Cruise Lines International Association Alaska v. City and Borough of Juneau

          ORDER

          H. Russel Holland United States District Judge

         Motion to Dismiss

         Defendants move to dismiss plaintiffs' amended complaint.^[1] This motion is opposed^[2] and plaintiffs move for the court to take judicial notice of four exhibits attached to their opposition.^[3] Oral argument was requested and has been heard on the motion to dismiss.

         Background

         Plaintiffs are Cruise Lines International Association Alaska and Cruise Lines International Association. Cruise Lines International Association Alaska is a “not-for-profit association” of twelve cruise lines which works “to build positive relationships with communities and government agencies in Alaska, to develop strong partnerships with communities and businesses in Alaska, and to protect its members' legal interests.”^[4] The twelve cruise lines are also members of Cruise Lines International Association, which is a “not-for-profit organization ... that helps its members succeed by advocating for the common interests of the cruise community and protecting its members' legal interests in the jurisdictions where they operate.”^[5]

         Defendants are the City and Borough of Juneau, Alaska and Rorie Watt, in his official capacity as the City Manager. Juneau “is a duly authorized Alaska Municipality....”^[6]

         Plaintiffs allege that Juneau imposes two “entry fees” on cruise ship passengers: 1) a $5.00 Marine Passenger Fee and 2) a $3.00 Port Development Fee.^[7] Plaintiffs allege that the Marine Passenger Fee was established by a voter initiative and then adopted by the Municipality to codify the terms and to provide for the administration and collection of the fee.^[8] The Ordinance provides that “the purpose of the fee [is] to address the costs to the City and Borough for services and infrastructure rendered to cruise ships and cruise ship passengers visiting the City and Borough.” CBJ Code 69.20.005.^[9] The Ordinance further provides that “[t]he fees ... shall be placed in the marine passenger fund” and that “[t]he proceeds of the fund shall be appropriated in support of the marine passenger ship industry....” CBJ Code 69.20.120.^[10]

         Plaintiffs allege that the Port Development Fee was established by a municipal resolution.^[11] The resolution provides that the “[p]roceeds of the fee shall be placed in the Port Development Fund.”^[12] The resolution further provides that “[i]t is the intent of the Assembly that the proceeds of the [Port Development] Fund shall be used for capital improvements to the downtown waterfront for the provision of service[s] to the cruise ship industry.”^[13]

         Plaintiffs allege that “[t]he Entry Fees discriminate against cruise travel over other modes of transportation”^[14] and that “[t]he Entry Fees discriminate against large cruise ships.”^[15] Plaintiffs also allege that “[r]evenues generated by the Entry Fees bear no reasonable relationship to the actual costs incurred by [Juneau] to provide services to the cruise vessels and the passengers paying the fees.”^[16] Plaintiffs allege that Juneau “has spent the proceeds from the Entry Fees, or significant portions thereof, on activities that are unrelated to and/or have not provided any benefits to passengers and vessels.”^[17] By way of example, plaintiffs allege that Juneau has allocated $10 million “to build a man-made recreational island, elevated walkways, and infrastructure to support a whale statute located nearly a mile away from the cruise ship docks.”^[18] Plaintiffs further allege that Juneau

“has ... applied proceeds from the Entry Fees to a variety of other projects and expenses that provide general benefits to the community, but do not recoup costs incurred by [Juneau] in providing services to vessels and passengers.”^[19] By way of example, plaintiffs allege that Juneau has appropriated Entry Fees during the period of Fiscal Year 2001 to Fiscal Year 2016 for the following:

(a) $22 million to fund ... general government operating expenses;

(b) $11 million to fund projects within the [Juneau] roaded service area, which include a number of projects that benefit [Juneau] generally and/or provide no direct benefits to the Cruise Lines' vessels and passengers;

(c) $2 million for ... bus services even though individual passengers, including Cruise Lines passengers using [the] bus services, already pay to use [the] bus services;

(d) $594, 000 for operations, maintenance, capital improvements, and expansions of the Juneau International Airport;

(e) $447, 000 for upgrades to a private dock that Cruise Lines' vessels and passengers are not able to use; and

(f) Attorneys' fees for outside counsel engaged to represent [Juneau] in matters related to this litigation.^[20]

         Based on these allegations, plaintiffs assert four claims for relief: 1) a claim that the Entry Fees violate the Tonnage Clause of the United States Constitution; 2) a claim that the Entry Fees violate the Rivers and Harbors Appropriation Act of 1884, as amended, 33 U.S.C. § 5; 3) a claim that the Entry Fees violate the Commerce Clause of the United States Constitution; and 4) a § 1983 equal protection claim. Plaintiffs seek a declaration 1) that the Entry Fees “violate the Tonnage Clause, the Supremacy Clause (by virtue of their violation of 33 U.S.C. § 5), and the Commerce Clause, ” 2) that “[d]efendants have deprived CLIA and its Cruise Lines members of federal rights under color of state law in violation of 42 U.S.C. § 1983;” 3) that “[d]efendants are legally barred from imposing or collecting the Entry Fees to the extent that revenues therefrom are unlawful, excessive or otherwise impermissible;” and 4) that “[d]efendants are legally barred from further use of Entry Fees revenue to fund activities that are unrelated to and do not benefit the Cruise Lines' vessels and passengers or that do not reflect the direct cost of providing services to cruise vessels.”^[21] Plaintiffs also seek to enjoin defendants 1) from “imposing or collecting the Entry Fees to the extent that the amount thereof is excessive or otherwise impermissible;” and 2) from “further use of the revenues from the Entry Fees to fund activities that are unrelated to and do not benefit the Cruise Lines' vessels and passengers, or approximate their use of [Juneau's] port.”^[22]

         Pursuant to Rule 12(b)(1), Federal Rules of Civil Procedure, defendants now move to dismiss plaintiffs' amended complaint on the ground that the Tax Injunction Act deprives the court of subject matter jurisdiction.

         Discussion

         “A Rule 12(b)(1) jurisdictional attack may be facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). Defendants are making a facial attack here. “In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction.” Id. In considering a facial challenge, the court is generally confined to the allegations in the complaint and “assumes the truth of [the] plaintiff's factual allegations and draws all reasonable inferences in its favor.” Ecological Rights Foundation v. Pacific Gas and Elec. Co., 803 F.Supp.2d 1056, 1059 (N.D. Cal. 2011). But, the court may also consider “‘additional facts ... contained in materials of which the court may take judicial notice'” without converting a facial attack into a factual attack. Id. (quoting Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994)). Plaintiff bears the burden of proving that subject matter jurisdiction exists. Robinson v. United States, 586 F.3d 683, 685 (9th Cir. 2009)).

         Defendants argue that the Tax Injunction Act (TIA) deprives the court of subject matter jurisdiction of this case. “The TIA is a limitation on the jurisdiction of federal courts.” Bidart Bros. v. Calif. Apple Com'n, 73 F.3d 925, 928 (9th Cir. 1996). The TIA provides that “[t]he district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.”^[23] 28 U.S.C. § 1341. “[T]he statute has its roots in equity practice, in principles of federalism, and in recognition of the imperative need of a State to administer its own fiscal operations.” Tully v. Griffin, Inc., 429 U.S. 68, 73 (1976). The TIA “bars both injunctive and declaratory relief.” Air Polynesia, Inc. v. Freitas, 742 F.2d 546, 547 (9th Cir. 1984). In order for the TIA to divest the court of jurisdiction of plaintiffs' claims, the Entry Fees must be “taxes” for purposes of the TIA; an Alaska state court must provide ...