Defining a vessel in admiralty: "I know it when I see it."

• Author: Faessler, Daniel

INTRODUCTION

Defining the term "vessel," while seemingly inconsequential at first blush, is an essential preliminary inquiry in almost any maritime law dispute. In Lozman v. City of Riviera Beach, Florida. (1) the Supreme Court's latest pronouncement on what it means to be a vessel, the Court inserts a "reasonable observer" standard and a "designed to a practical degree" element into the vessel inquiry, which may upset long-settled law in admiralty. Part I explains through various examples why status as a vessel is important in admiralty jurisdiction. (2) Part II (3) discusses the Supreme Court's latest cases defining a vessel including Stewart v. Dutra Construction Company () and Lozman. Part III.A analyzes how the Court arrives at the new test under Lozman, specifically how it adds a "reasonable observer" standard and a "designed to a practical degree" element to the vessel inquiry. (5) In addition, Part III.B considers whether Lozman categorically denies vessel status to houseboats. (6) Furthermore, Part III.C evaluates the inherent subjectivity that such a test creates since it is unclear how the "reasonable observer"--whoever she is--will base her determination, especially with the modicum of guidance provided in the "designed to a practical degree" element of the test. (7) Additionally, Part III.D examines whether the test under Lozman is necessary and argues that it may not be. (8) Lastly, Part III.E reviews the possible effects this new test may have on maritime industries. (9)

1. THE IMPORTANCE OF BEING A VESSEL

   Whether or not a floating craft is a "vessel" is often central to determining whether a court may exercise admiralty jurisdiction. Once a federal maritime claim is alleged, the claimant may bring an action in federal court exercising admiralty jurisdiction under Article III, Section 2 of the Constitution. (10) In addition, the savings to suitors clause of 28 U.S.C. [section] 1333 (11) allows for many, if not most, maritime matters where a remedy recognized at common law existed to be heard in state court rather than in federal court under admiralty jurisdiction. (12) In other words, for many maritime claims the plaintiff will be able to choose his or her forum. Parts i.A-I.C will discuss actions and claims that often cannot be heard in admiralty jurisdiction if they do not involve a vessel. (13) These actions highlight that determining whether a floating craft is a vessel is often the first procedural inquiry that must be answered before reaching any substantive maritime claims.

   1. Actions and Remedies Available to Vessels

      Certain claims and defenses are only available once a structure has been determined a vessel. Limitation of liability is available as a defense to vessel owners, limiting their liability to the value of the vessel to the extent provided for by statute. (14) Likewise, in rem actions are claims available against a vessel that allow a claimant to arrest and sell the vessel to pay a maritime lien. (15) Limitation of liability and in rem actions often cannot be brought or raised unless a vessel is involved. (16)

      i. Limitation of Liability

      Status as a vessel may limit one's liability to the value of the vessel. The Shipowners' Limitation of Liability Act (17) was enacted in 1851 to encourage the growing maritime trade industries, which at the time were concerned with almost limitless liability from numerous claims. (18) Currently, 46 U.S.C. [section] 30505, governing shipping, limits liability for a variety of property loss and injury claims to the value of a vessel. (19) Under [section] 30306, if the value of the vessel does not cover all expenses for injury or death after the loss, the statute includes a formula that may increase recovery based on the tonnage of the vessel. (20) With limitation of liability now embedded within the corporate structure, (21) the policy concerns underlying the enactment of this statute and its predecessor are less relevant. Limitation of liability, however, remains good law. (22) Additionally, as a result of a limitation of liability proceeding, the defendant may force the consolidation of the underlying claims against him before his chosen admiralty forum. (23) If an injury occurs on a floating craft or property damage occurs due to the vessel, the owner will likely argue that the floating craft is a vessel in order to limit their liability rather than be open to potentially limitless liability. An example may provide insight into how effective limitation of liability is as a defense. The Deepwater Horizon explosion, fire, and subsequent oil spill killed eleven workers and resulted in 205.85 million gallons of oil being released into the Gulf of Mexico over several months. (24) Transocean, the owner and operator of the Deepwater Horizon, unsuccessfully sought to limit its liability to the purported value of the vessel at $26.76 million. (25)

      ii. In Rem Actions

      An in rem action is a special maritime claim against the vessel itself. It is brought in the federal district where the vessel is located. (26) An in rem action arises from the arrest and can lead to the judicial sale of the vessel to pay a maritime lien if the defendant is unable to prevail. (27) In rem claims may be brought against the vessel even if the defendant is not found in the jurisdiction whether or not the defendant can be sued in personam. (28) For that reason, an in rem action is a powerful tool to recuperate losses where there may not be personal jurisdiction against the defendant. If a floating structure is determined not to be a vessel, the claimant will be unable to bring an in rem action.

   2. Actions and Remedies Available to Seamen

      Additionally, there are specific actions reserved for "seamen." One must be employed aboard a vessel in navigable waters (29) in order to be a seaman. (30) The Court stated in McDermott International, Inc. v. Wilander, "[t]he key to seaman status is employment-related connection to a vessel in navigation." (31) Moreover, there is a long tradition of treating seamen as wards of the court. (32) So, mere status as a seaman is likely to give a party more favorable treatment before the court.

      As a seaman, one is entitled to rights he would otherwise not be eligible for outside of admiralty jurisdiction such as maintenance and cure, unseaworthiness, and other remedies under the Jones Act. (33) Maintenance, cure and unseaworthiness are derived from general maritime law. (34) Because they are strict liability offenses, they make it easier for seamen to quickly recover for injuries rather than having to file a claim for worker's compensation or allege and prove negligence. (35) In addition, Congress enacted the Jones Act in 1920 providing seamen the right to allege negligence against an employer for injury or death. (36) This is a cause of action that is typically not available to employees against their employers. Each of these claims will be discussed below.

      i. Maintenance and Cure

      Maintenance and cure is an ancient remedy particular to admiralty law that was first noted in the jurisprudence of the United States in 1823. (37) It is an absolute or strict liability claim against a seaman's employer for injuries received while in the ship's service. (38) Even though the seaman is injured and may be unable to work, the ship's owner or employer must continue to pay the seaman's wage or "maintenance," (39) as well as medical expenses or "cure," (40) until he is able to resume work, or if not, for the duration of the voyage. (41) Maintenance and cure stems from the courts' concern that seamen, who were often in far-off exotic places, would fall ill and be left unable to care for themselves in foreign territory. (42)

      Maintenance and cure is often a broader remedy when compared to state and federal workers' compensation statutes. For example, a seaman may become injured while in the ship's service but not necessarily as a result of his employment. (43) In contrast, workers' compensation statutes typically require that the employee be injured in the course of her employment duties. (44) In addition, maintenance and cure must be given as soon as possible and has few procedural steps. (45) By contrast, under state law, there is often a waiting period between the reporting of the injury and the remittance of compensation benefits. (46) Therefore, being employed aboard a vessel and being a seaman as a result may make it easier for an aggrieved party to recover for wages and medical expenses.

      ii. Unseaworthiness

      Unseaworthiness is a strict liability offense available to a seaman against the employer or ship owner for an unsafe condition aboard the ship that causes injury. (47) The Court stated in Mitchell v. Trawler Racer, Inc., "it is a duty only to furnish a vessel and appurtenances reasonably fit for their intended use. The standard is not perfection, but reasonable fitness . . . ." (48) It was believed that a seaman could not accept the risk of the conditions aboard the ship because he was required to obey his superiors on board. (49) As a practical matter, it is also difficult to leave the ship once it has set sail. In addition, holding the employer or ship owner strictly liable for unsafe conditions encouraged vessel owners to provide safe environments for seamen. (50)

      Because unseaworthiness is a strict liability offense, the seaman need only prove that there was an unsafe condition aboard the ship that caused his injuries in order to recover for their injuries. (51) In contrast, under state law, a non-seaman would likely be entitled to worker's compensation if the injuries were within the course of employment. (52) Assuming a worker's compensation action can be brought, his benefits would likely be limited and would often be based on a statutory formula (53) whereas damages available under an unseaworthiness claim are often more expansive and include pecuniary and certain non-pecuniary losses. (54) In addition, under state law, the non-seaman...