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UPDATE 2-U.S. Supreme Court sinks Florida city over floating home

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* Casino industry stands to gain from 7-2 ruling

* Clears way for owner to seek compensation

By Jonathan Stempel

WASHINGTON, Jan 15 (Reuters) - When is a floating home not a vessel? The U.S. Supreme Court on Tuesday told a Florida city its argument did not hold water, and that an abode on water was nothing but a home.

In a 7-2 decision, the court ruled that a gray, two-story home which its owner said was permanently moored to a Riviera Beach, Florida, marina was not a vessel, depriving the city of power under U.S. maritime law to seize and destroy it.

Justice Stephen Breyer said nothing about former Chicago trader and Marine pilot Fane Lozman's home would have led a "reasonable observer" to conclude it could be used to transport people or things over water, but for the fact that it floated.

"Not every floating structure is a 'vessel'," Breyer wrote for the majority. "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'."

Riviera Beach had seized Lozman's home after he resisted a court order that he pay $3,040 in dockage fees, and destroyed the home after being unable to sell it.

Tuesday's decision reversed a lower court ruling upholding the fees, and clears the way for Lozman to seek compensation.

Riviera Beach officials had no immediate comment.

Lozman, 51, cheered the decision. "I feel like I'm floating on a cloud," he said in a phone interview. "I have been fighting this city for 6-1/2 years and it is humbling to get a reversal."

The definition of "vessel" is particularly important, given that admiralty law imposes different obligations on owners with respect to such things as staffing and taxation.

It is a victory for the casino industry, which in court papers argued that more than 60 riverboat casinos should not be subject to U.S. maritime laws designed to protect seamen, on top of state laws to license and regulate the gaming business.

The decision limits special rules and remedies of maritime law to matters that "genuinely involve maritime commerce and transportation," Jeffrey Fisher, a Stanford University law professor who represented Lozman, said in a phone interview. "That something floats and might be towed from Point A to Point B does not mean those rules and remedies should apply."

COURT SEEKS CONSISTENCY

Lozman bought the 60-by-12 foot home in 2002, which was equipped with French doors. Four years later, he towed it to a Riviera Beach marina, where he kept it docked.

Although he was able to move the home in this manner, Lozman said it should not be covered by maritime law because it lacked the usual seafaring features such as a motor and GPS device, and needed land-based sewer lines and an extension cord for power.

The legal battle started after Lozman resisted new rules governing houseboats at his marina and opposed a proposed $2.4 billion luxury redevelopment of the marina.

In his opinion for the court, Breyer said the decision was consistent with the laws of California and Washington, which also treat structures like Lozman's as land-based homes.

"Consistency of interpretation of related state and federal laws is a virtue" because it makes the law easier to understand and follow, Breyer said.

Joining Breyer's opinion were Chief Justice John Roberts, and Associate Justices Antonin Scalia, Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Elena Kagan.

Justice Sonia Sotomayor, joined by Justice Anthony Kennedy, dissented, in the term's first dissenting votes from a full court opinion. Sotomayor objected to the "reasonable observer" standard adopted by the majority.

The case is Lozman v. City of Riviera Beach, Florida, U.S. Supreme Court, No. 11-626.

http://www.globalpost.com/dispatch/news/thomson-reuters/130115/update-2-us-supreme-court-sinks-florida-city-over-floating-home