Wagner, Jon

English

University of Denver

Court Reportscourt found no basis to overturn the Board's decision that the transload-ing activities were conducted by a "rail carrier."Accordingly, the Board's decision that G&U's transloading activitiesconstituted "transportation" based on concerns of economic efficiencywas vacated and remand was required to determine whether the trans-loading activities facilitated the physical movement of pellets onto thetrucks.Robert BlankIndustria y Distribuction de Alimentos v. Trailer Bridge, 797 F.3d 141(1st Cir. 2015) (holding that a fee charged by the Puerto Rico Ports Au-thority to shipping operators for the scanning of incoming cargo did notviolate the dormant Commerce Clause and was not an unconstitutionalburden on the flow of interstate commerce).In 2011, the Puerto Rico Ports Authority ("PRPA") created Regula-tion No. 8067, which required the scanning of all incoming non-bulkcargo into the port of San Juan. The PRPA intended this regulation toallow for better identification of unreported taxable goods and improveupon existing security measures. The PRPA equipped three shipping op-erators at the port with scanning technology, and all importers and ship-ping operators who used the port were charged an Enhanced Security Fee("ESF") to cover the costs of the scanning procedures. Twenty-nine im-porters and the three shipping operators filed suit seeking injunctive re-lief from scanning requirements and the ESF, alleging the regulationsviolated the dormant Commerce Clause. The District Court held that thescanning procedures were permissible. However, the ESF as enforcedagainst the twenty-nine importers who were not provided with scanningtechnology, violated the dormant Commerce Clause. The three shippingoperators provided with the scanning technology (the "Plaintiffs")appealed.The Plaintiffs' complaint asserted that the ESF violated the dormantCommerce Clause because the ESF was excessive, the port operators re-ceived no benefit from it, and the burden on interstate commerce out-weighed the benefit to the PRPA.The Appellate Court reviewed the lower court's factual findings andlegal conclusions de novo. In accordance with Evansville- VanderburghAirport Auth. Dist. v. Delta Airlines, Inc., 405 U.S. 707 (1972), the courtheld that the ESF was a user fee and a user fee is constitutional if it: "(1)is based on some fair approximation of use of the facilities, (2) is notexcessive in relation to the benefits conferred, and (3) does not discrimi-201611Wagner: Industria y Distribuction de Alimentos v. Trailer Bridge, 797 F.3Published by Digital Commons @ DU, 2016Transportation Law Journalnate against interstate commerce." The court also noted that in a chal-lenge to government action the plaintiffs carry the burden of persuasion.The court first reviewed whether the ESF was based on a fair ap-proximation of the cost of services provided by the facilities. The PRPAstated that it attempted to assess a fee reasonably proportional to thetotal cargo scanned and imported; however, the court found two flawswith this method. First, the scanning procedures do not require the scan-ning of bulk cargo. The court suggested that if an operator imported alarge amount of bulk-cargo its fee would be disproportionate to its actualimports. Second, during busy times the PRPA exempts some container-ized cargo from scanning procedures. The court suggested if this occurredregularly the fee would not match the operators' use of the scanning ser-vice. However, the Plaintiffs did not produce evidence to support eitherof these possibilities. The court stated that while it is unable to defini-tively hold that the ESF is a fair approximation of the cost of servicesprovided, the lack of evidence provided to the contrary requires a rulingthat the ESF met the first requirement.The court then addressed whether the cost of the ESF is excessive inrelation to the benefits conferred. The Plaintiffs asserted that the ESFprovided no benefit to its business or to Puerto Rico because it was inef-fective and detrimental to business. The court pointed out that the Plain-tiffs used an incorrect standard in defining benefit, noting that the actualservice that the government provides is immaterial when considering theconstitutionality of a user fee. The correct standard is whether the userfee is comparable to the costs incurred by the taxing facilities. The PRPAdemonstrated that 97% of money brought in by the ESF went to payingfor the scanning services. The court again found that the Plaintiffs failedto provide evidence to the contrary, requiring a ruling that the ESF metthe second requirement.The court last reviewed if the ESF discriminated against interstatecommerce. Citing Pike v. Bruce Church, Inc., 397 U.S. 137 (1970), thecourt stated that a law will be upheld unless the burden imposed on com-merce is clearly excessive to the benefit received. The Plaintiffs arguedthat because out-of-commonwealth companies exclusively use the Port ofSan Juan the fee applied exclusively to out-of-commonwealth companies,creating a burden that interfered with commerce. The court disagreednoting that a facially neutral policy having an impact exclusively on anout-of-state company does not, by itself, demonstrate a burden on inter-state commerce, but rather a plaintiff must show actual interference without-of-state commerce. The court found the ESF met the third and finalrequirement, holding the ESF did not violate the dormant CommerceClause.[Vol. 43:932Transportation Law Journal, Vol. 43 [2016], Iss. 1, Art. 7https://digitalcommons.du.edu/tlj/vol43/iss1/72016] Court Reports 99Accordingly, the Court of Appeals denied Plaintiffs' appeal for in-junctive relief.Jon Wagner3Wagner: Industria y Distribuction de Alimentos v. Trailer Bridge, 797 F.3Published by Digital Commons @ DU, 20164Transportation Law Journal, Vol. 43 [2016], Iss. 1, Art. 7https://digitalcommons.du.edu/tlj/vol43/iss1/7TRANSPORTATION LAW JOURNALVolume 43 2016 No. 1CALL FOR SUBMISSIONSIn order to expand the scope of the Transportation Law Journal and to encouragescholarly debate, the Journal board invites you to submit for publication articlesconcerning transportation law or policy. In particular, the Journal is interested inessays and notes addressing current maritime, motor/trucking, railroad, aviation/airports, aerospace, pipelines, and general transit issues.POLICIES FOR SUBMITTING ARTICLESV1 Format: Article must be submitted in Microsoft Word ".doc" or Open DocumentFormat ".odf" format. Page must be set to 81h' x 11", double-spaced, and typed inTimes New Roman 12pt font. Articles should be twenty or more pages in length.,/ Sources: All factual assertions must be accompanied with footnote indication ofsource materials. Footnote form must comply with The Bluebook: A UniformSystem of Citation - Twentieth Edition. If material cited is not covered by TheBluebook, cite according to the U.S. Government Printing Office Style Manual./ Table of Contents: Prepare a table of contents for the article including allheadings and subheadings./ Summary: Submit a one to two page summary of the article for placement on theInternet./ Submission: Submit your completed article, note, or book review including a one-paragraph professional biography of each author via email or via postal service inelectronic format to:Transportation Law JournalEditor-in-ChiefUniversity of DenverSturm College of Law2255 E. Evans Avenue Room 448Denver, CO 80208tlj@law.du.eduhttp://www.law.du.edu/index.php/transportation-law-journal5Wagner: Industria y Distribuction de Alimentos v. Trailer Bridge, 797 F.3Published by Digital Commons @ DU, 2016The TRANSPORTATION LAW JOURNAL is available in Microform on 16mmmicrofilm, 35mm microfilm and 105mm microfiche. Article copies are alsoavailable. For more information contact:Serials Acquisitions DepartmentUniversity Microfilms, Inc.300 North Zeeb RoadAnn Arbor, MI 48106Back issues may be ordered directly from William S. Hein & Co., Inc., 1285Main Street, Buffalo, New York 14209-1987. Orders may also be placed bycalling Hein at (800) 828-7571, via fax at (716) 883-8100, or email toorder@wshein.com <mailto:order@wshein.com>. Back issues are also availablein PDF format through HeinOnline (<http://heinonline.org/>).6Transportation Law Journal, Vol. 43 [2016], Iss. 1, Art. 7https://digitalcommons.du.edu/tlj/vol43/iss1/7

Industria y Distribuction de Alimentos v. Trailer Bridge, 797 F.3d 141 (1st Cir. 2015)

https://digitalcommons.du.edu/cgi/viewcontent.cgi?article=1026&context=tlj

Industria y Distribuction de Alimentos v. Trailer Bridge, 797 F.3d 141 (1st Cir. 2015)

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