In its February 23, 2023 ruling in Mexican Gulf Fishing Co. v. United States Dep’t of Commerce, the Fifth Circuit Court of Appeals struck down a National Fisheries Management Services (“NFMS”) rule requiring owners and operators of charter boats in the Gulf of Mexico to equip their boats with approved GPS tracking devices that would transmit the boat’s position to NFMS and the United States Coast Guard on an hourly basis. The decision, which overturned a lower court decision upholding the law, came after a group of charter boat operators filed a class action in the United States District Court for the Eastern District of Louisiana challenging the rule.
The government issued the subject rule pursuant to the Magnuson-Stevens Fishery Conservation and Management Act of 1976 (“MSA”). That law and subsequent amendments are codified at 16 U.S.C. chapter 38. The “NFMS rule” was published on July 21, 2020, and codified in NOAA regulations as follows: 50 C.F.R. § 622.26(b)(5) (GPS-tracking requirement); id. § 622.26(b)(1) (business-information requirement); and id. § 622.26(b)(6) (trip-declaration requirement). In its decision, the Fifth Circuit found the GPS tracking requirement to be in violation of the Administrative Procedure Act and possibly the Fourth Amendment. The Rule(s) required the following:
- Charter boat owners to install NFMS-approved Vessel Monitoring System hardware and software that transmit the vessel’s location at least once per hour, 24 hours a day, every day of the year;
- Charter boat owners to submit trip declarations and written reports to NFMS prior to offloading fish detailing all fish harvested and discarded, and any other information requested by NFMS including location fished, fishing efforts, information on the vessel, and information on the permit holders; and
- Charter boat owners to disclose business data to NFMS, including charter fees, fuel prices, estimated amount of fuel used, and numbers of paying passengers and crew.
The appellants (captains of charter boats operating in the Gulf of Mexico with federal for-hire permits, and their companies) specifically challenged the GPS tracking requirement. The district court below originally rejected the fishermen’s claims, finding that permanent GPS tracking was not a violation of the Fourth Amendment’s guarantee against unreasonable search and seizure nor was it a violation of the nondelegation doctrine.
On appeal, the Fifth Circuit rejected the government’s arguments, finding that GPS tracking devices do not fall within the scope of the equipment that the MSA can require to be used on recreational vessels, and that therefore the NFMS rule exceeded the statutory authority conferred by the MSA when applying the test established by the Supreme Court’s seminal decision in Chevron USA Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).
The Fifth Circuit found that no provision of the MSA required 24-hour GPS tracking of charter boat operators. The government’s arguments that the GPS-tracking requirement was necessary to enforce the Act’s data-collection provisions fell flat with the Court finding that charter boat owners were already required under the rules to report all the information that the government claimed the GPS-tracking requirement was designed to collect. The Fifth Circuit found that the GPS tracking device requirement imposed an expensive burden on charter boat operators and owners while doing nothing to further the enforcement of any provision of the MSA. The Court concluded that a GPS device as required under the rule was not “equipment” whose use the government may mandate under the MSA and refused to apply the “necessary-and-appropriate” exception in the MSA, finding the exception did not apply for the same reasons – the government failed to demonstrate that it would obtain any meaningful benefit from the GPS data. The MSA only authorized provisions that mandate the use of particular equipment which may be required to facilitate enforcement of the provisions of this chapter. The Fifth Circuit based its holding on the statute’s plain and unambiguous language, obviating any further analysis under Chevron.
The Court then assumed a broad reading of the statute and ambiguity of the relevant provisions to consider possible Fourth Amendment violations. The Fifth Circuit noted that for closely regulated industries, the threshold for whether a search is reasonable for purposes of the Fourth Amendment is much lower. New York v. Burger, 482 U.S. 691, 702–03 (1987). However, the Court found that that the district court below erred by failing to consider whether the charter boat fishing industry was, in fact, closely regulated. Rather, the Court found that the district court considered the industry too broadly and incorrectly relied on cases regarding commercial fishing instead of recreational or charter fishing. Charter boat fishing is distinctly different from the commercial fishing industry and the government failed to show that it is a closely regulated industry or would pose a significant threat to the public if unregulated. The Fifth Circuit commented that it had “serious concerns that the GPS requirement violates the Fourth Amendment in this circumstance” but did not rule on the issue since it had already found the GPS tracking requirement invalid for violating the APA for other, non-constitutional reasons.
The fishermen also succeeded on their argument that that the GPS tracking requirement was arbitrary and capricious because (1) it imposed a costly and pointless burden on those operating charter fishing boats, and (2) the NFMS failed to respond to comments raising privacy violation concerns related to the GPS surveillance. The APA instructs courts to set aside agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). The Court found that the insignificance of the benefits “do not bear a rational relationship to the serious financial and privacy costs imposed,” rendering the rule arbitrary and capricious.
Ultimately, the Fifth Circuit struck down the part of the NFMS rule requiring GPS tracking devices but did not decide whether the rule was a violation of the Appellants’ Fourth Amendment rights. This ruling marks another example of the trend that finds courts taking a narrow view of administrative and agency powers.
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