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A Houseboat is Not a Vessel--USSC Rules in Lozman v. City of Riviera Beach

As I blogged on October 4, 2012 at http://miamishippinglaw.blogspot.com/2012/10/is-houseboat-house-or-vessel.html, Fane Lozman took his eviction by the city of Rivera Beach (the "City") from his houseboat to the U.S. Supreme Court during their fall session. The U.S. Supreme Court has now ruled that Lozman’s houseboat was a "floating home" and has ruled that his floating home is not a vessel.

In reading the decision, it was obvious by reading the first line of the decision that the Court had ruled in Lozman's favor. The houseboat was called a floating home, which was described as a house-like plywood structure with an empty bilge space underneath the main floor to keep it afloat. Don't all houses have empty bilge spaces underneath to keep them afloat? The Court noted that Lozman had the houseboat towed several times before deciding on a marina owned by the 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 houseboat, 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 Court of Appeals affirmed the trial court, agreeing that the home was a “vessel” since it was “capable” of movement over water despite Lozman’s subjective intent to remain moored indefinitely.

The Court first held that the case was not moot. The District Court ordered the houseboat sold, and the City purchased the home at auction and had it destroyed. However before the sale, the court ordered the City to post a bond to ensure Lozman could obtain monetary relief if he prevailed. 

The Court then found that Lozman’s floating home is not a §3 “vessel.”  The Court reasoned:

(1) The Eleventh Circuit found the home “capable of being used . . . as a means of transportation on water” because it could float and proceed under tow and its shore connections did not render it incapable of transportation.  The Court found this interpretation too broad.  The definition of "transportation,” the conveyance of persons or things from one place to another, must be applied in a practical way and cited  Stewart v. Dutra Constr. Co., 543 U. S. 481, 496 for this proposition. The Court then stated that a structure does not fall within the scope of the statutory phrase unless a reasonable observer, looking to the home’s physical characteristics and activities, would consider it designed to a practical degree for carrying people or things over water. 
(b) But 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, though it actually did.  The Court noted that the houseboat had no steering mechanism, had an unraked hull and rectangular bottom 10 inches below the water, and had no capacity to generate or store electricity.  It also lacked self propulsion, differing "significantly" from an ordinary houseboat. Sounds like a barge, doesn't it?
(c) This view of the statute is consistent with its text, precedent, and relevant purposes.  The statute’s language, read naturally, lends itself to that interpretation:  The term “contrivance” refers to something “employed in contriving to effect a purpose”; “craft” explains that purpose as “water carriage and transport”; the addition of “water” to “craft” emphasizes the point; and the words, “used, or capable of being used, as a means of transportation on water,” drive the point home.

The Court reviewed two cases in depth to support its conclusions. Evansville & Bowling Green Packet Co. v.  Chero Cola Bottling Co., 271 U. S. 19 involved a wharfboat floated next to a dock, used to transfer cargo, and towed to harbor each winter; Stewart, supra, involved a dredge used to remove silt from the ocean floor, which carried a captain and crew and could be navigated only by manipulating anchors and cables or by being towed. The Court explained that water transportation was not the primary purpose of either structure; neither was in motion at relevant times; and both were sometimes attached to the ocean bottom or to land. However, Stewart’s dredge, which was regularly, but not primarily, used to transport workers and equipment over water, fell within the statutory definition while Evansville’s wharfboat, which was not designed to, and did not, serve a transportation function, did not.

The Court also noted that the purposes of major federal maritime statutes—e.g., admiralty provisions provide special attachment procedures lest a vessel avoid liability by sailing away, recognize that sailors face special perils at sea, and encourage shipowners to engage in port-related commerce—reveal little reason to classify floating homes as “vessels.”

The Court rejected the arguments made by the City and its amici arguing that a purpose-based test may introduce a subjective element into “vessel” determinations. The Court points out that it considered only objective evidence, looking to the views of a reasonable observer and the physical attributes and behavior of the structure.  The Court recognized that its approach is "neither perfectly precise nor always determinative", it claimed it to be workable and consistent and should offer guidance in a significant number of borderline cases.

A copy of the decision can be found here: http://www.supremecourt.gov/opinions/12pdf/11-626_p8k0.pdf. Most of the readers to this blog will already know my views on this decision--that it will simply engender even more litigation in the borderline cases. I can recall several cases where in my personal view, the client should have fought the plaintiff's attempt to classify the "contrivance" as a vessel, but chose not to and settled rather than continue to fight and pay my legal fees. This case may give the next client pause. Therefore, while this decision may be good for us lawyers, I expect many with an interest in this industsry to vigorously disagree.

If you are interested in reaching me, you may do so by writing to me at mov@chaloslaw.com.

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