Fifth Circuit Holds That an Articulated Tug/Barge Unit Was a Dead Ship, Rejects Owner's Effort to Limit Liability
In a recent decision, the U.S. Court of Appeals for the 5th Circuit affirmed a lower court’s dismissal of a tug/barge unit owner’s claim to limit liability because the unit was not a “vessel” at the time of an incident.
The 5th Circuit was tasked with reviewing the District Court’s decision to dismiss a maritime limitation of liability action on the basis that an articulated tug/barge unit was actually a “dead ship” and not a “vessel” at the time of the incident. The case, In re Southern Recycling, L.L.C., involved a limitation action brought by Southern Recycling as a result of an incident that occurred during shipbreaking operations aboard the barge portion of the unit.
The claimants moved to dismiss for lack of admiralty jurisdiction. They argued that the barge was not a vessel at the time of the incident, but rather was a dead ship that was being broken for scrap. The District Court agreed with the claimants and dismissed the limitation action for lack of subject matter jurisdiction. Southern Recycling appealed.
On appeal, the 5th Circuit noted that a structure is not a vessel merely because it is capable of floating, moving under tow, and carrying an item or two when it does so. Rather, the court must examine the structure under the “reasonable observer” test as set forth by Justice Stephen Breyer’s opinion in the U.S. Supreme Court case titled Lozman v. City of Riviera Beach, 568 U.S. 115, 133 S.Ct. 735 (2013). This test asks if 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. In addition, to decide whether a vessel has become a dead ship, one must look to whether the vessel has been “withdrawn from navigation and maritime commerce” by examining its physical characteristics and modifications. Amoco Oil v. M/V Montclair, 766 F.2d 473, 477 (11th Cir. 1985).
In support of its appeal, Southern Recycling submitted an affidavit claiming that no cuts were made to the barge’s hull below the fully loaded waterline. Further, during the District Court proceeding Southern Recycling noted that the barge was still floating at the facility and had even been moved after the incident. Southern Recycling also contended that only minor preparatory cuts had been made to the barge such that it retained the essential characteristics of a vessel. But the 5th Circuit found these assertions to be both false and misleading based on photographs taken of the barge at the time of the incident. The photographs showed that a large portion of the barge’s bow had been severed off the front such that it had a “gaping hole open to the sea” below the waterline. The photographs also revealed that a large hole had been cut into the bottom of the liquid cargo tank and that large holes had been cut through the deck.
Based on these photographs, the 5th Circuit noted that a reasonable observer would see a severed bow, a hull with a hole in it, a deck with much of it removed, and cargo tanks that could no longer hold cargo. As such, the 5th Circuit concluded that a reasonable observer would not see a vessel ready to transport persons or cargo, but a dead ship in the process of being scrapped. Therefore, the 5th Circuit agreed with the District Court’s finding that the barge was a dead ship, not a vessel at the time of the incident, and affirmed the District Court’s dismissal for lack of subject matter jurisdiction.
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