The very question of what makes a structure a “vessel” under Section 3 of the Rules of Construction Act, 1 U.S.C. §3 is before the United States Supreme Court in City of Riviera Beach v. That Certain Unnamed Gray, Two-Story Vessel Approximately Fifty-Seven Feet in Length, 649 F. 3d 1259 (11th Cir. 2011). In Part 1 of this blog post, we looked at the position of the owner of the alleged vessel, who argued that use and intention should be considered and that a watercraft like his floating house should not be considered a vessel. The Eleventh Circuit, however, ruled otherwise.
In determining that the floating house was a vessel, the Eleventh Circuit distinguished and disagreed with jurisprudence from the Fifth and Seventh Circuits. According to the Eleventh Circuit, the Fifth and Seventh Circuits “focus on the intent of the ship owner rather than whether the boat has been ‘rendered practically incapable of transportation or movement.’” Compare Board of Commissioners of the Orleans Levee District v. M/V Belle of Orleans, 535 F.3d 1299 (11th Cir. 2008) with Pavone v. Mississippi Riverboat Amusement Corp., 52 F.3d 560 (5th Cir. 1995); Tagliere v. Harrah’s Ill. Corp., 445 F.3d 1012 (7th Cir. 2006). The Eleventh Circuit submitted that by injecting the owner’s intention into determining whether a floating structure was a vessel, the Fifth and Seventh Circuits have deviated from the United States Supreme Court’s decision in Stewart v. Dutra Construction Company, 543 U.S. 481 (2005).
In the amicus briefs filed by the National Marine Bankers Association and numerous maritime plaintiff attorneys, it was argued that the Eleventh Circuit’s decision should be upheld, and they too criticized the jurisprudence of the Fifth and Seventh Circuits. As argued by National Marine Bankers Association, under the Fifth and Seventh Circuits’ jurisprudence, “a once-valid marine security could at a later date be adversely affected because the craft is no longer deemed a vessel” by its owner, which would create uncertainty for lenders and banks. The plaintiff’s attorneys also supported the Eleventh Circuit’s decision as it potentially could expand admiralty jurisdiction to include, among other things, floating casinos, and other floating offshore installations.
The outcome of this case may have far reaching implications likely broader than those briefed, including whether the courts would revisit whether certain floating offshore installations used in the petroleum industry are vessels. That is, if the matter is decided at all. The U.S. Solicitor General has argued that the case is moot as the floating houseboat at issue has already been destroyed, and the Supreme Court has requested the parties further brief that issue. Stay tuned.