Complaint of Sisson

Decision Date16 March 1989
Docket NumberNos. 87-2713,87-2736,s. 87-2713
Citation867 F.2d 341
Parties, 57 USLW 2463 In the Matter of The Complaint of Everett A. SISSON, as owner of the motor yacht, THE ULTORIAN, for exoneration from or limitation of liability, Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

Dennis Minichello, Tribler & Marwedel, P.C., Chicago, Ill., for appellant.

Robert J. Kopka, Landau, Omahana & Kopka, Ltd., Chicago, Ill., for appellee.

Before CUDAHY, RIPPLE and KANNE, Circuit Judges.

CUDAHY, Circuit Judge.

This case presents an intriguing classificatory problem concerning the scope of the federal courts' admiralty jurisdiction. Specifically, we must decide whether a fire aboard a non-commercial vessel docked at a recreational marina on navigable waters bears a significant relationship to traditional maritime activity.

Everett Sisson owned the Ultorian, a 56-foot pleasure yacht, docked at the Washington Park Marina on Lake Michigan in Michigan City, Indiana. A fire erupted on the vessel, destroying it completely and damaging extensively the marina and several other boats. The fire allegedly was caused by a defective washer and dryer. The net value of the Ultorian after the fire was $800. The owners of the other vessels and of the marina have made claims for damages in excess of $275,000.

Sisson sought injunctive and declaratory relief in the district court, asserting jurisdiction under 28 U.S.C. Sec. 1333, which provides in part:

The district court shall have original jurisdiction, exclusive of the courts of the States, of:

(1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.

Essentially Sisson wishes to limit his liability to the claimants for damages caused by the fire, pursuant to the Limitation of Liability Act, 46 U.S.C.A. App. Sec. 181 et seq. The district court dismissed Sisson's complaint for lack of subject-matter jurisdiction. 663 F.Supp. 858 (N.D.Ill.1987).

Sisson moved for reconsideration, alleging that the Limitation of Liability Act provides a separate source of admiralty jurisdiction in this case. The district court denied the motion because, in its view, Sisson introduced a new legal theory which could have, but had not, been raised in the original opposition to dismissal. 668 F.Supp. 1196 (N.D.Ill.1987). The court then rejected Sisson's argument on the merits, concluding that the Limitation of Liability Act does not provide an independent basis of federal admiralty jurisdiction. The court held alternatively that, even if subject-matter jurisdiction did exist, Sisson was not entitled to limit his liability for damage caused by a pleasure boat.

For the reasons given below, we affirm the district court's dismissal of the case for lack of subject-matter jurisdiction.

I.

Had this case arisen prior to 1972, it would have fallen within the admiralty jurisdiction. Throughout most of the history of admiralty law in this country, the key criterion distinguishing maritime torts has been whether the actionable wrong occurred "on navigable waters." The Supreme Court stated the rule in The Plymouth, 70 U.S. (3 Wall.) 20, 36, 18 L.Ed. 125 (1866): "Every species of tort, however occurring, and whether on board a vessel or not, if upon the high seas or navigable waters, is of admiralty cognizance." The present case would clearly have satisfied this "locality test;" it involves a fire that began on board a vessel moored on navigable waters, with resulting damage to other vessels also moored on navigable waters.

This test, however, was changed in 1972 by the Supreme Court's decision in Executive Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249, 93 S.Ct. 493, 34 L.Ed.2d 454 (1972). In Executive Jet the owners of a jet aircraft invoked admiralty jurisdiction when their airplane crashed in Lake Erie. They alleged that the airport had negligently failed to keep its runway free of birds. The airplane's jet engines ingested the birds, causing the plane to lose power and crash. The tort arguably satisfied the locality test--the birds were ingested over, and the plane crashed in, the navigable waters of Lake Erie. See The Propeller Genesee Chief v. Fitzhugh, 53 U.S. (12 How.) 443, 13 L.Ed. 1058 (1851). Reasoning that the locality test "was established and grew up in an era when it was difficult to conceive of a tortious occurrence on navigable waters other than in connection with a waterborne vessel," id., 409 U.S. at 254, 93 S.Ct. at 497, the Court concluded that locality by itself was an inadequate basis for assuming admiralty jurisdiction over an airplane crash. Writing for a unanimous Court, Justice Stewart held that in the context of aviation, "a significant relationship to traditional maritime activity" must be shown as well, before admiralty jurisdiction could be invoked in tort cases. Id. at 268, 93 S.Ct. at 504. The Court's new "nexus" test was not satisfied by the mere similarity of problems confronting ships that sink and aircraft that crash in navigable waters. The fact that a "land-based plane flying from one point in the continental United States to another" happened to wind up in the water rather than on land did not provide a significant relationship between the crash and "traditional maritime activity involving navigation and commerce on navigable waters." Id. at 272, 93 S.Ct. at 506.

Executive Jet left open the question whether the new "nexus" test would apply in non-aviation contexts. Any doubt about this issue was subsequently removed in Foremost Insurance Co. v. Richardson, 457 U.S. 668, 102 S.Ct. 2654, 73 L.Ed.2d 300 (1982), a case involving the collision of two pleasure boats on navigable waters. The Court first concluded that all tort actions invoking admiralty jurisdiction must meet the new nexus test requiring a significant relationship with "traditional maritime activity." Id. at 673-74, 102 S.Ct. at 2658. When subsequently defining traditional maritime activity, the Court recognized that "the primary focus of admiralty jurisdiction is unquestionably the protection of maritime commerce," but refused to require that alleged tortfeasors be "actually engaged in commercial maritime activity" before they could assert admiralty jurisdiction. Id. at 674-75, 102 S.Ct. at 2658 (emphasis in original). In the Court's view, the federal interest in protecting maritime commerce "can be fully vindicated only if all operators of vessels on navigable waters are subject to uniform rules of conduct." Id. at 675, 102 S.Ct. at 2658 (emphasis in original).

The Court held that although the boats involved were "pleasure" rather than "commercial" craft, the collision in Foremost fell within the federal courts' admiralty jurisdiction:

The potential disruptive impact of a collision between boats on navigable waters, when coupled with the traditional concern that admiralty law holds for navigation, compels the conclusion that this collision between two pleasure boats on navigable waters has a significant relationship with maritime commerce.

Id. (footnote omitted). The Court cautioned, however, that "[n]ot every accident in navigable waters that might disrupt maritime commerce will support federal admiralty jurisdiction." Id. at 675 n. 5, 102 S.Ct. at 2658 n. 5. This seems to us a strong admonition to proceed with great caution in extending the Foremost principles.

We are now presented with a case that tests the limits of the developing admiralty nexus doctrine: Does a fire on board a moored pleasure yacht, docked in the navigable waters of a recreational marina on Lake Michigan, bear a significant relationship to traditional maritime activity? Guidance from the Court on this question is limited to two cases: a collision on navigable waters between pleasure craft, that passes the test, and the crash of a land-based airplane in navigable waters, that fails the test. 1 Foremost makes it clear that the distinction between aviation and non-aviation contexts is not the critical issue. However, the existing case law gives little basis for determining under what circumstances an accident involving a vessel, in navigable waters, would lack the requisite nexus with "traditional maritime activity."

One principled approach to delimiting the scope of "traditional maritime activity" might be to look at the original reasons for asserting admiralty jurisdiction over that activity. Most scholars of admiralty law agree that the original purpose of admiralty courts was to establish a uniform body of laws to govern (and to promote) maritime commerce. See, e.g., G. Gilmore & C. Black, The Law of Admiralty, Secs. 1-1, 1-5 (1975); 7A J. Moore & A. Pelaez, Moore's Federal Practice p .190, at 2005-06, p .325, at 3606-07 (2d ed. 1988); Black, Admiralty Jurisdiction: Critique and Suggestions, 50 Colum.L.Rev. 259, 280 (1950); Stolz, Pleasure Boating and Admiralty: Erie at Sea, 51 Calif.L.Rev. 661, 667 (1963). However, in Foremost Justice Marshall rejected efforts to limit the admiralty jurisdiction to cases involving commercial shipping:

[P]etitioners' argument that a substantial relationship with commercial maritime activity is necessary because commercial shipping is at the heart of the traditional maritime activity [that admiralty jurisdiction seeks to protect] ... is premised on the faulty assumption that, absent this relationship with commercial activity, the need for uniform rules to govern conduct and liability disappears....

Foremost, 457 U.S. at 674, 102 S.Ct. at 2658. Thus admiralty jurisdiction is not precluded in the case before us simply because the tort involves pleasure, rather than commercial, vessels.

Another approach would be to analyze the types of instrumentalities and accidents involved in each case in order to determine their relationship to traditional maritime activities. This is, in part, the...

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