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U.S. District Court in Hawaii dismisses lawsuit challenging applicability of Jones Act in Hawaii

A lawsuit filed in U.S District Court in Hawaii challenges the applicability of the Jones Act in the state.  The lawsuit was filed by attorney and former Hawaii state lawmaker John Carroll and alleges that provisions of the Jones Act are in violation of the commerce clause by restricting shipping between states to American-owned and manned ships.  Carroll blames the Jones Act for Hawaii’s high cost of living and other economic ills. 

The U.S. District Court dismissed the case on the grounds that the population Carroll represents, all Hawaiian consumers, is unduly large and diverse.  Carroll previously challenged the Jones Act in 2009, and his previous case was dismissed on the same grounds as the present case.  Carroll already filed an appeal of the ruling.

The provision of the Jones Act at issue in the lawsuit is that which requires all ships traveling between U.S. states to be manned, built, owned, and flagged by Americans.  American Samoa, the Northern Mariana Islands, and the U.S. Virgin Islands are already exempt from these provisions, and Guam is partially exempt.  Guam is exempt from the U.S. build requirement, but from manning, ownership, or flag requirements.  If Carroll’s lawsuit succeeds, Hawaii would be the only U.S. state exempted from the cabotage provisions of the Jones Act.

In March, the Hawaiian state legislature passed a pair of resolutions calling on the U.S. Congess to loosen the national build requirement under the Jones Act as applied to the noncontiguous United States.  If the U.S. Congress were to enact legislation consistent with the resolutions, the same exceptions would apply in Hawaii as currently applies in Guam.  In April of this year, the Puerto Rican Senate introduced a similar resolution.  As the Jones Act is federal law, state or territorial governments do not have authority to repeal it and any changes to the law must be enacted by U.S. Congress.

Continued application of these provisions of the Jones Act is supported by transportation companies and workers unions.  There are major concerns surrounding the potential impact on the United States shipping industry if the cabotage provisions of the Jones Act are stripped away.  Under the current system, the Jones Act prevents foreign companies that are not required to comply with U.S. labor laws or certain laws related to vessel safety from shipping between U.S. ports.  Critics say this drives up the cost of shipping, while proponents argue that paying laborers a living wage and complying with safety regulations should be part of the cost borne by the consumer.

It is important to note that the cabotage provisions under the Jones Act challenged by Carroll’s lawsuit are separate from the Jones Act provisions related to the rights of seamen.  Even if Carroll’s lawsuit is successful, Jones Act remedies for seamen injured in service of the vessel will remain unchanged.