Kōloa Rum Company challenges Jones Act in court, argues century-old shipping law violates the Constitution’s Port Preference Clause

News Release from Pacific Legal Foundation, February 25, 2025

Washington, DC; February 25, 2025: The Kōloa Rum Company, a leading distillery on the Hawaiian island of Kauai, is challenging a century-old federal shipping law that inflates costs, stifles competition, and severely disadvantages American businesses in Hawaii and Alaska.

Kōloa Rum Company has filed a federal lawsuit arguing that the Jones Act is unconstitutional under the Port Preference Clause — a largely overlooked provision of the Constitution that prohibits Congress from favoring the ports of one state over those of another, ensuring equal treatment in interstate commerce.

“Hawaii and Alaska are forced to pay billions in extra costs because of a shipping law that Congress had no constitutional authority to create,” said Joshua Thompson, senior attorney at Pacific Legal Foundation. “The Port Preference Clause was designed to prevent this exact type of economic discrimination.”

Enacted in 1920, before Hawaii and Alaska were states, the Jones Act requires that all shipping between U.S. ports be conducted on vessels built, owned, and crewed by U.S. citizens. While originally intended to bolster domestic shipbuilding, the law has had the opposite effect — shrinking the American shipping fleet while severely harming citizens and businesses Hawaii and Alaska.

“The Jones Act doesn’t just hurt our business — it hurts all Hawaii residents,” said Bob Gunter, CEO of Kōloa Rum Company. “We pay more for everything we import, from bottles to packaging, just like all families across the state. And then we are hit a second time, paying exorbitant costs for exporting our rum to our fellow Americans. This lawsuit is about ending an unfair, outdated law that discriminates against the citizens of Hawaii and Alaska.”

The Constitution requires the ports of each state be treated equally. However, by mandating that shipping between American ports must be only on American-flagged ships, the Jones Act puts the non-contiguous states at a severe and unconstitutional disadvantage. It restricts competition, limits economic opportunity, and drives up costs. American laws should work to the benefit of American businesses, but the Jones Act puts American business at a severe disadvantage on the world stage. The Constitution demands that Kōloa Rum Company have an equal opportunity to compete in the market.

The case is Kōloa Rum Company v. Noem, filed in the U.S. District Court for the District of Columbia.

PDF: Koloa-Rum-Company-v.-Noem_PLF-Complaint_2.25.25.pdf

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