The U.S. Department of Justice is climbing into the ring with the cruise industry in its federal lawsuit over Hawaii’s new “green fee,” putting the weight of the federal government behind a test case that could decide whether the state can tax cruise passengers. In papers filed this month, the department argues Hawaii’s law collides with long-standing federal maritime rules and the U.S. Constitution and urges the court to block the fee before its planned start date on Jan. 1, 2026. The move shifts the fight from a private industry dispute into a rare state versus federal showdown with very real consequences for visitors and island businesses.
According to Travel Weekly, the Justice Department filed a motion to intervene in the case on Thursday. The filing asks the U.S. District Court in Honolulu to let the United States formally join the Cruise Lines International Association’s suit against the state, arguing the federal government has a distinct interest in enforcing national navigation and commerce laws. Travel Weekly noted that the motion follows CLIA’s August lawsuit seeking to stop the law from taking effect next year.
In briefs submitted to the court, the DOJ brands Hawai‘i’s green fee a “scheme to extort American citizens and businesses” and argues the law “flies in the face of federal law twice over,” citing the Constitution’s Tonnage Clause and the Rivers and Harbors Appropriation Act of 1884. E&E News reported that language and quoted additional DOJ wording that the fee “preys upon American businesses and tourists.” The government also filed a proposed intervenor complaint that closely tracks the industry’s legal theory and presses the court to act quickly.
How the green fee works
Hawai‘i’s Act 96 raises the state transient accommodations tax to 11% and, for the first time, applies that rate to cruise ship passengers. Counties are allowed to tack on up to an additional 3% surcharge. The governor’s office has promoted the measure as a first-in-the-nation “green fee” dedicated to climate resilience and environmental projects, with an estimated $100 million in annual revenue. The law requires that the tax be prorated based on how many days a vessel is docked in Hawai‘i ports, a detail that sits at the center of the court fight. According to the governor’s office, the tax changes are scheduled to take effect next year.
What the industry argues
The Cruise Lines International Association and several Honolulu-area businesses filed their lawsuit in late August, asking for a preliminary injunction against the cruise-related provisions of Act 96. Climate Case Chart notes that the complaint contends the surcharge and registration rules are preempted by federal law and amount to an unconstitutional tonnage duty. The plaintiffs also attack disclosure and registration requirements as compelled speech and warn that combined state and county surcharges could push the effective rate close to 14% of a prorated fare. Local coverage reports that shoreside suppliers and tour operators joined the complaint, arguing that cruise visitors support thousands of island jobs and related businesses; see Hawaii News Now.
Why DOJ's move could change the fight
The DOJ stepping in is unusual and could undercut a state argument that the dispute belongs in state court under the Tax Injunction Act, which would make it more likely that a federal judge reaches the industry’s constitutional and statutory claims. Legal analysts told E&E News that the United States’ participation strengthens the case for federal jurisdiction and could influence whether the court blocks enforcement before Jan. 1. Federal filings lean heavily on the Tonnage Clause in Article I, Section 10 of the Constitution and on Congress’s bar on nonfederal navigation charges in GovInfo. The cited tonnage clause text can be reviewed through the National Archives.
Local stakes and what’s next
The court must now decide whether to let DOJ intervene and rule on motions already on the table from both the state and the industry. Until those rulings land, the future of the green fee is up in the air. Because Act 96 is slated to kick in on Jan. 1, 2026, any injunction or delay will directly determine whether cruise lines have to collect the charge next year and how counties will plan for the anticipated revenue. Supporters argue the fee will create a reliable stream of money for resilience and restoration work. Opponents warn it could push cruise itineraries away from Hawai‘i and hit local tourism businesses in the process. Expect more filings and a posted hearing schedule on the federal docket in Honolulu as the case moves ahead; it is listed in public records as Cruise Lines International Association v. Suganuma (1:25-cv-00367).
