Court Rules That a Vessel Ceases to be a Vessel When It Can No Longer Serve a Navigation Function

The U.S. Court of Appeals for the Fifth Circuit recently held that the question of whether a vessel has been withdrawn from navigation for purposes of determining admiralty jurisdiction is a question of whether the physical characteristics of, and modifications to, the structure are such that the structure no longer has a navigation function and has accordingly lost its status as a vessel.

The case of In re Southern Recycling, L.L.C., No. 20-40274 concerned claims for wrongful death and personal injuring arising from an explosion on a barge that occurred when workers had begun preliminary shipbreaking activities and struck a spark into a pocket of gas vapors. The owner had purchased the barge for scrapping and following the incident, had filed a claim for limitation or exoneration from liability under the maritime Shipowner’s Limitation of Liability Act. The claimants, including the estate of the deceased worker, moved to dismiss the claim for limitation on the basis of a lack of admiralty jurisdiction – a required predicate to maritime limitation of liability. The court first looked at the procedural question of how a district court should evaluate a motion to dismiss a limitation of liability claim based on a challenge to the status of a structure as a “vessel.”

The court held that such motions should be determined based on the court’s findings of jurisdictional facts rather than the more strict analysis of whether the plaintiff seeking limitation of liability had failed to state a claim in the first place. As with other aspects of maritime litigation, a motion to dismiss a case for lack of admiralty jurisdiction is ultimately a fact-intensive inquiry; far more so than the usual motions to dismiss in non-maritime matters.