Early this year, the United States Supreme Court decided a case that could have had far-reaching effects on local land use regulations affecting floating homes. However, the Court’s opinion in this case, Lozman v. City of Riviera Beach (No. 11-626), appears to have left most of these regulations intact—at least for the time being. The question presented to the Court was whether the definition of “vessel” found in the Federal Rules of Construction Act included every floating structure, or just structures that were designed to transport people and cargo over the water. A decision indicating that all floating homes were actually “vessels” under Federal admiralty jurisdiction could have raised preemption issues and other problems for local- and state-level building and land use regulations across the country. It could also complicate floating home mortgages by subjecting the structures to federal admiralty liens.
The case stemmed from a dispute involving the City of Riviera Beach and the owner of a floating home, Fane Lozman, who had his home towed to a City-owned marina for docking. In an attempt to recover moorage fees and trespass damages from Mr. Lozman, the City brought a federal admiralty action against Mr. Lozman’s floating home—which is an in rem proceeding to allow the City to enforce a lien against the structure itself. Mr. Lozman claimed the District Court lacked admiralty jurisdiction over his home, because his home was not a “vessel” under Federal law. However, the City prevailed in District Court and was awarded several thousand dollars for moorage fees. The Eleventh Circuit Court of Appeals upheld the District Court’s ruling, agreeing that Mr. Lozman’s home was a “vessel” under Federal admiralty law because it was capable of movement over water.
But Mr. Lozman’s home was not your typical “vessel.” It had “no ability to propel itself,” and lacked other attributes of other structures that are considered vessels. For example, it had no rudder or other steering mechanism, it was rectangular in shape, and relied on land-based sources for electricity.
The Supreme Court accepted review of the case and reversed the decision of the Eleventh Circuit. The Federal law in question defines “vessel” as “every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water.” See 1 U.S.C. § 3. The Eleventh Circuit read this definition quite broadly, seemingly applying it to any floating structure at all. The Supreme Court, however, rejected this “anything that floats” approach. The Court interpreted the word “capable” as applying “in a ‘practical,’ not a ‘theoretical,’ way.” That is, just because a structure floats does not mean it is “capable” of being used as a means of transportation within the meaning of the statute. The Court generally held that a structure does not qualify as a “vessel” under this definition “unless a reasonable observer, looking to the home’s physical characteristics and activities, would consider it designed to a practical degree for carrying people or things over water.”
While this “reasonable observer” test is imprecise, the Court’s decision provides some guidance on what kind of structures may be within reach of the Federal government’s admiralty jurisdiction, and which structures are principally subject to state or local regulations.
The author of this post assisted with the representation of Mr. Lozman.