Date: 03-18-2015

Case Style: Steve Fick v. Oregon Department of Fish and Wildlife

Case Number: A153317

Judge: Sercombie

Court: Oregon Court of appeals

Plaintiff's Attorney: Bob Steringer argued the cause for petitioners.
With him on the briefs were John C. Rake and Harrang
Long Gary Rudnick P.C.

Defendant's Attorney: Inge D. Wells, Assistant Attorney-in-Charge, argued
the cause for respondent. With her on the brief were Ellen
F. Rosenblum, Attorney General, Anna M. Joyce, Solicitor
General, and Matthew J. Preusch, Assistant Attorney
General.

Bruce H. Cahn argued the cause for intervenorsrespondents.
With him on the brief were Amy J. Heverly,
Ball Janik LLP, Gregory A. Chaimov, and Davis Wright
Tremaine LLP.

Description: Petitioners, Steve Fick, James Wells, and Fishhawk
Fisheries, Inc., seek judicial review of certain rules adopted
by respondent Oregon Department of Fish and Wildlife
(ODFW).1 In particular, pursuant ORS 183.400(1),2 petitioners
challenge a series of administrative rules entitled
“Columbia River Recreational and Commercial Fisheries
Management Strategies,” numbered OAR 635-500-6700
to 635-500-6765. On judicial review, petitioners challenge
the rules on seven grounds. We write to address petitioners’
first ground for challenge, in which they assert that the
rules should be declared invalid because they were adopted
without compliance with ORS 183.540, and reject petitioners’
remaining contentions without discussion. As explained
below, we conclude that the rules in question are valid.
Following letters from then-Oregon Governor
Kitzhaber to the Oregon Fish and Wildlife Commission
(the commission), the Columbia River Fishery Management
1 The Coastal Conservation Association and David Schamp, intervenors in
this review proceeding, have filed a brief in which, like ODFW, they contend that
this “court should * * * reject Petitioners’ challenge to the ODFW rules and affirm
the validity of those rules.”
2 ORS 183.400 provides, in part:
“(1) The validity of any rule may be determined upon a petition by any
person to the Court of Appeals in the manner provided for review of orders in
contested cases. The court shall have jurisdiction to review the validity of the
rule whether or not the petitioner has first requested the agency to pass upon
the validity of the rule in question, but not when the petitioner is a party to
an order or a contested case in which the validity of the rule may be determined
by a court.
“(2) The validity of any applicable rule may also be determined by a
court, upon review of an order in any manner provided by law or pursuant to
ORS 183.480 or upon enforcement of such rule or order in the manner provided
by law.
“(3) Judicial review of the rule shall be limited to an examination of:
“(a) The rule under review;
“(b) The statutory provisions authorizing the rule; and
“(c) Copies of all documents necessary to demonstrate compliance with
applicable rulemaking procedures.
“(4) The court shall declare the rule invalid only if it finds that the rule:
“(a) Violates constitutional provisions;
“(b) Exceeds the statutory authority of the agency; or
“(c) Was adopted without compliance with applicable rulemaking
procedures.”
Cite as 269 Or App 756 (2015) 759
Workgroup was appointed to develop “an alternative management
framework for non-tribal Columbia River recreational
and commercial fisheries.” The workgroup subsequently
produced a document outlining management
strategies that it recommended to the Fish and Wildlife
Commissions of Oregon and Washington. The recommendations
were “intended to enhance the economies of Oregon and
Washington as a whole, ensure the long-term viability of recreational
and commercial fisheries and those communities
that rely on them, and contribute to fish conservation and
recovery.” Based on those recommendations, ODFW developed
and proposed the administrative rules under review.
In late 2012, ODFW issued a notice of proposed
rulemaking for a hearing scheduled on December 7, 2012.
Then, in December 2012, the commission adopted the proposed
new rules, numbered as OAR 635-500-6700 to 635-
500-6765. Petitioners sought judicial review of the new rules,
asserting that the agency violated applicable rulemaking
procedures and that the rules were contrary to controlling
state statutes. Thereafter, ODFW sought an extension of
time to file the agency record with this court “in order to
address petitioners’ claims that the agency failed to comply
with certain rulemaking procedures.” Although the agency
did not concede the merits of petitioners’ assertions, it contended
“that judicial economy and the interests of justice
would best be served by amending the fiscal impact statement
and re-noticing the rules.” According to ODFW, that
process would address the procedural concerns raised by
petitioners. The agency further noted to the court that
“[t]he Commission will determine whether to repeal,
re-adopt, or amend the rules at a May 2013 meeting. If the
present rules are repealed or amended, this proceeding will
become moot and respondent will avoid the cost of unnecessarily
preparing a judicial review record. If the rules are
re-adopted, a single record may be provided at that time.”
The court granted the motion and held the case in abeyance
while the agency completed the process described in
the motion.3
3 The court also granted a stay on the enforcement of the rules, and that stay
remained in effect while the judicial review was held in abeyance.
760 Fick v. Dept. of Fish and Wildlife
In March 2013, ODFW issued a new notice of
rulemaking for a hearing scheduled on May 10, 2013. The
notice stated that
“[a]dditional time to comment on these rules, first adopted
December 7, 2012, is being provided in part to address
alleged deficiencies in either the process or economic analysis
of that rulemaking, articulated for the first time by the
petitioners on appeal in Fick v. Oregon Department of Fish
and Wildlife, CA# A153317.”
That notice of rulemaking was accompanied by a Statement
of Need and Fiscal Impact and a “Fiscal and Economic Impact
Statement for the May 10, 2013 Hearing In the Matter of
Rules Relating to Columbia River Fishery Management for
2013 and Beyond” (the FEIS).4 Eventually, in June 2013, the
commission readopted OAR 635-500-6700 to 635-500-6765,
which, as petitioners note, “are identical in substance to th[e
rules] passed on December 7, 2012.”
The rules establish the commission’s policy for the
“non-tribal Columbia River Recreational and Commercial
Fisheries Management Framework,” OAR 635-500-6700,
and address the management of certain species of fish protected
under the Endangered Species Act (ESA). OAR 635-
500-6705 articulates the “Guiding Principles for Columbia
River fisheries management.” Those are to
“(1) Promote the recovery of ESA-listed species and
the conservation of wild stocks of salmon, steelhead, and
sturgeon on the Columbia River.
“(2) Continue leadership on fish recovery actions,
including improved fish survival through the federal
Columbia River hydropower system, improved habitat
conditions in the tributaries and estuary, hatchery
reform, reduced predation by fish, birds, and marine mammals,
and harvest management that meets conservation
responsibilities.
“(3) Continue to meet terms of U.S. v. Oregon management
agreements with Columbia River Treaty Tribes.
“(4) In a manner that is consistent with conservation
and does not impair the resource, seek to enhance the
4 The rulemaking hearing was later rescheduled for June 6, 2013.
Cite as 269 Or App 756 (2015) 761
overall economic well-being and stability of Columbia River
fisheries in Oregon.
“(5) For steelhead, salmon and sturgeon, prioritize
recreational fisheries in the mainstem and commercial
fisheries in off-channel areas of the lower Columbia River.
Toward this end:
“(a) Assign mainstem recreational fisheries a sufficient
share of ESA-impacts and harvestable surplus to
enhance current fishing opportunity and economic benefit.
“(b) Assign commercial fisheries a sufficient share
of the ESA-impacts and harvestable surplus to effectively
harvest fish in off-channel areas and harvest surplus fish
with selective techniques in the mainstem Columbia River.
“(6) Phase out the use of non-selective gill nets in
non-tribal commercial fisheries in the mainstem Columbia
River. Transition gill net use to off-channel areas.
“(7) Enhance the economic benefits of off-channel commercial
fisheries, in a manner consistent with conservation
and wild stock recovery objectives. Enhancements include:
“(a) Providing additional hatchery fish for release
in off-channel areas by shifting currently available production,
and where possible providing new production for
release in off-channel areas, emphasizing complementary
conservation benefits in tributaries.
“(b) Expanding existing seasons and boundaries in offchannel
areas and/or establishing new off-channel areas,
allowing increased harvest in areas where the likelihood of
impacting ESA-listed stocks is lower than the mainstem.
“(8) Develop and implement selective-fishing gear and
techniques for commercial mainstem fisheries to optimize
conservation and economic benefits consistent with mainstem
recreational objectives, combined with incentives to
commercial fishers to expand the development and implementation
of these gear and techniques.
“(9) Maintain consistent and concurrent policies
between Oregon and Washington related to management
of non-tribal fisheries, to ensure orderly fisheries as well as
the sharing of investments and benefits.
“(10) To maximize economic return, develop a program
that seeks to implement Marine Stewardship Council or
other certification of commercial salmon and sturgeon fisheries
in the Columbia River as sustainably managed fisheries.”
762 Fick v. Dept. of Fish and Wildlife
OAR 635-500-6705. Under OAR 635-500-6710, ODFW is
to “manage fisheries consistent with the guiding principles
and the allocation framework and provisions in OAR 635-
500-6715 through 635-500-6765.”
To those ends, OAR 635-500-6715 to 635-500-6750
allocate the catch of ESA-listed salmon (spring Chinook,
summer Chinook, sockeye, tule fall Chinook, upriver bright
fall Chinook, coho, and chum) and white sturgeon in the
Columbia mainstem and off-channel fisheries between
higher-impact commercial and lower-impact recreational
fishers. The rules outline a plan to shift commercial fishing
with gillnets to off-channel fisheries that are populated
by hatchery-reared fish and require selective fishing in
the mainstem of the river. Thus, the regulatory effect is to
reduce the number of protected ESA-listed salmon that can
be harmed by fishing in the Columbia River.
For example, OAR 635-500-6715, which addresses
spring Chinook, provides:
“(1) Transition Period (2013-2016).
“(a) In 2013, assign 65%, then 70% of the ESA-impact
for upriver spring Chinook stocks to mainstem recreational
fisheries.
“(b) In 2013, assign 35%, then 30% to off-channel and
mainstem commercial fisheries.
“(2) Long Term (2017 and Beyond).
“(a) Assign 80% of the ESA-impact to mainstem recreational
fisheries.
“(b) Assign 20% to commercial fisheries.”
As noted, petitioners seek judicial review of the
rules, asserting that they should be invalidated under
ORS 183.400(4).5 Pursuant to ORS 183.400(4), a petitioner
5 While judicial review of the readopted rules was pending, petitioners
filed a motion seeking a stay of the enforcement of those rules. The Appellate
Commissioner denied the motion for stay, concluding that petitioners had not
demonstrated that enforcement of the rules would result in irreparable harm to
the petitioners or others. Furthermore, the Commissioner concluded that petitioners
were not likely to prevail on the issues they raised on judicial review. On
reconsideration, the Chief Judge adhered to the denial of the stay.
Cite as 269 Or App 756 (2015) 763
may challenge the validity of a rule by asserting that it
(1) violates a constitutional provision, (2) exceeds the agency’s
statutory authority, or (3) was adopted without compliance
with applicable rulemaking procedures.
Here, part of petitioners’ challenge relates to whether
the rules were adopted without compliance with applicable
rulemaking procedures. In particular, they assert that the
ODFW rules should be invalidated under ORS 183.400(4)
“because the Commission violated ORS 183.540 by failing to
reduce the impact of the ODFW Rules on small businesses.”
Under ORS 183.335(1), “[p]rior to the adoption, amendment
or repeal of any rule, the agency shall give notice of its
intended action[.]” Pursuant to ORS 183.335(2)(b)(E), that
notice shall include
“[a] statement of fiscal impact identifying state agencies,
units of local government and the public that may
be economically affected by the adoption, amendment or
repeal of the rule and an estimate of that economic impact
on state agencies, units of local government and the public.
In considering the economic effect of a proposed action on
the public, the agency shall utilize available information
to project any significant economic effect of that action on
businesses which shall include a cost of compliance effect
on small businesses affected.”6
ORS 183.336, in turn, provides:
“(1) The statement of cost of compliance effect on small
businesses required by ORS 183.335(2)(b)(E) must include:
“(a) An estimate of the number of small businesses
subject to the proposed rule and identification of the types
of businesses and industries with small businesses subject
to the proposed rule;
“(b) A brief description of the projected reporting,
recordkeeping and other administrative activities required
for compliance with the proposed rule, including costs of
professional services;
“(c) An identification of equipment, supplies, labor and
increased administration required for compliance with the
proposed rule; and
6 Under ORS 183.310(10), a “[s]mall business” means a legal entity “formed
for the purpose of making a profit, which is independently owned and operated
from all other businesses and which has 50 or fewer employees.”
764 Fick v. Dept. of Fish and Wildlife
“(d) A description of the manner in which the agency
proposing the rule involved small businesses in the development
of the rule.
“(2) An agency shall utilize available information in
complying with the requirements of this section.”
Finally, under ORS 183.540,
“[i]f the statement of cost of compliance effect on small
businesses required by ORS 183.335(2)(b)(E) shows that a
rule has a significant adverse effect upon small business,
to the extent consistent with the public health and safety
purpose of the rule, the agency shall reduce the economic
impact of the rule on small business by:
“(1) Establishing differing compliance or reporting
requirements or time tables for small business;
“(2) Clarifying, consolidating or simplifying the compliance
and reporting requirements under the rule for
small business;
“(3) Utilizing objective criteria for standards;
“(4) Exempting small businesses from any or all
requirements of the rule; or
“(5) Otherwise establishing less intrusive or costly
alternatives applicable to small business.”
Thus, where the small business impact statement shows
a significant adverse effect on small business, the agency
must reduce the impact of the rules on those businesses to
the extent consistent with the regulatory purpose.
ODFW contends that it was not required to take
ameliorative actions under ORS 183.540 in this case
because “the small business statement that the department
prepared does not show that the rule[s] will have a significant
adverse impact on small businesses, which would trigger
the requirements of ORS 183.540.” Intervenors agree
with ODFW that the small business impact statement does
not show that the rules have a significant adverse effect
on small businesses. In addition, intervenors contend that,
even if the requirements of ORS 183.540 apply, ODFW has
taken appropriate steps and is not required to do anything
more to mitigate any negative effects of the rules.
Cite as 269 Or App 756 (2015) 765
We conclude that the agency complied with the
requirements of ORS 183.540. We explained the purpose of
that statute in Schlip v. Oregon Fish and Wildlife Comm., 75
Or App 462, 468-69, 707 P2d 606 (1985):
“ORS 183.540 was added to ORS chapter 183 in 1981 in
response to the small business community’s concern over
the cost of implementing administrative rules. The intent
was to give small businesses special consideration, because
larger businesses were thought to be able to better deal
with the cost of implementing rules, creating a disproportionate
regulatory impact and competitive disadvantage
for small businesses.
“* * * * *
“ORS 183.540 only operates when the economic effect
analysis required by ORS 183.335(2)(b) * * * reveals that
the rule would have a significant adverse effect on small
businesses. Here, * * * most, if not all, of the businesses
affected by the challenged rules are ‘small businesses.’
Thus, the concern over disproportionate regulatory impact
and competitive disadvantage attaching to ‘small business’
vis-à-vis ‘big business’—the basis for adopting ORS
183.540—is not present in this case. To begin exempting
the specific businesses at which the challenged rules are
directly aimed and which they are intended to regulate
would be inconsistent with the purpose of the rule.”7
(Citation omitted); see also Oregon Cable Telecommunications
v. Dept. of Rev., 237 Or App 628, 638-39, 240 P3d 1122 (2010)
(“[T]he objective of the legislature in enacting ORS 183.336
was to ensure that an agency recognize and evaluate the
potential economic effect of a proposed regulatory action on
small business—at least as to the particular factors listed
in the statute—at the time the rule is being developed and
7 Although the “general, unadorned requirement in ORS 183.335(2)(b)(E)
that a fiscal impact statement accompanying a notice of proposed rulemaking
include a statement of ‘the cost of compliance effect on small businesses affected’
has been in effect since 1981,” it was in 2005 that “the legislature enacted ORS
183.336, explicitly defining the components required to be included in the small
business impact statement.” Oregon Cable Telecommunications v. Dept. of Rev.,
237 Or App 628, 639, 240 P3d 1122 (2010). At that time, the legislature “also
amended ORS 183.540 to provide that it is the small business impact statement
specifically—rather than an agency’s economic impact analysis generally—that
determines whether an agency must make efforts to reduce the impact of the rule
on small business.” Id.
766 Fick v. Dept. of Fish and Wildlife
drafted—so that the agency can, if appropriate under ORS
183.540, take steps to address that impact in the rule itself.”
(Emphasis in original.)).
Here, the small business impact statement in the
FEIS sets forth that the
“types of businesses and industries with small businesses
subject to the rule would include Columbia River non-tribal
gillnet fishermen, fish dealers who receive Columbia River
commercial non-tribal salmon landings, recreational fishing
guides, food and beverage stores, gasoline stations,
sporting good stores, general merchandise stores, accommodation
businesses, food services and drinking places,
and marinas.”
The FEIS estimates the number of small businesses affected
or potentially affected by the rules to include 292 gillnet
permittees, 17 dealers who receive Columbia River commercial
nontribal salmon landings, 102 recreational fishing
guides, and an unspecified number of private charter boat
operators, as well as specific numbers of stores, marinas,
and places of accommodation for recreational fishers. Thus,
the rules potentially had adverse effects on some small businesses
(e.g., some commercial fishers and dealers) and favorable
effects on other small businesses potentially affected by
any increase in recreational fishing.
According to the small business impact statement,
the rules are not projected to change costs for reporting,
recordkeeping, or other administrative activities required
for compliance. As to equipment, supplies, labor, and administration
required for compliance,
“[u]nder the Management Plan, gillnet fishermen can continue
to fish with gillnets in designated off-channel areas
of the Columbia River during the transition period and long
term. Those who fish the Columbia mainstem can continue
to do so with gillnets through at least 2016 (the transition
period), after which they would be required to switch to
more selective gears and techniques that prove effective
during the transition period.”
However, the rules do not establish what gear types will be
allowed, and further rulemaking and economic analysis will
be required on that issue in the future, and “[m]ore accurate
Cite as 269 Or App 756 (2015) 767
numbers for costs and effectiveness will be determined by
ongoing research during the transition period prior to final
selection of alternative gears and rule making.” Nonetheless,
the statement notes that “[c]hanging type of gear would
likely mean incurring new equipment costs.” Furthermore,
“more fishers are needed to effectively use” some of the
options being studied. The statement includes a table setting
forth assumed costs of some of the gear options being
studied “for Columbia River commercial salmon fisheries,”
but notes that “the Management Plan assumes new funds to
assist in the implementation of the plan and to help reduce
costs to individuals.” The small business impact statement
describes the involvement of small businesses in the development
of the rules. Finally, it notes that “a less intrusive
or less costly alternative adaptation to only small business”
would not be consistent with the purpose of the rules.
We begin by noting that the FEIS may not have
established any significant effect on the class of small businesses
affected by the proposed rules. We implied in Schlip
that a “significant” effect on small businesses under ORS
183.540 is one that disproportionally affects or disadvantages
small businesses as compared with the type of regulatory
effect on larger businesses. 75 Or App at 468-69. Here,
the regulation of the time, place, and manner of fishing on
the Columbia River applies equally and with the same qualitative
effect on small and large businesses engaged in fishing.
Moreover, it may be that the adverse effect referred to
in the statute (“a significant adverse effect upon small business”)
is one that disadvantages the entire class of small
businesses affected by the rule. As noted, the effects on
small businesses by the rules under review are not common
to all of those businesses; some may be disadvantaged, others
are not.
In any event, we need not determine whether the
rules produce “a significant adverse effect upon small business”
as shown by the FEIS. Assuming that they do, we
nonetheless conclude that the agency did not violate the
requirements of ORS 183.540. We begin by noting that OAR
635-500-6705 sets forth a number of measures to mitigate
the effect of the rules on a group of small businesses—
commercial fishers—who are regulated under the policies.
768 Fick v. Dept. of Fish and Wildlife
Those measures include increased production and release
of hatchery fish in off-channel areas where it is contemplated
that commercial fishers will continue to use gill nets,
expansion of seasons and boundaries in off-channel areas
or establishing new off-channel areas to allow for increased
harvest in off-channel areas, development of selective fishing
gear and techniques for commercial mainstem fisheries,
and incentives to commercial fishers to expand development
and implementation of those gear and techniques. Thus, it
appears that, as part of the rulemaking process, the commission
mitigated the effect on commercial fishers of the
changes in the way that Columbia River fisheries would be
managed.
More importantly, however, the text of ORS 183.540
refutes petitioners’ suggestion that the statute obligates the
agency to not regulate small businesses whenever that regulation
harms small businesses. ORS 183.540 requires an
agency to take actions to reduce the economic impact of a
rule on small business only “to the extent consistent with
the public health and safety purpose of the rule.” When
a rule regulates individuals and small businesses, ORS
183.540 does not require the undoing of that regulatory
effect in order to further the cause of mitigation. Rather,
the statute requires limiting the economic effect of a rule
on small business when the expense of complying with the
rule is substantial—but not at the cost of excusing compliance
with the substance of the rule. See Schlip, 75 Or App
at 469 (“To begin exempting the specific business at which
the challenged rules are directly aimed and which they are
intended to regulate would be inconsistent with the purpose
of the rule.”).
The purposes of the ODFW rules are set forth in
OAR 635-500-6705. Significant among those purposes are
the promotion of “the recovery of ESA-listed species and
the conservation of wild stocks of salmon, steelhead, and
sturgeon on the Columbia River” and the enhancement of
the “overall economic well-being and stability of Columbia
River fisheries in Oregon” in a “manner that is consistent
with conservation and does not impair the resource.” It is
clear from the FEIS in this case that the agency considered
the requirement of ORS 183.540 that it reduce the economic
Cite as 269 Or App 756 (2015) 769
impact of the challenged rules on small businesses and, as
to that requirement, aside from the mitigation measures
included within the rules, the agency concluded that “a less
intrusive or less costly alternative adaptation to only small
business” would not be consistent with the purpose of the
rules. Thus, the agency considered the effect of the rules
on small business and included mitigation measures within
the rules but declined to take additional actions to reduce
the effect of the rules on small business. The agency was not
required to act in a manner directly inconsistent with the
purpose of the rules and did not violate the statute by declining
to do so. Accordingly, we reject petitioners’ challenge.

Outcome: OAR 635-500-6700 to 635-500-6765 held valid.

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Defendant's Experts:

Comments: