F/V ' Quality One'

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Gowen Inc. v. F/V QUALITY ONE

US Federal Court: First Circuit Court of Appeals:
244 F.3d 64: March 2001

Case note contributed by Healy & Baillie, New York, attorney Jana N. Byron

In this case, the First Circuit Court of Appeals addressed an issue of first impression: whether federal fishing permits are "appurtenances" of a vessel and subject to a maritime lien. The Court held that they were "appurtenances" and therefore subject to sale, together with the vessel, under the Lien Act.

DMC Category Rating: Developed

The claimants sought to recover for wharfage and repairs under the Federal Maritime Lien Act, which provides for a maritime lien for debts owed for necessaries furnished to a vessel. The QUALITY ONE was arrested pursuant to a warrant commanding seizure of "her equipment, engines and appurtenances."

The District Court for t he District of Maine issued a judgment in favor of the claimants. It ordered a public sale of the vessel, including "any valid fishing permits...to the extent permitted by applicable law." Federal fishing permits allow a vessel to be used to fish for certain species at specified times. They are of great importance because vessels such as the QUALITY ONE are valuable, in part, because of their fishing permits.

The claimants sought judicial confirmation of the sale. The defendant owners of the fishing vessel opposed the action, on the grounds that the fishing permits were not "appurtenances," but rather the personal property of the owners and not subject to claimants’ maritime lien.

The Court of Appeals confirmed the sale. In the case of a vessel such as the QUALITY ONE, the Court found that because the fishing permits greatly contributed to the vessel’s overall value and to its creditworthiness, the permits fell within the statutory ambit of "appurtenances"of the vessel and were therefore subject to the claimants’ maritime lien. The Court observed that although fishing permits confer rights that are intangible, there is no general maritime objection to treating intangible rights, such as freight charges, as subject to a maritime lien. As the Court summarized, "[m]aritime liens underpin the extension of credit to fishermen, and this mechanism for ready credit would be impaired by excluding from the lien the permits that allow vessels to carry on their accustomed fishing activities." Because fishermen seeking repairs and supplies on credit would likely benefit from treating a vessel’s permits as appurtenances, the Court concluded that the fishing permits were appurtenances that passed to the buyer with the public sale of the QUALITY ONE.

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