## Facts

- H2O Houseboat Vacations Inc. rented a houseboat to Roberta Hernandez and her family for use on Lake Havasu, a navigable waterway.
- The houseboat was tied to the shore and used as overnight lodging the night before the family planned to take it out on the lake.
- Because of heat, the family closed windows in the sleeping area, turned on the air conditioning, and went to sleep.
- During the night, the family suffered serious injuries from carbon monoxide fumes accumulating inside the houseboat.
- Before the family filed a tort action, H2O filed a federal action seeking to limit liability under the Limitation of Vessel Owner’s Liability Act, asserting admiralty jurisdiction as the only basis for subject-matter jurisdiction.
- The district court dismissed under Federal Rule of Civil Procedure 12(b)(1) for lack of admiralty jurisdiction, concluding the incident lacked potential to disrupt maritime commerce.

## Issues

1. Whether carbon monoxide injuries to occupants of a houseboat tied to shore on navigable waters satisfy the maritime “connection” requirement for admiralty tort jurisdiction, particularly the requirement of a potentially disruptive impact on maritime commerce.
2. If admiralty tort jurisdiction is absent, whether a vessel owner may nonetheless maintain a federal limitation of liability action predicated solely on admiralty subject-matter jurisdiction.

## Decision

- The Ninth Circuit affirmed the Rule 12(b)(1) dismissal for lack of subject-matter jurisdiction.
- The court held the incident, as it occurred (carbon monoxide buildup inside a stationary houseboat used as lodging), did not have the required potential to disrupt maritime commerce.
- Because the limitation action rested only on admiralty jurisdiction and no maritime tort jurisdiction existed, the federal court lacked subject-matter jurisdiction.

## Legal Principles

- Admiralty tort jurisdiction requires both: (1) a location nexus to navigable waters and (2) a maritime “connection,” including an incident with a potentially disruptive impact on maritime commerce and a substantial relationship to traditional maritime activity.
- The “potential disruption” inquiry must be grounded in the nature of the incident at an appropriate level of generality, but cannot be manufactured through remote, highly speculative chains of hypothetical consequences.
- The mere presence of a vessel on navigable waters is insufficient; the activity and incident must realistically implicate maritime commerce to support admiralty jurisdiction.
- When a limitation of liability action relies exclusively on admiralty jurisdiction, the absence of a qualifying maritime tort defeats federal subject-matter jurisdiction.

## Conclusion

The Ninth Circuit concluded that carbon monoxide injuries suffered inside a houseboat tied to shore and used as sleeping quarters did not present a realistic potential to disrupt maritime commerce, so admiralty tort jurisdiction—and therefore federal jurisdiction for a limitation action premised solely on admiralty—was lacking.


H2O Houseboat Vacations Inc. v. Hernandez, 103 F.3d 914 (9th Cir. 1996)