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In an Alaska Supreme Court ruling announced Feb. 9, the majority of justices found that the cooperative was in violation of the state's Limited Entry Act, the legislation that controls who may participate in the state's fisheries.
"The Chignik cooperative fishery scheme permitted by the emergency regulation (of the Alaska Board of Fisheries) was fundamentally at odds with the Limited Entry Act," the court said.
"Although the 10-delivery requirement mandated some significant participation by each participating permit holder, the emergency regulation still allowed permit holders in the cooperative to benefit economically from the work of others. If the board wants to implement a cooperative regime, it must seek legislative approval first."
Justice Walter Carpeneti, in a dissenting opinion, noted that the state board drastically restructured the Chignik cooperative to meet the court's stated concern that "a central premise of the statutory scheme is that the permit holder is an individual who will fish."
The board established a program that requires every co-op member, in order to share in the co-op's proceeds, to fish and make at least 10 deliveries. In 2005, under the new regulation, 76 co-op members then made deliveries of fish, and 50 of them had at least 15 deliveries, he said.
Carpeneti said with the majority opinion that this dramatic change is not enough, the decision will probably doom several other cooperative fisheries, and "utterly strips the board of power to use a proven and effective tool in dealing with the critical problems it faces in managing Alaska's fisheries."
The board had initially approved the cooperative to help lower the cost of harvesting in the Chignik fishery and raise profits to fishermen. Most fishermen participated in the cooperative, but a minority group of Chignik seiners opposed it.
Juneau attorney Greg Cook, who represented the cooperative, said he was disappointed, but not surprised by the court's action. "Obviously what it means is the guys in the cooperative have to get a legislative solution or they are out of business," he said.
Soldotna attorney Chuck Robinson, who represented the independent fishermen, said he was happy with the decision. "It puts a kibosh on the co-op unless they can convince the Legislature to amend the Limited Entry Act, which is going to be difficult to do," Robinson said.
Cook called the decision "a giant step backwards for Chignik and the state. It will immediately harm conservation, it will reduce the quality of the salmon harvest, it will increase operating costs to fishermen, it will drive a number of destitute villagers out of business, and it will favor the exodus of limited-entry fishing permits from rural Alaska to out-of-state residents," he said. "The court's decision is a gift to the foreign fish farms that have put the Alaska salmon industry in a state of economic crisis."
Cook predicted the decision would have a strong ripple effect outside Chignik too. "According to the Alaska Department of Law, the court's decision will immediately upset the little-known cooperative commercial salmon fisheries at Nunivak island," he said. "It also calls into question the efforts of a lot of Sitka herring fishermen to get a herring co-op authorized. Nonetheless, the court made its decision without ever hearing from any of those affected fishermen and without considering the impacts of its decision on them, or how it may affect the now common, statewide practice of permit-stacking."
Robinson said the decision might indeed have impact on other cooperative fisheries that the board of fisheries created. The board will have to rethink these fisheries, he said. "The order from the court was pretty clear, that they don't have the authority unless the Legislature gives it to them."
Margaret Bauman can be reached at margie.bauman@alaskajournal.com.
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