Harbor Maintenance Tax Could Not Be Applied Retroactively
PRINCESS CRUISES, INC., Plaintiff-Cross Appellant, v. UNITEDSTATES, Defendant-Appellant.
03-1330, 03-1345
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
397 F.3d 1358; 2005 U.S. App. LEXIS 1955; 26 Int'l TradeRep. (BNA) 2153
February 8, 2005, Decided
PROCEDURAL POSTURE: Defendant United States sought review of a decision of the United States Court of International Trade, which determined that liability for harbor maintenance tax (HMT) payments on certain cruises before January 27, 1993, was barred by the retroactivity doctrine. Plaintiff cruise line filed a cross-appeal that awarded prejudgment interest to the government because the government was entitled to receive arriving passenger fee (APF) payments.
OVERVIEW: After enactment of the Harbor Maintenance Revenue Act of 1986 (HMRA), 26 U.S.C.S. ยง 4461 et seq., the United States Customs Bureau determined that the cruise line was liable for further HMT and APF payments, and the cruise line challenged the determination in court. The trial court determined upon remand that the cruise line could not be subjected to HMT liability for cruises that occurred before January 1993 because an earlier application was improperly retroactive. The trial court further determined that the government was entitled to prejudgment interest for the APF payments. Affirming, the court concluded that the application of the January 1993 ruling to conduct occurring before the ruling was issued would have an impermissible retroactive effect. The imposition of the ruling worked a significant change in the law, and applying the evidentiary presumption to pre-1993 conduct would prejudice the cruise line. The court found that the imposition of prejudgment interest on the APF payments was appropriate because it provided full compensation to the government.
OUTCOME: The court affirmed the decision of the trial court.
