Application of Salvage Law and the Law of Finds to Sunken Shipwreck Discoveries
Modern technology has made the location and retrieval of shipwrecks possible, but with the rise of statist attitudes in the United Nations, that may change
By Mark A. Wilder Mark A. Wilder, a 1999 graduate of IN THE 1977 motion picture, The Deep, a the University of Cincinnati Law School young couple, while scuba diving in the and member of the Ohio bar, is a clerk for Judge Robert S. Kraft in the Hamilton Bahamas, discover an ampoule of mor- County (Ohio) Common Pleas Court phine lying near an old World War II judge. He received his B.A. degree in freighter. After befriending a local treasure 1987 from the University of Cincinnati. salvor, the group endeavors to remove all This is a revised and condensed ver- the morphine ampoules from the wreck sion of the paper with which he won an and destroy the drugs before they fall into honorable mention in the 1999 IADC Le- the hands of a local bad guy. But the ad- gal Writing Contest. His interest in the venture deepens when an old grenade ex- subject derives from the fact that he is an plodes, causing the “floor” of the wreck to avid scuba diver. collapse, revealing an 18th century Span- ish vessel loaded with treasure. In the happy ending, which only Hollywood salvage has as its origins the sea laws of could create, the team recovers a booty of Byzantium and the Mediterranean seaport gold jewelry, the morphine is destroyed cities,2 and its earliest roots can be traced and the bad guys get their just comeup- to the Rhodian era, 900 years before the pance. Christian era. Rhodian laws were the first For the adventuresome, this film had a to allow a salvor to claim a reward based little bit of everything: beautiful scuba div- on a percentage of the cargo or ship recov- ing, treasure, danger, sharks and even voo- ered and the danger involved in the opera- doo. What it did not have was the probable tion. Awards varied from 10 percent for litigation over ownership rights in the trea- cargo washed ashore to between 33 and 50 sure. percent for recovered cargo, based on the depth of a shipwreck. LAW OF SALVAGE The law of salvage has three areas: Salvage has been defined as “service property salvage, life salvage, and treasure voluntarily rendered in relieving property salvage, the last being the focus of this ar- 3 from an impending peril at sea or other ticle. In 1869 in The Blackwall, the U.S. navigable waters by those under no legal Supreme Court set forth the basic prin- obligation to do so.”1 The law of marine ciples of maritime salvage, including the principle that a salvor’s efforts need to be successful in order to recover a reward, which is known as the “no cure, no pay” 1. 3A MARTIN J. NORRIS, BENEDICT ON ADMI- principle in contract salvage. The Court RALTY: THE LAW OF SALVAGE § 2, at 1-4 (7th ed. 1991). This is the source of several statements in stated: this article. Salvage is the compensation allowed to 2. THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW § 14-1, at 782 (1994). persons by whose assistance a ship or her 3. 77 U.S. 1 (1869). cargo has been saved, in whole or in part, Application of Salvage Law and the Law of Finds Page 93
from impending peril on the sea, or in recov- The law of finds has its root in the com- ering such property from actual loss, as in mon law in cases such as Armory v. the cases of shipwreck, derelict, or recap- Delamire7 and Pierson v. Post.8 In Armory, ture. Success is essential to the claim; as if a 12th century case, a chimney sweep who the property is not saved, or if it perish, or in found an apparently lost jewel was held by case of capture if it is not retaken, no com- the English court to have title superior to pensation can be allowed.4 all others except the true owner. In 1805 in The Court stated that providing compen- Pierson, a New York court denied a sation in the maritime context is consonant hunter’s claimed right to a fox, holding with the public policy of encouraging res- that mere pursuit of the animal did not vest cues at sea: title to it. Title was given to a second hunter who intervened and actually re- Compensation as salvage is not viewed by duced the fox to his possession. the admiralty courts merely as pay, on the principle of a quantum meruit, . . . but as a Application of the law of finds “neces- reward for perilous services, voluntarily ren- sarily assumes that the property involved 9 dered, and as an inducement to seamen and was never owned or was abandoned,” and others to embark in such undertakings to therefore the “ancient and honorable prin- save life and property. Public policy encour- ciple of ‘finders, keepers’ applies.”10 ages the hardy and adventurous mariner to The common law doctrine of finds law engage in these laborious and sometimes is available to a plaintiff in admiralty court dangerous enterprises, and with a view to under the “savings to suitors” clause of the withdraw him every temptation to embezzle- Judiciary Act of 1789, which preserves the ment and dishonesty, the law allows him, in common law remedy. Thus, a plaintiff is case he is successful, a liberal compensa- permitted to plead both salvage law and tion.5 the law of finds, so that if the court denies The Blackwall is often cited for the fac- finds, salvage law can serve as a backup.11 tors relevant in determining the amount of a salvage award, echoing the factors first LAW OF SALVAGE V. established during the Rhodian period: LAW OF FINDS (1.) [t]he labor expended by the salvors in Once an admiralty court establishes ju- rendering the salvage service; (2.) [t]he risdiction, the next step is to decide promptitude, skill, and energy displayed in whether the law of salvage or the law of rendering the service and saving the prop- finds applies. This inquiry ultimately re- erty; (3.) [t]he value of the property em- quires examination of the particular facts ployed by the salvors in rendering the ser- and circumstances of each case. The key vice, and the danger to which such property issue is whether the owner of the vessel— was exposed; (4.) [t]he risk incurred by the salvors in securing the property from the im- pending peril; (5.) [t]he value of the prop- erty saved; (6.) [t]he degree of danger from 4. Id. at 12 (emphasis supplied). which the property was rescued.6 5. Id. at 14. 6. Id. at 13-14. For factors during the Rhodian period, see NORRIS, supra note 1. LAW OF FINDS 7. 1 Strange 505 (K.B. 1172). 8. 3 Cai. R. 175 (Sup.Ct. N.Y. 1805). The focus of salvage law is on the right 9. Hener v. United States, 525 F.Supp 350, 356 to compensation for one’s successful ef- (S.D. N.Y. 1981). 10. Martha’s Vineyard Scuba Headquarters Inc. forts, not title to the property. Title is pre- v. Unidentified, Wrecked and Abandoned Steam sumed to still exist in the original owner. Vessel, 833 F.2d 1059, 1065 (1st Cir. 1987). In contrast, the object of the law of finds is 11. See Barlow Burke, Jr., A Reprise of the Case of Eads v. Brazelton, 44 ARK. L. REV. 425, 456 & to vest title in the person who reduces n.129 (1991). See also SCHOENBAUM, supra note 2, abandoned property to his possession. § 2-2, at 79. Page 94 DEFENSE COUNSEL JOURNAL—January 2000 or an insurer that asserts ownership property, the ship’s boilers and machinery, through subrogation—has abandoned the and a portion of the lead. However, the wreck and its cargo. Plaintiffs seeking title majority of the lead pigs and bars were to a wreck or a preliminary injunction for left. sole exploration rights usually describe the Two years later, an island formed over vessel as “wrecked and abandoned.”12 the wreck large enough to support a stand Abandonment in the maritime salvage of trees 30 to 40 feet tall. The island lasted context has been defined as the “act of for about 20 years before being washed leaving or deserting such property by those away by the river. who were in charge of it, without hope on In 1855, Brazelton attempted to salvage their part of recovering it and without the the remaining lead, but he was drawn away intention of returning to it.”13 However, the from the wreck site on other business and mere fact that property is lost at sea does mechanical problems. Before he left the not divest the owner of title.14 site, however, he placed a buoy marking As a general principle, an admiralty the sunken vessel and also marked trees court will favor salvage law over the law along the shoreline to enable him to find of finds because salvage law is more sup- the wreck in the event the buoy was portive of the public policy issues of pres- washed away. About eight months later, ervation of maritime property and return of Eads, a rival salvor, began salvaging op- distressed property to a use beneficial to erations and recovered a load of lead. society. As a result, the law of finds ap- Despite a preliminary injunction plies in only two situations: “(1) where the awarded to Brazelton preventing Eads owners have expressly and publicly aban- from further salvaging operations, Eads doned their property; and (2) where items returned to the wreck site alongside are recovered from an ancient shipwreck Brazelton and continued his recovery ef- and no one comes forward to claim forts. The trial court fined Eads $1,000, them.”15 which was paid to Brazelton as compensa- tory damages, and Eads appealed. A. Cases Applying Law of Finds The Supreme Court of Arkansas was According to one writer,16 Eads v. faced with two issues—had the America Brazelton17 was the first U.S. maritime been abandoned and did Brazelton’s mark- case in which the law of finds was applied ing of the wreck constitute possession of to a sunken shipwreck. Eads involved the the wreck. The court held that the vessel steamboat America, which sank in the had been abandoned, but that possession Mississippi River between Tennessee and was lacking. Possession, the court held, re- Arkansas in 1827 with a load of approxi- quires an actual taking with the “intent to mately 3,000 lead “pigs,” shot and bars. In reduce it to possession.” The court stated the two weeks after the sinking, the owners that constructive possession would have of the America salvaged animal furs, U.S. been found had Brazelton placed his boat over the wreck with the intent and ability to raise the cargo, as this would give rival salvors notice of possession and intent to 12. See Craig N. McLean, Law of Salvage Re- claimed: Columbus-America Discovery v. Atlantic salvage. Mutual, 13 BRIDGEPORT L. REV. 477, 499 (1993). Brady v. Steamship African Queen dealt 13. See NORRIS, supra note 1, § 134, at 9-10. with which of two rival salvors were to be 14. See The Akaba, 54 F. 197, 200 (4th Cir. 18 1893). granted title to shipwrecked property. In 15. SCHOENBAUM, supra note 2, § 14-7, at 800; 1958, the African Queen ran aground off Columbus-America Discovery, 974 F.2d at 460-61. the coast of Maryland. The ship split in 16. McLean, supra note 12, at 480. 17. 22 Ark. 499 (1861). two, the stern section exposed on a shoal, 18. 179 F.Supp. 321 (E.D. Va. 1960). while the bow floated some distance away. Application of Salvage Law and the Law of Finds Page 95
One salvor named Warner claimed title to While not deciding the constitutionality the stern section, alleging that he boarded of the Virginia statute, which permitted the this portion of the vessel, posted notice of state to lay claim to shipwrecked property, his claim on the vessel, and published no- the court held that since the commissioner tice in a newspaper asserting his legal was fully aware of the ship’s whereabouts rights. and cargo, his inaction over the 66-year However, a rival salvor, collectively time frame precluded him from granting named Brady, was found by the court to any exclusive salvage rights to a single have performed all the incidents necessary party. So, the salvors who had recovered for a successful salvage claim. Brady had 123 tons of the marble were awarded title boarded the stern section and remained over the salvors who were subsequently aboard for more than six months before granted the exclusive salvage rights by the eventually successfully towing the stern commissioner. While the lapse of time and section to port. Abandonment was not an nonuser are not sufficient in and of them- issue because the owner and its underwrit- selves to constitute an abandonment, the ers had affirmatively abandoned the vessel. court stated, they are factors that may, un- In addition, the salvage services far out- der certain circumstances, give rise to an weighed the value of the stern section re- implication of intent to abandon. covered. Although not involving an ancient Considering these facts, the federal dis- vessel, Moyer v. Wrecked and Abandoned trict court found it unnecessary to resolve Vessel, Known as the Andrea Doria dealt the competing claims through a salvage or with the famous Andrea Doria wreck and finds law application. Rather, it focused on illustrates use of the inference of abandon- the elements of possession and intent to ment to award title to a salvor.20 Andrea salvage and found title in the stern section Doria, an Italian vessel, collided with in Brady, basing its decision on the physi- the Swedish liner Stockholm and sank cal actions in recovering the property on July 26, 1956, off the coast of New rather than Warner’s assertion of legal Jersey in international waters. Societa rights through publication. D’Assicurazione (Societa), an Italian in- All in all, with abandonment found to surer, paid the claims for the loss of the exist, the court nonetheless could be con- vessel and was assigned ownership rights sidered to have applied the law of finds. through subrogation. In Wiggins v. 1,100 Tons, More or Less, John Moyer sought a preliminary in- of Italian Marble, salvors were awarded junction allowing him the exclusive right title to the 123 tons of marble they raised to find and salvage the ship’s bell and any from a Norwegian barkentine, the Cynthia, remaining Italian mosaic friezes that may which ran aground off the coast of Vir- be discovered. He previously had salvaged ginia in 1894.19 The vessel laid in shallow two Italian mosaic friezes and had them in water with its main mast above water for his possession at the time the case was 66 years before successful salvage efforts heard. were attempted. The federal district court found aban- The controversy was whether the Vir- donment and awarded title to Moyer of the ginia Commissioner of Wrecks had author- two friezes already recovered. It also ity to grant exclusive salvage rights to one granted him a preliminary injunction for salvor over another. The federal district the exclusive right to search and salvage court found that he did not possess such the ship’s bell and any remaining friezes power under a Virginia statute because the that he might discover. statute merely allowed the commissioner to act as a bailee of the property for the 19. 186 F.Supp. 452 (E.D. Va. 1960). true owner. 20. 836 F.Supp. 1099 (D. N.J. 1993). Page 96 DEFENSE COUNSEL JOURNAL—January 2000
Relying on Wiggins, the court stated In addition to the abandonment issue, that an intent to abandon may be inferred the court’s decision fostered the growth of from circumstantial evidence including modern treasure hunting through its treat- lapse of time and nonuse by the owner. ment of the definition of marine peril and Although Societa never actually waived its the government’s sovereign prerogative ownership interest, the court inferred aban- claim. The court determined that the donment because of its inaction in the face United States had misunderstood salvage of open salvage efforts on the Andrea law when the United States asserted that a Doria by amateur and professional salvors. salvage claim did not exist. The United Societa had not mounted any salvage ef- States had argued that the plaintiff was not forts of its own after it had rejected over a entitled to a salvage award because the hundred salvage contract offers, had failed necessary element of marine peril was to assert its title rights in items recovered lacking. The court responded by expanding ranging from a bronze statute to the the definition of marine peril to include the purser’s safe, and failed to take any mea- risk of loss pertinent to a sunken vessel. sures to assert title during an internation- Marine peril is not limited to the usual ally televised program featuring the recov- threats of fire, piracy and storms, it stated, ery and opening of the safe. but also includes the risk of loss due to Perhaps one of the most famous and “actions of the elements.” richest of wrecks to be discovered is re- The court also rejected the govern- counted in Treasure Salvors Inc. v. Un- ment’s argument that American law had identified Wrecked and Abandoned Vessel adopted the British common law doctrine Believed to be the Nuestra Senora de under which abandoned property recov- Atocha.21 In 1622, the Atocha, as a mem- ered by private citizens goes to the state. It ber of a fleet of Spanish galleons loaded adopted an “American Rule” vesting title with gold, sank during a hurricane near the in the finder. Florida keys. The loss of the fleet included In other cases, although a finding of 550 dead and treasure estimated at the time abandonment and the subsequent applica- of the case to be worth $250 million. In tion of the law of finds would lead one to 1971, an expedition team led by treasure assume title in the finder, the 11th Circuit hunter Mel Fisher located the Atocha and in Chance v. Certain Artifacts Found and sued for possession and title to the wreck Salvaged From the Nashville22 and Klein v. and its cargo. The only other party to the Unidentified Wrecked and Abandoned litigation was the United States, which also Sailing Vessel 23 held otherwise, relying on claimed title. an exception to the law of finds: where The Fifth Circuit affirmed the district abandoned property is found embedded in court’s decision applying the law of finds the soil, the property belongs to the land- and holding for Fisher’s team. However, owner. In both cases, the courts awarded the court declined to find exclusive title in title to both shipwrecks and their cargoes the salvors, despite a stipulation by the to the respective governments where the parties that the vessel had been abandoned. wrecks were found. In doing so, the court left open claims by Chance involved the Civil War era others, if any, who were not parties to the steamship, The Nashville, which was cap- case. tured by the Confederates and used to de- stroy Union shipping. Rechristened The Rattlesnake, it ran aground and was subse- 21. 569 F.2d 330 (5th Cir. 1978) (Treasure Sal- quently destroyed and sunk by a Union vors I). vessel while on the Ogeechee River in 22. 606 F.Supp. 801 (S.D. Ga. 1984), aff’d mem., 775 F.2d 302 (11th Cir. 1985). Georgia in 1863. The vessel became par- 23. 758 F.2d 1511 (11th Cir. 1985). tially imbedded in the riverbed during its Application of Salvage Law and the Law of Finds Page 97 slumber encompassing more than a cen- and any salvage award. While the applica- tury. tion of the law of finds was correct, given In 1979, salvors applied for permission the abandonment inferred from the passage from Georgia to recover The Nashville, but of time, the exception whereby title is that was denied. Nevertheless, they com- given to the landowner was found to apply menced salvaging, recovered numerous since the vessel was embedded on national items and filed an action to ascertain title park soil. or a possible salvage award. A dissent relied on the Antiquities Act The federal district court concluded that of 1906 instead of the exceptions to the the law of finds applied because an infer- law of finds to deny the plaintiff title in the ence of abandonment arose from the cir- recovered property. The dissent reasoned cumstance that The Nashville had re- that the plaintiff was entitled to a salvage mained unclaimed since its sinking in award, however, because his efforts actu- 1863. Instead of awarding title to the sal- ally located the vessel, whereas the United vors as finders, however, the court ruled States was only generally aware of the that since the vessel was embedded on vessel’s existence, not its precise location. state property, even though partially, Geor- gia was the owner, thereby falling within B. Cases Applying Salvage Law an exception to the law of finds. The court In Zych v. Unidentified, Wrecked and also denied any salvage claim because of Abandoned Vessel, Believed to be the SB Georgia’s 11th Amendment defense and “Lady Elgin,”24 the side-wheel steamer its finding that the salvors had not fulfilled Lady Elgin was found not to have been the required elements of a successful sal- abandoned by the insurer, which had been vage claim. The court concluded that by assigned ownership rights through subro- not making the necessary conservation ef- gation. The Lady Elgin sank in Lake forts, the artifacts recovered from The Michigan off Highland Park, Illinois, in Nashville were subject to a much greater early September of 1860 after a collision rate of deterioration than if they had re- with the schooner Augusta. The vessel had mained on the river bottom, and thus res- been chartered by the Union Guards of cue from marine peril had not occurred. Milwaukee’s Irish, Democratic “Blood The court’s emphasis on conservation Third” Ward for transportation of them efforts reflects the modern-day concern and their families from Milwaukee to Chi- over preservation of historical wrecks and cago to a political rally for Stephen Dou- artifacts. However, the court could have glas, then a candidate for President of the just as easily denied a salvage award based United States. On the return trip, it was on bad faith on the part of the salvors. rammed by the Augusta and sank in a trag- They had engaged in salvage operations edy claiming the lives of 297 of the 393 despite the refusal of a salvage permit by aboard. The Aetna Insurance Co. paid the Georgia. Therefore, the court stated, they claims on the Lady Elgin and became were trespassers. owner of the vessel through subrogation. In Klein, a sport diver spearfishing in Salvor Harry Zych located the Lady 1978 in Biscayne National Park, Florida, Elgin in 1989 and filed an action seeking owned by the United States, discovered an title to the vessel under the law of finds. 18th century English war vessel. He com- The State of Illinois intervened, moving to menced recovery efforts and filed an ac- dismiss any finding of ownership against tion claiming ownership of the vessel or, the state and claiming immunity from suit in the alternative, a salvage award from the government. The 11th Circuit affirmed the district 24. 755 F.Supp 213 (N.D. I11. 1990), vacated in court’s denial of the claim of ownership part, 960 F.2d 665 (7th Cir. 1992). Page 98 DEFENSE COUNSEL JOURNAL—January 2000 via the 11th Amendment. In the meantime, termine rights to salvage in a specific geo- Zych and other individuals formed with graphical area where a wreck has been the Lady Elgin Foundation, which had en- scattered and where the location of the tered an agreement with CIGNA, the suc- vessel remains only an approximation. cessor of Aetna. In exchange for 20 per- This is was the situation in MDM Salvage cent of proceeds from the sale of items Inc. v. Unidentified, Wrecked and Aban- recovered from the Lady Elgin, the agree- doned Sailing Vessel 26 and Hener v. ment gave the foundation ownership of the United States.27 wreck. All was looking well for Zych until In MDM Salvage Inc., rival salvors a disagreement occurred between him and sought exclusive salvage rights and sal- the foundation over the ownership of the vage awards over certain geographical wreck, which resulted in litigation. areas believed to contain the remains of While conceding the validity of the two ancient shipwrecks. The geographical agreement between CIGNA and the foun- areas requested overlapped in an area dation, Zych nevertheless claimed owner- known as “Coffins Patch” near Marathon, ship on the ground that the wreck had been Florida. The vessels believed to have been abandoned. Zych alleged that abandon- located in the area included the San ment had occurred because of the lapse of Fernando and the San Ingacio, which were 129 years and CIGNA’s failure to make part of a 1733 Spanish Fleet. However, any efforts during this period to recover neither vessel had been located and up un- the vessel. The foundation defended on the til the time of the litigation only a limited ground that failure to make recovery ef- amount of artifacts had been recovered by forts was owing to the lack of technology each salvor. A third salvor intervened, re- to locate the wreck until Zych was able to questing that neither salvor be granted ex- locate it in 1989 through the use of new clusive salvage rights. technology. The foundation also filed The court refused to grant injunctive re- Aetna documents from the 1860s negating lief constituting exclusive salvage rights to any inference of abandonment. either salvor, citing insufficient efforts to The federal district court agreed with the preserve the wreck sites for historical and foundation, stating that Aetna was not re- archeological research. Neither party was quired to engage in salvage efforts to avoid found to have made any significant com- abandoning its interest when those efforts mitments of time, capital or effort to have would have had minimal chances for suc- established notorious dominion and control cess. The court supported its finding on its over the sites at issue to warrant exclusive view that admiralty is reluctant to find salvage rights. However, the court did abandonment when not proven with grant salvage awards to each party for the “strong and convincing evidence.” The items each had recovered from Coffins court held that the foundation had sole Patch. ownership rights as against the State of Il- In Hener, three competing groups linois because of the state’s waiver of its sought rights to salvage the cargo of the opportunity to respond. This part of the de- barge Harold, which sank in the waters of cision was vacated and remanded by the Arthur Kill near Staten Island in 1903. It 25 Seventh Circuit. was carrying 400 tons of lead and silver In addition to the application of salvage bullion and lost most of the 7,678 ingots of law to determine rights in an individual silver during rough seas. wreck, courts sometimes are asked to de- Salvage efforts in 1903 recovered an es- timated 85 percent of the silver from an area between New Jersey and Staten Island 25. 960 F.2d at 665. 26. 631 F.Supp. 308 (S.D. Fla. 1986). known as Story Flats. At the time of this 27. 525 F.Supp. 359 (S.D. N.Y. 1981). litigation, the value of the remaining 15 Application of Salvage Law and the Law of Finds Page 99 percent of the silver was estimated to have The Hener court’s preference for the ap- been between $10 and $20 million, but in plication of salvage law over the law of 1980 valued at between $80 and $100 mil- finds was adopted by the Fourth Circuit in lion. Prior to the litigation, none of the Columbus-America Discovery Group v. three salvors had located any of the re- Atlantic Mutual Insurance Co.,28 which in- maining silver. volving the recovery of gold from the S.S. Faced with the decision of awarding sal- Central America. A coal burning side- vage rights, the federal district court began wheeler, it sank in a hurricane off of the with the threshold question of which of the coast of South Carolina in 1857 with a loss competing rules applied: salvage law or of 425 lives and $1.2 million in gold the law of finds. In a lengthy discussion of valued in 1857 dollars, as well as hundreds the policies behind each rule, the court of thousands of dollars of gold belonging came to the conclusion that salvage law to passengers returning to New York after was the correct principle for this particular striking it rich in California. The commer- case even if the remaining silver was cial portion of the gold was insured by found to have been abandoned. The court New York and London insurers, who paid stated the reasons to be first, that admiralty most of the claims. favors salvage law over the law of finds; Contractual salvage attempts were made second, that salvage law fosters coopera- to raise the vessel, but the attempts were tion because a salvor can be confident that fruitless because it had sunk in more than an admiralty court will exercise its equi- 8,000 feet of water and its exact location table power to award his contribution to a was unknown. shared salvage effort, whereas finds law is The Central America and its gold cargo an all or nothing awarding of title with no remained undisturbed from 1857 until consideration of shared efforts; and third, 1988 when its location was identified by that salvage law encourages open and law- the Columbus-America Discovery Group, ful behavior because a salvor is encour- which began salvage operations in 1989, aged to disclose his recoveries. These prin- recovering millions of dollars of gold with ciples were amplified by the case at bar, estimations at the time of a total cargo the court concluded, because ownership of worth up to one billion dollars. As a result, the silver had not yet been determined, al- litigation arose to determine the ownership though possible claimants existed, and no rights in the recovered gold. The parties silver had been recovered, although mul- claiming ownership were Columbus- tiple salvors were asserting rights. America, which asserted abandonment of Applying these considerations, the court the vessel, the original underwriters of the awarded two of the groups the right to sal- lost gold, the New York superintendent of vage the area known as Story Flats based insurance, who represented defunct insur- on their expenditure of time, effort and ance companies and other intervenors, in- money. Thus, the court awarded salvage cluding another salvor who alleged Co- rights based on the parties’ demonstrated lumbus-America had used his data to intent and ability to recover the silver, locate the vessel. similar to the court’s analysis in Eads v. The federal district court held that the Brazelton. To assure cooperation, the court Central America had been abandoned be- ordered that a buffer zone of 300 feet be cause, first, the underwriters had made no observed between salvage operations, and it limited the right to salvage to 30 days, after which if either of the groups was un- 28. 974 F.2d 450, 460 (4th Cir. 1992). See Todd successful in their salvaging efforts, the B. Siegler, “Finders Keepers” Revised for the High Seas: Columbus-America Discovery Group v. At- third salvor’s claim to conduct operations lantic Mutual Insurance, 17 TUL. MAR. L.J. 353, would be reconsidered. 354 (1993). Page 100 DEFENSE COUNSEL JOURNAL—January 2000 effort to locate it since 1858 and, second, concerning the Central America. Second, the underwriters had destroyed all docu- some original documents from the under- mentary evidence supporting claims of writer’s files were presented in evidence, ownership that otherwise would not have and they that tended to negate an inference been destroyed had they hoped to preserve of abandonment. Third, the primary under- their ownership interests. Columbus- writer, Atlantic Mutual Insurance Co., in- America was held to be the sole owner cluded the story of the Central America through the application of the law of finds. and the salvage contract executed to re- The claims of the rival salvor were dis- cover the vessel in its 1967 book about missed for lack of proof. maritime disasters and the history of the On appeal, the Fourth Circuit reversed, company. Fourth, advances in deep water concluding that salvage law should be ap- recovery in the late 1970s fostered re- plied, that the Central America had not newed interest in salvaging the Central been abandoned, and that Columbus- America, and during discussions between America was entitled only to a salvage the salvors and the insurers, the insurers award. The court stated that the law of did not abandon their interests. finds may be applied in only two types of Thus, having found that abandonment cases: (1) those where the owners have ex- did not exist, the court remanded the case pressly and publicly abandoned their inter- for determination of Columbus-America’s est and (2) those involving ancient ship- salvage award. wrecks where no owner appears to claim A dissenting opinion took the majority items recovered from the vessel. The court to task for reversing the finding of aban- added that in such cases an inference of donment, which was said not to be clearly abandonment may arise. But if an owner erroneous. The dissent also disagreed with appears to claim ownership and no evi- the majority’s holding that salvage law dence of express abandonment exists, then was preferred over the law of finds, espe- the law of salvage must be applied. Fi- cially when dealing with ancient ship- nally, the court held that evidence of aban- wrecks, arguing that nearly every circuit donment must be shown by clear and con- applies the law of finds to wrecks of an- vincing evidence, such as an express cient heritage. declaration of abandonment. On remand, the district court held that Applying these rules, the court ruled Columbus-America was entitled to a 90 that abandonment existed as to the passen- percent salvage award for the recovery of ger gold and possessions, the vessel itself the gold.29 However, this was a Pyrrhic and any cargo other than the commercial victory for Columbus-America since its gold, so that Columbus-America was en- projected costs as of the date of the award titled to ownership as finder. However, the were $30 million and the amount of gold district court’s holding of abandonment of recovered was only $21 million, resulting the insured gold was held not to have been in a final salvage award of roughly $19 shown by clear and convincing evidence million. This was a far cry from the $1 for four reasons. First, the evidence was billion of gold cargo thought to have insufficient to establish that the underwrit- existed at the beginning of the case. ers had intentionally destroyed documents In a similar case, Ocean Mar Inc. v. Cargo of the S.S. Islander,30 the court held that the mere destruction of insurance 29. 1993 WL 580900, at 32 (E.D. Va. Nov. 18, documents did not automatically support a 1993) (not reported in F.Supp.). See also 742 finding of intentional abandonment. The F.Supp. 1327 (E.D. Va. 1990). case involved the steamship Islander, 30. 1998 WL 965905 (D. Alaska 1998), also sub nom. Yukon Recovery LLC v. Certain Abandoned owned and operated by the Canadian Property. Pacific Navigational Co. to transport gold Application of Salvage Law and the Law of Finds Page 101 recovered from the Klondike River in the allowing “reconnaissance operations.” Yukon Territory, Canada, to smelting fa- Yukon Recovery claimed title on the cilities in the Pacific Northwest. ground of abandonment, citing Marine After departing Skagway, Alaska, in Insurance’s failure to make a any further August of 1901, the vessel made a brief salvage efforts. Ocean Mar countered, stop at Juneau before departing for Van- claiming exclusive salvage rights pursuant couver, British Columbia, with a large to its salvage contract with Marine Insur- shipment of gold. It hit either a sub- ance. merged object or an iceberg and sank in In holding that Ocean Mar was the 365 feet of water in the Gastineau Channel exclusive salvor, the court found that of Stephens Passage. Soon after the sink- abandonment had not taken place and that ing, salvage efforts were attempted by the more probably than not Marine Insurance underwriters of the insured gold to recover had paid the claims for loss despite the the cargo, but they were fruitless because lack of records. The court based its con- of the limited technology available at the clusion on evidence that Marine Insurance time. at the time of the sinking specialized in In 1934, salvage efforts by other indi- insuring valuable cargo like gold and that viduals were successful in raising the stern it was authorized by the Canadian gov- section of the Islander, but no gold was ernment to insure registered mail, which recovered because it had been stored in the was the manner in which the gold in ques- unrecovered 60-foot bow portion of the tion was transported. The court also vessel. Interest in the recovery of the gold pointed out that Marine Insurance had con- did not resurface until the mid-1980s when tinued business dealings with the shipper the rival salvors involved in the litigation bank in years subsequent to the Islander learned of the Islander’s story. sinking, suggesting that any cargo claims One of the salvors, Ocean Mar Inc., lo- by the shipper bank had been paid by cated the bow of the Islander in June 1993 Marine Insurance. The court added that and viewed a partially buried gold bar in further salvaging efforts after the 1901 1994 through the use of high-tech sub- attempts were technologically infeasible mersible video equipment. In August of and thus could not be construed as aban- 1995, Ocean Mar entered into a no sal- donment. vage-no pay contract to recover the gold Thus, Ocean Mar was deemed the ex- cargo with the Marine Insurance Co., a clusive salvor of the Islander cargo be- British insurer. Rival salvor, Yukon Re- cause it had located remains of the Is- covery, learned of Ocean Mar’s salvage lander first and had contracted with operations and began salvaging efforts of Marine Insurance as the subrogated owner its own in 1996, which resulted in the re- of the wreck. covery of a whiskey bottle and light fixture from the wreck site of the Islander. Yukon LEGISLATION RESTRICTING had these items arrested by the a U.S. mar- SALVAGE LAW AND shal. This resulted in a temporary restrain- LAW OF FINDS ing order suspending operations by Ocean Although the application of salvage law Mar. appears to hold a comfortable position of Ocean Mar then filed an action seeking strength over the law of finds in the dis- title to the Islander cargo, subject to its covery of sunken shipwrecks, Congres- salvage contract with Marine Insurance. sional action has affected the application The competing actions seeking salvage of both doctrines. In addition, the United rights were consolidated, and the court is- Nations has proposed a convention that sued a preliminary injunction prohibiting would all but eliminate private discovery salvage operations by either salvor but efforts. Page 102 DEFENSE COUNSEL JOURNAL—January 2000
A. Abandoned Shipwreck Act of 1987 remains a potential factor in any vessel re- covery.34 In response to the competing interests of sport divers, professional salvors and pres- B. R.M.S. Titanic Maritime Memorial ervationists, advances in technology, and Act of 1986 confusion over the states’ role in applying their laws to the ownership of abandoned That of the R.M.S. Titanic is probably shipwrecks lying in their territorial waters, the best known shipwreck in nautical his- Congress enacted the Abandoned Ship- tory. It sank on April 14, 1912, after col- wreck Act of 1987, 43 U.S.C. §§ 2101- liding with an iceberg in the North Atlan- 2106, effective April 28, 1988.31 Under the tic, with the loss of approximately 1,500 act, the United States “asserts title to any passengers and crew. The Titanic was dis- abandoned shipwreck that is—(1) em- covered lying 2.5 miles below the surface bedded in submerged lands of a state; of the North Atlantic on September 1, (2) embedded in coralline formations pro- 1985, by a French-American team of tected by a state on submerged lands of a scientists and explorers.35 state; or (3) on submerged lands of a state Following the discovery, interest in and is included in or determined eligible salvaging the Titanic grew to a fever pitch. for inclusion in the National Register.” In response, Congress enacted the R.M.S. Noteworthy of the act’s operation is its Titanic Maritime Memorial Act of 1986, relationship with other law. This is ad- 16 U.S.C. §§ 450rr-6, effective October dressed in Section 2106(a), which states 21, 1986. The stated purpose of the act was that “the law of salvage and the law of to encourage international agreement on finds shall not apply to abandoned ship- the preservation of the wreck site and pro- wrecks to which Section 2105 of this title hibit salvage of the Titanic pending inter- applies.” However, salvage law does not national agreement. The act directed the apply to abandoned vessels in any event.32 U.S. executive branch to enter into discus- Therefore, in operation, only the law of sions with Great Britain, France, Canada finds is limited by the act. Otherwise, if and other interested nations concerning the abandonment can be shown not to have oc- development of international guidelines on curred, a salvor may still be entitled to a the exploration and possible salvage of the salvage award for a vessel found in state Titanic. territorial waters. However, to this day no international Litigation involving salvor Zych has ad- agreement has been enacted despite efforts dressed the constitutionality of the act, its by the executive branch to do so, and no effect on admiralty’s need for uniformity country, including the United States, has in the application of maritime law, and its exclusive ownership or jurisdiction over effect on due process of law.33 All in all, the Titanic. As a result, courts hearing the act has survived these challenges and claims to explore and recover artifacts
31. See Timothy T. Stevens, The Abandoned on other grounds, 941 F.2d 525 (7th Cir. 1991), on Shipwreck Act of 1987: Finding the Proper Ballast remand, 811 F.Supp. 1300 (N.D. Ill. 1992); Sea- for the States, 37 VILL. L. REV. 573, 574-80 (1992). bird, 811 F.Supp 1300 (N.D. Ill. 1992) (“em- 32. See Sunken Treasure Inc. v. Unidentified, beddedness” element rationally related), aff’d, 19 Wrecked and Abandoned Vessel, 857 F.Supp. 1129, F.3d 1136 (7th Cir 1993), reh’g and suggestion for 1134 (D. V.I. 1994). reh’g en banc denied, cert. denied, 513 U.S. 961 33. Zych v. Unidentified, Wrecked and Aban- (1994). doned Vessel, Believed to be the Seabird, 941 F.2d 34. See Illinois ex rel. Illinois Historical Preser- 525 (7th Cir. 1991), on remand, 811 F.Supp. 1300 vation Agency v. Zych, 710 N.E.2d 820 (Ill. 1999). (N.D. 111. 1992) (act constitutional); Lady Elgin, 35. See Mary S. Timpany, Ownership Rights in 746 F.Supp. 1334 (N.D. Ill. 1990) (act does not the Titanic, 37 CASE W. RES. L. REV. 72, 73 destroy uniformity), reconsideration denied, rev’d (1987). Application of Salvage Law and the Law of Finds Page 103 from the Titanic must rely on international intend to recover any part of the wreck. maritime law, including salvage law, for DOE and Haver argued that the district governing principles. court (1) lacked jurisdiction over the wreck An example of litigation involving the and the wreck site, (2) lacked jurisdiction Titanic Act, salvage law and the Titanic is over them, and (3) that the injunction was R.M.S. Titanic Inc. v. Wrecked and Aban- too broad. In sum, they stated that the dis- doned Vessel,36 which involved the salvage trict court’s theory of “constructive in rem and exploration company R.M.S. Titanic jurisdiction” did not permit the court “to Inc. It sought a preliminary injunction to adjudicate the rights of persons over which prevent Deep Ocean Expeditions and it lacks personal jurisdiction with respect others from conducting $32,500 per- to a vessel [in international waters] that person expeditions to the wreck site of the have never been within the court’s terri- Titanic. tory.” Having declared R.M.S. Titanic Inc. the After a lengthy discussion of in per- sole salvor in possession in 1994, the U.S. sonam and in rem jurisdiction, the Fourth District Court for the Eastern District of Circuit held that although the district court Virginia issued a preliminary injunc- had in rem jurisdiction over the Titanic to tion preventing Deep Ocean Expeditions adjudicate salvage rights, it did not have (DOE) and others from conducting dives the requisite personal jurisdiction over to the wreck site. The court based its hold- DOE to enforce the injunction.37 Injunctive ing on its findings that R.M.S. Titanic Inc. relief, unlike in rem proceedings, was de- had been making satisfactory progress on termined to be limited to actions in which the salvaging of the Titanic, considering personal jurisdiction exists over the per- the expense and difficulty of exploration, son, entity or one in legal privity with that and as the appointed sole salvor, R.M.S. person or entity. DOE, a British Virgin Is- Titanic Inc. was entitled to freedom from lands corporation headquartered in Great interference by third parties, which would Britain, was found not to have been served occur if tourist access to the site was per- with process that would render it subject to mitted. The court further concluded that its jurisdiction. holding was not in contravention of the As for Haver, the court concluded that Titanic act. Since no further action on the he had consented to the district court’s per- part of the world’s nations has precluded sonal jurisdiction over him when he insti- exploration and salvage of the Titanic, the tuted the prior declaratory judgment action only applicable governing law was the in- in the district court. Therefore, the prelimi- ternationally recognized law of salvage. nary injunction was affirmed as against Finally, the court supported its decision by him. findings that R.M.S. Titanic Inc.’s efforts Next, the Fourth Circuit addressed the furthered the public interest in the preser- complex issue of whether a court can exert vation of the Titanic. in rem jurisdiction over wrecks lying in in- DOE and a U.S. resident, Christopher S. ternational waters far beyond the limits of Haver, appealed the district court’s deci- the court’s territorial jurisdiction. It inter- sion to the Fourth Circuit. Haver had filed preted the district court’s use of the term a separate in personam action in the dis- “constructive in rem jurisdiction” as “im- trict court against R.M.S. Titanic Inc. perfect in rem jurisdiction” that entitled seeking a declaratory judgment that he had the court to a “shared sovereignty” over a right to enter the wreck site and photo- graph the wreck. He had agreed to pay the $32,500 for transportation and alleged that 36. 9 F.Supp.2d 624 (E.D. Va. 1998). he intended to photograph the wreck for 37. R.M.S. Titanic Inc. v. Haver, 171 F.3d 943 his own personal use and that he did not (4th Cir. 1999), cert. denied, 120 S.Ct. 74 (1999). Page 104 DEFENSE COUNSEL JOURNAL—January 2000 the wreck with other nations’ admiralty tri- C. UNESCO bunals. Only after property or persons in- Recent action by the United Nations volved are brought before the district court poses the greatest threat to the status of is a district court able to enforce final sal- salvage law and the law of finds in the area vage rights, the Fourth Circuit stated. of sunken shipwreck discovery. The Finally, after discussing the history and United Nations Educational, Scientific and policies surrounding salvage law, the law Cultural Organization issued a draft of its of finds and their interplay with interna- International Convention on the Protection tional law, the Fourth Circuit held that in of the Underwater Cultural Heritage in order to maintain the principles underlying April 1998. The stated purpose of the con- salvage law it was reluctant to award vention is to protect the world’s under- R.M.S. Titanic Inc. the exclusive right to water cultural heritage encompassing ship- photograph and record images of the wrecks and archeological sites from Titanic’s remains. Likening the wreck to a destruction by treasure hunters.38 The publicly visible building and a salvor to an United States, as the only observer nation, architect holding a copyright in the design joined 53 other nations in Paris in July of that building, the court held that a salvor 1998 to discuss the proposed UNESCO did not have the right to exclude others draft.39 from photographing a wreck when the The convention in essence abolishes pri- property was yet to be saved. To extend to vate salvage of shipwrecks by awarding the exclusive right to photograph a wreck title to all abandoned shipwrecks to coastal in the name of salvage, the court noted, nations where the wreck lies on the would be to “convert what was designed country’s continental shelf or 200 miles as a salvage operation on behalf of the offshore, whichever greater. As an addi- owners into an operation serving the tional measure to discourage private sal- salvors,” running counter to the purpose of vage, member nations are precluded from salvage. Thus, DOE is now permitted to lawfully receiving in their ports any visit and photograph the Titanic wreck site wrecks that are found further offshore. as long as it does not interfere with the Abandonment is presumed to exist 25 salvaging efforts of R.M.S. Titanic Inc. years after sinking and becomes absolute Although Congress intended to preserve after 50 years. The only exceptions to the Titanic wreck site from the efforts of these rules are military vessels and aircraft, private salvage companies pending inter- which are to remain the property of the national agreement, inaction on the part of sovereign nation forever.40 the world’s nations has proved the act to The effect of the convention would be irrelevant. However, recent efforts on make state-sponsored salvage the only le- the part of the United Nations may alter gal salvage, with recovered property be- this situation. longing to the member state. The United States has indicated that it would not ap- prove the convention unless terms were in- cluded allowing private commercial efforts 38. See Michael Heyworth, Underwater Cul- tural Heritage Meeting,