ISSUE: What Is a Vessel?

Jack_crop 72dpiThe U.S. Supreme Court decided the case of Lozman v. City of Riviera Beach, Florida on January 15, 2013. The issue was whether Mr. Lozman’s floating home was a vessel, subject to Admiralty jurisdiction. The federal Eleventh Circuit Court of Appeals had ruled that it was a vessel. The U.S. Supreme Court disagrees, by a 7 to 2 margin. Mr. Lozman’s floating home was not a vessel (the reason I’m using the past tense is that the floating home was purchased at auction by the City and destroyed. Mr. Lozman still has a claim, however, against a bond posted by the City, so the issue of vessel status was not moot).

This case has been the subject of a great deal of interest in the maritime and admiralty communities, since a comprehensive answer to the important question of “What is a Vessel” has been elusive, and, in fact, is answered differently among different courts.

The Supreme Court took a very close look at the language of 1 U.S.C. Section 3, which defines a vessel as including “every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water”. The Supreme Court interpreted these words through the eyes of a reasonable observer looking at the practical attributes of the watercraft or contrivance, and in this context evaluated Mr. Lozman’s contrivance.

The “reasonable observer” standard, of course, is a case by case approach, but the Lozman decision does offer some general principles and some guidance in applying the reasonable observer method in a vessel status case.

1. Any determination based simply on the fact that the object floats is overly broad and incorrect. “Anything that floats is a vessel” is the wrong approach.

2. The owner’s subjective intent as to the status or use of the watercraft or contrivance is not part of the analysis. It is the view of the “reasonable observer” that will determine vessel status.

3. The watercraft or contrivance does not have to be used primarily for transportation; regular use in transporting people or things over water is sufficient.

4. A watercraft does not have to be in motion to qualify as a vessel; it may be temporarily attached to land or to the ocean floor and still qualify as a vessel.

5. A contrivance’s use and physical characteristics may change over time.

I think that there will be those in the admiralty community that will be disappointed with this decision. Anticipation and expectation had been raised by the fact that the Supreme Court agreed to hear this case and because the issue is so important.

In this case, the Court stated, “We believe that a reasonable observer, looking to the home’s physical characteristics and activities, would not consider it to be designed to any practical degree for carrying people or things on water.”

“Transportation” in the statutory definition of vessel means the conveyance of persons or things from one place to another, in a practical way. Except for the fact that it floated, and contained his personal possessions, Mr. Lozman’s home was not designed for transportation over water. In view of its physical characteristics it was not used, or “capable” of being used in any practical way for water transportation.

Although none of these characteristics alone were dispositive, the Court noted that the floating home had no rudder or other steering mechanism, no self-propulsion, its hull was unraked, it had a rectangular bottom 10 inches below water, no capacity to generate or store electricity, and all of its interior space was ordinary non-maritime living space. Nothing about it was designed for maritime transportation. It was not practically capable of such transportation.

The Court is aware that its approach in the Lozman case “is neither perfectly precise nor always determinative…. Nonetheless, we believe the criterion we have used, taken together with our example of its application here, should offer guidance in a significant number of borderline cases …. Moreover, borderline cases will always exist.”

The goal is a comprehensive equation where you plug in factors such as self-propulsion, movement, navigation, shore connections, regular use, configuration, maritime commerce, contents, perils of the sea, etc., and the calculation either equals “vessel” or “non-vessel”. We still don’t have such a simple calculation.

Mr. Lozman’s floating home was not a vessel by characteristics, by activity, or in any practical sense. This is a reasonable conclusion.

The Court pointed out that its decision in the Lozman case is consistent with its holding in Stewart v. Dutra Construction Company, since the Super Scoop dredge in that case, determined to be a vessel, “ordinarily served a waterborne transportation function” in that it regularly (not primarily) carried machinery, equipment, and crew over water.

I think that the Lozman case does narrow the holding in Stewart, in requiring the practical consideration of many factors in the determination of vessel status.

It will be very interesting to watch the courts apply the “reasonable observer” test to the vessel status question to other contrivances in the wake of the Lozman decision.

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