Relentless Inc. v. US Dep't of Commerce

62 F.4th 621

• Court: Court of Appeals for the First Circuit
• Decided: March 16, 2023
• Docket: 21-1886P
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 21-1886

RELENTLESS, INC.; HUNTRESS, INC.; SEAFREEZE FLEET LLC,

Plaintiffs, Appellants,

v.

UNITED STATES DEPARTMENT OF COMMERCE; GINA M. RAIMONDO, in her official capacity as Secretary of Commerce; NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION; RICHARD SPINRAD, in his official capacity as Administrator of NOAA; NATIONAL MARINE FISHERIES SERVICE, a/k/a NOAA Fisheries; JANET COIT, in her official capacity as Assistant Administrator for NOAA Fisheries,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND

Hon. William E. Smith, U.S. District Judge

Before

Kayatta, Lipez, and Thompson, Circuit Judges.

John J. Vecchione, with whom New Civil Liberties Alliance was on brief, for appellants. Dina B. Mishra, with whom Todd Kim, Assistant Attorney General, Alison C. Finnegan, Daniel Halanien, Environment & Natural Resources Division, U.S. Department of Justice, and Mitch MacDonald, Office of General Counsel, National Oceanic & Atmospheric Administration, were on brief, for appellees. March 16, 2023 KAYATTA, Circuit Judge. Charged with promoting the

sustainability of the nation's fisheries, the National Marine

Fisheries Service requires vessels fishing for herring on certain

fishing trips to carry monitors on board. Although the government

trains and certifies these monitors, it does not always pay them

for their work. Instead, the vessel owners must procure and pay

for certain monitors by contracting with private entities. Owners

of two fishing vessels that harvest herring -- plaintiffs

Relentless Inc., Huntress Inc., and Seafreeze Fleet LLC --

challenge the agency's authority to promulgate this requirement.

The district court granted summary judgment for the government,

reasoning that the rule is a permissible exercise of agency

authority under the statute governing fishery stocks and

conservation, that its promulgation followed proper procedures,

and that it does not violate the Constitution. On appeal,

plaintiffs renew their attacks. Because we agree with the district

court that the rule is a permissible exercise of the agency's

authority and is otherwise lawful, we affirm. Our reasoning

follows.

I.

A.

Atlantic herring fishing is regulated under the

Magnuson-Stevens Fishery Conservation and Management Act (the

"MSA"), which was enacted to respond to the threat of overfishing

- 3 - and to promote conservation. 16 U.S.C. §§ 1801 et seq. The MSA

established eight regional councils that manage the various

"fisheries" (defined as "one or more stocks of fish which can be

treated as a unit") in their respective regions. Id.

§§ 1802(13)(A), 1852(a). The councils accomplish this task

primarily by promulgating fishery management plans, which specify

the conservation measures "necessary and appropriate" to prevent

overfishing, to protect fish stocks, and to promote the

sustainability of each fishery. Id. §§ 1852–1853. The MSA sets

out elements that fishery management plans shall include, such as

a description of the fishery and the optimal yield for the fishery,

id. § 1853(a), as well as several elements that plans may include,

such as requirements that vessels subject to the plan obtain

permits, id. § 1853(b). Fishery management plans must also comply

with ten "National Standards" set out in the MSA that identify

broad goals and priorities such as minimizing cost, taking

communities into account, prioritizing efficiency, and using the

best scientific information available. Id. § 1851(a).

The Secretary of Commerce is tasked with reviewing each

fishery management plan or amendment and publishing it along with

implementing regulations for notice and comment. Id. § 1854(a)–

(b). The Secretary has delegated these responsibilities to the

National Marine Fisheries Service (NMFS or the "Agency"), a

division of the National Oceanic and Atmospheric Administration

- 4 - (NOAA). Regional councils submit plans and amendments to NMFS,

which publishes them for notice and comment while undertaking its

own review to ensure that the plans are consistent with the MSA,

its National Standards, and "any other applicable law." Id.

§ 1854(a)(1). The Agency must then approve, disapprove, or

partially approve the plan or amendment. Id. § 1854(a)(3). Once

a plan or amendment is approved, the Agency works with the regional

council and completes a notice and comment procedure to issue

implementing regulations. Id. § 1854(b).

B.

The New England Fishery Management Council ("New England

Council") regulates fisheries in the Atlantic Ocean seaward of

Maine, New Hampshire, Massachusetts, Rhode Island, and

Connecticut. Id. § 1852(a)(1)(A). This includes the Atlantic

herring fishery. The New England Council implemented the current

fishery management plan for Atlantic herring in 2000. The plan

includes an annual catch limit and restrictions on the location

and timing of herring fishing. 50 C.F.R. § 648.200. The Atlantic

herring fishery is subject to monitoring, including by government-

funded observers using Standardized Bycatch Reporting Methodology

- 5 - (SBRM) to measure bycatch (fish unintentionally caught) on fishing

trips.1 Id. § 648.11(m).

In 2013, the New England Council began a process to

provide for the use of industry-funded monitoring to reduce

uncertainty around catch estimates. In 2017, the Council approved

an Omnibus Amendment, which both provided general guidelines for

industry-funded monitoring in all of its fishery management plans

and specifically provided for the owners of herring vessels to

bear the expense of contracting for some of the monitors engaged

on their vessels. Magnuson-Stevens Fishery Conservation and

Management Act Provisions; Fisheries of the Northeastern United

States; Industry-Funded Monitoring, 85 Fed. Reg. 7414, 7414

(Feb. 7, 2020). The Agency approved the amendment in 2018. It

published the final rule implementing the amendment and the

1 The MSA requires that all fishery management plans "establish a standardized reporting methodology to assess the amount and type of bycatch occurring in the fishery." 16 U.S.C. § 1853(a)(11). The New England Council, along with the Mid- Atlantic Council, developed an SBRM omnibus amendment in 2015 that implements this requirement. Magnuson-Stevens Fishery Conservation and Management Act Provisions; Fisheries of the Northeastern United States; Standardized Bycatch Reporting Methodology Omnibus Amendment, 80 Fed. Reg. 37,182 (June 30, 2015); 50 C.F.R. § 648.18. The methodology in that omnibus amendment, which is primarily implemented through the Northeast Fisheries Observer Program placement of observers on vessels, applies to several fisheries, including the herring fishery. 50 C.F.R. § 648.18. Although the SBRM has been heavily litigated, see Oceana, Inc. v. Ross, 920 F.3d 855, 859–60 (D.C. Cir. 2019), it is not at issue in this appeal.

- 6 - industry-funded monitoring program for the herring fishery in

2020. 85 Fed. Reg. at 7414.

The rule implementing industry-funded monitoring for the

herring fishery (the "Final Rule" or "Rule") does not require

monitors on all vessels. Rather, it sets a target percentage (50%)

of herring trips to be monitored. Id. at 7417. Observer coverage

required under the SBRM program, which is fully paid for by the

government, counts toward this target. Additional monitoring, up

to a target of 50%, is covered by industry-funded monitoring (so

if SBRM observers are placed on 10% of trips, industry would be

asked to pay for monitoring on an additional 40% of trips). Id.

The Rule requires the Council to reexamine the monitoring coverage

targets after two years to consider the results of increased

monitoring, if any, and determine whether to make adjustments. 50

C.F.R. § 648.11(m)(1)(ii)(F). The government bears the

administrative expenses associated with the program, including the

training and certification of monitors. 85 Fed. Reg. at 7415.

The Rule specifies how industry-funded monitoring will

work in practice. Vessels must "declare into" a fishery before

beginning a fishing trip, meaning they contact NMFS and announce

the species of fish they intend to harvest. 50 C.F.R.

§ 648.11(m)(2). When a vessel declares into the herring fishery,

the Agency then informs it whether a monitor will be required for

that trip. Id. § 648.11(m)(3). Trips may receive a waiver of the

- 7 - monitor requirement under several circumstances: if a monitor is

not available, if the vessel is carrying certain fishing gear only

and does not intend to carry fish, or if the vessel intends to

catch less than 50 metric tons of herring on the trip. Id.

§ 648.11(m)(1)(ii)(D)–(E), (4)(ii). Vessels using certain types

of gear are exempt from the requirement to carry a monitor

altogether if they use electronic monitoring and portside sampling

instead. Id. § 648.11(m)(1)(iii).

When a nonexempt vessel that does not meet the criteria

for a waiver declares into the herring fishery, the Agency will

inform the vessel whether it needs to carry a monitor for that

trip. If so, the vessel must contact one of the private entities

that provide certified monitors, and pay that entity its resulting

fees and expenses. Id. § 648.11(m)(4). If the vessel cannot find

a monitor after contacting all available providers, it may ask for

a waiver. Id.

The precise cost of the industry-funded monitoring

program to vessels participating in the herring fishery is unclear.

In its notice publishing the Final Rule, the Agency cautioned that

"the economic impact of industry-funded monitoring coverage on the

herring fishery is difficult to estimate," because it would vary

with "sampling costs, fishing effort, SBRM coverage, price of

herring, and participation in other fisheries." 85 Fed. Reg. at

7420. The agency also noted that the Environmental Assessment

- 8 - estimated "industry's cost for at-sea monitoring coverage at

$710 per day," although this figure would "largely depend on

negotiated costs between vessels and monitoring service

providers." Id. The Agency further acknowledged that the Rule

could reduce vessel returns-to-owner (gross profits minus fixed

and operational costs) by around 20%. In total, the New England

Council recognized in its amendment adopting the herring plan that

"the impacts of [the Rule] on fishery-related businesses and human

communities are negative and result from reductions in returns-

to-owner."

C.

Plaintiffs participate in the herring fishery using

small-mesh bottom trawl gear. They also participate in the

mackerel, butterfish, and squid fisheries. Able to freeze fish at

sea, their vessels make longer trips, but also have less processing

capacity per day (125,000 pounds of fish per day, they state, which

equals approximately 57 metric tons) and higher overhead costs

than other herring vessels. Plaintiffs' style of fishing also

means that they can choose what to catch at sea, so they often

declare into multiple fisheries before leaving the dock in order

to catch whatever they encounter on the trip.

Plaintiffs assert that due to their unique fishing

style, they are disproportionately burdened by carrying monitors,

because they make longer trips (during which they may not even

- 9 - catch herring) and therefore need to pay a monitor for more days

at sea. They also claim that they cannot avail themselves of any

of the exceptions to having to carry monitors under the Rule

because of their style of fishing. In particular, they focus on

the exemption for trips taking less than 50 metric tons of herring.

While most herring trips only last 2–4 days, the vessels claim,

their trips last 10–14 days. So although they may catch less than

50 metric tons of herring every 2–4 days, they might catch far

more herring in a single trip, and thus cannot use the exemption

that is available for shorter trips despite having a similar catch

per day.

Plaintiffs therefore have a strong incentive to

challenge the Rule. They argue that it is not authorized by the

MSA, is arbitrary and capricious in violation of the Administrative

Procedure Act (APA), violates the National Standards set forth in

the MSA, violates the Regulatory Flexibility Act ("RFA"), and

violates the Commerce Clause. Defendants (the Agency, along with

the Secretary of Commerce, NOAA, and the Administrators of the

Agency) disagree on all counts.

The district court granted summary judgment for the

Agency. The court found that the MSA is ambiguous regarding

authorization for industry-paid monitors, and that under Chevron

U.S.A., Inc. v. National Resources Defense Council, Inc., 467 U.S.

837 (1984), the Agency's interpretation is entitled to deference.

- 10 - It further found that the Rule does not violate any of the National

Standards found in the MSA, and also does not violate the RFA

because the Agency issued a regulatory flexibility analysis that

indicates it considered plaintiffs' concerns, satisfying the

statute's procedural requirements.2 Finally, the court found that

the Rule does not violate the Commerce Clause, because it does not

force plaintiffs to enter the market for monitors.

II.

We review the district court's grant of summary judgment

de novo. Lovgren v. Locke, 701 F.3d 5, 20 (1st Cir. 2012).

Judicial review of agency actions under the MSA is governed by the

APA. Id.; 16 U.S.C. § 1855(f). We may set aside an agency action

only if it is "arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law." Lovgren, 701 F.3d at 20

(quoting 5 U.S.C. § 706(2)(A)). Our review is limited to the

administrative record. Id.

At issue here, principally, is the interpretation of the

MSA. Plaintiffs challenge the Agency's authoritative

interpretation of the statute as granting it the power to enact

the Rule. In considering such a challenge, we employ "the familiar

Chevron two-step analysis." Bais Yaakov of Spring Valley v. ACT,

2The district court also found that the Rule did not violate the APA because the comment periods for an amendment and its implementing rule overlapped. Plaintiffs do not challenge this finding on appeal.

- 11 - Inc., 12 F.4th 81, 86 (1st Cir. 2021). "First, always, is the

question whether Congress has directly spoken to the precise

question at issue. If the intent of Congress is clear, that is

the end of the matter . . . ." Id. (quoting Chevron, 467 U.S. at

842). Second, "[i]f the statute is silent or ambiguous with

respect to the specific issue, the question for the court is

whether the agency's answer is based on a permissible construction

of the statute." Bais Yaakov, 12 F.4th at 86 (quoting Chevron,

467 U.S. at 843).

In determining whether a statute has clearly spoken to

the question at issue, we "apply the 'ordinary tools of statutory

construction.'" Flock v. U.S. Dep't of Transp., 840 F.3d 49, 55

(1st Cir. 2016) (quoting City of Arlington v. FCC, 569 U.S. 290,

296 (2013)). Further, "a reviewing court should not confine itself

to examining a particular statutory provision in isolation." Nat'l

Ass'n of Home Builders v. Defs. of Wildlife, 551 U.S. 644, 666

(2007) (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S.

120, 132 (2000)). Rather, "the words of a statute must be read in

their context and with a view to their place in the overall

statutory scheme." Id. (quoting Brown & Williamson, 529 U.S. at

132–33). If, after using these tools, we find that there is still

relevant ambiguity, "we typically interpret it as granting the

agency leeway to enact rules that are reasonable in light of the

- 12 - text, nature, and purpose of the statute." Cuozzo Speed Techs. v.

Lee, 579 U.S. 261, 277 (2016).

With these principles in mind, we turn to plaintiffs'

challenges to the Agency's authority under the MSA to promulgate

the Rule. Plaintiffs argue generally that the MSA does not

authorize the Rule, and specifically that other provisions of the

MSA establishing fee programs make clear that the Agency has no

authority to require industry-funded monitoring in this instance.

They further argue that the legislative history and definitions in

the MSA support their position.

Plaintiffs' primary contention is that the MSA does not

authorize industry-funded monitoring and that the Agency therefore

exceeded its statutory authority in promulgating the Rule. This

argument faces an uphill textual climb. Congress expressly

provided that fishery management plans may "require that one or

more observers be carried on board a vessel of the United States

engaged in fishing for species that are subject to the plan, for

the purpose of collecting data necessary for the conservation and

management of the fishery." 16 U.S.C. § 1853(b)(8).

But, say plaintiffs, "at-sea monitors" -- as the term is

used in the industry-funded monitoring program -- are something

entirely different than the "observers" authorized by

section 1853(b)(8). We disagree. The statutory definition of

- 13 - "observers" in the MSA is quite broad and includes "any person

required or authorized to be carried on a vessel for conservation

and management purposes by regulations or permits under this

[Act]." 16 U.S.C. § 1802(31). This certainly includes at-sea

monitors, who are authorized by regulation to be carried on a

vessel to collect data for conservation purposes. 50 C.F.R.

§ 648.11(m)(1)(i) (requiring at-sea monitors to be carried on

Atlantic herring vessels); id. § 648.2 (defining "observer or

monitor" as "any person authorized by NMFS to collect . . .

operational fishing data [or] biological data . . . for

conservation and management purposes"). The narrow

differentiation in the notice promulgating the Final Rule, which

at one point notes that at-sea monitors, "in contrast to

observers," would not collect whole specimens, 85 Fed. Reg. at

7418, does not mean that at-sea monitors do not form a subset of

"observers." Rather, it simply acknowledges that the set of

observers is broader than that subset. In short, the MSA

explicitly provides for the placement of at-sea monitors on fishing

vessels.

Plaintiffs are thus left to argue that Congress somehow

conditioned the Agency's right to require monitors on the Agency

paying for the cost of the monitors. And this is indeed

plaintiffs' most prominently presented argument: Because the

statute, they contend, contains no language allowing the Agency to

- 14 - force plaintiffs to pay for those monitors, the Agency lacks the

authority to require any such payments (meaning there will be no

monitors on board unless the government pays for the monitors).

There are two defects with this argument.

1.

First, the "default norm" as "manifest without express

statement in literally hundreds of regulations, is that the

government does not reimburse regulated entities for the cost of

complying with properly enacted regulations, at least short of a

taking. If this statute needs clarification on this point, then

so too do hundreds of others." Goethel v. U.S. Dep't of Com., 854

F.3d 106, 117–18 (1st Cir. 2017) (Kayatta, J., concurring). When

Congress says that an agency may require a business to do "X," and

is silent as to who pays for "X," one expects that the regulated

parties will cover the cost of "X."

Plaintiffs insist that the requirement to pay for a

monitor does not fall into this default norm because it is not a

"traditional regulatory cost" and differs from an ordinary

instance of requiring a regulated party to bear its own costs.

The daily salary of a monitor, they assert, differs from the cost

inflicted by other regulatory requirements, such as those

mandating permits or particular fishing equipment, in both type

(because it pays for a credentialed individual, rather than a thing

or a piece of gear) and degree (because it is larger). Moreover,

- 15 - they argue, the compliance cost the MSA inflicts (and that the

Agency should try to reduce per the statute) is represented by the

room fishers make available on their vessels to physically host

observers -- something far short of paying an at-sea monitor's

salary.

To a regulated party, paying the expenses of a

credentialed at-sea monitor may well seem different than paying,

for example, a vendor who provides fishing gear mandated by a

regulation,3 or for an EPA-required scrubber or monitoring device

on a smoke stack.4 But plaintiffs offer no authority indicating

that these differences are material to the question of who pays.

To the extent they also argue that the monitors present a different

type of costs because they are "federal officers," we disagree.

See infra, Section II.B. We therefore see no reason why the

default rule does not apply: When Congress expressly authorized

3 See 16 U.S.C. § 1853(b)(4) (allowing fishery management plans to "prohibit, limit, condition, or require the use of specified types and quantities of fishing gear"); 50 C.F.R. § 622.188 (requiring certain types of gear in order to possess South Atlantic snapper-grouper). 4 See 42 U.S.C. § 7412(d)(2) (requiring EPA to promulgate standards "requir[ing] the maximum degree of reduction in emissions of the hazardous air pollutants subject to this section"); 40 C.F.R. § 61.122 (defining emission standard from kilns at elemental phosphorous plants, and noting that compliance will be shown if certain scrubbers are installed and operated); id. § 61.126 (requiring owner or operator of source "using a wet- scrubbing emission control device" to "install, calibrate, maintain, and operate a monitoring device").

- 16 - plans promulgated under the MSA to require vessels to carry an

observer, it presumed that the vessels' owners would bear the cost

of compliance, much like an SEC requirement to submit independently

audited financials imposes on the regulated entity the cost of

paying an independent accountant. See 15 U.S.C. § 77aa(25)–(27).

Nor are we persuaded that the cost of an at-sea monitor

is different than other compliance costs because it may be greater

than fees imposed elsewhere in the statute. The vessels decry

that they may be subject to costs of up to 20% of returns-to-

owner, while in other fishery programs, fees for observers are

capped at 2% or 3%. But the fact that costs of complying with one

regulatory requirement are greater than the costs of complying

with another regulatory requirement does not mean that the former

is unlawful.5 Nor do we have here any costs that are so great as

to cause us to think that Congress without so stating did not

presume that they would be borne by the regulated entities.

5 It is not clear that the plaintiffs will face a 20% reduction in their returns-to-owner. The Final Rule states that the monitoring program "has the potential to reduce annual [returns-to-owner] . . . up to 20 percent." But that figure represents an estimate across all types of fishing equipment; the New England Council's Omnibus Amendment shows that for small-mesh bottom trawl vessels, the type of gear Relentless uses, median returns to owner were expected to be reduced only by 5.4%. Applied only to vessels that take more than 50 metric tons of herring per trip, returns to owner could be reduced even less, by a median of 2.5%.

- 17 - 2.

Adding belt to suspenders, the government points out

that the statutory support for its position need not rely only on

the implication raised by the default norm. Section 1858(g)(1)(D)

in the MSA allows the Agency to suspend or revoke the license of

any vessel if any "payment required for observer services provided

to or contracted by the owner or operator [of the vessel] . . .

has not been paid and is overdue." 16 U.S.C. § 1858(g)(1)(D).

This penalty would make no sense if Congress did not anticipate

that owners and/or operators of the vessels would be paying the

observers.

Plaintiffs concede that Congress expected that some

vessels would have to pay for monitors, but they argue that that

expectation was limited to payments required in a few specific

instances elsewhere in the MSA in which Congress expressly

authorized the imposition of monitor costs on vessels (more on

these instances later). But the provision penalizing the

nonpayment of observers appears in a general part of the MSA

applicable to all fisheries and fishery management plans, rather

than in the specific provisions creating particular fee programs.

If Congress had meant to apply this provision only to certain fee

programs, it likely would have included it in the sections creating

those programs. Or it would have cross-referenced the specific

statutes creating fee programs in the penalty provision. See Silva

- 18 - v. Garland, 27 F.4th 95, 103–04 (1st Cir. 2022) (interpreting

statutory language broadly, rather than as limited by other

statutes, when potentially limiting statutes were not cross-

referenced in the broader statute).

The D.C. Circuit, which recently considered a similar

challenge to the very same Rule, relied on just such reasoning in

rejecting plaintiffs' position that the penalty provisions apply

only to a few statutorily specified fee programs. Loper Bright

Enters. V. Raimondo, 45 F.4th 359, 368 (D.C. Cir. 2022) (reasoning

that "the penalties in a broadly applicable section of the [MSA]

appear to recognize the possibility of industry-contracted and

funded observers beyond [a single] context"). That court sensibly

observed that "[i]f Congress had intended for penalties associated

with industry-funded monitoring to apply only in in the foreign

fishing context, the court would expect that Congress in the

penalty provisions would have specifically referenced foreign

vessels or included a cross-reference to the foreign fishing

provision." Id.

In an effort to rebut the clear textual support for the

Agency's lawful authority to require the vessel owners to pay for

at-sea monitors, plaintiffs point to other sections of the MSA

that expressly authorize the imposition of fees to be paid to the

government to cover certain observer costs. Plaintiffs ask us to

- 19 - reason that because Congress expressly authorized the imposition

of fees in three instances, its failure to do so in the instance

of observer costs under section 1853(b)(8) must mean that no such

costs can be imposed on plaintiffs. They also suggest that to

read the MSA as authorizing industry-funded monitoring would

render those other fee provisions superfluous, a result we usually

try to avoid.

The instances to which plaintiffs point in which the MSA

expressly provides for payments of a cost by the vessels are as

follows: First, section 1853a authorizes and sets requirements

for Limited Access Privilege Programs (LAPPs) to be created in

certain fisheries. To support a LAPP, a Council may "provide . . .

for a program of fees paid by limited access privilege holders

that will cover the costs of management, data collection and

analysis, and enforcement activities." 16 U.S.C. § 1853a(e)(2).

Second, section 1862(a) allows the North Pacific Council to

prepare a "fisheries research plan" for any fishery within its

jurisdiction except a salmon fishery. Such plans may require that

observers be stationed on vessels, and "establish[] a system . . .

of fees." Id. § 1862(a)(1)–(2). Third, section 1827(d) imposes

fees "in an amount sufficient to cover all of the costs of

providing an observer aboard that vessel" on foreign fishing

vessels in certain circumstances which may result in the incidental

taking of billfish. Id. § 1827(d). Plaintiffs contend that these

- 20 - are the only instances in which industry vessels may be required

to pay for observers.

This argument falters at the threshold because this is

not a case in which the agency need rely only on the default

presumption that a regulated party presumably bears its own costs.

To the contrary, as we have described in Part II.A.2 of this

opinion, the statutory text provides affirmative confirmation that

Congress presumed that vessel owners would bear the cost of

complying with monitoring requirements. So plaintiffs' effort to

use these examples to negate reliance on statutory silence is

inapt, or at least insufficient. In any event, the three instances

to which plaintiffs point do not present apples-to-apples

comparators from which one can infer that anything mentioned in

those instances but not in the general observer provision was

intentionally omitted from the latter.

First and foremost, no money is paid into government

coffers under the industry-funded monitoring program. Instead,

vessels are required to obtain and pay for a service from a non-

governmental source, just as they would have to pay for a certain

type of fishing gear. As the Loper Bright court explained, the

fact that Congress instituted a "different funding mechanism" in

the North Pacific fishery and for LAPPs, where funds are collected

by the Agency and deposited into the Treasury, does not indicate

- 21 - that Congress intended to preclude the entirely different

mechanism of industry-funded monitoring. 45 F.4th at 367–68.

Moreover, the North Pacific and LAPP programs are

further distinguishable because the fees fund agency programs that

include more than direct observer costs. See, e.g., 16 U.S.C.

§ 1854(d)(2)(A) (allowing fee "to recover the actual costs

directly related to the management, data collection, and

enforcement of any limited access privilege program," without

limiting fee to payment for observers); Fisheries of the

Northeastern United States; Amendment 17 to the Atlantic Surfclam

and Ocean Quahog Fishery Management Plan, 81 Fed. Reg. 38,969,

38971 (June 15, 2016) (in responding to comment regarding cost

recovery program for LAPP, noting that recoverable costs through

fee "would include the costs of issuing and renewing ITQ permits,

processing cage tag transfers, and tracking cage tag usage"); 16

U.S.C. § 1862(b)(2)(A) (providing that fees not exceed "the

combined cost" of stationing observers, "inputting collected

data," and assessing the necessity of a risk-sharing pool);

Groundfish Fisheries of the Exclusive Economic Zone off Alaska and

Pacific Halibut Fisheries; Observer Program, 77 Fed. Reg. 23,326,

23,339 (April 18, 2012) (explaining that in North Pacific fee

program which was eventually adopted, "[o]bserver fees would not

be linked to the actual level of observer coverage for individual

vessels and plants," but rather "each participant" would pay the

- 22 - same percentage regardless of when they carried observers). In

the industry-funded monitoring program at issue here, by contrast,

the Agency must pay its own administrative costs and vessels only

pay for observers they actually carry. As for the third instance

-- fees imposed on foreign vessels for observer costs -- the

placement of observers is authorized under a different provision

than the one relied on by the Agency, because section 1853(b)(8)

authorizes observers only on board "vessel[s] of the United

States." But even putting that aside, one can easily see why

Congress might opt for a direct fee rather than relying on foreign

owners to arrange for observers themselves. With treaties,

international agreements, and foreign relations at stake, it makes

sense that Congress would have opted for extra specificity.6

6 In their reply brief, plaintiffs also point to section 1821(h)(6), which provides that if there are insufficient appropriations to station an observer on each foreign vessel, the Secretary shall "establish a reasonable schedule of fees that certified observers or their agents shall be paid" by foreign fishing vessel operators. 16 U.S.C. § 1821(h)(6). As an initial matter, this argument was raised for the first time on reply, and absent exceptional circumstances we consider it waived. See Gottlieb v. Amica Mut. Ins., 57 F.4th 1, 11 (1st Cir. 2022). Even if we were to consider this argument, we would not find that this provision renders the Agency's interpretation unreasonable. It makes sense that Congress would provide more detail in a sensitive area (foreign relations) where it wanted to ensure observer coverage, rather than leaving such coverage to the discretion of the Agency or a regional Council. Such a provision does not suggest that Congress did not delegate authority to the Agency to require industry-funded monitoring in other instances. See Loper Bright, 45 F.4th at 367–68.

- 23 - Plaintiffs also contend that the costs under the Final

Rule are actually fees paid to the Agency. To build this argument,

they claim that privately contracted monitors are government

employees or agents. To that end, plaintiffs describe the monitors

engaged by private companies as "federal officers." To justify

this relabeling, the plaintiffs point to a penalty provision which

provides that interfering with an "observer" or "data collector"

is prohibited by federal law, 16 U.S.C. § 1857(1)(L), as well as

a decision upholding a conviction for sexually harassing an at-

sea monitor in violation of this law. See United States v. Cusick,

No. 11-cr-10066, 2012 WL 442005, at *6 (D. Mass. Feb. 9, 2012).

But, establishing that Congress intended to deter the harassment

of monitors falls well short of establishing that Congress intended

to turn those monitors into "federal officers." And the MSA

expressly distinguishes the provision that prohibits assaulting

"any observer" or "data collector," 16 U.S.C. § 1857(1)(L), from

a provision prohibiting similar actions against "officer[s]," id.

§ 1857(1)(D)-(F).

Finally, plaintiffs argue that the legislative history

confirms their preferred interpretation of the statute. They note

that amendments to the MSA enacted in 1990, which added the fee

provisions for observers in the North Pacific, indicated that

"nothing in [that] section should be construed as affecting the

- 24 - rights and responsibilities of other Regional Fishery Management

Councils." H.R. Rep. No. 101-393, at 31 (1989). We have already

explained why the industry-funded monitoring program at issue here

does not impose a fee. And in rejecting plaintiffs' challenge to

the observer rule, we do not (nor did the Agency) rely on any

contention that anything in that section altered another Council's

rights and responsibilities by granting new authority to require

plaintiffs to carry observers on board. To the contrary, the

Councils already had that authority, as acknowledged in the very

legislative history on which plaintiffs rely. See H.R. Rep.

No. 101-393, at 28 (1989) (stating that "the Councils already have

-- and have used -- such authority" to require that observers be

carried on board).7

***

In sum, we have no trouble finding that the Agency's

interpretation of its authority to require at-sea monitors who are

paid for by owners of regulated vessels does not "exceed[] the

bounds of the permissible." Barnhardt v. Walton, 535 U.S. 212,

218 (2002). We need not decide whether we classify this conclusion

as a product of Chevron step one or step two. Congress expressly

authorized NMFS to require vessels to carry monitors. And at the

7 The Agency also points to regulations that implement industry-funded monitoring in other fisheries. See, e.g., 50 C.F.R. § 648.11(k)(4)-(5) (sea scallop vessels required to carry observers must arrange and pay for those observers).

- 25 - very least, it is certainly reasonable for the agency to conclude

that its exercise of that authority is not contingent on its

payment of the costs of compliance.

III.

Having found that the MSA authorizes the adoption of a

rule requiring vessels to procure at their expense the services of

an at-sea monitor, we now consider plaintiffs' other challenges to

the Agency's decision process and procedure in adopting the Rule.

Plaintiffs argue that the Rule is arbitrary and

capricious because it allows for waivers for trips on which a

vessel plans to catch less than 50 metric tons of herring. This

exemption benefits mostly small mesh bottom trawlers and single

midwater trawlers that make short trips and plan on catches of

less than 50 metric tons of herring. Plaintiffs point out that

their larger scale operation, having the capacity to freeze and

hold more fish, catches around 50 metric tons per day but may

harvest many more tons than that on a per-trip basis. Hence, the

waiver is practically unavailable to them. The result, they argue,

is that plaintiffs would have to pay for an at-sea monitor on a

single 14-day trip in which they catch 343 metric tons of herring,

but a hypothetical smaller boat catching 49 metric tons on each of

seven back-to-back 2-day trips (for a total of the same 343 metric

tons) would not have to pay for a monitor at all. Additionally,

- 26 - the flexibility to stay at sea for longer means that plaintiffs

declare into multiple fisheries before leaving the dock, which

means they may declare that they will catch herring but not

actually take any herring. Thus, not only can they not use the

exemption, but they may be forced to pay for a herring monitor on

a trip where no herring is caught. Plaintiffs argue that these

features render the Rule and the exemptions arbitrary and

capricious.

"The scope of review under the 'arbitrary and

capricious' standard is narrow and a court is not to substitute

its judgment for that of the agency." Sorreda Transp., LLC v.

DOT, 980 F.3d 1, 3 (1st Cir. 2020) (quoting Motor Vehicle Mfrs.

Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

Under this deferential standard, "[a]n 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

- 27 - or the application of agency expertise." Associated Fisheries of

Me., Inc. v. Daley, 127 F.3d 104, 109 (1st Cir. 1997).

Here, the Agency expressly considered plaintiffs'

objections and rejected them. It stated:

In an effort to minimize the economic impact of industry-funded monitoring, the Council explicitly considered measures to address Seafreeze's concern about disproportional impacts on its vessels, including considering alternatives for coverage waivers for trips when landings would be less than 20-percent herring or less than 50 mt of herring per day. Ultimately, the Council determined that the potential for a relatively high herring catches per trip aboard those vessels warranted additional monitoring and chose the 50 mt per trip threshold.

85 Fed. Reg. at 7426. The Agency also found it highly unlikely

that plaintiffs would be paying as much as they claimed for trips

that did not take herring, based on cost estimates contained in

the Environmental Assessment. Id. So plaintiffs cannot argue

that the Agency failed to consider their objections.8 Nor do they

develop any contention that the explanation given by the agency

relied on any factors prohibited by Congress or ran counter to the

available evidence.

And the rationale given by the Agency -- "that the

potential for a relatively high herring catches per trip aboard

those vessels warranted additional monitoring" -- does not strike

8 Plaintiffs presented no evidence that their hypothetical scenarios actually occur.

- 28 - us as "so implausible that it cannot be attributed to a difference

in view or the applicable agency expertise." Associated Fisheries

of Me., 127 F.3d at 109. To the contrary, determinations as to

whether monitoring will be more effective on a per-trip basis or

per-day basis seem squarely within the expertise of the Agency.

Although we agree that the Agency could have provided a more

thorough explanation than it did, we do not find the per-trip

waiver to be arbitrary and capricious on its face. Certainly, one

can see why monitoring per trip rather than per day may be easier

to administer, and why plaintiffs' uncertainty about how much

herring they will decide to catch might counsel for including a

monitor rather than not. See id. at 111 ("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.")

Plaintiffs further contend that the Rule violates

several National Standards contained in the MSA. All fishery

management plans must be consistent with ten National Standards,

which "are broadly worded statements of the MSA's objectives for

all fishery conservation and management measures." Lovgren, 701

F.3d at 32. "The purposes of the national standards are many, and

can be in tension with one another." Id. As such, "we will uphold

- 29 - a regulation against a claim of inconsistency with a 'national

standard' under § 1851 if the [Agency] had a 'rational basis' for

it." Id. (quoting Or. Trollers Ass'n v. Gutierrez, 452 F.3d 1104,

1119 (9th Cir. 2006)).

First, plaintiffs allege that the Rule violates National

Standard One (which requires plans to "prevent overfishing while

achieving, on a continuing basis, the optimum yield from each

fishery," 16 U.S.C. § 1851(a)(1)) because it disproportionately

burdens them although they take less bycatch and herring than other

types of trawlers, and because it allows boats taking more herring

to harvest without monitors. The government counters that the

purpose of the industry-funded monitoring requirement -- more

accurately tracking catch -- will allow better calibration of

regulation, and thus furthers the goals of National Standard One.

We agree that the rule implementing industry-funded monitoring is

consistent with the standard for this reason. The district court

also pointed out that plaintiffs' argument here relates to the

distribution of herring catch between vessels, not the optimum

yield for the fishery as a whole. This mismatch between

plaintiffs' complaint and the actual subject of the Standard

further renders their challenge under National Standard One

unavailing.

Second, plaintiffs allege that the Rule violates

National Standard Two, which requires that plans "be based upon

- 30 - the best scientific information available," 16 U.S.C.

§ 1851(a)(2), because it burdens them without "scientific evidence

of clear increase in Atlantic herring stocks" as a result of the

Rule. But they do not actually allege that the Agency ignored

specific scientific data or point to better data available. "If

no one proposed anything better, then what is available is the

best." Massachusetts ex rel. Div. of Marine Fisheries v. Daley,

170 F.3d 23, 30 (1st Cir. 1999). National Standard Two does not

require the Agency to wait to regulate because it does not have

certain data. See 50 C.F.R. § 600.315(e)(2) ("The fact that

scientific information concerning a fishery is incomplete does not

prevent the preparation or implementation of an FMP."). Nor does

it prohibit an agency from regulating in the face of some

uncertainty about the effects of its chosen rule. See Coastal

Conservation Ass'n v. U.S. Dep't of Com., 846 F.3d 99, 109 (5th

Cir. 2017) (explaining that where economic impacts of rule were

uncertain because they depended on the choices of several parties,

"[t]he National Standards [did] not require analysis of

unpredictable, and thus unavailable, data"). Where, as here,

plaintiffs point to no data they say should have been considered

or relied upon -- and where the very purpose of the rule is to

gather better data to be used in future fishery management -- we

find that the regulation complies with National Standard Two. See

Massachusetts ex rel. Div. of Marine Fisheries, 170 F.3d at 30;

- 31 - see also Coastal Conservation Ass'n, 846 F.3d at 109 (finding that

National Standard Two was not violated where no one pointed to

data that Secretary had ignored, and citing cases doing the same).

The Rule also does not violate National Standard Six

(which requires the Agency to account for "variations among, and

contingencies in, fisheries, fishery resources, and catches," 16

U.S.C. § 1851(a)(6)). The regulations implementing this National

Standard focus on maintaining flexibility to adjust to uncertainty

or changed circumstances. 50 C.F.R. § 600.335; see J.H. Miles &

Co. v. Brown, 910 F. Supp. 1138, 1155 (E.D. Va. 1995) ("National

Standard Six, on its face, dictates flexibility on the part of

fishery managers. It suggests that the Secretary and his designees

must be prepared to address uncertainties or changes that might

arise."). Plaintiffs' challenge has nothing to do with flexibility

to adjust to changing circumstances, but rather protests that the

Rule does not adequately take their unique style of fishing or

community into account. As with their challenge based on National

Standard One, this mismatch between what the Standard requires and

the nature of Plaintiffs' challenge renders their complaints

unavailing. We do not see anything in the National Standard that

requires the Agency to change its regulations to eliminate all

differential impacts on all of the varied types of vessels. See

Ace Lobster Co. v. Evans, 165 F. Supp. 2d 148, 182 (D.R.I. 2001)

("There is no requirement in national standard 6 or anywhere else

- 32 - in the statute that defendant finely attune its regulations to

each and every fishing vessel in the offshore fishery.").

Finally, the Rule does not violate National Standards

Seven and Eight, which require the Agency to consider fishery

resources and cost burdens. See 16 U.S.C. § 1851(a)(7) (plans

"shall, where practicable, minimize costs and avoid unnecessary

duplication"); id. § 1851(a)(8)) (plans shall "utiliz[e] economic

and social data . . . to (A) provide for the sustained

participation of such communities, and (B) to the extent

practicable, minimize adverse economic impacts on such

communities"). Plaintiffs argue that the Rule violates these

standards because their boats bear heavier regulatory burdens than

other boats. As a result, they claim, National Standard Seven

"has been completely ignored," and National Standard Eight "has

been violated in the same way" because "Appellants are not more

damaging" to the fishery, but their community bears the brunt of

severe impacts.

Our precedent suggests that "the required analysis of

alternatives and impacts [under National Standard 8] is subject to

a rule of reason, for study could go on forever." Little Bay

Lobster Co. v. Evans, 352 F.3d 462, 470 (1st Cir. 2003). "About

the best a court can do is ask whether the [Agency] has examined

the impacts of, and alternatives to, the plan [it] ultimately

adopts and whether a challenged failure to carry the analysis

- 33 - further is clearly unreasonable, taking account of the usual

considerations . . . ." Id. Moreover, we are mindful that "the

plain language of [National Standard] 8 and its advisory

guidelines make clear that these obligations are subordinate to

the MSA's overarching conservation goals." Lovgren, 701 F.3d at

35.

Here, the Agency has done what is required under National

Standards Seven and Eight. The National Standards require

consideration, not adoption, of alternatives; they also require

the Agency to minimize costs "where practicable," not to eliminate

cost burdens entirely. The Agency considered various coverage

targets to meet its goal of gathering additional data, balanced

those targets with costs, and selected a 50% monitoring target.

Similarly, it adopted a waiver for boats taking less than 50 metric

tons of herring per trip, after considering and rejecting

Relentless' proposed alternative waiver. 85 Fed. Reg. at 7425–

26. The New England Council's Omnibus Amendment also considered

in detail the economic impacts to industry participants using

various gear types. The Agency explained how exemptions for

vessels catching below a certain weight threshold per trip would

minimize cost impacts. 85 Fed. Reg. at 7430. Nothing in our prior

opinions suggests that the National Standards require that cost

and community impacts, even those disproportionately borne by some

regulated parties, must be eliminated or distributed exactly

- 34 - evenly under National Standards Seven and Eight among those who

employ different methods of fishing.

Plaintiffs' challenges under each of the National

Standards boil down to arguments that the Rule burdens them more

heavily than it burdens others without a clear enough

justification, or without adopting an alternative they suggested.

But they have not proffered the types of evidence or argument under

which courts have found that agency actions violate the National

Standards. For example, they do not argue that the differential

treatment of different fishers under the Rule was based not on

scientific data, but on political compromise. See Hadaja, Inc. v.

Evans, 263 F. Supp. 2d 346, 354 (D.R.I. 2003); Hall v. Evans, 165

F. Supp. 2d 114, 136 (D.R.I. 2001). They also cannot show that no

reason was given either for the Rule itself or for the scope of

the exceptions. See Massachusetts ex rel Div. of Marine Fisheries,

170 F.3d at 31–32; Hall, 165 F. Supp. 2d at 137–38. The Agency

gave reasons for adopting the Rule and the waivers; the fact that

those reasons were unsatisfactory to these plaintiffs does not

mean that the Rule violates the National Standards.

This is not to say that the Rule, or the Agency's

explanation for it, is a model of clarity. Plaintiffs point out

several features of the Rule (for example, the hypothetical ability

of a boat to take more overall herring with no monitoring under

the structure of the exemptions) that might cause one to wonder if

- 35 - the Agency could have tailored the rule more precisely or chosen

a different alternative. But adoption of the Rule, and

consideration of alternatives, was the Agency's prerogative; it

met its obligations to respond to comments and explain the reason

for the Rule's adoption and structure. Plaintiffs' criticisms

that the Rule does not account for peculiarities of their specific

businesses under all hypothetical scenarios do not convince us

that the Rule violates the National Standards.

Plaintiffs also contend that the Rule violates the RFA,

which requires agencies to consider the effects of their actions

on small businesses. Associated Fisheries of Me., 127 F.3d at

110, 116. Agencies must publish interim and final regulatory

flexibility analyses in the Federal Register along with Notices of

Proposed Rulemaking, and make them available for comment in the

same way. 5 U.S.C. §§ 603–04. These analyses are reviewable under

the APA in a similar manner to final agency actions. Id. § 611.

Here, the Final Rule states that the Agency considered

the impact of the Rule on small businesses, and, to address that

impact, set the monitoring target at 50% of trips (rather than 75%

or 100%) and allowed waivers on certain types of trips. 85 Fed.

Reg. at 7429–30. Plaintiffs argue that the Agency nonetheless

violated the RFA because it did not consider the effect of its

actions on, or include recommendations to assist, businesses who

- 36 - freeze catch at sea like themselves. They also argue that the

Agency did not adequately respond to comments in response to the

RFA, did not consider data regarding a drop in fishermen, and did

not make a plan to ensure monitors are allocated fairly across the

fleet.

The RFA "does not alter the substantive mission of the

agencies" but creates "procedural obligations." Little Bay

Lobster, 352 F.3d at 470–71. The Agency met those here. The

Agency explained potential impacts on small businesses and

accordingly described how it mitigated those impacts, largely by

setting the monitoring coverage target at 50% and by setting a

weight threshold for monitored trips that would exempt many small

businesses from the requirement to carry a monitor. 85 Fed. Reg.

at 7429–30. The Agency also explained why it disagreed that small

businesses would be forced out of fishing. Finally, as discussed

above, it explained why it did not adopt alternative measures that

Relentless suggested. 75 Fed. Reg. at 7426. Plaintiffs'

suggestion that the Agency could have done more to respond to their

specific concerns is not without some appeal. But the RFA only

required the Agency to consider and respond to comments and to

evaluate the impact of its action on small businesses. It did so

here. See Little Bay Lobster, 352 F.3d at 471 (noting that "there

is no requirement as to the amount of detail with which specific

comments need to be discussed," and that "[t]he agency's obligation

- 37 - is simply to make a reasonable good faith effort to address

comments and alternatives.")

D.

Finally, plaintiffs claim that, by forcing them "to

participate in the market" for at-sea monitors, the Rule is an

unconstitutional exercise of Congress's commerce power under the

Supreme Court's decision in NFIB v. Sebelius, 567 U.S. 519 (2012).

That case, plaintiffs argue, held that Congress cannot force

individuals to become active in a market in which they do not

already participate. They argue that because Congress has forced

them to become unwilling participants in the market for at-sea

monitors, the Rule is unconstitutional since it is beyond the power

of the Commerce Clause.

We reject this contention. Plaintiffs harvest a

national resource for economic gain. But no one is forcing

plaintiffs to participate in any market. Rather, they choose to

engage in an activity that has long been subject to regulation.

In so doing, they can hardly complain about complying with the

otherwise lawful regulations that govern the manner in which they

engage in that activity merely because compliance requires some

- 38 - payment to another person, whether a seller of nets or life

preservers, or a seller of monitoring services.9

IV.

For the foregoing reasons, we hold that the rule

requiring plaintiffs to bear the costs of complying with on-board

monitor regulation is authorized by Congress and is otherwise

immune to plaintiffs' assorted procedural and substantive

challenges. We therefore affirm the judgment of the district

court.

9 To the extent plaintiffs challenge the Rule as violating constitutional controls on taxing, appropriations, and spending, U.S. Const. art. I, §§ 1, 7, 8, those challenges are referenced only in passing, are undeveloped, and are therefore waived. See United States v. Zannino, 895 F.2 1, 17 (1st Cir. 1990). Similarly, any potential Fourth Amendment argument was not raised in the briefing on appeal, and is therefore waived.

- 39 -