U.S. District Judge H. Russel Holland heard oral arguments last month on a lawsuit CLIA Alaska filed in the spring of 2016 charging that the City and Borough of Juneau (CBJ) is misusing marine-passenger and port-development fees imposed on cruise ships as a condition of their visits to Juneau.
At the heart of the suit is the charge that the CBJ is not following the Tonnage Clause of the U.S. Constitution and federal law limiting entry fees to only for services to the vessels. Section 5(b) of federal code U.S.C. 33 restricts fees that are “used solely to pay the costs of a service to the vessel.” During the hearing, CLIA Alaska requested the court provide guidance to enable both parties to work together going forward with a clear understanding of the guidelines.
Testimony and supporting documentation was provided to the court demonstrating the CBJ’s use of fees for general government, parks and other projects that have no connection to the vessel that paid the fees. “It’s a revenue stream that the city has created that it’s redispensing as it sees fit. We believe that just blows a big hole in the Constitution,” CLIA Alaska attorney Jonathan Benner told the court.
Benner said this is a first-of-its-kind case because no other municipality has taken passenger fees and used them for non-cruise purposes.
“It’s important that a precedent is set for future cases to deter other cities from misusing these funds collected from cruise ships,” said Benner.
Numerous motions are pending, including CLIA Alaska’s motion for summary judgment. Judge Holland closed the hearing, noting that it will take some time to work through the issues and arrive at a decision.