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UFO Chuting of Haw., Inc. v. Smith

ELR Citation: 37 ELR 20294
Nos. No. 05-16545, (9th Cir., 11/28/2007)

The Ninth Circuit held that a company's federal license allowing it to transport up to 12 passengers in "coastwise trade" off the coast of Maui as part of its parasailing business does not preempt Hawaii law prohibiting parasailing during limited portions of the year to protect mating humpback whales. Although a district court initially entered an injunction barring the state's enforcement of the parasailing provision, the injunction was vacated due to an intervening change in the law—the fiscal year (FY) 2005 Omnibus Appropriations Bill. Hawaii’s regulation does not completely exclude federal licenses. Because the ban is seasonal, not year-round, it is not wholly economically infeasible for the company to operate its business. Nor does the regulation conflict with federal law. The FY 2005 Omnibus Bill permits the state of Hawaii to regulate the operation of commercial vessels for the purpose of protecting humpback whales. Although the bill did not address the preemptive effect of U.S. Coast Guard licenses, it suggests that Congress meant the Hawaii legislation protecting humpback whales to continue in force, despite a known impact on parasailing and similar commercial boating activity. In addition, the parasailing ban is a reasonable regulation of federal licenses because it furthers the legitimate governmental purpose of protecting humpback whales. And the parasailing ban is nondiscriminatory and does not impose an unreasonable burden on interstate commerce. The court also held that the company was not entitled to attorneys fees. Because the injunction never went into effect, the company never received a direct benefit from the temporary relief granted by the court. It therefore does not qualify as a “prevailing party.”