Supreme Court Grants Another “Vessel” Case. Casino Boats Beware.

On February 21, 2012, the Supreme Court of the United States granted certiorari for Lozman v. City of Riviera Beach, Florida.  The issue is “[w]hether a floating structure that is indefinitely moored, receives power and other utilities from shore, and is not intended to be used in maritime transportation or commerce constitutes a “vessel” under 1 U.S.C. Sec. 3, thus triggering federal maritime jurisdiction.”  SCOTUSBlog’s case page provides a wealth of case information, including the Eleventh Circuit’s opinion from which certiorari was granted.

In the Eleventh Circuit, the City of Riviera Beach (“City”) filed an in rem proceeding against Defendant Unnamed Gray, Two-Story Vessel Approximately Fifty-Seven Feet in Length (“Defendant”) for trespass and to foreclose on the City’s maritime lien for unpaid dockage.  Defendant argued that his was a “floating residential structure” and not a “vessel,” but the Eleventh Circuit disagreed.  Pursuant to 1 U.S.C. Sec. 3, a “vessel” includes “every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water.”  In Stewart v. Dutra Constr. Co., 543 U.S. 481, 496 (2005), the Supreme Court pronounced that whether a watercraft is a vessel requires focusing on “whether the watercraft’s use ‘as a means of transportation on water’ is a practical possibility or merely a theoretical one.”  Its a matter of capability, not a matter of “present use or station.”

Ultimately, the Eleventh Circuit determined that the “floating residential structure” was a “vessel” for purposes of federal admiralty jurisdiction.  It did not matter that the Defendant’s vessel was “moored to a dock by cables, received power from land, and had no motive power or steering of its own.”  The vessel could still be towed.  It had a “practical capacity for transportation over water.”

Why should casino boats beware?  A line of cases has developed which tests the Eleventh Circuit’s broad reading of a “vessel.”  In De La Rosa v. St. Charles Gaming Co., 474 F.3d 185 (5th Cir. 2006), the M/V CROWN CASINO, a floating casino permanently moored to a dock, the Fifth Circuit considered the casino owner’s intent of usage in addition to the objective evidence that the craft was indefinitely moored.  Then, in Tagliere v. Harrahs Ill. Corp., 445 F.3d 1012, 1014-16 (7th Cir. 2006), the Seventh Circuit likewise considered owner intent, distinguishing “permanently moored” and “indefinitely moored” based upon whether the owner intends to sail the craft again.  State courts–especially in Louisiana–have latched onto De La Rosa to consider owner intent in addition to objective evidence.  Lemelle v. St. Charles Gaming Co., Inc., 11-255 (La. App. 3 Cir. 1/04/12), — So. 3d —-, 2012 WL 130351; Breaux v. St. Charles Gaming Co., Inc., 10-1349 (La. App. 3 Cir. 6/21/11), 68 So. 3d 684.  The Fifth and Seventh Circuits’ intent-based consideration was rejected by the Eleventh Circuit.  Bd. of Comm’rs of Orleans Levee Dist. v. M/V BELLE OF ORLEANS, 535 F.3d 1299 (11th Cir. 2008) (“The owner’s intentions with regard to a boat are analogous to the boat’s ‘purpose,’ and Stewart clearly rejected any definition of ‘vessel’ that relies on such a purpose.”).  The Supreme Court now gets to resolve this interesting offshoot of Stewart.

Note: Special thanks to Professor Michael Sevel, University of Miami School of Law , for the quick info about the Lozman cert. grant.  Of particular note to the maritime legal community, Professor Sevel is coaching two teams at the National Admiralty Moot Court Competition, which is scheduled to take place in New Orleans between March 22-24, 2012.  Considering Loyola’s Annual Longshore Conference and now the National Admiralty Moot Court Competition, New Orleans is the place to be this March for the maritime and longshore communities.