A Vessel Defined
By Marilyn Raia
Pacific Maritime Magazine
Everyone in the maritime industry knows what a vessel is. Or, maybe not. Recently, the United States Supreme Court provided some guidance on what is a vessel and what is not a vessel.
The Statutory Definition of "Vessel"
Federal statutory law defines a "vessel" to be "every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water." The definition of vessel is important in various contexts. For example, the federal lighting requirements apply only to vessels. Further, the rights of an injured maritime worker may depend on whether the injury occurred on a vessel. Moreover, as the recent Supreme Court case illustrates, only a vessel may be the subject of a maritime lien.
As readers may recall from a prior article, Appeals in Maritime Cases (Pacific Maritime Magazine, March 2012), there is no automatic right to appeal an adverse decision by a federal appellate court to the United States Supreme Court. However, the Supreme Court may agree to hear a case for several reasons, one of which is an inconsistency in rulings from different federal appellate circuits on the same point of law. The United States Supreme Court recently agreed to consider Lozman v. The City of Riviera Beach, Florida, 568 U.S. [TBD]* (2013) because the courts of appeals in the Fifth and Eleventh Circuits were not consistent in their interpretations of the term "capable" found in the statutory definition of vessel.
The Fifth Circuit interpreted the term in a case involving a floating casino and held the structure was not a vessel when it was only theoretically capable of sailing and the owner intended to moor it indefinitely. The Eleventh Circuit also interpreted the term in a case involving a floating casino. Despite the owner's intent to moor it permanently, the court held the structure was a vessel because it had functioning machinery and a maritime crew, and was capable of moving over water and being transported on water under tow.
The Underlying Facts of the Lozman Case
Lozman was the owner of a 60-foot by 12-foot floating home. The home was built of plywood, and had French doors on three sides. It had a sitting room, bedroom, closet, bathroom, and kitchen on the main floor. A stairway led to an office on the second level. An empty bilge space underneath the main floor provided buoyancy.
After buying the floating home, Lozman had it towed 200 miles to a small village in Florida where he moored it. He had it towed twice thereafter to nearby marinas. Several years later, Lozman had his floating home towed seventy miles to a marina owned by the city of Riviera Beach, Florida where he kept it docked.
After unsuccessful efforts to evict Lozman from the marina, the city of Riviera Beach brought a federal admiralty action in rem against the floating home, asserting a maritime lien for unpaid dockage and trespass damages. Lozman asked the district court to dismiss the case, arguing the court lacked admiralty jurisdiction because the floating home was not a vessel and therefore could not be subject to a maritime lien.
The district court found the floating home to be a vessel, and as a result, concluded it had admiralty jurisdiction over the case. After a court trial, judgment was entered in favor of the city of Riviera Beach for $3,039.88 for dockage and $1 for trespass damages. The district court also ordered the floating home to be sold to satisfy the judgment. The city of Riviera Beach bought the floating home at a public auction and then arranged for it to be destroyed. However, before the sale, the district court ordered the city of Riviera Beach to post a $25,000 bond to secure Lozman's interest in the vessel just in case it was wrong in its analysis about whether the floating home was indeed a vessel.
Lozman appealed. The Eleventh Circuit agreed with the district court's determination of the floating home's status as a vessel. It reasoned the floating home was "capable" of movement over the water and accordingly fell within the statutory definition of a vessel. It also reasoned the owner's subjective intent to keep the floating home moored indefinitely did not affect the floating home's character as a vessel.
The Supreme Court's Holding
A majority of the justices on the US Supreme Court disagreed with the district court and Eleventh Circuit and held the floating home was not a vessel and could not be subject to a maritime lien. It focused its analysis on the meaning of the statutory phrase "capable of being used…as a means of transportation on water". It declined to interpret the phrase broadly to encompass every item that can float. It reasoned some objects that float such as a wooden washtub, a plastic dishpan, a swimming platform on pontoons, a door taken off its hinges, or "Pinocchio when inside the whale," are clearly not vessels. Rather, the court held a structure does not fall within the scope of the statutory definition of a vessel unless "a reasonable observer" looking at the structure's physical characteristics and activities "would consider it designed to a practical degree for carrying people or things over water."
To the court, the physical attributes and use of a vessel were a more reliable basis for the determination of a vessel's status than the intent of the vessel owner. A structure's mere capacity to float, to move on the water, or to carry people or objects is not determinative of its status as a vessel. Instead, the court concluded the statutory definition of a vessel should be interpreted to mean a craft whose purpose to a reasonable degree is the transportation of persons, cargo, or equipment from place to place on the navigable waters and which purpose is undertaken.
To explain the rationale of its ruling, the Supreme Court contrasted the results in two earlier Supreme Court cases in which the court had to decide whether a particular watercraft was a vessel. Evansville & Bowling Green Packet Co. v. Chero Cola Bottling Co. 271 U.S. 12 (1926) involved a wharfboat that floated next to a dock. The wharfboat, which was connected to the dock with cables, utility lines, and a ramp, was used to transfer cargo from ship to dock and from ship to ship. It was towed away from the dock each winter to avoid river ice. Even though the wharfboat was regularly moved, the court held it was not a vessel because it was not actually used to carry freight from one place to another and was not exposed to the perils of navigation that vessels used for transportation typically encounter.
Stewart v. Dutra Construction Co. 543 U.S. 481 (2005) involved a dredge with a clamshell bucket that would remove silt from the ocean floor and deposit it into two scows floating nearby. The court held the dredge to be a vessel within the statutory definition because it had a captain, crew, navigational lights, and ballast tanks. Although the dredge could move only by manipulating its anchors and cables, the court noted it moved over the water every few hours. The court reasoned dredges serve a waterborne transportation function by transporting machinery, equipment and crew over the water, and therefore are vessels.
Applying their guidelines, the Supreme Court explained why Lozman's floating home was not a vessel. Even though it floated, nothing about the home's design suggested it was intended to be used for transportation of persons or objects over water and it was not so used. It had no steering mechanism or rudder. Its hull was unraked and it had a rectangular bottom. It had no capacity to generate or store electricity and had to rely on shore power. Finally, the court noted the home's rooms were more consistent with land-based living accommodations, having ordinary windows and French doors instead of watertight portholes. Although not determinative, the lack of self-propulsion was another factor leading to the court's determination that the floating home was not a vessel for maritime lien purposes.
Loss of vessel status
The Supreme Court also held a vessel's status as such is not necessarily permanent. That is, a vessel under the criteria set forth in the opinion, might lose its status as a vessel because of certain physical modifications. The court cited a situation in which a vessel owner might take a structure that is otherwise a vessel and permanently affix it to the land for another purpose, using the Queen Mary's conversion into a hotel in Long Beach, California as an example.
In Lozman, the Supreme Court attempted to clarify what is and what is not a vessel in the maritime law context. In effect, it has substituted the phrase "designed for" in place of the statutory phrase "capable of". What remains to be seen is whether the desired clarity has been achieved.
Marilyn Raia is of counsel in the San Francisco office of Bullivant Houser Bailey. She has been certified by the State Bar of California as a specialist in admiralty-maritime law. She can be reached at firstname.lastname@example.org.
*The citation to the Supreme Court case does not have an official page number yet because it is too new.
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