In a 7-2 decision, the U.S. Supreme Court sided with a homeowner who said his floating home was not a vessel and therefore not subject to arrest under maritime law. (Lozman v. City of Riviera Beach, Fla. No. 11-625. Jan. 15.)
The majority opinion authored by Justice Stephen Breyer concluded a structure does not qualify as a vessel “unless a reasonable observer, looking to the (structure’s) physical characteristics and activities, would consider it designed to a practical degree for carrying people or things over water.”
A dissent authored by Justice Sonia Sotomayer said the majority decision “effectively (and erroneously) introduces a subjective component into the vessel-status inquiry” and “works real damage to what has long been a settled area of maritime law.” She noted “numerous maritime industries rely heavily on clear and predictable legal rules for determining which ships are vessels.”
Vedder Price attorney Francis X. Nolan III said by stating a watercraft may pass in and out of “vessel” status, the decision “left lingering questions, such as whether a permanently moored structure or vessel in layup remains a vessel for purposes of vessel documentation. This ambiguity has far-reaching implications for mortgage financing of ships and insurance of ships, as well as the status of the gaming industry’s floating casinos and vessels in long term ‘cold layup.’ I would think this ruling would at least drive mortgage lenders to review and revise their loan covenants. Also marina operators should be aware that if the ‘reasonable observer’ finds a floating structure not to be a vessel, the owner may enjoy special rights under local landlord and tenant law. The ‘reasonable observer’ standard is not the bright line we had hoped for.”
Supreme confusion?
