Young

*1055 OPINION

The district court granted summary judgment and a permanent injunction in favor of three commercial tour boat who challenged a state regulation that prohibits them from operating their tour boats in Hanalei Bay, located on the northern coast of Kauai. We affirm.

I. BACKGROUND

Ralph A. Young, Whitey’s Boat Cruises, Inc., and Robert F. Butler are commercial tour boat operators conducting passenger tours from Hanalei Bay to the Na Pali coast on Kauai. In order to conduct boat tours in Hanalei Bay, the plaintiffs have held at least two types of licenses in the recent past: federal and state.

The U.S. Coast Guard issued the plaintiffs’ federal licenses (the “coasting licenses”) and these licenses include endorsements allowing licensees to engage in coastwise trade in the navigable waters of the United States, which include Hanalei Bay. The Hawaii Department of Land and Natural Resources’ (the “Department”) administrative regulations require the plaintiffs to obtain state-issued commercial use permits (the “use permits”) to operate in Hanalei Bay. Until recently, state regulations limited the number of use permits issued and imposed certain conditions on the activities…