General Practice, Solo & Small Firm DivisionMagazine

 
Volume 17, Number 6
September 2000

TRIAL PRACTICE

U.S. TREASURE TROVE LAW

By Lawrence D. Bradley, Jr.

A tocha: The First Big Case. The first highly publicized treasure trove case evolved from discovering the wreck of the Spanish galleon Atocha, which sank off the Florida Keys and was located by Treasure Salvers. The U.S. Supreme Court declared Treasure Salvers the sole owner of the wreck and its treasure against claims of ownership by the United States, Florida, and others. Atocha set the pattern for treasure trove jurisdiction and litigation.

According to this pattern, the finder of the sunken treasure wreck files an in rem admiralty action in the district court that has jurisdiction against the wreck and its contents under the legal personification of the ship doctrine. The finder seeks to be declared sole owner under the Law of Finds on the premise that the treasure had been abandoned or, alternatively, for a salvage award in the event that the wreck and treasure have not been abandoned. The treasure wreck finder must establish that the court has jurisdiction. To establish in rem jurisdiction, the vessel or object must be within the jurisdiction of the district court, which extends a marine league or three nautical miles offshore. The treasure wreck finder deposits something from the wreck in the Registry of the Court to establish in rem presence of maritime property within the court’s jurisdiction.

Central America: Treasure Hunters versus Underwriters versus States. After Columbus-America Discovery Group located the wreck of the Central America 160 miles off the coast of South Carolina, it filed in the district court an in rem action against the wreck and cargo, claiming it under the Law of Finds and alternatively under the Law of Salvage. To establish the court’s jurisdiction, Columbus-America brought into court several artifacts and pieces of coal from the ship. Although jurisdiction did not extend beyond the three-mile limit, the court, on the basis of the artifacts deposited with the marshal, granted salvage rights to Columbus-America and issued an injunction against all others. To establish its right to proceed with salvaging or recovering the treasures, Columbus-America had to prove to the court that it had the financial resources, organizational ability, and the archeological skill to recover the ship’s treasure properly. Several underwriters intervened, claiming ownership of the gold on the basis of payment of insurance claims shortly after the disaster. Because the underwriters had done nothing for more than 100 years, the court awarded Columbus-America 92.5 percent of the treasure recovered. Abandoned Shipwreck Act. Under the Abandoned Shipwreck Act, title to abandoned shipwrecks embedded in the submerged lands or territorial waters of a state, or eligible for listing in the National Register, is granted to the United States and then transferred to the various states. The Act covers the three nautical miles from shore but does not reach wrecks and treasures further offshore. If the wreck and its treasures have been abandoned and are embedded in the bottom, the state acquires title. The treasure finder’s action is against the state; because the Eleventh Amendment prevents a claim against the state, the action must be dismissed.

Brother Jonathan: Not Abandoned or Imbedded. In California v. Deep Sea Research, the Supreme Court determined what a state had to do to establish its title claim to the sunken wreck and treasure under the Act and, thus, to destroy maritime jurisdiction. The Brother Jonathan sank off the coast of Northern California in the vicinity of Crescent City. Deep Sea Research located the wreck within three miles of the coast. Because Deep Sea Research had bought the subrogation rights from the insurance companies that had paid cargo claims, it had title to the gold. Videotape of the wreck confirmed that the ship was largely intact, resting upright on the ocean floor, and not embedded. The state moved to dismiss Deep Sea Research’s in rem complaint, arguing that it was a claim against state property and prohibited by the Eleventh Amendment. The Supreme Court ruled that a state’s mere assertion of a claim to a sunken shipwreck and its treasures does not invoke the Eleventh Amendment and bar adjudication of competing claims to the shipwreck in the federal courts. The case was sent back to the district court to adjudicate the parties’ claims. Because Deep Sea Research had possession of the ship, California had to prove abandonment and that the ship was imbedded in the seabed. The state was unable to prove that the ship had been abandoned by her owner by specific proof that the owner intended to abandon the ship and her treasures. Only in an extreme case will a court infer an owner’s intent to abandon.

Titanic: Quasi in Rem Jurisdiction. After R.M.S. Titanic, Inc., located the Titanic, it filed a maritime action in rem. To take jurisdiction over the wreck, the court created and exercised "quasi in rem jurisdiction," awarded salvage rights to R.M.S. Titanic, and issued an injunction to prevent intermeddlers from interfering with the salvage operation. The court later rejected a challenge to the quasi in rem jurisdiction concept and entered an injunction protecting the salvage rights of R.M.S. Titanic against any person in the world "having notice of the court’s order" and prohibiting any person from "conducting search, survey or salvage operations or obtaining any image photographing or entering Titanic and recovering any objects." When Deep Ocean Expeditions announced plans to take members of the public to visit and photograph the wreck, R.M.S. Titanic was granted a preliminary injunction to prevent Deep Ocean Expeditions and any other party from visiting or photographing the wreck site. The Fourth Circuit reversed insofar as the injunction prohibited the visiting, viewing, searching, surveying, photographing, and obtaining images of the wreck or the wreck site, provided those activities did not constitute a salvage effort or interfere with salvage operations.

Lusitania: Salvage Claim Denied. After the Lusitania, owned by Cunard Steamship Company, sank, the hull underwriters paid a total loss claim to Cunard. In 1986, an English court found that American F. Gregg Bemis, Jr., had established title to the wreck through a chain of title transfers and that the British Crown did not have a valid claim. Because the contents of the wreck were abandoned to the extent that Bemis recovered or brought up the contents and no one had claimed them, the English court ruled Bemis was entitled to them under the Law of Finds. Bemis filed the in rem action on the basis of the few artifacts he deposited in the Registry of the Court. Although the court agreed that Bemis had title to the wreck, it determined that Bemis acquired title only to the contents recovered. The court denied Bemis’s claim to salvage, finding that Bemis had not shown that he had sufficient possession of the wreck’s contents to support his claim of title nor had he established a sufficient ongoing salvage operation to justify the right to an exclusive salvage operation.

Lawrence D. Bradley, Jr., is a lawyer with Pillsbury Madison & Sutro in Los Angeles, California.

This article is an abridged and edited version of one that originally appeared on page 24 of Experience, Spring 2000 (10:3).

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