The Chignik region has only one salmon gear type – purse seine. It also has a relatively small number of limited entry permits – fewer than 100. Over the years, local fishermen, including Alaska Natives, have maintained their ownership share relative to other residency cohorts. Over 90% of salmon earnings in the region are obtained from sockeye salmon that return primarily to Black Lake.

The Chignik purse seine fishermen undertook a unique experiment in the period from 2002-2005. The idea for a co-op was advanced to the Board of Fisheries after several years of discussion among the fishermen. A proposal was submitted to the Board of Fisheries requesting authorization of the co-op fishery with an allocated harvest “quota”, to which the board agreed. The co-op was based on the concept of assigning a limited group of vessels to harvest the salmon, with the proceeds distributed equally among the co-op participants. The objective was to increase the earnings of the permit holders.

A substantial majority of the permitted fishermen participated in the co-op, but a much smaller number chose not to and continued to fish as independents. Co-op fishermen benefited by not having to pay crew and expenses. Independent fishermen, who fished during the same openings made available to the designated co-op fishermen, paid crew and expenses. Fisheries biologists viewed the co-op experiment as providing for better control over openings and harvest levels.

This case brought into sharp focus two alternate models of the aims and responsibilities of salmon limited entry permit holders characteristic of different cohorts of fishermen. One view, sometimes referred to as “business fishing”, is that the limited entry permit is an asset to be mobilized by the holder to obtain the maximum financial returns that can be realized. Typically in such a view, the permit is used to catch and sell salmon, minimizing all the associated costs including payment of crew members in order to maximize the earnings of the permit holder.

The other view, sometimes termed “lifestyle fishing”, holds that fishing is a valued activity itself and further, the permit holder is a trustee whose use of the permit is to benefit not only himself but also others such as his family and community. Those benefits could be payments as crewman or assistants in preparing nets and other equipment for the fishing season. In the community of Perryville for example, there are four or five Chignik purse seine permit holders who, through their crew hiring practices, provide some level of support (income and subsistence salmon) to every household in Perryville.

The Board of Fisheries authorization to create the co-op was legally challenged in state court in 2005 after operating for three years. It was supported by the Chignik Seiners Association. In Grunert v. State of Alaska, plaintiffs contended that the co-op violated the State Constitution’s prohibition of the “establishment of a special right” in the fishery and the Limited Entry Act in that earnings were being realized by those not actually fishing the permit. The district court found in support of the co-op and the decision was appealed to the Supreme Court.

In 2005, the Supreme Court determined that the Board of Fisheries did not have the legal authority to create such a fishery, in that the co-op “quota” did violate the Constitution and the benefits to nonfishing permit holders violated the Limited Entry Act. The Board of Fisheries modified the authorization in light of the court decision and reauthorized the co-op, requiring all members to actually participate by making at least 10 deliveries. In 2006, however, the Supreme Court held that this modification did not address the underlying prohibition of establishment and again struck down the program. There have been no subsequent legal initiatives to make necessary changes to the Constitution to make such a program legal.