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Inc. v. City And County of San Francisco

United States District Court, N.D. California

July 24, 2017

LIL' MAN IN THE BOAT, INC., Plaintiff,


          JON S. TIGAR, JUDGE

         Before the Court is Defendants' motion to dismiss. ECF No. 12. The Court will grant the motion in part and deny it in part.

         I. BACKGROUND[1]

         Plaintiff Lil' Man In The Boat, Inc. “owns and operates a licensed commercial charter Motor Vessel ‘Just Dreaming' that provides transportation and hospitality services on the San Francisco Bay both for locals and visitors from all over the globe.” ECF No. 1 (“Compl.”) ¶ 1.[2]Plaintiff “hosts parties and receptions, and transports guests to visit local landmarks (like Angel Island or the Golden Gate Bridge) and cities (like Oakland and Sausalito), among other things.” Id. ¶ 25. Plaintiff's customers come “from all over the United States, and from other states and countries such as China, France, Mexico, Russia, Germany, Australia, and Spain.” Id.

         Since 2006, Just Dreaming has operated out of the Port of San Francisco, and, “by local regulation, must load and unload its passengers at the North Side Dock of Pier 40's South Beach Harbor.” Id. ¶¶ 1, 27. Defendants the City and County of San Francisco and the San Francisco Port Commission (together operating under the title “Port of San Francisco” and referred to here as “Defendant City”), Elaine Forbes, Peter Daley, Jeff Bauer, and Joe Monroe (collectively, “Defendants”) “operate and regulate the North Side Dock, including by setting all fees and charges associated with charter vessels' excursion landings.” Compl. ¶ 27.

         In 2016, Defendants “insist[ed] on a written landing rights agreement (the “2016 Landing Agreement”) between Defendant City and all commercial charter operators like Plaintiff who wished to land at the Port.” Id. ¶ 7. Most importantly, the 2016 Landing Agreement increased “landing fees” for use of the North Side Dock. “In 2013, 2014, and 2015 Defendants' landing fee for commercial vessels such as MV Just Dreaming was $160.00. In 2016, the fee increased to $220 for commercial vessel operators who signed the 2016 Landing Agreement, but remained at the 2015 rate for those who refused to sign the new agreement by virtue of a ‘grace period' extended by Defendants.” Compl. ¶ 27. The 2016 Landing Agreement also requires each “commercial vessel operator to pay 7% percent of its monthly gross revenues[3] in any month when (i) the 7% percent fee for such calendar month exceeds the (ii) the base landing fee for such calendar month.” Id. ¶ 35. Non-commercial or recreational vessels “pay little or nothing to Defendants” for use of the same dock. Id. ¶ 35. Defendants reserve the right to raise fees at any time. Id. ¶ 34.

         Despite paying these fees, vessels like Just Dreaming may only use a “small portion” of the North Side Dock. Id. ¶ 30. Moreover, Defendants allow recreational vessels to “moor for hours and even days, ” further decreasing the available docking space. Id. Nor is the North Side Dock in good condition. The dock is “not secured or protected, exposing the vessels to damage from Bay surges and making passenger loading difficult and potentially dangerous.” Id. ¶ 31. “Additionally, for the last three years, Defendants rarely inspect[ed] or maintain the North Side Dock despite its poor condition and repeated requests by tenants to do so.” Id.

         Plaintiff alleges that the “excessive fees imposed on commercial vessels have resulted in a profit to Defendants, far in excess of the costs to maintain the North Side Dock.” Id. ¶ 33. Specifically, Plaintiff explains that “Defendants' budget for operation of South Beach Harbor for fiscal years 2015 through 2021 shows that approximately $500, 000 per year will be taken as ‘rent' from the Port to the Defendant City, and approximately $1, 000, 000 will go to Defendant City's general funds.” Id. ¶ 32. As support, Plaintiff attaches to the Complaint a “budget for operation of South Beach Harbor from 2015 through 2021.” ECF No. 1-6.

         In addition to the fee provisions, the 2016 Landing Agreement contains other terms to which Plaintiff objects. Id. ¶ 37. “For example, it requires commercial vessel operators to waive every claim for damages against the Defendants.” Id. ¶ 37; ECF No. 1-3 ¶ 20.3 (“Licensee agrees that Licensee will have no recourse with respect to, and Port shall not be liable for, any obligation of Port under this License, or for any Claim based upon this License . . .”); ¶ 15.4 (“Licensee, as a material part of the consideration to be rendered to Port, hereby waives any and all Claims, including without limitation all Claims arising from the joint or concurrent, active or passive, negligence of the Indemnified Parties, but excluding any Claims caused solely by the Indemnified Parties' willful misconduct or gross negligence.”)

         Defendants stated that Plaintiff and other commercial vessel operators had to sign the 2016 Landing Agreement or they “would not be able to use the Port for commercial activities at all as of January 1, 2017.” Compl. ¶ 41. Plaintiff refused to sign the 2016 Landing Agreement. Id. ¶ 44.[4]As a result, Plaintiff is “locked out of South Beach Harbor (and, in reality, the City and County of San Francisco) for purposes of conducting their businesses.” Id.

         Plaintiff's complaint alleges four causes of action arising out of the 2016 Landing Agreement. First, Plaintiff brings a Section 1983 claim based on violations of the Tonnage Clause, the Commerce Clause, the Rivers & Harbors Act, and the First Amendment. Second, Plaintiff alleges that Defendants violated the Bane Act. Third, Plaintiff seeks declaratory and injunctive relief. And fourth, Plaintiff brings a claim for unjust enrichment. Plaintiff's complaint is a putative class action and Plaintiff seeks to represent the following four classes:

(a) All persons and entities licensed by the USCG for commercial passenger service who, at any time during the three years preceding the filing of this action to the date of Class Certification have landed at, moored, or caused passengers to traverse South Beach Harbor and incurred or paid fees to Defendants for that opportunity;
(b) All persons and entities who, at any time during the three years preceding the filing of this action to the date of Class Certification, were licensed commercial passenger vessel operators subject to Defendants' demand that they execute and/or comply with the terms, payments and conditions of the 2016 Landing Agreement in order to use South Beach Harbor;
(c) All persons and entities who, at any time during the three years preceding the filing of this action to the date of Class Certification, were licensed commercial passenger vessel operators and signed the 2016 Landing Agreement and complied with its terms;
(d) All persons or entities who, for the past three years to the present, have been licensed for sale and consumption of alcoholic beverages and who were or are subject to Defendants' demand for payment of a percentage of revenues or profits.

Id. ¶ 45.

         Defendants moved to dismiss on March 30, 2017. ECF No. 12. They argue that each of Plaintiff's claims fail as a matter of law.


         A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). While a complaint need not contain detailed factual allegations, facts pleaded by a plaintiff must be “enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. While the legal standard is not a probability requirement, “where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Id. (internal quotation marks omitted). The Court must “accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005).

         III. ANALYSIS

         A. Tonnage Clause

         First, Defendants argue that Plaintiff's claim under the Constitution's Tonnage Clause fails as a matter of law. Under the Tonnage Clause,

No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.

U.S. Const. art. I, § 10, cl. 3. Defendants claim that the fees imposed by the 2016 Landing Agreement are fees for a service, not tonnage duties. ECF No. 17 at 7. This distinction matters because the Tonnage Clause “does not extend to charges made by state authority, even though graduated according to tonnage, for services rendered to and enjoyed by the vessel.” Clyde Mallory Lines v. State of Alabama ex rel. State Docks Comm'n, 296 U.S. 261, 265-66 (1935). For example, “[p]roviding a wharf to which vessels may make fast, or at which they may conveniently load or unload, is rendering them a service, ” and charging for that service does not violate the Tonnage Clause. Keokuk N. Line Packet Co. v. City of Keokuk, 95 U.S. 80, 84-85, 24 L.Ed. 377 (1877). Here, the challenged fees appear to be fees to compensate Defendants for use of the North Side Dock; in other words, fees for service.[5]

         That is not the end of the inquiry, however. Fees for service can still violate the Tonnage Clause if they have “a general, revenue-raising purpose.” Polar Tankers, Inc. v. City of Valdez, 557 U.S. 1, 10 (2009). In other words, where a fee is used “for projects which do not and could not benefit” those paying the fee, the fee is unconstitutional. Brid ...

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