The Changing Waterfront – After Lozman:The Plaintiff’s Lawyer Perspective

By: Robert L. Gardana, Esq. [1]


I. Introduction

Poet James Whitcomb Riley (1849–1916) may have coined the phrase when he wrote: “when I see a bird that walks like a duck and swims like a duck and quacks like a duck, I call that bird a duck.”  Now, the Supreme Court has echoed that parable by the development of the “reasonable observer’s test, applying a “practical,” not “theoretical” definition of  a “vessel” – holding that Fane Lozman’s floating home was not a §3 vessel [2]– “[b]ut for the fact that it floats, nothing about Lozman’s home suggests that it was designed to any practical degree to transport persons or things over water.”[3]

This article is intended to provide guidance to the Plaintiff when determining whether  a structure is a “vessel” sufficient to support admiralty jurisdiction.   “In Lozman, the Supreme Court has sent a shot across the bow of those lower courts that have “endorse[d] the ‘anything that floats’ approach” to defining vessels.”[4]  The Lozman criteria “offer(s) guidance in a significant number of cases where the “capacity” to transport over water is in doubt.”[5]

The touchstone of admiralty jurisdiction rests upon the finding that the structure involved is a “vessel,” including maritime lien suits, marine insurance disputes, seaman’s claims and many others.  The Lozman majority believes that “in those borderline cases, the method used for resolution is workable; and unlike an “anything that floats” test, is consistent with statutory text, purpose, and precedent.”[6]

Lozman Criteria

As the majority observed, “Lozman’s floating home was a house-like plywood structure with empty bilge space underneath the main floor to keep it afloat.”  He had it towed several times before deciding on a marina owned by the city of Riviera Beach, Florida (“City”).  After various disputes with Lozman and unsuccessful efforts to evict him from the marina, the City brought a federal admiralty lawsuit in rem against the floating home, seeking a lien for dockage fees and damages for trespass. Lozman moved to dismiss the suit for lack of admiralty jurisdiction.  The District Court found the floating home to be a “vessel” under the Rules of Construction Act, 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,” 1 U. S. C. §3, concluded that admiralty jurisdiction was proper, and awarded the City dockage fees and nominal damages. The Eleventh Circuit affirmed, agreeing that the home was a “vessel” since it was “capable” of movement over water despite petitioner’s subjective intent to remain moored indefinitely.”[7]

Reversing the Eleventh Circuit, the Lozman majority reasoned that the Eleventh Circuit’s  interpretation was too broad.   “Not every floating structure is a ‘vessel.’  To state the obvious,  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) are not ‘vessels,’ even if they are ‘artificial contrivance[s]’ capable of floating, moving under tow, and incidentally carrying  even a fair-sized item or two when they do so.  Rather, the statute applies to an ‘artificial contrivance . . . capable of  being used . . . as a means of transportation on water.’”[8]

The Reasonable Observer Test

The Supreme Court’s decision will be particularly rememberd for articulating a new test to determine if a structure is a “vessel”.  The majority reasoned:

“[b]ut for the fact that it floats, nothing about Lozman’s home suggests that it was designed to any practical degree to transport persons or things over water.  It had no rudder or other steering mechanism.  Its hull was unraked, . . . it had a rectangular bottom 10 inches below the water . . . no special capacity to generate or store electricity . . .  could obtain that utility only through ongoing connections with the land. Its small rooms looked like ordinary non-maritime living quarters.  And those inside those rooms looked out upon the world, not through watertight portholes, but through French doors or ordinary windows.  Although lack of self-propulsion is not dispositive, it may be a relevant physical characteristic. And Lozman’s home differs significantly from an ordinary houseboat in that it has no ability to propel itself.  . . . Lozman’s home was able to travel over water only by being towed.  Prior to its arrest, that home’s travel by tow over water took place on only four occasions over a period of seven years. And when the home was towed a significant distance in 2006, the towing company had a second boat follow behind to prevent the home from swinging dangerously from side to side.”[9] (Citations omitted)

In light of these non-marine characteristics, the Lozman majority ultimately held “[t]he home has no other feature that might suggest a design to transport over water anything other than its own furnishings and related personal effects.  In a word, we can find nothing about the home that could lead a reasonable observer to consider it designed to a practical degree for ‘transportation on water.’” Id.

Practical considerations for the “Reasonable Observer” – Criteria for determining whether structure is a “vessel”

In the fine common law tradition, recognizing several key decisions, the Lozman majority opinion identified certain criteria which the reasonable observer should review in determining whether the structure at issue is a “vessel.”

  1. “Use of structure” wharfboat not a vessel – At oral argument, counsel for Lozman was adamant that his client’s structure was most similar to that in one particular case, Eveansville & Browning Green Packet Co. vs. Chero Cola Bottling Co., 217 U.S. 19 (1926); the Court agreed,  It opined that “‘a wharfboat was not a vessel;’ . . . it was floated next to a dock; it was used to transfer cargo from ship to dock and ship to ship; it was connected to the dock with cables, utility lines, and a ramp.  Id. at 21.  Despite that fact that annually it was towed each winter to a harbor, “it was not used to carry freight from one place to another, nor did it encounter perils of navigation to which craft used for transportation are exposed.”  Id. at 22.
  2. “Waterborn function” – dredge was a vessel – the majority found support in Stewart v. Dutra Constr. Co., 543 U. S. 481, 496, which observed that dredges ordinarily “served a waterborne transportation function, namely that ‘in performing their work they carried machinery, equipment, and crew over water.’  Id. at 491-492.
  3. “Engaged in transportation” – citing two lower court decisions for support, the Lozman majority opinion raised examples, as follows:

i    Bernard v. Binnings Constr. Co., 741 F.2d 824, 828, n. 13, 832, n. 25 (5th Cir. 1984), observed that a work punt was not a vessel – as the mere capacity to float or move across navigable waters does not necessarily make a structure a vessel

ii   Ruddiman v. A Scow Platform, 38 F. 158 (S.D.N,Y, 1889) determined a scow was not a vessel, though “capable of being towed . . . though not without some difficulty, from its clumsy structure” just a floating box, is not a “vessel,” because “it was not designed or used for the purpose of navigation,” not engaged “in the transportation of persons or cargo,” and had “no motive power, no rudder, no sails”)

“Original design vs. later physical alterations” original design is not always determinative – as Lozman observed that a design based or purpose-related criterion is not always the test of vessel, as “[a] craft whose physical apprearance and activities objectively evidence waterborne transportation purpose or function may still be rendered a non-vessel by later physical alterations – such as the [famous Cunard cruise ship] Queen Mary – where the owner takes a structure that is otherwise a vessel and connects it permanently to land.”

“Newly designed structure” – floating processing plant no longer vessel where a large opening had been cut into her hull, citing Kathriner v. Unisea, Inc., 975 F. 2d 657, 660 (CA9 1992).

The Lozman Dissent

Justice Sonia Sotomayor prepared a robust dissent, and focused on the ramifications of the lack an objective vessel determinative test.  “[W]ithout knowing whether a particular ship is a §3 vessel, it is impossible for lenders to know how properly to characterize it as collateral for a financing agreement because they do not know what remedies they will have recourse to in the event of a default.  . . . Similarly, cities like Riviera Beach provide docking for crafts like Lozman’s on the assumption that such crafts actually are “vessels,”  . . .  The majority makes it impossible for these marinas to know whether the “houseboats” that fill their slips are actually vessels and what remedies they can exercise in the event of a dispute.  Moreover, the majority’s decision reaches well beyond relatively insignificant boats like Lozman’s craft, ….. because it specifically disapproves of lower court decisions dealing with much larger ships, (questioning Holmes v. Atlantic Sounding Co., 437 F. 3d 441 (5th Cir. 2006) (finding a 140-foot-long and 40-foot-wide dormitory barge with 50 beds to be a 1 U.S.C. §3 vessel)).”[10]

Post Lozman Decisions

The dust did not have time to settle before courts around the country began to address the impact of the Supreme Court’s ruling.  On January 22, 2013, in Lemelle v. St. Charles Gaming Co., Inc., the Supreme Court  vacated  the Louisiana State Appellate Court, Third Circuit’s determination that a casino boat was not a vessel, granting certiorari, vacating the judgment, and remanding in light of Lozman.[11]   The state appellate court had previously reversed the trial court’s determination that the Crown was a vessel and observed “that the Crown has been affixed in its dockside location, to some degree, since 2001 by lines and cables. It has not sailed since the 2001 legislation prohibiting it from conducting cruises or excursions.  In fact, since 2001, its crew size has been reduced due to the lack of need to tie and untie the Crown onto the dock.  According to the testimony of the Crown’s captain, the Coast Guard no longer inspects the Crown.  Rather, at the time of the captain’s deposition, inspections were performed by a state entity.  Mr. Lemelle asserts that the Crown‘s practice of operating its engine and thrusters should be viewed as indicative of its actual capacity for transportation or movement. Similarly, its navigation equipment is intact.  However, the practice referenced by Mr. Lemelle is not, in fact, used for navigation or transportation purposes.”[12]

The Lozman decision was also applied in a marine insurance case on January 25, 2013.  In Fireman’s Fund Ins. Co., v. Great American Ins. Co.[12], involving a drydock, the district court judge observed that, “while arguably sufficient in a pre-Lozman landscape to prove the drydock a vessel, falls short post-Lozman.  Simply put, this Court cannot say that a reasonable observer would consider a drydock designed or ‘regularly’ used, to transport or things over water.”  Finding that the drydock and the Lozman vessel are materially indistiguishable. The Court went through an exhaustive reasonable observer analysis, as follows:

While towable, the Drydock lacked the ability to propel itself.   Accord Lozman 2013 WL 149633, at *5 (citing the fact that “Lozman’s home was able to travel over water only by being towed” as evidence that the houseboat was not “designed to any practical degree transport persons or things over water”).  Nor did the Drydock have a steering mechanism.  Accord id. (citing as additional evidence that ‘[Lozman’s home] had no rudder or other steering mechanism’).  Similarly, it lacked navigational lights, life boats, a wheel house or other equipment that would allow it to be used for the transportation of passengers.  Dkt. No.202, Ex. C; accord Lozman. 2013 WL 149633, at *9 (noting that whether a boat is “designed to any practical degree” for the transportation of cargo or people is relevant to the inquiry). In addition, the Drydock was never used to transport cargo or people, and the living quarters were no longer in use when the drydock was stationed at Port Arthur. Dkt. 202, Ex. B (“Cates Dep.”) at 212-213.

Moreover, while the drydock has been moved long distances at least twice in the distance past, it was, in the years leading up to its destruction, more or less permanently moored in one place. Dkt. No. 164 (“Haley Decl.) at ¶ 10. Although the drydock was still moved away from its mooring at least every two to three years for dredging of the sea floor beneath the drydock, Lozman makes plain that this amount of transportation is not sufficient. Lozman, 2013 WL 149633, at *5.

Lozman’s house was not a drydock in part because “[p]rior to its arrest, that home’s travel by tow over water took place on only four occasions over seven years.” More to the point, the drydock’s later movements were brief and of short distances, and the short trips were made solely to allow for dredging the slip, Cates Dep. at 114-115, which is self-evidently not the sort of “transportation” contemplated by the Supreme Court in Lozman.  Indeed, this type of movement is not “transportation” at all. See supra, note 5.

Upon release of the Lozman decision, on January 26, 2013, the Supreme Court also denied a petition for writ of certiorari in Grixi Mendez v. Anadarko Petroleum Corporation, et al.  In this case, Mendez sued Anadarko in Texas state court, seeking benefits under the Jones Act, 45 U.S.C. § 51, et seq. Anadarko removed on the basis that Mendez was not a Jones Act seaman because the RED HAWK Spar was not a “vessel” for the purposes of that Act.  Mendez moved to remand, Anadarko responded and on October 29, 2010, the court held that the RED HAWK Spar was not a vessel for the purposes of the Jones Act and remand was not appropriate.  The RED HAWK Spar, is a floating oil-production facility, which sits in over 5,000 feet of water in the Gulf of Mexico approximately 210 miles from Sabine Pass, Texas.  The Spar is located on the outer continental shelf.   The two states closest to the Spar are Texas and Louisiana. Since 2004, six anchors sunk into the ocean floor have held it in place.    The court found the RED HAWK Spar is a permanently moored work platform designed to process gas extracted from the seabed and is not practically capable of marine transportation.  As a result, Mendez is not a Jones Act seaman because he had no connection with a vessel in navigation.[13]

Lastly, in Mooney v. W&T Offshore, Inc., No. 2:12-cv-969 (E.D. La. Mar. 3, 2013), in light of Lozman, District Judge Lance M. Africk held that the MATTERHORN SEASTAR, a tension leg platforms (“TLP”) – a floating oil and gas production structure that has been secured to the Outer Continental Shelf off the coast of Louisiana since 2003 by six mooring tendons – was not a vessel as a matter of law.

Conclusion

Following Lozman, Plaintiff’s counsel must engage in a vessel-determinative analysis, as a resonable observer, to determine whether the prospective in rem defendant is a “vessel” and in cases where the basis for admiralty jurisdiction rests on the finding of a vessel, the Plaintiff’s counsel must utilize the Lozman criteria to make such a determination.  In borderline cases, I would recommend that counsel employ the use of marine surveyors, engineers or other experts to assist in this determination, such as Anadarko commissioned in Red Hawk spar case.[14] The district courts have only begun to unpeel the layers that is the Lozman decision.  As they do, more previously settled structures will be reexamined to confirm their status –leaving a plaintiff with some uncertainty in the coming years.  But overall, compared to the “anything but floats” previous 11th Circuit test, the Supreme Court’s new “reasonable observer” test is a welcome tool for plaintiffs and their counsel around the country.


[1] Captain Robert L. Gardana is a licensed U.S.C.G. Master and Maritime Attorney for over 30 years.  He is the founder and president of Robert L. Gardana, P.A..  His practice focus is maritime law, maritime liens, passenger and crew claims, and personal injury.   His contact is Robert L. Gardana at Robert L. Gardana, P.A., 12350 SW 132nd Court, Suite 204, Miami, Fl  33186, website: www.BoatLawyer.com  e-mail: Gardanalaw@gmail.com

[2] Lozman v. City of Riviera Beach, 2013 WL 149633, 133 S.Ct. 735, (Jan. 15, 2013)

[3] 2013 WL 149633, at *7, Id. at 741-744.

[4] Fireman’s Fund Ins. Co., v. Great American Ins. Co., 2013 WL 311084 (S.D.N.Y. January 25, 2013).

[4] 2013 WL 149633, at *8.

[5] Id.   Nor do we believe that the dissent’s approach would prove any more workable.   For example, the dissent suggests a relevant distinction between an owner’s “clothes and personal effects” and “large appliances (like an oven or a refrigerator).” Post, at 752 (opinion of SOTOMAYOR, J.). But a transportation function need not turn on the size of the items in question, and we believe the line between items being transported from place to place (e.g., cargo) and items that are mere appurtenances is the one more likely to be relevant.   Cf. Benedict, American Admiralty s 222, at 121 (“A ship is usually described as consisting of the ship, her tackle, apparel, and furniture …”).

[6] Id.  2013 WL 149633, 737 Syllabus

[7] Id. at *4.

[8] Id.  2013 WL 149633, 737 Syllabus

[9] Id. 2013 WL 149633, Id. at 744-746.

[10] 2013 WL 215486 (U.S.La.).

[11] Lemelle v. St. Charles Gaming Co., Inc., 86 So.3rd 627 (La. 2012).

[12] 2013 WL 311084 (S.D.N.Y. January 25, 2013)

[13] The RED HAWK Spar is a cell spar comprised of smaller “tube” cells that together serve as the 560 foot hull, allowing for greater stability. The RED HAWK is comprised of six twenty-foot diameter tubes surrounding a seventh tube. The tubes are “bundled” to form the equivalent of a hull that is sixty-four feet in diameter;  has no means of self-propulsion; its work platform consists of three individual decks, sits on top of the hull.  It supports a twelve-man living quarters, crane, boom, heledeck, power generators, production equipment, mono-ethylene-glycol recovery unit, heaters, glycol storage tanks, utilities, pipeline launchers and receivers, and safety and survival capsules. Its deck is 55 feet by    74 feet and the main and production decks are 105 feet by 135 feet.  In 2004, the Spar was floated into place on its side, righted, and attached to the anchors by the six permanent mooring lines. When the Spar was installed, the suction anchors were first put in place, then the hull was towed and upended by flooding the lower segments. The hull was then    moored. The deck was lifted onto the hull and fixed in place. The lines were then installed.  In addition to these mooring lines, an underwater infrastructure of flow lines and export pipeline systems, as well as umbilicals extending from the Spar to the subsea wellheads, used to transport oil and gas to shore-based facilities attach the Spar to the ocean floor. A pipeline extends from the Spar to the Pelican Gas Plant in Patterson Louisiana, by way of the VR-397 platform. The gas comes from the well heads on the sea floor, up through the flow lines (steel pipes), then to the platform. Once on the platform, a separator takes the liquids out, and the gas flows to shore through a sixteen-inch steel pipeline.

[14] Anadarko has no plans to move the RED HAWK Spar.  Anadarko commissioned a study on the feasibility of  having the Spar moved to another field approximately 100 miles away. The study concluded that doing so would take approximately 50 days and cost over $42 million. The actual movement of the Spar would take only 2 to 4 of those 50 days; the greatest time and difficulty were presented by preparing to move it and modifying it to anchor it in the new location. Only the Spar itself would be moved; the mooring system, and the risers and umbilicals, would all have to be severed or disconnected. The mooring system would either be disposed of or left in place. Anadarko would have to build a new mooring system at the new location if it decided to have the Spar moved. There are no plans to do so.

About Robert

As a U.S.C.G. Licensed Captain-Master and Attorney for over 30 years, member of the Maritime Law Association of the United States, Southeast Admiralty Law Institute, Robert L. Gardana, P.A., located in Miami, Florida, home to the largest passenger port in the world, is available to handle cases against cruise lines for injuries, death, missing persons, rape, assault and excursion related injuries or death.

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