October 2, 2001

By Ken Coons

Comments: tsackton@seafood.com

Seafood.com - The U.S. Supreme Court refused to hear a case from the The U.S. District Court in Portland (Maine) and the 1st U.S. Circuit Court of Appeals in Boston that ruled on whether fishing permits should go with the vessel when it is sold to pay a lien or stay with the previous owner to be used on another boat. Depending on the fishery, permits can be worth more than the vessel. The case involves the Quality One, a small dragger that has a valuable 88-day mutli-species permit that several expert witnesses said was worth more than the vessel.

Both courts had ruled that the permits are included when a vessel is seized and auctioned to pay a lien.

Camden, Maine lawyer Sandy Welte represented the plaintiff, the former owners of the 40-foot dragger Quality One.

According to the Kennebec Journal, Welte argued that permits were a license for the owner, not tangible equipment that could be seized. If a vessel sinks, the owner can transfer the fishing permit to another boat, which Welte argued should hold true in the case of a seizure for debts.

Now that the current rulings stand, banks could seek to renegotiate their mortgages on boats to reflect the collateral of fishing permits, which previously had been considered intangible. If the permits are considered property like a boat, rather than a privilege as federal authorities assert, fishermen might sue the government for damages if officials shut down a fishery.

Many permits are for fisheries where no new entrants are allowed in. The permits are nontransferable, which is supposed to limit their value separate from a vessel. But industry lawyers told the newsapaper that fishermen routinely advertise the sale of certain types of permits for tens of thousands of dollars, which they can accomplish by selling a boat with a permit and then immediately buying the boat back without the permit.

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