SAN FRANCISCO(CN) – A private yacht company’s class action against San Francisco over excessive docking fees survives, even as a federal judge dismissed some of its claims Tuesday.
Lil’ Man in the Boat Inc. sued the city in 2016 after refusing to sign an “landing agreement” that raised daily dock fees at South Beach Harbor from $160 to $220, and also imposed a new requirement for commercial vessel operators to hand over 7 percent of their gross monthly revenues when the revenue fee exceeds the base landing fee.
The 2016 landing agreement also forced operators to sign a waiver saying they wouldn’t sue the city.
Lil’ Man in the Boat claims the fees are diverted to the city’s general fund rather than to upkeep of the docks. The company has been running chartered excursions in the San Francisco Bay aboard the yacht Just Dreaming since 2006, using the north side dock of Pier 40’s South Beach Harbor as its pick-up and drop-off point. The dock, the company points out in its lawsuit, isn’t secured or protected and the city rarely inspects or maintains it.
In 2017, U.S. District Judge Jon Tigar ruled that Lil’ Man in the Boat might have a case, finding fees could be an illegal violation of the federal Tonnage Clause barring states from imposing taxes on cargo. He also said the company had shown the fees are excessive.
But on Tuesday the judge sided with the city, which argued Lil’ Man cannot bring its lawsuit because it never signed the waiver and isn’t actually subject to it.
“Plaintiff must actually sign the waiver, then see if defendants assert it. At that point, plaintiff can dispute its validity. But Lil’ Man may not bring a standalone claim for coercive waiver, because the law does not recognize such a claim,” Tigar wrote.
He also nixed Lil’ Man’s claim under California Business and Professions Code section 23300, which prohibits unlicensed entities like the city from sharing in any profits from alcohol sales, which the company claims is part of the city’s grab for 7 percent of their gross monthly revenues. Lil’ Man sought a declaration that the city’s charges were prohibited by the statute and wanted any charges the city has already collected to be returned.
Tigar said the city was correct to argue there is no private right of action for violation of section 22330. But even if he were to look at the merits of the claim Tigar said it would still fail since the city hasn’t violated the statute.
“Here, defendants are not attempting to sell, manufacture, import or otherwise exercise any privilege or perform any act that reserved for those with a license. Thus, section 23300 does not apply to the revenue-sharing agreement presented by defendants,” he said.
The company’s attorney David Ongaro said his client will likely appeal Tigar’s ruling.
“Judge Tigar is a good judge and he had a tough decision to make. He had said these are fairly novel issues. But we’re going to take it to the Ninth Circuit and see what they have to say,” Ongaro said in an interview Tuesday.
Tiger did not mention the company’s remaining claims for excessive fees in violation of the Tonnage Clause and Rivers and Harbors Act, which prohibits fees greater than the cost of the upkeep of the harbor. Ongaro said those claims are moving forward.
“We will be moving for class certification within 30 days,” he said. “The crux of the case is the Tonnage Clause and Rivers and Navigation Act.”