United States v. Approximately 64,695 Pounds of Shark Fins

Citations: 520 F.3d 976; 2008 A.M.C. 821; 38 Envtl. L. Rep. (Envtl. Law Inst.) 20066; 2008 U.S. App. LEXIS 5637; 2008 WL 696907Docket: 05-56274

Court: Court of Appeals for the Ninth Circuit; March 17, 2008; Federal Appellate Court

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A civil complaint was brought by the U.S. Government seeking the forfeiture of 64,695 pounds of shark fins from the King Diamond II (KD II), a U.S. vessel owned by the Hong Kong company Tai Loong Hong Marine Products, Ltd. (TLH). The fins were seized under the Shark Finning Prohibition Act (SFPA), which prohibits possession of shark fins obtained through illegal shark finning. TLH does not dispute that the KD II purchased the fins at sea from foreign vessels involved in shark finning but argues that the KD II should not be classified as a fishing vessel under the Magnuson-Stevens Fishery Conservation and Management Act, thus claiming the forfeiture violates due process.

The court found that TLH did not receive adequate notice that the KD II's activities would categorize it as a fishing vessel under the relevant statute. Therefore, the Ninth Circuit reversed the forfeiture judgment and remanded the case for further proceedings. The background of the case includes the enactment of the Magnuson Act in 1976 to manage fishery resources and the 2000 SFPA amendment aimed at eliminating shark finning. The definition of a fishing vessel encompasses not only vessels used directly for fishing but also those assisting in fishing-related activities. The KD II was initially registered for fishing but later redocumented for foreign trade, which was relevant to its classification during the events in question.

TLH, a Hong Kong seafood company, chartered the KD II to purchase shark fins from foreign vessels on the high seas and transport them to Guatemala. In June 2002, the KD II began its voyage and acquired approximately 64,695 pounds of shark fins from over 20 vessels. On August 14, 2002, U.S. Coast Guard officials boarded the KD II and found the shark fins without corresponding shark carcasses. Under the Shark Finning Prohibition Act (SFPA), there is a rebuttable presumption that fins found without carcasses were obtained illegally, leading to the KD II's detention and subsequent seizure of the fins on August 23, 2002. The government filed a civil complaint for forfeiture on March 26, 2003, citing violations of the Magnuson Act and SFPA. 

The district court addressed whether the KD II qualified as a fishing vessel under the SFPA and Magnuson Act. It found a genuine issue of material fact regarding whether the KD II was equipped for fishing; however, it ultimately concluded that the KD II was a fishing vessel as it assisted fishing activities, granting the government's motion for summary judgment. The parties later agreed on the fair market value of the seized fins, set at $618,956, leading to a forfeiture judgment on June 6, 2005. TLH appealed, arguing that the KD II did not meet the definition of a fishing vessel and that the regulations did not provide adequate notice of the possession prohibition, which constituted a due process violation. The conclusion was that even if the KD II were considered a fishing vessel, the SFPA's provisions did not give TLH fair notice of the applicable regulations.

Due process mandates that an agency must provide fair notice of prohibited conduct before imposing sanctions, as established in Stillwater Mining Co. v. Federal Mine Safety & Health Review Comm'n. A lack of clear regulatory notice prevents an agency from depriving a party of property through civil or criminal liability, as emphasized by the D.C. Circuit in Trinity Broadcasting of Florida, Inc. v. Federal Communications Commission. For notice to be adequate, statutes or regulations must allow a person of ordinary intelligence to understand what is prohibited. The interpretation of a statute begins with its plain language. In this case, § 1802(18)(B) does not adequately inform the owners of the KD II that their activities would classify their vessel as a fishing vessel under this provision. The district court found the KD II in violation of the Shark Finning Prohibition Act (SFPA) due to the possession of unlawfully obtained shark fins aboard a fishing vessel, relying on the Magnuson Act for the definition of "fishing vessel." The district court determined that the KD II aided and assisted fishing vessels at sea by purchasing, storing, and transporting the shark fins. However, these activities do not fit the common understanding of "aiding" or "assisting," which imply performing acts for the benefit of another. The KD II's charterers purchased the fins for their own commercial gain, meaning their actions did not benefit the foreign fishing vessels. Thus, the mere act of purchasing shark fins does not constitute aiding or assisting in the fishing activities of the sellers.

The district court's interpretation that purchasing shark fins constitutes aiding or abetting is flawed. The act of purchasing is not included in the statute's definition of aiding and abetting activities related to fishing. Consequently, the statutory prohibition against aiding or assisting fishing activities does not clearly indicate that purchasing fins is illegal, nor does it suggest that storing or transporting them post-purchase is unlawful. Additionally, purchasing shark fins at designated at-sea locations does not equate to aiding the foreign vessels involved in fishing, as the purchasers acted for their own benefit and any advantage to the sellers was incidental. The district court's assertion that the purchasing actions facilitated extended fishing operations for the foreign vessels lacks merit, as the evidence provided does not establish that these arrangements constituted aiding or assisting. The intent of the Shark Finning Prohibition Act (SFPA) is to eliminate shark finning but does not imply that the act of purchasing or processing fins for one’s own business purposes falls under the possession prohibition. The plain language of the relevant statute does not support the conclusion that the KD II's activities amounted to aiding or assisting the foreign vessels. Thus, the government’s argument lacks sufficient legal grounding in light of the statutory language and intent.

The court found that § 1802(18)(B) does not indicate that the possession prohibition applies to the KD II's activities. It examined the district court's alternative conclusion based on implementing regulations and rejected it. The regulations established by the National Marine Fisheries Services (NMFS) prohibit shark finning and the possession or landing of shark fins without corresponding carcasses for vessels operating within U.S. waters. Specifically, § 600.1204(b) prohibits possession of shark fins on U.S. fishing vessels without carcasses, while § 600.1204(c) prohibits landing shark fins without carcasses on any fishing vessel, including cargo vessels receiving fins at sea.

The district court's reliance on NMFS's explanation suggested that any vessel receiving shark fins at sea becomes a "fishing vessel" for landing purposes. However, this interpretation does not extend to the possession prohibition, which lacks similar language defining cargo vessels as fishing vessels. The absence of this language implies intentional exclusion by the agency. Therefore, the possession prohibition does not consider the KD II a fishing vessel, contradicting the government's rationale for seizing the shark fins aboard the vessel.

Vessels involved in the at-sea transfer of shark fins are classified as fishing vessels solely regarding the prohibition on landing fins in U.S. ports. The regulation's preamble lacks any mention of a possession prohibition related to at-sea transfers, indicating that while these vessels are barred from landing fins domestically, they are not prohibited from possessing them for delivery to foreign ports. This interpretation is reinforced by the agency's intent to avoid disrupting international trade. The case at hand, concerning the KD II's activities of purchasing and delivering shark fins to foreign ports, aligns with international trade, suggesting that a reasonable vessel operator would not expect to fall under the possession prohibition as a fishing vessel. Therefore, the district court's application of the possession prohibition to the KD II was deemed a violation of due process, prompting a reversal and remand for further proceedings.