In 2010, the U.S. Coast Guard spotted a wooden fishing boat without lights and a flag off the coast of Panama and reported the suspicious vessel to the Panamanian Navy.

The Navy pursued the boat until its occupants jumped out and fled — then it found 760 kilos of cocaine on board. Panamanian authorities later arrested the four occupants on the beach and in the jungle, and turned them over to the U.S. government for prosecution in Miami.

In a bit of a blow to the endless war on drugs, a federal appeals court has concluded the 1986 law used to charge the defendants is illegal. In November, the 11th U.S. Circuit Court of Appeals in Atlanta vacated their convictions after finding that Congress exceeded its constitutional power when it passed a portion of that law that was used to prosecute them.

The appeals court found that the Maritime Drug Law Enforcement Act could not be used for prosecuting drug smugglers arrested within the 12-mile territorial waters of foreign countries such as Colombia, Panama, Guatemala and Honduras.

In the Panama case, three of the four defendants have already served their U.S. prison terms and have been deported, but one defendant is still serving a 7 1/2 year sentence.

It is unclear how many similar cases — involving vessels ranging from submarines to tuna boats — might be affected by the appeals court ruling in Florida, where maritime drug-trafficking prosecutions are commonplace. The U.S. attorney’s offices in Miami and Tampa, which have heavily targeted cocaine smuggling from Colombia through Central America and the Caribbean basin, declined to comment.

NO AUTHORITY

The court’s decision by a three-judge panel — a case of “first impression” that is likely to be challenged by the Justice Department because of its unique significance — does not apply to the U.S. prosecution of drug smugglers arrested in international waters. They make up the majority of maritime drug cases filed in federal courts. The ruling also does not affect the federal prosecution of traffickers charged with using “stateless” submersible or semi-submersible vessels to import drugs on the high seas.

In the 35-page decision, the appeals court concluded that Congress lacked the authority to pass part of the maritime act under its constitutional power to “define and punish … Offenses against the Law of Nations.” The problem: Congress can punish offenses that are recognized under “customary international law,” but drug trafficking is not one of them.

“Drug trafficking was not a violation of customary international law at the time of the Founding [of the United States], and drug trafficking is not a violation of customary international law today,” the appeals court found.

A FOREIGN AFFAIR

A defense attorney who represented one of the four defendants in the Panama case put the court’s decision in layman’s terms.

“This is basically a Panamanian internal matter, and their government is saying, ‘United States, you clean it up for us,’ ” Miami lawyer Philip Horowitz said. “With this decision, they can no longer do that.”

Since the mid-1980s, the maritime act has allowed U.S. drug enforcement agencies to share information with their counterparts in the pursuit of catching foreign-flag and stateless vessels carrying drugs in both territorial and international waters.