Is a Floating Casino Subject to Maritime Jurisdiction?

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In some cases, yes.  In this case, a paddlewheel vessel, the Belle of Orleans. served as a dockside casino on Lake Pontchartrain.  It became unmoored during Hurricane Katrina, damaged nearby property, and was liable for unpaid rent and dockage fees.  The Board of Commissioners of the Orleans Levee District filed a lawsuit to recover in tort for damage to property and to impose a lien on the vessel for unpaid rent.  The district dismissed all of the claims for lack of admiralty jurisdiction, based on the premise that the casino Belle of Orleans was not a “vessel.”

The Eleventh Circuit reversed the finding of non-vessel status and the ruling on the tort claim, but affirmed the dismissal of the in rem action to impose a lien. 

Regarding whether the Belle of Orleans was a “vessel,” the court framed the issue as whether she was “rendered practically incapable of transportation or movement when her owner moored her in 2001.”  In holding that she was in fact a “vessel,” the court reasoned, “The Belle of Orleans maintained functioning machinery and was capable of moving under her own power. . . . [A]ll her crew would have had to do was unmoor her cables and start up her engine and the Belle of Orleans would have been able to sail. Further, . . . the Belle of Orleans was capable of moving over water . . . and was capable of being transported under tow.”

The court also reversed the dismissal of the in personam tort action.  The court recited the rule, “A party seeking to invoke federal admiralty jurisdiction over a tort claim must satisfy conditions both of location and of connection with maritime activity.”  “To satisfy the location test, the tort must have occurred on navigable water or the injury suffered on land must have been caused by a vessel on navigable water. With respect to the connection test, two issues must be considered: (1) whether, upon assessment of the general features of the type of accident involved, the incident has a potentially disruptive impact on maritime commerce; and (2) “whether the general character of the activity giving rise to the incident shows a substantial relationship to traditional maritime activity.”

Here, the court held, “The Belle of Orleans was . . . was operating in . . . a navigable waterway; she broke free from imperfect moorings; she had the potential to and actually did disturb commercial activity; and she is alleged to have caused damage when she struck property alongside a navigable waterway. Thus, the district court improperly concluded that there was no admiralty jurisdiction over the Board’s tort claim.”

Because the Board properly asserted a tort claim, the appellate court mandated the issuance of an attachment based on Rule B of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions.  (According to the court, “A plaintiff asserting an in personam maritime claim may seek an attachment of the relevant vessel under Rule B if he produces an affidavit attesting to the fact that the defendant cannot be ‘found within the district’ for purposes of jurisdiction and service of process.”)

Finally, the court affirmed the dismissal of the in rem claim.  The court stated,  “A maritime lien may arise out of the breach of a maritime contract, but “not every contract that somehow relates to a ship or its business is considered maritime.  “A maritime contract must pertain directly to and be necessary for commerce or navigation upon navigable waters.”

Importantly, “a contract that provides a vessel with ‘necessaries’ is commonly considered a maritime contract giving rise to a maritime lien.” See 46 U.S.C. §§ 31341-342. The term “necessaries includes repairs, supplies, towage, and the use of a dry dock or marine railway.” 46 U.S.C. § 31301(4).  “Courts have also commonly interpreted ‘necessaries’ to include dockage.”

Here, the court held that agreement between the Board and the Belle of Orleans was not a maritime contract.  While Parcel 1 referenced in the contract provided a mooring berth and use of an area adjacent to the wharf, “Parcel 1 made up only a small percentage of the total land leased under the Agreement, less than five percent. A contract must be ‘wholly maritime in nature’ to fall within federal admiralty jurisdiction or its non-maritime elements must be either insignificant or separable without prejudice to either party.”  The court found that the Board had not met this test as to the Belle of Orleans.

Board of Commissioners of the Orleans Levee District v. M/V Belle of Orleans, 535 F.3d 1299 (11th Cir. 2008), available at:

http://scholar.google.com/scholar_case?case=13791563421659366267&q=belle+of+orleans&hl=en&as_sdt=40006

 

Topics:  Casinos, Jurisdiction, Vessels

Published In: Civil Procedure Updates, General Business Updates, Maritime Updates, Personal Injury Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Trenam Kemker | Attorney Advertising

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