ISSUE: What is a “Vessel”?

We’ve seen this one before (Blog – Question Number 4 – “What Is a Vessel? What Is a Crewmember?”, 03/31/2010).  And we’ll see it again.  So, let’s try to keep up.

What is a “vessel”?  This is anything but a simple question, especially at the fringes of any attempt at an all inclusive definition. 

If you write marine insurance exposures, whether inland or ocean, property or liability, or workers’ compensation coverage under certain federal statutes such as the Longshore and Harbor Workers’ Compensation Act, or if you’re a lawyer sorting out applicable laws, proper forums, and correct jurisdiction, or if you’re the owner or operator of or have employees working on or around a watercraft or floating structure of any composition, or if you are in the shipbuilding/ship repair or oil and gas exploration industries, then this is an important question to you.

A few years ago the U.S.Supreme Court, in the case of Stewart v. Dutra Construction Co., 543 U.S. 481 (2005) adopted a very broad definition.  It applied 1 U.S.C. Section 3 to define a vessel as follows:  “The word ‘vessel’ includes every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water.”

This is a very broad definition, arguably including anything capable of floating.  But this was not the last word on the vessel status question.  A case currently pending at the Supreme Court raises the issue of vessel status.  This is the case of Fane Lozman v. The City of Riviera Beach, Florida.  The defendant in the original in rem action in the United States District Court for the Southern District of Florida was captioned as “That Certain Unnamed Gray, Two-Story Vessel Approximately Fifty-Seven Feet in Length”.  In this action the City ofRiviera Beach was suing the “vessel” for the maritime tort of trespass and for the enforcement of a maritime lien for necessaries.

The federal district court found that the defendant was a vessel subject to the court’s admiralty jurisdiction.  Mr. Lozman contested this finding and appealed to the United States Court of Appeals for the Eleventh Circuit.

The Eleventh Circuit (Alabama, Georgia, and Florida) affirmed the district court, following the Supreme Court’s lead in the Stewart case, “that the determination of whether a craft is a ‘vessel’ focuses on whether the watercraft’s use as a means of transportation on water is a practical possibility or merely a theoretical one.  We therefore look at the capability of the craft, not its present use or station.”  The Court found that the craft in this case was afloat and capable of being towed, and, therefore, that it was a vessel.

The U.S. Supreme Court has agreed to hear Mr. Lozman’s appeal presumably because of the existence of a conflict among federal circuits on the interpretation of the vessel status question.

The federal Fifth (Louisiana, Texas, and Mississippi) and Seventh (Wisconsin, Illinois, and Indiana) Circuits consider the floating structure owner’s intent as a relevant factor in determining vessel status, while the Eleventh Circuit considers only whether the floating object is practically capable of transportation on water, regardless of its purpose or the owner’s intent.

This case involves an “unusually designed craft”.  I don’t know whether to describe it as a houseboat, a house that floats, or as Mr. Lozman calls it, a “floating residential structure”.  At any rate, it was his primary residence, it floats, and as the Eleventh Circuit found, it was towed considerable distances on more than one occasion.

Because of the unusual nature of the “vessel” in this case, this will also probably not provide the last word on the issue of vessel status.  It will surely provide an illuminating discussion, however, for what really is an important issue.  Based on the number of amicus briefs filed with the Court in this case, the question definitely has the attention of the legal and insurance communities.

I think that as a result of this case an even more emphatically broader definition of “vessel” will be adopted.  So, stay tuned.

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