 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued November 6, 2007            Decided December 18, 2007

                        No. 07-5153

            FISHING COMPANY OF ALASKA, INC.,
                      APPELLANT

                              v.

    CARLOS GUTIERREZ, IN HIS OFFICIAL CAPACITY AS THE
            SECRETARY OF COMMERCE, ET AL.,
                      APPELLEES


        Appeal from the United States District Court
                for the District of Columbia
                      (No. 06cv00835)


    Shaun M. Gehan argued the cause for appellant. With
him on the briefs was David E. Frulla.

    Stacey W. Person, Attorney, U.S. Department of Justice,
argued the cause for federal appellee. With her on the brief
was John L. Smeltzer, Attorney. R. Craig Lawrence, Assistant
U.S. Attorney, entered an appearance.

     Eric P. Jorgensen and Janis Searles were on the brief for
intervenor-appellees Oceana and Alaska Marine Conservation
Council.
                               2

   Before: HENDERSON and TATEL, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.

     WILLIAMS, Senior Circuit Judge: In April 2006, the
Secretary of Commerce (the “Secretary”), via his delegee the
National Marine Fisheries Service (the “Service”), see C & W
Fish Co. v. Fox, 931 F.2d 1556, 1558 & n.1 (D.C. Cir. 1991),
issued a final rule establishing a minimum “groundfish
retention standard” for the Bering Sea and Aleutian Islands
fishing region. See Groundfish Retention Standard, 71 Fed.
Reg. 17,362 (Apr. 6, 2006) (to be codified at 50 C.F.R. pt. 679)
(the “Final Rule”). In issuing the rule, the Service exercised
authority under the Magnuson-Stevens Fishery Conservation
and Management Act (“MSA”), 16 U.S.C. §§ 1801-1883.

     The Fishing Company of Alaska (“FCA”), an operator of
commercial fishing vessels in the region, sued the Secretary in
district court, claiming that the rule was unlawful because of
its inclusion of three monitoring and enforcement (“M&E”)
requirements. FCA argued that the Service had adopted the
rule without statutorily required predicate action by the North
Pacific Fishery Management Council (the “Council”), a
regional body created by the MSA to represent state
governments, certain agencies of the federal government, and
other interested constituencies. See § 1852(a)(1)(G). FCA
also claimed that the M&E requirements were substantively
inconsistent with the MSA’s “National Standards” for
conservation. § 1851(a)(7)-(10).

    Both sides sought summary judgment, which the district
court granted in favor of the defendants. Legacy Fishing Co.
v. Gutierrez, No. 06-835 (D.D.C. Mar. 20, 2007). FCA
appeals, and we reverse, finding that the inadequacy of the
                              3

Council’s action fatally tainted the Final Rule’s three
challenged M&E requirements.


                            * * *

     The fertile seas off the Alaskan coast are home to a wide
variety of fish. Among them are many species of groundfish,
which spend most of their lives on or near the ocean floor. To
capture these groundfish, fishing vessels in the Bering Sea and
Aleutian Islands region drag large nets known as “trawls”
across the ocean floor and then haul them up on deck.
Sometimes the trawls dredge up unwanted fish, known as
“bycatch”; the vessels discard these back into the ocean (often
dead or dying).

    In 1996 Congress responded to environmental concerns
about bycatch by amending its formal statement of policy in
the MSA, adding a goal of “minimiz[ing] bycatch” (subject to
various constraints). See § 1801(c)(3).

     Under the MSA’s unusual regulatory framework, the
Council is required to implement congressional policies in its
region by developing a fishery management plan (“FMP”), as
well as necessary amendments thereto. § 1852(h)(1). Neither
FMPs nor amendments may take effect without being
submitted to the Secretary, who publishes them for comment
in the Federal Register and reviews them for compliance with
applicable law. § 1854(a).

    The Council also proposes regulations to implement the
FMP and its amendments. Under the statute, “[p]roposed
regulations which the Council deems necessary or
appropriate for the purposes of . . . implementing a fishery
management plan or plan amendment shall be submitted to the
Secretary simultaneously with the plan or amendment.”
§ 1853(c) (emphasis added). The Secretary must then review
                               4

the proposed regulations for consistency with the FMP and
amendments, as well as with the MSA and other applicable
law. § 1854(b)(1). If he finds them inconsistent, he must
return the regulations to the Council with proposed revisions.
§ 1854(b)(1)(B). Otherwise, he must publish the regulations
for comment in the Federal Register, “with such technical
changes as may be necessary for clarity and an explanation of
those changes.” § 1854(b)(1)(A). After the public comment
period has expired, the Secretary must then promulgate final
regulations, consulting with the Council on any revisions and
explaining his changes in the Federal Register. § 1854(b)(3).
Throughout this process, the Secretary is bound by the judicial
review provisions of the Administrative Procedure Act,
including the requirement that his actions not be “arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.” See § 1855(f); 5 U.S.C. § 706(2)(A).

     The regulation at issue here originated in the Council’s
vote, at its June 2003 meeting, to endorse the concept of a
minimum groundfish retention standard, which would impose
economic disincentives on vessels with high rates of bycatch.
To that end it adopted Amendment 79 to its FMP. See
Groundfish Retention Standard, 70 Fed. Reg. 35,054, 35,055
(June 16, 2005) (the “Proposed Rule”); see also Final Rule, 71
Fed. Reg. at 17,362; Joint Appendix (“J.A.”) 193 (providing
the text of Amendment 79). Simultaneously with its adoption
of Amendment 79, the Council approved a brief outline of
regulatory measures designed to implement the Amendment.
This outline included certain enforcement measures, such as a
requirement that vessels use certified scales to weigh their fish
and keep observers on board to monitor bycatch. N. Pac.
Fishery Mgmt. Council, Minutes of the 162nd Plenary Session
app. VII (June 2003), J.A. 161.

     Once the full Council had approved the outline, it took no
further action. Instead, the Service, in accordance with what
                               5

the parties accept as customary practice in the Alaska
fisheries, began to draft language for the proposed regulation,
based on the Council’s substantive outline. On May 24, 2005,
the Service sent the text of the proposed regulation to the
Council’s Executive Director—an employee of the Council
and a member of its staff, not a Council member in his own
right—stating that “you should now submit all documents
required for Secretarial review.” J.A. 364.

     The draft text delivered to the Executive Director,
however, contained three M&E requirements that were not
mentioned in the Council’s June 2003 outline. These
provisions required that vessels not mix fish from distinct
“hauls” in the same holding bin; that observers take samples
of the catch from a single location only, with a clear line of
sight between the holding bin and the scale where fish are
weighed; and that vessels operate only one scale at any given
time. See Final Rule, 71 Fed. Reg. at 17,382 (to be codified at
50 C.F.R. § 679.27(j)(3)(ii)-(iii)).

     Two days after the Service’s delivery of the draft, on May
26, the Executive Director dutifully returned copies of the
requested documents to the appropriate offices of the Service.
J.A. 192. In due course the Service issued the Proposed Rule
and, after comment, the Final Rule.


                            * * *

    FCA does not challenge the role of the Service in drafting
the formal language of the proposed regulation, only the
divergence of this language from the substance previously
approved by the Council. The Service has acknowledged that
the M&E requirements “were not before the Council when it
took its final action” in June 2003. Final Rule, 71 Fed. Reg. at
17373. The Secretary contends, however, that the MSA “says
                               6

nothing about the process of developing proposed
regulations,” and that the regulation as a whole was properly
submitted under the law when the Council, “by and through
its Executive Director,” transmitted the copied documents
back to the Service in May 2005. Gutierrez Br. 28, 30.

     Neither party considers whether the Council had ever
purported to authorize the Executive Director to approve new
M&E requirements on its behalf. Under the Council’s current
bylaws, for example, approval of an FMP, amendment, or new
regulation requires a formal roll call vote of the full Council.
See N. Pac. Fishery Mgmt. Council, Statement of Organization,
Practices, and Procedures § 3.2(2) (June 10, 2007),
http://www.fakr.noaa.gov/npfmc/misc_pub/sopp607.pdf. The
record does not reveal whether or not these provisions were in
effect in May 2005. Nor is it obvious that the MSA—which
identifies preparing FMPs and amendments thereto as the first
of the Council’s functions, 16 U.S.C. § 1852(h)(1)—permits
such a holus-bolus delegation of the Council’s regulatory
authority.

      Fortunately, however, we need not reach these questions.
Assuming arguendo that the Executive Director’s acts in this
matter can properly be attributed to the Council, he never
purported to make the statutorily required finding. Recall that
the Council is to submit to the Secretary proposed regulations
which it “deems necessary or appropriate for the purposes of
. . . implementing a fishery management plan or plan
amendment . . . simultaneously with the plan or amendment.”
§ 1853(c) (emphasis added).

     At no point did the Executive Director purport to “deem”
the three new M&E requirements “necessary or appropriate.”
Under normal circumstances, such as the formal votes
required by the Council’s current bylaws, the “ultimate
finding will be implied from the action taken.” Ethyl Corp v.
                               7

EPA, 541 F.2d 1, 12 n.15 (D.C. Cir. 1976). Here, however,
there is no indication that anyone acting for the Council knew
that the M&E requirements existed, let alone “deem[ed them]
necessary or appropriate,” before the Executive Director
submitted them to the Secretary. The Service’s May 24 letter
called no attention to the added provisions in the draft text and
was mandatory in tone: “Under procedures for initiating
Secretarial review, you should now submit all documents
required for Secretarial review to the Alaska region. The
Council must also submit a specified number of copies . . . .”
J.A. 364. The Executive Director, evidently seeing his role as
that of a mailroom clerk, made the distribution as instructed but
expressed no “deem[ing]” and, in his cover letter executing the
Service’s instructions, made no note of the substantive
changes. J.A. 192. And while the Council staff participated in
developing the Environmental Assessment and other
supporting documents accompanying the Proposed Rule, these
documents as of July 2005 still assumed the absence of rules
like those in the M&E provisions. For example, they discussed
whether vessels might comply with the rules by installing
multiple scales, even though the M&E requirements’ practical
effect was to limit each vessel to a single scale. J.A. 651.

     In adding the M&E requirements to the draft text, the
Service went far beyond the mere translation of Council-
approved substance into formal regulatory language. The
Council’s June 2003 outline required vessels to use certified
scales to measure the total amount of fish caught, and to keep
independent observers on the vessels who would monitor the
handling of the catch. J.A. 161. While the Service defended
its additional measures as “clarifications” of the “details” of
the monitoring program, Final Rule, 71 Fed. Reg. at 17373,
there was no lack of clarity in the Council’s June 2003
outline, merely an absence of more exacting requirements.
The Secretary describes the M&E provisions as “not
inconsistent” with the Council’s outline, Gutierrez Br. 38, but
                                8

agency regulations are defined not only by what they prohibit,
but also by what they allow. As compared to the Council’s
June 2003 outline, the M&E requirements were material
additions that made unlawful certain fishing practices that
would otherwise have been perfectly lawful.

     In fact, the Service has admitted that the Council’s first
opportunity to consider the M&E requirements took place
after their submission to the Secretary, not before. Final Rule,
71 Fed. Reg. at 17373. In meetings held in June 2005, shortly
after the regulation was submitted by the Executive Director,
the Council discussed the regulation and later heard public
comment on the new M&E requirements. The Council then
provided the Service with its own comments, expressing
concern with the M&E requirements’ effective date and
suggesting that vessels be given more time to comply. J.A.
252-53.

     The Secretary would have us treat these developments as
ratification or at least “acquiescence” in the M&E
requirements. See Gutierrez Br. 40. But he points to nothing
in the Council’s activities suggesting that it conceived itself as
“deem[ing]” the proposed regulation “necessary or
appropriate.” So far as appears, the Council took insertion of
the three new M&E requirements as a done deal, leaving it no
more role than to propose palliatives.

     The Council was right to perceive its post-transmittal role
as limited.     It had previously deemed appropriate the
substance of the proposed regulation (but for the M&E
requirements), and the parties here agree that the Executive
Director effectively transmitted the regulation to the Secretary
under § 1853(c)(1), though they dispute whether a condition
precedent to that regulation’s lawful adoption—the
deeming—had been met as to the M&E requirements. “Upon
transmittal,” the Secretary was then obliged to “immediately
                               9

initiate an evaluation” of the regulation’s consistency with the
amended FMP and applicable law, in preparation for public
notice and comment. § 1854(b)(1). The Council’s post-
transmittal opinion of the M&E provisions is thus beside the
point; even had the Council risen up in outrage at the
provisions, it could not have removed them. The Council is
free to submit comments on a proposed rule (as are others),
but power to alter the rule before it becomes final rests only
with the Secretary. § 1854(b)(3). That the Council delayed
sending its letter to the Service until July 5, 2005, more than
two weeks after the Proposed Rule had been published in the
Federal Register, further demonstrates that its intent was only
to comment, and not to alter, adopt, or ratify.

     Whether or not the Council attempted to ratify the M&E
requirements, moreover, it remained the Secretary’s duty to
review the proposed regulation for consistency with
applicable law, including the MSA’s required procedures.
The Secretary argues that he followed all appropriate
procedures, and that under Yakutat, Inc. v. Gutierrez, 407 F.3d
1054 (9th Cir. 2005), an MSA plaintiff who alleges
insufficient deliberation on the Council’s part “must
demonstrate irregularities in the Secretary’s actions or show
that the Secretary followed incorrect procedures.” Id. at 1072.
We need not decide whether this is a correct statement of the
law, because here there was an irregularity in the Secretary’s
conduct: in reviewing the regulation for consistency with
applicable law, he was obligated to decide whether the
entirety of the proposed regulation had been lawfully
submitted, i.e., with the requisite deeming, which it had not.
Because the Secretary should have insisted on some indication
that the Council “deem[ed]” the M&E requirements necessary
or appropriate prior to their submission, his decision to
publish the Proposed Rule as it then read was “inconsistent
with law,” 5 U.S.C. § 706(2)(A), and FCA is entitled to relief.
                              10

                            * * *

    We therefore reverse the district court’s grant of summary
judgment to the appellees and remand the case with instructions
to vacate the three disputed M&E requirements of the Final
Rule. See 5 U.S.C. § 706(2).

                                                   So ordered.
