Hawaiian Rum Company Files Lawsuit Challenging the Jones Act, Citing Constitutional Violations

Koloa Rum Company, a renowned distillery based on Hawaii’s island of Kauai, has filed a federal lawsuit challenging the century-old Merchant Marine Act of 1920, commonly known as the Jones Act.

The lawsuit, filed on February 25, 2025, in the U.S. District Court for the District of Columbia, asserts that the Jones Act violates the Constitution’s Port Preference Clause by disproportionately disadvantaging businesses in non-contiguous states like Hawaii and Alaska.

The Jones Act mandates that all goods transported between U.S. ports be carried on vessels that are built, owned, and crewed by U.S. citizens. While intended to bolster the domestic shipping industry, critics argue that it has led to inflated shipping costs and limited competition, particularly impacting states separated from the mainland.

“The Jones Act doesn’t just hurt our business—it hurts all Hawaii residents,” said Bob Gunter, CEO of Koloa 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,” he added.

The lawsuit contends that the Jones Act’s restrictions force Hawaiian businesses to rely on a limited fleet of U.S.-flagged vessels, leading to higher shipping costs and logistical challenges by creating a monopoly for the small number of U.S. shipping companies that operate on the U.S. mainland to Hawaii trade. For Koloa Rum Company, this means increased expenses when importing essential materials and exporting their products to the mainland and international markets.

Represented by the Pacific Legal Foundation, the distillery argues that the Jones Act’s enforcement leads to economic discrimination against Hawaii, infringing upon the Port Preference Clause, which prohibits Congress from favoring the ports of one state over those of another.

“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.”

The case, titled Koloa Rum Company v. Noem, seeks a declaratory judgment that the Jones Act’s cabotage provisions are unconstitutional as applied to interstate commerce between Hawaii and the mainland United States. Additionally, the lawsuit requests a permanent injunction to prevent federal officials from enforcing these provisions against K?loa Rum Company.

The legal challenge has the potential to reshape maritime commerce regulations and could set a precedent for other businesses adversely affected by the Jones Act. As the case progresses, it will undoubtedly draw significant attention from industries reliant on maritime shipping, policymakers, and legal experts nationwide.

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