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California's Only Oyster Cannery Denied Relief; May Face Closure

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By William Peacock, Esq. on September 06, 2013 3:54 PM

There is only one place in the Golden State than harvests oysters, and soon, there may be none. Shucks.

Kevin Lunny and his family purchased the state's only oyster farm, then known as Johnson's, and renamed it Drakes Bay in 2005. At the time of the purchase, they knew about the possibility of the lease of federal land expiring seven years later.

Time's up, and that notice of possible closure was a major part of the majority's holding in denying a preliminary injunction.

Injunction Sought During Legal Battle

The oyster farm sought an injunction to allow the business to continue running while it argued that Secretary of the Interior Ken Salazar had "violated constitutional, statutory, regulatory, or other legal mandates or restrictions" when he decided to terminate the lease in 2012.

Unfortunately, the majority opinion, penned by Judge McKeown, felt that the farm was unlikely to succeed on the merits, even though it would face great harm from shutting down in the meantime.

Secretary's Discretion

According to McKeown, "Congress authorized, but did not require, the Secretary to extend the permit. Congress left the decision to grant or deny an extension to the Secretary's discretion, without imposing any mandatory considerations. The Secretary clearly understood he was authorized to issue the permit; he did not misinterpret the scope of his discretion."

When Secretary Salazar made his decision, he did so on the basis of an environmental study, one that troubled Congress enough that the National Academy of Sciences was directed to review the study. The NAS pointed out several instances where the report "lack[ed] assessment of the level of uncertainty associated with the scientific information ..." The study was revised in response to the NAS's concerns.

The questionability of the study was of no import, however, as McKeown doubted that federal law even required such a study. The majority also was unconcerned by the Secretary's failure to wait a full thirty days after publishing the study (for notice and comment) before making his decision, as the Secretary received and addressed Drakes Bay's concerns.

Arbitrary and Capricious!

The dissent called the Secretary's decision "arbitrary and capricious," and would have granted the injunction.

Judge Watford came to that conclusion based on the legislative history of the 1976 law that designated Drake's Estero as a federally-protected wilderness. One senator remarked, "Established private rights of landowners and leaseholders will continue to be respected and protected. The existing agricultural and aquacultural uses can continue."

Other comments made during the legislative hearing reflected the perception that oyster farming had little environmental impact on the area.

In 2005, Congress passed a law, § 124, that stated, "notwithstanding any other provision of law, the Secretary of the Interior is authorized to issue a special use permit ..." to allow oyster farming. No provision of the law prohibited oyster farming at that point, other than a recent federal (mis)interpretation of the 1976 law that sought to wipe out those farms.

The dissent's argument? Congress' only possible purpose in passing that 2005 law would be to override the agency's recent misinterpretation of the 1976 law's intent.

It's Not Over

Drakes Bay plans to seek an en banc rehearing, according to the Marin Independent Journal. Barring that, it is unknown whether they will be able to reopen after a protracted court battle.

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