Fane Lozman, a self-described “corruption fighter” whose legal battle over his Riviera Beach floating home made its way to the U.S. Supreme Court, won his case in a ruling that has wide implications for the nation’s maritime industry.
The Supreme Court, in a 7-2 decision Tuesday, overturned an 11th Circuit Court of Appeals ruling, deciding the city of Riviera Beach could not regulate Lozman’s former home as a maritime vessel.
“I’ve been vindicated," Lozman said in a telephone interview. “My argument from day one when my home was arrested by three armed federal marshals was: ‘You guys don’t have jurisdiction, this is a state issue.’ ... At the end of the day I was right.”
In fact, when Riviera Beach seized and later destroyed Lozman’s floating home, no one likely expected it would create a legal fight that would lead to the nation’s highest court. But they may have underestimated Lozman, a former Marine Corps officer.
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Lozman, 51, had made his fortune in the commodities trade in Chicago and built a reputation for civic activism in North Bay Village and Riviera Beach.
“My hobby is fighting political corruption, trying to remove politicians that my investigations show are corrupt, and I take credit for removing three North Bay Village commissioners and two North Bay Village mayors from office,” Lozman, who now lives in both North Bay Village and Miami Beach, said in an interview in late September.
In the legal case that captured national attention from gambling companies with floating casinos and others, the Supreme Court concluded that Riviera Beach went too far when it used maritime law to seize and ultimately destroy Lozman’s floating home. Besides giving Lozman a personal victory, the ruling clarifies and narrows how government agencies can deploy maritime law.
“But for the fact that it floats, nothing about Lozman’s home suggests that it was designed to any practical degree to transport persons or things over water,” Justice Stephen Breyer wrote for the majority.
Instead, Breyer stressed, Lozman’s dockside home was “a house-like plywood structure” that differed “significantly from an ordinary houseboat” in ways large and small. Maritime law only applies, under the court’s new ruling, if “a reasonable observer, looking to the home’s physical characteristics and activities, would consider it designed to a practical degree for carrying people or things over water.”
The decision finalizes the debate of whether a floating structure that is indefinitely moored, receives power and other utilities from shore and is not intended to be used in maritime transportation or commerce constitutes a “vessel” under the U.S. Code of Laws, thus triggering federal maritime jurisdiction. Among the implications: owners of floating homes usually must pay property taxes, as Lozman did, while those owning vessels under federal maritime law do not.
In addition, the standards differ on what kinds and amounts of damages can be awarded in personal-injury lawsuits. And there are different federal rules for employment disputes and compensation for workers injured on the job.
The issue matters, for instance, to the American Gaming Association members that filed a legal brief siding with Lozman. The gambling companies feared that if Riviera Beach prevailed, then other agencies could likewise impose new maritime law restrictions on the 60-plus “riverboat” gambling facilities docked in states like Mississippi and Missouri.
Houseboat owners in Seattle and Sausalito, Calif., likewise, urged the court not to extend the reach of maritime law.
“One of my main motivations is that 10,000 floating homes around the country should not have to go through the horror show that I did ... to include having armed federal marshals breaking down the door of your home and seizing it. That should not happen in America,” Lozman said Tuesday.
Justices Sonia Sotomayor and Anthony Kennedy dissented, warning that the court’s ruling “reaches well beyond relatively insignificant boats like Lozman’s craft” to potentially call into question regulations of larger vessels.
But the Obama administration had sided with Lozman, warning about unnecessary inspection burdens on the U.S. Coast Guard. Kerri Barsh, a shareholder with Greenberg Traurig in Miami, and one of Lozman’s attorneys, added Tuesday that the ruling “closed the door” to a potentially onerous new round of regulations.
“Not every floating structure is a ‘vessel,” Breyer wrote. “To state the obvious, a wooden washtub, a plastic dishpan, a swimming platform on pontoons, a large fishing net, a door taken off its hinges, or Pinocchio [when inside the whale] are not ‘vessels.’ ”
Lozman bought his floating home (60 feet long, 12 feet wide) in 2002 and docked it at the Riviera Beach marina after Hurricane Wilma destroyed his former marina. The rectangular structure lacked an engine, bilge pumps, lifeboats or other devices usually found on waterborne vessels. It was equipped for connection to land-based sewer lines and received its power through an extension cord. Its small rooms looked like ordinary living quarters, with windows instead of watertight portholes.
But Riviera Beach officials, following extended conflict with Lozman, eventually turned to U.S. maritime law in 2009 to seize the home as a vessel. They towed it to Miami, where they bought it at auction for $4,100 and then had it destroyed.
“The houseboat was in violation of the wet slip agreement, and it posed a hazard to other vessels in the marina if, because of its flimsy moorings, it came unmoored during a storm,” Riviera Beach’s attorney David C. Frederick declared during oral argument last October.
Barsh, whose firm has been representing Lozman pro bono, said the legal victory means Lozman can now seek legal fees from the city of Riviera Beach. He can also receive a payout from a $25,000 security bond that had been placed by the city pending the court’s decision. Lozman said he will also seek reimbursement for the value of his home and furniture.
He said that within the next six months he will decide whether to put another floating home in Riviera Beach, where he still has plenty of friends and supporters.
“You can fight city hall,” Lozman said. “It’s very humbling. You can make it to the top and win.”