Cruise Organization Sues Alaskan City

By Mark Edward Nero

The Cruise Lines International Association and its Alaska branch are suing the City of Juneau over the legality of taxes imposed on cruise passengers as a condition of their visit to Juneau and how the borough spends that money.

The legal challenge, which was filed April 12, is intended to resolve a longstanding disagreement between the cruise industry and the city regarding the interpretation of the US Constitution and federal restrictions on the use of passenger entry fee taxes.

At the crux of the case is millions of dollars in fees the city charged cruise passengers to help pay for the construction of a three acre, $10 million artificial island with a life-sized statue of a humpback whale.

Juneau collects $8 in fees from each cruise ship passenger, plus receives funds from a state charge of $5 per passenger. It adds up to millions of dollars for the city per year.

Cruise line passengers pay about 19 percent of all sales taxes generated in Juneau, according to the cruise association.

“The industry certainly does not have an issue with paying taxes or contributing to local services,” said John Binkley, president of CLIA Alaska. “However, the US Constitution is clear that per passenger entry fees are prohibited unless they meet a very narrow list of exceptions, none of which apply to this situation.”

CLIA Alaska says it has objected on numerous occasions to the artificial island project as well as other projects that “do not provide a direct benefit to the passengers paying for those projects and the vessel that transports them.”

If a community feels strongly about a particular project, sales taxes or other revenue sources are appropriate, CLIA said, but projects of general community benefit cannot be funded by one mode of transportation such as the per passenger entry fees.

Juneau has received more than $55 million in entry fee taxes in just the past four years. In addition to the artificial island project, the complaint lists a number of other expenditures over the years that do not meet the criteria mandated by law, including $22 million to fund Juneau general government operating expenses; $594,000 for the Juneau airport; and $447,000 for upgrades to a private dock that CLIA cruise vessels and passengers can’t use.

“Filing suit was a difficult decision for us,” Binkley said. “Juneau is a great port and a community of people who take excellent care of our guests. In turn, it’s important that we ensure that the fees our guests pay to visit Juneau are used in a responsible and legal way.”

A full version of the lawsuit can be seen at http://www.cliaalaska.org/wp-content/uploads/2016/04/COMPLAINT.pdf

Young Bros. Sues Ex-Tug Capt. Over Grounding

By Mark Edward Nero

Hawaii-based freight handling and transportation company Young Brothers Ltd. has filed a lawsuit against the captain and first mate on one of its tugboats, alleging that the first mate’s inebriation led to the grounding of a tug and barge last Halloween.

The company, which is a subsidiary of Seattle-based Foss Maritime, filed the suit Jan. 7 in US District Court. It alleges that the captain of the tug Moana Holo knew that the first mate was drunk but still sailed out of Nawiliwili Harbor on Oct. 31, 2014. The tug and the barge Maka’ala became separated and struck a breakwater. Maka’ala’s hull was damaged and it lost a 30-by-15-foot skeg; the Moana Holo suffered a breach to its hull.

According to the lawsuit, members of the 10-person crew were ordered to take an alcohol test immediately after, but did not take the tests as required.

The captain and first mate were subsequently fired by the company, but thus far no criminal charges have been pursued against them.

The US Coast Guard says it cannot comment on the matter because it is still investigating the incident. Young Brothers also would not comment other than in a statement it issued Jan. 8.

“We are not able to comment on this pending lawsuit related to the incident at Nawiliwili Harbor last October,” Young Brothers Vice President Roy Catalani said in the prepared statement. “However, Young Brothers regrets that this incident occurred. We’re also grateful that no employees were injured, no customer cargo was lost or damaged, and no fuel or oil leaked from our vessels.”

Young Brothers has so far declined to state the amount of damages it is seeking from the two defendants.

PMSA Wins Public Records Lawsuit

By Mark Edward Nero

The San Francisco Superior Court granted the Pacific Merchant Shipping Association a significant victory on May 23 when it awarded the PMSA more than $260,000 in attorneys’ fees and costs against the State of California as a result of a Public Records Act lawsuit.

The PMSA had been seeking records documenting pilot assignments on the San Francisco Bay, and the Superior Court declared that PMSA’s case established that the Port Agent is a public official subject to the Public Records Act and that, as a result, the records he uses regarding the working hours and rest periods of the state-licensed pilots who navigate vessels in and around the San Francisco Bay must be made public.

“Our goal is to ensure that cargo vessels are safely and legally navigated in the San Francisco Bay, and for this to happen we need transparency and accountability in our state pilotage system,” PMSA General Counsel Mike Jacob said. “When assignment documents are made public anyone can see when state-licensed pilots are dispatched to ships, evaluate pilots’ actual working conditions, independently confirm pilots’ work hours, or verify minimum rest period violations. We are pleased that as a result of this action we have ensured the public’s right to access records used by the Port Agent and that the Superior Court has vindicated our efforts.”

The original case was filed in July 2012 in San Francisco Superior Court.

“Our efforts were supported by the ACLU, the California Newspapers Publishers Association, First Amendment Coalition, LA Times and McClatchy newspapers,” PMSA President John McLaurin told Pacific Maritime Magazine Online via email.

POLB Loses Suit Filed by Ex Employee

By Mark Edward Nero

The Port of Long Beach was ordered by the Los Angeles Superior Court on April 29 to pay a former employee $1.1 million related to a discrimination case the woman filed against the city in 2010.

The former employee, Sharon Jordan, was the secretary of government affairs for the port until being fired in 2010. After her termination, she sued, alleging she was retaliated against for filing a discrimination report against her employer and for complaining about her job conditions.

Jordan, who was named the port’s secretary of government affairs in February 2008, had also worked for many years as an administrative assistant for the port, which is overseen by the City of Long Beach. She said that although she had previously received only positive reports regarding her performance while working at the port, treatment of her changed in 2008 after her husband became seriously ill.

Jordan said after that point, she was asked by her then-supervisor for regular updates on her husband’s condition, which was followed by criticism of her work and job performance and an unsuccessful attempt by her then-supervisor to demote her. Jordan took medical leaves of absence in July 2009 and May 2010 because of issues at work with her supervisor. She eventually asked to be transferred to another position, but was denied and then fired in July 2010. Her firing came several weeks after she filed a discrimination complaint against the port.

As a result of her termination, she lost her medical insurance; her husband died in January 2011.

"We're obviously disappointed with the verdict," said City of Long Beach assistant city attorney Monte Machit. "We're taking a look at the transcript to see if we will appeal."

Machit didn't say when a decision could come, but he mentioned that under state law, the city has up to 60 days from when a judgment is handed down to file an appeal.

Defendants in Anchorage Port Suit Seek Dismissal

Three companies being sued by the City of Anchorage for alleging mismanaging an expansion of the Port of Anchorage are trying to have the suit dismissed.

Project construction manager Integrated Concepts and Research Corp., known as ICRC; designer PND Engineers; and engineering and construction company CH2M Hill were sued in March 2013 by the city. In mid-April, all three companies filed motions with the US District Court in Anchorage denying liability and seeking to have the lawsuit thrown out.

Anchorage’s suit came in the wake of a late 2012 report that revealed three of four new sections built at the port were not constructed correctly, and due to shifting land, could fail during an earthquake.

The $2.2 million, 2,200-page sustainability study was conducted by CH2M Hill on behalf of the US Maritime Administration (MARAD) and the US Army Corps of Engineers. It says the danger comes mainly from a foundation system called Open Cell Sheet Pile, or OCSP, where instead of building a traditional dock on piling, interlocking sheets of steel are hammered into the sea floor to form U-shaped cells, which are then backfilled with dirt and gravel.

Due to the problems, most construction of the project was halted in 2010.

The city seeks an unspecified amount in damages in its lawsuit, but the expansion, which has been in the works for more than a decade, was originally estimated to cost $360 million, and was supposed to be complete by 2011.

Instead, cost estimates have jumped to more than $1 billion and continue to climb. Project completion is at least a decade away, according to port estimates.

Port of Astoria Settles Malpractice Suit

The Port of Astoria has reportedly settled a malpractice lawsuit it had filed against one of its former attorneys.

A decision to settle the case was made Aug. 23 by the port, according to the Daily Astorian newspaper.

The litigation had been brought against attorney Heather Reynolds because of Reynolds’ failure to notify former port insurers about petroleum contamination on port property. The lack of disclosure was related to the port attempting to secure insurance.

Multiple former port tenants, including Exxon and Mobil Oil, stored petroleum on port property in the past. Contamination includes an area south of Slip 2, where an underground pipe ruptured, leaking petroleum into the ground.

The port is currently negotiating with the oil companies, insurers and the Department of Environmental Quality on how to clean up the contamination.

The Daily Astorian reports the commission accepted a lawsuit settlement of $50,000, but rather than Reynolds having to pay up, the money would come from the Oregon State Bar’s liability fund.

The port commission is continuing a malpractice case against another of its former attorneys, Mike Lilly, who had specialized in environmental cleanup issues.

“I think it was the prudent thing to do,” one of the port’s lawyers, Thane Tienson, told the newspaper. “We’ll go forward and concentrate our efforts against Mike Lilly. He is the person who was hired expressly for his expertise in environmental law, including environmental insurance.”