H&L AXELSSON, INC. et al v. BLANK et al

Filing 32

OPINION. Signed by Chief Judge Jerome B. Simandle on 4/15/2014. (drw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
H&L AXELSSON, INC., et al.,

HONORABLE JEROME B. SIMANDLE

Plaintiffs,
Civil Action
No. 13-183 (JBS/KMW)

v.
PENNY PRITZKER, et al.,

OPINION
Defendants.

APPEARANCES:
Kevin J. Thornton, Esq.
COOPER LEVENSON, P.A.
1125 Atlantic Avenue
Atlantic City, NJ 08401
- and Stephen M. Oullette, Esq.
OUELLETTE LAW OFFICE
127 Eastern Avenue, Suite 1
Gloucester, MA 01930
Attorneys for Plaintiffs
John Brett Grosko, Esq.
Environment & Natural Resources Division
Wildlife & Marine Resources Section
UNITED STATES DEPARTMENT OF JUSTICE
601 D Street NW
Washington, DC 20004
Attorney for Defendants
SIMANDLE, Chief Judge:

I.

INTRODUCTION1
Plaintiffs H&L Axelsson, Inc., Dan Axelsson and Lars

Axelsson (collectively, “Plaintiffs” or “the Axelssons”) bring
this action to reverse and vacate the assessment of fines and
penalties against them by the National Oceanographic and
Atmospheric Administration (“NOAA”), pursuant to 16 U.S.C. §
1858(b).2 Plaintiffs, who are commercial fishermen based in Cape
May County, N.J., failed to comply with some reporting
requirements of the Magnuson-Stevens Fisheries Conversation and
Management Act (“MSA” or “the Act”), 16 U.S.C. § 1801, et seq.,
related to their harvesting of Atlantic herring for a six-month
period in 2007. Plaintiffs’ failure to make reports about their
Atlantic herring catches constituted 27 separate violations of
the MSA, for which NOAA fined the Axelssons $270,000 and issued
24 months of permit sanctions. After an administrative hearing,

1

When this matter was docketed, Defendant Rebecca Blank served
as Acting Secretary of the U.S. Department of Commerce, and Jane
Lubcheno served as Under Secretary of Commerce for Oceans and
Atmosphere. In the meantime, Penny Pritzker has assumed the
office of Secretary of the U.S. Department of Commerce, and Dr.
Kathryn D. Sullivan was confirmed as Under Secretary of Commerce
for Oceans and Atmosphere. Under Fed. R. Civ. P. 25(d), an
“officer’s successor is automatically substituted as a party.”
The caption here so reflects.
2

“Any person against whom a civil penalty is assessed under
subsection (a) of this section or against whom a permit sanction
is imposed under subsection (g) of this section . . . may obtain
review thereof in the United States district court for the
appropriate district . . . .” 16 U.S.C. § 1858(b). The Court has
jurisdiction under this statute and 28 U.S.C. § 1331.
2

an administrative law judge (“ALJ”) suspended the majority of
the penalties, and an agency administrator further reduced the
fine to $54,000 with no suspended penalties and reduced the
outright permit sanction to one month. Plaintiffs now seek
judicial review of the ALJ’s decision and urge the Court to
vacate the assessment of fines. Before the Court are crossmotions for summary judgment, although, in substance, this case
is an appeal of an administrative action. [Docket Items 20 &
28.]
Plaintiffs raise three main challenges to the penalties:
(1) the ALJ improperly denied Plaintiffs’ motion to dismiss
based on the Paperwork Reduction Act (“PRA”), 44 U.S.C. §§ 3501,
et seq.; (2) the ALJ’s decision was not in accordance with
governing statutes or agency guidelines; and (3) the excessive
fine violated the Eighth Amendment to the U.S. Constitution.3
Neither party has requested oral argument and these crossmotions are decided upon the submissions of counsel without oral
argument pursuant to Rule 78, Fed. R. Civ. P.
3

Plaintiffs also argue that the ALJ improperly permitted the
agency to amend its complaint. (Pl. Mot. at 22-23.) The original
complaint misstated Lars Axelsson’s vessel name in some
paragraphs, but also contained accurate references to the vessel
name. (R. at AR01690-93.) The ALJ properly permitted the
amendment, finding that Plaintiffs were on notice of the charges
and the error did not prevent Plaintiffs from preparing their
case. (R. at AR001690-92.) This determination was supported by
the record and was within the ALJ’s discretion, and the Court
will not vacate the agency’s assessment of penalties on this
ground.
3

For reasons explained below, because the fines do not
violate the Eighth Amendment, and because substantial evidence
supports the ALJ’s ruling, the Court will affirm the agency’s
assessment of penalties. Reviewing the Paperwork Reduction Act
motion on the merits, the Court finds that the agency complied
with the statute and accompanying regulations, and therefore the
ALJ was correct to deny Plaintiffs’ motion to dismiss.
Accordingly, the Court will affirm the agency proceedings below,
grant Defendants’ cross-motion for summary judgment, and deny
Plaintiffs’ motion for summary judgment.
II.

BACKGROUND
A. Facts
The material facts are undisputed.4 Plaintiffs Dan and Lars

Axelsson are owners of H&L Axelsson, Inc., a family-owned
commercial fishing operation out of Erma, N.J. The Axelssons

4

Defendants argue that because Plaintiffs’ motion for summary
judgment was not accompanied by a statement of material facts
not in dispute, per L. Civ. R. 56.1, Plaintiffs’ motion for
summary judgment must be dismissed. (Def. Statement of Material
Facts (“SMF”) [Docket Item 28-2] at 3 n.2.) However, because
this appeal concerns whether the agency’s determination was
arbitrary or capricious, or otherwise not in accordance with
law, and not whether there exists a genuine dispute of material
fact, the lack of a L. Civ. R. 56.1 statement is not fatal to
Plaintiffs’ motion. The “well rehearsed summary judgment
standard, as articulated in Fed. R. Civ. P. 56(c), does not
apply because the underlying action is an appeal brought under
the substantial evidence standard of the APA.” Salisbury v.
United States, No. 07-4881, 2008 WL 5423487, at *2 n.5 (E.D. Pa.
Dec. 30, 2008), aff’d, 368 F. App’x 310 (3d Cir. 2010).
4

have been fishing for more than 30 years. (SMF ¶ 1.) H&L
Axelsson and Dan Axelsson own and operate the fishing vessel
known as F/V Dyrsten; H&L Axelsson and Lars Axelsson own and
operate the F/V Flicka. (Id. ¶¶ 4, 7.) The Axelssons have fished
for a number of heavily regulated species such as bluefish,
trout, flounder, mackerel, and others (id. ¶ 2), and hold
permits to fish for Atlantic herring. (R. at AR002227,
AR002259.)
NOAA’s National Marine Fisheries Service (“NMFS”) requires
permitted Atlantic herring vessels to submit multiple reports
about their harvests, known as “landings,” in order to monitor
fish populations and prevent overfishing.5 See Atlantic Herring
Fishery Management Plan, 65 Fed. Reg. 77,450, 77,450, 77,452
(Dec. 11, 2000) (codified in relevant part at 50 C.F.R. pt.
648); (R. at AR02227). The Atlantic Herring Fishing Management
Plan requires permitted fishermen to complete monthly Vessel
Trip Reports (“VTRs”), which record fishing efforts, landings
and discards on paper forms supplied by a regional
administrator. 65 Fed. Reg. at 77,452; 50 C.F.R. § 648.7(b)(1).
However, because the processing of these monthly paper reports
is slow -- accurate statistics are available only on a 30- to
45-day lag -- the NMFS also requires certain Atlantic herring

5

Federal regulations set target “total allowable catch” levels
for different fishes in particular areas of the ocean.
5

vessels to be equipped with a Vessel Monitoring System (“VMS”)
unit and to file weekly “Interactive Voice Response” (“IVR”)
reports by calling a toll-free number and entering data by
pressing numbers on a touchtone phone. 65 Fed. Reg. at 77,452;
50 C.F.R. § 648.7(b)(2). Atlantic herring dealers are required
to submit weekly reports by mail and may be required to submit
weekly IVR reports, if so determined by the regional
administrator. 65 Fed. Reg. at 77,452.
Until late 2006, Plaintiffs did not file IVR reports
directly with NOAA, but sent their information to Ms. Kohl
Kanwit, a researcher who worked for the Maine Division of Marine
Resources, who in turn forwarded the Axelssons’ data to NOAA.
(SMF ¶ 30.) When Ms. Kanwit transitioned out of that job, she
sent an e-mail to a group of fishermen, including Plaintiffs,
stating: “If you have been e-mailing or calling me with your IVR
numbers you will now have to call them in to [NM]FS directly.”
(R. at AR001094.) Plaintiffs “admit that such an e-mail was sent
and may have been received by Lars Axelsson.” (Pl. Response to
SMF [Docket Item 30-1] ¶ 30.)
Plaintiffs concede that when Ms. Kanwit stopped making IVR
reports to NOAA, they did not immediately begin submitting their
own reports. (Pl. Resp. to SMF ¶ 36.) Plaintiffs admit that Dan
Axelsson failed to submit nine IVR reports between January 10,
2007 and April 4, 2007, arising from the operation of the F/V
6

Dyrsten (SMF ¶ 4), and Lars Axelsson failed to submit six IVR
reports between January 24, 2007 and July 16, 2007, arising from
the operation of the F/V Flicka. (SMF ¶ 7; see also Pl. Mot. Br.
at 2 (stating that Plaintiffs “do not dispute” that “for a
period of time they failed to report their herring landings over
the IVR system”).) During approximately the same time period,
Lars Axelsson did not timely file 12 VTRs. (SMF ¶ 9; see also
Pl. Mot. Br. at 2 (admitting “that Lars Axelsson submitted
several months worth of VTRs late”).) These missing or late
reports would have communicated to NMFS that Plaintiffs landed
3.25 million pounds of herring over that period. (SMF ¶ 14.)
Plaintiffs contend that the amount of their harvest was
nonetheless reported to NOAA in the dealer reports, even if the
Axelssons themselves did not directly report the numbers to NOAA
in a timely fashion using the IVR reports or the VTRs. (Pl.
Resp. to SMF ¶ 14.)
The MSA provides a maximum civil penalty of $140,000 for
each violation of the Act or the regulations issued pursuant to
the Act. 16 U.S.C. § 1858(a) (setting the civil penalty maximum
at $100,000 per violation); 15 C.F.R. § 6.4(f)(14) (adjusting
the maximum penalty up to $140,000 per violation, due to
inflation). On October 1, 2008, NOAA fined Plaintiffs $270,000
jointly and severally for the 27 violations: $180,000 assessed
against H&L and Lars Axelsson for the 18 IVR and VTR violations,
7

and $90,000 against H&L and Dan Axelsson for the nine IVR
reporting violations. (SMF ¶¶ 6, 10, 11.) NOAA also issued
permit sanctions totaling 24 months against the Axelssons. (SMF
¶ 42; Def. Cross-Mot. at 1.)
Plaintiffs requested an administrative hearing to challenge
the penalties. (SMF ¶ 17.) Administrative Law Judge Michael
Devine held a hearing on June 16, 2009.
B. ALJ’s decision
The ALJ first ruled on Plaintiffs’ motion to dismiss, which
was predicated on the Paperwork Reduction Act (“PRA”), arguing
that federal law requires NOAA to “display” certain information
on the forms associated with the collection of information, and
NOAA failed to do so in this case. (R. at AR000223.) Plaintiffs
argued that NOAA’s failure to comply with the PRA barred the
agency from enforcing the reporting requirements. (R. at
AR000225.) The ALJ denied the motion for three reasons:
First, [the Axelssons’] filing of this motion at the
beginning of the hearing, as a surprise legal issue,
is in violation of the regulations. 15 C.F.R. §
904.240(a)(3). A party has an ongoing affirmative duty
to supplement its Preliminary Positions on Issues and
Procedures (PPIP). Id. This includes legal issues in
dispute. Id. On this basis alone, [the Axelssons’]
Motion to Dismiss should be denied. Additionally, the
undersigned does not have authority to rule on
challenges to the validity of Agency regulations. 15
C.F.R. § 904.200(b). Therefore, the regulations that
provide for reporting requirements are deemed valid.
Finally, [the Axelssons’] Motion also lacks merit. . .
. [T]he Agency did obtain Paperwork Reduction Act
clearance to collect all the information required to
8

be submitted for both the FVTR and IVR reporting
systems. Each of these reasons independently supports
denial of the motion to dismiss . . . .
(R. at AR000382.)
Moving to the merits of the case, the ALJ found that the
agency proved the 27 charged violations. (R. at AR000386.) Next,
the ALJ considered each of the statutorily required factors: (1)
the nature, circumstances, extent and gravity of the violations;
(2) the degree of culpability; (3) any history of prior
offenses; and (4) any other matter as justice requires. (Id.,
citing 15 C.F.R. § 904.108(a) and 16 U.S.C. § 1858(a)). As to
the first factor, the ALJ found that the Agency had a valid
concern in preventing overfishing, but “no over-fishing resulted
as a result of Respondents’ failure to report.” (R. at
AR000388.) Next, the ALJ determined that while no evidence
showed that the Axelssons intentionally failed to report in
order to derive an economic advantage, “their conduct is of
significant concern because a failure of fishermen to provide
timely IVR reports could harm the resource by giving NMFS
insufficient information regarding the point where the fishery
had reached the total allowable catch.” (R. at AR000389-90.) As
a result, “a significant penalty is appropriate in this matter.”
(R. at AR000390.) The ALJ noted that neither the Axelssons nor
their business had been cited for prior fisheries violations.
(Id.)
9

The ALJ then considered whether Plaintiffs had the ability
to pay, even while noting that a party’s inability to pay does
not preclude the assessment of a fine. (Id. at AR000390-91.) He
recognized that financial evidence showed significant debt, but
found that Plaintiffs “would have ability to pay the suggested
penalty even if it required selling some of their assets.” (R.
at AR000390) Specifically, the ALJ found that the corporation
had more than $400,000 in cash on hand, and, because the
penalties were assessed jointly and severally, the corporation
could pay the entire fine. (R. at AR000390-91.) At the same
time, the ALJ found that while the corporation has “substantial
assets on paper, its repeated net profit losses during the last
several years have resulted in financial difficulties and its
main equity exist in vessels which have very little actual
market value.” (R. at AR000392.)
The ALJ concluded that some penalty was required to remove
any incentive to commit further violations, but that there was
“good cause for reducing the Agency’s proposed penalties,”
because (1) the violations did not result in overfishing or
economic gains; (2) Plaintiffs did not intentionally circumvent
fishery limits; (3) Plaintiffs cooperated with the Agency in
correcting the deficient reports; (4) Plaintiffs had no history
of prior offenses; and (5) the corporation was in a weakened
financial position. (R. at AR000392-93.) The ALJ reduced the
10

outright fine to $54,000, suspending the remaining $216,000,
which would become immediately due and payable only if
Plaintiffs violated the MSA during a two-year probationary
period, and reduced the permit sanction to one month, with the
remaining sanction suspended for the same probationary period.
(R. at AR000394.)
Plaintiffs then petitioned the federal agency for
discretionary review. (SMF ¶ 46.) The agency administrator found
that the outright penalty of $54,000 was appropriate, but found
the suspended sanctions to be “harsh” and “inconsistent with the
ALJ’s assessment of the circumstances surrounding the violation
and the Respondents’ financial position.” (R. at AR001674.) The
administrator found that the deterrence rationale for the
suspended penalty did not justify “such a high suspended
sanction.” (Id.) On December 10, 2012, the administrator entered
an order modifying the penalty to $18,000 against Dan Axelsson
and H&L Axelsson, jointly and severally, and $36,000 against
Lars Axelsson and H&L Axelsson, jointly and severally, for a
total of $54,000. (R. at AR001675.) The administrator also
directed further inquiry into whether Plaintiffs had violated
the MSA while their challenge was pending, and, if not, ordered
that no permit sanction be imposed. (Id.) If any of the
Plaintiffs violated the MSA, a permit sanction of one month
would be imposed. (Id.)
11

Plaintiffs filed a two-count Complaint in this Court,
alleging violations of the Administrative Procedures Act and the
MSA (Compl. ¶¶ 12-13), and violations of the Paperwork Reduction
Act (Compl. ¶¶ 14-15). The parties have filed cross-motions for
summary judgment.
III. STANDARD OF REVIEW
The MSA expressly incorporates the standard of review in
the Administrative Procedure Act (“APA”), 5 U.S.C. § 706(2). See
16 U.S.C. § 1858(b). Under the APA, “the reviewing court shall
decide all relevant questions of law” and “interpret
constitutional and statutory provisions . . . .” § 706. Agency
actions, findings or conclusions are subject to considerable
deference and will be set aside if they are (1) “arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law,” (2) “contrary to constitutional right,” or
(3) “unsupported by substantial evidence.” § 706(2)(A), (2)(B) &
(2)(E). A decision is “arbitrary and capricious” if the agency
(1) relied on facts other than those intended by Congress, (2)
failed to consider an important aspect of the issue, (3)
provided an explanation for a decision that runs counter to the
evidence before the agency, or (4) if the determination is
entirely implausible. La. Forestry Ass’n Inc. v. Sec’y U.S.
Dep’t of Labor, --- F.3d ---, No. 12-4030, 2014 WL 444157, at
*16 (3d Cir. Feb. 5, 2014) (citing Gardner v. Grandolsky, 585
12

F.3d 786, 790 (3d Cir. 2009)). “Substantial evidence is ‘more
than a mere scintilla. It means such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.’” Mars Home for Youth v. NLRB, 666 F.3d 850, 853 (3d
Cir. 2011) (quoting Citizens Publ’g & Printing Co. v. NLRB, 263
F.3d 224, 232 (3d Cir. 2001)). The reviewing court is not
empowered to substitute its judgment for that of the agency. La.
Forestry Ass’n Inc., 2014 WL 444157, at *16.
IV.

DISCUSSION
A. Eighth Amendment
The Eighth Amendment prohibits the imposition of “excessive

fines.” U.S. CONST. amend. VIII. To comport with the Eighth
Amendment, a fine “must bear some relationship to the gravity of
the offense that it is designed to punish.” United States v.
Bajakajian, 524 U.S. 321, 334 (1998) (citing Austin v. United
States, 509 U.S. 602, 622-23 (1993)). A fine is unconstitutional
if it is “grossly disproportional to the gravity” of the
offense. Id. at 337. The U.S. Supreme Court has observed that
“judgments about the appropriate punishment for an offense
belong in the first instance to the legislature.” Id. at 336.
Here, Congress has determined that the maximum acceptable
penalty for a single violation of the MSA is $140,000. As
modified by the agency administrator, the fine in this case is
$2,000 per violation -- approximately 1.4 percent of the maximum
13

penalty.6 Although the violations here did not result in the
overfishing of Atlantic herring, the Court agrees with the ALJ
that the conduct -- even if merely negligent -- is nonetheless
serious because the failure to provide timely reports could
negatively impact the management and conservation of the herring
population and, consequently, disrupt the economy surrounding
Atlantic herring. While the $54,000 fine is significant, the
fine is not grossly disproportionate to the gravity of the 27
conceded violations of the MSA, nor does the fine amount to an
equivalent of impairing the continued existence of Plaintiffs’
fishing enterprise. Moreover, at a total of $54,000 in fines for
3.25 million pounds of unreported herring catch, the fine
amounts to about 1.66 cents per pound of catch. By any measure,
this fine is not constitutionally objectionable. The Court will
not vacate the penalties on Eighth Amendment grounds.
B. Substantial evidence supports the agency determination
Plaintiffs argue that the ALJ and the administrator “failed
to properly consider” statutory factors, and Plaintiffs “leave
it to this Court to consider whether it is fair and reasonable,
and consistent with the intent of the Act to assess fines for
6

Plaintiffs argue that the agency’s penalty schedule suggests a
penalty of between $5,000 and $80,000 for a first-time
violation. (Pl. Mot. Br. at 8; R. at AR002065.) In any event,
the actual assessed fine in this case for 27 violations was
$2,000 per violation, still significantly below the express
range of acceptable penalties. These fines are not grossly
disproportionate to the gravity of the violations.
14

technical non-compliance resulting from negligent conduct . . .
.” (Pl. Mot. Br. at 9.) Plaintiffs then list the statutory
factors to be considered as well as additional factors that may
be considered under NOAA’s Penalty Schedule (R. at AR002061-62),
and discuss each factor. (Pl. Mot. Br. at 10-19.) Plaintiffs
argue that the penalties are excessive, that other agencies and
other ALJs deal with similar violations differently, and that
NOAA knew about Plaintiffs’ violations but permitted the late
reports and penalties to accrue.7
This Court, in reviewing an agency action, does not have
the authority to make a de novo determination of whether the
assessed penalties are “fair and reasonable,” as Plaintiffs seem
to suggest (see Pl. Mot. Br. at 9, 19), and the Court is unmoved
by whether other ALJs or other agencies may treat violations
differently. The scope of this Court’s review is to determine

7

The cited portions of the record do not support Plaintiffs’
contention that NOAA personnel “allowed the number of violations
to amass to the point that the fines became crippling.” (Pl.
Mot. Br. at 9.) Alison Verry, an NMFS employee, testified that
in mid- to late 2007, the agency began to investigate vessels
that had not been reporting their herring landings. (R. at
AR001786-87), but this testimony is not evidence that the agency
was aware of Plaintiffs’ reporting errors and decided to allow
violations to pile up. An e-mail from October 19, 2007,
discusses Plaintiffs’ violations (R. at AR002128), but provides
no support for the fact that the agency sat idly in order for
reporting violations to accumulate between January and July of
2007. The ALJ’s findings of fact (R. at AR000420-21) do not
support this contention, either.
15

whether substantial evidence supports the agency’s assessment of
fines in this particular case.
Here, the ALJ considered each of the statutory factors, as
well as other permissible factors, and cited to substantial
evidence in his discuss of each factor to support his downward
adjustment of the penalties. (R. at AR000387-92.) The ALJ also
soundly reasoned that some penalty was required to deter future
violations by Plaintiffs or others and to encourage compliance
with the MSA and related regulations.8 (R. at AR000393.)
Plaintiffs essentially ask this Court to substitute its judgment
for that of the ALJ or the agency administrator, which is
improper. La. Forestry Ass’n Inc., 2014 WL 444157, at *16. On
this record, there is no justification for the Court to reweigh
the evidence. The ALJ performed the analysis ably and supported
his decision with evidence that a reasonable mind might accept
as adequate to support his conclusions. See Mars Home for Youth,
666 F.3d at 853. Although Plaintiffs believe the adjusted
penalty remains excessive, the agency is entitled to deference
when substantial evidence informs the assessment of whether a
penalty is appropriate. The Court will not vacate the penalty on

8

The administrator did not accept deterrence as a sufficient
rationale to support large suspended penalties of $216,000, but
agreed that the $54,000 penalty was appropriate. (R. at
AR001673-74).
16

the ground that the ALJ or the agency administrator was not in
accordance with law.
C. Paperwork Reduction Act
Plaintiffs also contend that the IVR reporting violations
should be dismissed because NOAA did not comply with the
requirements of the PRA when it failed to display on the
collection of information document the “control number”
signifying approval from the Office of Management and Budget
(“OMB”) and an expiration date for the approved collection of
information. See 44 U.S.C. §§ 3507, 3512. The Court reviews the
PRA defense de novo, because it presents a pure question of law
and because the statute permits the defense to be raised “at any
time during the agency administrative process or judicial action
applicable thereto.” 44 U.S.C. § 3512(b). The Court finds that
the ALJ correctly denied Plaintiffs’ motion to dismiss, but this
Court finds the denial proper for a different reason than that
expressed by the ALJ.9 On the merits of the PRA challenge, the

9

Ordinarily, “a reviewing court, in dealing with a determination
or judgment which an administrative agency alone is authorized
to make, must judge the propriety of such action solely by the
grounds invoked by the agency.” SEC v. Chenery Corp., 332 U.S.
194, 196 (1947); see also Zhen Hua Li v. Att’y Gen., 400 F.3d
157, 163 (3d Cir. 2005). However, “the Supreme Court has
explained that ‘Chenery does not require that [the Court]
convert judicial review of agency action into a ping-pong game’
and that remand to the agency is not required when it ‘would be
an idle and useless formality.’” Li Hua Yuan v. Att’y Gen., 642
F.3d 420, 427 (3d Cir. 2011) (quoting NLRB v. Wyman-Gordon Co.,
394 U.S. 759, 766 n.6 (1969)). In Li Hua Yuan, the Third Circuit
17

Court finds that the agency did “display” the OMB control number
within the meaning of the regulations promulgated pursuant to
the PRA. Therefore, the agency did not violate the PRA, and the
ALJ reached the correct outcome by denying Plaintiffs’ motion to
dismiss, for the reasons now discussed.
1. Statutory scheme & background
Under the PRA and related regulations, each “collection of
information” by an agency must display a “control number” issued
by the OMB, signifying the OMB’s approval of the agency’s
request to collect information. 44 U.S.C. §§ 3506(c)(1)(B) &
3512; 5 C.F.R. § 1320.5(b). To obtain OMB approval, an agency
must demonstrate that “it has taken every reasonable step to
ensure that the proposed collection of information” is the
adopted a harmless error standard for review of administrative
decisions in immigration cases, “when it is highly probable that
the error did not affect the outcome of the case.” Id. at 427.
Here, the PRA expressly authorizes the statutory defense to
be raised at any time, including during a judicial action
applicable to an agency proceeding. Thus, this is not a case
where Congress exclusively granted the agency the authority to
make determinations about a statute. Nor is this a case where
the Court is substituting its own judgment of the record for
that of the agency. The question presented is purely legal, and
does not depend on findings of disputed facts or weighing of the
evidence, which is properly the domain of the agency. The
statutory and regulatory scheme of the PRA, as the Court will
explain, leaves no room for the agency’s judgment or discretion
when applying the law to the facts of the case. “There is not
the slightest uncertainty as to the outcome of a proceeding
before the [agency] . . . . It would be meaningless to remand.”
Wyman-Gordon Co., 394 U.S. at 766 n.6. Therefore, the Court will
review the merits of the PRA defense and, as explained herein,
affirm the ALJ’s determination that the agency complied with the
PRA.
18

“least burdensome necessary,” is “not duplicative of information
otherwise accessible to the agency,” and is useful. 5 C.F.R. §
1320.5(d)(1). One purpose of the PRA is to “minimize the
paperwork burden” on those regulated by the federal government.
44 U.S.C. § 3501(1).
A “collection of information” is defined in the PRA as
the obtaining, causing to be obtained, soliciting, or
requiring the disclosure to third parties or the
public, of facts or opinions by or for an agency,
regardless of form or format, calling for . . .
answers to identical questions posed to, or identical
reporting or recordkeeping requirements imposed on,
ten
or
more
persons,
other
than
agencies,
instrumentalities, or employees of the United States .
. . .
44 U.S.C. § 3502(3)(A)(i). The regulations clarify that the
phrase “‘collection of information’ refers to the act of
collecting or disclosing information, to the information to be
collected or disclosed, to a plan and/or an instrument calling
for the collection or disclosure of information, or any of
these, as appropriate.” 5 C.F.R. § 1320.3(c). The regulations
continue: “A ‘collection of information’ may be in any form or
format, including the use of . . . instructions; . . .
automated, electronic, mechanical, or other technological
collection techniques; . . . or any other techniques or

19

technological methods used to monitor compliance with agency
requirements.” 5 C.F.R. § 1320.3(c)(1).10
The implementing regulations specify that “an agency shall
not conduct or sponsor a collection of information” unless (1)
“the collection of information displays a valid OMB control
number,” and (2) the agency informs “the potential persons who
are to respond to the collection of information that such
persons are not required to respond to the collection of
information unless it displays a valid OMB control number.” 5
C.F.R. § 1320.5(b); 44 U.S.C. § 3512(a). When the collections of
information are published in the Federal Register or in the Code
of Federal Regulations, regulations permit the agencies to
satisfy the “display” requirement by publishing the OMB control
number, as well as the notification about responding
information, in the Federal Register or the Code of Federal
10

Defendants refer to the phrase “information collection
request” in their motion (Def. Cross-Mot. at 32), but that
phrase was eliminated from 44 U.S.C. § 3502(11) in 1995 when
Congress amended the PRA. S. REP. No. 104-8, at 37 (1995) (“the
present definition of ‘information collection request’ in
section 3502(11), and all its uses in current law are deleted”).
According to the Senate Report, the deletion of “information
collection request” was for the sake of “clarity and
consistency” and to eliminate confusion between that phrase and
“collection of information.” Id. at 37-38. New confusion,
however, appears to have arisen, because the term “collection of
information” refers to both the act of collecting information as
well as instruments calling for the collection or disclosure of
information, such as “application forms,” “questionnaires,”
“surveys,” “directives,” and “instructions,” among others. 5
C.F.R. § 1320.3(c)(1).
20

Regulations. See 5 C.F.R. §§ & 1320.3(f)(3) &
1320.5(b)(2)(ii)(C).11
An agency’s failure to display this required information is
a “complete defense” to any alleged liability for failing to
comply with a collection of information. 44 U.S.C. § 3512(a)(b). “The protection provided by this section may be raised in
the form of a complete defense, bar or otherwise at any time
during the agency administrative process or judicial action
applicable thereto.” § 3512(b) (emphasis added).
In this case, NOAA obtained OMB approval for the collection
of IVR information. In NOAA’s application, the agency sought
permission “not to display the expiration date for OMB approval
11

Although the word “display” is not defined in the PRA, the
regulations specify that “display” means,
[i]n the case of collections of information published
in regulations, guidelines, and other issuances in the
Federal Register, to publish the currently valid OMB
control number in the Federal Register (for example,
in the case of a collection of information in a
regulation, by publishing the OMB control number in
the preamble or the regulatory text for the final
rule, in a technical amendment to the final rule, or
in a separate notice announcing OMB approval of the
collection
of
information).
In
the
case
of
a
collection of information published in an issuance
that is also included in the Code of Federal
Regulations,
publication
of
the
currently
valid
control number in the Code of Federal Regulations
constitutes an alternative means of “display.”
5 C.F.R. § 1320.3(f)(3). The regulations add a similar provision
for the notification about the need to respond if the OMB
control number is not displayed. See 5 C.F.R. §
1320.5(b)(2)(ii)(C).
21

of the information collection.” (R. at AR000256.) The agency
wrote:
Because part of this collection involves an IVR system
and not a written form, there is no form on which to
display an expiration date. However, an expiration
date will be displayed in the instructions and/or
cover letter that will be mailed to each permit holder
who is required to report purchased through the IVR
system. All logbook forms will display the OMB Control
number and expiration date along with information
relevant to the PRA.
(Id.) The OMB approved the application “WITHOUT CHANGES.” (R. at
AR000242.) NOAA published the OMB control number (“0648-0212”)
in the Federal Register. 65 Fed. Reg. at 77,463 (listing “Vessel
trip reports, OMB control number 0648-0212 (5 minutes/response)”
and “Interactive voice response system reports, OMB control
number 0648-0212 (4 minutes/response),” as well as the required
warning about the consequences of the failure to display the
control number). The OMB control number also was displayed in
the Code of Federal Regulations. See 15 C.F.R. § 902.1(b)
(matching the “CFR part or section where the information
collection requirement is located” with the “Current OMB control
number,” including 50 C.F.R. §§ 648.4, 648.7, 648.14 & 648.85
with control number 0648-0212). These “displays” of the control
number and warning complied with the PRA as discussed below in
Part IV.B.3.
Periodically, the NMFS sent Plaintiffs letters enclosing
instructions for reporting Atlantic herring landings using the
22

IVR system, including letters on May 1, 2006, and May 1, 2007.
(See R. at AR002246-57, AR002278-82.) The cover letters and
related worksheets did not contain the OMB control number. (Id.)
At the beginning of the hearing before the ALJ, Plaintiffs
filed a motion to dismiss based on a violation of the PRA. The
ALJ denied the motion to dismiss because (1) the request was
untimely under NOAA procedural regulations, (2) the ALJ did “not
have authority to rule on challenges to the validity of Agency
regulations,” and (3) the agency obtained clearance to collect
the VTR and IVR information. (R. at AR000382.) On the merits,
the Court finds that NOAA complied with the PRA in this case,
and therefore ALJ was correct to deny the motion to dismiss.
However, the Court pauses to address the reasoning of the ALJ,
with which the Court disagrees.
2. The ALJ’s rationales for denying the motion to
dismiss
The ALJ first denied the motion to dismiss because it was
not filed until the day of the hearing and presented a “surprise
legal issue” in violation of 15 C.F.R. § 904.240(a)(3), which
imposes an affirmative obligation on a party to supplement a
written “preliminary position on issues and procedures” document
submitted to the ALJ “as available information or documentation
relevant to the stated charges or defenses becomes known to the
party.” The ALJ erred in denying the motion on timeliness

23

grounds because (1) the plain language of the PRA unambiguously
states that the PRA may be raised as a defense “at any time
during the agency administrative process or judicial action
applicable thereto,” 44 U.S.C. § 3512(b) (emphasis added), and
(2) the U.S. Court of Appeals for the D.C. Circuit, which is
highly persuasive on issues related to federal agency law, has
rejected similar timeliness objections to PRA defenses. See Saco
River Cellular, Inc. v. FCC, 133 F.3d 25, 31 (D.C. Cir. 1998)
(stating that the PRA “prevents an agency or court from refusing
to consider a PRA argument on the ground that it is untimely”
and requires an agency or court to “entertain arguments that
would otherwise have been barred . . . by the proponent’s
failure to have made the argument at an earlier stage in the
administrative or judicial process”); Ctr. for Auto Safety v.
Nat’l Highway Traffic Safety Admin., 244 F.3d 144, 150 (D.C.
Cir. 2001) (reading the PRA expansively, extending the holding
in Saco River, and holding that “a Paperwork Reduction Act claim
can be raised after information has been submitted”); see also
Springer v. C.I.R., 580 F.3d 1142, 1145 n.2 (10th Cir. 2009)
(quoting Saco River for the proposition that the PRA obligates
federal agencies to entertain PRA arguments that would have been
barred by the proponent’s failure to have made the argument at
an earlier stage in the administrative process).12
12

Moreover, an agency “cannot rely on one of its own regulations
24

The ALJ offered a second reason to deny the motion to
dismiss: “the undersigned does not have authority to rule on
challenges to the validity of Agency regulations. 15 C.F.R. §
904.200(b). Therefore the regulations that provide for reporting
requirements are deemed valid.” (R. at AR000382.) Section
904.200(b) states that the ALJ “has no authority to rule on
constitutional issues or challenges to the validity of
regulations promulgated by the Agency or statutes administered
by NOAA.”
Plaintiffs’ motion to dismiss does not implicate the
subsection cited by the ALJ. The motion challenged NOAA’s
compliance with a federal statute that dictates what information
must be displayed with a collection of information, not the
validity of regulations promulgated by the agency themselves.
(See R. at AR00223-25.) Holding that NOAA failed to comply with
the PRA would not necessarily invalidate the regulations
themselves. Therefore, Section 904.200(b) does not provide
grounds for denying the motion to dismiss.
Finally, the ALJ stated that the motion to dismiss “lacks
merit” because “the Agency did obtain Paperwork Reduction Act
clearance to collect all the information required to be
submitted for both the FVTR and IVR reporting systems.” (R. at

to trump the plain meaning of a statute.” Atl. City Elec. Co. v.
FERC, 295 F.3d 1, 11 (D.C. Cir. 2002).
25

AR000382.) Although it is true that the agency received
approval, gaining OMB approval for a collection of information
does not relieve the agency from the duty of having to comply
with the terms of the PRA regarding display. An agency could not
obtain a control number to display if it did not receive OMB
approval. Therefore, this was an incorrect basis for finding PRA
compliance.
3. The merits of the PRA defense
Regardless, because the PRA permits a proponent to raise a
PRA defense “at any time during the agency administrative
process or judicial action applicable thereto,” and because
Plaintiffs renew their request to have the merits of their PRA
defense heard (Pl. Mot. Br. at 6; Pl. Opp’n at 10), the Court
will consider the merits of this argument. Although the Court
agrees with the ALJ that the PRA defense fails, the Court so
holds because the agency complied with the PRA and accompanying
regulations. Any flaw in the ALJ’s reasoning was harmless error,
and remanding this matter to the ALJ to rule upon this pure
legal question, about which there cannot reasonably be
disagreement, would be a meaningless exercise in formality. (See
supra n.9.)
Plaintiffs argue that the OMB control number must “be set
forth in the collection document,” and because NOAA did not
display the control number on the permit holder letters, the
26

agency failed to comply with the PRA. (Pl. Mot. Br. at 6-8.)
Plaintiffs further state: “It may seem a minor technical
failure; however Congressional intent is clear that the failure
to display a valid OMB number and warning on every information
request, including IVR requests, precludes any fine or penalty
for the IVR violations.” (Pl. Opp’n [Docket Item 30] at 11)
(emphasis in original). Plaintiffs raise this argument as a
complete defense to the IVR reporting violation penalties, under
44 U.S.C. § 3512.
In this case, however, the agency did “display” the OMB
control number and warning, as that term is defined in the
federal regulations. For collections of information published in
the Federal Register or the Code of Federal Regulations, as is
the case here, agencies satisfy the “display” requirement by
publishing the control number and warning “in the preamble or
the regulatory text for the final rule, in a technical amendment
to the final rule, or in a separate notice announcing OMB
approval of the collection of information.” 5 C.F.R. §
1320.3(f)(3); 5 C.F.R. § 1320.5(b)(2)(ii)(C). Publication in the
Code of Federal Regulations is “an alternative means of
‘display.’” 5 C.F.R. § 1320.3(f)(3); 5 C.F.R. §
1320.5(b)(2)(ii)(C). Here, NOAA published the OMB control number
and warning in the IVR regulatory text published in the Federal
Register and republished the control number in the Code of
27

Federal Regulations. See 65 Fed. Reg. at 77,463; 15 C.F.R. §
902.1(b). The agency also displayed the OMB control number and
expiration date on the VTR form (R. at AR002215) -- the only
paper form associated with the collection of information that
must be returned to NOAA -- which is the same control number as
the IVR collection control number.
Plaintiffs offer no argument for why this publication of
the OMB control number and warning does not satisfy the display
requirements of the PRA, in light of 5 C.F.R. § 1320.3(f)(3) and
5 C.F.R. § 1320.5(b)(2)(ii)(C). That the agency did not
republish the information on the permit holder letters or
instructions is of no import because the agency complied with
the statute as defined in the federal regulations. Therefore,
Plaintiffs’ motion to dismiss was properly denied.
V.

CONCLUSION
The agency’s determination of fines and permit sanctions

was adequately supported by the record, consistent with
governing statutes and regulations, and did not violate the
Eighth Amendment. The Court also finds that the PRA defense
fails on the merits, and therefore denial of the Plaintiffs’
motion to dismiss was proper. The Court affirms the agency
determination of penalties, grants Defendants’ cross-motion for

28

summary judgment, and denies Plaintiffs’ motion for summary
judgment. An accompanying Order will be entered.

April 15, 2014
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

29