Southwest: US Violates Statutory Interpretation Rules in Demanding Customs Inspection Fees on Canceled Tickets

Southwest Airlines argued at the Court of International Trade that the U.S. violated the rules of statutory interpretation when it claimed that the airline isn't entitled to keep Customs Passenger Processing Fees paid by its customers on canceled tickets. Southwest said it "harmonizes" all the sections of the governing statute, 19 U.S.C. Section 58c, while the U.S. reads the law's collection provision in a way that isolates it from the rest of the statute (Southwest Airlines v. U.S, CIT # 22-00141).

The government faulted Southwest for keeping the fees on canceled tickets, claiming CBP is entitled to have the fee paid whenever a fee is collected from an individual, even if the person never enters the U.S. or receives any customs services (see 2408130036). Southwest said this claim "fails to address the overall statute," which says CBP is entitled to the fee only when a person arrives in the U.S. aboard a commercial aircraft. The U.S. attempt to "reach beyond the express language of the statute" violates principles of statutory interpretation, Southwest argued in a reply brief.

Southwest offered travel credits as a refund for the canceled tickets, but when the credits went unused after a year, the airline kept the customs passenger processing fees paid by the customer. While the U.S. said these credits don't amount to a refund, which would return the fees to "uncollected" status, the airline said in response that nothing in the governing law or regulations "authorizes that result." Southwest said CBP's "own treatment of certain tickets belies its argument, by conceding that Fees associated with certain canceled tickets that were neither refunded in cash, nor remitted to CBP, are outside of CBP’s reach."