Kurtz v. Commissioner

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
__________________________ ELEVENTH CIRCUIT
July 23, 2009
No. 08-15209 THOMAS K. KAHN
__________________________ CLERK

T.C. Docket No. 3130-06

MIKE KURTZ,

Petitioner-Appellant,

versus

COMMISSIONER OF INTERNAL REVENUE,

Respondent-Appellee.

__________________________

Appeal from the Decision of the
United States Tax Court
__________________________

(July 23, 2009)

Before BLACK and MARCUS, Circuit Judges, and QUIST,* District Judge.

*
Honorable Gordon J. Quist, United States District Judge for the Western District of
Michigan, sitting by designation.
QUIST, District Judge:

The Internal Revenue Code permits an individual to deduct from his federally

taxable income “amounts expended for meals . . . while away from home in the

pursuit of a trade or business.” 26 U.S.C. § 162(a)(2). This deduction is limited to

“50 percent of the amount” expended. 26 U.S.C. § 274(n)(1). There are, however,

exceptions to this limitation. One such exception permits a taxpayer to deduct 100

percent of the expense for “food or beverages required by any Federal law to be

provided to crew members of a commercial vessel.” 26 U.S.C. § 274(n)(2)(E)(i).

(italics added.) The sole question on appeal is whether this exception applies to

seamen aboard a fishing vessel. The Tax Court held that it did not. Our answer turns

on whether “any Federal law” requires food or beverage be provided to seamen

aboard a fishing vessel. Because it does not, we affirm.

I.

Appellant, Mike Kurtz, served as an engineer aboard the commercial fishing

vessels “Storm Petrel” and “Poseidon” in 2001 and 2002, respectively. Kurtz was

compensated with a share of the catch aboard both vessels. Kurtz worked 231 days

aboard the Storm Petrel in 2001 and 145 days aboard the Poseidon in 2002. Both

ships harbored in Dutch Harbor, Alaska. The vessels harvested cod and pollock in

the Bering Sea off the Alaskan coast. A typical voyage lasted four or five days, but

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some lasted longer than a week. He was charged $25.00 per day for the meals served

aboard, and he was not reimbursed for those meals. Federal regulations provide a per

diem meals and incidental expense rate. The per diem rate for Dutch Harbor, Alaska

varied from $67 to $78 during 2001 and 2002. Rather than deduct the actual cost of

his meals, Kurtz deducted 100% of the federal meals and incidental expense per diem

rate each day he was at sea on his federal income tax returns for 2001 and 2002. The

IRS agrees that Kurtz was entitled to base his deduction on the per diem rate rather

than his actual cost. However, it assessed deficiencies of $10,823 and $16,899 in

Kurtz’s income tax for 2001 and 2002, respectively, after it determined that he was

permitted to deduct only 50% of the federal per diem rate pursuant to 26 U.S.C. §

274(n)(1). Kurtz filed a petition with the Tax Court seeking a redetermination of the

deficiencies. The sole question before the Tax Court was whether he could deduct

50% or 100% of the federal per diem rate for his meals at sea. Kurtz claimed he was

entitled to deduct $16,161 for meals in 2001 and $10,507 in 2002. The IRS argued

those figures should be halved. The case was tried before the Tax Court on a

stipulated record.

The Tax Court examined several sources of law and determined that nothing

brought to its attention required the provision of food or beverages to seaman aboard

a fishing vessel. The court rejected Kurtz’s contention that 18 U.S.C. § 2191, a

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criminal statute prohibiting the withholding of food from seamen, created an

affirmative duty to provide seamen food or beverage. It also determined that 46

U.S.C. § 10303, which provides that “a seaman shall be served at least 3 meals a day

that total at least 3,100 calories,” was inapplicable to Kurtz because it specifically

excepted from coverage seamen aboard “a fishing or whaling vessel or a yacht.” 46

U.S.C. § 10303(c). The court noted that federal law “specifically tailored to fishing

voyages is codified in 46 U.S.C. sections 10601 through 10603 … and does not

contain any requirement that seamen employed on fishing vessels be provided with

food or beverage.” Finally, it rejected Kurtz’s argument that the provision of food

and water was required by the maritime common law doctrine of seaworthiness. The

court reasoned that 46 U.S.C. § 10901, et seq., addressed proceedings on

unseaworthiness and specifically excepted fishing vessels from its coverage.

II.

The question before the Court is one of law. As such, the Court reviews it de

novo. Bone v. Comm’r, 324 F.3d 1289, 1293 (11th Cir. 2003); Feldman v. Comm’r,

20 F.3d 1128, 1131 (11th Cir. 1994). Kurtz has the burden of clearly showing a right

to the claimed deduction by coming within the letter of the deduction. INDOPCO,

Inc. v. Comm’r, 503 U.S. 79, 84, 112 S. Ct. 1039, 1043 (1992); Sumter Farm & Stock

Co. v. United States, 151 F.2d 975, 976 (5th Cir. 1945).

4
 Kurtz argues that “any federal law” includes maritime common law in addition

to federal statutes. The Tax Court, he contends, did not construe “any” broadly

enough. Like the Tax Court, we find no federal law requiring the provision of food

or beverage to seamen aboard a commercial fishing vessel.

A. Maritime Common Law

Commercial seamen have historically been treated as wards of the court,

enjoying special protections because they are vulnerable to exploitation by their

employers at sea. Fuller v. Golden Age Fisheries, 14 F.3d 1405, 1408 (9th Cir.

1994). Myriad decisions note that the shipmaster is obliged to provide suitable food

and water to these seamen under his charge. See, e.g., The Lottie Bennett, 3 F. Supp.

764 (N.D. Cal. 1933); The Balize, 2 F. Cas. 547 (E.D. Mich. 1872); Foster v.

Sampson, 9 F. Cas. 572 (D.C. Mass. 1849); Dixon v. The Cyrus, 7 F. Cas. 755 (D. Pa.

1789). Seamen aboard fishing vessels, however, have traditionally borne greater

responsibility for themselves and their provisions than those aboard other commercial

vessels. This is reflected in both our common and statutory law. “Unlike merchant

seamen, who have long enjoyed the special protection of courts and Congress,

American fishermen . . . have not been the subject of much federal legislative concern

throughout most of our nation’s history.” TCW Special Credits v. Chloe Z Fishing

Co., 129 F.3d 1330, 1332 (9th Cir. 1997).

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 Other courts have also noted the distinction between fishermen and merchant

seamen. In Sigurjonsson v. Trans-American Traders, Inc., 188 F.2d 760 (5th Cir.

1951), the former Fifth Circuit in binding precedent held that the crew was not

entitled to seamen’s wages provided by statute because it contracted with the owner

of the ship for half of the proceeds from the sale of the fish caught on their voyage.

Id. at 762.1 The court also noted that “fishing vessels are expressly excluded from the

[wage] penalty provisions of 46 U.S.C. §§ 596 and 665,” the applicable statutes

governing the conditions of employment of merchant seamen at the time. Id. In

Welch v. Fallon, 181 F. 875 (D.C. Mass. 1909), the court noted that

merchant vessels, whose voyages may probably oblige them to stay at
sea for considerable periods, or take them far away from any port of
supply, and for the outfitting of which the owners assume a full
responsibility, are required by statute to be provided with a chest of
medicines . . . . But there is no such requirement applying to fishing
vessels, and, speaking generally, it may be said that, so far as they are
concerned, little occasion exists for any such requirement. Not only
does their employment seldom take them far out of reach of a port of
supply, but the supplies to be consumed on their trips, if furnished by
the owners in the first instance, are really paid for by the captain and
crew out of their share in the voyage.

Id. at 877. In Old Point Fish Co. v. Haywood, 109 F.2d 703, 704 (4th Cir. 1940), the

court observed that it was “common practice from ancient times” for the crew of a

fishing vessel to “furnish the food, ice and fuel” and receive a portion of the proceeds
1
The Eleventh Circuit has adopted as precedent all decisions of the former Fifth Circuit
rendered prior to October 1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir.
1981).
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from the catch. These and other similar cases reveal that seamen aboard fishing

vessels have historically been compensated with a share of the revenue from the catch

and that they have provided the fuel and other provisions for the journey, or, if the

provisions were provided by the ship’s owner, the owner debited their cost from the

seamen’s share of the profits – just like Kurtz.

Kurtz contends that the common law doctrine of seaworthiness requires the

provision of food and beverage to crew members. Seaworthiness is an implied

warranty from a ship’s owner to its crew that the vessel is reasonably fit for its

intended purpose. Vierling v. Celebrity Cruises, Inc., 339 F.3d 1309, 1318 (11th Cir.

2003). Kurtz argues that: 1) a ship must be kept seaworthy at all times; 2) the crew

is an integral part of the ship; 3) the ship is unfit if the crew is unfit; 4) the crew is

unfit if it lacks adequate food and water; and 5) the provision of food and water is

thus necessary for a ship to be seaworthy.

The principal problem with this argument is that the same common law that

creates the doctrine of seaworthiness recognizes the longstanding customs of

seafaring fishermen, i.e., that the fishermen are responsible for their provisions. The

ship is no less seaworthy if the fisherman provide their own food and water.

Seaworthiness does not oblige the shipmaster to provide food or beverage to the

fishermen.

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 B. Codification of the Common Law

Throughout our nation’s history, Congress has enacted statutes codifying

common law doctrines protecting seamen. These statutes often excluded seamen

aboard fishing vessels. Congress first imposed penalties upon merchant marine ships

who fail to provide their crews with access to proper food and water in the Act of

1790, Ch. 29 § 9, which states:

every ship or vessel . . . bound on a voyage across the Atlantic ocean,
shall, at the time of leaving the last port from whence she sails, have on
board . . . at least sixty gallons of water, one hundred pounds of salted
flesh meat, and one hundred pounds of wholesome ship-bread, for every
person on board . . . .

1 Stat. 135 (emphasis added). This protection applied only to ships on transatlantic

voyages and was thus inapplicable to local commercial fishing vessels. See The

Iathe, 12 F. Cas. 1145, 1146 (D. Maine 1856) (“The fishing trade . . . is, and always

has been, regulated by its own appropriate and peculiar system of laws,” and the Act

of 1790 cannot “be made to reach an ordinary fishing voyage”).

In 1873, Congress required the master of a vessel bound to a foreign port to

contract with each individual aboard, and specify a scale of provisions that would be

provided each seaman. 53 U.S.C. § 4511, Rev. Stat. 878. This statute also required

fishing vessels enter into contracts with their crews, but did not require a scale of

required provisions aboard fishing vessels. In 1898, Congress amended the statute

to modify the statutory scale of required provisions, and expressly stated that these
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food requirements “shall not apply to fishing or whaling vessels or yachts.” Rev.

Stat. Supp. 906, 908 (1898); H.R. Rep. No. 55-1657 at 2 (1898).

In 1983, Congress again revised the maritime law, now codified as Title 46 of

the United States Code. Pub. L. No. 98-89, 97 Stat. 500 (1983). 46 U.S.C. §§ 10301-

21 govern the rights of seaman on foreign and intercoastal voyages.2 Chapter 103

requires the vessel’s owner or agent to form a written agreement with each seaman.

This agreement must include “a scale of the provisions that are to be provided each

seaman.” 46 U.S.C. § 10302(b)(6). This agreement must also specify, “[a] seaman

shall be served at least 3 meals a day that total at least 3,100 calories, including

adequate water and adequate protein, vitamins, and minerals in accordance with the

United States Recommended Daily Allowances.” 46 U.S.C. § 10303.

The statutory protections afforded seamen aboard fishing vessels or on shorter

voyages is narrower than that afforded seamen on foreign and intercoastal voyages.

46 U.S.C. §§ 10601-03 govern the rights of a fishing vessel’s crew. Section 10601

requires the vessel’s owner or agent to “make an [] agreement in writing with each

seaman” which specifies “the [agreement’s] period of effectiveness”; the terms of

compensation; and “other agreed terms.” In contrast to Chapter 103, Chapter 106

does not require any guarantee for the provision of food or beverage aboard the
2
A “foreign” voyage is one between a port in the United States and a port in a foreign country
other than Canada, Mexico, or the West Indies. 46 U.S.C. § 10301(a)(1). An “intercoastal” voyage
is one between a port of the United States on the Atlantic Ocean and a port of the United States on
the Pacific Ocean. 46 U.S.C. § 10301(a)(2).
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fishing vessel. Chapter 106's savings clause states only that “[t]his section does not

affect a common law right of a seaman to bring an action to recover the seaman’s

share of the fish or proceeds.” 46 U.S.C. § 10602(c).

46 U.S.C. § 10501-09 similarly governs the rights of seamen on coastwise

voyages.3 It also requires the formation of a written agreement with each seaman.

However, this agreement need “not contain . . . a scale of provisions.” 46 U.S.C. §

10502(c). Like Chapter 106, and in contrast to Chapter 103, Chapter 105 does not

require the provision of food or water to the crew on coastwise voyages.

Congress has specifically instructed that marine employees on foreign and

intercoastal voyages are to receive three meals a day, while omitting a similar

provision in its statutory scheme governing fishing vessels and vessels on coastwise

voyages. “Where Congress includes particular language in one section of a statute

but omits it in another section of the same Act, it is generally presumed that Congress

acts intentionally and purposely in the disparate inclusion or exclusion.” CBS, Inc.

v. PrimeTime 24 Joint Venture, 245 F.3d 1217, 1225-26 (11th Cir. 2001). As we

have written before, we “must presume that Congress said what it meant and meant

what it said.” Shotz v. City of Plantation, 344 F.3d 1161, 1167 (11th Cir. 2003).

Congress thus intended to exempt the masters of fishing vessels and vessels on

3
A “coastwise” voyage is one between a port in one State and a port in another State (except
an adjoining State) to which the provisions of Chapter 103 of Title 46 are inapplicable. 46 U.S.C.
§ 10501(a).
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shorter journeys from the obligation to provide food and water to the crew. Indeed,

46 U.S.C. § 10301(b) specifies that the requirements of Chapter 103 do not apply to

a “vessel on which the seamen are entitled by custom or agreement to share in the

profit or result of a voyage,” and 46 U.S.C. § 10303(c) provides that its guarantee of

the provision of meals does “not apply to a fishing or whaling vessel or a yacht.”

Federal statutory law simply does not require that meals be provided to crew members

of commercial fishing vessels.

C. Statutes Prohibiting the Withholding of Food

18 U.S.C. § 2191 states that “[w]hoever, being the master or officer of a vessel

of the United States, … withholds from [the crew] suitable food and nourishment …

shall be fined under this title or imprisoned not more than five years, or both.” 46

U.S.C. § 11501 specifies that “[f]or continued willful disobedience to lawful

command or continued willful neglect of duty at sea, the seaman … may be confined,

on water and 1,000 calories, with full rations every 5th day, until the disobedience

ends.” Kurtz argues that these statutes require the provision of food and water to the

crew. We disagree. Prohibiting the withholding of food is not tantamount to creating

an affirmative duty to make it available on the vessel.

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 D. Legislative History

Furthermore, in enacting the exceptions in 26 U.S.C. § 274(n)(2)(E)(i) to the

general rule that one may deduct only 50 percent of his meal expenses while traveling

for business, Congress observed that the exception would not apply to fishing vessels:

The percentage reduction rule does not apply to an otherwise
allowable deduction for expenses of food or beverages that (1) are
required by Federal law (46 U.S.C. § 10303) to be provided to crew
members of a commercial vessel, or (2) are provided to crew members
of a commercial vessel operating on the Great Lakes, the St. Lawrence
Seaway, or the U.S. inland waterways that is of a kind that would be
required by Federal law to provide food or beverages to crew members
if operated at sea. (Thus, for example, the provision for full
deductibility would not apply with respect to fishing boats or foreign
vessels operating on the inland waterways).

H.R. Conf. Rep. No. 100-1104 (Vol. II) at 134-15, 1988-3 C.B. 473, 624-25

(emphasis added). Thus, it was Congress’s understanding that no federal law requires

the provision of food or beverage to seamen aboard a fishing vessel. Our review of

the historical evolution of the pertinent statutory scheme, the statutory language, the

legislative history of the tax code, and federal maritime common law - including the

seaworthiness doctrine - reveals that this is indeed the case. It follows apodictically

that the exception in 26 U.S.C. § 274(n)(2)(E)(i) to the 50 percent limitation on the

deduction of meal expenses while traveling for business is inapplicable to Kurtz.

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 CONCLUSION

For these reasons, no federal statute or common law requires a shipmaster to

provide food or water to seamen aboard a commercial fishing vessel. Because no

federal law requires food or beverage to be provided to crew members of a

commercial fishing vessel, Kurtz can deduct only 50% of the meal expense. The

judgment of the Tax Court is therefore AFFIRMED.

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