Bunge Corpe. v. Freeport Marine Repair, Inc., 240 F.3d919 (11th Cir. 2001).

Freeport manufactured and owned a casino vessel that was in the final stages of construction. During Hurricane Opal, the casino vessel broke free of its moorings and damaged Bunge’s grain loading facility. Bunge brought suit seeking recovery of the damages it sustained as a result of Freeport’s alleged negligence. The district court entered judgment against Freeport, and Freeport appealed. The primary issue in the case is whether or not Freeport’s hull constituted a vessel such that the burden shifting principles under the Louisiana Rule would apply. The question of whether an object constitutes a vessel for purposes of the Louisiana Rule is a question of law reviewed de novo. When a moving ship strikes and damages a stationary object, it is presumed that the moving ship is at fault. This presumption operates to shift the burden of persuasion on to the moving ship. This presumption may be rebutted by showing by a preponderance of the evidence that the allision was the fault of the stationary object, that the moving vessel acted with reasonable care, or that the allision was an unavoidable accident. Therefore, the court turned to a discussion of admiralty jurisdiction.

The Supreme Court has rejected the purely mechanical application of the locality of the wrong test for admiralty jurisdiction and has concluded that the wrong must bear a significant relationship to traditional maritime activity. This second prong is commonly referred to as the nexus test. Thus, the situs of the allision as well as the relationship between the unmooring of a partially constructed ship in traditional maritime activity must be considered in order to determine admiralty jurisdiction.

With respect to the locality test, the casino vessel broke free from her moorings on navigable waters and thus satisfied the locality test. Regarding the nexus test, there are two considerations: (1) did the incident have a potentially disruptive impact on maritime commerce? and (2) does a substantial relationship exist between the activity giving rise to the incident and traditional maritime activity? Regarding the first question, no actual disruption of maritime commerce need occur; rather, the law requires that the court examine the general features of the type of incident to determine whether such an incident is likely to disrupt commercial activity. In the instant case, the casino vessel was not only a potential disruption to commercial activity but actually disrupted activity.

Regarding the second question of the nexus test, the relevant activity was the construction of the casino vessel and the mooring of the casino vessel on a navigable waterway. Some case law suggests that a vessel under construction may not be subject to admiralty jurisdiction. The Supreme Court has held that a vessel could not be made liable in admiralty when in dry dock. The Court stated, however, that in the baptism of launching the vessel receives her name, and from the moment she touches the water she is transformed and becomes a subject of admiralty jurisdiction. Thus, the casino vessel arguably became a vessel when it entered the navigable waters. The Court of Appeals concluded by examining the district court’s holding that Hurricane Opal did not constitute an act of God and could not absolve Freeport from fault. Therefore, the Court of Appeals affirmed the district court’s ruling.