This section contains the nature of the case and procedural background.

Makela (P) was struck and seriously injured by a car while crossing Harbor Drive in Duluth, Minnesota. The driver of the car was allegedly intoxicated. Both P and the car's driver had just disembarked from the S.S. Flamingo after a three-hour privately chartered cruise around the Duluth-Superior harbor. The charter cruise was advertised as a 'booze cruise.' Ds had brought several kegs of beer on board. The Flamingo was owned by Flamingo Excursions, Inc. (D), and operated by Duluth Superior Excursions, Inc. (D). P's filed a tort claim against Ds. Ds filed an action in federal court seeking to limit their potential liability to the value of the S.S. Flamingo, her equipment, and any pending freight as of August 12, 1977. P's claim against Ds was that Ds inadequately supervised the passengers aboard the Flamingo, who consequently became illegally intoxicated, and that Ds failed to provide a safe means of exit for these passengers. The district court dismissed Ds’ action for want of admiralty jurisdiction. Ds appealed.

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