1

MEMORANDUM

TO: Cindy Squires

Chief Counsel for Public Affairs, Director of Regulatory Affairs

National Marine Manufacturers Association

FROM: Tommy Tobin

Legal Intern

National Marine Manufacturers Association

DATE: August 6, 2012

RE: Fane Lozman v. The City of Riviera Beach:

Recreational Boating Industry Ramifications

Question Presented

You asked me to review the filings in the case Lozman v. Riviera Beach that has

recently been granted certiorari by the Supreme Court to determine its potential impact on the

recreational boating industry and to provide a summary of the case and my findings. Here, the

petitioner Mr. Lozman docked a floating residential structure at the city’s marina, which placed a

maritime lien against the structure for unpaid debt. Mr. Lozman contends that this maritime lien

was inappropriate as his structure was not a “vessel” under the term’s statutory definition in 1

U.S.C. § 3. He contends that his structure was indefinitely moored, received power and other

utilities from land, and was not intended to be used for maritime commerce or transportation.

Could the determination of this structure’s “vessel” status substantially affect the recreational

boating industry?

Brief Answer

Yes. First, statutory determinations that are based entirely on a structure owner’s

subjective intent would be untenable, resulting in vacillating determinations of a structure’s

“vessel” status. If this were the case, structures could float in and out of “vessel” status based on

the whims of the craft’s owner and avoid relevant statutory and regulatory requirements. Second,

changing a watercraft’s “vessel” status could create confusion for marine businesses and

regulators. For example, maritime liens rely on a structure’s “vessel” status. Therefore, maritime

liens entered against a craft that has lost its “vessel” status could be adversely affected or

rendered invalid in certain circumstances. The Court is slated to hear oral arguments on October

1, 2012 and a decision will be issued by June 2013.

Discussion

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The statute at issue, 1 U.S.C. § 3, defines “vessel” as including “every description of

watercraft or other artificial contrivance used, or capable of being used, as a means of

transportation on water.” A shift in this statute’s interpretation would alter the way this default

definition is applied throughout the U.S. Code as the definition applies to numerous federal

statutes, such as the Jones Act.1 While Mr. Lozman’s structure was certainly artificial in nature,

the question remains whether it was used or was capable of being used for marine transport.

Here, Mr. Lozman’s craft was used as a residence and was attached to land-based

utilities. The structure had no propulsion of its own, had no Hull Identification Number, and had

been towed several times. In his appeal before the Eleventh Circuit, Mr. Lozman’s structure was

classified as a “vessel” as it was able to be moved over water, even to its supposed detriment.

In the Court’s most recent case addressing the statutory definition of a “vessel,” a large

dredger in Boston Harbor with limited means of self-propulsion was found to be a “vessel” as its

function was to move through the Harbor to dig the trench and was therefore “used to transport”

equipment and laborers over water.2 The Stewart Court drew a distinction between watercraft

temporarily stationed in a position and those permanently affixed to shore or the seafloor.3 The

Court ruled that structures “permanently moored, taken out of service, or otherwise rendered

practically incapable of maritime transport” are not vessels.4

A Split in the Circuits Has Emerged, Prompting the Court to Grant Certiorari

Since Stewart, the circuit courts have split in their interpretation of 1 U.S.C. § 3. The

Fifth Circuit has incorporated the purpose and function of a structure in determining its use or

capability of use for marine transportation.5 Judge Posner in the Seventh Circuit delivered a fine-

grained analysis that hinged on whether a structure had been “permanently” or “indefinitely”

moored.6 Judge Posner’s opinion hypothesized a place for the owner’s intended use of the

structured, writing that perhaps “a boat also is ‘permanently’ moored when its owner intends that

the boat will never again sail, while if he has not yet decided its ultimate destiny it is only

‘indefinitely’ moored.”7

1 See Brief for the United States as Amicus Curiae Supporting Petitioner at 11.

2 Stewart v. Dutra Constr. Co., 543 U.S. 481, 495. (2005)

3 Id, at 493.

4 Id, at 496.

5 De La Rosa v. St. Charles Gaming Co., 474 F.3d 185 (5th Cir. 2006) (ruling that a dockside casino was not a

vessel as its operations were entirely gaming related and “not maritime in nature”). 6 Tagliere v. Harrah’s Ill. Corp., 445 F.3d 1012, 1016 (7th Cir. 2006).

7 Id.

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While the Fifth and Seventh Circuits incorporated the purpose for which the structure

was built and the function of the craft as factors in the determination of “vessel” status, the

Eleventh Circuit has articulated a standard that eschews such an analysis and focuses instead on

a structure’s ability to move over water as dispositive.8 The Belle of Orleans concerned a

riverboat casino was moored to shore with steel chords and was connected to land-based data,

phone, and electrical lines. This craft was ruled a “vessel” as it could be moved over water

whether by self-propulsion or by tow, even to its detriment.9

Here, the parties and amici are divided on the standard to be used when determining

whether a structure is a “vessel.” Mr. Lozman suggests that the standard should be the practical

capacity of a structure to move people or things over water, focusing on the vessel’s purpose as

judged by the function and design of the craft. The United States, as amicus curiae, proposes a

similar standard emphasizing a vessel’s purpose as identified by objective criteria, such as that of

a recent Coast Guard regulation that presented five objective questions to determine whether a

structure was a “vessel” or a “Craft Routinely Operated Dockside.”10

This regulation can be

found in Appendix A. The city of Riviera Beach supports the bright-line Eleventh Circuit

standard, considering the ability to be towed as dispositive of a structure’s practical capacity to

move over water carrying people or cargo. The positions of the parties and amici curiae are

summarized below in Appendix B, and selected cases are included within Appendix C for

reference.

Potential Impact on Recreational Boating Industry

Regardless of the standard chosen, the case holds considerable potential ramifications

for the recreational boating industry regarding the criteria used in “vessel” status determinations

and problems with resulting statutory uncertainty.

Briefs for the United States, the Maritime Law Association, and a group of Thirty-Six

Maritime Law Professors, among others, describe the potential issues if an owner’s subjective

intent is used to ascertain “vessel” status.11

Structures could escape relevant statutory and

regulatory requirements by floating in and out of “vessel” status based on their subjective,

unverifiable, and non-binding intent about the use for the structure. For example, these

professors claim that unprincipled vessel owners could manipulate their craft’s status to frustrate

the process of maritime lenders.12

Instead of focusing on highly malleable, subjective intent,

several briefs suggest that the Court examine objective factors that are less likely to change

rapidly.13

A focus on objective criteria could avoid structures floating in and out of “vessel”

8 Bd. of Comm’rs of the Orleans Levee Dist. v. M/V Belle of Orleans, 535 F.3d 1299, 1312 (11th Cir. 2008).

9 Id.

10 Craft Routinely Operated Dockside, 74 Fed. Reg. 21,814, 21,815 (May 11, 2009) (Notice of policy).

11 See e.g., Brief for Thirty-Six Maritime Law Professors as Amici Curiae Supporting Respondent at 15-24.

12 Id, at 22.

13 E.g., Brief for the United States as Amici Curiae Supporting Petitioner at 26.

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status based on the whims of the craft’s owner and would decrease the likelihood that such status

determinations could frustrate the expectations of maritime businesses and regulators.

National Marine Bankers Association Warns of Potential Uncertainty in Maritime Lending

Confusion about the legal classification of a marine structure could “cripple” the

recreational boating industry, according to the National Marine Banking Association

(“NMBA”).14

The Association warns that uncertainty about the legal status of the property and

available remedies for enforcement could hinder marine lenders ability to recover debts and

discourage potential marine lending.15

The Association is considerably concerned about the

possibility that craft owners could sign marine loan documents as a “vessel” then successfully

avoid the debt by changing its vessel status. They predict that consumers would face increased

interest rates to offset lender uncertainty and risk, at a minimum. At worst, marine lenders could

depart the industry, potentially decreasing the number of marine funding opportunities overall.16

Federal maritime jurisdiction, requirements, and its unique procedures are based on the

particular circumstances of maritime commerce and transportation. Whether the Court adopts the

standards of the Fifth or Eleventh Circuits, the maritime lending sector and other sectors of the

recreational boating industry could be substantially affected if an owner’s subjective intent is

incorporated into the “vessel” status determination, especially if it considered the dispositive

factor.

Conclusion

If the Court adopts a “vessel” status standard that is based on an owner’s subjective

intent, the recreational boating industry could be considerably affected. The Court will hear oral

arguments on October 1, 2012 and issue a decision by June 2013.

14

Brief for NMBA as Amicus Curiae Supporting Respondent at 4. 15

Id. 16

Id, at 9.

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Appendix A

“Craft Routinely Operated Dockside” Non-Exclusive List of Factors

Is the craft surrounded by a cofferdam, land or other structure, such that although

floating, it is in a “moat” with no practical access to navigable water?

Is the craft affixed to the shore by steel cables, I-beams or pilings, or coupled with land

based utility connections for power, water, sewage and fuel?

If the craft were operated in navigation, would it be thereby endangered because of its

construction?

What is the purpose, function, or mission of the craft?

Can the craft get underway in less than eight (8) hours? If more than eight hours are

required, the [Coast Guard Officer in Charge, Marine Inspection] will determine if the

delay was attributable to factors outside the owner's or operator's control, in which case

the delay may be overlooked.

Craft Routinely Operated Dockside, 74 Fed. Reg. 21,814, 21,815 (May 11, 2009) (Notice of

policy).

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Appendix B

Summary of Arguments

Arguments for Petitioner Lozman

Mr. Lozman’s arguments before the Court center on the incorporation of a structure’s

purpose and practical capacity to transport people or cargo over water into the test for “vessel”

status. To bolster his assertion, he cites Court precedent in support as well as the allegedly

deleterious effects on maritime law and federalism of the expansion of the Eleventh Circuit’s

standard.

First, Mr. Lozman examines a structure’s purpose, finding that crafts that function as

extensions of land should not be classified as “vessels.” According to Mr. Lozman, marine

transportation within 1 U.S.C. § 3 draws a distinction between moving people and things to

various points and being moved. Far more items can float and be moved in marine environments

than can move across the water on their own. According to Mr. Lozman, “vessel” should include

only those structures that possess the practical capacity to be used as a means of transport over

water. If the purpose of a craft is the ability to move people or things across the water, then it is

rightly classified as a “vessel.” Instead of relying on an owner’s subjective intent, Mr. Lozman

bases this test of purpose on a structure’s design and function. Brief for Petitioner at 21-24.

Second, Mr. Lozman reads Court precedent excluding a floating drydock, wharfboat,

and decommissioned Liberty ship from “vessel” status as supporting a test for “vessel” status

that includes a structure’s purpose and practical capacity for marine movement. For example, the

fact that a wharfboat had been towed hundreds of miles was not dispositive in the Court’s

determination. See Evansville & Bowling Green Packet Co. v. Chero Cola Bottling Co., 271 U.S.

19, 20 (1926). Mr. Lozman asserts that the Eleventh Circuit erred in its analysis of Stewart.

Instead of standing for the abandonment of the inquiry into a structure’s purpose, Mr. Lozman

claims Stewart incorporated the dredge’s function as necessitating movement at various points in

the harbor and incidentally carrying workers on board. According to Mr. Lozman, the Eleventh

Circuit’s “capability of tow” test fails to acknowledge the unanimous Stewart Court’s

endorsement of this precedent. Brief for Petitioner at 26-30, 34.

Third, Mr. Lozman is concerned that applying “vessel” status to indefinitely moored

structures would upset current maritime law, such as the Jones Act, the Maritime Lien Act, and

the Limitation of Liability Act. According to his filing, applying these statutes to floating

structures that are not “vessels” run against the purpose of the statutes themselves. As an

example, maritime liens are noted as a unique federal remedy to attach debts to a craft itself

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without notifying the owner as to avoid the ship moving away to escape the debt. For a craft that

is permanently moored, there would be no reason to believe that it could vacate quickly to avoid

repaying the debt. See The Rock Island Bridge, 73 U.S. 213, 216 (1867) (A “maritime lien can

only exist upon movable things engaged in navigation, or upon things which are the subjects of

commerce on the high seas or navigable waters”). Mr. Lozman claims that, given the different

risks, function, and uses of these crafts, indefinitely moored structures should also be exempted

from these requirements because they lack the practical capacity to move over water. If these

structures are extensions of land, the land-based rules should apply and solutions tailored to the

maritime environment are ill-applied. Brief for Petitioner at 35-37.

Finally, Mr. Lozman claims that applying federal maritime jurisdiction to indefinitely

moored structures would raise issues of federalism. Whereas “vessels” are automatically subject

to federal maritime jurisdiction and requirements, structures that are not connected to maritime

transportation or commerce may or may not implicate federal law. Taking issues out of states’

purview, according to Mr. Lozman, could unnecessarily burden federal courts, usurp traditional

areas of state legislative and regulatory domains, and place inappropriate strictures on litigants

costing them both money and time. Brief for Petitioner at 44-46.

In sum, Mr. Lozman advocates for a “vessel” determination standard of practical

capacity for a structure to engage in maritime transportation. As such, a structure should be able

to move over water and carry people or items, rather than simply be able to be towed while doing

so. If the Court were to adopt this standard, it would be charged with divining the purpose of a

structure from its design and function, incorporating this evaluation into a test of practical

capacity for marine transportation.

Amici for the Petitioner

Four amici wrote in support of Mr. Lozman’s position that indefinitely moored

structures are not “vessels” under 1 U.S.C. § 3 given their function, purpose, or design. Amici

include: the United States, the Floating Home Associations of Seattle and Sausalito, the

American Gaming Association, and a group of three maritime law professors. Each amicus

hopes to classify “vessels” in such a way that reflects the structure, operation, and traditions of

maritime law. Each is concerned about the application of federal maritime requirements

inappropriate for non-vessel structures.

Petitioner Amicus 1: The United States

The United States supports an “Objective Purpose” test, especially as it is concerned

that the outcome in this case could affect the activities of numerous federal agencies, namely the

Coast Guard, Department of Labor, and the Maritime Administration. It argues that the ability to

be towed is insufficient to establish “vessel” status. Instead, it contends that the status

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determination should be made using objective criteria that includes the craft’s purpose, design, or

function.

According to the United States, other questions of maritime law depend on a

structure’s purpose, design, or function, making it not unusual for courts to have to ascertain

such qualities in making a “vessel” status determination. For example, questions of whether

injured workers could recover under the Jones Act often hinge on whether the employee was

contributing to the “vessel’s function or mission.” Brief for United States as Amicus Curiae

Supporting Petitioner at 22-23.

The United States notes that using objective criteria gleaned from a structure’s

attributes and circumstances would avoid the dangers of relying on an owner’s whims or

subjective intent in determining “vessel” status. Such intent could be subject to rapid change. If

owner’s could subjectively alter a structure’s status, enabling it to drift in and out of “vessel”

status, the risks of manipulation in litigation would soar as would regulatory complications for

relevant agencies. Id, at 26.

For stationary structures operated near the shore, an analysis of their functions would

likely be highly relevant to its practical capability for marine transport, according to the United

States. Its brief describes that the Coast Guard developed regulations exempting certain classes

of structures from its regulations pertaining to “vessels.” 74 Fed. Reg. 21,814 (May 11, 2009).

These regulations excluded “Craft Routinely Operating Dockside” from the categorization of

“vessels” under 1 U.S.C. § 3 and articulated a set of factors that the agency would use to

determine whether such a structure had the practical capacity to operate in maritime

transportation. These factors are included in Appendix C. The United States claims these factors

present objective criteria that the United States claims were responsive to the Court’s ruling in

Stewart and incorporated its purposive line of inquiry. Brief for United States as Amicus Curiae

Supporting Petitioner at 28.

As Lozman’s appeal was decided prior to discovery, several of the facts to be used if

the Court were adopt an objective standard that includes the structure’s purpose or function are

yet undetermined and remain in dispute. Therefore, the United States suggests that a remand for

further fact-finding would be appropriate once the standard is determined. Id, at 29-31.

Petitioner Amicus 2: Seattle and Sausalito Floating Home Associations (“FHA”)

The Floating Home Associations of Seattle and Sausalito represent approximately 750

floating residences that are concerned that the Eleventh Circuit’s standard would classify their

structures as “vessels.” These groups claim that the only substantial difference between floating

homes and homes on land is the foundation on which they sit. Brief for Seattle FHA and FHA of

Sausalito as Amicus Curiae Supporting Petitioner at 4.

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The Associations contend that state laws differentiate floating homes from “vessel”

watercraft. According to the Associations’ materials, at least three states have laws that

specifically define floating homes and exclude them from state definitions of “vessels.” Id, at 5.

Further, they claim that floating homes are distinct from houseboats: whereas houseboats have

self-propulsion, floating homes have no motor. Id, at 5-6. According to the Associations, floating

homes are stationary entities, they lack self-propulsion, and are connected to shore for utilities.

They claim that floating homes are rarely moved, and such movement is slow, rare, and risky for

the structure itself.

Petitioner Amicus 3: American Gaming Association (“AGA”)

The AGA advocates for a practical standard for “vessel” status determination,

incorporating a structure’s prior use, current circumstance, and its reasonably likely future use.

Dockside casinos operate on the water and may be included in the status of “vessel” were the

Court to uphold the Eleventh Circuit standard, triggering federal maritime jurisdiction and

requirements. In its review of eleven post-Stewart decisions regarding dockside casinos, the

Association found that nine cases, or roughly eighty-two percent (82%), regarded these floating

structures as non-vessels. Brief for the AGA as Amicus Curiae Supporting Petitioner at 8.

Reviewing each of the eleven cases, the AGA claims that the Eleventh Circuit’s capability of tow

was idiosyncratic and was not adopted in any other jurisdiction. Id. The Association is further

concerned that the application of federal maritime law to dockside casinos could interfere with

state gaming laws and regulations. Id, at 15-16.

Petitioner Amici 4: Three Maritime Law Professors

The three professors recognize that maritime law is a unique body of law that was

constructed to respond to the unique circumstances of maritime commerce, employment, and

transportation. Brief for Three Maritime Law Professors as Amici Curiae Supporting Petitioner

at 7-9. As such, these professors articulate a set of three considerations for the Court in making a

“vessel” status determination that reflect the general principles of maritime law codified in 1

U.S.C.§ 3. These professors’ considerations include: (1) functional reasons to apply maritime

law to this structure, (2) the adequacy of state law in addressing the subject, and (3) the intended

and unintended consequences of applying maritime law to the subject. Id, at 10.

The three professors warn that the extension of federal maritime jurisdiction to

indefinitely moored structures could sweep subjects adequately covered by state law into federal

purview. Id, at 14-16. As an example, the professors categorize Mr. Lozman’s dispute as falling

within landlord-tenant requirements that are adequately covered by state law and would not

implicate federal interests.

Arguments for Respondent Riviera Beach

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The city of Riviera Beach’s arguments advance the bright-line Eleventh Circuit

standard of “vessel” status determination, centering on the capacity of a structure to move or be

moved over water while carrying people or things. The city advances two primary lines of

reasoning to support its argument, including (1) the purported plain meaning of 1 U.S.C. § 3 and

(2) the clarity and simplicity of adopting the bright-line rule.

First, the city contends that the statute’s use of “capable” means that “vessel” status is

a broader concept than simply looking at intended purpose. Brief for Respondent at 19-20.

According to the city, the capability of an object is distinct and more general than its intended

purpose, meaning that something could be put to use for many tasks that they were not intended

to do. Comparing the situation to a carving knife used to inflict bodily harm, a structure not

purposively intended to carry people or items over water could conduct this activity. In the city’s

reasoning, it is not that such an act would actually occur but instead that the structure was

“capable” of doing so. Id, at 22.

The city reads Stewart as supporting an approach that differentiates capacity from

purpose. While the Stewart drudge’s purpose was to dig in the harbor, it was also used to carry

workers across the water. According to the city, this actual use evinces such a structure’s

capability for marine transportation. Id, at 24.

Second, the city emphasizes the simplicity of the proposed bright-line rule, especially

for jurisdictional disputes. The city stresses that the case is a jurisdictional question and that the

Court has an interest in making jurisdictional rules simple and easily applied to similar questions.

Compared with the petitioner’s purposive inquiry or the United States’ “objective purpose” test,

the city claims its proposed bright-line rule is easier to apply and is simple to understand. Under

this standard, most structures that could float, could carry persons or cargo, and have the capacity

to move or be towed across the water would merit classification as “vessels.” That said, if such

structures had physical impediments rendering this movement or transportation practically

incapable, they would be excluded from “vessel” status. Id, at 30. This bright-line rule, according

to the city, would have an additional benefit of avoiding any reliance on the subjective intent of

the structure’s owner.

As the case before the court asks whether the Court should apply maritime jurisdiction

to a structure, the city suggests that most policy arguments are better left for a later admiralty

court to decide which doctrine to apply. Id, at 44. The city further submits that the strong federal

interest in promoting uniformity for those who use navigable waters would trump local interests,

subverting any federalism concerns. Id, at 47.

Alternatively, the city claims that even if the court were not to adopt its proposed

standard, objective criteria would resolve the immediate jurisdictional question at hand in its

favor. According to the city, the facts suggest Mr. Lozman’s structure was a houseboat rather

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than a floating home, and was therefore a vessel with a marine transportation purpose. Further,

the city claims that it has carried the prima facie subject matter jurisdiction burden, presenting

sufficient evidence to suggest that the structure was a vessel.

Amici for the Respondent

Five amici wrote in support of the city’s position that federal maritime jurisdiction was

correctly applied in this case as Mr. Lozman’s structure was a vessel under 1 U.S.C. § 3. These

amici include: the Maritime Law Association, a group of thirty-six maritime law professors, the

Marine Bankers Associaiton, Professor Kevin M. Clermont, and the United Brotherhood of

Carpenters and Joiners of America. Amici seek to avoid a standard based on the subjective intent

of owners, especially as the structure’s status as a vessel is foundational to assertions of maritime

lien mechanisms.

Respondent Amicus 1: Maritime Law Association (“MLA”) of the United States

The MLA, a bar association for lawyers specializing in maritime law, supports the

Eleventh Circuit’s bright-line rule. The MLA is concerned that the standard proposed by Mr.

Lozman and his amici could present substantial issues of uniform application.

The MLA reasoned that 1 U.S.C. § 3 has a plain meaning, presenting a question if the

structure was either actually used as a mode of marine transportation or the capacity to do so it

would become a “vessel.” Brief for the MLA as Amicus Curiae Supporting Respondent at 6-7.

The MLA went on to note that the physical characteristics of the structure and its present

situation are relevant in determining whether a structure could move on short notice over water.

See id, at 13-14. What is irrelevant instead, in its argument, is the owner’s subjective,

unverifiable, and non-binding intent about the use for the structure. Further, the MLA notes that

seaworthiness of a structure is also not relevant to “vessel” status determination. If the structure

can be moved over water, even to its detriment, it would trigger “vessel” categorization in this

view.

The MLA contends that a structure need not be in navigation to become a vessel.

Instead, the status would require the capability to move or be moved over water. The Association

regards “vessels in navigation,” a classification that might trigger an array of maritime

requirements such as the Jones Act, as a subset of the larger “vessel” categorization. Id, at 7, 15-

30. Here, the Court is only concerned with the “vessel” element, not whether a vessel is in

navigation. By separating out the concepts of “vessels” and “vessels in navigation,” the MLA

addresses potential federalism concerns raised by Mr. Lozman and his amici. According to the

MLA, such concerns need not arise if these concepts are kept separate and the statutory

definition in 1 U.S.C. § 3 is properly applied. Finally, the MLA points out that state laws and

Coast Guard regulations should not be taken into account in “vessel” status determinations as

neither of these sources would trump the statute’s binding interpretation.

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Respondent Amici 2: Thirty-Six Maritime Law Professors

The group of Thirty-Six Maritime Law Professors argues that an owner’s subjective

intent should play no role in the “vessel” status determination. According to the professors, an

owner’s subjective whims should not matter and arguments based on owner intent should be

barred as they are potentially self-serving and highly malleable. The professors oppose any form

of owner-intent arguments, claiming that they “will do a great deal of harm without bringing

anything useful into the inquiry.” Brief for Thirty-Six Maritime Law Professors as Amici Curiae

Supporting Respondent at 23. Comparatively, a structure’s objective purposes are not as readily

changed and should be included in the Court’s analysis. The professors see a distinction between

an owner’s subjective intent and a craft’s objective purposes. As such, they are concerned with

some of the opinion’s language in the Eleventh Circuit. Particularly, they express some

reservations about the court’s dicta where it seemed to conflate these objective craft purposes

and an owner’s intent. Id, 31.

Here, the professors claim that the city had presented substantial evidence of the

structure’s “vessel” status and Mr. Lozman had presented little to no contradictory evidence in

rebuttal. Id, at 6-15. Therefore, they see a remand as a “pointless” exercise and suggest

affirmation of the Eleventh Circuit standard. Id, at 32.

Respondent Amicus 3: National Marine Bankers Association (“NMBA”)

NMBA is considerably concerned about the effect of any change in determining

“vessel” status on maritime lending. They claim that confusion about the legal classification of a

marine structure could have a “crippling” effect on the recreational boating industry. Brief for

NMBA as Amicus Curiae Supporting Respondent at 4. Maritime lenders’ uncertainty about the

legal classification of the collateral and their available remedies could hamper marine lenders

ability to recover debts and could result in a chilling effect on maritime lending. Id, at 9.

NMBA claims that adopting Mr. Lozman’s proposed standard would cause its

members to stop relying on documentation currently executed in marine loan transactions. Id, at

17. NMBA asserts that its lenders require certainty when lending; without this certainty, there

may be decreased access to marine consumer credit and further strain the fragile market recovery

of the maritime lending industry. Id, at 18-19. Allowing owners to subvert existing lending

agreements based on changed intended use places additional risk in the maritime lending market,

which may lead to increased interest rates for consumers.

Respondent Amicus 4: Professor Kevin M. Clermont

Professor Clermont advocates for a prima facie standard for the “vessel” status

determination as the issue of federal maritime jurisdiction overlaps with the merit questions.

According to Prof. Clermont, Mr. Lozman’s question of whether his structure is a “vessel”

13

presents two overlapping inquiries, one of jurisdiction and one on the merits. As the “vessel”

status would trigger federal maritime jurisdiction and would also be one of the major questions at

a trial on the merits, Prof. Clermont suggests that the litigants should not have to prove the case

conclusively prior to discovery but instead provide sufficient evidence to survive the relevant

summary judgment standard. Brief for Professor Kevin M. Clermont As Amicus Curiae at 11,

17. Here, Prof. Clermont suggests that there was a reasonable likelihood that Mr. Lozman’s

structure was a “vessel” due to the lowered standard of decision caused by the overlapping

questions of jurisdiction and merits.

Respondent Amicus 5: United Brotherhood of Carpenters and Joiners of America

(“UBCJA”)

Many of UBCJA’s 500,000 members work on special-purpose craft which may have

their “vessel” status affected by the outcome of this case. Using the example of the Jones Act,

the UBCJA notes that the statutory definition of 1 U.S.C. § 3 was designed to sweep broadly, but

that other maritime laws and regulations are often delimited. Brief of UBCJA As Amicus Curiae

at 10-11. Further, the UBCJA went on to discuss the nature of special-purpose craft, such as the

dredger in Stewart or a floating derrick, as these craft retain their “vessel” status even while they

remain stationary when they perform their work. Id, at 20. In its experience working on special-

purpose vessels, UBCJA suggests that vessels do not become extensions of land or lose their

“vessel” status merely because they only move across water occasionally. Id, at 12.

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Appendix C

Selected Relevant Cases

Name of Case Citation

(Chronological

Order)

Structure

Involved

Vessel /

Non-Vessel

Rationale

The Hendrick

Hudson

3 Ben. 419

(S.D.N.Y. 1869)

Decommissioned

Steamboat

Non-Vessel Steamboat was no longer

engaged in “commerce or

navigation,” having been turned

into a dockside hotel. p. 419

Cope v. Vallette

Dry Dock Co.

119 U.S. 625

(1887)

Floating Drydock Non-Vessel Drydock was permanently

moored for 20 years and

operated like “a floating bridge,

or meeting-house, permanently

moored or attached to a wharf.”

p. 630

Ruddiman v. A

Scow Platform

38 F. 158

(S.D.N.Y. 1889)

Floating Scow

Platform

Non-Vessel Platform was capable of being

towed from place to place but

“was not designed or used for

the purpose of navigation, nor

engaged in the uses of

commerce, nor in the

transportation of persons or

cargo.” p. 158

Evansville &

Bowling Green

Packet Co. v.

Chero Cola

Bottling Co.

271 U.S. 19

(1926)

Wharfboat Non-Vessel Wharfboat “not practically

capable of being used as a

means of transportation” as it

“remained at the same point”

and “did not encounter the

perils of navigation to which

craft used for transportation are

exposed” while in use. P. 21, 22

West v. United

States

361 U.S. 118

(1959)

Deactivated

Liberty ship

Non-Vessel While the ship had been towed

previously, it was not in active

maritime service. p. 121

15

Miami River Boat

Yard, Inc. v. 60’

Houseboat, Serial

No. SC-40-2860-

3-62

390 F.2d 596

(5th Cir. 1968)

Houseboat Vessel Houseboat “afford[ed] a water-

borne place to live with the

added advantage of at least

some maritime mobility” and

was towed a great distance. p.

597

Pavone v. Miss.

Riverboat

Amusement Corp.

52 F.3d 560 (5th

Cir. 1995)

Floating Casino,

Restaurant, and

Bar

Non-Vessel Structure had been towed, but

was moored to shore in “semi-

permanent or indefinite

manner” by sunken steel

pylons, primary purpose was to

support dockside casino

structure, and was removed

from navigation. p. 570

Stewart v. Dutra

Constr. Co.

543 U.S. 481

(2005)

Dredge Vessel Even with limited means of

self-propulsion, dredge’s

function was to “move through

Boston Harbor” and was “used

to transport” workers and

equipment over water. p. 495

Board of

Comm’rs v. M/V

Belle of Orleans

535 F.3d 1299

(11th Cir. 2008)

Riverboat Casino Vessel Structure was “capable of

moving over water, albeit to her

detriment” and was “capable of

being transported under tow.”

p. 1312

Crimson Yachts v.

Betty Lyn II

Motor

603 F.3d 864

(11th Cir. 2010)

Yacht Vessel Craft had been drydocked,

lifted from the water, and

temporarily disabled for

repairs, but it remained a vessel

as it could be towed upon 24

hours’ notice. p. 875