Facts
- Everett A. Sisson owned the Ultorian, a 56-foot pleasure yacht.
- The Ultorian was docked at a marina on Lake Michigan, a navigable waterway.
- A fire started in the area of the yacht’s washer/dryer unit.
- The fire destroyed the Ultorian and damaged neighboring vessels and the marina.
- Marina and vessel owners sought more than $275,000 in damages from Sisson.
- Sisson filed a federal limitation of liability action seeking to cap liability at $800, the yacht’s post-fire salvage value.
Issues
- Whether federal admiralty jurisdiction under 28 U.S.C. § 1333(1) covers a limitation of liability action arising from a fire on a noncommercial pleasure vessel docked at a marina on navigable waters.
- Whether the incident satisfies the required maritime “connection” to maritime commerce and traditional maritime activity.
Decision
- The Supreme Court held that the district court had admiralty jurisdiction under 28 U.S.C. § 1333(1).
- The Court applied a two-part connection test: (1) potential hazard to maritime commerce; and (2) substantial relationship to traditional maritime activity.
- The Court characterized the incident generally as a fire on a vessel docked at a marina on navigable waters, which could disrupt maritime commerce by spreading to nearby vessels or making the marina inaccessible.
- The Court characterized the relevant activity generally as the storage and maintenance of a vessel at a marina on navigable waters, which is substantially related to traditional maritime activity.
- The Court rejected limiting admiralty jurisdiction to navigation or to commercial vessels.
- The Seventh Circuit was reversed and the case was remanded.
Legal Principles
- Admiralty tort jurisdiction requires both (1) location on navigable waters and (2) a maritime connection: a potential hazard to maritime commerce arising from an activity substantially related to traditional maritime activity.
- The connection inquiry focuses on the general character of the incident and activity, not the specific facts or actual commercial disruption in the particular case.
- Storage and maintenance of a vessel at a marina on navigable waters qualifies as a traditional maritime activity for jurisdictional purposes.
- Noncommercial pleasure vessels may fall within admiralty jurisdiction when the location and connection requirements are met.
- When the underlying tort falls within admiralty jurisdiction, a vessel owner’s limitation action under the Limited Liability Act may proceed in federal court.
Conclusion
A fire on a pleasure yacht docked at a marina on navigable waters falls within federal admiralty jurisdiction because it presents a potential hazard to maritime commerce and arises from vessel storage and maintenance, an activity substantially related to traditional maritime activity.