Opinion ID: 767452
Heading Depth: 2
Heading Rank: 3

Heading: The Arriving Passenger Fee

Text: 30 With regard to the APF, Princess argues that the statute should be interpreted to mean that a journey includes only the cruise travel and thus the journey originates where the cruise begins and not where the passenger first departed from the United States on a plane. Customs, however, has interpreted journey, under the statute, to include all stages of an itinerary, even in those circumstances where travel is on different modes of transportation and covers multiple destinations. See 19 C.F.R. § 24.22(g)(2)(i)(B). 31 As discussed above, the Supreme Court's decision in Haggar makes clear that a Customs regulation interpreting a statute is entitled to Chevron deference. See 119 S. Ct. at 1400. That deference is not affected by the fact that Customs promulgated the regulation formalizing its interpretation of the statute subsequent to imposing the APF on Princess pursuant to that interpretation. See Smiley v. Citibank (S.D.), N.A., 517 U.S. 735, 739-41 (1996) (holding that neither an agency's delay in promulgating a regulation nor the fact that it was litigation which disclosed the need for the regulation affects the court's deference to the agency's interpretation of an ambiguous statute as embodied in such regulations). Thus we will apply the traditional two-step Chevron analysis to the APF statute and its interpretation by the Customs Service. 32 Princess contends that even with Chevron deference Customs's interpretation must fail because it is at odds with the statute, exceeds the congressional delegation of authority and is unreasonable, arbitrary and capricious. First Princess argues that the intent of Congress was clear and unambiguous with regard to the meaning of journey. We reject this argument, however, because the statute clearly does not provide any definition of the term journey. 33 Princess next argues that Congress did not grant Customs broad power to promulgate substantive regulations when it passed the COBRA, but rather gave Customs the limited role of administering the APF. The legislative history reveals concern in Congress that Customs not use the APF to exact additional fees for other services or to increase the paper-work burden imposed on industry. It does not reveal, however, any specific definition of journey or concern that application of the APF to passengers making layover stops in APF-covered ports would be an imposition of additional fees or a greater paper-work burden. Accordingly, we hold that defining journey to include multiple stops or more than one mode of transportation was not outside the scope of the authority granted to Customs by Congress. 34 Princess argues that the Customs interpretation is arbitrary and capricious because such interpretation unfairly subjects Princess to APF liability based on decisions made by passengers regarding air travel which are out of Princess's control. To support its argument Princess quotes from the Customs ruling denying its protest in which Customs declares that a travel agent issuing a plane ticket and a cruise ticket would be liable for the APF, whereas neither the travel agent nor the cruise operator would be liable if each issued the same tickets independently. Princess poses other hypotheticals with equally anomalous results, such as a passenger arriving for a cruise from overseas or a passenger who makes a trip abroad before traveling to a U.S. departure port. 35 It is not clear, however, that any of the scenarios presented by Princess are currently at issue. Customs asserts that its interpretation only applies to those situations where Princess sells a cruise package or otherwise coordinates an itinerary such that Princess would be aware of the journey's beginning and ending points. In fact, the government argues the hypotheticals are just that, as none have actually been imposed on Princess nor would the APF be imposed on Princess in situations where it was unreasonable to do so. We therefore refuse to hold Customs's interpretation of the statute to be unreasonable merely because the Appellee can conjure a hypothetical situation in which that interpretation would produce unreasonable results. Rather we hold that the Customs interpretation, imposing liability for the fee on the party issuing the travel documents, or in the case of foreign-issued tickets, on the carrier transporting the passenger out of the United States customs territory, avoids the record-keeping difficulties hypothesized by Princess, because the responsible entity necessarily knows the entire itinerary of the passenger traveling on that set of travel documents. 36 Finally, Princess argues that the plain language of the statute exempts from the APF any passenger whose last port of call before arriving in the U.S. was an exempt port, regardless of non-exempt locations visited prior to the exempt port. This interpretation directly conflicts with the language of the statute, and thus we reject it. 37 The statute exempts trips that originated in the United States and [were] limited to Canada, Mexico, a territory, possession or an adjacent island. 19 U.S.C. § 58c(b)(1)(A)(i)(II) (emphasis added). If the interpretation offered by Princess were allowed to stand, the exemption in the statute for trips originating in the U.S. would become superfluous. If all APF liability was dependent only on the last stop before entering a U.S. port, Congress would not have needed to create an exemption for those trips originating in the U.S. and stopping only at exempt ports, since those trips, by definition, would already be excluded from APF liability by the other exemptions. It is a long-held tenet of statutory interpretation that one section of a law should not be interpreted so as to render another section meaningless. Accordingly, we hold that the exemption depends on where the journey originated, not on the last port of call before entering the United States. 38 For similar reasons, we reject the lower court's holding that layover stops at APF-covered ports do not, in and of themselves, trigger APF liability. Princess Cruises, Inc. 15 F. Supp. 2d at 804. The statute is clear, when a journey begins and ends in the United States, the journey is only exempt from the APF if the entire journey is limited to Canada, Mexico, U.S. territories or possessions, or the adjacent islands. 19 U.S.C. § 58c(b)(1)(A)(i)(II). Thus, any journey beginning and ending in the U.S., including journeys involving both airline and cruise ship travel, as described above, will be subject to APF liability if any stop on the itinerary was in a non-exempt port. However, because it is the place of origin that determines liability, if the journey originated in one of the exempt ports, such as Puerto Rico, then a stopover or layover in a non-exempt port will not trigger liability even if the traveler enters the United States at the end of the journey. 39 In addition to the arguments addressed above, Princess also asserted at oral argument before this court that it did not issue any tickets, but rather that all tickets were issued by independent travel agents. Thus, Princess claimed it should not be subject to APF liability even if the Customs interpretation of the word journey is found to be reasonable, because the regulation requires that the APF be paid by the entity issuing the ticket. The trial court made no findings regarding whether or not Princess issued some or all of the tickets in question. Also not briefed or fully argued before this court is the question of whether Princess as a principal would be liable for the APF on tickets distributed by designated travel agents acting on its behalf. This court is without any evidence upon which to make a determination regarding whether Princess, or another party, is liable for the APF on the tickets in question. In addition to the question of which party is responsible for collection of the APF on the tickets, a number of other factual questions must be answered before a final determination of liability can be made. Those factual findings must be made by the trial court on remand. 40 Because we hold that the Customs Service's interpretation of the APF statute is not unreasonable, we reverse the lower court's holding that APF liability depends only upon the points of origination and termination of the cruise. We further reverse the holding that layovers and stopovers do not trigger APF liability, and hold that APF liability attaches when a passenger whose journey originates in the United States has a layover or stopover in any non-exempt port. Consequently, we remand this case to the Court of International Trade for a determination of Princess's APF liability that is consistent with this decision.