Maher Terminals is suing the Port of New York and New Jersey in federal court in Newark, claiming
the agency’s port charges and fees are “unlawful.”
Maher, the port's largest container terminal, says the fees violate the 1984 Water Resources Development Act (WRDA), the Rivers and Harbors Appropriation Act of 1884, and the so-called “tonnage clause” in the U.S. Constitution.
A port authority spokesman had no comment on the lawsuit.
Maher, which has a 445-acre terminal in Elizabeth, N.J., said in complaint filed at U.S. District Court in Newark that the port authority’s charges and fees are unlawful because they recover the agency’s “local sponsor share” of the cost of deepening the harbor in a way that violates the WRDA.
Maher was purchased by a Deutsche Bank unit in 2008. In September, Deutsche Bank told an investor conference that Maher was an asset it might sell to raise capital, according to a report
in the Virginia Pilot
Maher said the port authority is “including recovery of expended and future projected WRDA Local Sponsor share costs in levying charges and fees for the use of marine container terminals” and has not established a cost recovery fee pursuant to the law.
It said the port authority's fees “are not reasonable fees charged on a fair and equitable basis used solely to pay the cost of a service to a vessel” and added they “constitute charges for the privilege of entering, trading in or lying in a port in excess of permissible purposes” in violation of the “tonnage clause” in the U.S. Constitution.
The tonnage clause says "No State shall, without the Consent of Congress, lay any Duty of Tonnage …”
Maher argues “the prohibition against tonnage duties embraces all taxes and duties regardless of their name or form, even though not measured by the tonnage of the vessel” and that the port authority’s “marine container terminal charges and fees for the use of container terminals, including volumetric throughput charges pertaining to containerized cargo loaded and unloaded at the port authority’s container terminals, constitute charges for the privilege of entering, trading in, or lying in a port and therefore constitute duties on tonnage.”
It wants the court to declare the port authority’s marine terminal charges and fees unlawful, enjoin it from levying or collecting them, and award it restitution for fees previously paid along with punitive damages.
The port authority is the local sponsor for several Army Corps of Engineers projects that will improve various waterways, some to a depth of 50 feet.
To date, Maher said the agency has incurred over $400 million for “local share” costs, and it explained “revenue derived from the use of Maher’s container terminal, both in an aggregate and on a per container basis, has exceeded and exceeds the WRDA Local Sponsor share costs allocated to New Jersey marine container terminals.”
The lawsuit details some of the charges that Maher pays the port authority, which is a landlord port.
Maher said the port authority’s current aggregate "basic rental" charge for its terminal was $22.4 million, or $50,413 per acre, and was increased to nearly $22.9 million, or $51,421 per acre, on Oct. 1.
It also noted that for cargo in containers, the port authority charges a container throughput rental based on the number of containers loaded and unloaded at Maher’s terminal, which rose from $19 to $21 per container on Oct. 1.
Maher said it must pay a minimum throughput rent on the equivalent of 775,000 containers annually, though the throughput is waived for the first 356,000 containers. Maher said it handled 1,024,561 containers in 2008, 817,490 in 2009, 1,029,679 in 2010.
In 2010, the terminal operator paid $12.5 million in throughput rent.
In April, Maher filed a complaint
against the port authority with the U.S. Federal Maritime Commission, claiming the agency gave a sweetheart deal to the neighboring Port Newark Container Terminal (PNCT) after it won the business of its largest customer.
In October 2009, Mediterranean Shipping Co. transferred its business from Maher to (PNCT).
Maher said the port authority knew that the transfer would harm Maher and PNCT could not handle the MSC business unless its terminal was expanded.
After MSC moved to PNCT, Maher said the port authority announced an agreement with PNCT to expand the terminal and extend its lease. - Chris Dupin