                FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


GLACIER FISH COMPANY LLC, a                 No. 15-35103
Washington limited liability
company,                                   D.C. No.
             Plaintiff-Appellant,     2:14-cv-00040-MJP

               v.
                                             OPINION
PENNY PRITZKER, in her official
capacity as Secretary of U.S.
Department of Commerce;
NATIONAL OCEANIC AND
ATMOSPHERIC ADMINISTRATION;
NATIONAL MARINE FISHERIES
SERVICE,
           Defendants-Appellees.


     Appeal from the United States District Court
       for the Western District of Washington
  Marsha J. Pechman, Senior District Judge, Presiding

          Argued and Submitted May 10, 2016
               San Francisco, California

                    Filed August 10, 2016
2                 GLACIER FISH CO. V. PRITZKER

        Before: Sandra S. Ikuta, and Paul J. Watford, Circuit
        Judges, and Derrick Kahala Watson,* District Judge.

                      Opinion by Judge Ikuta;
               Partial Concurrence by Judge Watson


                           SUMMARY**


          Magnuson-Stevens Fishery Conservation and
                      Management Act

    The panel affirmed in part and reversed in part the district
court’s grant of summary judgment to the National Marine
Fisheries Service (“NMFS”) in an action by the Glacier Fish
Co. challenging the fee imposed on it pursuant to NMFS’s
cost recovery program developed under the Magnuson-
Stevens Fishery Conservation and Management Act for a
fishery management plan.

     In December 2013, NMFS published a final rule and final
regulations that required members of a catcher-processor
coop to pay a percentage of the revenue earned by each vessel
as a fee to NMFS. Glacier is a coop member, and challenged
NMFS’s requirement that Glacier pay a fee of 1.1 percent of
its 2014 revenue.



    *
    The Honorable Derrick Kahala Watson, United States District Judge
for the District of Hawaii, sitting by designation.
  **
     This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
               GLACIER FISH CO. V. PRITZKER                  3

    The panel held that the agency had the authority to require
Glacier to pay a cost recovery fee but that the agency’s
calculation of the amount of the 2014 cost recovery fee was
inconsistent with its own regulations. Addressing Glacier’s
three claims, first, the panel held that NMFS had the authority
to collect a fee from the individual members of the coop,
including Glacier, because the catcher-processor coop permit
was a limited access privilege, and Glacier could reasonably
be said to be a “holder’ of that permit. Second, the panel held
that NMFS applied the appropriate cost accounting
methodology and complied with16 U.S.C. § 1853a(e). Third,
the panel held that NMFS’s calculation of the 2014 cost
recovery fee of the catcher-processor fee sector was
inconsistent with NMFS’s own regulations, and reversed the
summary judgment to the extent it upheld NMFS’s fee
calculation.     The panel remanded to the agency to
redetermine that fee in accordance with its regulations.

    District Judge Watson concurred in part and concurred in
the judgment. While he joined in the majority’s evaluation of
the merits of Glacier’s three claims, Judge Watson would not
have considered much of the issue of NMFS’s authorization
to collect a cost recovery fee because Glacier waived the
claim.


                         COUNSEL

Andrew Richards (argued), Sullivan & Richards LLP, Seattle,
Washington, for Plaintiff-Appellant.

Evelyn S. Ying (argued), J. David Gunter, II and John H.
Martin; John C. Cruden, Assistant Attorney General;
Environment and Natural Resources Division; United States
4               GLACIER FISH CO. V. PRITZKER

Department of Justice, Washington, D.C.; Ryan Couch,
Office of the General Counsel National Oceanic &
Atmospheric Administration, Seattle, Washington; for
Defendants-Appellees.


                           OPINION

IKUTA, Circuit Judge:

    Glacier Fish Co. challenges the fee imposed on it by the
National Marine Fisheries Service (NMFS) pursuant to the
agency’s cost recovery program developed under the
Magnuson-Stevens Fishery Conservation and Management
Act (Magnuson-Stevens Act, or MSA). We conclude that the
agency had the authority to require Glacier to pay a cost
recovery fee but that the agency’s calculation of the amount
of the 2014 cost recovery fee was inconsistent with its own
regulations. We therefore reverse the district court’s grant of
summary judgment in part and remand to the agency.

                                 I

    The Magnuson-Stevens Act created eight Regional
Fishery Management Councils.1 Each council creates a
fishery management plan, which must contain conservation
and management measures and an assessment of the
maximum sustainable yield from each fishery. 16 U.S.C.
§ 1853(a). Beginning in 1990, the councils were given the
discretion to use “a limited access system for the fishery in


    1
    The background of this case overlaps with our recent decision in
Pacific Dawn v. Pritzker, No. 14-15224, — F.3d — (9th Cir. 2016). We
repeat that background here to the extent it is relevant.
               GLACIER FISH CO. V. PRITZKER                    5

order to achieve optimum yield.” Id. § 1853(b)(6). A limited
access system allows only those entities that satisfy certain
eligibility criteria or requirements contained in a fishery
management plan to participate in a fishery. Id. § 1802(27).

      In 2007, Congress reauthorized the Magnuson-Stevens
Act with amendments that, among other things, were intended
to encourage market-based fishery management through
“limited access privilege programs” (referred to by NMFS as
a LAPP). The term “limited access privilege” is defined as “a
Federal permit, issued as part of a limited access system
under section 1853a of this title to harvest a quantity of fish
. . . representing a portion of the total allowable catch of the
fishery that may be received or held for exclusive use by a
person.” 16 U.S.C. § 1802(26). Thus, a limited access
privilege program (which must be part of a limited access
system) is a program in which fishery participants obtain a
Federal permit “to harvest a certain portion of the total catch
allowed for a particular species.” Pac. Coast Fed’n of
Fishermen’s Ass’ns v. Blank, 693 F.3d 1084, 1088 (9th Cir.
2012). One way to implement such a program is to distribute
the allocated portion through “individual fishing quota”
(IFQ), or quota shares (i.e., a specified percentage of the total
catch). 16 U.S.C. § 1802(23). But councils need not adopt
IFQ programs; they retain discretion to implement limited
access privilege programs in different ways. See id.
§§ 1853a, 1802(26).

    Any council that elects to implement a limited access
privilege program must also implement a cost-recovery
program. Id. § 1853a(e). The Magnuson-Stevens Act
requires councils to “develop a methodology and the means
to identify and assess the management, data collection and
analysis, and enforcement programs that are directly related
6                 GLACIER FISH CO. V. PRITZKER

to and in support of the program,” id. § 1853a(e)(1), and then
provide “for a program of fees paid by limited access
privilege holders that will cover the costs of management,
data collection and analysis, and enforcement activities,” id.
§ 1853a(e)(2). The Secretary of Commerce is authorized to
“collect a fee to recover the actual costs directly related to the
management, data collection, and enforcement of any limited
access privilege program.” Id. § 1854(d)(2)(A)(i). The fee
“shall not exceed 3 percent of the ex-vessel value2 of fish
harvested under any such program, and shall be collected at
either the time of the landing, filing of a landing report, or
sale of such fish during a fishing season or in the last quarter
of the calendar year in which the fish is harvested.” Id.
§ 1854(d)(2)(B).

    Once a regional council has prepared a fishery
management plan for each fishery within its jurisdiction that
requires such a plan, it submits the plan and any proposed
regulations to the Secretary of Commerce. Id. § 1852(h)(1).
The Secretary must review the plan to determine whether it
is consistent with statutory requirements, id. § 1854(a)(1)(A),
and publish a notice of proposed rulemaking in the Federal
Register, id. § 1854(a)(1)(B). This publication starts a public
notice and comment period. Id. If the Secretary approves the
plan, the Secretary must review the council’s proposed
regulations for consistency with its fishery management plan
and other law. 16 U.S.C. § 1854(b). The Secretary must
publish these regulations as well for public comment. Id.
The Secretary has delegated her responsibilities under the Act


 2
   Ex-vessel value is essentially the revenue earned by a particular vessel:
“Ex-vessel value means . . . all compensation (based on an arm’s length
transaction between a buyer and seller) that a fish buyer pays to a fish
seller in exchange for groundfish species.” 50 C.F.R. § 660.111.
               GLACIER FISH CO. V. PRITZKER                  7

to NMFS, which is housed in the National Oceanic and
Atmospheric Administration in the Department of
Commerce.

    One of the eight regional councils established by the
Magnuson-Stevens Act is the Pacific Fishery Management
Council (Pacific Council), which consists of representatives
from California, Oregon, Washington, and Idaho and covers
the fisheries seaward of those states.               16 U.S.C.
§ 1852(a)(1)(F). One of those fisheries is the Pacific
groundfish fishery, which “extends 200 miles into the Pacific
Ocean, along the coasts of California, Oregon, and
Washington, and includes more than 90 species of fish that
dwell near the sea floor.” Pac. Coast Fed’n of Fishermen’s
Ass’ns, 693 F.3d at 1088. The Pacific groundfish fishery is
comprised of three sectors: the catcher-processor (C/P)
sector, which consists of trawl fishing vessels that catch and
process whiting on board; the shoreside sector, which consists
of vessels that catch whiting and deliver the catch to
processors on land; and the mothership sector, which consists
of vessels that catch whiting and deliver the catch to
processors at sea. The Pacific Council first developed the
Pacific Coast Groundfish Fishery Management Plan
(Groundfish Management Plan) in 1982. The plan covers the
Pacific whiting, the species of fish at issue here, among other
groundfish.

   In 1994, Amendment 6 to the Groundfish Management
Plan limited participation in the Pacific groundfish catcher-
processor sector by requiring each vessel to obtain one of a
8                GLACIER FISH CO. V. PRITZKER

small number of limited entry permits.3 The Council also
provided certain allocations of whiting to each sector of the
fishery; for instance, in 1997, the Council allocated 34
percent of the allowable catch to the catcher-processor sector,
42 percent to the shoreside sector, and 24 percent to the
mothership sector. Whiting Allocation Among Nontribal
Sectors, 62 Fed. Reg. 27519-01, 27520 (May 20, 1997). In
addition, the Council established a short season for whiting
and allowed permitted vessels to harvest whiting only from
the time the season opened until the time the catch limit was
reached. This management structure led to a so-called “race
for fish.” A vessel with a limited entry permit had an
incentive to make an intense, concentrated effort at the
beginning of the season to harvest the largest possible portion
of the catcher-processor allocation of whiting before the
window closed.

    In an attempt to eliminate this “race for fish,” catcher-
processors formed a private cooperative, the Pacific Whiting
Conservation Cooperative (PWCC), in 1997. Through
private agreements, each member of the PWCC agreed to
limit its own whiting harvest to a certain percentage of the
catcher-processor sector whiting allocation. By agreeing to
apportion shares of the whiting allocation in advance, the
members no longer needed to race to catch their portion of
the catcher-processor sector’s allocation. This private
solution was effective, and NMFS acknowledged that the
catcher-processor sector no longer raised the “race for fish”
problem.



 3
   A limited entry permit limits the number of fishing vessels, the number
of vessels using each of three specified types of gear, and the vessel
length. 50 C.F.R. § 660.11.
              GLACIER FISH CO. V. PRITZKER                 9

    But because other sectors had not successfully ended the
race for fish, in 2003, the Pacific Council and NMFS began
developing a limited access privilege program for the
groundfish fishery as a whole (including the catcher-
processor sector). The program’s primary goal was to
implement an IFQ program (or quota share system) for the
shoreside sector. In January 2004, NMFS published a notice
of proposed rulemaking, which stated that the Pacific Council
was considering implementing a limited access privilege
program in the form of a “trawl rationalization program” for
the Pacific groundfish fishery. 69 Fed. Reg. 1563-01 (Jan. 9,
2004). The Pacific Council then engaged in a lengthy process
to develop an amendment to the Groundfish Management
Plan that would implement the trawl rationalization program.
Finally, in 2009, the Pacific Council submitted its proposal
for a trawl rationalization program to the Secretary as
Amendment 20 to the Groundfish Management Plan. NMFS
published the proposed amendment for comment in May
2010, see Amendments 20 and 21, Trawl Rationalization
Program, 75 Fed. Reg. 26,702-01 (May 12, 2010), and the
proposed regulations for implementing Amendment 20 in
June 2010, see Amendments 20 and 21, Trawl Rationalization
Program, 75 Fed. Reg. 32,994-01 (June 10, 2010). After a
round of notice and comment, NMFS adopted Amendment 20
to the Groundfish Management Plan and promulgated
implementing regulations. See Amendments 20 and 21,
Trawl Rationalization Program, 75 Fed. Reg. 60,868-01 (Oct.
1, 2010).

    The final trawl rationalization program (Amendment 20)
established an IFQ program for the shoreside sector. An IFQ
program is “a quota system where each quota share could be
harvested at any time during an open season.” Advance
Notice of Proposed Rulemaking Regarding a Trawl
10             GLACIER FISH CO. V. PRITZKER

Individual Quota Program and to Establish a Control Date,
69 Fed. Reg. 1563-01, 1563 (Jan. 9, 2004). “Participants in
the fishery (i.e., those who already had a limited entry permit
allowing them to fish) would need to obtain a quota share
permit as well in order to receive a share of the allowable
catch.” Pacific Dawn, No. 14-15224, draft at 8 (citing
16 U.S.C. §§ 1853a, 1802(26)).

    But because the catcher-processor sector had been
operating successfully as a cooperative, Amendment 20
adopted a different approach for the catcher-processor sector.
Rather than requiring each catcher-processor to obtain an IFQ
or quota share permit in order to receive its share of the catch,
Amendment 20 allowed the members of the coop (i.e., all the
participants in the catcher-processor sector) to obtain a single
“coop permit” in order to receive the catcher-processor
sector’s entire allocation of catch. The members of the coop
would then continue to distribute that allocation amongst
themselves through their private agreements. Amendment 20
termed this a “coop program.” The participants in the
catcher-processor sector would be required to obtain
individual IFQs or quota share permits only if the coop
dissolved. 50 C.F.R. § 660.160(h)(4)(ii).

    The final regulations defined the “coop program” as “a
limited access program that applies to vessels in the C/P
sector of the Pacific whiting at-sea trawl fishery” that had
formed a voluntary coop.           Id. § 660.160(a).         A
“catcher/processor coop” is defined as “a harvester group that
includes all eligible catcher/processor at-sea Pacific whiting
endorsed permit owners who voluntarily form a coop and
who manage the catcher/processor-specified allocations
through private agreements and contracts.” Id. § 660.111.
Under the program, a coop must obtain a “coop permit,”
               GLACIER FISH CO. V. PRITZKER                 11

renewable annually. A coop permit “conveys a conditional
privilege to an eligible coop entity to receive and manage a
coop’s allocation of designated species and species groups.”
Id. § 660.25(e)(2). According to NMFS, the coop permit
“formally register[s] the coop and its associated members to
harvest and process in the sector.” 75 Fed. Reg. 53380-01,
53392. The permit allows members to engage in fishing of
the catcher-processor sector’s allocation during the season.
50 C.F.R. § 660.160(d)(1)(iv). The coop program also
required the coop to submit an annual report to NMFS, while
the members of the coop are required to submit economic
data. Id. §§ 660.160(b)(1)(ii), (b)(2)(ii). In sum, Amendment
20 made only a few changes to the catcher-processor sector;
it continued to operate as a coop through which members
divided their allocation according to their private agreements.

    After implementing Amendment 20 and the trawl
rationalization program, the Pacific Council began to develop
a cost recovery program as required by 16 U.S.C.
§ 1853a(e)(1). It submitted a proposed program to NMFS in
December 2012. On February 1, 2013, NMFS proposed
regulations establishing a cost recovery program and solicited
public comments. See Cost Recovery, 78 Fed. Reg. 7371-01
(Feb. 1, 2013). On December 11, 2013, NMFS published its
final rule, which established the requirements for cost
recovery from each of the sectors. See Cost Recovery,
78 Fed. Reg. 75,268-01 (Dec. 11, 2013); 50 C.F.R.
§ 660.160(e)(5).

   The final regulations required members of a catcher-
processor coop to pay a percentage of the revenue earned by
each vessel (i.e., its ex-vessel value) as a fee to NMFS.
NMFS calculated the fee percentage based on DPC, or direct
program costs, defined as “the actual incremental costs for
12                GLACIER FISH CO. V. PRITZKER

the previous fiscal year directly related to the management,
data collection, and enforcement” of the catcher-processor
sector, 50 C.F.R. § 660.115(b)(1)(i), divided by V, “the total
ex-vessel value, as defined at § 660.111, from the previous
calendar year attributable to that sector of the trawl
rationalization program,” id. § 660.115(b)(1)(ii).4

    Comment 5 to the proposed regulations asked NMFS to
“provide the legal basis for defining the C/P Coop Program
as a LAPP [limited access privilege program].” 78 Fed. Reg.
75,268-01, 75,272. NMFS responded that it “decided that the
C/P Coop Program was a LAPP during implementation of
Amendment 20.” Id. It further explained that “[c]onsistent
with the definition of a ‘limited access privilege’ in the MSA
(16 U.S.C. § 1802 (26)), the C/P Coop Program is a LAPP
under the MSA (16 U.S.C. § 1853a) because it requires a
Federal permit for exclusive use by the coop to harvest a
portion of the total allowable catch.” Id. NMFS also
acknowledged “that generally the C/P Coop Program
management costs are less than those of the other sectors.”
Id.

    In 2013, the PWCC received a catcher-processor coop
permit that stated: “This permit authorizes the entity named
above [PWCC] to harvest 100% of the Pacific Whiting and
non-whiting allocated to the C/P sector,” which was 34
percent of the total allowable catch. The three coop
members, American Seafoods, Trident Seafoods, and Glacier



  4
    Because each year’s fee is determined based on the previous year’s
costs, NMFS calculates the actual costs at the end of each year and adjusts
each participant’s fee for the following year accordingly. 50 C.F.R.
§ 660.115(b)(1).
                 GLACIER FISH CO. V. PRITZKER                        13

Fish, then apportioned the allocation among themselves
according to their agreements.

    To calculate the 2014 fee percentage for purposes of its
cost recovery program, NMFS determined its 2013 direct
program costs for the catcher-processor sector to be
$176,460. NMFS divided the 2013 direct program costs by
the total catcher-processor sector ex-vessel value of $16.76
million, which resulted in a fee percentage of 1.1 percent.
Thus, each participant in the catcher-processor coop program
was required to pay a fee of 1.1 percent of its 2014 revenue.5

   On January 9, 2014, Glacier filed this action in district
court. The parties filed cross-motions for summary
judgment. The district court rejected each of Glacier’s
arguments and granted summary judgment to NMFS. Glacier
timely appealed.

     On appeal, Glacier makes three arguments. First, Glacier
argues that because NMFS may collect a fee only from
“limited access privilege holders,” 16 U.S.C. § 1853a(e)(2),
it is not authorized to collect a cost recovery fee from Glacier
for two reasons: (1) a “coop permit” is not a limited access
privilege because it does not authorize PWCC to harvest a
quantity of fish and it lacks one of the statutory
characteristics of a limited access privilege; and (2) it is not
the holder of the coop permit. Second, Glacier argues that
NMFS failed to implement the cost accounting methodology
recommended by the Council in violation of 16 U.S.C.


 5
    NMFS’s calculation of $176,460.05 turned out to be well in excess of
its actual 2014 direct program costs, which resulted in a significant
overpayment by Glacier. NMFS applied the amount of overpayment to
Glacier’s 2015 and 2016 fees.
14               GLACIER FISH CO. V. PRITZKER

§ 1853a(e). Third, Glacier argues that NMFS’s calculation of
the 2014 fee was inconsistent with NMFS’s own regulations.
We address each of Glacier’s arguments in turn.6

                                   II

    The district court had jurisdiction under 28 U.S.C. § 1331,
and we have jurisdiction under 28 U.S.C. § 1291. We review
the district court’s grant of summary judgment de novo.
Fishermen’s Finest, Inc. v. Locke, 593 F.3d 886, 894 (9th Cir.
2010).

   We review NMFS’s interpretation of the Magnuson-
Stevens Act under the two-step framework of Chevron,
U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
467 U.S. 837, 842–43 (1984). See Pacific Coast Fed’n of
Fishermen’s Ass’ns, 693 F.3d at 1091; Or. Trollers Ass’n v.
Gutierrez, 452 F.3d 1104, 1119 (9th Cir. 2006).

    At step one, we consider whether “the intent of Congress
is clear.” Chevron, U.S.A., Inc., 467 U.S. at 842. If
“Congress has directly spoken to the precise question at


 6
   NMFS argues that Glacier waived the first two arguments by failing to
raise them in its comments on the proposed cost recovery rules. We
disagree. We generally do not invoke the waiver rule so long as an issue
was raised “with sufficient clarity to allow the decision maker to
understand and rule on the issue raised,” Nat’l Parks & Conservation
Ass’n v. Bureau of Land Mgmt., 606 F.3d 1058, 1065 (9th Cir. 2009),
whether the issue “was considered sua sponte by the agency or was raised
by someone other than the petitioning party.” Portland Gen. Elec. Co. v.
Bonneville Power Admin., 501 F.3d 1009, 1024 (9th Cir. 2007). Based on
our review of the record, Glacier’s arguments were raised with sufficient
clarity in the comments or addressed sua sponte by NMFS, so they were
not waived.
               GLACIER FISH CO. V. PRITZKER                   15

issue,” we “must give effect to the unambiguously expressed
intent of Congress.” Id. at 842–43. We will uphold the
agency’s interpretation if it is consistent with that
congressional intent. See Or. Trollers Ass’n, 452 F.3d at
1119.

    If the statute is “silent or ambiguous” on the precise issue,
or susceptible to multiple interpretations, we consider
whether Congress delegated authority to the agency “to speak
with the force of law when it addresses ambiguity in the
statute or fills a space in the enacted law.” United States v.
Mead Corp., 533 U.S. 218, 229 (2001); see also Nat’l Cable
& Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967,
980 (2005) (“[A]mbiguities in statutes within an agency’s
jurisdiction to administer are delegations of authority to the
agency to fill the statutory gap in reasonable fashion.”).
Congress has delegated such authority “when it provides for
a relatively formal administrative procedure,” like notice-and-
comment rulemaking. Mead, 533 U.S. at 230. And where
the agency interprets the statute through an exercise of that
authority, we must “accept the agency’s construction of the
statute” so long as “the implementing agency’s construction
is reasonable, . . . even if the agency’s reading differs from
what the court believes is the best statutory interpretation.”
Brand X, 545 U.S. at 980. An interpretation is reasonable so
long as it “reflects a plausible construction of the plain
language of the statute and does not otherwise conflict with
Congress’ expressed intent.” Rust v. Sullivan, 500 U.S. 173,
184 (1991).

    Here, Congress directed NMFS to promulgate a fishery
management plan and implementing regulations that have the
force of law through notice-and-comment rulemaking. See
16 U.S.C. § 1854. Accordingly, we must defer to NMFS’s
16             GLACIER FISH CO. V. PRITZKER

construction of ambiguous statutory provisions authorizing
such plans so long as its interpretation is reasonable.

                              A

    We first consider Glacier’s argument that it is not subject
to cost recovery because NMFS is authorized to collect a fee
only from “limited access privilege holders,” 16 U.S.C.
§ 1853a(e)(2). Glacier claims that it is not such a holder for
two reasons: first, because a catcher-processor coop permit is
not a limited access privilege, and second, because even if a
coop permit is a limited access privilege, PWCC holds the
permit, not Glacier.

                              1

     Under the Chevron framework, we begin with the
question whether Congress has addressed the precise question
before us, that is, whether a “limited access privilege” may
include a permit such as the catcher-process coop permit, as
set forth in Amendment 20 and the implementing regulations.

    The Magnuson-Stevens Act defines a “limited access
privilege” as “a Federal permit, issued as part of a limited
access system under section 1853a of this title to harvest a
quantity of fish . . . representing a portion of the total
allowable catch of the fishery that may be received or held for
exclusive use by a person,” 16 U.S.C. § 1802(26)(A), and
“includes an individual fishing quota,” id. § 1802(26)(B).
Thus, the definition of a “limited access privilege” makes
clear that the IFQ permits used for participants in the
shoreside sector are limited access privileges. But the
definition does not resolve whether a coop permit, which is
not issued directly to harvesters, but to a coop to receive and
               GLACIER FISH CO. V. PRITZKER                  17

manage a catch allocation on behalf of its members, is a
“permit . . . to harvest a quantity of fish.” Nor does any other
part of the statute answer this question. Although the Act has
delineated the contours of “limited access privilege
programs” in a detailed statutory framework, id. § 1853a,
including the requirements for a limited access privilege, id.
§ 1853a(c), and the characteristics of such a privilege, id.
§ 1853a(f), we have not found, and the parties have not
identified, any provisions in the Magnuson-Stevens Act that
specifically address whether a limited access privilege could
include a permit issued to a coop along the lines set forth in
NMFS’s regulations. We therefore conclude that Congress
has not directly spoken to this issue.

    Accordingly, we move to the second step of the Chevron
analysis and ask whether NMFS’s construction of “limited
access privilege” as including the coop permit defined in
NMFS’s regulations was reasonable. According to the
regulations, the “coop program” is “a limited access program
that applies to vessels in the C/P sector of the Pacific whiting
at-sea trawl fishery and is a single voluntary coop.”
50 C.F.R. § 660.160(a). The “coop permit” is defined as a
permit that “conveys a conditional privilege to an eligible
coop entity to receive and manage a coop’s allocation of
designated species and species groups.” Id. § 660.25(e)(2).
A coop is a group of participants that acts both as a group and
individually: the regulations define a coop as “a harvester
group” that includes participants in the catcher-processor
sector with limited entry permits who “voluntarily form a
coop and who manage the catcher/processor-specified
allocations through private agreements and contracts,” id.
§ 660.111, and the harvester group and its members are
jointly and severally responsible for compliance with the
coop permit and coop program, id. § 660.160(b)(2)(iii). In
18             GLACIER FISH CO. V. PRITZKER

order to harvest fish, participants in the catcher-processor
sector must be members of the coop, and the coop must have
a coop permit. Id. § 660.160(a), (b)(2)(i)(A). Once the coop
permit has been obtained, coop members may engage in
catching the catcher-processor sector’s allocation during the
season. Id. § 660.160(d)(1)(iv). In sum, as NMFS explained
in proposing the regulations, the “coop permit” registers “the
coop and its associated members to harvest and process in the
sector.” 75 Fed. Reg. 53,380-01, 53,392.

    We conclude that NMFS could reasonably interpret a
“federal permit . . . to harvest a quantity of fish” as including
the coop permit. Taking the regulations as a whole, a coop
permit is a federal permit issued to a harvester group,
50 C.F.R. § 660.111, which is necessary (but not sufficient)
for the group members to harvest the fish allocated to the
catcher-processor sector, id. § 660.160(b)(2)(i)(A), and which
allows the group members to apportion the harvest of fish
amongst themselves through private agreement, id.
§ 660.111. Because the coop permit allows the group to
catch the portion of the fish allocated to the catcher-processor
sector, it can reasonably be called a “federal permit . . . to
harvest a quantity of fish,” 16 U.S.C. § 1802(26). That
participants in the fishery obtain their right to catch fish by
means of a coop permit rather than an individual permit does
not change the underlying nature of the permit. Because
NMFS’s determination was a plausible construction of the
statute, we defer to the agency’s interpretation.

    Glacier argues that because the coop permit is defined as
“a conditional privilege to an eligible coop entity to receive
and manage a coop’s allocation of designated species and
species groups,” 50 C.F.R. § 660.25(e)(2), rather than
expressly stating that it is a permit to “harvest” fish, the coop
                 GLACIER FISH CO. V. PRITZKER                       19

permit is not a “limited access privilege.” And, Glacier adds,
a coop itself cannot “harvest” fish in the ordinary sense of the
word because it does not have the physical or legal means to
catch fish, so the coop permit cannot be a permit to “harvest”
fish. We do not dispute that “harvest” should be given its
ordinary meaning and in this context generally means to catch
fish. But we reject Glacier’s argument because it fails to
consider the nature of a coop and a coop permit in the context
of the regulation as a whole, which establishes a coop permit
as an authorization allowing the members of a harvester
group to catch a certain quantity of fish.7 Congress gave
NMFS authority to develop a limited access privilege
program, and “agencies are better equipped to make” the
policy choices for doing so than are the courts. Brand X,
545 U.S. at 980.          We therefore defer to NMFS’s
determination that a coop permit is a permit allowing a
harvesting group to harvest fish.

    Glacier also argues that that NMFS cannot deem a coop
permit to be a “limited access privilege” because the catcher-
processor coop permit lacks one of the characteristics of a
limited access privilege set forth in § 1853a(f). The missing
characteristic, according to Glacier, is that a limited access
privilege is “issued for a period of not more than 10 years
that—(1) will be renewed before the end of that period,
unless it has been revoked, limited, or modified as provided
in this subsection.” 16 U.S.C. § 1853a(f). Under NMFS’s
regulations, an application for a coop permit must be
submitted to NMFS between February 1 and March 31 of


 7
    Indeed, the “permit” issued to PWCC expressly provides the right to
harvest fish, stating “This permit authorizes the entity named above
[PWCC] to harvest 100% of the Pacific Whiting and non-whiting
allocated to the C/P sector.”
20                 GLACIER FISH CO. V. PRITZKER

each year and it expires on December 31 of the year in which
it was issued. 50 C.F.R. § 660.160(d)(1)(ii).8 Glacier claims
that because the coop permit lacks the characteristic of
renewability, it is not a limited access privilege.

    This argument misses the point. Rather than raise a
question as to whether it was unreasonable for NMFS to
construe a “limited access privilege” as including the type of
“coop permit” defined in NMFS’s regulations, this argument
raises a different question: whether the regulation setting
forth the coop permit’s renewal requirements is a reasonable
interpretation of the statutory renewal requirements in
§ 1853(a)(f). The answer to this question sheds no light on
whether a coop permit is a “limited access privilege.” Here,
for instance, if NMFS fails to renew the coop permit before
the end of the one-year period, Glacier could raise the
argument that NMFS’s actions are inconsistent with
§ 1853a(f), which requires renewal of a permit “unless it has
been revoked, limited or modified” pursuant to § 1853a(f)(1).
If Glacier prevailed on this claim, NMFS could have the
obligation to revise or interpret the limited access privilege to
meet statutory requirements. But regardless of Glacier’s
success on this claim, the coop permit would still be “a
Federal permit, issued as part of a limited access system


 8
     50 C.F.R. § 660.160(d)(1)(ii) states:

          Annual registration and deadline. Each year, the coop
          entity must submit a complete application to NMFS for
          a C/P coop permit. The application must be submitted
          to NMFS by between February 1 and March 31 of the
          year in which it intends to participate. NMFS will not
          consider any applications received after March 31. A
          C/P coop permit expires on December 31 of the year in
          which it was issued.
               GLACIER FISH CO. V. PRITZKER                  21

under section 1853a of this title to harvest a quantity of fish
. . . representing a portion of the total allowable catch of the
fishery that may be received or held for exclusive use by a
person,” 16 U.S.C. § 1802(26), and therefore would
constitute a limited access privilege. Thus, Glacier’s
renewability argument does not change our conclusion that
NMFS could reasonably determine the coop permit to be a
limited access privilege.

                               2

    We turn next to Glacier’s argument that, even if the
catcher-processor coop permit is a limited access privilege,
NMFS is authorized to collect a fee only from “limited access
privilege holders,” 16 U.S.C. § 1853a(e)(2) (emphasis
added), and Glacier is not a “holder” of that permit because
it was issued only to PWCC.

    We again begin by determining whether Congress has
addressed the precise question before us, which is whether
each individual member of a coop, defined as a “harvester
group,” 50 C.F.R. § 660.111, can be deemed a “holder” of the
Federal permit issued to that group. The word “holder” is not
defined in the statute. Nor is there “an unambiguous common
sense meaning of the word” that answers the question here.
See Arizona Health Care Cost Containment Sys. v.
McClellan, 508 F.3d 1243, 1249 (9th Cir. 2007). Although
the term “holder” as it is used here means “possessor,”
Webster’s Third New International Dictionary 1079 (2002),
this definition does not resolve our issue; rather, it merely
raises the same question: whether a member of a group may
be deemed to be a “possessor” of a group permit. We
therefore conclude that Congress has not directly answered
the precise question at issue.
22             GLACIER FISH CO. V. PRITZKER

    Turning to the second step of Chevron, we ask whether
NMFS’s determination that each member of the harvester
group that received the coop permit can be treated as a
“limited access privilege holder” is a reasonable construction
of § 1853a(e)(2). We conclude that it is. As we have
explained, the regulations define the coop as a “harvester
group,” which is treated for regulatory purposes as both the
group and the individual members. Because each member of
the group exercises the group’s rights under the coop permit
to harvest fish, see 50 C.F.R. § 660.160(b), (d)(1)(iv), and
each member is jointly and severally responsible for
compliance with the permit, see id. § 660.160(b)(2)(iii), it is
both fair and sensible to regard each member of the group as
a joint holder of the privilege. Accordingly, we defer to
NMFS’s reasonable construction of “holder” in § 1853a(e)(2)
as being applicable to each member of a coop that has been
issued a limited access privilege. Id. § 660.115(d)(2).

    Because the catcher-processor coop permit is a limited
access privilege, and Glacier can reasonably be said to be a
“holder” of that permit, NMFS had the authority to collect a
fee from the individual members of the coop, including
Glacier. The district court therefore did not err in granting
summary judgment to NMFS on this issue.

                              B

   We turn next to Glacier’s argument that NMFS did not
apply the Council’s cost accounting methodology, which
Glacier argues violated 16 U.S.C. §§ 1853a(e), 1854(d)(2).

    The Magnuson-Stevens Act requires a council that elects
to establish a limited access privilege program to “(1) develop
a methodology and the means to identify and assess the
               GLACIER FISH CO. V. PRITZKER                 23

management, data collection and analysis, and enforcement
programs that are directly related to and in support of the
program,” and “(2) provide . . . for a program of fees paid by
limited access privilege holders that will cover the costs of
management, data collection and analysis, and enforcement
activities.” Id. § 1853a(e). After the council develops the
methodology and provides the program, NMFS may accept
or reject the program proposed by the council, id. § 1854(b),
but it does not have the authority to develop a methodology
itself.

    The Pacific Council developed a methodology for
collecting costs “directly related to and in support of the
program,” id. § 1853a(e)(1), and prepared a report with its
recommendation. In its report, the Council recommended
recovering only “incremental costs, i.e. those costs that would
not have been incurred but for” the trawl rationalization
program. It defined “[a]ctual incremental costs” to mean
“those net costs that would not have been incurred but for the
implementation of the trawl rationalization program including
additional costs for new requirements of the program and
reduced trawl sector related costs resulting from efficiencies
as a result of the program.” “Net costs” were to be
interpreted pursuant to Appendix B, which provided some
guidance and examples for determining how the cost of an
employee’s time changes with and without a trawl
rationalization program.

    NMFS followed the Council’s recommendation in its
regulations. The final regulations required each participant
in the fishery to pay as an annual fee a percentage “of the ex-
vessel value of fish harvested by sector under the trawl
rationalization program,” but no more than 3 percent under
16 U.S.C. § 1854(d)(2)(B). 50 C.F.R. § 660.115(a). The
24                GLACIER FISH CO. V. PRITZKER

regulations required NMFS to calculate the fee percentage
each year using the formula, (DPC/V) x 100.               Id.
§ 660.115(b)(1). It defined DPC, or direct program costs, as
“the actual incremental costs for the previous fiscal year
directly related to the management, data collection, and
enforcement of each sector (Shorebased IFQ Program, MS
Coop Program, and C/P Coop Program).”                     Id.
§ 660.115(b)(1)(i). The regulations adopted the council’s
definition of “actual incremental costs”: the “net costs that
would not have been incurred but for the implementation of
the trawl rationalization program, including additional costs
for new requirements of the program and reduced trawl sector
related costs resulting from efficiencies as a result of the
program.” Id. NMFS therefore sought to collect only the
“incremental costs” as the Council defined them, the costs
that would not have been incurred but for the implementation
of the rationalization program.9 Because NMFS’s regulations
implemented the Council’s recommendations, the regulations
are consistent with the statutory requirement.

    Glacier argues that the cost recovery regulations violated
§ 1853a(e) because NMFS did not use the “with and without”
approach in Appendix B. But Appendix B’s “with and
without” approach is merely an example of how to calculate
“net costs that would not have been incurred but for the
implementation of the trawl rationalization program.” In
other words, Appendix B demonstrated that the net costs in
this context are equal to costs “with” the implementation of


 9
   NMFS defined V as “the total ex-vessel value, as defined at § 660.111,
from the previous calendar year attributable to that sector of the trawl
rationalization program.” § 660.115(b)(1)(ii). Thus, the fee percentage for
each sector is the lesser of three percent or the net costs of the program
attributable to each sector as a percentage of the sector’s revenue.
                  GLACIER FISH CO. V. PRITZKER                          25

the trawl rationalization program less costs “without” that
program. Because NMFS’s regulations include the Council’s
definition of incremental costs as net costs with and without
the trawl rationalization program, NMFS complied with
§ 1853a(e), and we reject Glacier’s argument to the contrary.

                                    C

    Finally, we address Glacier’s argument that NMFS’s
calculation of the 2014 cost recovery fee was inconsistent
with NMFS’s own cost recovery regulations because NMFS
did not determine the “actual” costs “directly related to” the
program and failed to account for any efficiencies gained as
a result of the program. We generally defer to the agency’s
interpretation of its own regulations unless “plainly erroneous
or inconsistent with the regulation.” Bassiri v. Xerox Corp.,
463 F.3d 927, 930 (9th Cir. 2006) (citing Auer v. Robbins,
519 U.S. 452, 461(1997)); see also Chase Bank USA, N.A. v.
McCoy, 562 U.S. 195, 207–08 (2011).

     The regulations require NMFS to begin by determining
the “additional costs” of the trawl rationalization program
attributable to each sector. 50 C.F.R. § 660.115(b)(1)(i).10
Accordingly, NMFS was obliged to develop a reasonable
method for determining the actual additional costs of the
trawl rationalization program (over and above existing costs
related to groundfish fishery management) as well as a

  10
    The final regulations stated that NMFS would determine “the actual
incremental costs . . . directly related to the management, data collection,
and enforcement of each sector,” meaning the “net costs that would not
have been incurred but for the implementation of the trawl rationalization
program, including additional costs for new requirements of the program
and reduced trawl sector related costs resulting from efficiencies as a
result of the program.” 50 C.F.R. § 660.115(b)(1)(i).
26            GLACIER FISH CO. V. PRITZKER

reasonable method for determining which of these additional
costs was directly attributable to each of the three sectors.
Moreover, the regulations required NMFS to develop a
method to evaluate whether it has gained any “efficiencies”
and reduced costs as a result of implementing the coop permit
program. Id.

    A review of the record discloses that NMFS did not
develop or apply such reasonable methods. First, NMFS did
not have a systematic method for determining the number of
employee hours that were spent on the trawl rationalization
program over and above the amount that had previously been
spent on the groundfish fishery. Instead, NMFS made rough
approximations. It began with the presumption that all
employee time should be treated as the incremental cost of
the trawl rationalization program because it had hired many
new employees solely for work on the trawl rationalization
program. NMFS acknowledged that this presumption was
not wholly justified, because NMFS had retained some
employees who had been working on the same tasks before
and after the implementation of the program. To address this
problem, NMFS contended that time spent by existing
employees was offset by NMFS’s decision not to obtain cost
recovery for certain overhead costs. This approach of using
roughly estimated offsets is not consistent with NMFS’s
regulatory obligation to determine “the actual incremental
costs” of developing the coop program. 50 C.F.R.
§ 660.115(b)(1)(i) (emphasis added).

     Nor did NMFS develop a reasonable system for
separating time spent on the trawl rationalization program
from time spent on other projects. NMFS asked employees
to track the hours they spent working on trawl rationalization
matters related to each of the groundfish fishery sectors
                 GLACIER FISH CO. V. PRITZKER                        27

(using a code assigned to each of these sectors), plus any
hours they spent working on general matters not specifically
attributable to any sector (using a code for “general work”).
The record shows that managers used rough estimates and
deducted hours on an ad hoc basis. For instance, over two
thousand hours were deleted because they “seem[ed] high.”
A manager deleted one employee’s time entirely because it
turned out she had not spent any time on the trawl
rationalization program. NMFS also had problems with the
“general” category. A manager deleted one employee’s time
in the general category because that employee had not spent
any time on general work, and reduced another’s time by 75
percent because the manager learned, based on personal
communications with the employee, that the employee had
coded the time he spent on projects other than the trawl
rationalization program as “general” work. Again, such a
haphazard approach to estimating the number of employee
hours actually spent on the trawl rationalization program is
inconsistent with NMFS’s regulatory obligation to calculate
the actual incremental costs directly related to the program.

    Moreover, NMFS did not allocate time in the general
category according to the sector that required the most
employee time; rather, NMFS divided the cost of the general
time (including employee leave time) evenly among the three
sectors even though employee costs of the catcher-processor
sector amounted to only 1.4% of the sector-specific employee
costs.11 The record shows that the vast majority of the costs


 11
     Recall that Amendment 20’s changes to the catcher-processor sector
were limited to: (1) requiring a catcher-processor endorsement on the
limited entry permits; (2) requiring the catcher-processor coop permit;
(3) requiring reports from the coop and its members; and (4) implementing
an IFQ program only if the coop dissolves. Because there were few
28              GLACIER FISH CO. V. PRITZKER

assigned to the catcher-processor sector is from the “general”
category: of the $176,460 in costs allocated to the catcher-
processor sector, only $25,807 was for time spent on the
catcher-processor sector, while the other $150,653 constituted
one-third of the “general” time spent on the trawl
rationalization program as a whole. Distributing general
costs like employee leave time evenly across the three sectors
is again inconsistent with calculating the “actual incremental
costs . . . directly related to . . . each sector.” 50 C.F.R.
§ 660.115(b)(1)(i).

    Finally, NMFS apparently made no attempt to calculate
the “reduced trawl sector related costs resulting from
efficiencies” in the program as it was required to do under
50 C.F.R. § 660.115(b)(1)(i).

    Based on our review of the record, NMFS did not
properly determine the “actual incremental costs” that were
“directly related to the management, data collection, and
enforcement of each sector” for assessment on the members
of the catcher-processor sector. 50 C.F.R. § 660.115(b)(1)(i).
We therefore conclude that NMFS’s calculation of the 2014
cost recovery fee of the catcher-processor sector was
inconsistent with NMFS’s own regulations. We reverse the
district court’s grant of summary judgment to the extent it
upheld NMFS’s fee calculation and remand to the agency to
re-determine that fee in accordance with its regulations.




changes to the status quo, NMFS acknowledged that it would incur less
costs in this sector than other sectors. See 78 Fed. Reg. 75,268-01,
75,272.
               GLACIER FISH CO. V. PRITZKER                    29

    Each party shall bear its own costs on appeal.

    AFFIRMED in part, REVERSED AND REMANDED
in part.



WATSON, District Judge, concurring in part and concurring
in the judgment:

    On appeal, Glacier makes three claims: (1) that NMFS is
not authorized to collect a cost recovery fee from Glacier
because (a) the coop permit does not qualify as a limited
access privilege and (b) even if it did, Glacier does not hold
the permit; (2) that NMFS failed to implement the cost
accounting methodology recommended by the Council; and
(3) that NMFS’s calculation of the 2014 fee was inconsistent
with its own regulations. While I join in the majority’s
evaluation of the merits of all three issues, in my view, we
need not have considered much of the first because Glacier
waived it.

     “[A] party’s failure to make an argument before the
administrative agency in comments on a proposed rule bar[s]
it from raising that argument on judicial review.” Universal
Health Servs., Inc. v. Thompson, 363 F.3d 1013, 1019, 1021
(9th Cir. 2004) (citing Exxon Mobil Corp. v. EPA, 217 F.3d
1246 (9th Cir. 2000)). “Although ‘claimants who bring
administrative appeals may try to resolve their difficulties by
alerting the decision maker to the problem in general terms,
rather than using precise legal formulations,’ claimants are
still obligated to raise their problem ‘with sufficient clarity to
allow the decision maker to understand and rule on the issue
raised.’” Buckingham v. Sec’y of U.S. Dep’t of Agr., 603 F.3d
30               GLACIER FISH CO. V. PRITZKER

1073, 1080 (9th Cir. 2010) (citation omitted); see also Great
Basin Mine Watch v. Hankins, 456 F.3d 955, 967 (9th Cir.
2006) (concluding that a claimant had failed to exhaust where
the general concerns raised below were insufficiently closely
connected to the legal claim at issue). While “there is no
bright-line standard as to when this requirement has been
met,” Idaho Sporting Cong., Inc. v. Rittenhouse, 305 F.3d
957, 965 (9th Cir. 2002), in my view, it was not met here.

     Glacier relies on a single comment letter from the PWCC
for having preserved its first claim that a coop permit does
not qualify the permittee as a “limited access privilege
holder.” In fact, Glacier primarily relies on the following
sentence within that letter that reads as follows: “The PWCC
requests from NMFS a clear and detailed account of the legal
basis for defining the CP cooperative as a LAPP, including
why other U.S. sector-based, cooperative management
programs are not defined as LAPPs.” That level of generality
is simply too attenuated to have put NMFS on notice of much
of what Glacier asserts now. For instance, Glacier spends
multiple pages discussing what “harvest” means under
16 U.S.C. § 1802(26) and spends multiple additional pages
discussing the permit “renewal” requirement in 16 U.S.C.
§ 1853a(f)(1). Yet the PWCC letter it cites never even
mentions the nuanced “harvest” that Glacier now interprets,
and the letter gives equally short shrift (i.e. none) to
“renewal.” How this could possibly satisfy its exhaustion
obligation is beyond me,1 and it is no surprise, then, that
NMFS did not address these specific issues during the
administrative process.



  1
    In addition, I agree with the district court’s conclusion that Glacier
waived the argument that it is not the holder of the coop permit.
             GLACIER FISH CO. V. PRITZKER              31

    Accordingly, while I concur in the judgment, including
the majority’s analysis of the merits of each of Glacier’s
claims, I cannot join in Footnote 6 of Part I.
