SISSON v. RUBY
Legal provision: 28 U.S.C. 1333
Argument of Warren J. Marwedel
Chief Justice Rehnquist: We'll hear argument next in Number 88-2041, Everett Sisson v. Burton Ruby.
Mr. Marwedel: Mr. Chief Justice, and may it please the Court:
In September of 1985 the Petitioner was doing what all sailors have to do, performing maintenance on his boat.
His boat was docked, what we regard a traditional maritime activity, in a navigable waterway Michigan... in Michigan City, Indiana, at a pleasure boating dock.
Unknown Speaker: Was this a kind of a marina, or was it just a single dock?
Mr. Marwedel: It's a marina that is in part of the harbor of Michigan City.
They have allocated part of the harbor... it used to be a commercial harbor, part of it now has municipal docks operated as a marina for pleasure craft, six-pack fishing boats, that sort of thing.
Unknown Speaker: Commercial fishing boats?
Mr. Marwedel: Well, they are commercial in the sense of I may own a boat, and if I have a fishing license I can take out six people to fish on Lake Michigan, and I charge them a fee for taking them out.
Not in the sense of a commercial boat that brings it in for restaurants and that sort of thing.
That night a fire broke out on the boat, which has been classified as one of the main perils of a boat, and it totally destroyed Mr. Sisson's yacht and did considerable damage to other yachts, as well as to marina property.
A limitation of liability petition was filed in the U.S. District Court in Chicago--
Unknown Speaker: Now, when you use the term yacht, Mr. Marwedel, do you mean something fairly specific?
Mr. Marwedel: --It is a 56-foot Hatteras inboard, twin screw motor yacht, which can be used for cruising throughout the Great Lakes.
Unknown Speaker: And when you say other, it damaged other yachts, you mean boats of similar size, or much smaller size?
Mr. Marwedel: Yes.
In fact the petitioner's... or the respondents' yacht was of similar size.
There were some smaller yachts, sailboats, everything from another 56-foot yacht to a small sailboat.
Unknown Speaker: What is the difference between a yacht and a sailboat?
Mr. Marwedel: Well, they are all yachts.
I am only describing the size.
Unknown Speaker: So, how do we, very briefly, define a yacht?
Mr. Marwedel: Well, I think a yacht... well, I am a sailor, and generally we refer to a yacht as something over 26 feet.
Unknown Speaker: Over 26 feet.
Mr. Marwedel: There is no rule, but it's just a term we use.
The district court dismissed the petition for limitation of liability on the grounds there was no subject matter admiralty jurisdiction.
The admiralty jurisdiction of the United States courts is derived from Article 3 of the Constitution and the judicial power.
It confers on the courts the admiralty and maritime jurisdiction.
Today those two terms are used synonymously, but in past times, in colonial times and in European times, the admiralty law generally dealt with just the sea, the navigable waters.
The maritime law dealt with matters of contract, maritime liens, finance, that sort of thing.
They have been combined in Article 3 into one judicial power.
In colonial times, as well as in the... basically the first 180, 190 years of this country, the tests for admiralty jurisdiction was generally the situs test.
If the... if the accident took place, or the tort took place on a navigable waterway, it has since been extended to the Great Lakes, the western rivers, then you had admiralty jurisdiction.
This Court had a problem with that... with that test the way it had been described in Executive Jet, where a small commercial aircraft, in taking off, struck some birds, essentially crashed and skidded into the water.
The owners of the aircraft sued the airport under admiralty jurisdiction.
We believe that the Court rightly ruled there was no admiralty jurisdiction.
But the reason that we think should have been used is there was no vessel involved.
If you review the tort cases in the first 180 years of admiralty jurisdiction, the facts disclose you have a vessel involved.
It is not just the situs.
It is not just the navigable water.
It takes both.
And obviously an airplane--
Unknown Speaker: Is a sea plane a vessel?
Mr. Marwedel: --It can be, and under the rules of the road, if a sea plane is operating on the water as a vessel it must comply with the rules of a vessel.
It has the same navigation lights, it must follow the same rules of the road.
Unknown Speaker: Like if it is taxiing away to make a take off?
Mr. Marwedel: That still is under the rules of the road.
If that sea plane just drops out of the sky and falls into the water, we may have a different result.
That may be the Executive Jet.
It's a fortuitous incident that it landed in the water.
I think if the focus is on the vessel, and the U.S. Code 1 U.S.C. Section 3 describes a vessel as a water craft or other contrivance used or capable of being used as a means of transportation on the water.
Unknown Speaker: Does that go right down to a rowboat?
Mr. Marwedel: It could.
There are obviously situations that you will get to where you will question.
A rowboat is... may be... questionable.
But a lifeboat is a rowboat, and there are... a rowboat has to follow the rules of the road.
Rowboats or lifeboats have certain regulations on the Recreational Boating Act.
Unknown Speaker: Well, suppose you have an outboard motor on the rowboat.
Is that... is that clearly a vessel?
Mr. Marwedel: Yes.
It is if it's a water craft or it's a contrivance that is designed for transportation on the water.
Unknown Speaker: Well, supposing you are on an inland lake in northern Michigan or Wisconsin or Minnesota, and the lake has no connection with the river or sea or anything, just say it's 10 square miles.
Now is that admiralty jurisdiction?
You're running an outboard motorboat on an inland lake?
Mr. Marwedel: The way the courts have construed admiralty jurisdiction, no, it would not.
Unknown Speaker: Why not?
Mr. Marwedel: Because it is water that is solely with the boundaries of the state.
It is not connected with interstate transportation.
However, I think the judicial power could extend that far if the Court wanted to.
We are not asking it to in this case, but I think the judicial power for admiralty is different from the commerce power, or the commerce clause.
And if the Court saw fit to extent it, it could.
The Federal Government, in enacting the Recreational Boating Act, has regulations for the operation of boats and for safety equipment of boats, and it just says water in the statute.
It doesn't restrict it to navigable waters.
Unknown Speaker: Well, it regulates mix masters too.
I mean, you don't need the admiralty jurisdiction for the government to adopt safety rules.
Mr. Marwedel: You don't... you don't have to--
Unknown Speaker: Does it place these suits in admiralty courts?
Mr. Marwedel: --You don't have to.
Unknown Speaker: I was sort of with you up until the time where you expressed doubt about a rowboat.
Why wouldn't a rowboat be a vessel?
I don't understand why you hesitate.
Mr. Marwedel: Well, you get to a point... you get to a point in... in... in these types of craft where you can get to a personal flotation device.
Now, a rowboat I don't have a problem with.
Then you get to maybe a styrofoam raft that has a couple of oars on it.
I would consider that to be a personal flotation device, the way a life jacket would be... or water wings.
Unknown Speaker: But you said a moment ago, I thought, that even an outboard on a rowboat on an inland lake is not admiralty jurisdiction.
Mr. Marwedel: Well, because we don't have a navigable water.
Unknown Speaker: It doesn't depend on the... it is a vessel, but it is not on navigable water?
Mr. Marwedel: --Correct.
I... I contend that you need both.
You need a navigable water... for the traditional maritime activity that has been exercised by this Court, you need a navigable waterway and you need a vessel.
You need those two things.
Unknown Speaker: And if it is navigable and you have a smaller craft, say an outboard motor or a small cruiser, maybe 12-14 feet long, and they are pulling a water skier and they run into another water skier, and there is serious personal injury, would the... under your theory would the liability limitation act apply?
Mr. Marwedel: The limitation of--
Unknown Speaker: So that the injured skier's recovery is limited to the value of the vessel?
Mr. Marwedel: --The limitation act is slightly different from the general maritime, because it... nowhere in that statute does it require a navigable water.
Unknown Speaker: Well, under your... under your theory, what would be the result of my case?
Under the theory you are arguing here.
Mr. Marwedel: The owner of the vessel is entitled to limit.
The water skier would not be.
Unknown Speaker: And so the only person driving was the owner of the vessel, and he injured somebody else that was water skiing, the Limitation of Liability Act would apply under your submission?
Mr. Marwedel: It would apply.
He would have his chance in court, although I would admit that if he is driving the boat and there was an error on his part, there would be very little chance of his prevailing on his limitation action.
But he would be entitled to use the limitation act.
Unknown Speaker: xxx use it as a basis for jurisdiction of the admiralty court.
Mr. Marwedel: Yes.
Unknown Speaker: And this applies whether the accident occurs on an inland lake or not?
Mr. Marwedel: Well, thus far--
Unknown Speaker: --because the government says not.
The government says that your theory produces different results, as I recall, depending upon whether the water skier is on the Mississippi River or on some land-locked... land-locked lake in Wisconsin.
Mr. Marwedel: --We are not contending, for the purposes of our case, that the limitation act does apply in an inland lake.
I am only pointing out that there is no language in the statute that restricts it to navigable waters.
Unknown Speaker: But at least it applies to navigable waters, you would submit?
Mr. Marwedel: Yes.
Unknown Speaker: And if there is a vessel.
Mr. Marwedel: And if there is a vessel.
Unknown Speaker: And you said there is very little chance he would prevail.
Let's have navigable water, a vessel, injures a water skier, invokes Liability of Limitation Act.
Is there some other way the water skier can recover for more than the value of the boat by alleging some other cause of action, like negligence or something?
Was that the purport of your answer to me that he might not be successful?
Mr. Marwedel: No, no.
The limitation act would be a defense to all claims that would be brought.
All I am saying--
Unknown Speaker: So that if the vessel is worth $12,500, the most the water skier can recover is $12,500?
Mr. Marwedel: --Only if the vessel owner is able to prevail.
I'm saying that it would be very difficult for the vessel owner to prevail--
Unknown Speaker: Why?
Mr. Marwedel: --where he is driving the boat.
For example, if the vessel owner makes a sharp turn, causing the water skier to have an accident, so that it's operational negligence on behalf of the owner, who is the operator as well, under the provisions of the limitation act he couldn't limit, because he has privity and knowledge of the proximate cause of the accident.
But he has an opportunity to at least present his case in the limitation action in Federal court.
Now, if the accident were caused by some other... some other reason that was not within his privity and knowledge, for example he is going along in clear open waters and there is an underwater obstruction that caused his vessel to veer off, then he would be entitled to limit, because it was not within his privity and knowledge.
Unknown Speaker: xxx this case?
Mr. Marwedel: Well, in this particular case we have a--
Unknown Speaker: Suppose you use... suppose you are entitled to use the limitations act in this case.
How about prevailing under it?
Mr. Marwedel: --We would hope to prevail.
What we have to do is establish--
Unknown Speaker: But you might not.
Mr. Marwedel: --But we might not.
Unknown Speaker: Okay.
Mr. Marwedel: It goes to what the proximate cause of the accident was and did we have privity and knowledge of that proximate cause.
In our brief we use the analogy of the automobile.
If I am driving the automobile, or I am driving the boat, and I cause the accident, I may be able to get into court under the limitation act, but I am probably going to lose.
However, if I lend my boat to somebody else, or lend my car to somebody else, and it is their negligence that causes the accident, I, as the owner, would be entitled to limit.
The driver of the boat would not.
So that the injured party would have a claim against the driver of the boat.
Unknown Speaker: Mr. Marwedel, if we were looking just at Section 1333 and the question of the admiralty jurisdiction of the courts, without regard for the moment to whether the Limitation of Liability Act enlarges at all that jurisdiction, is a traditional maritime activity also required, do you suppose, for jurisdiction?
Mr. Marwedel: This was first articulated in the Executive Jet decision and then again in the Foremost decision.
And it's our contention that the operation of a vessel, as defined by the statute, is the most traditional maritime activity.
The Eighth Circuit, subsequent to Executive Jet--
Unknown Speaker: Well, your answer is yes?
Mr. Marwedel: --Yes.
Unknown Speaker: Traditional maritime activity is part of the requirement.
It isn't enough to have navigable water and situs.
It has to be a traditional maritime activity.
Mr. Marwedel: That's what the test has been subsequent to Executive Jet and Foremost.
Unknown Speaker: Yes.
And you accept that?
Mr. Marwedel: I accept it, except as to how that is defined.
And that is what has caused the lower courts so much confusion.
The Seventh Circuit essentially restricted it to navigation, but that's not all vessels do.
A vessel can be in navigation without actually moving through the water.
As long as it is fit, manned and it is ready to go, it is in navigation until such time--
Unknown Speaker: Well, I think the Seventh Circuit would hold that if this vessel were a commercial vessel and was tied up at a dock and had this fire, that there would be admiralty jurisdiction.
Mr. Marwedel: --Yes.
Unknown Speaker: And yet, because this is not a commercial vessel, it... it is not within... admiralty jurisdiction.
Mr. Marwedel: Basically that is correct.
But this Court in Foremost indicated that the commercial activity of the vessel wasn't the test.
And the jurisdiction of the admiralty courts in colonial times was to control the water, whatever moved on the water.
These... to look at just a commercial nexus, you would have to look at what is going on in this vessel.
What if the next morning we were going to... the system was going to take out six fishermen, and charge them all $100 apiece to go fishing?
We would wind up having to have a mini trial for every case to determine what the traditional maritime activity was.
And that's why we feel that the operation of a vessel, whatever a vessel does on the water, is a traditional maritime activity by definition.
Unknown Speaker: It is... it is your position in this case, if I understand it correctly, however, that it really doesn't matter, that we don't have to reach the question of whether this is traditional maritime activity or not.
Mr. Marwedel: Correct.
As long as there... it's a vessel.
Unknown Speaker: Because the limitation act applies beyond admiralty.
Mr. Marwedel: Additionally.
Beyond admiralty, the limitation act would also give you jurisdiction.
Unknown Speaker: But if we think--
--You say... you say without regard to the limitation act, it is enough for admiralty jurisdiction if there is a vessel and if there is navigable water?
Mr. Marwedel: Yes.
We get the same result with that test in Executive Jet, and we get the same result with that test in Foremost.
It... we would not disturb any of the prior decisions of this Court, going back and looking at all of them, involve a navigable water and a vessel.
Unknown Speaker: I suppose under the Seventh Circuit test if the yacht were just backing out of the... backing away from the... from the dock or the pier, and the fire broke out and there was a lot of damage, it... it would be within admiralty jurisdiction because it would be moving.
Mr. Marwedel: Because it was moving.
And I think that is starting to split hairs.
Unknown Speaker: Maybe if the engines were just started it would be in navigation.
Mr. Marwedel: Yes.
Well, I don't know with what their... I would assume that they are looking at movement through the water.
But if that becomes a test, you have a problem with all sorts of vessels that are not pleasure craft, but not commercial vessels.
You have government vessels, you have from the Federal Government, the state governments, the city governments.
Unknown Speaker: Or the boat for hire tied up at the same marina.
Mr. Marwedel: Exactly.
And you could have a fire that would do damage to all sorts of different types of boats and have all sorts of different types of jurisdiction.
And I think for uniformity on the navigable waters that the test of a vessel in navigable water is sufficient to keep out the... if it's not a vessel it is probably not a traditional maritime activity, but there may be some.
The sea plane, for example, is a bridge between the vessel and the airplane, so at some point it is a traditional maritime activity if it is operating as a vessel.
If it is flying in the air it is not.
We also feel that our test is in agreement with what Congress has done in the Extension Act, where they extend the admiralty jurisdiction to vessels, without describing the type of vessel, on navigable waters.
It's consistent with the wording in the limitation act which refers to vessels.
And again, we don't feel that it would cause this Court to have to overrule any prior decisions, so that roughly 200 years of maritime jurisprudence would stay intact with our definition.
The limitation act provides a separate, as I have already indicated, a separate basis of jurisdiction.
We feel that that was confirmed in the Richardson v. Harmon case, and it has been confirmed again in the supplemental rules that were propounded by this Court, the Supplemental Admiralty Rules, which conferred jurisdiction on the Federal court to hear limitation of liability cases.
I would like to reserve five minutes for rebuttal, if there are no further questions.
Unknown Speaker: Very well, Mr. Marwedel.
Argument of Robert J. Kopka
Mr. Kopka: Thank you, Mr. Chief Justice, and may it please the Court:
I represent the respondent.
With respect to the facts as stated by the petitioner, I would only add that after the occurrence the petitioner's yacht was worth $800 in salvage value.
The fire caused $275,000 worth of damage to the other boats and to the municipal marina, and what Petitioner is seeking to do is to limit his liability for $275,000 worth of damage to $800.
We believe that there are two issues addressed in this case.
Unknown Speaker: xxx he might lose under the limitation act.
Mr. Kopka: He may lose under the limitation act.
However, the description provided to the Court of what is privity and knowledge was somewhat inaccurate.
Privity and knowledge is not the same as negligence.
And a common law action under state law for negligence is something different than proving privity and knowledge.
Unknown Speaker: Yes, I agree.
Mr. Kopka: --an owner of a vessel... counsel gave an example of an owner of a vessel versus an owner of a car.
An owner of a vessel may have no privity and knowledge, although his employee is negligent or is... has privity and knowledge which gives rise to the occurrence, whereas under common law or state tort law, one might have vicarious liability for the actions of an employee.
So you have a difference in applying the admiralty law when you have an employee who is either negligent or has privity and knowledge, as compared to on the land, where you would have vicarious liability by operation of state law.
I think that there are--
Unknown Speaker: I don't know what... does that mean a corporation can't have privity and knowledge?
Mr. Kopka: --I think that is correct, Your Honor.
A corporation would not have privity and knowledge in... in the admiralty context, and would then be, the limitation of liability would be available notwithstanding the privity and knowledge issue.
Another issue which was raised by counsel which I think is a problem for counsel is this.
Counsel claims that the Limitation of Liability Act doesn't say anything about navigable waterway.
And that issue was raised in several courts below and it was rejected.
But what counsel would urge this Court to do is to allow application of the Limitation of Liability Act even on non-navigable waterways, such as inland lakes.
And by doing so, under counsel's argument, there would be admiralty jurisdiction to every body of water, notwithstanding the fact that it is navigable or non-navigable, by virtue of the Limitation of Liability Act.
This wasn't the intent of Congress in drafting the Limitation of Liability Act.
In fact, this Court early on stated that the Limitation of Liability Act is a part of the general maritime laws.
And it is our position that the requirements of general admiralty jurisdiction should be applied to the Limitation of Liability Act, just as it's applied to every other general admiralty case coming before the Federal courts.
And the reason for that is because the admiral... admiralty courts of the United States have a certain expertise and interest in matters which are strictly admiralty.
And what has happened in the recent... past, is that with a proliferation of pleasure craft upon the waterways, the Federal courts are being confronted with common law, garden variety tort cases which have nothing to do with the traditional maritime activity which this Court required for Federal jurisdiction in the Executive Jet case.
Unknown Speaker: Would there be any principled basis for our giving a more restrictive application to the Limitation of Liability Act than to the jurisdictional sections, 1333 and the Extension Act?
Mr. Kopka: No.
I think that the jurisdictional aspects are the same.
In other words, the Limitation of Liability Act, being a part of the general admiralty laws, should apply similarly.
The only other restriction would be the language of the act itself.
And, accordingly, one of the issues that was asked of us to brief was the issue of the case of Richardson v. Harmon.
Counsel mentioned, by the way, that there are no cases which would be disturbed by counsel's vessel test, and I point out that In re Phenix, the case preceding Richardson v. Harmon, indeed involved a vessel, and yet this Supreme Court found that there was no admiralty jurisdiction at that time.
We believe that the Richardson case does not hold broadly that there is a separate species of admiralty jurisdiction under the Limitation of Liability Act.
We believe that if the Supreme Court in Richardson had intended a separate species or a separate vehicle to obtain jurisdiction through the Federal courts it would have said so.
It did not.
Instead it construed Section... what is now called Section 189 of the Limitation of Liability Act, to include damage which occurs to structures upon the land, whereas prior to the enactment of Section 189, such damage was not covered under Section 189... or under the Limitation of Liability Act.
Unknown Speaker: xxx confine Richardson to its facts.
Mr. Kopka: I would confine--
Unknown Speaker: You have to run into a bridge.
Mr. Kopka: --That's correct.
Which, of course, has been codified in the Extension of Admiralty Act.
However, I would like to address the possibility that this Court would see Richardson more broadly than that.
And if this Court does construe Richardson to supply a vehicle for Federal admiralty jurisdiction, even when the other requirements of Federal jurisdiction are absent, meaning today that there is no navigable water location, or that there is no significant contact to traditional maritime activity, then Richardson should be reconsidered in light of what has occurred in modern day.
And that is what I have previously mentioned, which is the proliferation of pleasure craft, and accordingly, the proliferation of common variety torts being litigated in an admiralty court which has no interest in those torts.
Unknown Speaker: Are you defending the court of appeals' decision?
You are, I take it.
Mr. Kopka: Indeed.
Unknown Speaker: And you agree with it?
Mr. Kopka: I do.
Unknown Speaker: So you say that if the, if this yacht had been just backing away from its moorings, that would have been navigation and admiralty jurisdiction.
Mr. Kopka: I think that there would--
Unknown Speaker: Or do you really intend to say that pleasure craft shouldn't be covered at all?
Mr. Kopka: --No, we are not taking the position that pleasure craft should not be covered at all, because, as this Court pointed out in the Foremost case, a collision between two pleasure craft may have a significant impact upon maritime commerce.
Unknown Speaker: How do you... how do you... what principal distinction do you, can you draw between a commercial craft that is just sitting at a dock and catches fire, like this one did, and a pleasure craft that catches fire, if the test is in navigation?
Mr. Kopka: The test would be a two-fold test, Your Honor.
The first inquiry... pardon me.
Unknown Speaker: Well, neither one of them is technically in navigation in the sense that it isn't... neither one of them is moving.
Mr. Kopka: No, but if you have a commercial maritime activity, and I would suggest that a commercial craft, even docked, is engaged in a commercial maritime activity.
For example a tanker which is docked and is either being loaded with cargo or cargo is being loaded off of--
Unknown Speaker: Well, no, but on that basis you should enquire about a pleasure craft if it is moving it isn't engaged in a commercial activity.
Mr. Kopka: --Correct.
The difference is--
Unknown Speaker: Well, but, all of a sudden it is covered by admiralty jurisdiction.
Mr. Kopka: --And the reason is because the Federal Government and the Federal judiciary have an interest in protecting commercial navigation.
And because two pleasure... even pleasure craft in navigation may have a significant impact upon the commercial activity, or the commercial navigation, that would be governed--
Unknown Speaker: What circuit said... the Seventh Circuit test is that if the commercial... if the pleasure craft is moving, there is your admiralty jurisdiction.
Mr. Kopka: --The Seventh Circuit--
Unknown Speaker: And there's... there's admiralty jurisdiction with a commercial craft even if it isn't moving.
Mr. Kopka: --That is correct.
That is correct.
And the reason for that is because commerce is the key element which provides the foundation for admiralty jurisdiction.
Unknown Speaker: But a pleasure craft can affect commerce when it is docked just as well as when it is moving, as the fire here showed.
Any... any commercial vessels that happened to be on that dock would have... would have been effected by this fire, just as any commercial vessels out in the river or the lake would have been affected had the sailboat been moving, or had the pleasure boat been moving.
Mr. Kopka: First of all, there were no commercial vessels on this dock, but--
Unknown Speaker: I understand that, but it could have been.
Unless you consider the head fishing boats to be commercial boats.
Are you sure they are not commercial?
Mr. Kopka: --There is no evidence in the record that there were any commercial vessels on this particular dock.
Unknown Speaker: No... no fishing craft that took out people for daily fishing trips?
Mr. Kopka: No evidence in the record of that, Your Honor.
Unknown Speaker: None in the record.
Mr. Kopka: However, let me respond to your point, which is that a pleasure yacht may have an impact upon commercial activity if it is... even if it is docked.
And my response to that is as follows.
That the decisions of this Court in Executive Jet and in Foremost, and the Sisson decision of the Seventh Circuit, instructs the district courts to look at the wrong, what they call the wrong.
And I would call that the offending vessel, meaning the vessel where the fire started, or the vessel which causes the collision, or the vessel which... on which the tort occurs.
And by focusing upon the wrong, we recognize that the purpose of Federal case law is to affect the conduct of parties engaged in everyday activities, for example, navigation through navigable waterways.
In an instance where a pleasure craft may have an impact upon commercial activity, although it is not in navigation, there would be no Federal interest in the conduct of that particular pleasure craft, even though it may have an effect upon commercial navigation, so that there would be no Federal jurisdiction.
Which is not to suggest that there wouldn't be jurisdiction under the state courts.
There clearly would.
And for any tort committed by that pleasure craft, there would be jurisdiction for any potential state tort law liability, and it may very well be that Federal standards are admissible in the Federal... in the state law--
Unknown Speaker: But commercial requirement is only, I take it is only relevant, really, to a commercial ship that is tied up.
Mr. Kopka: --That is correct.
That is how I understand the Seventh Circuit's decision, which is I think consistent with--
Unknown Speaker: Yeah, because otherwise anything that is in motion on navigable waters is covered.
Mr. Kopka: --Anything in motion would be covered, and if it was any effect at all on commercial activity, there would be no principled basis upon which to draw a line.
Unknown Speaker: Anything in motion... supposing a pleasure craft is not moored as securely as it should be, and the ropes break in a storm and it then bumps into another boat.
Is that in navigation or not?
Mr. Kopka: I would say that it is.
I would suggest that navigation is any movement through a body of water.
And, accordingly, that would be navigation without a pilot, I suppose.
The Seventh Circuit's test, I think, is a principled approach, because it recognizes the foundation upon which admiralty law is based.
And that foundation is commerce.
There is a balance which must be done by this Court, and that is the balance between the Federal interest in regulating maritime commerce, and the states' rights to adjudicate common law tort liability.
Unknown Speaker: Well, it does seem to go beyond the test articulated in Foremost and Executive Jet of anything having a significant relationship to a traditional maritime activity.
It extends beyond that and is more restrictive, is it not?
Mr. Kopka: I don't think so.
I would suggest that it defines what Foremost--
Unknown Speaker: Well, it certainly appears to be more restrictive, and it's hard for me to know why a pleasure craft which is moored or docked some place couldn't likewise be significantly related to a traditional maritime activity.
Mr. Kopka: --If the pleasure craft which is moored or docked is in any way involved in a commercial maritime activity itself, then even under the Seventh Circuit's decision, it would provide the basis of Federal jurisdiction.
So we are only dealing with the subsection of pleasure craft which are not themselves involved in commercial maritime activity.
And the question that the Seventh Circuit answered is in what cases, in what types of situation, in what principled approach will we apply to answer the question of when pleasure craft, non-commercially related, should provide the basis of Federal jurisdiction, when would they have the significant maritime activity.
Unknown Speaker: Neither the constitutional provision nor any of the statutes modifies the word maritime by commercial... by the adjective commercial.
Where do you get it from?
Mr. Kopka: Well, to start out, it comes from this Court's decisions in Executive Jet and Foremost.
But the reasons for the addition of this, what we call the nexus test, were laid out in Executive Jet and Foremost.
And the reason is that when those statutes and when the Constitution was drafted there was no concept of anything other than commercial activity upon the navigable waterways.
We recite in our briefs some statistics--
Unknown Speaker: What did Handel write his water music for?
Was this a commercial thing going down the Thames, was it?
Mr. Kopka: --At the time that we were talking about the navigable waterways, which at the time were waterways subject to the tides.
So we would be dealing with essentially international commerce.
Even when the waterways subject to admiralty jurisdiction were redefined to include navigable waterways in the United States, we are talking about commercial activity upon those waterways.
Unknown Speaker: I can't believe that people haven't been using the waterways for recreation for a long time.
You tell me we just invented this, this is a modern creation.
Mr. Kopka: --It is... this is a modern creation which this Court invented in 1973, but I will, if I may be permitted an anecdote, I was at Mount Vernon yesterday and I was standing where George Washington's porch is, and I saw literally hundreds of pleasure craft.
And I recognized that George Washington couldn't have seen anything like that in his day.
My suggestion is that, and the statistics which we supplied in our brief suggest, that at the turn of this century there weren't more than 1,000 pleasure craft in these United States, whereas in 1987 there were estimated to be 17 million pleasure craft upon the United States.
So the question of when the Federal Government will have jurisdiction over a common law tort, which has nothing to do with commercial activity, wasn't foreseeable at the time the Constitution was drafted.
Unknown Speaker: Well, let me ask you about your anecdote.
You... this... the Michigan City harbor, I guess, they send boats out and they do fishing.
Maybe that's not in the record.
And I suppose George Washington might have seen some Indians in canoes who were doing some fishing.
Mr. Kopka: That may be the case.
That may be the case.
Unknown Speaker: Or he may have fished from a canoe himself.
Mr. Kopka: That's true.
I don't know, to answer your question, Justice Scalia, I don't know of any cases that really address the question of common law torts on pleasure craft, and whether they apply to the Federal admiralty jurisdiction, until the relatively recent past, other than those cases in which the Limitation of Liability Act was sought to be imposed.
And in those cases the Limitation of Liability Act in Phenix did not provide, according to this Court, a separate basis of Federal jurisdiction.
Only in Richardson v. Harmon, which is one case somewhat different from all of the other cases decided under the Limitation of Liability Act, did this Court grant Federal admiralty jurisdiction.
And I suggest that under the aegis of, and the test laid down by the Executive Jet and the Foremost cases, that Richardson v. Harmon would not apply today, because the nexus requirement, the requirement that there be a significant connection to... traditional maritime activity, would not be applied to a... to a non traditional and a common law, garden variety tort.
Unknown Speaker: How would your test apply to a large pleasure boat, then, used for illegal commercial activity?
Smuggling drugs into the country, for example.
Mr. Kopka: Interesting question.
I wonder whether... I question whether smuggling drugs is a commercial activity, and I suppose that it may... it may be.
Although this would point out, I suppose, the injustice of permitting a Limitation of Liability Act in such a situation.
Unknown Speaker: You could just make up another adjective.
It has to be a lawful commercial activity.
I mean, you made up the first one, make up a second one.
Mr. Kopka: The requirement that there be a commercial activity is not one, I don't think, with respect, Justice Scalia, which was made up.
I think that it was a recognition that commercial activity is the foundation upon which admiralty jurisdiction applies, and with respect to states' rights to adjudicate garden variety torts, torts which do not have any basis, in which the Federal judiciary doesn't have any special interest.
What this Court recognized in Foremost--
Unknown Speaker: Except that the torts are taking place on navigable water.
Mr. Kopka: --Yes, but the question of whether admiralty jurisdiction applies to anything occurring on navigable waterway was addressed by Executive Jet and rejected.
And I would submit that my esteemed opponent's recommendation that jurisdiction apply to anything on navigable waterway upon a vessel is really a return to the days prior to Executive Jet when any occurrence upon a navigable waterway would... would permit Federal admiralty jurisdiction.
Unknown Speaker: Well, what if we just did here to the language of this Court's more recent opinions in Foremost and Executive Jet, to the effect that if the activity has a significant relationship to significant... to traditional maritime activity, that is enough for admiralty jurisdiction?
Mr. Kopka: --I fully support that position, and I suggest that--
Unknown Speaker: All right.
Well, that position is one which Mr. Marwedel says would result in jurisdiction in the Federal courts in this case, that there needn't be movement of the vessel for it to have a significant relationship to traditional maritime activity.
Is that the point of difference, then?
Is that what it all boils down to?
Mr. Kopka: --I believe it does.
It boils down--
Unknown Speaker: Movement or non-movement.
Mr. Kopka: --I think it boils down to something a little bit broader than movement or non-movement, Justice O'Connor.
I think it boils down to a definition of traditional maritime activity.
And what Mr. Marwedel would suggest in this case is that a fire which started in a washer-dryer unit is traditional maritime activity, just because it happened to be upon a yacht which was docked.
If that fire had started in a washer-dryer unit in a mobile home, there wouldn't be any question of traditional maritime activity.
Unknown Speaker: Or just backing out... backing away from the pier and the fire took place, there is jurisdiction?
Mr. Kopka: Because there was--
Unknown Speaker: Even though it started in this washer-dryer.
Mr. Kopka: --Because there would be a significant impact, and only if there is a significant impact.
Unknown Speaker: Well, so it's movement, as just... that's it, isn't it?
Mr. Kopka: That's right.
Unknown Speaker: No, it isn't just movement.
It would also be a traditional maritime activity if it occurred in the washer-dryer unit on a commercial barge.
Mr. Kopka: That is correct.
And again, the reason is because commerce is the key which is the foundation to Federal expertise.
What is the reason--
Unknown Speaker: Well, it isn't.
As soon as it starts away from the dock, whether there is commerce or not, there is admiralty jurisdiction.
Mr. Kopka: --Correct.
But the reason that navigation is one basis of Federal admiralty jurisdiction--
Unknown Speaker: I... sometimes you see it and sometimes you don't.
Mr. Kopka: --I think you see it in every case, Justice.
I think that you see it any time you have navigation.
And the reason is because any navigation upon navigable waterways may have a significant impact on the commercial activity on those waterways.
What the Seventh Circuit required was both navigation and a potentially disruptive impact upon maritime commerce.
So that any navigation by itself, in the absence of an impact or a potential impact on maritime commerce, would not serve to provide a basis for admiralty jurisdiction.
The reason for that, again, is a recognition--
Unknown Speaker: So then the Seventh Circuit would say even though this yacht had moved away from the dock, it was not subject to admiralty jurisdiction?
Mr. Kopka: --That's correct.
What the Seventh Circuit said was that in order... if you have a non-commercial vessel you must find both that the tort involves navigation and a potentially disruptive impact upon maritime commerce.
Unknown Speaker: Well, so it is not an admiralty jurisdiction as it backs away from the dock, unless there's a fire in the washer-dryer.
Mr. Kopka: Well, I would go further than that, and say unless there is a potentially disruptive impact upon maritime commerce.
Because only with a potentially disruptive impact upon maritime commerce is the Federal interest in... in protecting maritime commerce arise.
Unknown Speaker: But, when you require a potentially disruptive impact on maritime commerce, you are in effect saying that until that happens the... the ship isn't in admiralty jurisdiction.
Yet you really have to know before that, don't you?
Mr. Kopka: You have to know before... the potential--
Unknown Speaker: Well, what is the potentially disruptive impact here?
Is it the damage from the fire?
Mr. Kopka: --It... it was the damage which may arise as a result of the fire.
The Seventh Circuit provided an example in its decision.
The example it provided was that if the fire spread across oil-covered water and blocked a channel which was used by commercial vessels, then that would be a potentially disruptive impact upon maritime commerce.
But in another situation where it was simply backing out of a dock, there were nothing but pleasure boats in the area, there was no potential disruption--
Unknown Speaker: I thought earlier in your submission all this yacht had to be was in motion and there would be admiralty jurisdiction.
Mr. Kopka: --That is not... that is not--
Unknown Speaker: Well that's what you said.
Mr. Kopka: --But that is not the position that the Seventh Circuit took.
I would take the position that all it has to be is in motion.
The Seventh Circuit took a more... a more restrictive approach.
The Seventh Circuit took the approach that it has to be both in motion and have a potentially disruptive impact upon maritime commerce.
I would restrict it to navigation any time it's in motion, because in the Foremost decision, which this Court rendered in 1983, there really was no discussion of a potentially disruptive impact on maritime commerce in the facts of that case, although this Court did say in that case that navigation would provide a basis of Federal admiralty jurisdiction because of the potentially disruptive impact that a collision between two pleasure craft may have on maritime commerce.
Unknown Speaker: So the test is whether this particular vessel, if something bad happened to it, would have a potentially disruptive impact?
Mr. Kopka: That is the Seventh Circuit's test.
Unknown Speaker: Then, if on this yacht... this yacht is out in the lake, out in the lake and there's an accident on the boat, and somebody... a crew man is injured.
Now, does that... is that injury within admiralty jurisdiction?
Mr. Kopka: I don't believe it is, Your Honor.
I would suggest to you that an accident on a boat is no different than an accident in a home or an accident in a store.
Unknown Speaker: Well, but even... even under your submission that would not be covered.
Mr. Kopka: It would not be covered, and--
Unknown Speaker: I know, and I am certain it wouldn't under the Seventh Circuit.
Mr. Kopka: --But that's correct.
And even under my submission it would not.
And the reason that it would not is because the wrong had nothing to do with the fact that it was involved in navigation, unless the facts indicated that it was.
We have a case currently pending in the Ninth Circuit in which the plaintiff slipped and fell upon a pleasure boat which happened to be docked.
The Limitation of Liability Act was asserted by the--
Unknown Speaker: So, at sea, where the pleasure boats just aren't within... just because they are at sea aren't within admiralty jurisdiction.
Mr. Kopka: --No.
I would suggest that the concept of admiralty jurisdiction is not geographic.
And I think that that was recognized by this Court in Executive Jet, that geographic jurisdiction under the Federal courts really doesn't exist.
It is more constitutional jurisdiction.
So that it is concurrent with the state's geography, and yet it arises only when a Federal interest is... is impacted.
And in this... in this case I was going to say the Federal interest is maritime commerce.
It is now and it has been since the day of the Constitution.
Unknown Speaker: Could you be more... I understand it is not your test, but the Seventh Circuit, but this potentially disruptive effect on maritime commerce.
I guess you would apply that test where... where the pleasure craft is stationary, and... and the Seventh Circuit would apply it where it is both stationary and moving?
Is that right?
Mr. Kopka: No.
I would not apply it when the pleasure craft is stationary, because when a pleasure craft is stationary it, it being the offending vessel, then it would have no impact... no potentially disruptive impact upon maritime commerce, even involve navigation.
Unknown Speaker: Even... well even if this fire... if the fire had occurred at a commercial dock.
I mean, let's assume it's a dock where there is some pleasure craft but also commercial boats.
That wouldn't be a potentially disruptive impact?
Mr. Kopka: That, I suppose, would be a potentially disruptive impact.
However, the offending vessel being a pleasure craft, there again would be no Federal interest in regulating the conduct of that offending vessel.
The purpose, it seems to me, of case law is to regulate the conduct of individuals involved in activities.
The individual in that scenario would be an owner of a pleasure craft.
Unknown Speaker: Well, you could say the same when it is moving out in the... out in the open water.
Mr. Kopka: But out in the open water you have the peril of a collision between two pleasure craft, or a collision between a pleasure craft and a commercial vessel, and the immediate impact upon commerce moving through the waterway.
Unknown Speaker: But you... but you have just told me that where you burn down the dock at which commercial vessels are docked it doesn't matter.
I don't see how that is any... any better.
Mr. Kopka: Well, let me suggest--
Unknown Speaker: A little inconsistency there, isn't there?
Mr. Kopka: --Let me suggest this.
In the scenario that you gave, I would suggest that the first test of the Seventh Circuit would apply, that is, whether the activity involves commercial maritime activity.
And in a dock, even if it is one pleasure boat among many commercial boats, then that in and itself, may involve commercial maritime activity.
So that we are talking now about the first test as opposed to the second test.
You are correct that the second test, in my suggestion, would not apply.
However, the first test, that a commercial maritime activity may be impacted, would permit Federal admiralty jurisdiction in that scenario.
The scenario where Federal admiralty jurisdiction would not be permitted is where the dock had only pleasure craft or pleasure craft which were not involved in maritime commercial activity and did not involve navigation.
With five minutes remaining, I would like to address the other issue, which is the question of whether Foremost... pardon me, whether Richardson v. Harmon provides a separate species of Federal admiralty jurisdiction, as is suggested by the petitioner.
Petitioner would have this Court read Foremost to apply Federal admiralty jurisdiction even when the tests that we have been discussing, the situs test and the nexus test, are absent.
And there is no basis, either in the law or in the Constitution, for applying Federal admiralty jurisdiction pursuant to the Limitation of Liability Act.
There is nothing in the Limitation of Liability Act which provides a separate basis of Federal jurisdiction.
There is nothing in the Section 189, the amendment to the Limitation of Liability Act, which provides a separate basis of Federal jurisdiction.
And Richardson v. Harmon, to the extent that it is construed to provide such a basis, is out of step with the other cases of this Court, such as In re Phenix and the Foremost case.
And since the advent of the nexus test in 1973 and again in 1983, that test should be applied to any cause of action under the Limitation of Liability Act, notwithstanding the decision in Richards v. Harmon.
If there are no other questions, I pray for an affirmance.
Unknown Speaker: Thank you, Mr. Kopka.
Mr. Marwedel, do you have rebuttal?
Rebuttal of Warren J. Marwedel
Mr. Marwedel: Just a couple of points that I wanted to make clear.
I believe that the law is very clear that a corporation can be found to have privity and knowledge of the proximate cause of an accident, and that a corporation could not limit, as happened in the Seventh Circuit, or the district court, rather, in In re Amoco Kadiz, where the Amoco corporation was found to have privity and knowledge and not able to use the limitation... or have limitation for the oil spill.
Unknown Speaker: In what court was that case?
Mr. Marwedel: That was before Judge Magar in Chicago, the district court.
Second, we are not urging that the limitation action statute be applied on inland lakes.
I was only pointing out that the statute... the words in the statute and in the supplemental admiralty rules don't require navigable waters.
They don't use the phrase; they just use water.
Unknown Speaker: I suppose that if there is inconsistency in treatment between pleasure boats on inland waters and pleasure boats on navigable waters, there's also inconsistency anyway between commercial boats in the two.
Isn't that right?
I mean, I assume you have commercial boats on inland... some inland waters.
Mr. Marwedel: You do, for example Lake Geneva in Wisconsin has a sightseeing boat that also carries the U.S. mail and picks people up from the train station and takes them around the lake and there are four drop off points.
That is a lake that is wholly within the State of Wisconsin.
Unknown Speaker: And they are not subject to admiralty jurisdiction?
Mr. Marwedel: As far as I know that's never been determined by anyone.
The issue hasn't come up.
I had one, but it got settled.
Secondly, Phenix, we feel, was out of step with Richardson and Butler and Hamilton.
Phenix was a case where it's really form over substance.
The Court found there was no jurisdiction under the limitation action because of the place that the lawsuit was filed.
This has been subsequently corrected in the supplemental Rule F, paragraph 9, which allows the limitation action to be filed where the vessel is, where the owner has been sued, where the vessel has been arrested, or any other district court.
At the time of Phenix there were the admiralty rules that were more restrictive as to venue, so that in a sense the venue became jurisdictional, that the lawsuit then had to be filed someplace else but not in the court that was addressing the Phenix case.
Recreational boats are a matter of Federal concern, and Congress has passed many regulations concerning the operation, safety, fire fighting, life saving, et cetera, for the pleasure craft.
In fact, 46 U.S.C., under the Recreational Boating Act, preempts state law on the regulation and operation of boats.
It will allow state law to have the same requirement that the Federal law requires, but no more.
The U.S. Coast Guard has a life-saving station at Michigan City which was right next to this marina.
If there has to be an impact on commerce, we have a fire in the middle of the night.
As I understand the people that were awakened, sleeping on their boats, was immediately to get their boats out of the way, to get away from the flames.
There was an oil line that went... a gasoline line that went right under the dock in front of our boats.
People were afraid that that was going to blow up.
If the fire had spread it could have gone right to the Coast Guard station, which is situated literally at the end of this dock, and that provides the life saving for commercial as well as recreational craft.
That Coast Guard station also supervises the navigational aids in that part of the lake.
As far as the number of... of boats, recreational boats that we have now or in the time of Washington, the boats that were registered in Washington's time, I assume, because there was a statute, were registered with the U.S. government, as Mr. Sisson's boat was.
It was enrolled under the laws of the United States with the U.S. Coast Guard.
Today we have statistics that go beyond the vessels that are enrolled, your... usually your rowboat or your small sailboat are not enrolled with the Coast Guard, but large vessels such as this are.
This is a boat that is designed, as any commercial ship is, for people to literally live on.
Unknown Speaker: You say they are, are they required by statute to be enrolled, or is it a voluntary matter?
Mr. Marwedel: In most instances it is a voluntary matter.
You get to a certain size and use, I am not that familiar with the statute, but you get to the point where you have to.
Also, when you--
Unknown Speaker: This is to facilitate the transfer of title when you sell the boat, isn't it?
Mr. Marwedel: --Correct.
And most lending institutions, boats of this size are... usually you borrow money to buy a boat of this size, so the lending institutions require that you have this type of enrollment.
We also get... if we are going to look at commerce, which is not set out in any of the statutes, and in the history of the admiralty side of the court, commerce was not the issue.
Commerce is mentioned as the underpinning originally for the limitation act, which has been amended many times in the last century and in this century.
Congress has never amended it to include Congress.
It includes pleasure craft, in spite of lower courts suggesting that admiralty jurisdiction should not be extended to pleasure craft.
Congress has never amended out the inclusion of all vessels on all waters.
But what is commerce?
These boats now are... are built all over the country.
We see them go down our highways.
There is not admiralty jurisdiction yet, but they are in the stream of commerce.
They are bought and sold, they are insured, they buy fuel, they pay taxes.
People hire crew members to work on pleasure craft.
Mr. Trump's yacht's got a crew that is paid.
That is a very large yacht, but it is still a pleasure craft.
I would suggest that all of these boats are part of... part of commerce.
We are a changing society.
We are becoming a service society, we are becoming a society that has a lot of recreation.
It is big business in this country.
And it is using the natural resource, the resource that the admiralty courts used to supervise.
The commercial court, which you will find still in Europe... there used to be a distinction where matters that happened on the water involving vessels were handled in the admiralty court.
Matters involving loss of cargo, liens, contracts, bills of lading, were handled in a commercial court.
In this country it is all combined together.
I submit that the admiralty jurisdiction under the Constitution extends to navigable waters for all purposes.
It has been traditionally used and extended to vessels operating on navigable waters.
We submit that our vessel was in fact in navigation, although it was not navigating through the water.
It was crewed, it was manned, it was ready to go.
That it is a vessel, it is on a navigable water, it should be covered by the admiralty jurisdiction.
And we ask that the Court reverse the Seventh Circuit.
Chief Justice Rehnquist: Thank you, Mr. Marwedel.
The case is submitted.
Unknown Speaker: The honorable court is now adjourned until tomorrow at ten o'clock.