Cruise Lines International Association Alaska et al v. The City and Borough of Juneau, Alaska et al

Filing 207

ORDER granting in part and denying in part 67 Motion for Summary Judgment and 118 Cross Motion for Summary Judgment, and denying in part 81 Motion to Determine Law. Signed by Judge H. Russel Holland on 12/6/18. (JLH, COURT STAFF)

WO

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA

CRUISE LINES INTERNATIONAL
ASSOCIATION ALASKA and CRUISE
LINES INTERNATIONAL ASSOCIATION,

)
)
)
)
Plaintiffs, )
)
vs.
)
)
THE CITY AND BOROUGH OF JUNEAU, )
ALASKA, a municipal corporation, and
)
RORIE WATT, in his official capacity as
)
City Manager,
)
)
Defendants. )
_______________________________________)

No. 1:16-cv-0008-HRH

ORDER
Cross-motions for Summary Judgment;
Motion to Determine Law of the Case
Plaintiffs move for summary judgment.1 In response, defendants move for a
determination of the law of the case on the Tonnage Clause and Rivers and Harbors Act.2
Defendants also oppose plaintiffs’ motion for summary judgment and cross-move for
summary judgment.3 Defendants’ motion for a determination of law is opposed4 as is

1

Docket No. 67.

2

Docket No. 81.

3

Docket Nos. 118 and 180-1.

4

Docket No. 97.

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defendants’ cross-motion for summary judgment.5 Oral argument has been heard on the
foregoing motions. At oral argument, counsel agreed that the defendants’ motion to
determine the law of the case was purely a matter of law and should be taken up first.
Facts
Plaintiffs are Cruise Lines International Association Alaska (CLIA Alaska)6 and
Cruise Lines International Association (CLIA). CLIA is a global organization that represents
51 cruise lines operating worldwide. CLIA Alaska represented cruise lines that entered
Alaska waters. CLIA Alaska members included Carnival Cruise Lines, Crystal Cruises,
Disney Cruise Lines, Holland America Line, Norwegian Cruise Line, Oceana Cruises,
Princess Cruises, Regent Seven Sea Cruises, Royal Caribbean International, and Silverseas
Cruises.
Defendants are The City and Borough of Juneau, Alaska (CBJ) and Rorie Watt, in his
official capacity as the City Manager. CBJ owns and operates the Cruise Ship Terminal and
the Alaska Steam Ship Dock, which are two of the four cruise docks located in the downtown
area of the City of Juneau. The other two cruise ship docks, AJ Juneau Dock and Franklin
Dock, are privately owned. The Franklin Dock is owned by Princess Cruises.7 The AJ
Juneau Dock is owned in part by Holland America.8 CBJ, which has approximately 32,000
year-round residents, receives approximately 1,000,000 cruise ship passengers each year
from early May through mid-September.
5

Docket No. 148.

6

CLIA Alaska was dissolved in 2016. Exhibit MD, Docket No. 176-2. The regional
group of CLIA that represents cruise lines which operate in Alaska is now called CLIA North
West & Canada. Exhibit MC, Docket No. 172-5.
7

Exhibit IP, Docket No. 127-16.

8

Exhibit BT at 1, Docket No. 120-20.

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This case involves challenges to two passenger fees imposed by CBJ. First, the
Marine Passenger Fee (MPF) is a $5-per-passenger fee assessed on any marine passenger
ship, with some exceptions,9 that enters any CBJ port. The MPF for each ship that enters any
CBJ port is calculated based on the passenger manifest, and the owner or agent of the ship,
not the individual passengers, is responsible for paying the MPF.10 CBJ Code §§ 69.20.030
and 69.20.040.11 The MPF was first imposed in 2000, at which time the stated purpose of
the fee was
to address the costs to the City and Borough for services and
infrastructure usage by cruise ship passengers visiting Juneau,
including emergency services, transportation impacts and
recreation infrastructure use, and to mitigate impacts of increased utilization of City and Borough services by cruise ship
passengers.[12]
In 2012, CBJ amended the “purpose and intent” portion of the MPF ordinance. The purpose
of the MPF is now “to address the costs to the City and Borough for services and
infrastructure rendered to cruise ships and cruise ship passengers visiting the City and
Borough.”13 Revenue from the MPF is placed in the Marine Passenger Fund, and the
proceeds of the Fund are:
appropriated in support of the marine passenger ship industry
including:

9

Ships having accommodations for 20 or fewer passengers, ships without overnight
berths, non-commercial ships, and government ships are excluded from paying the MPF.
10

There is, however, no dispute that cruise lines incorporate this fee into the cost cruise
passengers pay for their cruises.
11

A copy of the MPF ordinance can be found at Exhibit 11, Docket No. 68-12.

12

Exhibit 5 at 2, Docket No. 68-6.

13

Exhibit 36 at 1, Docket No. 70-6.

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(1)
(2)

(3)

(4)
(5)
(6)

Design, construction, enhancement, operation, or maintenance of capital improvements;
Operating funds for personnel, training, commodities,
rentals, services and equipment for services provided,
made available to, or required as a result of marine
passenger ships and marine passengers;
Projects and programs that promote safety, environmental improvements[,] efficiency of interstate and international commerce, or enforcement of laws caused or
required by marine passenger ships and marine passengers;
Acquisition of land required to execute the activities
listed in this section;
Reserved; [and]
Surveys, analyses, polls, monitoring, and similar efforts
to measure, describe or predict, or manage marine
passengers, for items listed in subsection (a)(1)-(a)(4)
of this section.

CBJ Code § 69.20.120. In FY 2017, the revenue from the MPF was approximately
$5 million.
CBJ allocates a portion of the revenue generated by the MPF to municipal government
departments which perform functions “that are available for use by cruise ship passengers.”14
These departments have included Emergency Medical Services, Libraries, Police, Parks and
Recreation, Streets, Finance, and the City Manager’s Office.15 The allocated portion is
transferred to the General Government Fund. “The amount allocated is based on the number
of hours cruise ship passengers spend in Juneau compared to the number of hours residents,
independent visitors, conventioneers, and embarking/disembarking passengers spend in
Juneau on an annual basis.”16

14

Exhibit 25 at 1, Docket No. 69-10.

15

Id.

16

Id.

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Revenue from the MPF is also used to directly fund projects. Each year, the City
Manager accepts proposals for projects to be funded by the MPF.

CBJ Code

§ 69.20.120(b)(1). A draft list of proposals is prepared and put out for public comment as
well as comment from the cruise line industry. CBJ Code § 69.20.120(b)(3). After comment
and review by the finance committee, a final list is forwarded to the Assembly for approval.
Id.
The direct funding includes projects and services that are provided by CBJ. By way
of example, for FY 2015, CBJ used revenue from the MPF17 for downtown foot/bike police
patrols, downtown restroom cleaning, downtown sidewalk cleaning, Air Medevacs, EMS
services, Docks and Harbors general operations and building maintenance, downtown pay
phones, emergency room staff at the Bartlett Regional Hospital, and the city bus service.18
The direct funding also includes projects and services that are provided by third
parties via operating grants. By way of example, for FY 2015, operating grants funded by
revenue from the MPF were given to Tourism Best Management Practices,19 SAIL Accessible Training and Trip Coordination,20 Airlift Northwest,21 Franklin Dock

17

Estimated MPF revenue for FY 2015 was $4,700,000. Exhibit 39 at 29, Docket No.

70-10.
18

Id.

19

The Tourism Best Management Practices “is a voluntary industry-managed program,
designed to provide services to vessel passengers and address impacts, including safety
issues, of tourism on local residents.” Exhibit IG at 3, Docket No. 127-7.
20

SAIL provides training “on communicating and serving customers with disabilities”
and assists disabled visitors with accessing tours and other recreation opportunities. Exhibit
IY at 2, Docket No. 127-25.
21

“Airlift Northwest provides air ambulance service for visitors and residents of
Juneau and the surrounding communities.” Exhibit GH at 3, Docket No. 125-8.
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Enterprises,22 AJ Juneau Dock, LLC,23 Goldbelt,24 and the Juneau Convention and Visitors
Bureau.25 Grant funds were also used to pay for the downtown crossing guards and the
Downtown Security Program.26
Finally, revenue from the MPF is also used for capital projects. By way of example
for FY 2015, funds generated by the MPF were used for the Waterfront Seawalk,27 electrical
winches, real-time weather monitoring and communications, and Last Chance Basin HydroGeo.28

22

This company owns one of the private cruise ship docks. For FY15, Franklin Dock
Enterprises requested funding for restroom cleaning and maintenance supplies, dock repair,
security training, a bear-proof dumpster, and a total suspended solids monitoring system.
Exhibit IE at 6, Docket No. 127-5.
23

This company owns one of the private cruise ship docks. For FY15, it requested
MPF revenue for restroom cleaning and maintenance, operational expenses for a short-range
response boat, port security training, covered walkway side panels, and bear-proof dumpster
and garbage cans. Exhibit IE at 5, Docket No. 127-5.
24

Goldbelt operates the Seadrome Marina, which is located in downtown Juneau, and
which caters to “boat based shore excursions, [the] small cruise ship market, and private
yachts.” Exhibit 112 at 1, Docket No. 75-7. MPF funds have been awarded to Goldbelt for
replacement of the gangway, dock improvements, and construction of a guest staging area.
25

Exhibit 39 at 29, Docket No. 70-10.

26

This funding was for two uniformed security officers who do foot patrols in the
downtown area during the cruise season. Exhibit IE at 4, Docket No. 127-5.
27

The Waterfront Seawalk project was part of CBJ’s Long Range Waterfront Plan
which was developed in 2004. The Waterfront Seawalk “goes directly along the cruise ship
docks, starting at the Franklin Dock and continuing along the CT and AS docks before
connecting to the sidewalk. The Seawalk picks up again at Gold Creek and continues to the
whale statute.” Affidavit of Dncan Rorie Watt [etc.] at 16-17, ¶ 70, Docket No. 132.
28

Exhibit 39 at 29, Docket No.70-10. The Last Chance Basin project was designed
to increase the capacity of water wells to “provide[] a predictable water supply to the cruise
ships.” Exhibit IE at 7, Docket No. 127-5.
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The second fee being challenged is the Port Development Fee (PDF), which is a $3.00
fee imposed on, with a few exceptions,29 “vessels carrying passengers for compensation on
port calls in the City and Borough. . . .”30 Pursuant to Assembly resolutions, the PDF has
been imposed by CBJ since at least 2002, although the amount of the fee has increased over
time to the current $3.00. The owner or agent of the vessel is responsible for paying the
PDF.31 Funds generated by the PDF are intended to be used “for capital improvements to the
downtown waterfront for the provision of service to the cruise ship industry” and any
projects paid for with PDF funds are intended “to benefit all entities which remit the Fee.”32
In FY 2017, the PDF generated approximately $3 million in revenue. Since 2011, funds
generated by the PDF have only been used for the 16B project33 and the Seawalk project.34
Claims and Issues
A.

Plaintiffs’ Claims/Issues

On April 13, 2016, plaintiffs commenced this action to challenge the MPF and PDF.
In their first amended complaint, plaintiffs assert four causes of action. In their first cause
of action, plaintiffs assert that the MPF and PDF violate the Tonnage Clause of the United

29

Vessels under 200 tons, non-commercial vessels, government-owned vessels, and
tribal-owned vessels are exempt from paying the PDF.
30

Exhibit 16 at 2, Docket No. 69-1.

31

Id. There is, however, no dispute that cruise lines incorporate this fee into the cost
cruise passengers pay for their cruises.
32

Id.

33

The 16B project involved the construction of a new public dock and the reconstruction of the Alaska Steamship Wharf to accommodate larger cruise ships. Watt Affidavit at
7, ¶ 29, Docket No. 132. The cost of this project exceeded $54 million. CBJ incurred
substantial bond indebtedness to plan, design, and build the 16B project. Id. at 7, ¶¶ 29, 33.
34

Affidavit of Bob Bartholomew [etc.] at 6, ¶ 22, Docket No. 133.

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States Constitution. In their second cause of action, plaintiffs assert that the MPF and PDF
violate the Rivers and Harbors Appropriation Act of 1899 (RHAA), as amended, 33 U.S.C.
§ 5. In their third cause of action, plaintiffs assert that the MPF and PDF violate the
Commerce Clause of the United States Constitution. In their fourth cause of action, plaintiffs
assert that the MPF and PDF violate the Supremacy Clause of the United States Constitution,
and they allege that 42 U.S.C. § 1983 provides a basis for their Tonnage Clause and
Commerce Clause claims.
Plaintiffs seek declaratory and injunctive relief. Plaintiffs seek declarations that 1)
the MPF and PDF violate the Tonnage Clause, the Supremacy Clause, and the Commerce
Clause, 2) defendants have deprived plaintiffs of their federal rights in violation of § 1983,
3) “[d]efendants are legally barred from imposing or collecting” the MPF and PDF “to the
extent that revenues therefrom are unlawful, excessive, or otherwise impermissible;” and 4)
“[d]efendants are legally barred from further use of” the MPF and PDF “revenue to fund
activities that are unrelated to and do not benefit the Cruise Lines’ vessels and passengers or
that do not reflect the direct cost of providing services to cruise vessels.”35 Plaintiffs seek
a permanent injunction prohibiting defendants from 1) “imposing or collecting the” MPF and
PDF “to the extent that the amount thereof is excessive or otherwise impermissible;” and 2)
“further use of the revenues from the” MPF and PDF “to fund activities that are unrelated
to and do not benefit the Cruise Lines’ vessels and passengers, or approximate their use of
CBJ’s port.”36 Plaintiffs contend that many of CBJ’s uses of the MPF and PDF revenue are
unconstitutional or otherwise unlawful, including:

35

First Amended Complaint for Declaratory and Injunctive Relief at 14, ¶ 1, Docket

No. 14.
36

Id. at ¶ 2.

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revenues directed to general government operations; legal fees
and costs (internal or external); infrastructure construction;
maintenance, and improvements such as sidewalks, roadways,
walkways, promenades; hospital costs; internet service and
library upgrades; police and crossing guard costs; parks and
beautification projects; and public transit.[37]
Plaintiffs now move for summary judgment on their first, second, and fourth causes
of action and argue that it is not necessary for the court to address their third cause of action.
B.

Defendants’ Claims/Issues

By their motion to determine the law of the case, defendants ask the court to
determine:
1)

Whether the Tonnage Clause permits the use of fees for services that
benefit vessel passengers and/or the vessel;

2)

Whether the Tonnage Clause permits the use of fees for services that
benefit vessel passengers and/or the vessel even if those services may
be available to and/or used by the general public;

3)

Whether the RHAA permits the use of fees for services that benefit
vessel passengers and/or the vessel;

4)

Whether the RHAA permits the use of fees for services that benefit
vessel passengers and/or the vessel even if those services may be
available to and/or used by the general public.

Defendants also cross-move for summary judgment. Defendants seek the dismissal
of all of plaintiffs’ causes of action, arguing that CBJ’s use of MPF and PDF revenue has not
been unconstitutional or unlawful. In addition, defendants state the defenses of statute of
limitations, failure to exhaust administrative remedies, waiver, estoppel and/or quasiestoppel, and laches.

37

Plaintiffs’ Reply [etc.] at 2, n.3, Docket No. 148.

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C.

Matters Not in Dispute

First, in plaintiffs’ amended complaint and in their opening brief, plaintiffs seem to
contend that the court should void the MPF ordinance and PDF resolution and enjoin CBJ
from collecting the MPF and PDF altogether because the fees were unconstitutional and
unlawful. In their reply brief, plaintiffs acknowledge that the MPF ordinance and PDF
resolution are not necessarily unconstitutional or unlawful on their face, but rather plaintiffs
contend that some of CBJ’s uses of the revenue generated by the MPF and PDF are
unconstitutional or unlawful. Plaintiffs contend that they are asking the court to enjoin CBJ
from using future revenue from the MPF and PDF in an unconstitutional or unlawful manner.
Second, plaintiffs do not seek the refund of MPF or PDF paid to date.
Third, plaintiffs are associations of which cruise vessel owners are members.
Plaintiffs seek declaratory and injunctive relief for the benefit of their members. Defendants
concede that plaintiffs have standing to sue on behalf of their members for purposes of
raising constitutional and statutory challenges to the MPF and PDF which are imposed upon
association members’ vessels calling at the Port of Juneau. That is, defendants concede that
plaintiffs have standing to bring their claims for declaratory and injunctive relief as presently
pleaded.38
Discussion
A.

Motion to Determine the Law of the Case

In their motion to determine the law of the case, defendants first ask the court to
determine whether the Tonnage Clause and the RHAA permit revenue from the MPF and
PDF to be used for services that benefit vessel passengers, but do not benefit the vessel itself.
The court begins with the Tonnage Clause.
38

Transcript of Oral Argument at 28:20-29:2 (Sept. 18, 2018), Docket No. 203.

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The Tonnage Clause of the United States Constitution, Article I, Section 10, Clause
3, provides that:
No State shall, without the Consent of Congress, lay any Duty
of Tonnage. . . .
The Tonnage Clause “seeks to prevent states with ‘convenient ports’ from placing other
States at an economic disadvantage by laying levies that would ‘ta[x] the consumption of
their neighbours.’” Polar Tankers, Inc. v. City of Valdez, Alaska, 557 U.S. 1, 7 (2009)
(quoting 3 Records of the Federal Convention of 1787, pp. 542, 519 (M. Farrand rev. 1966)).
The “‘prohibition against tonnage duties has been deemed to embrace all taxes and duties
regardless of their name or form, and even though not measured by the tonnage of the vessel,
which operate to impose a charge for the privilege of entering, trading in, or lying in a port.’”
Id. at 8 (quoting Clyde Mallory Lines v. Alabama ex rel. State Docks Comm’n, 296 U.S. 261,
265-266 (1935)). “Although the Clause forbids all charges, whatever their form, that impose
‘a charge for the privilege of entering, trading in, or lying in a port, nothing in the history of
the adoption of the Clause, the purpose of the Clause, or th[e Supreme] Court’s interpretation
of the Clause suggests that it operates as a ban on any and all taxes which fall on vessels that
use a State’s port, harbor, or other waterways.” Id. at 9 (citations and emphasis omitted).
Plaintiffs acknowledge that the Tonnage Clause does not preclude fees imposed for
services provided to a vessel entering a port, such as charges for regulation of harbor traffic,
pilotage, wharfage, use of locks, medical inspections of vessels, or emergency services for
vessels. “Charges for such services, even those that vary according to tonnage, are
constitutional for at least two reasons. First, they are not taxes—which are assertions of
sovereignty—but are instead demands for reasonable compensation—which are assertions
of a right of property.” Maher Terminals, LLC v. Port Authority of New York and New

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Jersey, 805 F.3d 98, 107 (3rd Cir. 2015) (citing Packet Co. v. Keokuk, 95 U.S. 80, 85
(1877)). “Second, charges for services are constitutional because they facilitate, rather than
impede, commerce.” Id. (citing Clyde Mallory Lines, 296 U.S. at 265–66). But, a state or
local government “may not escape the Tonnage Clause’s reach merely by labeling a [fee] as
a charge for services.” Id. “Fees for service can still violate the Tonnage Clause if they have
‘a general, revenue-raising purpose.’” Lil’ Man In The Boat, Inc. v. City and County of San
Francisco, Case No. 17-cv-00904-JST, 2017 WL 3129913, at *4 (N.D. Cal. July 24, 2017)
(quoting Polar Tankers, 557 U.S. at 10). “In other words, where a fee is used ‘for projects
which do not and could not benefit’ those paying the fee, the fee is unconstitutional.” Id.
(quoting Bridgeport & Port Jefferson Steamboat Co. v. Bridgeport Port Auth., 567 F.3d 79,
82–83 (2d Cir. 2009)).
Case law over the past 150 years, most of it from the United States Supreme Court,
unequivocally supports the proposition that, in order for a fee imposed upon a vessel to be
permissible under the Tonnage Clause, it must be compensation for a service rendered to the
vessel itself. Thus, Keokuk Northern Line Packet Co. v. City of Keokuk, 95 U.S. 80 (1877),
holds that a city may impose and collect wharfage from vessel owners which moor at cityconstructed wharves. See also Northwestern Union Packet Co. v. City of St. Louis, 100 U.S.
423, 429 (1879) (wharfage fees constitutional because they were “paid as compensation for
the use of an improved wharf and not for the mere privilege of entering or stopping at the
Port of St. Louis or for landing at the shore, in its natural condition, where there were no
conveniences which could be called a wharf”); Cincinnati P.B.S.&P. Packet Co. v.
Catlettsburg, 105 U.S. 559, 562 (1881) (“[n]or is there any room to question the right of a
city or town situated on navigable waters to build and own a wharf suitable for vessels to
land at and to exact a reasonable compensation for the facilities thus afforded to vessels by
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the use of such wharves”); Huse v. Glover, 119 U.S. 543, 548 (1886) (“[t]he exaction of tolls
for passage through the locks is as compensation for the use of artificial facilities
constructed[,] . . . like charges for the use of wharves and docks constructed to facilitate the
landing of persons and freight, and the taking them on board, or for the repair of vessels”).
In Southern S.S. Co. of New Orleans v. Port Wardens, 73 U.S. 31 (1867), the United
States Supreme Court evaluated and struck down a fee imposed on every ship entering the
Port of New Orleans, regardless of whether the ship was rendered a service of any kind while
in port. The Court compared this fee to fees for pilotage and half-pilotage fees which the
Court had found to not run afoul of the Tonnage Clause. The Court explained:
Pilotage is a compensation for services performed, half-pilotage
is compensation for services which the pilot has put himself in
readiness to perform by labor, risk, and costs and which he has
actually offered to perform. But in the case before us there were
no services and no offer to perform any.
Id. at 34. This case stands for the proposition that the mere availability of a service does not
run afoul of the Tonnage Clause if the availability of that service is of benefit to a vessel.
There is no requirement that fees imposed upon vessels have a physical impact upon the
vessel. But a fee imposed “not for services provided to the vessel” is unconstitutional
because such fees are deemed “designed to raise revenue used for general municipal service.”
Polar Tankers, 557 U.S. at 8, 10 (Valdez’ personal property tax held unconstitutional because
it was “not for services provided to the vessel”).
In Morgan’s Louisiana & T. R. & S. S. Co. v. Board of Health of State of Louisiana,
118 U.S. 455., 460 (1886), the fee being challenged was a fee that vessels were required to
pay, as part of Louisiana’s quarantine system, to be “examined at the quarantine station, with
respect to their sanitary condition and that of their passengers[.]” The Court found that the
fee did not violate the Tonnage Clause because it was “compensation for a service rendered,
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as part of the quarantine system of all countries, to the vessel which receives the certificate
that declares it free from further quarantine requirements.” Id. The fee in question also
provided some benefit to vessel passengers as the funds generated by the fee were used “for
[the] care and treatment of diseased passengers, and for the comfort of their companions[.]”
Id. at 460. But the fee was primarily compensation for a service rendered to the vessel itself
and any benefit provided to passengers was incidental.
Summarizing the foregoing, the Tonnage Clause does not prohibit the imposition and
expenditure of fees imposed upon a vessel that reflect the costs of services provided to a
vessel or for services which, if called upon by a vessel, would further the marine enterprise.
Tonnage Clause case law focuses exclusively upon the permissibility of fees for services
rendered to a vessel. No case law supports the proposition that fees imposed upon vessels
but expended for services that benefit vessel passengers only would be constitutional under
the Tonnage Clause.
The same is true of the RHAA. The RHAA was amended in 2002 to include what is
now codified as 33 U.S.C. § 5(b). Section 5(b) of the RHAA provides that:
[n]o taxes, tolls, operating charges, fees, or any other impositions whatever shall be levied upon or collected from any vessel
or other water craft, or from its passengers or crew, by any
non-Federal interest, if the vessel or water craft is operating on
any navigable waters[39] subject to the authority of the United
States, or under the right to freedom of navigation on those
waters, except for
(1) fees charged under section 2236 of this title;
(2) reasonable fees charged on a fair and equitable basis that –
39

The cruise ships that are being assessed the MPF and PDF dock in Gastineau
Channel, which is navigable water. See Approved Jurisdictional Determination Form,
Exhibit 76 at 1, Docket No. 73-1 (“Gastineau Channel qualifies as navigable water of the
United States” for purposes of the RHAA “because it is a water body subject to the ebb and
flow of the tide”).
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(A) are used solely to pay the cost of a service to the vessel or
water craft;
(B) enhance the safety and efficiency of interstate and foreign
commerce; and
(C) do not impose more than a small burden on interstate or
foreign commerce; or
(3) property taxes on vessels or watercraft, other than vessels or
watercraft that are primarily engaged in foreign commerce if
those taxes are permissible under the United States Constitution.
The foregoing “codified the common law concerning the [] constitutional provisions”
of the Commerce and Tonnage Clauses of the United States Constitution. State, Dep’t of
Natural Resources v. Alaska Riverways, Inc., 232 P.3d 1203, 1222 (Alaska 2010).
“33 U.S.C. § 5(b), like the Commerce and Tonnage Clauses, prohibits levying fees on the use
of navigable waters unless those fees do not impose a significant burden on interstate
commerce and represent a fair approximation of the benefit conferred or cost incurred by the
charging authority.” Id.; see also, Bridgeport and Port Jefferson Steamboat Co. v. Bridgeport
Port Auth., 566 F. Supp. 2d 81, 102 (D. Conn. 2008) (“[t]he language of the requirements”
in Section 5(b) “closely tracks the Commerce Clause and Tonnage Clause cases . . . in its
focus on reasonable fees used to cover the cost of service to vessels”). “The U.S. House
Conference Report state[d] that the purpose of 33 U.S.C. § 5(b) was ‘to clarify existing law
with respect to Constitutionally permitted fees and taxes on a vessel,’ and ‘to prohibit fees
and taxes on a vessel simply because that vessel sails through a given jurisdiction.’” Reel
Hooker Sportfishing, Inc. v. State, Dep’t of Taxation, 236 P.3d 1230, 1235 (Haw. Ct. App.
2010) (quoting H.R. Rep. No. 108–334, at 180 (2002) (Conf. Rep.)).
In codifying the common law developed under the Tonnage Clause, Congress
unambiguously provided that entities such as CBJ may not impose fees on vessels operating

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in navigable waters of the United States or upon the passengers or crew of such vessels,
unless such fees were reasonable and used to pay “the cost of a service to the vessel.”
Section 5(b) creates no exception for services beneficial only to passengers of a vessel.
Secondly, in their motion for determination of the law of the case, defendants ask the
court to determine whether the Tonnage Clause and the RHAA permit revenue from the MPF
and PDF to be used for services that benefit passengers and/or vessels but also benefit the
general public. Whether a particular service is available to and/or used by the general public
is not relevant under either the Tonnage Clause or Section 5(b). Services that constitute a
service to a vessel do not become unconstitutional or unlawful because of incidental/parallel
use by the general public.
Based on the foregoing, defendants’ motion to determine the law of the case is granted
in part and denied in part. The motion is denied as to defendants’ contention that the
Tonnage Clause and Section 5(b) of the RHAA permit the use of fees for services that only
benefit passengers. In order for fees to be permissible under the Tonnage Clause and the
RHAA, the fees must be used for services rendered to a vessel itself. The motion is granted
as to defendants’ contention that fees that are otherwise permissible do not become
impermissible simply because the services being provided may also benefit the general
public.
B.

Cross-Motions for Summary Judgment

Summary judgment is appropriate when there are no genuine issues of material fact
and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The
initial burden is on the moving party to show that there is an absence of genuine issues of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the moving party meets
its initial burden, then the non-moving party must set forth specific facts showing that there
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is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).
In deciding a motion for summary judgment, the court views the evidence of the non-movant
in the light most favorable to that party, and all justifiable inferences are also to be drawn in
its favor. Id. at 255. “[T]he court’s ultimate inquiry is to determine whether the ‘specific
facts’ set forth by the nonmoving party, coupled with undisputed background or contextual
facts, are such that a rational or reasonable jury might return a verdict in its favor based on
that evidence.” T.W. Elec. Service, Inc. v. Pacific Elec. Contractors Ass’n, 809 F.2d 626,
631 (9th Cir. 1987). “[W]hen parties submit cross-motions for summary judgment, [t]he
court must rule on each party's motion on an individual and separate basis, determining, for
each side, whether a judgment may be entered in accordance with the Rule 56 standard.”
Fair Housing Council of Riverside County, Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th
Cir. 2001) (citations omitted).
1.

private cause of action

Defendants argue that plaintiffs’ second cause of action fails because there is no
private cause of action under the RHAA. In California v. Sierra Club, 451 U.S. 287, 289
(1981), the Court considered whether “private parties may sue under the Rivers and Harbors
Appropriation Act of 1899 to enforce § 10 of that Act.” Section 10 of the Act “prohibits
[t]he creation of any obstruction not affirmatively authorized by Congress, to the navigable
capacity of any of the waters of the United States. . . .’” Id. (quoting 33 U.S.C. § 403). The
Court applied the four Cort factors to determine if Section 10 established a private cause of
action:
“First, is the plaintiff one of the class for whose especial benefit
the statute was enacted, . . . —that is, does the statute create a
federal right in favor of the plaintiff? Second, is there any
indication of legislative intent, explicit or implicit, either to
create such a remedy or to deny one? . . . Third, is it consistent
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with the underlying purposes of the legislative scheme to imply
such a remedy for the plaintiff? . . . And finally, is the cause of
action one traditionally relegated to state law, in an area
basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law?”
Id. at 293 (quoting Cort v. Ash, 422 U.S. 66, 78 (1975)). As to the first factor, the Court
found that “Section 10 of the Rivers and Harbors Appropriation Act is the kind of general
ban which carries with it no implication of an intent to confer rights on a particular class of
persons.” Id. at 294. As to the second factor, the Court found that there was “nothing in the
legislative history suggesting that § 10 was created for the especial benefit of a particular
class.” Id. Rather, the Court found that “the legislative history supports the view that the Act
was designed to benefit the public at large by empowering the Federal Government to
exercise its authority over interstate commerce with respect to obstructions on navigable
rivers caused by bridges and similar structures.” Id. at 294-95. Because the first two Cort
factors plainly indicated that Congress did not intend to create a private cause of action, the
Court did not consider the third and fourth factors. Id. at 298.
Defendants argue that the holding in California v. Sierra Club is not limited to Section
10 of the RHAA but applies to Section 5(b) as well. Defendants contend that there is nothing
to indicate that Congress intended to create a private cause of action when it amended
Section 5(b) in 2002.
No other court has actually analyzed this issue. In Bridgeport Port Authority, 566 F.
Supp. 2d at 102-03, the court questioned “whether there is a private right of action under the
statute” but did not resolve this question since it found that the ferry passenger fee at issue
violated the Tonnage Clause. In Moscheo v. Polk County, Case No. E2008–01969–COAR3–CV, 2009 WL 2868754, at *5 (Tenn. Ct. App. Sept. 2, 2009), the court observed that

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“Polk County appears to be correct when it argues that 33 U.S.C. § 5(b) does not create a
private cause of action[,]” but it provided no analysis.
California v. Sierra Club does not control the issue of whether there is a private cause
of action under Section 5(b) of the RHAA because that case involved an entirely different
section of the Act. More importantly, “[i]n later cases, the Supreme Court essentially
collapsed the Cort test into a single focus: ‘[t]he central inquiry remains whether Congress
intended to create, either expressly or by implication, a private cause of action.’” Logan v.
U.S. Bank Nat’l Ass’n, 722 F.3d 1163, 1170 (9th Cir. 2013) (quoting Touche Ross & Co. v.
Redington, 442 U.S. 560, 575 (1979)). “As with any case involving congressional intent,
[the court] presume[s] that Congress expressed its intent through the statutory language it
chose.” Id. at 1171. The court “begin[s] [its] search for congressional intent with the
language and structure of the statute, and then look[s] to legislative history only if the
language is unclear, or if there is a clearly expressed contrary intention in the legislative
history that may overcome the strong presumption that the statutory language represents
congressional intent[.]” Id. (internal citations omitted).
Congress could not have intended to preclude a private cause of action under Section
5(b) of the RHAA because it was Congress’ clear intent to mirror the federal common law
of the Commerce Clause and the Tonnage Clause when it enacted Section 5(b). “When
Congress codifies a judicially defined concept, it is presumed, absent an express statement
to the contrary, that Congress intended to adopt the interpretation placed on that concept by
the courts.” Davis v. Michigan Dep’t of Treasury, 489 U.S. 803, 813 (1989). Because
private plaintiffs have been able to enforce the prohibitions of the Tonnage Clause in courts,
Congress must have intended that private plaintiffs would be able to enforce these same
prohibitions under Section 5(b) of the RHAA.
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The foregoing conclusion is reinforced by the fact that Section5(b) was enacted for
the benefit of vessels, and with respect to passengers and crews of vessels, as opposed to the
general public. Section 5(b) expressly prohibits certain fees or taxes being imposed on
vessels, crews, and passengers. For this additional reason, the court concludes that Congress
intended that vessels (or associations representing vessels and their owners, such as plaintiffs
here) could enforce Section 5(b). In short, Section 5(b) of the RHAA creates a private cause
of action such as that asserted by plaintiffs in their second cause of action.
2.

statute of limitations

The first, third, and fourth causes of action of plaintiffs’ complaint are founded upon
the United States Constitution. These constitutional claims are before the court pursuant to
42 U.S.C. § 1983. Although plaintiffs only refer to § 1983 in connection with their fourth
cause of action, the Ninth Circuit holds that “a litigant complaining of a violation of a
constitutional right does not have a direct cause of action under the United States
Constitution but must utilize 42 U.S.C. § 1983.” Arpin v. Santa Clara Valley Transp.
Agency, 261 F.3d 912, 925 (9th Cir. 2001). Plaintiffs’ causes of action based upon the
Tonnage Clause, the Commerce Clause, and the Supremacy Clause are all § 1983 claims40
and are subject to the statute of limitations which applies to such claims.

40

There is some suggestion by defendants that plaintiffs’ § 1983 claims against CBJ
fail because plaintiffs cannot show that CBJ is acting pursuant to an official policy. To
prevail on a § 1983 claim against a municipality, “a plaintiff must show: (1) that he was
‘deprived of [his] constitutional rights by defendants and their employees acting under color
of state law; (2) that the defendants have customs or policies which amount to deliberate
indifference to . . . constitutional rights; and (3) that these policies [were] the moving force
behind the constitutional violations.’” Gant v. County of Los Angeles, 772 F.3d 608, 617
(9th Cir. 2014) (quoting Lee v. City of Los Angeles, 250 F.3d 668, 681-82 (9th Cir. 2001)).
If CBJ has been using revenue from the MPF and PDF in impermissible ways, there can be
no doubt that it has done so pursuant to an official policy which is expressed in the MPF
ordinance and the PDF resolution.
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“[B]ecause there is no specified statute of limitations for an action under 42 U.S.C.
§ 1983, the federal courts look to the law of the state in which the cause of action arose and
apply the state law of limitations governing an analogous cause of action.” Pouncil v. Tilton,
704 F.3d 568, 573 (9th Cir. 2012). Defendants urge the court to apply Alaska’s two-year tort
statute of limitations, AS 09.10.070(a), which applies to actions based “upon a liability
created by statute[.]” Defendants argue that means that any allegations as to the collection
and expenditure of the MPF and PDF prior to April 16, 2014 are barred by the statute of
limitations.
Assuming without deciding that a two-year statute of limitations applies to plaintiffs’
constitutional claims, these claims are not barred by the statute of limitations because
“continued enforcement of an unconstitutional statute cannot be insulated by the statute of
limitations.” Virginia Hospital Ass’n v. Baliles, 868 F.2d 653, 663 (4th Cir. 1989) (citation
omitted). Moreover, plaintiffs are only requesting prospective relief, so whether the court
considers expenditures related to the MPF and PDF prior to April 16, 2014 is irrelevant. The
question here is the proper expenditure of MPF and PDF revenue in the future. Plaintiffs’
constitutional claims are not time barred.
Defendants also argue that plaintiffs’ RHAA claim is barred by the statute of
limitations. Defendants argue that the four-year limitation in 28 U.S.C. § 1658(a) would
apply to plaintiffs’ RHAA claim. The PDF was first levied in 2002 and became $3.00 in
2008. But, plaintiffs did not file the instant suit until April 13, 2016. Thus, defendants argue
that plaintiffs are barred from bringing a claim that the PDF violates the RHAA. And
although defendants do not expressly make the same argument as to the MPF, presumably
the same statute of limitations would apply to plaintiffs’ claim that the MPF violates the

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RHAA and plaintiffs did not file the instant suit challenging the MPF within four years of
that fee first being imposed.
Plaintiffs’ RHAA claim is not time barred. “When a plaintiff alleges a continuing
violation of the law, an overt act is required to restart the statute of limitations and the statute
of limitations runs from the last overt act.” Eichman v. Fotomat Corp., 880 F.2d 149, 160
(9th Cir. 1989). Each year the CBJ Assembly approves the expenditures of the MPF and
PDF revenue, so each yearly decision constitutes an overt act and restarts the statute of
limitations.
3.

exhaustion of administrative remedies

Defendants argue that they are entitled to dismissal of plaintiffs’ claim that the MPF
is unconstitutional because plaintiffs failed to exhaust their administrative remedies. “To
determine if a complaint should be dismissed for failure to exhaust administrative remedies,
a court must decide whether (a) exhaustion of remedies was required; (b) the [plaintiff]
exhausted those remedies; and (c) the failure to exhaust remedies was excused.” South
Peninsula Hospital v. Xerox State Healthcare LLC, 223 F. Supp. 3d 929, 936 (D. Alaska
2016) (citation omitted). “In general, exhaustion is required if a statute or regulation
provides for administrative review. If, however, a court finds no effective remedy is
available, it will generally be an abuse of discretion to require exhaustion of remedies.” Id.
(citation omitted).
CBJ Code § 69.20.100 provides:
An owner or agent who protests the payment of the fees charged
under this chapter shall pay the fees and shall, within the time
set for payment of the fees, provide the manager with a written
statement of protest specifying the amount of the fees paid and
the basis for the protest. The manager’s decision shall be final
and any appeal thereof shall be to the superior court.

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Defendants argue that there is no dispute that plaintiffs did not avail themselves of this
administrative remedy. Defendants further argue that there is no excuse for plaintiffs’ failure
to avail themselves of this administrative remedy. Defendants argue that plaintiffs cannot
contend that the procedure provided is inadequate particularly since the procedure allows for
appeal to the superior court, a court that has jurisdiction to hear constitutional claims.
Defendants also argue that plaintiffs cannot claim that the procedure would have been futile
or that it was unreasonable.
Plaintiffs’ MPF claims are “outside the reach of the administrative review
process. . . .” South Peninsula Hospital, 223 F. Supp. 3d at 937. The procedures in CBJ
Code § 69.20.100 provide a mechanism for a fee payer to protest the amount of a specific
assessment and obtain a refund for an improperly calculated fee. But, plaintiffs’ MPF claims
have nothing to do with improperly calculated fees but rather are claims for prospective relief
based on allegations that the MPF violates the Tonnage Clause and the RHAA. There is no
administrative remedy that plaintiffs have failed to exhaust as a predicate to bringing this
action.
4.

waiver

Defendants argue that plaintiffs have waived any right to assert that the MPF and PDF
violate the Tonnage Clause. “A waiver occurs when ‘a party intentionally relinquishes a
right’ or ‘when that party’s acts are so inconsistent with an intent to enforce the right as to
induce a reasonable belief that such right has been relinquished.’” Salyers v. Metropolitan
Life Ins. Co., 871 F.3d 934, 938 (9th Cir. 2017) (quoting Intel Corp. v. Hartford Accident
& Indem. Co., 952 F.2d 1551, 1559 (9th Cir. 1991)).

“The general rule is that

‘[c]onstitutional rights may ordinarily be waived [only] if it can be established by clear and
convincing evidence that the waiver is voluntary, knowing, and intelligent.’” Schell v.
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Witek, 218 F.3d 1017, 1023 (9th Cir. 2000) (quoting Gete v. INS, 121 F.3d 1285, 1293 (9th
Cir. 1997)). “Whether a waiver of constitutional rights was made knowingly and voluntarily
is a mixed question of law and fact. . . .” Kirkpatrick v. Chappell, 872 F.3d 1047, 1055 (9th
Cir. 2017) (quoting Moran v. Godinez, 57 F.3d 690, 698 (9th Cir. 1994)).
The parties disagree as to whether plaintiffs (or a predecessor association) did or did
not knowingly and voluntarily waive any rights they had to challenge the MPF and PDF. The
parties disagree as to the authority of various representatives of vessel owners or of the
associations to consent to or waive the collection of fees imposed upon plaintiffs’ members’
vessels. The court need not resolve this dispute because no reasonable fact-finder could find
that plaintiffs or their members knowingly and voluntarily waived for all time in the future
any possible constitutional or legal challenge to the MPF and PDF.
If plaintiffs were seeking to obtain a refund of fees paid by vessel owners in the past,
defendants’ waiver argument might have some validity. But plaintiffs are not seeking
refunds, and requests by plaintiffs or their members for services and/or concurrences in the
providing of services in the past do not evidence a knowing and voluntary waiver of a
prospective constitutional or legal challenge to the MPF ordinance or the PDF resolution.
5.

laches

Defendants argue that laches prevents plaintiffs from pursuing claims that the MPF
and PDF violate the Tonnage Clause. “The affirmative defense of laches ‘is an equitable
time limitation on a party’s right to bring suit, which is derived from the maxim that those
who sleep on their rights, lose them.’” Eat Right Foods Ltd. v. Whole Foods Market, Inc.,
880 F.3d 1109, 1115 (9th Cir. 2018) (quoting Miller v. Glenn Miller Prod., Inc., 454 F.3d
975, 997 (9th Cir. 2006)). “To establish that laches bars a claim, a defendant must ‘prove
both an unreasonable delay by the plaintiff and prejudice to itself.’” Id. (quoting Evergreen
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Safety Council v. RSA Network Inc., 697 F.3d 1221, 1226 (9th Cir. 2012)). “‘[E]ven
constitutional rights can be waived if not timely asserted.’” Fox v. Johnson, 832 F.3d 978,
989 (9th Cir. 2016) (quoting Hill v. Blind Indus. & Servs. of Md., 179 F.3d 754, 758 (9th
Cir. 1999)).
Defendants must first show that plaintiffs have unreasonably delayed in bringing their
challenges to the MPF and PDF. There is no question that plaintiffs delayed in bringing their
constitutional challenges as to the MPF and PDF fees paid in the past. This delay was
unreasonable, given that CBJ has been expending the revenue from the MPF and PDF for
years for some of the projects to which plaintiffs are now objecting.
But plaintiffs are not seeking refunds of fees which were paid in the past. The relief
that plaintiffs are seeking is forward-looking and has to do with MPF and PDF funds not yet
collected or expended. “[L]aches typically does not bar prospective injunctive relief.”
Danjaq LLC v. Sony Corp., 263 F.3d 942, 959 (9th Cir. 2001). “[T]he general rule that
laches does not bar future injunctive relief stems from a practical recognition of the
interaction between the temporal components of those two doctrines. Laches stems from
prejudice to the defendant occasioned by the plaintiff’s past delay, but almost by definition,
the plaintiff’s past dilatoriness is unrelated to a defendant’s ongoing behavior that threatens
future harm.” Id. at 959-960.
Although laches may apply in “special case[s]” seeking prospective injunctive relief,
id. at 960, this is not a special case. The 16B project is the only evidence of possible future
prejudice to defendants, and plaintiffs unequivocally conceded at oral argument41 that
defendants may constitutionally and lawfully use PDF revenue in the future to pay for the
16B project. There is no future prejudice to defendants because they have an entirely free
41

Transcript of Oral Argument at 11:15-22 (Sept. 18, 2018), Docket No. 203.

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hand in determining what projects to propose in the future and how those projects should be
funded.
The parties’ cross-motions for summary judgment have not presented a genuine
dispute of material fact as regards defendants’ laches defense. Plaintiffs delayed for years
in bringing their constitutional challenge to the MPF and PDF expenditures, and that delay
was unreasonable in light of the fact that defendants were using MPF and PDF fees for years
for some of the projects to which plaintiffs are now objecting. But defendants’ affirmative
defense of laches, like their waiver defense, is unavailing in light of the fact that plaintiffs
are not seeking a refund of fees previously collected.
6.

equitable estoppel

Defendants argue that plaintiffs should be equitably estopped from challenging the
MPF and PDF.
To demonstrate that equitable estoppel is warranted, a party
must show:
“(1) the party to be estopped knows the facts, (2) he or she
intends that his or her conduct will be acted on or must so act
that the party invoking estoppel has a right to believe it is so
intended, (3) the party invoking estoppel must be ignorant of the
true facts, and (4) he or she must detrimentally rely on the
former’s conduct.”
United States v. Kim, 806 F.3d 1161, 1168 (9th Cir. 2015) (quoting United States v.
Hemmen, 51 F.3d 883, 892 (9th Cir. 1995)). “‘Equitable estoppel ordinarily presents a
question of fact unless only one reasonable conclusion can be drawn from the undisputed
facts.’” Kendall v. Amer. Hawaii Cruises, 704 F. Supp. 1010, 1018 (D. Haw. 1989) (quoting
Shamrock Development Co. v. City of Concord, 656 F.2d 1380, 1386 (9th Cir. 1981)).
Defendants argue that plaintiffs asserted that they supported the PDF and then
followed that assertion by not challenging the PDF for eight years. Defendants argue that
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CBJ relied on that assertion by planning and developing numerous infrastructure improvements, including the 16B project. Defendants argue that CBJ would not have undertaken
these projects if they had known that plaintiffs were going to challenge the PDF at some
point down the road. But, this argument fails for the same reason as defendants’ laches
argument fails, namely that the 16B project is irrelevant to this case.
As for the MPF, defendants argue that CBJ has relied on the fact that plaintiffs’
members specifically agreed to expenditures or requested expenditures, with no knowledge
that plaintiffs might someday dispute how CBJ was using the MPF revenue. Defendants
argue that it cannot possibly be equitable for plaintiffs’ members to request expenditures
from the MPF funds and then for plaintiffs to later file a lawsuit alleging that those very
expenditures are unconstitutional.
This argument fails because there is nothing inequitable about receiving the benefits
of a statute or ordinance and then later challenging the constitutionality of that statute or
ordinance. See Louisville & N. R. Co. v. Bass, 328 F. Supp. 732, 741 (D.C. Ky. 1971)
(rejecting argument that the defendants were estopped from challenging the constitutionality
of a statute because they had accepted “the monetary benefits” of the statute). Moreover, as
has been repeatedly stated herein, plaintiffs are only seeking prospective relief, which makes
their failure to object in the past to certain projects irrelevant to the issue of whether
defendants can expend MPF and PDF funds on those projects in the future.
7.

quasi-estoppel

Defendants argue that quasi-estoppel should apply to plaintiffs’ claims that the MPF
and PDF are unconstitutional. “Quasi-estoppel applies where it would be unconscionable
to allow a party to assert inconsistent positions.” In re Quintana, 915 F.2d 513, 518 (9th Cir.
1990); see also, In re Kritt, 190 B.R. 382, 388 (9th Cir. BAP 1995) (citation omitted) (“quasi
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estoppel[] forbids a party from accepting the benefits of a transaction or statute and then
subsequently taking an inconsistent position to avoid the corresponding obligations or
effects”). In determining whether quasi-estoppel applies, the court considers the following
factors:
“whether the party asserting the inconsistent position has gained
an advantage or produced some disadvantage through the first
position; whether the inconsistency was of such significance as
to make the present assertion unconscionable; and, whether the
first assertion was based on full knowledge of the facts.”
TKC Aerospace, Inc. v. Muhs, Case No. 3:11–cv–0189–HRH, 2015 WL 6394481, at *5
(D. Alaska Oct. 22, 2015) (quoting Wright v. State, 824 P.2d 718, 721 (Alaska 1992)).
Defendants argue that plaintiffs are now taking an inconsistent position because
plaintiffs originally supported the PDF but are now claiming that only fees that are used to
provide services to the physical vessel itself are constitutional. Defendants argue that this
inconsistency is significant because over the last eight years, plaintiffs’ members have made
a substantial amount of money by bringing their cruise ships to Juneau and using the
infrastructure created in part with revenue generated by the PDF. Defendants argue that for
plaintiffs to now change their position is unconscionable. As for the MPF, defendants argue
that it is unconscionable for plaintiffs to now argue that the MPF is unconstitutional when
plaintiffs’ members have been requesting and using MPF funds for years.
Plaintiffs are indeed taking a different position than they have sometimes taken
concerning expenditures from the PDF and MPF. Plaintiffs’ members operate profitable
tourist businesses, and the Juneau tourist business is also extremely beneficial to the City and
Borough of Juneau. But the fact that both parties benefit from tourism is irrelevant to the
question of whether or not the doctrine of quasi-estoppel applies in this case. It is true that
plaintiffs’ members have accepted benefits in the sense that their money has been collected
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by defendants and then expended for projects or services, some of which plaintiffs’ members
have requested. It would indeed bother the conscience of the court were plaintiffs’ members
to accept the benefit of projects or services which they requested and then challenge
defendants for providing those projects or services by seeking a refund. But plaintiffs are
not seeking a refund of any fees collected from their members. Again, the relief that
plaintiffs are seeking here is forward-looking. At present, plaintiffs have taken no position
and have gained no advantage – nor have they caused any disadvantage – with respect to
future expenditures of revenue generated by the MPF and PDF.

There is nothing

unconscionable about plaintiffs asserting their constitutional and statutory rights as to the
future use of fees collected from plaintiffs’ members. Defendants’ affirmative defense of
quasi-estoppel fails.
9.

merits

The constitutional and statutory issues raised by the parties’ cross-motions for
summary judgment are purely legal issues. There are no fact disputes to be resolved at this
time because plaintiffs do not seek the refund of fees previously imposed and collected by
CBJ. Although presently the court is not in a position to evaluate the constitutionality or
lawfulness of PDF or MPF funded services or projects which defendants may offer in the
future, the case is ripe for declarations of law applicable to plaintiffs’ first and second causes
of action and the constitutionality of the MPF ordinance and the PDF resolution in light of
the Supremacy Clause of the United States Constitution (plaintiffs’ fourth cause of action).
The court begins with the issues raised in defendants’ cross-motion for summary
judgment. Defendants first ask the court whether the Tonnage Clause permits the use of fees
for services that benefit vessel passengers and/or the vessel. Applying the legal authorities
set out above, the use of MPF and PDF fees for services which defendants provide to vessels
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is permissible. The Tonnage Clause is not violated by defendants’ spending of MPF and
PDF funds for those endeavors that facilitate the marine operations of plaintiffs’ members’
vessels. Such endeavors constitute services to a vessel. Expenditure of MPF and PDF fees
for the benefit of passengers violates the Tonnage Clause unless those expenditures
constitute a service to the vessel. For example, the supply and maintenance of equipment by
defendants which is used by passengers for purposes of embarking or disembarking a vessel
plainly benefits passengers. However, the expenditure of MPF and PDF funds for that type
of service does not offend the Tonnage Clause because boarding and disembarking from a
vessel plainly constitutes a service to the vessel as well. But expenditures of MPF and PDF
funds for services to passengers only – such as crossing guards, repair and maintenance of
sidewalks – violate the Tonnage Clause because they do not constitute a service to a vessel.
There is no nexus to the marine operations of a vessel.
Put somewhat differently, the question which plaintiffs’ first cause of action puts
before the court is not whether CBJ’s use of MPF and PDF funds benefits passengers.
Passenger benefits are not relevant. The proper question as to each category of expenditure
by defendants is: Does the expenditure provide a service to a vessel? If the answer is yes,
the expenditure is constitutional. If the answer is no, the expenditure is unconstitutional
under the Tonnage Clause.
The second issue raised in defendants’ cross-motion for summary judgment also
concerns plaintiffs’ first cause of action. Defendants ask whether the Tonnage Clause
permits the use of fees for services that benefit the passengers or a vessel, even if those
services may be available to and/or used by the general public. As discussed above,
expenditure of MPF and PDF fees for services that benefit a vessel (that facilitate marine
operations) are constitutional, whereas those expenditures that do not benefit a vessel are
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unconstitutional. Whether a particular service provided by defendants is available to and/or
used by the general public is not relevant to plaintiffs’ Tonnage Clause claim. Providing
facilities that constitute a service to a vessel do not become unconstitutional because of
incidental/parallel use by the general public. That said, services provided by defendants to
passengers which are of like kind to those services generally provided by municipalities and
generally funded by municipal tax revenues are unlikely to qualify as services to a vessel.
Whereas a gangplank used by passengers and the general public is a service to a vessel,
sidewalk repairs and access to the public library’s internet, which passengers share with the
general public, are unlikely to be a service to a vessel.
The third issue raised by defendants in their cross-motion for summary judgment
concerns plaintiffs’ second cause of action. Defendants ask whether the RHAA limits the
use of fees to those services only provided to a vessel, or if fees may properly be used for
services benefitting only vessel passengers. As discussed above, the RHAA expressly limits
the use of fees imposed upon a vessel or its passengers to services provided to the vessel.
A service which is provided by defendants and is beneficial to a vessel does not become
unlawful under the RHAA because passengers, in addition to the vessel, may benefit from
the expenditure. But using fees imposed on a vessel for services which benefit passengers,
but which do not also benefit the vessel, is unlawful.
Finally, defendants ask with respect to plaintiffs’ second cause of action whether the
RHAA limits the use of fees to services to the passengers and the vessel to the exclusion of
use or availability of use by the public. Again, the critical inquiry is whether or not a service
provided by defendants and paid for with MPF or PDF funds constitutes a service to a vessel.
Whether a service to a vessel incidentally benefits passengers or is used by passengers as
well as the general public does not matter. Services provided by defendants, funded by MPF
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Motion to Determine Law of the Case
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or PDF fees, which benefit passengers, or passengers and the general public, are unlawful
under the RHAA unless those expenditures are shown to be a service to a vessel.
In the end, defendants argue that they are entitled to summary judgment on plaintiffs’
first and second causes of action because their use of MPF and PDF revenue for services to
passengers is constitutional and lawful. Defendants’ cross-motion is denied as to the
plaintiffs’ first and second causes of action for the reason that fees imposed by defendants
upon vessels and used for services to passengers are unconstitutional and unlawful unless the
services in question constitute a service to a vessel.
Defendants also seek summary judgment on plaintiffs’ third cause of action based
upon the Commerce Clause. Defendants’ cross-motion for summary judgment on plaintiffs’
Commerce Clause cause of action is denied. Fees imposed and collected for services to
passengers that do not also benefit the vessel may violate the Commerce Clause because fees
for such services likely unduly burden interstate commerce.
Finally, defendants seek summary judgment on plaintiffs’ Supremacy Clause cause
of action. “It is a familiar and well-established principle that the Supremacy Clause, U.S.
Const., Art. VI, cl. 2, invalidates state laws that ‘interfere with, or are contrary to,’ federal
law.” Hillsborough County, Fla. v. Automated Medical Laboratories, Inc., 471 U.S. 707,
712–13 (1985) (quoting Gibbons v. Ogden, 9 Wheat. 1, 9 (1824)). “‘The Supremacy Clause
unambiguously provides that if there is any conflict between federal and state law, federal
law shall prevail.’” Berezovsky v. Moniz, 869 F.3d 923, 930 (9th Cir. 2017) (quoting
Gonzales v. Raich, 545 U.S. 1, 29 (2005)). “Preemption arises when ‘compliance with both
federal and state regulations is a physical impossibility, or . . . state law stands as an obstacle
to the accomplishment and execution of the full purposes and objectives of Congress.’” Id.
(quoting Bank of Am. v. City & Cty. of S.F., 309 F.3d 551, 558 (9th Cir. 2002)).
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Plaintiffs argue that the RHAA preempts the MPF ordinance and the PDF resolution.
But, this argument fails. The MPF ordinance and PDF resolution are not preempted by the
Supremacy Clause. It is not impossible for vessel owners to comply with both the federal
law and the local law. Because some of the uses of the MPF and PDF revenue is permissible
under the RHAA, the local laws do not “stand[] as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.” Berezovsky, 869 F.3d at 930
(citation omitted). Defendants’ cross-motion as to plaintiffs’ Supremacy Clause claim is
granted.
Turning then to plaintiffs’ motion for summary judgment, plaintiffs seek a declaration
that the MPF and PDF violate the Tonnage Clause of the United States Constitution (first
cause of action) and Section 5(b) of the RHAA (second cause of action). The following
rulings on plaintiffs’ first and second causes of action are forward-looking. These rulings
are based upon the court’s determination of the law of the case as set forth above and the
court’s resolution of the substantive issues raised by defendants in their cross-motion for
summary judgment. The court is not making factual determinations at this time. Moreover,
the court does not presently have before it any claim or sufficient evidence upon which to
make a determination as to the reasonableness of any costs of services which defendants
supply to vessels.
The MPF ordinance and the PDF resolution do not impose a tax nor do they raise fees
for general revenue purposes. Rather, defendants’ MPF ordinance and PDF resolution
impose fees for proposed services. On their face, the MPF ordinance and the PDF resolution
do not impose unconstitutional or unlawful fees for entry into the Port of Juneau. Based
upon the MPF ordinance and the PDF resolution, defendants may, constitutionally and
lawfully, impose and collect fees to pay the reasonable costs of services rendered to a vessel.
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Motion to Determine Law of the Case
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But, MPF and PDF funds may not be expended for services benefitting passengers which do
not also constitute a service to a vessel – that is, a service which advances the interstate
marine enterprise of the vessel. Expenditures of fees imposed upon vessels which enhance
the tourist experience of passengers brought to Juneau by plaintiffs’ members’ vessels do not
qualify as a service to a vessel, even though the enhancement of passengers’ experience at
Juneau may benefit plaintiffs’ members financially. What is critical is that there be a service
to a vessel.
Based on the foregoing, plaintiffs’ motion for summary judgment on their first and
second causes of action is granted in part and denied in part. Under both the Tonnage Clause
of the United States Constitution and Section 5(b) of the Rivers and Harbors Appropriation
Act, imposing reasonable fees for the cost of services provided to vessels engaged in
interstate marine commerce is constitutional and lawful. Imposition of such fees which do
not constitute a service to a vessel is unconstitutional and unlawful. Plaintiffs’ motion for
judgment on their first and second causes of action is granted to the extent that the MPF
ordinance and the PDF resolution impose fees that are used to fund services that are not
services rendered to a vessel. The motion is otherwise denied.
Plaintiffs’ motion for summary judgment as to plaintiffs’ fourth cause of action is
denied. As set out above, the MPF ordinance and the PDF resolution do not violate the
Supremacy Clause of the United States Constitution.
Conclusion
Defendants’ motion for determination of the law of the case is denied in part because,
contrary to defendants’ arguments, PDF and MPF funds may not be expended for services
provided to passengers, if those services do not also benefit the vessel. Defendants’ motion
for determination of the law of the case is granted as to defendants’ contention that the use
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Motion to Determine Law of the Case
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of PDF and MPF funds for services to vessels which also benefit the public does not render
an otherwise permissible use of PDF and MPF funds unconstitutional or unlawful.
Plaintiffs’ motion for summary judgment is granted in part and denied in part. The
motion is granted as to plaintiffs’ first and second causes of action to the extent that the MPF
ordinance and the PDF resolution impose fees that are used to fund services that are not
services rendered to a vessel. Plaintiffs’ motion for summary judgment on their first and
second causes of action is otherwise denied. Plaintiffs’ motion for summary judgment on
their fourth cause of action is also denied. Plaintiffs’ argument that it is unnecessary for the
court to decide their Commerce Clause claim is accepted, given the court’s rulings as to
plaintiffs’ first and second causes of action. Plaintiffs’ Commerce Clause claim in their third
cause of action is dismissed without prejudice.
Defendants’ cross-motion for summary judgment is denied as to plaintiffs’ first and
second causes of action because defendants’ affirmative defenses fail and because fees
imposed by defendants upon vessels and used for services to passengers are unconstitutional
and unlawful unless the services in question constitute a service to a vessel. Defendants’
cross-motion for summary judgment is granted as to the Supremacy Clause claim in
plaintiffs’ fourth cause of action. Plaintiffs’ Supremacy Clause claim is dismissed with
prejudice.
DATED at Anchorage, Alaska, this 6th day of December, 2018.
/s/ H. Russel Holland
United States District Judge

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Motion to Determine Law of the Case
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