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

Citation: Not availableDocket: 05-56274

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

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The United States Court of Appeals for the Ninth Circuit addressed a forfeiture case involving 64,695 pounds of shark fins seized from the U.S. vessel King Diamond II (KD II), owned by Hong Kong company Tai Loong Hong Marine Products, Ltd. (TLH). TLH chartered the KD II to acquire shark fins from foreign vessels engaged in shark finning on the high seas and transport them to Guatemala. The U.S. Government seized the fins under the Shark Finning Prohibition Act (SFPA), which prohibits possession of shark fins obtained through illegal practices aboard U.S. fishing vessels.

TLH did not dispute the legality of the shark fins' acquisition but contended that the KD II did not qualify as a fishing vessel under 16 U.S.C. § 1802(18)(B), thus claiming that the forfeiture violated due process. The court agreed that TLH lacked fair notice that the KD II would be classified as a fishing vessel for the purposes of the SFPA. Consequently, the court reversed the forfeiture judgment and remanded the case for further proceedings.

The court highlighted the SFPA's unlawful acts regarding shark fins, which include discarding the shark carcass at sea and possessing fins without the corresponding carcass aboard a fishing vessel. The Magnuson-Stevens Fishery Conservation and Management Act, which governs fishing vessel definitions, includes vessels used for activities related to fishing, including transportation and processing. The KD II operated under a "Registry" endorsement, allowing for employment in foreign trade, rather than a "Fishery" endorsement, which raised questions about its classification as a fishing vessel under the law.

TLH, a Hong Kong seafood company, chartered the KD II to purchase shark fins from foreign fishing vessels on the high seas and transport them to Guatemala. In June 2002, the KD II began its voyage from Honolulu and, over two months, 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, finding only shark fins and no corresponding shark carcasses. Under the Shark Finning Prohibition Act (SFPA), this led to a rebuttable presumption of illegal shark finning. Consequently, the Coast Guard detained the KD II and seized the fins on August 23, 2002. The government filed a civil complaint for forfeiture of the fins on March 26, 2003, citing violations of the Magnuson Act and the SFPA.

The legal dispute centered on whether the KD II qualified as a fishing vessel under these statutes. The district court determined that there was a genuine issue regarding the KD II's classification and denied summary judgment on that basis. However, it ultimately ruled that the KD II was a fishing vessel because it assisted other fishing vessels in activities such as purchase and transportation, granting summary judgment in favor of the government. An amended agreement stipulated that the fair market value of the seized fins was $618,956, leading to a judgment of forfeiture on June 6, 2005. TLH appealed, contesting both the classification of the KD II as a fishing vessel and the due process implications of the SFPA's possession prohibition, asserting that it lacked fair notice of the law’s application to the KD II. The court concurred that the application of the SFPA to the KD II violated due process rights.

Due process mandates that an agency must provide fair notice of prohibited conduct prior to imposing sanctions, ensuring individuals are aware of what is expected of them. In the absence of clear regulations, an agency cannot impose civil or criminal liability. A statute or regulation must afford a person of ordinary intelligence a reasonable opportunity to understand what is prohibited. In this context, a reasonable owner of a cargo vessel engaged in the purchase and transfer of shark fins would not anticipate that their vessel could be classified as a fishing vessel under § 1802(18)(B).

The interpretation of a statute begins with its language. The plain meaning of § 1802(18)(B) does not indicate to the owners of the KD II that their activities would classify it as a fishing vessel. The district court ruled that the KD II violated the Shark Finning Prohibition Act (SFPA) by possessing unlawfully obtained shark fins, which is defined under the Magnuson Act to include vessels aiding fishing-related activities.

However, the district court's conclusion that the KD II was a fishing vessel was based on its alleged aiding and assisting of foreign fishing vessels through the purchase, storage, and transport of shark fins. The definitions of "aid" and "assist" imply actions taken for the benefit of another party. In this case, the KD II's activities were for its own commercial benefit, as the foreign fishing vessels had no further interest in the shark fins after their sale. Therefore, the KD II's post-purchase actions did not constitute aiding or assisting the foreign vessels as defined.

Purchasing an item does not inherently equate to aiding or assisting the seller in illegal activities, as criminal statutes explicitly delineate the roles of buyers and sellers. The district court's interpretation that buying illegal substances makes a buyer an aider or abettor is flawed; mere purchasing is not listed in the statute as an act of aiding and abetting. The statute prohibiting "aiding or assisting any activity relating to fishing" fails to clearly indicate that purchasing shark fins is illegal, nor does it imply that subsequent actions like storing or transporting them are unlawful. The purchasers acted for their own commercial interests, and any incidental benefit to the foreign fishing vessels from the at-sea sales does not alter this reality. The district court's conclusion that purchasing fins at specific locations supported the vessels’ fishing operations is unfounded, as it does not demonstrate that the KD II's actions constituted aiding or assisting those vessels. The evidence regarding operational efficiencies does not substantiate claims of aiding, as the purchaser's motivations remain centered on their own business purposes, independent of the sellers' benefits. Thus, the statutory language does not substantiate the district court's view that the KD II's transactions transformed it into a fishing vessel through mere purchasing.

Congress enacted the Shark Finning Prohibition Act (SFPA) to eliminate shark finning practices by addressing the issue both nationally and internationally. While the Act expresses intent to prevent shark finning, it does not indicate that purchasing, transporting, or storing shark fins constitutes aiding the seller or falls under possession prohibitions. The relevant section, § 1802(18)(B), does not extend the possession prohibition to the activities of the KD II.

The district court held that implementing regulations indicated the KD II was subject to possession prohibitions. However, this conclusion was rejected. The National Marine Fisheries Services (NMFS) regulations prohibit engaging in shark finning, possessing shark fins without corresponding carcasses on U.S. vessels, and landing shark fins without the corresponding carcasses. Specifically, § 600.1204(b) prohibits possession of shark fins on U.S. vessels unless the corresponding carcasses are onboard. The landing prohibition in § 600.1204(c) applies only to vessels landing at U.S. ports, not those like the KD II landing in foreign ports.

The district court's reliance on the regulation's preamble, which states that vessels receiving shark fins at sea are considered fishing vessels under the landing prohibition, does not apply to the possession prohibition. The absence of similar language in the possession prohibition suggests that the NMFS intentionally omitted it, indicating that the KD II does not qualify as a fishing vessel under the possession prohibition.

The landing prohibition explicitly includes cargo or shipping vessels like the KD II, categorizing them as fishing vessels when engaged in at-sea transfer of shark fins. However, the possession prohibition lacks similar language, indicating that vessels involved in such transfers are not classified as fishing vessels under this provision. The regulation’s preamble reinforces this interpretation, as it only mentions at-sea transfer restrictions in the context of the landing prohibition, not possession. Consequently, vessels participating in at-sea transfers have no indication they are barred from possessing fins for delivery to foreign ports, aligning with the agency's intent to avoid interfering with international trade. Therefore, the KD II's activities fall under international trade, suggesting it should not be considered a fishing vessel under the possession prohibition. As a result, the district court's application of the possession prohibition to the KD II violated due process, leading to a reversal of its decision and a remand for further proceedings.