Family Fishermen Move to Block Industry-Killing At-Sea Monitoring Rule

Herring Fishermen are Fighting Burdensome Regulation, COVID-19, and New, Unlawful Monitoring Requirements to Stay Afloat

Arlington, VA (June 8, 2020) – Cause of Action Institute (CoA Institute) today filed a motion for summary judgement on behalf of a group of New Jersey fishermen, asking a D.C. Federal Court to vacate job-killing fisheries regulations called the “Omnibus Amendment.” CoA Institute filed suit in February to challenge the industry-killing rule, which requires certain boats in the Atlantic herring fishery to carry “at-sea monitors” at their own cost.

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Family Fishermen Challenge Illegal, Industry-Killing At-Sea Monitoring Rule from Department of Commerce

Arlington, VA (Feb. 19, 2020) – Cause of Action Institute (“CoA Institute”) today filed a lawsuit on behalf of a group of New Jersey family fishermen to block a new regulation that would force them to pay for third-party “at-sea monitors.”  The industry-killing rule—which was designed by the New England Fishery Management Council and promulgated by the National Oceanic and Atmospheric Administration and U.S. Department of Commerce—will require certain boats in the Atlantic herring fishery to carry “at-sea monitors” and at their own cost. Learn More

CoA Institute Highlights Deficiencies in Proposed Rule to Shift Burdensome Costs of At-Sea Monitoring to Commercial Fishermen

The New England Fishery Management Council (NEFMC), in coordination with the National Marine Fisheries Service (NMFS), seeks to approve and implement a controversial set of regulatory amendments that would create a new industry-funding requirement for at-sea monitoring in the Atlantic herring fishery and, moreover, create a standardized process for introducing similar requirements in other New England fisheries.  Under the so-called Omnibus Amendment, the fishing industry would be forced to bear the burdensome cost of allowing third-party monitors to ride their boats in line with the NEFMC’s supplemental monitoring goals.  This would unfairly and unlawfully restrict economic opportunity in the fishing industry.

Cause of Action Institute (CoA Institute) filed a public comment last month requesting that NMFS disapprove the Omnibus Amendment and scrap the NEFMC’s plans to shift monitoring costs onto fishermen. CoA Institute explained that the Omnibus Amendment raised serious legal questions concerning the authority of the government to compel regulated parties to pay for discretionary agency programs that cannot be funded with congressional appropriations or other statutorily-authorized means.

At the December 2018 meeting of the NEFMC, I reiterated the lack of statutory authorization for the Council’s efforts to create an industry-funded at-sea monitoring regime for the Atlantic herring fishery. A similar monitoring program currently exists in the Northeast multispecies groundfish fishery; CoA Institute represented a group of sector fishermen in a lawsuit challenging that requirement, but the case was dismissed on procedural grounds.

It is a fundamental principle of administrative law that federal agencies only possess congressionally delegated powers and are limited in their operation by the funding provided by Congress.  The NEFMC and NMFS’s efforts to coerce the fishing industry—including many small, family-owned businesses—to support monitoring programs that Congress has declined to fund sustain sets a dangerous precedent that lends itself to unaccountable and unlimited government.

Beyond the clear lack of statutory authorization, industry-funded monitoring in the herring fishery will also have devastating economic consequences.  Monitors are expected to cost between $710–810 per sea day, which would cut heavily into the economic viability of many small-scale operations.  And according to the government’s own proposed rule, at least some portion of the herring fleet would suffer up to a 20% reduction in annual “return-to-owner,” which is roughly analogous to profit.

Worse yet, the government’s cost estimates are based on data collected in 2014–2015, and the situation in the herring fishery has only worsened over the past few years.  This past summer, for example, the NEFMC and NMFS cut herring quota for the remainder of 2018 by 52%, and they now propose to cut the quota for the next three years by upwards of 70%.  Recent NMFS estimates suggest that these adjustments may cause an 80–87% reduction in herring revenue.  Coupled with new industry-funded monitoring requirements, that could spell the end of small-scale fishing firms dependent on herring operations.  That is an unacceptable result, and CoA Institute remains committed to fighting to prevent the effects of such burdensome overregulation.

Ryan P. Mulvey is Counsel at Cause of Action Institute

The FTC Raided My Office, Found Nothing, And Is Destroying My Business Anyway

The FTC Raided My Office, Found Nothing, And Is Destroying My Business Anyway

ROBERT CUPO

Without due process or conviction in a court of law, the government is destroying my family’s business.

In early May, federal investigators raided my small tech-support company, Vylah Tec LLC, d/b/a “V-Tec,” on suspicion of “deceptive” sales practices. The raid was part of a politically hyped campaign by the Federal Trade Commission with the Florida Attorney General’s office, dubbed Operation Tech Trap, to “crack down on tech-support scams.” The problem: My business is not a scam.

Read the full article at Investor’s Business Daily.

Law360: LabMD Loses Bid To Exclude FTC Docs In Data Security Row

Read the full story: Law360

An administrative law judge on Thursday shot down LabMD Inc.’s bid to block the Federal Trade Commission from introducing into the parties’ data security fight new evidence related to the origin of an allegedly leaked patient file, rejecting the lab’s argument that the documents were clearly inadmissible.

 

In his order, Chief Administrative Law Judge D. Michael Chappell denied LabMD’s motion to prohibit the FTC from using or offering into evidence six documents that contain additional information about how data security firm Tiversa Holding Corp. came across a LabMD patient file that Tiversa allegedly found on servers outside the company and turned over to the regulator.

 

LabMD argued in its March 25 motion to exclude that the agency shouldn’t be allowed to introduce the proposed exhibits because it would cause unfair prejudice and confusion due to the agency’s undue delay in obtaining and producing the documents. According to the lab, the evidence should have been produced pursuant to a September 2013 subpoena that the FTC issued to Tiversa that sought all documents related to LabMD, but were withheld by the data security company.

 

But Judge Chappell declined to side with the lab in his order Thursday, instead ruling that the present record in the case “fails to support the conclusion that the subject documents are clearly inadmissible for all purposes” and that the possibility still existed that the FTC could use the documents to rebut the lab’s defense…

 

Reed Rubinstein, a Dinsmore & Shohl LLP partner and the senior vice president of litigation at Cause of Action, which is representing LabMD in the administrative proceeding, told Law360 on Friday that his side was encouraged by the judge’s decision to leave open the possibility that the evidence could still be excluded at a later time.

 

“It seemed as though the judge’s ‘wait and see’ attitude was a suggestion perhaps that our arguments had not fallen on deaf ears,” he said.

Law360: LabMD, FTC Data Security Fight Delayed Again

Read the full story: Law360

An administrative law judge has postponed until May 5 the resumption of proceedings in the Federal Trade Commission’s closely watched data security fight with LabMD Inc., marking the latest delay in a case that has been on hold for almost a year.

 

In an order dated Thursday, Chief Administrative Law Judge D. Michael Chappell revealed that the evidentiary hearing in the case, which was scheduled to resume on March 19, would instead be rescheduled to May 5.

 

The order offered no reason for the extension, saying only that the decision was “based upon good cause” and had been made following a conference call with the parties during which there had been no objections. The case has been on hold since May 30, when witness Rick Wallace revealed a congressional investigation into a key player in the FTC’s case.

 

“The judge told us the hearing was postponed, so we’ll show up on May 5 and we’ll see what Mr. Wallace has to say then,” Reed Rubinstein, a Dinsmore & Shohl LLP partner and the senior vice president of litigation at Cause of Action, which is representing LabMD in the administrative proceeding, told Law360 on Monday.

Law360: LabMD Rips 11th Circ. For Refusing FTC Data Security Suit

Read the full story: Law360

The Eleventh Circuit’s refusal to weigh in on a complaint from the Federal Trade Commission accusing LabMD Inc. of failing to safeguard patient information unlawfully shifts the balance of power between agencies and courts, the company recently said in a request for an en banc rehearing…

 

Reed Rubinstein, an attorney for LabMD and senior vice president of litigation at nonprofit Cause of Action, told Law360 on Wednesday that his client shouldn’t have to wait for the FTC proceeding to play out when there’s no doubt about its outcome.

 

“If the process is going to result in an outcome that is, for all intents and purposes, predetermined, what is the justification for requiring a person or a company to have to go through that process in order to obtain judicial review?” Rubinstein asked.