Cunard Steamship Co. v. Mellon

1923-04-30

Headline: Decision allows Prohibition enforcement inside U.S. territorial waters, upholds seizure of liquor from foreign passenger ships in U.S. ports, but limits enforcement on U.S.-flag ships outside those waters.

Holding: The Court ruled that the Eighteenth Amendment and the National Prohibition Act apply to all merchant ships, foreign and domestic, while they are within U.S. territorial waters, but do not reach U.S.-flag ships when outside those waters.

Real World Impact:

Allows seizure of alcoholic beverages from foreign passenger ships in U.S. ports.
Requires U.S.-flag ships to remove liquor when entering U.S. territorial waters.
Leaves U.S. ships free to carry liquor on the high seas outside U.S. waters.

Topics: prohibition enforcement, maritime law, territorial waters, passenger ships

Summary

Background

A group of passenger shipping companies sued to stop enforcement of the National Prohibition Act against liquor they carry aboard ships between U.S. and foreign ports. Ten plaintiffs are foreign corporations with foreign-flag ships; two are U.S. corporations with U.S.-flag ships. The ships routinely buy alcohol in foreign ports and keep it as sea stores to sell or serve to passengers and crews, a practice allowed or required by some foreign ports.

Reasoning

The Court examined the Eighteenth Amendment and the Prohibition Act, focusing on what transportation, importation, and territory mean. It held territory covers land, ports, harbors and a one-league belt of adjacent sea (three miles). The Court concluded the Amendment and the Act apply to all merchant ships while they are within U.S. territorial waters, and that Congress intended the law to operate throughout those waters. The Act does not apply to U.S.-flag ships when they are outside U.S. territorial waters. The opinion noted a special exception for liquor transiting the Panama Canal.

Real world impact

As decided, foreign passenger ships may have liquor seized and be subject to penalties when in U.S. ports and territorial waters. U.S.-flag passenger ships cannot be regulated under the Act while on the high seas outside U.S. waters, but they must comply when within the territorial belt. The Court affirmed dismissals against foreign companies and partly reversed relief for the U.S. companies.

Dissents or concurrances

Justice Sutherland dissented as to foreign ships, stressing international comity and that interference with a foreign ship’s internal affairs should rest on clear congressional language; Justice McReynolds also dissented.