Lawsuit filed over Jones Act


By TOM CALLIS

Tribune-Herald staff writer

A Honolulu attorney is challenging the Jones Act again in federal court.

John Carroll filed the class-action lawsuit Thursday on behalf of seven plaintiffs, including a Hilo businessman, who allege the maritime law encourages shipping monopolies and unfairly inflates prices for Hawaii consumers.

Carroll had lost a legal challenge of the act in 2009, seeking injunctive relief for his clients. A federal court judge dismissed the case saying he couldn’t prove a direct connection to the financial harm they suffered and the law.

“The main difference is that we do have the particularized basis for showing this,” he said. “And then also, I’m not asking for injunctive relief this time. I’m going to go right to trial.”

The case will be heard in the U.S. District Court of Hawaii. Carroll estimated a trial would take six to eight months to start.

The Jones Act requires all shipping vessels travelling between states to be American built, owned and manned.

Its critics say it causes economic harm to Hawaii, particularly dependent on ocean cargo, by in effect putting shipping in control of two companies: Matson and Horizon Lines. That lack of competition leads to higher prices, they argue.

James O’Keefe, one of the plaintiffs, wrote in an affidavit that rising shipping costs, which he partially attributed to limited shipping competition, helped put his Hilo bakery out of business.

“The Jones Act singles out Hawaii for disparate treatment in relation with other states,” the former owner of O’Keefe & sons, Bread Bakers wrote in the affidavit signed in 2009. The bakery went out of business in 2008.

“It was not the only factor in the demise (of the business) … but at an estimated additional cost of 7.5 percent of income, it was the most significant,” he wrote.

Carroll said the goal of the lawsuit is the repeal of the act, which he believes violates the Commerce Clause of the U.S. Constitution.

“It’s like a revolution for Hawaii to throw off the chains of the oppressive U.S. government on this little single state with this stupid provision,” he said. “It’s just crazy.”

Carroll lost a bid for the Republican Senate nomination this year, and included repeal of the act as part of his platform.

Email Tom Callis at tcallis@hawaiitribune-herald.com.

 

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