ties. That is not an appropriate basis for the activities involved here.

The industry throughout this country, I believe, and at least in our area and up and down the east coast, has time and time again asked for the funds to be available for a fair enforcement, a uniform enforcement, so that they can trust the system and so they can operate under it.

In a communication dated August 28, 1989, from James W. Brennan, Assistant Administrator for Fisheries, in response to a request to Mr. Studds, he wrote, "The Court in Avo-Gonzales United States v. Gonzales 536 F. 2d 652 also noted that the strict liability nature of the offenses was tempered by Congress through its intent that culpability be considered in determining the amount of the penalty as opposed to the fact of liability. This was carried forward in the Magnuson Act, which specifically requires the degree of culpability to be taken into account in determining the penalty amount."

At the time this was done, the maximum penalty was $25,000. We were entering into a new era in fisheries, a new era for the Department of Commerce, and a new era for the fishing community, and a new era for enforcement, which has not been looked at, once again, from that aspect.

May I suggest the loss of catch penalties to the amount of $100,000, potential loss of right to do business, is not a tempering when a trip for scallops to be legal under the current plan, just as an example, must average a specific size and may contain hundreds of thousands of pounds of individual scallops.

And when the plan requires

Mr. FRANK. Our bearer of ill tidings just entered the room. That is just signaling us that we have to vote in 15 minutes. Go ahead. Mr. MICKELSON. The regional counsel's office has used the power of strict liability and penalties and the threat of appearing before the administrative law judge, where everybody knows there is no chance to force settlements on fishermen and processors.

Its attitude can best be expressed by Attorney Charles Juliand's quote in the New Bedford Standard-Times, in which he said, "When we do catch scallop smugglers, we are going to hammer them and keep on doing it." If one is to be treated like a smuggler, one should have the rights of a smuggler.

Thank you for your cooperation and courtesy.

[The prepared statement of Mr. Mickelson follows:]

PREPARED STATEMENT OF HARVEY B. MICHELSON, ESQ.

TESTIMONY BEFORE THE SUCOMMITTEE ON ADMINISTRATIVE LAW
AND GOVERNMENTAL RELATIONS

October 1, 1992

It is indeed an honor to be invited to testify on a matter that I have been attempting to bring to the attention of the legislature, the Department of Commerce, and the New England Fisheries Management Council and that is specifically the fairness of the administrative hearing process as it relates to the enforcement of the Magnuson Fishery Conservation and Management Act. This opportunity will give a clear signal to the domestic fishing industry the Department of Commerce and their empowered investigators, counsel and administrative judges that their activities will be subject to scrutiny and indeed may be the catalyst for legislative changes to the Magnuson Act in the near future.

In order to consider the fairness of the administrative law process, one should identify whether the underlying levels of actively leading to the ultimate hearing are fair and equitable.

The Magnuson Act imposes strict liability on individuals. What this means is that if physical possession of a nonconforming product can be proven, the possessor is guilty of the violation despite the fact that they have no knowledge that they possess the illegal product or intention to violate the law or regulation. The statutory language is included within 16 USCA 185.71 (1) F. "It is unlawful to sell, purchase, import, export, or have custody, control or possession of any fish taken or retained in violation of this Act or any regulation, permit or agreement". In the drafting of the Act, the requirement of culpability intent or exercise of due care or mens rea were not included. When we have raised the question as to whether culpability should be applied to the statute we have been advised by the Department of Commerce and Regional Counsel for the Department of commerce that we are not dealing with a criminal statute and that strict liability is therefore appropriate. It is well founded that merely by entitling a statute as civil rather than criminal should not automatically transform the offense into strict liability. Rather, the severity of the punishment for the violation of a statute should be considered when determining what type of protections and culpability standards should be applied. Within certain limits the government has the power to create regulatory statures under which absolute liability exists and no mens rea is required. This power allows the government to protect the "public welfare" by balancing the interests of the individual violator and the public good. Despite the fact that the penalties that are now authorized under the Act are currently being enforced to the maximum of $100,000 per violation and that there is pending changes which will deprive the vessel owner of the right to fish and the fish processor from engaging in business there is no requirement of culpability.

The process of enforcement starts when an armed investigator from the National Marine Fisheries Service enters into the plant of a buyer or onto the fishing vessel. Under current regulations he is empowered to do so, without a warrant, if he believes there may be violation of the Magnuson Act. His investigative activities are uncontrolled and when questioned as to his reasons for entering the premises or vessel, the investigator will use the threat of interference and possible criminal sanctions, all of which is authorized under the statute. In the event that the investigator believes that there is a violation of the Act or regulations promulgated thereunder, he can seize the catch of a vessel or the product of a processor forthwith, remove it from the owner, cause the proceeds to be deposited with the Department of Commerce and be assessed a penalty up to $100,000 without the benefit of having had a warrant issued for the search or a hearing prior to removal of product and sale. Please keep in mind that none of this activity relates to prevention of a health hazard to the public. Again, he has gone through the deprivation of his property, e.g. a trip of scallops worth $40,000-$50,000 forces a penalty assessment of as much as $100,000 and then faces the Administrative Laws system which will apply the strict liability standard. It is entirely possible for both a fishing vessel and a buyer/processor to suffer penalty assessments of the magnitude indicated for the same incident.

From the time of alleged violation and seizure, there is a paper chase which includes a Notice of Violation, which is transmitted to the alleged violator with an assessed penalty and usually offers with it an opportunity to settle at a reduced penalty. At this particular stage of the proceedings, he must make a decision whether to pay the offered penalty or retain counsel, face an increased penalty if he goes to an administrative hearing because he knows that anyone who has exercised his right to a hearing has been found by the court to be a violator. There is a general distrust of the system and people are being forced, because of the operation of the entire system from enforcement to hearing, to accept severe punishment because their predecessors have taught them that it will be more severe after a hearing before the Administrative Laws Judge, often times referred to as the "Hanging Judge". That expectation combined with the cost and time involved to reach that anticipated result makes the effort futile, rather than fair. Because one judge appears at all of the sessions, and it appears that one judge hears all violations under the Magnuson Act and that all findings are in favor of the Commerce Department, there is a perception of unfairness.

May I suggest that we have situations where the system has gone bad due to events fostered by the standards for wrongdoing, the penalties applicable thereto, the lack of due process in and the areas of search and seizure and the taking of property. Many of the extraordinary powers granted to enforcement and supported by the Regional Counsel's office have been explained as necessary for enforcement because there is not enough money available too

the department for enforcement activities. That is not an appropriate basis for the activities involved here.

In a communication dated August 28, 1989 from James W. Brennan, Assistant Administrator for Fisheries in response to my request to Congressman Studds to air the issues I have raised here, Mr. Brennan wrote, "The Court in Avo-Gonzales U.S. vs. Gonzales 536 F.2nd 652 also noted that the strict liability nature of the offenses was tempered by Congress through its intent that culpability be considered in determining the amount of the penalty (as opposed to the fact of liability.) This was carried forward in the Magnuson Act, which specifically requires the degree of culpability to be taken into account in determining the penalty amount.

"

May I suggest that loss of catch, penalties to the amount of $100,000 and potential loss of right to do business, is not a tempering for inclusion of absolute liability when a trip of scallops to be legal under the current scallop plan, must average a specific size and may contain in a normal trip 350,000 individual scallops and when the plan requires legally sized scallops to be caught so that average can be met.

The Regional Counsel's office has used the power of strict liability and penalties and the threat of appearing before the Administrative Law Judge, where everyone knows that there is no chance, to force settlements on fishermen and processors. It's attitude can best be expressed by Attorney Charles Juliand's (Office of General Counsel, Northeast Region, Gloucester) quote in the New Bedford Standard-Times in which he said, "When we do catch (scallop smugglers) we're going to hammer them. And we're going to keep on doing it". If one is to be treated like a smuggler, one should have the rights of a smuggler.

Thank you for your cooperation.

Respectfully submitted,

Harvey B. Mickelson

Mr. FRANK. We note who Mr. Reed, who is very much interested in fishing, has joined us.

We are going to break now and vote and go back. Mr. Reed and Mr. Edwards, at least a couple of us, will be back. We will have to recess for about 10 minutes, and then we will be back.

[Recess.]

Mr. FRANK. We will reconvene. We will be joined by my colleagues shortly.

Next we will hear from Mr. Barnet.

STATEMENT OF DAVID S. BARNET, ESQ.

Mr. BARNET. Thank you, Mr. Chairman, for the opportunity to address the committee.

My formal comments have been previously

Mr. FRANK. Without objection, they will be made part of the

record.

Mr. BARNET. Thank you, sir.

I would in summary like to address one of the major problems that we have in the fleet of New Bedford, and that is the system: How does the thing work, how does it operate, what is good about it, what is bad about it.

Without getting into the propriety of the particular regulation that we are talking about, which could take another month of argument as to the pros and cons of the particular regulatory scheme, but taking it as given that we have a particular regulatory environment

Mr. FRANK. I should point out for jurisdictional purposes for this subcommittee, that is what we have to do, because we don't have any substantive jurisdiction here. We have the procedural. So that is exactly what we have to do.

Mr. BARNET. Thank you, sir.

What we have is a situation where the Department of Commerce makes the rules and the regulations. It is the Department of Commerce who decides what the regimen is, what the standards are that the fleet has to adhere to. We then have the Department of Commerce who runs the enforcement program. They have got the agents, they have got the Rambos out there on the docks with the guns and bulletproof vests, waiting to meet every scalloper who comes to port, waiting to do their sampling, which we feel is questionable, the methods they do, but that is one man's opinion.

They give the boat a ticket. They write it up. They say, you have got a violation, your scallops are too small. If they feel they are too small by a certain standard, they will confiscate the entire trip. The trip is gone, the crew goes home unpaid, the boat owner has the expenses of the trip to handle.

The point is, it is the Department of Commerce who makes the rules, the Department of Commerce who enforces them.

Now a notice of this action goes to the regional counsel's office. In my situation, in my practice, that is in Gloucester. Some 3 to 6 months after the event, when it is stale, when the facts are hard to come by, when the crew has left the vessel involved and gone on to another boat, a so-called NOVA, notice of violation and assessment of civil penalties is issued by the regional counsel's office.