Virgin Islands Port Authority v. United States
13-390
| Fed. Cl. | Jan 9, 2018Background
- VIPA, a Virgin Islands public corporation created in 1968, has statutory authority to set and collect port wharfage/tonnage (ship dues) and published rates in its Marine Tariff; CBP collected those fees from ~1969 until March 1, 2011.
- Federal law (Revised Organic Acts) preserved pre-1917 Danish customs law (including ship dues) and charged the Treasury Secretary with administering Virgin Islands customs; later statutes authorized reimbursable services to territories (48 U.S.C. § 1469c).
- In 1994 the Virgin Islands government and U.S. Customs entered a Memorandum of Agreement (1994 MOA) authorizing CBP to collect duties/fees, reimburse itself for operating costs, and remit net receipts to the Virgin Islands Deposit Fund; VIPA was not a party to the MOA.
- Beginning in 2006–2007 VIPA sought to assume direct collection; VIPA sent a 2007 letter asking CBP to stop collecting fees, and adopted a 2010 resolution to begin collecting on March 1, 2011 (which it did).
- VIPA sued the United States seeking return of fees collected by CBP (2008–2011), alleging illegal exaction (interception of VIPA’s fees and excessive reimbursements), a Fifth Amendment taking, and earlier contract-based claims (the latter were dropped). The Court granted the government summary judgment and denied VIPA’s cross-motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CBP’s continued collection after VIPA’s 2007 demand constituted an illegal exaction (i.e., government has plaintiff’s money directly or "in effect") | CBP intercepted fees VIPA had the right to collect; VIPA’s 2007 letter revoked CBP’s authority so collection after that was unlawful and monies must be returned | CBP acted under federal authority (reimbursable services statute and 1994 MOA) at the Virgin Islands government’s request; VIPA never had standing to revoke the MOA; no direct payment by VIPA to the U.S. | Court: CBP’s interception could be an “in effect” payment, but VIPA failed to show CBP’s collection contravened U.S. law; summary judgment for U.S. on this claim |
| Whether CBP’s reimbursement methodology (allegedly excessive / charging ineligible items) constituted an illegal exaction | CBP reimbursed itself from collections in excess and charged ineligible expenses, effectively exacting VIPA’s funds | Reimbursement was authorized by the 1994 MOA and federal statutes; reimbursements came from the Deposit Fund (maintained by the VI gov’t), not directly from VIPA; disputes over line-item calculations are contractual/accounting matters outside Tucker Act illegal-exaction scope | Court: rejected illegal-exaction theory based on detailed reimbursement disputes as beyond Tucker Act scope; summary judgment for U.S. |
| Whether excessive reimbursement or collection constituted a Fifth Amendment taking | VIPA has a property right in fees (authorized by VI law); improper deductions amount to a taking requiring just compensation | Either VIPA lacks a cognizable property right or, assuming lawful collection and reimbursement authority, any dispute is about statutory/contractual enforcement rather than a compensable taking | Court: VIPA has a property interest but must assume collection/reimbursement were lawful for takings analysis; the claim reduces to statutory/administrative enforcement disputes (not a takings claim here); summary judgment for U.S. |
Key Cases Cited
- Eastport S.S. Corp. v. United States, 178 Ct. Cl. 599 (1967) (distinguishes two Tucker Act noncontract claims: illegal exaction where money was paid to government or rights to payment by statute)
- Aerolineas Argentinas v. United States, 77 F.3d 1564 (Fed. Cir. 1996) (explains illegal-exaction jurisdiction and limits; government misapplication of authority can support recovery)
- Fireman v. United States, 44 Fed. Cl. 528 (1999) (illegal-exaction claim where agency misapplied federal law leading to funds being retained by government)
- Rith Energy v. United States, 270 F.3d 1347 (Fed. Cir. 2001) (for takings claims court assumes validity of challenged government action and then addresses whether it constitutes a taking)