BY MALIA ZIMMERMAN – Most Hawaii residents haven’t heard of the Jones Act, but one Hawaii lawyer and several business owners say the 1920 federal shipping law has a major negative impact on virtually ever resident and business in the state, and they are challenging the law in U.S. District Court.
John Carroll, an attorney and former state lawmaker, has filed a class action suit against the federal government on behalf of his clients. They maintain the Jones Act violates the Commerce Clause by restricting shipping between states to American-owned and manned ships and thereby hurting businesses and residents by inflating the cost of goods.
The issue is hotly debated among Hawaii’s political elite, but largely ignored by the general public.
Carroll and his plaintiffs – who include Patrick Novak, CEO of The French Gourmet; Daniel Rocha, a farmer and rancher; Ken Schoolland, a professor at Hawaii Pacific University, as well as William Akina, Bjorn Arntzen and Philip Wilkerson – hope to educate the public about the detriments of the Jones Act, which some experts argue increases the cost of living in the islands by as much as one third.
“The most important issue for me is the violation of the Commerce Clause,” Carroll said. “The founding fathers fought the British and over threw them based on imposition, without representation, of a tax on tea. This law’s enforcement taxes everyone who purchases anything in this state because of the excessive shipping costs, which seem to be out of control.”
Carroll maintains the class action lawsuit should be considered as Hawaii’s “revolution”… “to obtain economic freedom from monopolistic domination of shippers who face no competitors.”
But Carroll and other opponents of the Jones Act have met with powerful enemies who prefer to keep their control and profit.
Not surprisingly, the law has its advocates, including transportation companies, unions and lawmakers who benefit from political contributions.
Hawaii’s congressional delegation, with the exception of former Congressmen Ed Case and Charles Djou, have been beneficiaries of substantial donations from Jones Act supporters, including Hawaii’s duopoly shipping companies Matson and Horizon.
Carroll has spent a great deal of his career trying to kill the federal legislation or win Hawaii a special exemption, much like the exemptions granted by the President during natural disasters.
Three years ago, Carroll brought a lawsuit against the Jones Act, but U.S. District Judge David Ezra threw out the case saying Carroll’s clients did not have standing. Carroll said he’s learned from that experience, and believes the new lawsuit will address the issues that caused the first to fail.
Carroll said the impact of the Jones Act is so severe, that the state of Hawaii is denied access to about 90% of all available shipping in the world. He also blames the Jones Act for destroying Hawaii’s agricultural economy.
“The cost of agricultural production is prohibitive, not only because of the cost of fertilizers, herbicides, and farm implements, but also the cost of outbound shipping of locally grown fruits, livestock and ornamental plants to any destination other than the West Coast of the continental United States.”
The lawsuit not only maintains the Jones Act violates the U.S. Constitution but it also claims shippers that service the route from the continental United States, Hawaii and Guam have a monopoly.
Matson brings in 67 percent of the goods to Hawaii while Horizon Lines ships in 33 percent of the goods.