Until 2014, Fisherman’s Finest Holdings, Inc. and a collection of related Washington State companies owned two fishing vessels, American No. 1 and U.S. Intrepid, both of which had the necessary entitlements, endorsements, permits, and approvals under the Magnuson-Stevens Act to engage in commercial fishing within the United States’ Exclusive Economic Zone (EEZ). In November 2014, Fisherman’s Finest arranged to construct a third vessel, America’s Finest.

In 2017, Fisherman’s Finest obtained permission to designate America’s Finest as a replacement vessel for American No. 1. But soon thereafter, the U.S. Coast Guard determined that America’s Finest was constructed using foreign steel and therefore violated a statutory provision requiring that the vessel must be “built in the United States.” 46 U.S.C. § 12113(a). The vessel owner lobbied Congress for a waiver to the statutory requirement, which Congress subsequently passed. But Section 836 of this Act limited the amount of fish that any of Fisherman’s Finest’s three vessels could harvest and process in the restricted areas.

Fisherman’s Finest contended that these fishing restrictions limited its commercial activities on the three vessels to its historical fishing amounts, and deprived the owners from any increased fishing capacity using the vessels, in violation of the Fifth Amendment. Fisherman’s Finest filed a taking suit in the U.S. Court of Federal Claims, asserting that the Coast Guard’s fishing restrictions amounted to an uncompensated taking of its full fishing rights under its endorsements, licenses, and permits and undervalued the vessels.

The CFC trial judge dismissed the lawsuit, holding that, because Fisherman’s Finest possessed no constitutionally protected property interest in its fishing rights, plaintiffs had failed to state a legally cognizable taking claim. On appeal, the Federal Circuit affirmed, holding that “fishing permits and licenses issued pursuant to the Magnuson-Stevens Act are revocable privileges, rather than compensable property interests.”  The Federal Circuit further held that there is “no inherent cognizable property interest in the use of vessels for fishing within the EEZ.”

The Federal Circuit explained that the Magnuson-Stevens Act statutory language “informs the public’s expectations and form the ‘existing rule or background principle of federal law that inhere in [Fisherman’s Finest]’s title” to its vessels. And the statutory scheme, the Federal Circuit noted, explicitly states that the issuance of any fishing right or permit issued under the Act “creates no property right in the permit.” See 16 U.S.C. § 1853 (d)(3)(D) (2000).

Read full decision here.