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The Marine & Energy Report: January 15, 2013

January 15, 2013

The United States Supreme Court today issued its opinion on general maritime law vessel status that will impact the marine, offshore, energy, and riverboat gaming industry for years to come.

The case came from the United States Court of Appeals for the Eleventh Circuit that held a “floating shack, built out of plywood with only 1/16” of fiberglass surrounding its unraked hull, without proper cleats for towing, no bilge pumps, no navigation aids, no lifeboats and other lifesaving equipment, no propulsion, and no steering”, was “practically capable of transportation over water” and, so, a vessel for purposes of admiralty jurisdiction.

The Supreme Court reversed and held that the Eleventh Circuit’s interpretation of a “vessel” was too broad. The Court explained that the “vessel” analysis must focus on whether the floating structure is capable of being used “as a means of transportation on water” in a practical, rather than theoretical, sense. The Court held that a floating structure is not a vessel for purposes of admiralty jurisdiction “unless a reasonable observer, looking to [its] physical characteristics and activities would consider it designed to a practical degree for carrying people or things over water.”

In so doing, the Court recognized that although a craft may have “physical characteristics and activities [that] objectively evidence a waterborne transportation purpose or function,” the craft “may still be rendered a nonvessel by later physical alterations” such as the Queen Mary that is permanently connected to land and serves as a hotel. 

The case is Lozman v. City of Riviera Beach, Fla., No. 11-626.