California Fishing License Fees Ruled Unfair

     SAN FRANCISCO (CN) – It is illegal for California commercial fisherman to pay one-third the licensing fees of out-of-staters, the Ninth Circuit ruled Friday.
     When lead plaintiff Kevin Marilley filed the class action in 2013, California charged out-of-state residents like him $3,260 for a commercial fishing license, commercial fishing vessel registration, a Herring Gill net permit and a Dungeness crab vessel permit.
     All four licenses would cost a resident just $1,100.
     A federal judge found the scheme unfair under the privileges and immunities clause of the U.S. Constitution, but the state sought reversal earlier this summer in hearing before a three-judge panel of the Ninth Circuit.
     California had argued that the fishermen must show that the differing fees “exclude them, in whole or in part, from commercial fishing.”
     By a 2-1 vote, the federal appeals court found this argument unavailing Friday.
     The ruling shoots down California’s claim that it is “merely compensating itself for expenditures on conservation and enforcement efforts from which non-residents benefit.”
     “Although we agree that obtaining compensation for expenditures the state makes for conservation or enforcement is a permissible state objective, the additional fees charged to non-residents must bear a close relation to the taxes which only residents pay,” said U.S. District Judge Paul Friedman, writing for the court by designation from Washington, D.C.
     “Charging non-residents two to three times the amount charged to residents plainly burdens non-residents’ right to pursue a common calling,” Friedman added.
     Judge Susan Graber meanwhile wrote in dissent that the issue was not ripe for summary judgment, boiling the issue down to one of high California taxes for conservation projects.
     “Nonresidents increase the amount of commercial fishing activity in California’s coastal waters,” the 11-page dissent continues. “That increased activity, in turn, requires the state to spend more money than it otherwise would spend on commercial fisheries management, including enforcement and conservation. Because nonresidents are a ‘peculiar source’ of those additional costs, I would hold that not subsidizing nonresident participation in an activity funded with residents’ tax dollars is a substantial reason for discrimination.”
     Though California emphasized that the percentage of nonresident commercial fishers in the state has actually increased, the majority did not think this helped the state’s case.
     “Permitting a state to freely discriminate against non-residents up to the point that they are driven out” would not “place the citizens of each state upon the same footing with citizens of other states,” the 14-page majority opinion states.
     California had also vied unsuccessfully for evidence that it enacted the scheme for a “protectionist purpose.”
     On this point, Friedman said the state had misinterpreted precedent to mean that proof of such a purpose is always required to determine a privileges and immunities inquiry.
     “When the court determines that the Privileges and Immunities Clause does not apply at all, it says so,” Friedman added.
     Judge Graber’s dissent took issue with the plaintiffs’ reliance on a per-capita calculation of a California resident’s tax burden, related to DFW’s commercial fishing budget.
     “That sort of rigid across-the-board calculation does not accurately reflect the real benefit that a taxpayer obtains through his or her tax dollars,” Graber wrote. “Taxpayer dollars support a large number of state-funded programs. Education, natural resources management, healthcare services, corrections and rehabilitation, infrastructure, and transportation all are at least partially funded with state tax revenues in California. In a given year, an individual taxpayer likely receives no direct benefit from some of those programs, but a benefit that far exceeds his or her pro rata contribution from others. This is the deal that we make when we pay taxes: We all put a portion of our income into a big pot and it is spent in a variety of ways, some of which benefit us directly and some of which do not.”
     For Graber, “the per capita formula thus systematically disadvantages the resident vis-à-vis the nonresident.” (Emphasis in original.)
     Neither side could be immediately reached for comment on Friday.

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