BY NATALIE HARRISON — Back in October, UMLR candidate Adam Fischer described oral arguments in Lozman v. City of Riviera Beach. Lozman involved an in rem action, under the Federal Maritime Lien Act, by the City of Riviera Beach against Fane Lozman’s floating home. Mr. Lozman protested that his home was a “floating residential structure,” more house than boat, and thus not subject to admiralty jurisdiction. The Eleventh Circuit Court of Appeals affirmed the Southern District of Florida’s determination that Mr. Lozman’s floating structure satisfied the statutory definition of “vessel.” The Eleventh Circuit agreed with Riviera Beach that, because the structure had been towed a handful of times over the last decade, it was practically capable of moving, and thus a vessel.
The Supreme Court granted cert in Lozman to resolve a circuit split that emerged in the wake of Stewart v. Dutra Construction. In Stewart, the Supreme Court stated that, to satisfy the statutory definition of “vessel”, a structure must be used, or be capable of being used, as a means of transportation on water. Stewart held that a dredge that mostly served to collect silt was a “vessel” because it also transported crew on a regular basis.
The circuits immediately ran in different directions with this definition. The Eleventh Circuit took the broad approach that anything practically capable of transportation was a vessel. Under that definition, Mr. Lozman’s floating structure was a “vessel.”
The Fifth Circuit, on the other hand, looked to the owner’s intent. Under the Fifth Circuit test, if the owner did not intend the vessel to move again in the future, it was not a “vessel” under admiralty jurisdiction. The Seventh Circuit provided further nuance, determining that a riverboat casino that was permanently disabled from sailing was not a “vessel.”
In January, the Supreme Court struck down the Eleventh Circuit’s ruling that Mr. Lozman’s structure was a “vessel.” The Court determined that the Eleventh Circuit’s definition of vessel was so overly broad that “a wooden washtub, a plastic dishpan, a swimming platform on pontoons, a large fishing net, a door taken off its hinges, or Pinocchio (when inside the whale)” could be considered vessels subject to admiralty jurisdiction.
Instead, the Supreme Court leaned toward the Fifth Circuit’s subjective test. Under Lozman, to satisfy the statutory definition of a “vessel,” a reasonable observer, considering physical characteristics and activities, must think that the structure is practically capable of transporting people or cargo on water. The Court suggested that the owner’s intent regarding the vessel is a useful factor in this test. If the owner intended the structure to engage in transportation, it would be more likely to be considered a vessel. Therefore, because Mr. Lozman’s structure was permanently moored and not intended for further transportation, the Court determined that no reasonable observer would think it a vessel.
Justice Sonia Sotomayor, joined by Justice Anthony Kennedy, dissented, writing that this new test unnecessarily injects subjectivity into a critical component of maritime jurisprudence. Although Justice Sotomayor agreed with the majority that the Eleventh Circuit’s standard was too inclusive, she argued that the Court should have relied on its ample precedent to answer this question, rather than invent a new test unsupported by precedent.
Justice Sotomayor, citing Stewart, urged the adoption of a three-part test. Under Sotomayor’s approach, a structure would classify as a “vessel” if (1) it had the capacity to float and transport people or objects; (2) it could not be permanently moored or otherwise fixed in place; and (3) it was of a type that currently or historically was engaged in maritime transport. Sotomayor concluded that, by looking at the particular elements of Mr. Lozman’s (now destroyed) structure, and in announcing the “reasonable observer” test, “the majority gives our vessel test an ‘I know it when I see it flavor’” that may be unworkable.
Why the fuss over the word “vessel”? One word—jurisdiction. The definition of “vessel” is a fundamental concept in admiralty law, given federal jurisdiction under Article III of the Constitution. In addition to providing access to federal courts, admiralty contains a number of unusual exceptions and protections to its participants. Several admiralty statutes only apply to individuals associated with a vessel. And unlike other areas of the law, admiralty retains in rem jurisdiction, allowing individuals to sue the vessel directly. Riviera Beach sued not Mr. Lozman, but “that certain, unnamed gray, two-story vessel approximately fifty-seven feet in length,” which was how the case was styled before the Eleventh Circuit.
In other words, Mr. Lozman’s victory is clear. But admiralty jurisdiction under Lozman v. City of Riviera Beach is anything but.