliaries of the United States. Zapata appealed.

As a contemporary interpretation of the Act by those charged with its administration, the challenged regulation is entitled to great weight. Nonetheless, we are obliged to reject the agency’s interpretation of the statute underlying the regulation if “there are compelling indications that it is wrong.” Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 381, 89 S.Ct. 1794, 1802, 23 L.Ed.2d 371 (1969). We conclude that the regulation is inconsistent with the intent of Congress as indicated by the great weight of the available evidence.

Although it is clear from the language of the statute and the provision of 46 U.S.C. § 11

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