Doc. No.: 753
Date: November 3, 2000
Recreational Boating Spring 2000
COMMITTEE ON RECREATIONAL BOATING
NEWSLETTER, SPRING 2000
Editor: Frank P. DeGiulio
Boat Owner Not Entitled to Recover Loss of
In 1988 the corporate owner of the yacht Blackhawk
contracted for the use of a floating dry dock to conduct repairs to the
vessel. Although apparently used for business purposes, the Blackhawk
was documented as a pleasure boat under U.S. law. The boat was extensively
damaged when the bilge and keel blocks gave way during the attempt to secure
the boat in the dry dock. There was no evidence that the vessel had ever
been chartered by the owner. The owner brought suit against the owner and
the builder of the drydock claiming the cost of repairs and loss of use
during the repair period. The district court entered judgment in favor
of the boat owner but held that the owner was not entitled to recover for
loss of use.
The boat owner appealed. In Central State Transit
& Leasing Corp. v. Jones Boat Yard, Inc., __ F.3d __, 2000 WL 292573
(11th Cir., March 20, 2000) the Eleventh Circuit Court of Appeals
considered the issue of whether the owner of a pleasure boat may recover
loss of use damages in connection with a maritime tort claim. The Court
of Appeals affirmed the district court’s denial of loss of use damages,
holding that the boat owner had not proved “that profits had actually or
may reasonably supposed to have been lost.” The court relied on the U.S.
Supreme Court’s 1897 decision in The Conqueror, 166 U.S. 110, 17
S.Ct. 510 (1897), which it referred to as “[t]he seminal case regarding
damages for loss of use of a pleasure boat....”
The decision in The Conqueror is generally
viewed as establishing the parameters for recovery of loss of use damages
arising from a collision or other maritime tort whether related to a pleasure
craft or a commercial vessel. In that case, Frederick W. Vanderbilt sued
the U.S. Custom Service on the grounds that his private yacht was improperly
seized for import duties allegedly owed. Vanderbilt claimed damages for
loss of use of $100 per day during the five months that the boat was detained.
Following a trial the district court awarded Vanderbilt $15,000 for loss
of use. At trial Vanderbilt had introduced the testimony of several yacht
brokers as expert witnesses with regard to the charter value of the yacht.
However, there was no evidence that Vanderbilt actually chartered the boat.
To the contrary, the evidence established not only that Vanderbilt intended
to use the yacht solely for his personal pleasure but that he would not
have used the yacht at all during the winter off season in New York when
the vessel was under seizure.
On appeal, the Supreme Court reversed the decision
of the district court and held that “loss of use will be allowed only when
profits have actually been, or may reasonably supposed to have been, lost,
and the amount of such profits is proven at trial.” The Court found the
testimony of Vanderbilt’s experts to be speculative, of questionable credibility
and insufficient to establish a right to loss of use damages. The Court
recognized the fact that some pleasure boats are let to hire and earn profits
for their owners, thereby leaving open the possibility that such owners
could recover loss of use in an appropriate case. As regards Vanderbilt
the Court held that mere deprivation of use was insufficient as “[t]here
must be a pecuniary loss, and not a mere inconvenience arising from the
inability to use the vessel for purposes of pleasure....”
In its appeal of the Central States Transit
decision, the defendant boat yard seized upon language in the Supreme Court’s
subsequent decision in Brooklyn Eastern District Terminal v. U.S.,
287 U.S. 170, 53 S.Ct. 103 (1932), to argue that the rule of The Conqueror,
requiring a pleasure boat owner to prove pecuniary loss as a prerequisite
to loss of use damages, had been overturned by implication. Brooklyn
Eastern involved a towing company’s claim for loss of use its tug boat
due to a collision. Justice Cardozo, reviewing the principles governing
the right to recover for loss of use arising from a maritime tort, strongly
suggested that the holding in The Conqueror was subject to question:
The vessel may be a yacht, employed for pleasure
and not for business. Even then, in the judgment of many courts, the value
of her use may be considered by the triers of the facts in fixing the recovery
if there has been a substantial impairment of that enjoyment for which
such vessels are used. [citations omitted] There are statements to the
contrary in The Conqueror that may be in conflict with that view,
but they are were not essential to the judgment and in the light of later
decisions as to the loss of pleasure vehicles are unquestionably in opposition
to a strong current of authority.
Despite this rather strong language from a renowned
jurist, the Eleventh Circuit in Central States Transit rejected
the defendant’s argument and held that they were bound by The Conqueror
to affirm the district court’s denial of loss of use damages.
Federal Court Holds That Limitation Act Provides
Independent Basis of Subject Matter Jurisdiction
In the summer of 1997 Michael Bergeron was seriously
injured in a boating accident on Lake Winnisquam in New Hampshire. Bergeron
was riding in an innertube towed by a pleasure boat owned by Gary and Claire
Berstein. Bergeron, a minor, filed suit against the owners in Massachusetts
state court. The Bersteins then filed a limitation action in Massachusetts
federal district court under the Limitation of Liability Act, 46 U.S.C.
§ 181 et seq. (“the Limitation Act”). The state court action
Bergeron moved to dismiss the limitation action
for lack of admiralty subject matter jurisdiction. In a decision which
stands alone among those courts which have considered the issue in recent
times, the District of Massachusetts concluded that it was bound to apply
the Supreme Court’s decision in Richardson v. Harmon, 222 U.S. 96
(1911), and held that the Limitation Act provides an independent basis
of admiralty subject matter jurisdiction over torts involving vessels.
Complaint of Berstein, 2000 AMC 760 (D. Mass. 1999).
In moving to dismiss the limitation proceeding,
Bergeron argued that the action did not fall within the court’s admiralty
jurisdiction because Lake Winnisquam is wholly within the State of New
Hampshire and is not capable of supporting interstate navigation in its
present state due to the existence of lockless dams. Bergeron therefore
argued that the “situs” test for admiralty tort jurisdiction was
not satisfied because the accident did not occur on navigable waters.
In response to Bergeron’s motion, the boat owners
first presented the court with evidence that the lake could and did support
interstate navigation via Silver Lake and the Winnipesaukee and Merrimack
Rivers prior to the construction of the dams. The owners urged the court
to adopt an “historical” test for determining navigability. However, the
District Court rejected the owner’s argument after noting that prior decisions
which had adopted a “historical” navigability test had been overruled or
superceded by subsequent case law.
The owners argued in the alternative that the
Limitation Act itself provided an independent basis for admiralty subject
matter jurisdiction based on the decision in Richardson v. Harmon.
In Richardson, a vessel owner had attempted to limit its liability
for damages arising from a collision with a bridge. In 1911, prior to passage
of the Admiralty Extension Act, admiralty tort jurisdiction did not extend
to shoreside damage caused by a vessel. However, the vessel owner argued
that an 1884 amendment to the Limitation Act, now 46 U.S.C. § 189,
expanded the scope of the Act to include all liabilities involving
vessels, whether or not such liabilities fell within the traditional scope
of admiralty jurisdiction. The Supreme Court agreed that the 1884 amendments
were intended “to add to the enumerated claims of the old law any and all
debts and liabilities not theretofore included.” As a result the Court
held that the Act encompasses “all claims arising out of the conduct of
the master and crew, whether the liability be strictly maritime or from
a tort non-maritime.”
Between 1911 when Richardson was decided
and the end of the 1980’s, only a handful of decisions had addressed the
issue of whether the Act provides an independent basis of subject matter
jurisdiction. Ironically, a number of these cases were decided by the Massachusetts
District Court. In each case the courts followed Richardson. See
The Trim Too, 1941 AMC 1147 (D. Mass 1941) (explosion on pleasure boat
ashore for winter storage); City of Bangor, 1936 AMC 615 (D. Mass.
1936); The Irving F. Ross, 1923 AMC 1015 (D. Mass. 1923).
As the district court in Berstein noted,
since 1989 no fewer than seven U.S. Circuit Courts of Appeal have rejected
the argument that the Limitation Act provides an independent basis of subject
matter jurisdiction. See e.g., Seven Resorts, Inc. v. Cantlen, 1995
AMC 2087 (9th Cir. 1995). In addition, Courts of Appeal in the
Fourth, Fifth, Seventh, Eighth and Eleventh Circuits have held that the
Limitation Act does not provide a separate basis for subject matter jurisdiction.
However, a number of these decisions failed even to mention, let alone
attempt to distinguish, Richardson v. Harmon. The issue was also
before the Supreme Court on two occasions in the 1990’s in Sisson v.
Ruby, 497 U.S. 358 (1990) and in Jerome B. Grubart, Inc. v. Great
Lakes Dredge and Dock Co., 513 U.S. 527, 1995 AMC 913 (1995). In each
case, however, the Supreme Court decided the appeal on other grounds and,
therefore, found it unnecessary to reach the issue.
Despite the overwhelming weight of recent contrary
authority, the District Court in Berstein concluded that Richardson
v. Harmon had not been overruled by the Supreme Court and that it was
bound by stare decisis to follow Richardson. Accordingly,
the District Court in Berstein found that subject matter jurisdiction
existed under the Limitation Act despite the fact that the circumstances
surrounding the underlying tort claim failed to satisfy the contemporary
tests for admiralty subject matter jurisdiction.
Federal Regulations Limit PWC Use in National
The National Park Service recently implemented
regulations designed to limit the use of Personal Watercraft (“PWC”) in
national parks. The Final Rule, published in the Federal Register at 65
Fed. Reg. 15077 (March 21, 2000), became effective on April 20, 2000. The
regulations do not impact recreational boating other than PWC.
The regulations prohibit the use of PWC in any
national recreation area unless the Park Service specifically determines
through formal rulemaking that PWC use is permissible based on a review
of various public interest factors. There are currently 87 areas within
the National Park System where recreational boating is generally permitted.
According to the background information published with the Final Rule,
PWC use was observed in 32 of these areas.
The regulations carve out an exception for ten
designated recreation areas where the primary use is recreational boating.
In these areas PWC use may continue subject to regulation by local National
park officials. The ten areas are Amistad and Lake Meredith in Texas, Bighorn
Canyon in Montana, Chickasaw in Oklahoma, Curecanti in Colorado, Gateway
in New York, Glen Canyon in Arizona/Utah, Lake Mead in Arizona/Nevada,
Lake Roosevelt in Washington and Whiskeytown-Shasta in California.
The Final Rule also establishes a two-year grace
period for eleven other recreation areas. In these designated areas PWC
use may continue until April 20, 2002, subject to regulation by local park
officials. After the expiration of the grace period, PWC use in these areas
will be prohibited unless authorized by a special rulemaking. The eleven
areas subject to the two-year grace period are Assateague in Maryland/Virginia,
Cape Cod in Massachusetts, Cape Lookout in North Carolina, Cumberland Island
in Georgia, Fire Island in New York, Gulf Islands in Florida, Padre Island
and Big Thicket in Texas, Indiana Dunes in Indiana, Pictured Rocks in Michigan
and Delaware Water Gap in Pennsylvania/New Jersey.
The Park Service received approximately 20,000
responses to the proposed rule, originally published and opened to comment
in September, 1998. The most common objection to the rule (i.e., some 12,700
responses), according to the Park Service, was that it unreasonably discriminates
against one form of recreational vessel. The Park Service answered this
objection by citing Personal Watercraft Industry Association v. Department
of Commerce, 48 F.3d 540 (D.C. Cir. 1995). In that decision, the circuit
court had held that a federal agency may discriminate and manage one type
of vessel differently than others as long as it has a rational basis for
doing so. The Park Service compared its approach to PWCs to its regulation
of snowmobiles and off-road vehicles.
Inquiries regarding the Final Rule may be directed
to National Park Service, Ranger Activities Division, Room 7408, 1849 C
Street NW, Washington, D.C. 20240.
Florida State Court Holds That Dive Accident
is Not Subject to Maritime Law; Limitation Act Does Not Invalidate Release
In April 1995, Kenneth Borden tragically drowned
while participating in an off-shore scuba diving class in Florida. Before
participating in the class, Borden signed a document which purported to
release the organizers and dive instructors from liability for their own
negligence. Borden drowned after the boat captain detached the dive “tag
line” from the boat, preventing Borden from pulling himself towards the
boat. Borden’s estate commenced a wrongful death action against the dive
instructors, the dive boat owner and PADI (Professional Association of
Diving Instructors) in Florida state court.
Borden’s estate argued that the release was rendered
invalid and unenforceable by the Limitation of Liability Act, 46 U.S.C.
§ 183c. Section 183c of the Act provides in part that:
[i]t shall be unlawful for the...owner of any
vessel transporting passengers between ports of the United States...to
insert in any...contract or agreement any provision or limitation (1) purporting,
in the event of loss of life or bodily injury arising from the negligence
or fault of such owner or his servants, to relieve such owner, master or
agent from liability...for such loss or injury, or (2) purporting in such
event to lessen, weaken or avoid the right of any claimant to a trial...on
the question of liability for such loss or injury....All such provisions
or limitations contained in any such...contract...are declared to be against
public policy and shall be null and void and of no effect.
However, the trial court concluded that §183c
of the Limitation Act did not apply and that the release was enforceable,
and entered summary judgment against the plaintiffs and in favor of all
defendants. The estate appealed.
The Florida Court of Appeal affirmed the trial
court’s decision, holding that admiralty law was inapplicable to the accident
and, as a result, that §183c did not apply to invalidate the release.
Borden v. Phillips, __ So.2d __, 2000 WL 158485 (Fla.App.1st Dist.,
Feb. 16, 2000). The Court of Appeal first concluded that § 183c was
applicable during the voyage to the dive site because the vessel was transporting
passengers. However, the court then considered whether the accident itself
would fall within admiralty jurisdiction such that admiralty law would
apply. Applying the test set forth in Jerome B. Grubart v. Great Lakes
Dredge & Dock Co., 513 U.S. 527, 115 S.Ct. 1043 (1995), the court
held that the accident would not fall within admiralty jurisdiction because
the alleged negligence was unrelated to the operation or maintenance of
the vessel. Accordingly, the court held that § 183c was inapplicable
to the release.
In reaching its holding, the Florida Court of
Appeal distinguished Matter of Pacific Adventures, Inc., 5 F.Supp.2d
874, 1998 AMC 2857 (D.Haw. 1998), in which a federal district court had
concluded that § 183c of the Limitation Act invalidated a similar
release signed by a dive participant. (See 8 Boating Briefs No.
1 (1999)). Pacific Adventures involved a claim by a dive participant
who was injured when her leg became entangled in a boat’s propellor. The
District Court for Hawaii found that the plaintiff’s accident fell within
admiralty jurisdiction and that the plaintiff’s status as a passenger had
not ended even though she was injured while diving. In a dissenting opinion
in Borden, a single appellate judge argued that Mr. Borden remained
attached to the dive boat as a passenger at the time of his death and that
the majority had erred in concluding that the alleged negligence did not
relate to the operation of the dive boat.
The applicability of § 183c of the Limitation
Act was also considered in a recreational context in Waggoner v. Nags
Head Water Sports, Inc. 141 F.3d 1162, 1998 AMC 2185 (4th
Cir. 1998). In Waggoner, the Fourth Circuit Court of Appeals considered
whether § 183c invalidated a release in a jet-ski rental agreement.
The court held that § 183c was inapplicable on the ground that it
applies only to common carriers of passengers for hire. (See 7 Boating
Briefs No. 1 (1998)). It does not appear that the decedent’s estate
in Borden advanced the argument that a dive boat is not a common
carrier of passengers to which § 183c applies. The Waggoner
decision was not mentioned by the Court of Appeal in Borden.
Coast Guard Proposes Reduced Standard of Intoxication
On March 16, 2000 the Coast Guard published a
Notice of Proposed Rulemaking to reduce the federal Blood Alcohol Concentration
(“BAC”) standard for recreational boaters from .10 BAC to .08 BAC. The
proposed rule, which would amend 33 CFR Parts 95 and 177, is published
at 65 Fed. Reg. 14223.
In its regulatory notice, the Coast Guard cites
the concern that alcohol remains a significant factor in boating deaths
and the desire to support what is termed a trend toward reduced state boating
BAC standards as reasons for the proposed rule. Specifically the Coast
Guard notes that while the overall number of boating deaths dropped from
1,100 in 1986 to 821 in 1997, the number of deaths in which alcohol was
a factor remained stable. According to Coast Guard statistics, alcohol
was consumed by vessel occupants in 27 percent of all boating fatalities
The materials accompanying the proposed rule indicate
that in 1987 only 21 states had enacted BAC standards for recreational
boaters. Nineteen of these 21 states had adopted a BAC of .10 while the
remaining two had specified a .08 BAC. By 1999, 54 states and territories
had enacted BAC standards for recreational boaters. A BAC of .10 is specified
by 34 states. Twenty states specify a BAC of .08 for recreational boaters.
The proposed rule would also amend existing federal
regulations by replacing the term “intoxicated” with “under the influence
of alcohol or a dangerous drug” as used in connection with the new BAC
The proposed rule, like the existing regulations,
would adopt and would not preempt existing state BAC standards for navigable
waters wholly within a particular state or within state coastal boundaries.
Accordingly, there would be no change in those states that utilize the
higher .10 BAC standard. The federal standard applies to navigable coastal
waters beyond state boundaries, to vessels owned by U.S. citizens while
operating on the high seas and to navigable waters and waters on federal
property in those states which have not enacted BAC standards for recreational
boating (presently Iowa and New Mexico).
Comments in response to the proposed rule must
be submitted by July 14, 2000. Comments may be submitted by mail addressed
to Docket Management Facility, U.S. Department of Transportation, Room
PL-401, 400 Seventh Street SW, Washington, D.C. 20590, by telefax to 202-493-2251
or by E-Mail to http://dms.dot.gov. Questions concerning the proposed rule
may be directed to Carlton Perry, Project Manager, Office of Boating Safety,
U.S. Coast Guard by telephone at 202-267-0979 or E-Mail at email@example.com.
Primary Assumption of Risk Doctrine Does Not
Bar Tube Rider’s Personal Injury Claim
In Volume 8, No. 2 (Fall/Winter 1999), we reported
the decision in Record v. Reason, 86 Cal.Rptr.2d 547, 1999 AMC 2380
(Cal.Ct.App. 1999), wherein the California Court of Appeal held that “tubing”
is a sport to which the doctrine of primary assumption of the risk applies.
The court held that the doctrine barred the plaintiff’s personal injury
claim based on alleged negligence in the operation of the towing boat.
A separate division of the same court recently
addressed a similar claim in Bjork v. Mason, 92 Cal.Rptr.2d 49,
2000 AMC 455 (Cal.Ct.App. 2000). Fifteen year old Brian Bjork sustained
injuries when a tow rope attached to the inner tube on which he and another
boy were riding broke, striking him in the eye. Bjork brought suit against
David Mason, the adult owner and operator of the towing boat, in California
state court. The incident occurred when the boat operator suddenly accelerated
the towing boat while operating in a no-wake zone. The operator testified
that he checked the condition of the tow rope before the activity began
but he could not recall how old the tow rope was. There was evidence that
the tow rope was frayed and damaged. The operator also testified that it
is not uncommon for tow ropes to break while “tubing.” The plaintiff alleged
that the operator negligently accelerated the boat and negligently furnished
a defective tow rope for the activity.
The trial court found that the plaintiff’s claims
were barred by the primary assumption of risk doctrine and granted summary
judgment in the defendant operator’s favor. The plaintiff appealed.
On appeal the plaintiff argued that summary judgment
was improperly granted due to the existence of triable issues of fact regarding
whether the doctrine of assumption of the risk barred the plaintiff’s claims
under the circumstances. As in Record v. Reason, the Court of Appeal
held that “tubing” is a sporting activity to which the doctrine of primary
assumption of the risk applies and that the boat operator and tube rider
are “co-participants” in the sport. In so holding the court rejected the
plaintiff’s first argument that summary judgment was improperly granted
with regard to the plaintiff’s allegation that the operator negligently
accelerated the boat in a no-wake zone. The court held that changes in
speed and turn angle are risks inherent in the sport and that when the
doctrine of primary assumption of the risk applies, a co-participant is
liable only for intentional or reckless conduct totally outside the range
of risk inherent in the activity.
The plaintiff argued in the alternative that summary
judgment was improper in light of his allegation that the owner and operator
of the boat negligently furnished a defective tow rope. In considering
this argument the Court of Appeal held that the owner/operator of the boat
had a dual capacity of co-participant and supplier of equipment in connection
with the activity. After reviewing analogous cases outside of the recreational
boating context, the court held that “when a person supplies equipment
to be used in a sport, even if he or she thereafter becomes a coparticipant
in the sport, the act of supplying of the equipment is something separate
and distinct from participation in the sport and the tests for liability
are accordingly different.” The Court of Appeal held that general negligence
rules apply to claims based on the furnishing of equipment for an activity
to which the primary assumption of risk doctrine applies, reversed the
trial court’s entry of summary judgment and remanded the case for further
proceedings on the defective equipment claim.
Other Recent Cases
Krummel v. Bombardier Corp., __ F.3d __,
2000 WL 266543 (5th Cir. March 27, 2000). Plaintiff who sustained
a broken leg while using a PWC, brought a products liability action against
the manufacturer, claiming defective design of the craft’s footwells and
failure to warn. The district court found that the PWC was not defectively
designed but entered judgment against the manufacturer for failure to warn
users of the potential risk of leg injuries. On appeal, the Fifth Circuit
reversed and rendered judgment for the manufacturer on the basis that the
plaintiff had failed to demonstrate that the manufacturer should have foreseen
the risk of injury through either a pattern of similar injuries or a design
Naglieri v. Bay, 1999 WL 1611209 (D.Ct.
1999). The estate of decedent who drowned while serving as a volunteer
crew member on the defendant’s racing sloop brought a negligence cause
of action against the owner under the general maritime law and Connecticut
law. The decedent drowned when the sloop broached after encountering a
sudden 42 knot wind gust. The decedent, who was not wearing a PFD, was
thrown into the water. Efforts by the captain and crew to retrieve him
were unsuccessful. Following a bench trial, the district court entered
findings of fact and conclusions of law and entered judgment for the defendants.
Olson v. Empire District Electric Co.,
2000 WL 140752 (Mo.App.S.D. Feb. 9, 2000). The defendant electric company,
a Kansas corporation, owned and operated a dam and lake in Cherokee County,
Kansas. Eric Olson, a Missouri resident, was killed in a boating accident
on the lake when his boat was swept into the dam. The electric company
moved to dismiss a suit brought by the decedent’s estate on the ground
that the action was barred by the Kansas Land and Water Recreational Areas
Act. The statute immunizes landowners who permit their property to be used
by the public for recreational purposes without charge. The trial court
granted summary judgment to the defendants. The Court of Appeals affirmed.
See discussion of recreational use immunity statutes in 8 Boating
Briefs No. 2 (Fall/Winter 1999).
Sprietsma v. Mercury Marine, 2000 WL 355575
(Ill.App. 1 Dist. April 6, 2000). The estate of a decedent killed when
struck by a propellor after falling from a pleasure boat brought a wrongful
death action against the boat’s manufacturer based on its alleged failure
to equip the boat with a propellor guard. The appellate court affirmed
the trial court’s entry of summary judgment in favor of the manufacturer
on the ground that the plaintiffs’ state law tort claims were impliedly
preempted by the Federal Boat Safety Act, 46 U.S.C. § 4301 et seq.
See discussion of other cases in 7 Boating Briefs No. 1 (Fall/Winter
LeBlanc v. Cleveland, 198 F.3d 353 (2nd
Cir. 1999). In a suit arising from the collision of a kayak and a motor
boat on the Hudson River 29 miles upstream of Fort Edward, the district
court dismissed the action for lack of subject matter jurisdiction, finding
that the accident did not occur on navigable waters. The area of the Hudson
in question cannot presently support interstate navigation due to the presence
of man-made dams. The Second Circuit affirmed the dismissal, rejecting
the defendant’s argument that the court should apply an historical navigability