## Facts

- A fishing vessel, the F/V PACIFIC LADY, was required by federal fishery regulations to carry certified observers as a condition of operating in certain fisheries.
- Alaskan Observers, Inc. contracted to supply observers to the vessel and billed for those services.
- The vessel’s owners/operators allegedly failed to pay amounts due for observer services.
- Alaskan asserted a maritime lien for the unpaid observer compensation and claimed the lien qualified as a preferred maritime lien for “wages of the crew of the vessel.”
- Multiple claimants asserted competing liens against the arrested vessel or its sale proceeds, including a secured lender (Bank of America, N.A.) with an interest that would be subordinate to preferred maritime liens.

## Issues

1. Whether federally mandated fishery observers supplied to a fishing vessel are “members of the crew” under the Federal Maritime Lien Act so that unpaid observer compensation gives rise to a preferred maritime lien for “wages of the crew of the vessel.”
2. Whether federal regulations limiting observers’ permissible tasks preclude treating observers as crew for lien-priority purposes.

## Decision

- The court held that the observers were not “members of the crew” within the meaning of the Federal Maritime Lien Act.
- The court ruled that Alaskan’s lien for observer compensation did not qualify as a preferred maritime lien for crew wages.
- Alaskan’s claim was therefore treated as a non-preferred maritime lien, subordinate to a preferred ship mortgage and true crew-wage liens in distribution of the vessel’s proceeds.

## Legal Principles

- A preferred maritime lien for “wages of the crew of the vessel” is limited to persons who function as crew in the vessel’s operation and service, not merely individuals who are aboard and whose presence is required by law.
- Federal regulations that bar observers from performing traditional shipboard duties (e.g., cooking, standing watch, or fish-processing duties) support treating observers as regulatory monitors rather than crew.
- Lien priority rules in admiralty do not expand crew-wage superpriority to categories of onboard personnel who are structurally and functionally distinct from the vessel’s crew.

## Conclusion

The court rejected preferred-lien status for unpaid compensation of federally required fishery observers, concluding they are not “crew” under the Federal Maritime Lien Act; their liens rank as non-preferred claims below true crew-wage liens and a preferred ship mortgage.


Bank of Am., N.A. v. Pac. Lady, 2001 A.M.C. 727 (W.D. Wash. 2000)