Three Buoys Houseboat Vacations U.S.A., Ltd. v. Morts

• Decision Date: 04 October 1989
• Docket Number: No. 88-2436,88-2436
• Citation: 878 F.2d 1096
• Parties: In the Matter of the Complaint of THREE BUOYS HOUSEBOAT VACATIONS U.S.A., LTD., etc., Appellant, v. Harvey G. MORTS, et al., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1096

878 F.2d 1096

1989 A.M.C. 2058

In the Matter of the Complaint of THREE BUOYS HOUSEBOAT VACATIONS U.S.A., LTD., etc., Appellant, v. Harvey G. MORTS, et al., Appellees.

No. 88-2436.

United States Court of Appeals Eighth Circuit.

Submitted March 15, 1989.

Decided July 5, 1989.

Rehearing and Rehearing En Banc Denied Oct. 4, 1989.

Joseph A. Murphy, St. Louis, Mo., for appellant.

John C. Torjesen, St. Louis, Mo., for appellees.

Before JOHN R. GIBSON and BOWMAN, Circuit Judges, and FLOYD R. GIBSON, Senior Circuit Judge.

FLOYD R. GIBSON, Senior Circuit Judge.

Three Buoys Houseboat Vacations U.S.A., Ltd. [hereinafter Three Buoys] appeals an order of the district court ¹ which dismissed its Complaint for Exoneration from or Limitation of Liability filed under the Limitation of Liability Act, 46 U.S.C. App. Secs. 181 et seq. (Supp. I 1983). A service vessel owned by Three Buoys was involved in a collision with a houseboat on the Lake of the Ozarks, in the state of Missouri. Three Buoys filed its complaint in the district court seeking the protection provided under the Limitation of Liability Act. The district court rejected Three Buoys' assertion of admiralty jurisdiction as a basis for subject matter jurisdiction. The district court, however, concluded that it had subject matter jurisdiction under its general federal question jurisdiction. On the merits, the district court determined that the Limitation of Liability Act only applies to vessels which are used on "navigable" waterways as that term is defined for purposes of admiralty jurisdiction. The court also concluded that the Lake of the Ozarks was not navigable for this purpose. Accordingly, the district court dismissed Three Buoys' complaint for failure to state a claim. We affirm the decision of the district court.

I. BACKGROUND

On August 2, 1987, a service vessel owned by Three Buoys collided with a houseboat on the Lake of the Ozarks. ² The Lake of the Ozarks is a large reservoir which was created when the Army Corps of Engineers constructed the Bagnell Dam impounding the Osage River. The Bagnell Dam has no locks which allow the passage of vessels. The lake created by the dam is now a popular recreational area for many Missourians and tourists. The lake is located entirely within Missouri.

The collision occurred at approximately 2:00 a.m. and resulted in the deaths of two passengers on the houseboat. Three other passengers on the houseboat and a Three Buoys employee on its service vessel sustained personal injuries. Several claims for wrongful death, personal injury, and property damage have been filed against Three Buoys and its vessel in the Missouri state courts.

Three Buoys filed its complaint in the district court seeking the protections provided under the Limitation of Liability Act, 46 U.S.C. App. Secs. 181 et seq. Three Buoys maintains that the district court had subject matter jurisdiction pursuant to three federal statutes. The first, 28 U.S.C. Sec. 1333, gives district courts subject matter jurisdiction to hear admiralty cases. The two remaining statutes, 28 U.S.C. Secs. 1331, 1337, give the district courts subject matter jurisdiction to hear cases involving federal questions and cases arising under an act of Congress regulating commerce, respectively.

II. DISCUSSION

A. Subject Matter Jurisdiction

We begin our analysis by determining the basis for the district court's, and hence this court's, subject matter jurisdiction. As already noted, Three Buoys maintains that subject matter jurisdiction is proper pursuant to three statutes, 28 U.S.C. Secs. 1333, 1331, and 1337. We will review each of these statutes to determine whether they provide a basis for subject matter jurisdiction.

Subject matter jurisdiction over admiralty cases is conferred by 28 U.S.C. Sec. 1333 which provides in pertinent part:

The district courts 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.

28 U.S.C. Sec. 1333 (1982).

In the early admiralty cases the extent of admiralty jurisdiction over maritime torts was determined exclusively through a locality test, i.e., whether the tort occurred on navigable waters. In 1972, however, the Supreme Court added a nexus requirement for purposes of determining admiralty jurisdiction. In Executive Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249, 268, 93 S.Ct. 493, 504, 34 L.Ed.2d 454 (1972), the Supreme Court held that in order to come within the court's admiralty jurisdiction a tort must "bear a significant relationship to traditional maritime activity." We need not reach the nexus requirement in the present case because we conclude that the collision on the Lake of the Ozarks at issue in this appeal fails the locality requirement of admiralty jurisdiction.

As already noted, it is well settled that admiralty jurisdiction only extends to torts which occur on "navigable" waters. Id. at 253, 93 S.Ct. at 497. Therefore, we must determine whether the Lake of the Ozarks is navigable as that term is used in the context of admiralty jurisdiction.

In Kaiser Aetna v. United States, 444 U.S. 164, 171-72, 100 S.Ct. 383, 388-89, 62 L.Ed.2d 332 (1979), the Supreme Court noted some of the conflicting definitions that are often applied by the lower courts in determining whether a waterway is navigable. The confusion was attributed primarily to the four distinct purposes underlying the term "navigability" as set forth in Livingston v. United States, 627 F.2d 165, 169 (8th Cir.1980), cert. denied, 450 U.S. 914, 101 S.Ct. 1354, 67 L.Ed.2d 338 (1981) which are:

to delimit the boundaries of the navigational servitude; to define the scope of Congress' regulatory authority under the commerce clause; to determine the extent of the authority of the Corps of Engineers under the Rivers and Harbors Act of 1899; and to establish the limits of federal admiralty jurisdiction. Each of these areas of the law might well require a different definition of 'navigability.'

Three Buoys argues for an expansive definition of navigable which, of course, would include the Lake of the Ozarks within its definition. In Loc-Wood Boat & Motors v. Rockwell, 245 F.2d 306, 307 (8th Cir.1957), a case with facts somewhat similar to the instant case, this court stated: "The Lake of the Ozarks was created by the Bagnell Dam in the Osage River. The lake is entirely within the state of Missouri, but is navigable water within the admiralty and maritime jurisdiction of the United States." See also George v. Beavark, Inc., 402 F.2d 977, 978 (8th Cir.1968) ("If the river was navigable prior to construction of the dam, it continues to be considered as a navigability stream."). Three Buoys argues that because the Osage River was historically a navigable waterway prior to the construction of the Bagnell Dam, it retains its navigable waterway status notwithstanding the construction of the dam which prevents interstate travel on the Osage.

While Loc-Wood Boat & Motors and George v. Beavark, Inc. seem to provide strong support for Three Buoys' contentions, those cases were later disapproved in Livingston v. United States. In Livingston, this court suggested that navigability is not a static concept and once a waterway is found to be navigable this does not preclude a subsequent finding of nonnavigability due to a change in circumstances.

The history of commercial traffic on the river, whatever its intrinsic interest, does not determine the scope of present-day admiralty jurisdiction. Notwithstanding any expressions to the contrary in prior decisions of this court, federal admiralty jurisdiction turns on contemporary navigability in fact.

Livingston v. United States, 627 F.2d at 170 (emphasis added).

In Livingston this court indicated that the closing of waters to commercial shipping should have the effect of eliminating admiralty jurisdiction over them. Id. at 169. Accordingly, this court held the "concept of 'navigability' in admiralty is properly limited to describing a present capability of waters to sustain commercial shipping." Id. at 169-70. When this definition of navigability is applied to the facts before us it is clear that the Lake of the Ozarks, as found by the district judge, is not a navigable waterway for purposes of admiralty jurisdiction.

Because of its large size the Lake of the Ozarks is capable of sustaining commercial shipping. Nevertheless, in order to qualify as a navigable waterway for admiralty purposes we hold that purely intrastate commercial shipping is not enough. Navigability for this purpose requires interstate or foreign commercial shipping. The federal admiralty jurisdiction is founded upon the need for a uniform body of governing law with respect to navigation and commercial maritime activity. Applying uniform rules in admiralty prevents those engaged in interstate and foreign shipping from being subjected to conflicting rules of law. Such a concern is not present in the context of purely intrastate commercial shipping because only one body of law will necessarily apply and shippers will not be subjected to conflicting legal rules. Therefore we hold that the Lake of the Ozarks is not a navigable waterway and the district court properly declined to exercise its admiralty jurisdiction over this dispute.

Our decision is controlled by the Livingston case. At oral argument Three Buoys urged this panel to reject the reasoning of the Livingston case and apply a different definition of navigability. We, of course, cannot do this. A panel of this court is not at liberty to disregard prior panel decisions even when the panel may disagree with the reasoning of existing decisions. Unless intervening Supreme Court precedent has cast doubt on the reasoning of existing circuit authority, we must apply the body of circuit law that exists when we decide a given case. Only this...