Towboat One, Inc. v. M/V Waterdog, 2008 U.S. Dist. LEXIS 48628 (S.D. Fla., June 24, 2008).
Stephanie Showalter, J.D./M.S.E.L.
The U.S. District Court for the Southern District of Florida recently struck down as unconstitutional a 180-year old statute requiring wreckers to obtain a license from a district court before commencing salvage operations.
Background
While operating in navigable waters off the coast of Florida in October 2007, the M/V Waterdog began taking on water due to a malfunction in its bilge-pumping system. Towboat One, a salvage company, responded to Waterdog’s distress signal. Towboat One was able to “de-water” the ship and navigate the Waterdog back to port. Since ancient times, “a salvor of imperiled property on navigable waters gains a right to compensation from the owner.”1 When Waterdog disputed Towboat One’s bill, the salvage company filed suit in federal district court to determine the amount owed and force payment.
Waterdog raised a number of affirmative defenses in its answer to Towboat One’s complaint. In one of its affirmative defenses, Waterdog argued that Towboat One lacked the requisite salvage license and therefore may be precluded from a salvage award or may have its award reduced. Towboat One filed a motion to strike claiming the license requirement is unconstitutional.
Florida Wrecking Statute
46 U.S.C. A7 80102(a) mandates that “to be regularly employed in the business of salvaging on the coast of Florida, a vessel and its master each must have a license issued by a judge of the district court of the United States for a judicial district of Florida.” The original statute, passed in 1828, was addressed to “wreckers,” the term then used to describe individuals engaged in salvage operations in the Florida Keys. The statute was apparently passed to protect merchant ships from shady characters who were placing lanterns near the reefs and luring merchant ships into dangerous waters where the cargo could be looted after the wreck. Under the statute, “wreckers who lacked a license forfeited the right to any award for their efforts.”2
Before Florida was admitted to the Union in 1845, wrecker licenses were issued by the territorial court of the Florida Keys. After 1845, the licenses were issued by the federal judge sitting in the Florida Keys. Although questions were raised over the years about the statute’s constitutionality, the law was obscure and virtually ignored. Then in 2006 Congress re-codified Title 46 of the U.S. Code. During the re-codification, the term “wrecking” was replaced with “salvage.” Soon thereafter the Florida district courts began receiving petitions for salvage licenses.
The District Court granted Towboat One’s motion to strike on constitutional grounds. Article III, Section 1 of the U.S. Constitution vests judicial power in “one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.” Courts do not generally issue licenses. “The issuance of licenses for salvaging off the coast of Florida is not an action taken in furtherance of carrying out a judicial act or part of the Court’s governance of the proceedings before it.”3 Licenses are usually issued by administrative agencies in the Executive Branch. According to the district court, because an “Article III court can exercise no other power than the judicial power,” the Congressional mandate that Florida district court judges issue salvage licenses is unconstitutional.4 Towboat One had no ob ligation to obtain a license under an unconstitutional statute and Waterdog cannot argue that the lack of a license subjects Towboat One to less than full recovery.
Endnotes
1. Thomas J. Schoenbaum, Admiralty and Maritime Law, A7 14-1 (4th ed. 2003).
2. Towboat One, Inc. v. M/V Waterdog, 2008 U.S. Dist. LEXIS 48628 at *5-6 (S.D. Fla., June 24, 2008).
3. In re Beck, 526 F. Supp. 2d 1291, 1304 (S.D. Fla. 2007).
4. Towboat One, 2008 U.S. Dist. LEXIS 48628 at *7.
