Deno v. Progressive: Intrastate, Dam-Blocked Reservoirs Are Not “Navigable Waters” for Admiralty Jurisdiction; Regulatory Labels and Consent Decrees Don’t Control

1. Introduction

Case: Deno v. Progressive Casualty Insurance Company, No. 25-10507 (5th Cir. Mar. 5, 2026) (per curiam) (unpublished).
Parties: Douglas Deno (yacht owner; Plaintiff–Appellant) versus multiple insurers and related parties (Defendants–Appellees), many appearing as subrogees of damaged-vessel owners.
Backdrop: A fire and explosion aboard a motor yacht at Silver Lake Marina on Grapevine Lake, Texas, injured a person and damaged numerous other boats.

The central dispute was not fault for the explosion but forum: whether the federal district court had admiralty jurisdiction to entertain Deno’s petition under the Limitation of Liability Act. Deno invoked the Act to cap exposure from claims arising out of the incident. The insurers countered with a jurisdictional attack under Rule 12(b)(1), arguing that the incident did not occur on navigable waters and therefore fell outside admiralty.

The key issues on appeal were:

  • Navigability (location test): Is Grapevine Lake “navigable waters” for admiralty purposes under Fifth Circuit/Supreme Court standards?
  • Role of regulatory definitions: Do “navigable waters”/“waters of the United States” definitions in environmental/Corps regulations establish navigability for admiralty jurisdiction?
  • Effect of an agency consent agreement: Can an EPA consent agreement labeling the lake “navigable” bind federal courts in unrelated litigation?
  • Procedure: Was Deno wrongly denied jurisdictional discovery, and did he preserve that issue?

2. Summary of the Opinion

The Fifth Circuit affirmed dismissal for lack of subject-matter jurisdiction. The court held Deno failed the location component of admiralty tort jurisdiction because Grapevine Lake is an intrastate, landlocked reservoir separated from the Trinity River by a dam blocking vessel passage. Under governing navigability precedent—especially The Daniel Ball and Fifth Circuit authority (Guillory v. Outboard Motor Corp.)—that meant the incident did not occur on “navigable waters” for admiralty purposes.

The court also rejected Deno’s reliance on:

  • Regulatory definitions in 33 C.F.R. § 329.4 and 40 C.F.R. § 120.2 as inapposite to admiralty jurisdiction;
  • An EPA consent agreement as non-binding on nonparties and irrelevant to the admiralty navigability inquiry; and
  • An expert report that relied on those same regulatory concepts rather than the controlling admiralty tests.

Finally, the court held the “jurisdictional discovery” argument was forfeited because Deno never moved for such discovery in the district court; a passing footnote about a FOIA request was not enough to preserve the issue.

3. Analysis

3.1 Precedents Cited

Admiralty jurisdiction framework: location + connection

The court applied the Supreme Court’s two-part test for admiralty tort jurisdiction from Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527 (1995): a plaintiff must satisfy both (1) location and (2) connection to maritime activity. The panel also cited Fifth Circuit applications of that test in In Re La. Crawfish Producers, 772 F.3d 1026 (5th Cir. 2024) and Bommarito v. Belle Chasse Marine Transp., LLC, 159 F.4th 297 (5th Cir. 2025).

Critically, the court used these cases to justify an efficiency move common in admiralty analysis: when location fails, courts need not reach connection. That is why the opinion, like the district court, did not analyze whether a marina yacht explosion “potentially disrupts maritime commerce” or bears a “substantial relationship” to traditional maritime activity—because, absent navigable waters, admiralty does not attach.

Navigability standard for admiralty: interstate commercial highway concept

The navigability rule was drawn from the foundational Supreme Court decision The Daniel Ball, 77 U.S. 557 (1870), which defines navigable waters as those that form, “in their ordinary condition,” a continued highway for commerce with other states or foreign countries—either alone or by “uniting with other waters.” The panel emphasized the interstate dimension: waters wholly within one state and not serving as a conduit to interstate commerce generally are not navigable for this purpose.

The court reinforced that view with Fifth Circuit authority: Guillory v. Outboard Motor Corp., 956 F.2d 114 (5th Cir. 1992), which held a wholly intrastate reservoir incapable of interstate travel was non-navigable for admiralty. Guillory functioned here as the closest factual analog: a reservoir bounded within one state, used for recreation, and lacking interstate commercial navigation.

The opinion also cited The Propeller Genesee Chief v. Fitzhugh, 53 U.S. 443 (1851) to reiterate the commercial rationale for admiralty jurisdiction: where interstate/national commerce by water exists, the jurisdictional reason is “precisely the same.” That reference underscored why purely local, cut-off lakes are typically outside admiralty.

Limitation Act does not itself create jurisdiction

The court cited In Re N&W Marine Towing, LLC, 90 F.4th 724 (5th Cir. 2024) for the statutory ability to file a limitation action, but relied on Guillory v. Outboard Motor Corp. for the crucial limiting principle: the Limitation Act “does not confer admiralty jurisdiction.” A petitioner must independently establish admiralty jurisdiction under § 1333 and the location/connection tests.

“Navigability” is context-specific, but context here is admiralty

Deno tried to import environmental/agency definitions of “navigable waters” and “waters of the United States.” The panel implicitly fenced that effort off using Kaiser Aetna v. United States, 444 U.S. 164 (1979), which warns that “navigability” varies with the purpose for which the concept is invoked. The lesson applied here: regulatory navigability (for Clean Water Act or Corps administration) is not necessarily admiralty navigability.

Consent decrees/agreements do not bind nonparties (and don’t decide jurisdiction)

To reject Deno’s reliance on an EPA consent agreement footnote labeling the lake navigable, the court drew from:

  • United States v. Armour & Co., 402 U.S. 673 (1971) for the contract-like nature of consent decrees: they define obligations for the parties to that decree.
  • Chisom v. Louisiana ex rel. Landry, 116 F.4th 309 (5th Cir. 2024) for the proposition that consent decrees reflect negotiated precise terms among parties.
  • Martin v. Wilks, 490 U.S. 755 (1989) for the rule that settling parties cannot dispose of third-party rights without their agreement—supporting the conclusion that an agency settlement cannot bind a federal court (or third parties) in unrelated litigation.

This line of cases buttressed a practical jurisdictional point: subject-matter jurisdiction cannot be stipulated into existence by an agency settlement to which the litigants and the court are strangers.

Procedural preservation: forfeiture of jurisdictional discovery argument

Deno’s complaint that the district court should have allowed jurisdictional discovery failed primarily on preservation grounds. The panel cited United States v. Zuniga, 860 F.3d 276 (5th Cir. 2017) to support the principle that issues not properly raised below are forfeited on appeal. The court treated a passing footnote about FOIA as insufficient to constitute a motion or request for discovery relief.

Out-of-circuit navigability and “capable of commerce” arguments

Deno invoked Price v. Price, 929 F.2d 131 (4th Cir. 1991) to argue navigability does not require current commercial use, only capability. The Fifth Circuit distinguished Price: there, the water body was found capable of commercial use even if not currently used; here, Grapevine Lake was not merely unused—it was structurally incapable of serving as an interstate commercial highway because it is landlocked and dam-blocked.

Standards of review and Rule 12(b)(1) mechanics

The court relied on Morris v. Thompson, 852 F.3d 416 (5th Cir. 2017) for de novo review of 12(b)(1) dismissals, the plaintiff’s continuing burden to establish jurisdiction, and the district court’s ability to consider record evidence and resolve disputed jurisdictional facts. It also cited Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006 (5th Cir. 1998) for the general standard governing dismissal (as stated in Morris).

3.2 Legal Reasoning

  1. Admiralty jurisdiction required more than a Limitation Act filing. The opinion begins from the premise (from Guillory) that the Limitation Act is procedural/remedial and does not itself generate admiralty jurisdiction. Therefore, Deno had to show the underlying tort met the Grubart location/connection requirements.
  2. Location test controlled the outcome. The panel accepted the district court’s approach: if the tort did not occur on navigable waters, admiralty fails without reaching the connection test.
  3. Grapevine Lake failed the admiralty navigability standard as a matter of governing doctrine and record facts. The court treated several facts as decisive under The Daniel Ball and Guillory:
    • Artificial reservoir built for flood control/water conservation;
    • Located entirely within Texas (intrastate);
    • Landlocked and separated by a dam that blocks vessel passage to the Trinity River;
    • No evidence of actual or potential interstate vessel travel from Grapevine Lake.
    Even if the Trinity River is navigable in parts, the lake’s inability to connect to it by vessel meant it could not “unite with other waters” to form a continued interstate commercial highway.
  4. Regulatory definitions did not answer the admiralty question. The court rejected reliance on 33 C.F.R. § 329.4 (Corps administration context) and 40 C.F.R. § 120.2 (Clean Water Act context) because the relevant question was navigability for admiralty jurisdiction under The Daniel Ball line, not “waters of the United States” for regulatory programs.
  5. EPA consent agreement language could not bind the court or establish jurisdiction. Citing Armour, Chisom, and Martin v. Wilks, the panel treated the consent agreement as, at most, a settlement term among others—not a legal adjudication controlling admiralty navigability in unrelated litigation.
  6. Expert evidence was discounted as legally mis-aimed. The court’s critique was not that experts can never help on navigability, but that Tulloch’s opinion relied on the wrong legal yardstick (regulatory definitions) rather than the admiralty “interstate highway of commerce” standard. An expert’s conclusion does not substitute for the governing legal test.
  7. Jurisdictional discovery complaint was forfeited. Because Deno never sought jurisdictional discovery via motion or similar request, he could not fault the district court for not granting relief he did not ask for in a procedurally meaningful way.

3.3 Impact

Although unpublished and therefore non-precedential under Fifth Circuit rules, the decision is significant as a clear application of existing doctrine to a common modern setting: explosions/fires at recreational marinas on inland reservoirs. Its likely practical effects include:

  • Reinforcing a bright-line navigability approach for intrastate, dammed reservoirs. Parties litigating marina incidents on Texas lakes (and similarly situated waters) should anticipate aggressive 12(b)(1) challenges where the water body is wholly intrastate and not vessel-connected to an interstate commercial route.
  • Limiting “regulatory navigability” arguments. The opinion cautions that Clean Water Act or Corps regulatory classifications—often easier to document—may not move the needle in admiralty. Future litigants will need evidence keyed to The Daniel Ball standard (interstate commercial highway capability) rather than citations to regulatory texts.
  • Reducing reliance on agency settlements as “proof” of navigability. The court’s consent-decree discussion signals skepticism of attempts to bootstrap jurisdiction from third-party settlements.
  • Procedural lesson: preserve jurisdictional discovery issues. Parties facing a factual jurisdictional dispute should formally move for jurisdictional discovery and explain what facts discovery is expected to yield and why those facts are material under the controlling legal test.
  • Forum consequences for limitation actions. If admiralty jurisdiction is absent, the Limitation Act petition cannot proceed in federal admiralty; claimants and vessel owners may be relegated to state court litigation and insurance coverage disputes without the consolidating/injunctive features of Supplemental Rule F.

4. Complex Concepts Simplified

  • Admiralty jurisdiction: Federal court authority over maritime matters. For torts, it generally requires (i) an incident on navigable waters and (ii) a meaningful tie to maritime activity.
  • Location test (“navigable waters”): A gatekeeping requirement. Under The Daniel Ball, waters are navigable for admiralty when they are (or can be) used as a highway of interstate or international commerce by water—often meaning a practical vessel connection to other states’ waters.
  • Connection test: Even if location is met, the incident must be of a type potentially disruptive to maritime commerce and arise from activity substantially related to traditional maritime activity (from Sisson v. Ruby, 497 U.S. 358 (1990), and Grubart).
  • Limitation of Liability Act: Allows a vessel owner, in certain circumstances, to limit liability to the value of the vessel and pending freight—but only if a federal court has admiralty jurisdiction in the first place.
  • Rule 12(b)(1): A motion asserting the court lacks subject-matter jurisdiction. Courts may consider evidence beyond the pleadings and resolve jurisdictional fact disputes.
  • Subrogation / “as subrogee of”: An insurer pays its insured and then pursues the insured’s rights against responsible parties. Here, insurers stood in the shoes of damaged-boat owners.
  • Consent decree/agreement: A settlement embodied in a court order (or comparable formal agreement). It binds the parties who agreed to it; it usually does not bind strangers or decide legal questions for other cases.
  • Forfeiture (issue preservation): If a party does not properly raise an issue in the trial court—such as by filing a motion for jurisdictional discovery—an appellate court may refuse to consider it later.

5. Conclusion

Deno v. Progressive is a straightforward but instructive application of admiralty’s jurisdictional boundary lines. The Fifth Circuit affirmed dismissal because Grapevine Lake—an intrastate, landlocked, dam-blocked reservoir—does not qualify as “navigable waters” under The Daniel Ball and Guillory v. Outboard Motor Corp. for admiralty tort jurisdiction. The opinion also underscores that environmental regulatory definitions and third-party agency consent agreements do not control the admiralty navigability inquiry, and it highlights the procedural necessity of properly requesting jurisdictional discovery in the district court.