A Small Fish and an Uncollected Fee Add Up to Big-Government Challenge at the Supreme Court

Greg Stohr
·6-min read

(Bloomberg) -- Conservatives who have spent decades asking the Supreme Court to rein in the US government’s regulation of businesses are now betting on a case involving fishermen challenging a $710 fee they’ve never had to pay.

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The case could undercut the power of federal regulators on major issues including air pollution and securities fraud. It also exemplifies the way many of the high court’s biggest fights are born these days -- driven less by the practical aims of the litigants than by the ideological vision of the interest groups behind the suits.

The fight concerns a federal requirement that some herring boats host government-approved observers aboard their vessels and cover an estimated $710 daily cost. The fisherman say that would be an onerous burden on their family-owned businesses -- so onerous they are suing even though the fee is on hold and might never kick in.

“We have not had to pay. We’re just nervous about this hanging over our head,” said Bill Bright in an interview in Cape May, New Jersey, where he runs his two-vessel fishing business. “So we feel that we need to solve this problem now.”

The real stakes lie in the broader legal issue, one that anti-regulatory groups have eagerly sought to get before the Supreme Court and its conservative supermajority. The justices are considering overturning a 1984 ruling known as Chevron v. Natural Resources Defense Council, under which judges typically defer to regulators on the meaning of ambiguous statutes – including those that set out how much power the agency has.

Democratic administrations have relied heavily on the so-called Chevron doctrine, using it to justify rules governing energy, the environment and the workplace. In the herring case, a federal appeals court invoked Chevron in upholding the National Marine Fisheries Service's payment demand even though Congress didn’t explicitly authorize the rule.

“At stake is a foundational legal principle that our nation depends on to protect millions of people from climate pollution, consumer fraud and destruction of our fisheries,” said Vickie Patton, general counsel of the Environmental Defense Fund.

Critics of the Chevron decision have filed dozens of briefs urging that it be overruled or at least scaled back. The US Chamber of Commerce told the justices the Chevron doctrine “has contributed to an unpredictable, unstable regulatory environment.”

The justices will hear arguments in January in two near-identical cases, each being pressed by a group funded by conservative billionaire Charles Koch’s network. The New Jersey case is being spearheaded by the Cause of Action Institute, which lost on procedural grounds when it filed a similar suit eight years ago over industry-funded monitors for other species of fish.

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That case only fueled the group’s interest in what it saw as the overregulation of the nation’s fisheries, says Ryan Mulvey, a Cause of Action Institute lawyer. Amid efforts over the past decade to increase monitoring of herring boats, Mulvey started attending meetings of the regional council that helped craft the Fisheries Service rule. He also submitted comments on behalf of the Cause of Action Institute.

“We were interested in what we saw as a very egregious instance of regulatory overreach that was going to have a terrible economic impact,” Mulvey said. “We can’t sue on our own behalf, but we knew that there were going to be fishermen who needed help.”

The monitoring program is part of a broader effort to conserve and manage the US Atlantic herring fishery, which stretches from North Carolina to the Canadian maritime boundary. A 2022 federal assessment concluded that the species was “overfished” but that the stock was rebuilding. The fast-growing fish, which grows to a maximum of about 14 inches, is commonly used as bait for catching lobster.

Herring boats have carried observers for years. Under the 1976 Magnuson Stevens Act, the Fisheries Service can require boats to carry observers to track where the vessels are fishing and what they are catching.

The new rule would expand coverage, aiming to put monitors on half of all qualified herring vessels. It also adds the type of industry-funding requirement that is already in place for a handful of other species.

Those pressing the lawsuits say they readily work with the Fisheries Service toward the common goal of a robust herring stock but draw the line at having to pay for monitors.

“We welcome observers on board our fishing vessels, but we shouldn’t have to pay for that,” said Wayne Reichle, president of Lund’s Fisheries Inc., which owns vessels as well as five processing facilities on the East and West Coasts. “That’s something that the government should have to pay for.”

Environmental advocates contend that industry-funded observer programs have a long history, a practice that reflects the status of the nation’s fisheries as public resources.

“From a conservation perspective, they’re accessing it for free and monitoring it is expensive,” said Erica Fuller, an attorney with the Conservation Law Foundation, which is backing the Fisheries Service in the case. “So asking them to pay part of the cost seems like a reasonable expectation.”

So far, that debate has been mostly theoretical. Vessels were able to get waivers from the monitoring requirement during the pandemic, and the program is now on hold because Congress hasn’t appropriated money to cover the administrative costs assigned to the federal government.

The Biden administration also says the government has reimbursed vessels for any at-sea monitoring costs they incurred. “In practice, the 2020 rule’s monitoring provisions have had no financial impact on regulated vessels,” the administration told the court.

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With its hard-to-discern stakes, the case bears similarities to other recent high court fights pressed by advocacy groups. In its last term, the court heard the case of a Colorado web designer who sued to ensure she could make wedding websites only for opposite-sex couples. The court backed the designer — bolstering free speech rights — even though she wasn’t yet making wedding websites and it wasn’t clear any same-sex couples were seeking her services.

Advocates on both sides say the legal issue before the court is an important one for the fishing business. The key question is whether Congress authorized the Fisheries Service to impose monitoring charges on herring vessels. The agency is relying on a provision that says it can take steps that are “necessary and appropriate” to prevent overfishing, rebuild stocks and promote the long-term health of fisheries.

Critics say an expansive reading of that provision would leave fishing businesses vulnerable to crushing fees. “Once they’ve got it fixed in the legal firmament, they can go charge whatever they want,” said John Vecchione, a lawyer with the New Civil Liberties Alliance representing a separate group of fishing businesses in New England.

Environmentalists contend the long-term health of the oceans depends on a Fisheries Service with enough power to ensure it gets the information it needs.

“As a practical matter, it’s not clear that for the fishermen there’s any real risk here,” said Kirti Datla, a lawyer with EarthJustice, which is urging the court to back the Fisheries Service. But, she added, “there’s a real need for the kind of data that these observers provide.”

The cases are Loper Bright Enterprises v. Raimondo, 22-451, and Relentless v. Department of Commerce, 22-1219.

--With assistance from Emily Birnbaum.

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