Catlin (Syndicate 2003) at Lloyds et al v. San Juan Towing & Marine Services, Inc.
Filing
112
OPINION AND ORDER re 78 motion for summary judgment; and re 99 Report and Recommendation. The Court REJECTS the recommendations contained in the magistrate judge's Report and Recommendation (Docket No. 99). The Court GRANTS defendant SJT's motion for partial summary judgment (Docket No. 78), and dismisses case number 11-2093 without prejudice. Judgment shall be entered accordingly. Signed by Judge Francisco A. Besosa on 04/08/2013. (brc)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
CATLIN
(Syndicate
LLOYD’S,
2003)
AT
Plaintiff,
CIVIL NO. 11-2093 (FAB)
Consolidated with
v.
SAN
JUAN
TOWING
SERVICES, INC.,
&
MARINE
Civil No. 11-2116 (FAB)
Defendant.
OPINION AND ORDER
BESOSA, District Judge.
Before the Court is the Report and Recommendation (“R&R”),
(Docket No. 99), regarding defendant San Juan Towing & Marine
Services, Inc. (“defendant SJT”)’s motion for partial summary
judgment, (Docket No. 78).
judge’s
recommendations;
Having considered the magistrate
defendant
SJT’s
objections,
(Docket
No. 103); plaintiff Catlin (Syndicate 2003) at Lloyd (“plaintiff
Catlin”)’s response, (Docket No. 106); and Lozman v. City of
Riviera Beach, 133 S. Ct. 735 (2013),1 the Court REJECTS the
recommendations contained in the magistrate judge’s R&R, GRANTS
defendant SJT’s motion and dismisses case number 11-2093 without
prejudice.
1
Lozman was decided after the magistrate judge issued his
Report and Recommendation.
Civil No. 11-2093 & 11-2116 (FAB)
2
BACKGROUND
I.
Procedural History
On November 8, 2011, plaintiff Catlin filed a complaint
against defendant SJT, and SJT then filed a complaint against
Catlin in a separate case on November 16, 2011.
(Docket No. 1.)2
Plaintiff Catlin’s eight causes of action in Civil No. 11-2093, the
lead case, are all admiralty or maritime claims, and jurisdiction
rests under 28 U.S.C. §§ 1333 (admiralty) and 1332 (diversity).
(See Docket No. 1 at pp. 1–2.)
In Civil No. 11-2116, the member
case, jurisdiction rests solely on diversity, however, because the
two claims in that case arise under the laws of the Commonwealth of
Puerto Rico.
(See Docket No. 50 at p. 2.)
The issue in the cases was whether the object of the insurance
contract between the parties — a floating dry dock called the
Perseverence
—
was
(Docket No. 78.)
a
“vessel”
for
purposes of
maritime law.
Defendant SJT argued that it is entitled to
judgment as a matter of law because the floating dry dock does not
constitute a vessel pursuant to section 1 U.S.C. § 3 (“section 3”)
for two alternate reasons.
Id. at p. 1.
First, case law decided
before Stewart v. Dutra Constr. Co., 543 U.S. 481 (2005) indicates
2
The cases were consolidated on December 22, 2011.
All
citations to docket entries, therefore, are to the consolidated
case docket, Civil No. 11-2093 (“lead case”). Although SJT is the
plaintiff and Catlin is the defendant in Civil No. 11-2116 (“member
case”), for the sake of consistency and clarity, only the party
designations of Civil No. 11-2093 shall be used throughout the
Court’s Opinion and Order.
Civil No. 11-2093 & 11-2116 (FAB)
3
that SJT’s floating dry dock was not a vessel at the time of its
sinking because it sank “while moored to the pier.” (Docket No. 80
at p. 2.)
Second, even in light of Stewart, the dry dock was not
a vessel at the time of its sinking because “it was not practically
capable of being used as a means of water transportation.”
p. 3.
Id. at
Plaintiff Catlin responded that the floating dry dock was a
vessel pursuant to section 3 because it had the physical attributes
of a vessel and was capable of transportation by water.
No. 82.)
(Docket
(Docket
Defendant SJT disputed those contentions in its reply,
No.
90),
January 11, 2013.
and
the
magistrate
(Docket No. 99.)
judge
issued
a
R&R
on
Recommending that the Court
deny defendant SJT’s motion, the magistrate judge found:
(1) that
Stewart determines the standard to be used to evaluate whether the
Perseverence is a “vessel” for purposes of admiralty jurisdiction;
and (2) that under Stewart’s standard, the Perseverence meets the
definition of “vessel” because it was actually used and capable of
being used for transportation on water.
Id.
On January 25, 2013, defendant SJT filed an objection to the
R&R, informing the Court of a recently decided Supreme Court case,
Lozman v. City of Riviera Beach, 133 S. Ct. 735 (2013), which
addressed the definition of a “vessel” pursuant to section 3.
(Docket No. 103.)
Arguing that Lozman narrows the interpretation
of the definition of “vessel” announced in Stewart, defendant SJT
claims that Lozman “changed the current state of the law” such that
Civil No. 11-2093 & 11-2116 (FAB)
4
the magistrate judge’s findings, which necessarily did not rely on
Lozman, cannot stand.
(Docket No. 103 at p. 2.)
Plaintiff Catlin
responded on February 8, 2013 by contending that Lozman “did
nothing more than reaffirm” the analysis in Stewart,” and by
maintaining that the Perseverence “is essentially a barge, designed
to be towed[, and i]t was clearly capable of transporting cargo and
passengers
by
water
.
.
.
.”
(Docket
No.
106
at
p.
4.)
Essentially arguing that the law has not changed since Stewart,
plaintiff Catlin requests that the Court accept the magistrate
judge’s findings in full.
II.
Id. at p. 6.
Factual History
Defendant SJT purchased the Perseverence, a floating dry dock,
in 2006 from Formel Marine Services.
Docket No. 81 at p. 1.)
(Docket No. 79 at p. 1;
Mark Payne, defendant SJT’s marine
manager, signed the purchase and sale agreement, which identified
the Perseverence as a vessel with Official Number 1070055, and the
subsequent
Coast
Guard
Bill
of
Sale
and
Certificate
of
Documentation, which also referred to the Perseverence as a vessel
with Official Number 1070055.
Perseverence
arrived
January 1, 2007.
in
San
(Docket Nos. 79-1; 81-8.)
Juan,
Puerto
Rico
on
or
The
around
(Docket No. 79-2 at p. 1.)
The Perseverence consisted of a horizontal platform called a
pontoon, which measured 150 feet long, 70 feet wide, and 5 feet
tall.
(Docket No. 79-3 at p. 3.)
It had a superstructure — its
Civil No. 11-2093 & 11-2116 (FAB)
5
“wingwalls” — which consisted of two vertical elements 120 feet
long, four feet wide, and sixteen feet tall.
Id. at p. 2.
The top
of the port wingwall was fitted with one semi-sheltered steel
control room.
Id. at p. 3.
The Perseverence had a raked bow and
two tow pads to connect it to a towing vessel, (Docket No. 79-2 at
p. 1; Docket No. 79-3 at pp. 1–2; Docket No. 81 at p. 1), and
according to Payne, “[t]he drydock was specially outfitted and
prepared for the voyage to San Juan.”
(Docket No. 79-2 at p. 1.)
Upon arrival in San Juan, most of the Perseverence’s temporary
modifications3 required for navigation, except for the raked bow,
were removed and were not replaced.
(Docket No. 79-2 at pp. 1–2.)
Additional modifications of the dry dock were then made, including
the “installation of two steel gangways, shore power cable, a
pneumatic manifold and an electrical distribution panel.”
Id. at
p. 2.
The Perseverence was secured and attached to the southwestern
end of the outfitting pier 15 in Miramar, a location that was
adjacent to an apron designated by the Puerto Rico Ports Authority
(“Ports Authority”) for rental to defendant SJT.
3
(Docket No. 79-2
The temporary modifications included: wire towing bridle;
towing chains; emergency retrieving line; emergency drag float;
emergency tow wire; all emergency tow wire attachment clips; towing
day shape; plastic enclosure of control area; navigation lights;
the [six] braces on each wing wall; all of the sealant on all of
the manholes; emergency diesel pump; equipment welded on deck; and
the welding of shore side electrical ground wire to the side of the
wing wall and its attachment to the pier.” (Docket No. 79-2 at
pp. 1–2.)
Civil No. 11-2093 & 11-2116 (FAB)
at p. 2.)
The area occupied by defendant SJT contained mooring
lines, support
equipment
and
machinery,
electricity, and compressed air.
the
6
pier,
the
Perseverence
grounding
connection,
(Docket No. 79-2 at p. 2.)
received
electrical
power
At
from
generators located on shore that fed 600 amps of 480 volts to the
dry dock when needed.
Id.
A shoreside pneumatic line fed
compressed air to the dry dock, and the wing wall was connected
directly to a grounding lug on the pier with a three-quarter-inch
grounding wire.
Id.
At least one gangway — chained both to the
dry dock and the pier — provided access to the Perseverence, which
was tied to the dock with more than ten three-inch-diameter mooring
lines and numerous spring lines.
The
Perseverence
was
Id.
designed,
constructed,
and
used
to
provide marine maintenance and repair services to vessels. (Docket
No. 79-2 at p. 3; Docket No. 81 at p. 5.)
“Its intended use [was]
to lift floating equipment for inspection and repair.”
No. 79-7 at p. 2.)
(Docket
According to Mr. Payne, the Perseverence was
not designed or constructed to transport cargo or passengers.
(Docket No. 79-2 at p. 3.)
At the time that it sank, the
Perseverence was insured as a “port risk” and had been nonoperational for almost a year.
(Docket No. 79-5 at p. 2.)
Between
the time it arrived in 2007 and when it sank in 2011, the dry dock
was occasionally moved ten or fifteen feet within its assigned area
at the pier.
The movement done for the purpose of returning the
Civil No. 11-2093 & 11-2116 (FAB)
7
dry dock back to its original position after raising and repairing
a vessel, (Docket No. 79-6 at pp. 2–3), and was accomplished by the
use of ropes pulled by either harbor workers or a pickup truck.
(Docket No. 79.)
On or around September 4, 2011, defendant SJT agreed to sell
the
Perseverence
company,
and
on
to
Leevac
September
Shipyards,
19,
2011
LLC,
Mr.
a
Payne,
Louisiana-based
on
defendant SJT, signed a purchase and sale agreement.
No. 81-16 at p. 7.)
behalf
of
(Docket
When the Perseverence sank on or around
September 29, 2011, the dry dock was operational; “[w]elding
repairs had been conducted on the wing walls and on the main deck
and repairs were being made to the forward rake in preparation for
towing.”
(Docket No. 81-4 at p. 3.)
DISCUSSION
I.
STANDARDS
A.
28 U.S.C. § 636(b)(1)
A district court may refer, inter alia, [a] “motion []
for summary judgment” to a magistrate judge for a report and
recommendation.
Loc. Rule 72(a)(9); see 28 U.S.C. § 636(b)(1)(B);
Fed.R.Civ.P. 72(b). Any party adversely affected by the report and
recommendation may file written objections within fourteen days of
being served with the magistrate judge’s report.
§ 636(b)(1)(C); Loc. Rule 72(d).
See 28 U.S.C.
A party that files a timely
objection is entitled to a de novo determination of “those portions
Civil No. 11-2093 & 11-2116 (FAB)
8
of the report or specified proposed findings or recommendations to
which specific objection is made.” Sylva v. Culebra Dive Shop, 389
F.Supp.2d 189, 191 (D.P.R. 2005) (citing United States v. Raddatz,
447 U.S. 667, 673 (1980)).
Failure to comply with this rule
precludes further review. See Davet v. Maccarone, 973 F.2d 22, 3031 (1st Cir. 1992) (“Failure to raise objections to the Report and
Recommendation waives the party’s right to review in the district
court . . . .”).
In conducting its review, the court is free to
“accept, reject, or modify, in whole or in part, the findings or
recommendations
made
by
the
magistrate
judge.”
28
U.S.C.
§ 636(b)(1)(C); Jasty v. Wright Med. Tech., Inc., 528 F.3d 28, 3334 (1st Cir. 2008).
Furthermore, a court may accept those parts of
a report and recommendation to which the parties do not object.
See Hernandez-Mejias v. Gen. Elec., 428 F.Supp.2d 4, 6 (D.P.R.
2005) (citing
Lacedra
v. Donald
W.
Wyatt
Det.
Facility, 334
F.Supp.2d 114, 126 (D.R.I. 2004)).
B.
Federal Rule of Civil Procedure 56 Standard and Local
Rule 56
Summary judgment is appropriate when a “movant shows that
there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Loc. Rule 56.
Fed.R.Civ.P. 56(a);
In order for a factual controversy to prevent
summary judgment, the contested facts must be “material” and the
dispute must be “genuine.”
U.S. 242, 248 (1986).
Anderson v. Liberty Lobby, Inc., 477
“Material” means that a contested fact has
Civil No. 11-2093 & 11-2116 (FAB)
the
potential
governing law.”
to
“affect
Id.
the
outcome
9
of
the
suit
under
the
The dispute is “genuine” when a reasonable
jury could return a verdict for the nonmoving party based on the
evidence.
See id.
The party moving for summary judgment has the
initial burden of “demonstrat[ing] the absence of a genuine issue
of material fact.”
(1986).
Celotex Corp. v. Catrett, 477 U.S. 317, 323
The party must identify “portions of ‘the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any’” which support its motion.
Id.
Once a properly supported motion has been presented, the
burden shifts to the non-moving party “to demonstrate that a trier
of fact reasonably could find in [its] favor.”
Santiago-Ramos v.
Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000)
(internal citation omitted).
It is well settled that “[t]he mere
existence of a scintilla of evidence” is insufficient to defeat a
properly supported motion for summary judgment. Anderson, 477 U.S.
at 252.
It is therefore necessary that “a party opposing summary
judgment must ‘present definite, competent evidence to rebut the
motion.’”
Maldonado-Denis v. Castillo-Rodriguez, 23 F.3d 576, 581
(1st Cir. 1994) (internal citation omitted).
In making this assessment, the Court “must view the
entire record in the light most hospitable to the party opposing
summary judgment, indulging in all reasonable inferences in that
Civil No. 11-2093 & 11-2116 (FAB)
party’s favor.”
1990).
The
10
Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.
Court
does
not,
however,
determinations or weigh the evidence.”
“make
credibility
Talavera-Ibarrondo v.
Municipality of San Sebastian, No. 09-1942, 2011 U.S. Dist. LEXIS
63929, at *9 (D.P.R. June 16, 2011) (citing Anderson, 477 U.S.
at
255).
The
Court
may
safely
ignore,
however,
“conclusory
allegations, improbable inferences, and unsupported speculation.”
Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir.
1990).
The First Circuit Court of Appeals has “repeatedly . . .
emphasized the importance of local rules similar to Local Rule 56
[of the District of Puerto Rico].”
Hernandez v. Phillip Morris
USA, Inc., 486 F.3d 1, 7 (1st Cir. 2007).
Rules such as Local
Rule 56 “are designed to function as a means of ‘focusing a
district court’s attention on what is — and what is not — genuinely
controverted.’”
Id. (quoting Calvi v. Knox County, 470 F.3d 422,
427 (1st Cir. 2006)).
Local Rule 56 imposes guidelines for both
the movant and the party opposing summary judgment. A party moving
for summary judgment must submit factual assertions in “a separate,
short, and concise statement of material facts, set forth in
numbered paragraphs.”
Loc. Rule 56(b).
A party opposing a motion
for summary judgment must “admit, deny, or qualify the facts
supporting the motion for summary judgment by reference to each
numbered paragraph of the moving party’s statement of facts.” Loc.
Civil No. 11-2093 & 11-2116 (FAB)
Rule 56(c).
11
Facts which are properly supported “shall be deemed
admitted unless properly controverted.”
Loc. Rule 56(e); P.R. Am.
Ins. Co. v. Rivera-Vazquez, 603 F.3d 125, 130 (1st Cir. 2010).
Due
to the importance of this function to the summary judgment process,
“litigants ignore [those rules] at their peril.”
Hernandez, 486
F.3d at 7.
II.
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
In its motion for partial summary judgment, defendant SJT
argues that the Supreme Court’s opinion in Stewart does not provide
the accurate standard by which to evaluate the Perseverence’s
vessel status; rather, it would have the Court believe that the
case law prior to Stewart governs whether the Perseverence is a
vessel.
(Docket No. 80.)
In the alternative, defendant SJT
contends that even under a Stewart analysis, the Perseverence is
not a vessel because it was practically incapable of being used as
a means of water transportation.
Id.
The magistrate judge
addressed and rejected defendant SJT’s arguments in the R&R, basing
his decision on case precedent available to him.
(Docket No. 99.)
Because the Supreme Court issued Lozman after the R&R was issued,
however, the Court embarks on an analysis of defendant SJT’s and
plaintiff Catlin’s arguments under a new legal lens.
A.
Jurisprudence Defining “Vessel” Pursuant to Section 3
As a preliminary matter, the Court agrees with the
magistrate judge that Stewart is not limited to cases involving the
Civil No. 11-2093 & 11-2116 (FAB)
Jones
Act
or
the
LHWCA.4
In
12
light
of
the
Supreme
Court’s
discussion in Lozman, however, it is clear that Stewart provides
only a glimpse into the standard to be used in determining a
“vessel” pursuant to section 3.
The Supreme Court’s decision in
Lozman sheds new light on the concept of a vessel under federal
4
In response to defendant’s argument that Stewart does not
provide the accurate standard by which to evaluate the dry dock in
this case, the magistrate judge engaged in a lengthy discussion as
to the proper definition of “vessel” pursuant to section 3. (See
Docket No. 99 at pp. 6–12.)
Surveying extensive case law, the
magistrate judge disagreed with defendant SJT that Stewart only
applies to cases implicating the Jones Act or the Longshoremen and
Harbor Workers Compensation Act (“LHWCA”), and concluded that
Stewart determines the standard used to examine whether the
Perseverence is a vessel for purposes of admiralty jurisdiction.
Id. at p. 12.
Courts have consistently applied Stewart to cases that did not
arise under the Jones Act or the LHWCA in order to determine
“vessel status” for the purpose of invoking federal admiralty
jurisdiction. See, e.g., Silver Slipper Casino Venture, 264 F.
App’x. 363 (5th Cir. 2008) (applying Stewart to determine whether
a casino constituted a vessel for purposes of admiralty
jurisdiction); De La Rosa v. St. Charles Gaming Co., 474 F.3d 185
(5th Cir. 2006) (applying Stewart to interpret the definition of
“vessel” for the purposes of general maritime law and admiralty
jurisdiction); Tagliere v. Harrah’s Ill. Corp., 445 F.3d 1012 (7th
Cir. 2006) (applying Stewart in concluding that an indefinitely
moored riverboat was a vessel, thus establishing admiralty
jurisdiction).
Indeed, the Supreme Court’s recent opinion in
Lozman further supports the proposition that Stewart extends to
admiralty cases beyond those involving the Jones Act and LHWCA.
See 133 S. Ct. 735 (applying Stewart to interpret whether a
floating houseboat constituted a “vessel” pursuant to section 3 in
determining whether admiralty jurisdiction existed for a Federal
Maritime Lien Act claim). The Court, therefore, rejects defendant
SJT’s contention that Stewart is limited to cases under the Jones
Act or the LHWCA. As discussed below, however, the Supreme Court’s
decision in Lozman expands upon Stewart and the concept of a
“vessel,” warranting a new analysis of the Perseverence’s vessel
status.
Civil No. 11-2093 & 11-2116 (FAB)
13
maritime law and, therefore, warrants new consideration of the
Perseverence’s status and the magistrate judge’s findings. A brief
review of the evolution of case law, originating before Stewart and
progressing through Lozman, sets the historical backdrop against
which the Court must address the Perseverence’s vessel status.
1.
Pre-Stewart Precedent & The Supreme Court’s Stewart
Opinion
The Supreme Court first addressed whether a dry dock
constitutes a vessel in Cope v. Vallete Dry-Dock Co., 119 U.S. 625
(1887). It reasoned that “a fixed structure, such as this dry-dock
is, not used for the purpose of navigation, is not a subject of
salvage service, any more than is a wharf or a warehouse when
projecting into or upon the water.
The fact that it floats on the
water does not make it a ship or vessel . . . .”
at 627.
Cope, 119 U.S.
Rather, “‘vessels’ are used in a very broad sense, to
include all navigable structures intended for transportation.” Id.
at 629.
The Court reasoned, rather broadly, that “no case can be
found which would construe the term[] [“vessel”] to include a drydock . . . permanently moored or attached to a wharf.”
Id. at 630.
In the wake of Cope, lower courts generally excluded
dry docks from the definition of vessel.
See, e.g., Royal Ins. Co.
of Am. v. Pier 39 Ltd. P’ship., 738 F.2d 1035, 1037 (9th Cir. 1984)
(“Although some cases hold that a floating dry dock becomes a
vessel when it is in transit from one place of employment to
another, the general rule is that stationary floating dry docks are
Civil No. 11-2093 & 11-2116 (FAB)
14
not vessels.”) (internal citations omitted); In re Two-J Ranch,
Inc., 534 F. Supp. 2d 671 (W.D. La. 2008) (“Prior to Stewart, the
Fifth Circuit . . . clearly embraced the proposition that, as a
matter of law, a floating dry dock is not a vessel when it is
moored and in use as a dry dock.”); Cook v. Belden Concrete Prods.,
Inc., 472 F.2d 999, 1000 (5th Cir. 1973) (“Since Cope, . . . it has
been clear that a floating drydock is not a ‘vessel’ . . . .”)
(internal citations omitted); De Martino v. Bethlehem Steel Co.,
164 F.2d 177, 179 (4th Cir. 1947) (citing Cope for the proposition
that “a floating dock[] can hardly be considered a vessel”).
In
2005, when the Supreme Court decided Stewart, however, it seemingly
confined its holding in Cope and proffered a broader understanding
of the meaning of “vessel” pursuant to section 3.
In Stewart, the Supreme Court considered whether a
dredge, a massive floating platform used during Boston’s Big Dig
and from which a clamshell bucket excavated silt from the ocean
floor onto adjacent scows, constituted a vessel under federal
maritime
law.
543
U.S.
at
484.
The
dredge
had
“certain
characteristics common to seagoing vessels, such as a captain and
a crew, navigational lights, ballast tanks, and a crew dining
area,” but it also had limited means of self-propulsion, moved
“long distances” only by tugboat, and navigated “short distances”
of thirty to fifty feet every couple of hours by manipulating its
anchors and cables.
Id. at 484–85.
To address an argument that
Civil No. 11-2093 & 11-2116 (FAB)
15
prior to Stewart the Supreme Court had adopted a definition of
vessel narrower than that of section 3’s text, the Supreme Court
reflected upon its holding in Cope.
The dry dock in Cope, which had been moored and
stationary for twenty years, was “neither taken from place to place
nor used to carry freight from one place to another.”
S. Ct. at 493 (citing Cope, 119 U.S. at 627).
Lozman, 133
The Supreme Court
distinguished the dry dock as “a fixed structure that had been
permanently moored, rather than a vessel that had been temporarily
anchored,” id. (internal quotations omitted), and indicated that
Cope’s holding —that the dry dock was not a vessel— “did no more
than construe [section] 3 in light of the distinction drawn by the
general maritime law between watercraft temporarily stationed in a
particular location and those permanently affixed to shore or
resting on the ocean floor.”
also
warned
that
a
Id. at 493–94.
watercraft’s
use
as
The Supreme Court
a
means
of
water
transportation must be a practical, not merely a theoretical,
possibility,
id.
at
496,
and
declared
that
“[s]imply
put, a
watercraft is not ‘capable of being used’ for maritime transport in
any meaningful sense if it has been permanently moored or otherwise
rendered practically incapable of transportation or movement.” Id.
at 494.
dredge
Accordingly, and contrary to the dry dock in Cope, the
in
Stewart
constituted
a
vessel
because
it
was
only
temporarily stationary and had not been taken out of service,
Civil No. 11-2093 & 11-2116 (FAB)
16
permanently anchored, or otherwise rendered practically incapable
of maritime transport.
2.
Id. at 497.
Post-Stewart & The Supreme Court’s Lozman Opinion
Lower courts interpreted the Supreme Court’s ruling
in Stewart to have broadened the spectrum of section 3 “vessels” to
include a variety of unconventional watercraft.
See, e.g., Holmes
v. Atl. Sounding Co., 437 F.3d 441, 448 (5th Cir. 2006) (“As long
as a water-borne structure is practically capable of being used for
transportation on navigable waters, it is a ‘vessel.’”); In re TwoJ Ranch, Inc., 534 F. Supp. 2d 671, 678–79 (W.D. La. 2008) (finding
that, “[c]onsistent with Stewart’s expanded definition of that term
“vessel,” a floating barge was a vessel).
In its recent Lozman
opinion, however, the Supreme Court “has sent a shot across the bow
of those lower courts that have ‘endorsed the ‘anything that
floats’ approach’ to defining vessels.” Fireman’s Fund Ins. Co. v.
Great Am. Ins. Co. of N.Y., 2013 U.S. Dist. LEXIS 11114 (S.D.N.Y.
2013).
Tasked with determining whether a floating home fell
within the ambit of section 3, the Supreme Court in Lozman reviewed
an Eleventh Circuit Court of Appeals holding that a houseboat was
a vessel because it “was practically capable of transportation over
water by means of a tow, despite having no motive or steering power
of its own.”
City of Riviera Beach v. Unnamed Gray, 649 F.3d 1259,
1269 (11th Cir. 2011).
Recognizing that the Eleventh Circuit’s
Civil No. 11-2093 & 11-2116 (FAB)
17
interpretation of the section 3 term “capable” (of being used as a
means of transportation) was too broad, the Court remarked:
Not every floating structure is a ‘vessel.’ To state the
obvious, a wooden washtub, a plastic dishpan, a swimming
platform on pontoons, a large fishing net, a door taken
off its hinges, or Pinocchio (when inside the whale) are
not ‘vessels,’ even if they are ‘artificial contrivances’
capable of floating, moving under tow, and incidentally
carrying even a fair-sized item or two when they do so.
Lozman, 133 S. Ct. at 740.
Lozman indicates that a floating structure is not
necessarily a vessel merely because it has a literal capability of
transporting persons or things on water.
Instead, the central
question becomes whether 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.”5
Lozman, 133 S. Ct. at 741.
Reiterating its
reasoning in Stewart, the Supreme Court explained that it must
5
In enunciating the “reasonable observer test,” the Supreme
Court upheld its reasoning in Stewart that a watercraft may qualify
as a vessel even if it is not primarily used for transportation
purposes; or if it is not in motion at the time in question; or if
it is attached — albeit temporarily – to land. See Lozman, 133 S.
Ct. at 742. It explained that the dredge in Stewart was a vessel
in spite of these characteristics, not because of them. Fireman’s
Fund Ins. Co., 2013 U.S. Dist. LEXIS 11114; Lozman, 133 S. Ct.
at 742 (“[Stewart] say[s] [and] . . . mean[s] that the statutory
definition may (or may not) apply — not that it automatically must
apply – where a structure has some other primary purpose, where it
is stationary at relevant times, and where it is attached – but not
permanently attached — to land.”) (emphasis in original).
Similarly, the Supreme Court indicated that the lack of a
watercraft’s ability to self-propel, while not dispositive, “may be
a relevant characteristic” to determine if one of its purposes is
transportation. Id. at 741.
Civil No. 11-2093 & 11-2116 (FAB)
18
apply the capable-of-transporting-persons-or-things-from-one-placeto-another definition “in a practical, not a theoretical, way.”
Id. at 741 (internal quotations omitted).
It also indicated that
no universal set of sufficient conditions exists for a structure to
meet
the
definition
of
“vessel.”
Id.
at
742.
The
mere
considerations, for example, that a structure can float; can
proceed under tow; or has shore connections (power cable, water
hose, rope lines) that do not render it practically incapable of
transportation
themselves.
or
movement,
Lozman,
133
S.
are
not
Ct.
at
sufficient
740.
in
Moreover,
and
of
certain
characteristics — while not dispositive — may indeed be relevant to
the reasonable observer test — like the fact that a watercraft has
a primary purpose other than transportation or that it lacks the
ability to self-propel.
Id. at 741.
Citing extensive legal authority, the Lozman Court
provided insight into the meaning of section 3’s “capable of being
used[] as a means of transportation on water” language. It pointed
out that “the bulk of precedent supports our conclusion,” Lozman,
133 S. Ct. at 742, and that “lower court cases also tend, on
balance, to support our conclusion.”
Id. at 743.
It discussed and
compared its holdings in Stewart and Evansville & Bowling Green
Packet Co. v. Chero Cola Bottling Co., 271 U.S. 19 (1926) more in
depth, identifying a “basic difference” between the structures in
those cases that ultimately led to the opposite findings:
The
Civil No. 11-2093 & 11-2116 (FAB)
19
dredge in Stewart, the Supreme Court reasoned, “was regularly, but
not primarily, used (and designed in part to be used) to transport
workers
and
equipment
over
water,
while
the
wharfboat
[in
Evansville] was not designed (to any practical degree) to serve a
transportation function and did not do so.”
Id. at 743.
As
support for that distinction, the Supreme Court cited Cope both as
a case “describing [a] ‘hopper-barge’ as potentially a ‘vessel’
because it is a ‘navigable structure, used for the purpose of
transportation,” and as a case illustrating that a “floating
drydock [was] not a ‘vessel’ because [it was] permanently fixed to
wharf.”
Id.
structure
To bolster its conclusion that to be a vessel, a
must
contain
features
objectively
indicating
a
transportation function, the Supreme Court also relied on various
additional authority:
Jerome B. Grubart, Inc. v. Great Lakes
Dredge & Dock Co., 513 U.S. 527, 535 (1995) (“A barge [that is]
sometimes attached to river bottom to use as a work platform
remains
a
‘vessel’
when
‘at
other
times
it
was
used
for
transportation.’”); Great Lakes Dredge & Dock Co. v. Chicago, 3
F.3d 225, 229 (7th Cir. 1993) (“[A] craft is a vessel if its
purpose
is
passengers,
to
some
cargo,
reasonable
or
equipment
degree
from
‘the
place
transportation
to
place
of
across
navigable waters.’”); 1 Benedict on Admiralty § 164, p. 10-6 (7th
rev. ed. 2012) (“[M]aritime jurisdiction [is] proper if ‘the craft
is a navigable structure intended for maritime transportation.’”).
Civil No. 11-2093 & 11-2116 (FAB)
Lozman, 133 S. Ct. at 743.
20
Ultimately, however, the Lozman Court
rejected opinions that endorsed the “anything that floats” approach
as “inappropriate and inconsistent with our precedents.”
Id.
at 740, 743.
The Supreme Court indicated that its reasonable
observer test is to be determined on a case-by-case basis and
acknowledged the test’s limitations. See Lozman, 133 S. Ct. at 745
(“[O]ur
approach
is
neither
perfectly
precise
nor
always
determinative . . . .”). It recognized that “borderline cases will
always exist,” but stood by the test as one that “should offer
guidance
in
a
significant
number
of
borderline
‘capacity’ to transport over water is in doubt.”
B.
cases
where
Id.
The Reasonable Observer Test and Defendant SJT’s Dry Dock
After determining that Stewart provided the applicable
standard for interpreting section 3, the magistrate judge analyzed
the Perseverence’s vessel status.
Ultimately he concluded that
“the Perseverence’s capability of moving up and down the wharf
constitutes practical capability of transportation under Stewart”
because Stewart contained no minimum requirement or threshold for
capability of movement; did not distinguish between the terms
“transportation” and “movement”; and made no distinction between
voyages over great distances and movements of ten or fifteen feet.
(Docket No. 99 at p. 14); id. at p. 17 (“[T]he drydock was used for
maritime transportation — even if only in the form of short-
Civil No. 11-2093 & 11-2116 (FAB)
21
distance movements — which is sufficient to meet the definition of
vessel in 1 U.S.C. § 3.”).
While such reasoning may have been
sound in a pre-Lozman context, the magistrate judge’s conclusion
cannot stand
concept.6
in
light
of
Lozman,
which
later
addressed
each
With the Lozman opinion and historical evolution of
section 3 interpretations in mind, the Court turns to the issue of
whether the Perseverence constitutes a vessel for purposes of
federal admiralty jurisdiction.
The parties’ statements of uncontested facts do not lead
to the conclusion that defendant SJT’s dry dock was designed to any
practical degree to transport persons or things over water.
Both
parties admit that the Perseverence was designed, constructed and
used to provide marine maintenance and repair services.7
(Docket
6
First, the Supreme Court enunciated the reasonable observer
test, which requires a structure to be designed to a practical
degree “for carrying people or things on water.” Lozman, 133 S.
Ct.
at
739.
Second,
the
Supreme
Court
distinguished
“transportation”
from
“movement”
by
defining
the
word
“transportation” as the conveyance of things or persons from one
place to another, and illuminating that the definition be applied
in a “practical, not a theoretical way.” Lozman, 133 S. Ct. at 741
(internal quotations and citation omitted).
Third, the Supreme
Court regarded as insufficient even movement over significant
distances that occurred infrequently, only under tow, and without
carrying passengers or cargo. Id. at 746.
7
The Supreme Court indicated the impropriety of considering
the subjective intent of a structure’s owner in a court’s review.
Lozman, 133 S. Ct. at 744.
It clarified that the reasonable
observer test permits “consideration only of objective evidence of
a waterborne transportation purpose . . . [by] look[ing] to the
physical attributes and behavior of a structure, as objective
manifestations of any relevant purpose, and not to the subjective
intent of the owner.” Id. at 744-45.
Civil No. 11-2093 & 11-2116 (FAB)
22
No. 79 at p. 4; Docket No. 81 at p. 5.)
An independent marine
surveyor
Inc.
from
Merrill
Marine
Services,
determined
the
Perseverence’s “primary function” to be “the dry-docking of boats
for repair and refurbishment.”
(Docket No. 79-3 at p. 3.)
Another
marine surveyor, from Marine Consultants, Inc., indicated that
“[i]ts intended use [was] to lift floating equipment for inspection
and repair.”
(Docket No. 79-7 at p. 2.)
None of those enumerated
designs — lifting, dry-docking, repairing, or refurbishing — even
arguably involves transportation, and indeed Mr. Payne confirmed
that the dry dock was not designed or constructed to transport
cargo or passengers.
(Docket No. 79-2 at p. 3.)
There is nothing
in the record, therefore, that the Perseverence was designed to any
practical degree to convey things or persons from one place to
another. The Supreme Court clarified that a structure may classify
as a vessel as long as it has some transportation purpose, whether
primary or not; if it has no transportation function whatsoever,
however, then the structure does not fall within section 3’s vessel
classification.
See Lozman, 133 S. Ct. at 742–43.
Because the
Court does not find that the Perseverence was designed to any
practical degree to transport or carry persons or things over
water, it
cannot
conclude that
the
Perseverence
is
a vessel
according to admiralty law.
Regardless of the parties’ agreement as to the purpose of
the Perseverence’s design, an independent analysis of the dry
Civil No. 11-2093 & 11-2116 (FAB)
23
dock’s physical attributes would not lead a reasonable observer to
conclude that the Perseverence was designed to any practical degree
to transport persons or things over water. The Perseverence lacked
the ability to propel itself over water because it required an
external force to be moved from Louisiana to Puerto Rico and even
to move ten to fifteen feet up and down the Miramar pier.
(Docket
Nos. 79; 79-2; 79-3; 79-6; 81); accord Lozman, 133 S. Ct. at 741
(citing the fact that the floating structure “was able to travel
over water only by being towed” as relevant evidence that the
structure was not “designed by any practical degree to transport
persons or things over water”).
Nothing demonstrates that the dry
dock was equipped with any type of steering mechanism, and indeed
neither of Merrill Marine Services, Inc.’s trip & tow surveys,
which describe in detail the Perseverence’s attributes, list those
parts.
(See Docket Nos. 79-2; 79-3; 79-7); accord id. (citing as
additional evidence that the floating structure “had no rudder or
other steering mechanism”).
The temporary modifications that were
required for navigation during its tow from Louisiana to Puerto
Rico, including its navigational lights, had been removed in
January 2007 upon Perseverence’s arrival in Puerto Rico, and the
Perseverence appears to have lacked any other equipment allowing it
to be used for transporting passengers or cargo.
(Docket Nos. 79;
79-2; 79-3; 81); accord Lozman, (noting that whether a structure is
“designed to any practical degree” for transportation is relevant
Civil No. 11-2093 & 11-2116 (FAB)
to
the
inquiry).
Furthermore,
24
the
Perseverence’s
physical
attributes while secured to pier 15 in Miramar do not demonstrate
that it was designed for transportation. The Perseverence was tied
to the pier with more than ten three-inch-diameter mooring lines
and numerous spring lines to keep it in place; at least one gangway
— which was chained both to the Perseverence and the pier —
provided access to the dry dock; and the Perseverence was only able
to receive electricity from power generators and compressed air
from a pneumatic line, both of which were located on shore.
(Docket No. 79-2); accord Lozman, 133 S. Ct. at 741 (considering as
probative evidence that the floating home “had no special capacity
to generate or store electricity but could obtain that utility only
through ongoing connections with the land”).
Admittedly,
the
attributes of a vessel.
Perseverence
is
not
devoid
of
all
The dry dock, for example, floated,
(Docket No. 79 at p. 5; Docket No. 81 at p. 6); contained a raked
bow and tow pads to facilitate transit via towing, (Docket No. 79-3
at pp. 1–2; Docket No. 79-2 at 1); was equipped with mooring
devices, bollards, and cleats for securing it to the shore or to
other vessels, (Docket No. 79-3 at p. 2–5); and had been towed
across the ocean from Louisiana to Puerto Rico, (Docket No. 79-2 at
p. 1).
See Stewart, 543 U.S. at 484 (regarding as probative that
the dredge was “moved long distances by tugboat”); see also Holmes
v. Atl. Sounding Co., 437 F.3d 441, 449 (5th Cir. 2006) (abrogated
Civil No. 11-2093 & 11-2116 (FAB)
25
on other grounds, Lozman, 133 S. Ct. at 743) (finding as “objective
characteristics of a vessel” a raked bow; two end tanks where the
rakes are located for flotation; traditional mooring devices, bits
or
bollards
mooring).
or
cleats;
and
anchors
and
land
lines
used
for
While arguably sufficient in a pre-Lozman landscape,
however, this evidence falls short of proving that the Perseverence
is a vessel in today’s post-Lozman world because it does not
indicate that the dry dock was practically designed — or, as
discussed below, regularly or actually used — for transporting
cargo or passengers.
See Fireman’s Fund Ins. Co., 2013 U.S. Dist.
LEXIS 11114.
It cannot be said that the Perseverence was regularly or
actually used to transport persons or goods over water.
See
Lozman, 133 S. Ct. at 743 (drawing distinction between a structure
“regularly” used to transport workers or equipment over water, and
one that was not designed to any practical degree to serve a
transportation
function “and
did
not
do
so”);
id.
at
745–46
(explaining that section 3 also includes as a “vessel” a structure
that “actually” was used for transportation).
Perseverence
was
capable
of,
and
was
To argue that the
actually
used
for,
transportation, plaintiff Catlin points to the fact that at the
time of its sinking, the Perseverence was being prepared for
another open ocean voyage back to Louisiana; that it was not
permanently affixed to the shore; that it could be towed “as and
Civil No. 11-2093 & 11-2116 (FAB)
26
when needed;” that it did indeed occasionally move ten to fifteen
feet up and down the Miramar pier; and that the docking agreement
defendant SJT signed with the Ports Authority required defendant
SJT to move the Perseverence “anywhere in the harbor” where the
Port Authority directed.
(Docket No. 106 at pp. 2–7.)
A common
sense evaluation of the regular and actual uses of the Perseverence
in the wharf, however, belies plaintiff Catlin’s assertion.
Between the time it arrived in San Juan in January 2007
and the time it sank in September 2011, the Perseverence remained
virtually stationary at a single location — at the southwestern end
of the outfitting pier 15 in Miramar.
(Docket No. 79-2 at p. 1.)
Mr. Payne testified that occasionally “a couple of guys pull [the
Perseverence], very slowly, and it moves, or we use a pickup truck”
to shift the dry dock along pier 15.
(Docket No. 79-6 at pp. 2–3.)
He
ten-to-fifteen-foot
explained,
however,
that
the
movement
occurred not for the purpose of transporting a vessel or any other
person or thing on the Perseverence, but instead for the purpose of
returning the dry dock to its original position on the pier after
working on a vessel.
Id. at pp. 2–3 (“[W]hen we were sinking the
dry dock to raise the vessel, [the dry dock] goes down.
And when
it comes up, it comes up ten or fifteen feet down the wharf, and
then we move it back . . . .”).
Those movements, which were brief,
infrequent, of short distances, and made solely for the purpose of
returning the dry dock to its original position after raising a
Civil No. 11-2093 & 11-2116 (FAB)
27
vessel for repair, therefore, constitute neither the type nor the
amount of transportation sufficient for vessel status under Lozman.
See 133 S. Ct. at 742 (citing its holding in Evansville that a
wharfboat was not a vessel because “despite the annual movement
under tow, the wharfboat was not used to carry freight from one
place to another, nor did it encounter perils of navigation to
which craft used for transportation are exposed”).
Furthermore,
the Court is unpersuaded that the Perseverence was actually used
for transportation in 2007 when, carrying equipment welded to the
deck, the dry dock made the thousand-mile trip from Louisiana to
Puerto Rico towed by a tugboat.
While the Perseverence did
traverse the ocean from Louisiana to Puerto Rico, it did so
transporting nothing but its own equipment.
Perseverence
moved
by
tow
once
over
a
Thus, although the
large
distance
and
occasionally over distances of approximately ten to fifteen feet,
it did not do so regularly or for the purpose of “carrying people
or things on water.”
Instead, the facts establish nothing more
than the Perseverence as an artificial contrivance “capable of
floating, moving under tow, and incidentally carrying . . . a fairsized item or two when [it] do[es] so.”
See Lozman, 133 S. Ct.
at 740.
The Court agrees with defendant SJT that the Perseverence
lacked any waterborne transportation purpose, (Docket No. 103 at
p. 10); the dry dock was not designed to transport cargo or
Civil No. 11-2093 & 11-2116 (FAB)
28
passengers over water and was not regularly used to do so, (id. at
p. 11); the occasional movement of the dry dock ten to fifteen feet
within
the
Miramar
pier
does
not
constitute
“transportation”
pursuant to Lozman, (id. at pp. 9–10); the dry dock’s physical
characteristics do not demonstrate that it was designed to any
practical degree to transport persons or things over water, (id. at
pp. 13–14); and the dry dock was not actually used for water
transportation, (id. at pp. 16–17). Applying the standard outlined
in Lozman, the Court cannot say that a “reasonable observer,
looking
to
[the
Perseverence’s]
physical
characteristics
and
activities, would consider it designed to a practical degree for
carrying people or things over water.”
at 741.
See Lozman, 133 S. Ct.
The Perseverence, therefore, does not qualify as a vessel
pursuant to section 3.
CONCLUSION
Because a reasonable observer, looking to the Perseverence’s
physical characteristics and activities, would not consider it to
be designed to any practical degree for carrying people or things
on water, the dry dock does not constitute a “vessel” under
section 3.
See Lozman, 133 S. Ct. at 741.
Accordingly, the Court
lacks jurisdiction over this matter, GRANTS defendant SJT’s motion
for partial summary judgment (Docket No. 78), and dismisses case
number 11-2093 without prejudice.
Judgment shall be entered accordingly.
Civil No. 11-2093 & 11-2116 (FAB)
29
Case number 11-2116 survives.
IT IS SO ORDERED.
San Juan, Puerto Rico, April 8, 2013.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
United States District Judge
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