vs. ) CASE NO. 95-5066
Respondent. )
Robert E. Meale, Administrative Law Judge of the Division of Administrative Hearings, conducted the final hearing in Bradenton, Florida, on August 22, 1996.
For Respondent: Louise T. Sadler
The issue is whether Petitioner is entitled to additional compensation for fishing nets that he sold to the State of Florida under the Net Buy-Back Program.
By Net Buy-Back Application filed with Respondent, Petitioner sought compensation for nets that he proposed to sell to the State of Florida. The State of Florida paid him for one set of eight nets, and this case involves a second set of eight nets.
At the hearing, Petitioner called one witness and offered into evidence three exhibits. Respondent called one witness and offered into evidence nine exhibits. All exhibits were admitted.
The parties did not order a transcript.
Petitioner is a commercial fishers who is an affected person under the Florida Net Ban, which is set forth in the Florida Constitution, Article X, Section 16.
Section 370.0805(5), Florida Statutes, which became effective on July 1, 1995, establishes the Net Buy-Back Program. The program enables eligible persons previously engaged in the commercial fishing industry to sell fishing nets to the State of Florida. The Legislature appropriated $20 million to the Seafood Workers Economic Assistance Account (the Account) to fund the payments authorized in Section 370.0805, as well as agency expenses in administering the program. Section 370.0805(3)(b) directs Respondent to purchase nets "according to the availability of funds on a first-come, first-served basis determined by the date of receipt of each completed application."
By Net Buy-Back Application signed on July 5, 1995, and filed with Respondent on the same day, Petitioner applied to sell nets to the State of Florida. His application form is completely filled out and shows two saltwater-product license numbers, one for an individual and one for a vessel.
The application form calls for the applicant to list the "TOTAL NUMBER OF YARDS OF EACH NET TYPE THAT YOU INTEND TO SELL." The form lists five categories of nets: gill (49 meshes or less); gill (50 meshes or more); beach, purse, seine; trawl; and trammel. The former gill net is a shallow-water gill net. The latter gill net is a deepwater gill net.
Petitioner listed on his application 800 yards of shallow-water gill nets, 4600 yards of deepwater gill nets, two trawls, and 600 yards of trammel nets.
After checking a data base maintained by the Department of Environmental Protection, Respondent found only one of Petitioner's two listed saltwater-product licenses. Respondent thus processed Petitioner's application as though he had only one license.
By letter dated August 8, 1995, Respondent advised Petitioner that he was eligible "to receive compensation for 8
nets" and set an appointment for him to turn in the nets on September 6, 1995.
On September 6, 1995, Petitioner appeared at the appointed site with nets to sell to the State of Florida. He delivered 4800 yards of seine nets, for which he received a voucher for $27,998.40.
Prior to paying the voucher, Respondent discovered that the Account might be exhausted before Respondent had paid for all of the nets that fishers might lawfully seek to sell to the State. Respondent thus dishonored Petitioner's voucher, as well as the vouchers held by numerous other fishers, while Respondent considered changes in its administration of the program.
The purpose of the Net Buy-Back Program, as provided by Section 370.0805(5)(a), Florida Statutes, was to allow, "[a]ll commercial saltwater products licensees and persons holding a resident commercial fishing license" to apply to Respondent "to receive economic assistance to compensate them for nets rendered illegal or useless by the constitutional limitation on marine net fishing." The emphasis was on economic assistance. Section 370.0805(5)(a) authorizes Respondent to make payments only "in nonnegotiable amounts not intended to reflect the actual value of the nets."
Section 370.0805(5)(a) assigns payment amounts of $3500 for beach, purse, or seine nets of at least 600 yards in length;
$500 for trawls and shallow-water gill nets of at least 600 yards in length; and $1000 for trammel nets of at least 600 yards in length and deepwater gill nets of at least 600 yards in length.
Section 370.0805(5)(a) states that, except for trawls, nets of less than 600 yards in length shall be "valued proportionately."
Section 370.0805(5)(c) limits the number of nets that a commercial fishers could sell, based on his annual earnings from the sale of eligible saltwater products. The limits range from four nets, for licensees whose annual earnings average from $2500 to $4999 in earnings, to ten nets, for licensees whose annual earnings average more than $30,000.
Respondent relied on another data base from the Department of Environmental Protection to determine the average yearly earnings of applicants. The Department of Environmental Protection maintains records of each licensee's trip tickets, which disclose earnings.
The only other limit in the statute as to the type and number of nets to be purchased is that, under Section
370.0805(5)(d), "[n]o licensee may be paid for more than two. . . trawls."
Respondent reviewed the applications that it received from the initial 951 fishers who filed applications. This was a large majority of the 1104 fishers who would eventually sell their nets to the State under the Net Buy-Back Program. The purpose of the review was to determine whether the funds in the Account would be sufficient to cover the nets that the State was to be purchasing.
Respondent found from the applications that seine nets represented only about five percent of the nets that fishers intended to sell to the State. Relying on this information, Respondent calculated the potential encumbrance of $6.5 million on the Account, based on an average payment of $1000 per net.
Applications contained few seine nets because commercial fishers initially resisted selling their best nets to the State of Florida. The Net Buy-Back Program provided for payment of only $3500 per seine net, even though many seine nets were worth $10,000. And commercial fishers were optimistic at first that their legal challenges to the constitutional amendment would succeed.
Applying liberal eligibility criteria, such as calculating the number of nets that each applicant could sell based on the number of licenses that he held, Respondent raised its estimate of the potential encumbrance to $8.775 million. But in recalculating the potential encumbrance on the Account, Respondent still assumed that the average payment per net would be $1000.
Respondent began receiving nets on August 3, 1995. Through the first three weeks of August, Respondent purchased seine nets in roughly the same five-percent mix that it had used in calculating the potential encumbrances on the Account. After this point, however, fishers started turning in much larger numbers of seine nets than they had listed in their applications.
During this first phase of the program, Respondent paid fishers for whatever types of nets they presented at their net buy-back appointment. Respondent would pay a fishers entitled to sell eight nets for seine nets if he turned in seine nets, even though he had listed only gill nets on his application.
This policy jeopardized the solvency of the Account because the payments to fishers turning in all seine nets were
3.5 times greater than the figures that Respondent had used in calculating the potential encumbrance on the Account. From the
fishers's perspective, the program acquired an element of chance, as applicants with earlier appointment times-which did not necessarily correspond with earlier-filed applications-netted fine catches of economic assistance at the expense of their counterparts, upon whom destiny had bestowed later appointment times.
By late August, the applicants, less sanguine about their litigation prospects (as the fishers suggest) and more inventive in recasting old gill nets as seine nets (as Respondent suggests), began turning in seine nets in large numbers, so that Respondent was purchasing nearly all seine nets. Eventually, the cumulative effect of this trend raised the total mix of seines purchased from five percent, during the first three weeks, to sixty percent.
After a brief period of trying to stay the course, Respondent decided on September 6, 1995, that it had to take action or else the Account would be exhausted before the State had purchased all of the nets listed on the applications. Respondent immediately suspended further payments on issued vouchers and applied new criteria to persons holding unpaid vouchers, as well as to applicants who had not yet received vouchers. This action stopped payment on all vouchers issued from around August 28 through September 6.
At the time that it stopped payment on outstanding vouchers, Respondent had approved the purchase of nets from about 750 fishers. About 450 of these applicants received their money prior to the suspension of payments, leaving about 300 applicants, including Petitioner, holding worthless vouchers. However, a large number of the 450 applicants who were actually paid for their nets prior to September 6 sold a relatively large percentage of gill nets rather than seine nets.
As of September 6 (retroactive to August 28), Respondent began the second phase of the Net Buy-Back Program.
In this phase, Respondent paid for seine nets, but only up to the greater of the number of seines shown on the application or the number of seines based on past use of seines. Respondent determined the latter figure from the trip tickets, which also contained information as to types of catch, from which Respondent could infer the type of net used. As in the first phase, Respondent continued to insist the fishers turn in seines if they were being paid for seines.
The 300 fishers holding dishonored vouchers filed a class action suit. Petitioner's voucher for his first eight nets was covered in this legal action and is not the subject of this
case. Petitioner received slightly more than $10,000 on his claim for about $28,000.
In the meantime, Respondent discovered that Petitioner in fact held two licenses, as he had represented on his application. By letter dated October 5, 1995, Respondent advised Petitioner that it had reconsidered his application and determined that he had the right to sell 16 nets, not eight nets, but none could be a seine net.
Respondent issued Petitioner a new voucher for these additional eight nets. This voucher is in the amount of $7996.80 for 4800 yards of deepwater gill net. On October 13, 1995, Petitioner turned in eight nets and received his money.
Petitioner's application lists no seine nets. His application, as noted above, lists one and one-third shallow- water gill nets (i.e., 800 yards), eight deepwater gill nets, two trawls, and one trammel net.
Petitioner claimed that he turned in seine nets. If turned in during the first or second phase of the program, Respondent would have treated these nets as seine nets. But it is Petitioner's unique fortune to have been intimately involved with all three phases of the Net Buy-Back Program.
Evidently dissatisfied with the effects of the restrictions introduced by the second phase of the program, Respondent added a third phase by promulgating an emergency rule defining "seine nets," effective October 2, 1995.
This third phase, which did not change Respondent's policy of paying for the greater number of seines as shown on the application or the trip tickets, restricted the kinds of nets that fishers could turn in as seine nets.
Rule 38BER95-1 provides that, for the purpose of "the implementation of the Net Buy-Back Program" described in Section 370.0805(5):
"Gill net" means a wall of netting suspended vertically in the water, with floats across the upper margin and weights along the bottom margin which captures fish by entangling them in the meshes, usually by the gills. Any net offered for the net buy- back program that consists of at least fifty- one percent (51 percent) gill net, shall be considered a gill net.
"Seine" means a small-meshed net
suspended vertically in the water, with floats along the top margin and weights along the bottom margin, which encloses and concentrates fish, and does not entangle them in the meshes. No net offered for the net buy-back program shall be considered a seine if the wings are composed of entangling mesh.
* * *
THIS RULE SHALL TAKE EFFECT IMMEDIATELY UPON BEING FILED WITH THE DEPARTMENT OF STATE.
Effective Date: October 2, 1995
Under the emergency rule, Respondent's nets were not seines, but were gill nets because they were at least 51 percent, by area, gill net.
At the time of the final hearing, Respondent estimates that the Account balance is about $300,000 with about 160 contested claims remaining to be resolved.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter. Section 120.57(1), Florida Statutes. (All references to Sections are to Florida Statutes.)
In his original application, Petitioner requested that the State of Florida purchase one and one-third shallow-water gill nets (i. e., 800 yards), eight deepwater gill nets, two trawls, and one trammel net.
Petitioner got what he requested. The issue in this case is whether he is entitled to get what other fishers got from this program-i. e., more than he requested.
Respondent complains that unscrupulous fishers altered gill nets to take unfair advantage of the program and their fellow fishers. However, Respondent invited insolvency by not paying fishers on the same basis that it calculated the potential encumbrance. If Respondent calculated the potential encumbrance based on the information contained in the applications, then it had to purchase nets based on what was contained in the applications. If Respondent wanted to purchase nets based on some other method, then it had to recalculate the potential encumbrance based on the same method.
But this case does not turn on balancing the acts and omissions of Respondent versus those of Petitioner and other fishers. Nor does this case turn on ensuring that Petitioner receives the same treatment as given those fishers who, by chance, received earlier appointment times, even though they may have filed their applications after Petitioner filed his. If ample funds remained in the Account, perhaps Petitioner could prevail after such analysis. But insolvency loomed when Respondent changed the rules at each new phase, and these changes protected the many fishers whose nets had not yet been purchased.
Under these circumstances, Petitioner fails to prevail in his claim for additional compensation for any of three reasons. First, he received what he asked for in his application. As this program demonstrates, it is difficult to administer an economic-assistance program when the public agency insists on giving the applicants more than they apply for. This limit should have been in effect during all three phases of the program.
Second, Petitioner has turned in all the seine nets that he is entitled to turn in, based on his historic use of seine nets, as reflected in his trip tickets. The effect of this limitation, which governed the second and third phases of the
program, is not entirely clear in this case. But it is Petitioner's burden to prove entitlement to more compensation
and, thus, satisfaction of the requirement that his trip tickets reveal sufficient past use of seine nets. Petitioner has failed to meet this burden.
Third, Petitioner did not turn in seine nets, as such nets were defined by the emergency rule whose promulgation marks the start of the third phase of the program. This rule was in effect at the time of Petitioner's net buy-back appointment.
The imposition of any of these three requirements is to some extent unfair to Petitioner. No other fishers selling seines was required to have listed seines in his application, provided the trip tickets revealed past use of seines. Fishers selling seine nets in phase one were not limited by the extent of past use of seine nets, as reflected on their trip tickets. Fishers selling seine nets in phases one and two were not required to turn in nets meeting the requirements of the emergency rule.
The unfairness of the situation is exacerbated because, if Respondent had not incorrectly dropped one of Petitioner's licenses, he probably would not have encountered the restrictions of phase three, although the trip-ticket limitation in phase two probably would have prevented his sale of the seines. It is impossible to determine on these facts the effect on Petitioner's claim if Respondent had complied with the law and purchased nets in the order that it received applications.
But, at this point in the Net Buy-Back Program, fairness requires consideration of the interests of not only Petitioner and Respondent, but also the remaining applicants. And Petitioner has not proved his entitlement to additional compensation for the reasons stated.
RECOMMENDED that the Department of Labor and Employment Security enter a final order dismissing the petition for additional payment from the Account.
ENTERED on October 3rd, 1996, in Tallahassee, Florida.
ROBERT E. MEALE
Filed with the Clerk of the Division of Administrative Hearings this October 3rd, 1996.
Secretary Douglas L. Jamerson Department of Labor and
Edward A. Dion General Counsel
Louise T. Sadler Senior Attorney
All parties have the right to submit written exceptions within 15 days from the date of this recommended order. Any exceptions to this recommended order must be filed with the agency that will issue the final order in this case.
