Attorneys argue cases in cruise industry suit against Juneau

JUNEAU – A federal judge said it will take some time to decide a lawsuit brought against the City and Borough of Juneau by the cruise ship industry.

Attorneys for the Cruise Lines International Association and Juneau argued their cases Tuesday before U.S. District Judge H. Russel Holland in the lawsuit claiming that taxes were misused, the Juneau Empire reported.

The association filed the suit in April 2016, claiming Juneau used marine passenger fees and port development fees for projects that did not directly benefit the cruise ships visiting the city. The association claims Juneau violated the Tonnage Clause of the U.S. Constitution that prohibits states from charging for a vessel's cargo without providing a service to the boat.

"It's a revenue stream that the city has created that it's re-dispensing as it sees fit," said Jonathan Benner, the association's attorney. "We believe that just blows a big hole in the Constitution."

The city and borough claim the funds have been only used in projects that serve cruise passengers. Bob Blasco, Juneau's attorney, has argued that passenger fees can be spent on services for the passengers, not solely for the vessels.

The association has not targeted specific expenditures that could be in violation of the Tonnage Clause, Blasco argued.

"They have not identified which actual expenditures they claim to be unlawful," Blasco said in court. "And so we are put in the position of saying, 'well, your honor, we don't know what they're claiming to be unlawful. The ones that they agreed to, the ones that they requested, those cannot be any kind of violation of the Tonnage Clause.'"

The association isn't seeking reimbursement for city expenditures with the fee revenue, rather it's looking to set a precedent for future cases, Benner said. A case similar to this has not been tried, he said.

"All the case law development over two centuries was about situations where fees were being extracted for different kinds of uses," Benner said. "As far as I'm aware, this is the first and only situation in which a city's just trying to create a revenue stream out of it."