This case arose out of a consolidation of two cases,[1] Washington v. Daley[2] and Midwater Trawlers Coop. v. Department of Commerce,[3] which challenged a fishing allocation regulation, promulgated pursuant to the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).[4] Under the Magnuson-Stevens Act, Regional Fishery Management Councils prepare fishery management plans (FMPs) for review and possible amendment by the Secretary of Commerce.[5] The Secretary may also promulgate regulations under certain circumstances.[6]

The Pacific Fishery Management Council (Pacific Council) prepares FMPs for Washington, Oregon, and California, including allocations of fish harvests to the Makah, Hoh, and Quileute tribes, and the Quinault Indian Nation (Tribes). When the Pacific Council refused to recognize the Makah's treaty rights,[7] the Secretary promulgated his own regulation, which established a structure to implement these fishing rights and set aside a portion of the whiting harvest for the Makah. The State of Washington and the Midwater Trawlers Cooperative (Midwater) separately challenged the regulation in the district courts in Washington and Oregon, alleging that it was in violation of the Magnuson-Stevens Act.[8] Midwater Trawlers Cooperative also challenged the Secretary's regulation for violations of the Endangered Species Act (ESA)[9] and the Regulatory Flexibility Act.[10] All claims involving the Tribes were dismissed for failure to join the Tribes under Rule 19 of the Federal Rules of Civil Procedure.[11] Both the State of Washington and Midwater appealed those rulings.[12] As well, Midwater appealed a summary judgment ruling in favor of the Secretary on Midwater's ESA and Regulatory Flexibility Act claims.

On appeal, the Ninth Circuit considered three sets of claims. First, the Tribes argued that the appellants' Magnuson Act claims were moot. Second, Midwater and Washington argued that the Tribes were not necessary parties under Rule 19. Third, Midwater appealed the summary judgment ruling on its ESA and Regulatory Flexibility Act claims.

The Ninth Circuit rejected the Tribes' argument that the Magnuson-Stevens Act claims were moot. The Tribes argued that because the 1996 and 1997 fishing seasons had passed, the appellants' challenges had become moot. However, the court determined that the regulation was still valid because it created a framework for tribal fishing allocations that extended beyond the 1996 and 1997 seasons to future seasons.

The Tribes also argued that the appellants' cases were moot because the appellants did not have standing to pursue the appeal. Standing requires an actual injury that is fairly traceable to the defendant's actions and would likely be redressed by a favorable ruling from the court.[13] The Makah argued that the change in allocation of fish harvest was not fairly traceable to the challenged regulation and not likely to be redressed if the regulation was invalidated. Because future allocations would be determined using the Secretary's framework, the court found that the appellants' injury was both fairly traceable to the regulation and likely to be redressed.

In addition, the Tribes argued that the Magnuson-Stevens Act claims were moot because underlying factual circumstances on which the appellants based their claims had since been altered. For example, the Ninth Circuit determined in Subproceeding 96-2 of United States v. Washington[14] that the Makah could take whiting, and the Pacific Council had adopted the Secretary's regulatory framework. Furthermore, the Ninth Circuit, in a separate subproceeding in United States v. Washington,[15] had affirmed the Tribes' treaty right to take "all species of fish in their usual and accustomed grounds."[16]

Although some circumstances had changed since the initiation of the suit, the court found that cases were not moot. While Subproceeding 96-2 determined the fishing rights of the Makah, it left unanswered the treaty rights of the Hoh, Quileute, and Quinault Tribes. Also, even though the Pacific Council had yielded to the Secretary's version of the harvest allocation, the regulation was still reviewable for arbitrary and capricious behavior.

On the joinder issue, the Ninth Circuit reversed the district court's ruling, finding that the Tribes were not necessary parties under Rule 19. First, the court dismissed the appellants' arguments that actions under the Magnuson Act are always reviewable. It chose to follow its decision in Makah Indian Tribe v. Verity,[17] where it considered a similar issue and concluded that the Makah tribe was subject to Rule 19.[18]

Next, the Ninth Circuit considered whether the district court's dismissal for failure to join was in error. The court applied a two-part analysis: It first determined whether the absent party is "necessary;" if the absent party is necessary but cannot be joined, the court then determined whether the absent party is "indispensable"?[19] In relevant part, Rule 19 defines an absent party as "necessary" if a party is "so situated that [its absence] may . . . as a practical matter impair or impede the [party's] ability to protect that interest."[20] The Tribes have an interest in the whiting allocation, a favorable decision would increase their allocation and uphold their treaty rights to harvest groundfish--species living on or near the sea bottom--while an unfavorable decision would undermine those same rights.

Because the United States had similar interests to the Tribes and could adequately represent them in the suit, the Tribes were not necessary parties under Rule 19. An absent party's rights will not be impaired when an existing party adequately represents the absent party's interests.[21] The federal government may "adequately represent an Indian tribe unless there exists a conflict of interest between the United States and the tribe."[22] The court determined that here the United States and the Tribes' interests were "virtually identical."[23] In addition, there was no potential for conflicting obligations. The only possible conflict between the United States and the Tribes would concern the level of allocations, which was not an issue in this case. Moreover, the court emphasized the federal government's trustee relationship with the Tribes as a basis for the government's representation of the Tribes. The Ninth Circuit held that the Tribes were not necessary parties and reversed the district court's dismissal.

Finally, the Ninth Circuit considered Midwater's arguments that the Secretary had violated the ESA and the Regulatory Flexibility Act under an arbitrary and capricious standard. Because this standard is narrow, the Secretary's decision could only be overturned if the Secretary's decision had not been based on "a consideration of the relevant factors."[24] The ESA requires consultation between agencies to ensure that federal actions are not "likely to jeopardize the continued existence of any endangered species."[25] Midwater argued that the Secretary had violated the ESA when he failed to reinitiate consultation to examine the effects of Tribal fishing on protected chinook salmon caught from whiting bycatch.[26] In fact, the Secretary, through the National Marine Fisheries Service, had reinitiated consultation and had determined that there would be no adverse effect on the salmon. The court held that the agency decision was not arbitrary and capricious and did not violate the ESA.

Under the Regulatory Flexibility Act, an agency is required to perform a regulatory flexibility analysis to assess possible negative impacts of a proposed rule on small entities, but an analysis is not required if the head of the agency certifies that the proposed action will not have a "significant economic impact on a substantial number of small entities." [27] The district court did not act arbitrarily when it considered the Secretary's information and relied on the Secretary's conclusion that the Tribes' whiting allocation would not significantly affect Midwater's revenues.[28] The Regulatory Flexibility Act requires agencies to "consider the effect on the entity, not the effect on revenue earned from a particular harvest."[29] The Ninth Circuit held that the Secretary had not violated the Regulatory Flexibility Act merely by considering the effect on whiting revenues and therefore affirmed the district court's summary judgment against Midwater.