United States: Supreme Court Docket Report - February 21, 2012

Keywords: admiralty, maritime jurisdiction, maritime lien

Federal Admiralty Jurisdiction—"Vessel" Status

On February 21, 2012, the Supreme Court granted certiorari in one case of interest to the business community

Article III, Section 2 of the Constitution extends the judicial power of the United States "to all Cases of admiralty or maritime Jurisdiction." Congress, in turn, has granted federal district courts exclusive original jurisdiction over admiralty and maritime cases. 28 U.S.C. § 1333. An in rem admiralty proceeding must be based on a maritime lien, a property right that only attaches to a "vessel," see 46 U.S.C. § 31342. Under 1 U.S.C. § 3, "[t]he word 'vessel' includes every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water." Today the Supreme Court granted certiorari in Lozman v. City of Riviera Beach, Florida, No. 11-626, to address the scope of this definition of "vessel" for the purpose of triggering federal admiralty jurisdiction.

Respondent, the City of Riviera Beach, brought an in rem suit in federal district court for trespass and to foreclose on a maritime lien on a floating residential structure owned by petitioner, Fane Lozman. Lozman argued that his floating residential structure was not a "vessel" and should instead be treated as a land-based residence. The district court held that the floating structure was a "vessel" for purposes of federal admiralty jurisdiction and then ruled for the City on the merits.

The Eleventh Circuit affirmed, agreeing that Lozman's floating residential structure was a "vessel" subject to federal admiralty jurisdiction. The court held that a floating structure is a "vessel," regardless of the purpose for which it was constructed or its intended use, as long as it is "practically capable of transportation over water by means of a tow." 643 F.3d 1259, 1269. The Eleventh Circuit rejected tests adopted by the Fifth and Seventh Circuits, which focus on the owner's intended and actual use of the structure rather than the structure's potential ability to move or be towed across water.

The Court's decision on what constitutes a "vessel" will be important to commercial owners of floating structures, including those in the casino, restaurant, and hotel industries. Aside from determining whether disputes over such structures are subject to federal jurisdiction and federal tort law, the Court's decision is likely to determine whether structures of the type at issue are subject to various tax, employment, and safety laws whose application depends upon whether the structure in question is a "vessel."

Absent extensions, which are likely, amicus briefs in support of the petitioner will be due on April 13, 2012, and amicus briefs in support of the respondent will be due on May 14, 2012.

Today the Court also invited the Solicitor General to file a brief expressing the views of the United States in the following case of interest to the business community:

Vance v. Ball State University, No. 11-556: The question presented is whether the "supervisor" liability rule established in Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998)—according to which an employer is vicariously liable under Title VII for severe or pervasive workplace harassment by a supervisor of the victim—applies to harassment by those whom the employer vests with authority to direct and oversee their victim's daily work or, instead, is limited to those harassers who have the power to "hire, fire, demote, promote, transfer, or discipline" their victim.

Mayer Brown's Supreme Court & Appellate practice distributes a Docket Report whenever the Supreme Court grants certiorari in a case of interest to the business community and distributes a Docket Report-Decision Alert whenever the Court decides such a case.

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