Hawaii Rum Company Sues To Overturn “Outdated & Unfair” Jones Act

Hawaii’s Koloa Rum Company has filed a federal lawsuit against the Jones Act, a shipping law that has been in place for over a century.

The company argues that the law unfairly raises costs for businesses and residents in Hawaii and Alaska, violating the Port Preference Clause of the U.S. Constitution.

The lawsuit, filed in the U.S. District Court for the District of Columbia, claims that the Jones Act gives unfair advantages to some U.S. ports while placing others, especially in non-contiguous states, at a severe economic disadvantage.

The Port Preference Clause, a little-known section of the U.S. Constitution, prevents Congress from favouring certain states’ ports over others.

Kolao Rum Company argues that the Jones Act does exactly that by restricting shipping options for states like Hawaii and Alaska while benefiting ports in the mainland U.S.

Joshua Thompson, senior attorney at Pacific Legal Foundation, which is representing Koloa Rum, stated that the Jones Act imposes billions of dollars in extra costs on Hawaii and Alaska.

“The Constitution does not allow Congress to enforce laws that give economic advantages to some states while severely harming others. The Port Preference Clause was created to prevent this kind of discrimination, yet Hawaii and Alaska have suffered under this law for decades.”

The Jones Act, enacted in 1920, requires that all shipping between U.S. ports be conducted on vessels that are built, owned, and crewed by American citizens.

While the law was originally designed to strengthen the U.S. shipbuilding industry, critics say it has had the opposite effect, reducing the number of U.S. flagged ships while raising costs for businesses and consumers in non-contiguous states.

Bob Gunter, CEO of Koloa Rum Company, emphasised how the law hurts both businesses and residents. “We are paying extra for everything we import, from bottles to packaging materials, just like families across Hawaii pay more for basic necessities. On top of that, we face extremely high costs when exporting our rum to the mainland. The Jones Act is outdated, unfair, and needs to be overturned.”

Because of the Jones Act, businesses in Hawaii and Alaska must use more expensive U.S.-built and U.S. crewed ships, limiting competition and driving up shipping prices.

These costs get passed onto customers making everyday goods more expensive in these states than in the rest of the country.

Koloa Rum Company states that the law prevents them from competing fairly in the American market. The company states that American laws should support, not harm, U.S. businesses and that the Constitution guarantees equal economic treatment for all states.

The case, Koloa Rum Company v. Noem, could have major legal and economic consequences. If the court rules in favour of Koloa Rum, it could open the door for further challenges against the Jones Act, potentially changing how goods are shipped within the U.S.

Reference: Pacific Legal Foundation

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