Avast! Supreme Court sinks Florida houseboat ruling

02/21/2013 5:50 AM

02/21/2013 5:50 AM

A Florida resident actually had his “boat floated” Tuesday by the Supreme Court, as the justices ruled that the city of Riviera Beach could not regulate his home as a maritime vessel.

In a peculiar case that captured national attention from gambling companies and others, the court in a 7-2 ruling concluded that the city went too far when it used maritime law to seize and ultimately destroy the floating home of former commodities trader Fane Lozman. Besides giving Lozman a personal victory, the ruling clarifies and narrows how government agencies can deploy maritime law.

“But for the fact that it floats, nothing about Lozman’s home suggests that it was designed to any practical degree to transport persons or things over water,” Justice Stephen Breyer wrote for the majority.

Instead, Breyer stressed, Lozman’s dockside home was “a house-like plywood structure” that differed “significantly from an ordinary houseboat” in ways large and small. Maritime law only applies, under the court’s new ruling, if “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.”

This matters, for instance, to the American Gaming Association members that filed a legal brief siding with Lozman. The gambling companies feared that if Riviera Beach prevailed, then other agencies could also impose new maritime law restrictions on the 60-plus “riverboat” gambling facilities docked in states like Mississippi and Missouri.

Houseboat owners in Seattle and Sausalito, Calif., likewise urged the court not to extend the reach of maritime law.

"I’ve been vindicated," Lozman said in an interview. "My argument from day one when my home was arrested by three armed federal marshals was: ‘You guys don’t have jurisdiction, this is a state issue.’ . . . At the end of the day I was right.”

"One of my main motivations is that 10,000 floating homes around the country should not have to go through the horror show that I did . . . to include having armed federal marshals breaking down the door of your home and seizing it. That should not happen in America."

Justices Sonia Sotomayor and Anthony Kennedy dissented, warning that the court’s ruling “reaches well beyond relatively insignificant boats like Lozman’s craft” to potentially call into question regulations of larger vessels.

But the Obama administration had sided with Lozman, warning about unnecessary inspection burdens on the U.S. Coast Guard. Kerri Barsh, one of Lozman’s attorneys, said Tuesday that the ruling “closed the door” to a potentially onerous new round of regulations.

“Not every floating structure is a ‘vessel,’” Breyer wrote. “To state the obvious, a wooden washtub, a plastic dishpan, a swimming platform on pontoons, a large fishing net, a door taken off its hinges, or Pinocchio (when inside the whale) are not ‘vessels.’”

The fictional wooden puppet Pinocchio, in the story alluded to by Breyer, was, during the course of many misadventures, swallowed by a whale named Monstro. Eventually, Pinocchio escapes, along with his creator, Geppetto.

Lozman is a former Chicago commodities and options trader. The one-time Marine Corps aviator is also a self-described corruption fighter, who battled persistently with Riviera Beach officials.

Lozman bought his 60-foot-by-12-foot floating home in 2002 and docked it at the Riviera Beach marina after Hurricane Wilma destroyed his former marina. The rectangular structure lacked an engine, bilge pumps, lifeboats or other devices usually found on waterborne vessels. It was equipped for connection to land-based sewer lines and received power through an extension cord. Its small rooms looked like ordinary living quarters, with windows instead of watertight portholes.

But Riviera Beach officials, following extended conflict with Lozman, eventually turned to U.S. maritime law in 2009 to seize the home as a vessel. They towed it to Miami, where they bought it at auction for $4,100 and then had it destroyed.

“The houseboat was in violation of the wet slip agreement, and it posed a hazard to other vessels in the marina if, because of its flimsy moorings, it came unmoored during a storm,” Riviera Beach attorney David C. Frederick declared during oral arguments last year.

Barsh, whose firm has been representing Lozman pro bono, said the legal victory means Lozman can now seek legal fees from the city of Riviera Beach. He can also receive a payout from a $25,000 security bond that had been placed by the city pending the court’s decision.

“You can fight city hall,” Lozman said. “It’s very humbling. You can make it to the top and win.”

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