We are entitled, by the way, to pay up to $3,000 in terms of a claim in an instance like that, and if Mr. Kvilhaug has been wronged, I will see that he is compensated.

Mr. FRANK. I appreciate that.

Let me also say, I don't know how long it has been $3,000. It may be one of those statutes that needs to be amended.

I would also ask you, because I would think if we are talking about your ability to pay out, this subcommittee will have at least partial jurisdiction. Will you look to see if your authority to pay out or to be paid above $3,000, if we are talking about entire fish catches, it might be a 50-year-old statute. I appreciate your looking into that, and also looking into whether in the future we can increase that in the future.

Mr. CAMPBELL. Congressman Frank, we will examine that. I think it is important to put this all in context.

NOAA and the Congress of the United States has a stewardship responsibility over a publicly held resource. We are to fulfill that stewardship, keeping in mind our primary constituency, and that is the fishermen. But our responsibility is to protect the fishermen from an overexploitation of the resource that ultimately will rebound to their detriment and to the detriment of the people of the United States. And that is the basic spirit under which the Magnuson Act was promulgated, in an effort to preserve and steward a very important, valuable resource of the American people.

We also have responsibility for enforcement of the Northern Pacific Halibut Act, the Lacey Act, the Marine Mammal Protection Act, the Endangered Species Act, just to name a few. The majority of those cases involve 32 fisheries that are managed under the Magnuson Act, each with its own set of regulations, promulgated by councils that are a product of that particular location. And so they write the rules under which they are governed, truly the governed govern.

NOAA's consolidated civil procedure rules govern proceedings for assessing civil penalties under all of these statutes and regulations, and are attached to my testimony.

Also attached is a discussion paper that I think will be very helpful. It was prepared by my staff a couple of years ago. It is a comprehensive description of case-processing procedures from the time that a violation is documented through hearing and final decision. Briefly, a violation may be detected either by a National Marine Fisheries officer, a Coast Guard officer-by the way, in the case of the Coast Guard and the scallop incident that was talked about, sometimes the Coast Guard has other missions there, looking for drugs, for example and I think that that instance their motivation was not in terms of the scallop discard, but that other things might have been involved in the discard.

What would happen in a case like that is that a NOAA attorney would review that case when it got back, if in fact those allegations were corroboratable, I would think that that would be a case that would be of the type that we would want to dismiss.

But there is a review that also occurs in the field office by the regional enforcement agents themselves. The regional enforcement officer reviews the case, checks it for completeness, checks whether or not there are prior violations on the part of the particular party

that was involved; and if the file is complete, then he forwards it to the corresponding regional NOAA General Counsel's Office.

NOAA General Counsel is responsible for prosecution of these civil penalty cases. An assigned attorney reviews each case for legal sufficiency in accordance with the enforcement policy published in NOAA's National Enforcement Operations Manual, which I will refer to as NEOM. Under these standards and procedures set forth in NEOM, the case attorney may, one, decline prosecution; two, return the case to the enforcement officers for further investigation; three, downgrade to a written warning-and as you will see by the statistics, a number of these cases go out by written warning; four, refer the case to headquarters for action in peculiar instances; five, initiate a civil penalty action; or number six, they can refer the case to the Department of Justice for judicial actions.

And in the case of judicial actions through the district court, both in terms of appeals and initial actions, we have a very good record. In every instance where an action has been appealed to the district court, NOAA's action on the ALJ level has been upheld. In only two instances has the fine amount been reduced.

The case attorney initiates a civil penalty action by issuing a charging document known as a notice of violation; we refer to that as a NOVA. NOAA's procedural rules set forth the specific content and procedural requirements of the NOVA. In addition, the NEOM establishes standards which the case attorney must meet before issuing the NOVA.

A NOVA is issued only when, in the attorney's judgment, the case shows that it can be established by a preponderance of the evidence that the respondent has committed a violation and a civil penalty is warranted. In addition, the attorney must decline prosecution if evidence is insufficient; and he may decline it if he determines that no valid purpose of law would be served by going forward.

The attorney issues the NOVA either by certified mail or by personal service, and encloses a copy of the NOAA procedures. The NOVA specifies the facts believed to show a violation, the law allegedly violated, and the amount of the penalty assessed. It also enumerates the respondent's procedural rights and options under the circumstances.

The respondent must respond within 30 days of receipt of the NOVA. The respondent may, during this time, pay the penalty, request a hearing, seek to have the NOVA amended, or request an extension of time to respond.

The case attorney determines the appropriate penalty to assess in the NOVA with guidance from NOAA's civil penalty guidelines. NOAA's regional general counsel office develops the guidelines for the specific fishery that he is required to tailor it to, and that is subsequently approved by the headquarters. This is done with input from the National Marine Fisheries Service, the Coast Guard, and from the Fisheries Management Councils themselves. The penalty must be fair, but provide sufficient deterrence; that is, it must represent more than just a cost of an ordinary day's busi

ness.

Ordinarily, the guidelines provide the flexibility necessary to reflect all relevant factors, including those which the Magnuson Act

requires to be considered. The single most important factor is the respondent's history of violations; both aggravating and mitigating circumstances are also factored in, as is the value of the catch and whether or not the catch was seized.

NOAA's procedural rules address consideration of the respondent's ability to pay. The respondent is responsible for supplying financial information if he is making a determination that he does not have the ability to pay, and we have provided them with simplified forms.

Each region utilizes what is called a summary settlement schedule. For minor, first-time violations, the enforcement agent may issue settlements to alleged violators based upon the lower fixed penalty amount for specified violations on the schedule. A person is issued a summary settlement form and, within 20 days, must elect to pay the summary settlement amount or to wait for a formal NOVA process.

This system operates somewhat like the traffic ticket system or magistrate's bail schedule. It offers a person who does not wish to contest the facts the chance to settle the matter quickly and informally. These are done, by the way, only in small dollar amounts in an effort to streamline the process.

If a respondent requests a hearing with respect to the NOVA, the Office of the Administrative Law Judge dockets the request. All hearings are formal and on the record. A respondent may either be represented by counsel, or he can be represented by another individual, or represent himself. A prehearing order from the ALJ requires the party to put their preliminary issues-to submit a preliminary issues and procedures document, which essentially describes their case to the ALJ.

The ALJ reviews the issues, then makes his decision. There is cross-examination, all of the normal requirements under the ALJ system, and then the parties have an opportunity to submit briefs after the fact.

After a final decision is made, the Administrator, under statute, has the following grounds upon which he can overturn the action of the ALJ. No. 1, the finding of the material fact is clearly erroneous; No. 2, necessary legal conclusion is contrary to law or precedent; No. 3, a substantial important question of law or policy of discretion is followed; or No. 4, there is a prejudicial procedural error. No evidence is presented before the Administrator on his appeal; this is important. NOAA's appeal process procedures are patterned directly on those recommended by the Administrative Conference of the United States. If neither party appeals to the Administrator within the prescribed period, or the order is final, the respondent may appeal an adverse decision to the Federal district court. If the agency loses at the Administrator's level, we have no right of appeal.

All ALJ and Administrator decisions, as well as decisions of the Fish and Wildlife Service, are available in the Ocean Resources and Wildlife Reporter.

We have 3,000 cases that are opened each year. The vast majority are resolved by negotiated settlements between the respondent and the case attorney. As with other adjudications, a high rate of settlements keeps NOAA's law enforcement program operating in

an efficient and timely manner. Often a respondent's ability to pay is a central element in the settlement talks.

There are safeguards contained in the process throughout the administrative process. NOAA imposes standards on NOAA attorneys through the NEOM: They are to exercise their judgment as to whether or not a case should be prosecuted; they are to exercise their judgment as to whether or not the appropriate penalty amount is appropriate the penalty amount is appropriate. The potential award of attorney's fees against the agency under the Equal Access to Justice Act, should a prosecution be found not to be substantially justified, provides an additional safeguard.

If a case goes to hearing, the ALJ not on makes findings of fact and conclusions of law, but also makes a de novo determination of the appropriateness of the penalty, based upon the record. The penalty assessed in NOVA is presumptively valid, and the ALJ must give good reason for increasing or decreasing the amount of the penalty. In at least one instance where the ALJ has increased the amount of the penalty above that requested by the enforcement attorneys, the Administrator has overturned that action and reduced the penalty amount.

Civil penalties are one of the several remedies available under the enforcement statutes. NOAA agents seize and seek forfeitures of illegal catches, as was discussed earlier. As stated in NOAA's published enforcement policy, this is considered only the initial step in remedying a violation by removing the ill-gotten gains of the offense.

NOAA and the Coast Guard also refer vessel forfeiture cases to the U.S. attorney's office when remedies would not prove adequate deterrence. Permit sanctions and civil penalties may be sought, especially in those cases where we have prior violations.

Mr. FRANK. Mr. Campbell, I appreciate all this, but we are getting into some things that I think you can simply-I mean just tell me what the basics are.

Mr. CAMPBELL. The reason I thought it was important because I wanted to give a full breadth of the process that is in place. It is an exhaustive process; there are checks and balances in the process, and I

Mr. FRANK. I appreciate it. It is better to tell us that it is exhaustive rather than demonstrate it.

Mr. CAMPBELL. All right. It is exhaustive, and my job, as well as yours, is to be sure that it is fair to all involved.

I think you have the statistics in front of you; I think that the statistics speak for themselves. We have tried to effect our stewardship in a responsible way, Congressman Frank, and I would be happy to answer any questions that you might have.

Mr. FRANK. Thank you. I appreciate it. As I said, this is the beginning of a process.

[The prepared statement of Mr. Campbell follows:]

TESTIMONY OF

THOMAS A.

CAMPBELL

GENERAL COUNSEL

NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

U.S. DEPARTMENT OF COMMERCE

BEFORE THE

SUBCOMMITTEE ON ADMINISTRATIVE LAW AND GOVERNMENT RELATIONS COMMITTEE ON THE JUDICIARY

U.S. HOUSE OF REPRESENTATIVES

OCTOBER 1, 1992

Mr. Chairman and Members of the Subcommittee:

My name is Thomas Campbell. I am General Counsel for the National Oceanic and Atmospheric Administration (NOAA), U.S. Department of Commerce. On behalf of John Knauss, Under Secretary for Oceans and Atmosphere and Administrator of NOAA, I wish to thank you for the opportunity to testify about civil penalties assessed by NOAA.

NOAA has been delegated the responsibility for assessing civil penalties under 25 statutes, including such statutes as the Magnuson Fishery Conservation and Management Act, Northern Pacific Halibut Act, Lacey Act, Marine Mammal Protection Act, Endangered Species Act, and Marine Protection, Research and Sanctuaries Act. The majority of NOAA's cases involve 32 fisheries managed under the Magnuson Act, each with its own set of regulations. NOAA's consolidated civil procedure rules at 15 CFR part 904 govern proceedings for assessing civil penalties under all of these statutes and regulations, and are attached to my testimony.