This is me in 1994 with treasure hunter Mel Fisher, who salvaged the wreck of the Spanish treasure ship Nuestra Senora de Atocha. Mrs. Fisher customarily took pictures like these whenever a visitor to their Treasure Museum (now the Mel Fisher Maritime Heritage Museum) in Key West* bought a gold 8-reale coin (“piece of eight”) from the ship’s haul while she and Mel happened to be in town. That was what I’d just done; that’s my “I’ve been SCUBA diving all morning, wandering around in the sun all afternoon, and now I just spent a pretty big (for me) wad of cash” slightly poleaxed smile. That’s also one of the Atocha‘s gold chains around my neck (just for the picture); who knew the Spaniards of 1622 blinged themselves out like the rappers of 1985?
Not until ten years later, in law school, did I learn that this shipwreck was the centerpiece of a litigation train-wreck. There were too many lawsuits to describe in even one of my awfully-long posts, so I’m having to serialize. In stories, sunken and buried treasures are often cursed (I mean “with bad mojo,” not “by people trying unsuccessfully to find them”). But the usual curse symptoms are violent death, or insanity, or something similarly speedy and dramatic. Upon reflection, though, “a long, tangled string of lawsuits on whomsoever disturbs this place” is a pretty good curse.
And, like someone seeing a train wreck, I couldn’t look away.
The Atocha was named for a holy shrine to the Blessed Mother in Madrid. She (the ship,that is) made her final voyage as a heavily armed rear-guard for imperial Spain’s 28-ship Tierra Firme fleet. This fleet picked up shipments of gold, silver, emeralds, and other precious commodities from Spain’s New World colonies, and also took on pearls, silk, fine china, and porcelain from ships that sailed between South America and the Phillippines. In 1622, the fleet assembled at Havana as per usual, and for Spain on Sept. 4 – smack in the middle of hurricane season.
It wasn’t that the captains didn’t know any better, but they had their orders. Spain was in dire financial straits and embroiled in the Thirty Years’ War. Aside from the usual pirates, the enemy French and Dutch fleets and the British crown’s commissioned privateers had been capturing far too many Spanish ships. After sighting a large Dutch fleet too close to Havana for comfort, the fleet commander and the Spanish officials decided the Tierra Firme fleet should sail immediately.
Two days later, a hurricane wrecked five of the Tierra Firme ships, including the Atocha, driving them onto the treacherous reefs of the Dry Tortugas.** Of the 265 people aboard the Atocha, only five survived – three sailors and two slaves who had been working in the upper rigging of the mizzenmast, the only part that remained above water. Their rescuers could not recover the treasure because the water was so deep and the hatches so tightly battened down. Before reinforcements could arrive with better equipment, another hurricane swept the wreck off to parts unknown. Spain searched for the wreck of the Atocha for 60 years, but never found her.
Fast-forward to the twentieth century. With advances in SCUBA, sonar, and submersible technology, wrecks were now much easier to find and salvage. Mel Fisher and his company, Treasure Salvors, Inc. (TSI) searched for the Atocha from 1969 to 1975, making extensive use of prop-wash deflectors called “mailboxes.” “Mailboxes” blow away accumulated sand and other lightweight debris from heavier objects on the ocean floor. (They also demonstrate to local sea life what it’s like to stand behind a jet engine). TSI finally found the Atocha in July, 1975, on the continental shelf outside US territorial waters.
And they lived happily every after – NOT.
- Treasure Salvors, Inc. v. Abandoned Sailing Vessel Believed to Be Nuestra Senora De Atocha, 408 F.Supp. 907 (D.C.Fla. 1976). (To non-lawyers this looks strange – did they really sue the ship? No, there’s a class of lawsuits called in rem actions, involving some types of property-ownership disputes, where the property is named as the defendant). TSI asked the court to declare it the legal owner of the Atocha and its contents. This could have been a really short, open-and-shut case. The very, very old legal doctrine of “animus revertendi” translates loosely as “the owner has no intention of returning,” and in the practical sense as “Finders Keepers.” Under maritime and international law at that time, one beginning a salvage operation on an abandoned vessel (recall that Spain had given up looking for Atocha 380 years previously) is entitled to sole possession of the salvaged property.It wasn’t a short case, though, because the U.S. government answered, intervened, and counterclaimed (for you non-lawyers, that’s “butted in and demanded a piece of the action.”) The U.S. argued that whenever someone subject to its jurisdiction recovers an antiquity, the antiquity belongs to the sovereign (an ancient common-law doctrine known as the “sovereign prerogative”). We inherited sovereign prerogative from England, where the Crown could technically appropriate any abandoned property in its domain. We significantly declawed it, though; the U.S. government may appropriate abandoned property found in the U.S. or by U.S. citizens only if Congress manifests a specificintent to appropriate it.
- The Abandoned Property Act was not a specific enough manifestation to apply to the Atocha; it had been held to only apply to property once connected with the U.S. government, such as Civil War military artifacts.
- The Antiquities Act only applies to antiquities situated on land within U.S. jurisdiction, which the Atocha was not. The Outer Continental Shelf Lands Act brought the “surface and subsoil” of the continental shelf under U.S. jurisdiction for the purpose of mineral rights, but the waters above it were explicitly to remain “high seas.”
- The UN Convention in the Continental Shelf stated that a coastal state may exercise sovereign rights over the shelf to explore and exploit natural resources; shipwrecks were explicitly excluded.
Therefore, the court concluded that even though the wreck was under sand that had to be blown aside with TSI’s “mailboxes,” mineral and “natural resource” sovereign rights did not apply. Even if the U.S. had jurisdiction over that part of the continental shelf, the court said, “an extension of jurisdiction is not an extension of sovereignty.” TSI was given legal ownership.
- Treasure Salvors, Inc. v. Unidentified Wrecked and Abandoned Sailing Vessel, 569 F.2d 330 (5th Cir. (Fla.) 1978). Of course, the U.S. appealed. Speaking of jurisdiction, it argued, if it didn’t have jurisdiction over wrecks on the contintental shelf, the district court couldn’t have had jurisdiction to determine ownership of those parts of the wreck still out there.The Appeals Court held that yes, it did, because it did everything in its power to have it marshal bring the wreck into court custody. Besides, by intervening in the case, the U.S. had consented that the district court had admiralty jurisdiction over the wreck; that’s not the sort of thing any litigant may change its mind about, willy-nilly, at the appeal stage. However, the district court decision, affirmed on appeal, only meant that TSI had a better claim than the U.S.; it couldn’t “quiet title” to the wreck against anybody else who might show up with another claim. TSI won again, in a qualified sort of way.
- Treasure Salvors, Inc. v. Unidentified Wrecked and Abandoned Sailing Vessel, 459 F.Supp. 507 (D.C. Fla. 1978). After the Appeals Court decision, the district court issued a warrant for the Atochaand all its artifacts so it could hand off rightful ownership to TSI. The Florida Division of Archives apparently had its ears wide open when the Appeals Court mentioned others who might have claims; it claimed to have rights in some of the artifacts under a contract with TSI. It obtained a temporary stay of the warrant, which the Appeals Court then dissolved, and the district court took custody of the artifacts.The court gave Florida short shrift, finding that the Department of Archives had involved itself in the U.S.’s intervention in the original case, could have intervened on its own behalf back then, and so was not really an “other claimant not a party to the action” within the meaning of the Appeals Court’s ruling. The state treasure-trove statute Florida used for support, even if they read it correctly, was pre-empted by maritime law, which is federal and which states cannot modify. The contract between Florida and TSI also fell into dispute before the original case was heard, so Florida could have brought that in then too. Because the original case was an in rem proceeding intended to quiet title in the Atocha “against all the world,” and since Florida knew of and participated indirectly in that proceeding, it was bound by the earlier decision.
Furthermore, the court held that the contract dispute was Florida’s fault, and the contract was void for several different reasons.
- The contract provided for a 75-25 split of the artifacts between TSI and Florida, but when TSI repeatedly asked Florida for a specific division, Florida had refused. The court found these refusals were a bad-faith act done in the hope of triggering the forfeiture provisions that would give Florida all the treasure. General contract law allows courts to void contracts where a party has acted in bad faith.
- Only when another case before the Supreme Court ruled conclusively that the wreck site was not in Florida state waters – destroying the reason why TSI made the contract in the first place even though it was doing all the salvage work – did Florida offer to divide the treasure according to the contract. Both general contract law and maritime law allow courts to void contracts for “mutual mistake” – an assumption fundamental to the contract, believed by both parties when they made the contract, but later discovered to be invalid.
- The only thing Florida promised TSI under the contract (the “consideration” Florida furnished) was the right to salvage the wreck. After the Supreme Court’s ruling, that right was clearly not Florida’s to give. Courts may void contracts if the consideration does not exist.
The Eleventh Amendment might have protected Florida from court seizure of artifacts the state actually owned, but for all the reasons above, the state didn’t own these. The court also entered a default judgment against any other possible claimants who hadn’t spoken up by then.
- State of Fla., Dept. of State v. Treasure Salvors, Inc., 621 F.2d 1340 (5th Cir. (Fla.) 1980). The state appealed. The Appeals Court affirmed all the district court’s rulings. More or less “yeah, what they said.” One judge dissented, opining that the Eleventh Amendment deprived the district court of jurisdiction to seize the artifacts if Florida believed in good faith that it owned them, and that it lacked jurisdiction to quiet title in the part of the wreck that still lay on the continental shelf. Florida asked for a rehearing, which the 5th Circuit denied. State of Florida, Department of State v. Treasure Salvors, Inc., 629 F.2d 1350 (Table) (5th Cir. (Fla.) 1980), so Florida appealed to the Supreme Court, which granted certiorari (agreed to hear the case). Florida Dept. of State v. Treasure Salvors Inc., 101 S.Ct. 2312 (Mem) (1981).
- Treasure Salvors, Inc. v. Unidentified Wrecked & Abandoned Sailing Vessel, 640 F.2d 560 (5th Cir. (Fla.) 1981). In the original case, TSI estimated that the Atocha wreckage was spread over a circular area with a radius of 2500 yards, and the court gave it exclusive salvage rights in that area. Later, TSI announced discovery of a second Atocha anchor further away, revising their estimate to a larger area, and claiming exclusive salvage rights in the larger area.In the meantime, two rival salvage ships had begin operating near the area where the second anchor was found. The newcomers did not “play nice”; one of them fired five shots at Fisher’s crew, and on another occasion one of them tried to ram one of Fisher’s vessels. At TSI’s request, the district court granted a temporary restraining order and then a preliminary injunction so that the rival salvors had to cease operations in the area pending a trial. Usually, preliminary injunctions can be appealed before the final decision of the trial court. TSI claimed that admiralty cases were an exception, but the court disagreed, finding the distinctions purely historical and now obsolete.
Courts have to be careful about preliminary injunctions because they take away a defendant’s rights before the full trial has exposed whether or not the defendant was actually doing anything wrong. Before issuing a preliminary injunction, they look at the available facts and weigh several factors. The two most important factors are the plaintiff’s likelihood of winning (pretty good here – TSI already owned the Atocha and the odds of another salvageable wreck in the claimed area was fairly remote, although not vanishingly small because other ships in the same fleet were wrecked at the same time) and the risk of irreparable harm to the plaintiff without a preliminary injunction (if the other salvors could keep working in the area until the trial was over, they could abscond with Atocha artifacts or mess up the site).
The Appeals Court was concerned that if the trial got held up too long, TSI could salvage non-Atocha objects in the area, which would then immediately become TSI’s under the Finders Keepers rule, but which could just as easily and legally have been found and kept by the defendants. The court compromised (though not very much): they upheld the preliminary injunction, but limited it to a duration of 90 days from their decree to encourage a speedy resolution in the trial court.
The Appeals Court also explained that, in a “salvor v. salvor” case, a court has jurisdiction if both salvors can be subjected to it, no matter where the wreck is (and, in passing, pointed out to the district court that because the in rem decision on the Atocha had already been made, the other salvors, not the ship, should be named as defendants). The Appeals Court upheld the preliminary injunction, but modified it to expire 90 days after its mandate to encourage a speedy trial and permanent resolution.
- Florida Dept. of State v. Treasure Salvors, Inc., 102 S.Ct. 3304 (1982). This was it – Atocha‘s day in the Supreme Court!A few preliminary bubbles had come to the surface in preparation. The Court denied Florida’s pre-trial motions for divided argument and for extra time for oral argument. Florida Department of State v. Treasure Salvors Inc., 102 S.Ct. 23 (Mem) (1981). The Court granted permission for Florida Assistant Attorney General (AG) Susan Gamble Smathers to present Florida’s oral argument pro hac vice (loosely, “just this once”; it probably had to do with Supreme Court Rule 6.). Florida Department of State v. Treasure Salvors Inc., 102 S.Ct. 382 (Mem) (1981). One might idly wonder if she was the AG’s office’s fastest talker, called in because they couldn’t get the extra oral-argument time they asked for. AGs from eleven states and two territories with coastlines (12 oceanic, one Great Lake) collaborated on an amicus brief urging the Court to overturn the lower court decisions, rather than setting a precedent allowing federal district courts from grabbing artifacts out of state buildings any time their ownership was disputed.
The Supreme Court took the case because of the Eleventh Amendment issue; they believed they really needed to settle how the Eleventh Amendment applied here. The Eleventh Amendment simply says private citizens can’t sue states in federal court over matters of “law or equity” (admiralty is historically a separate category). Its purpose is to protect state treasuries – imagine how high state taxes would be if, for example, everyone injured in accidents on state roads could sue the state for damages. Private citizens may, however, sue state officials who act outside their legal authority (the “ex parte Young” exception). Here, TSI never sued Florida. The federal district court took custody of the Atocha artifacts on TSI’s behalf, after deciding in the in rem case that the artifacts legally belonged to TSI. Florida tried to intervene in the in rem case too late, then sued TSI in federal court to get the artifacts back.
The nine Supreme Court Justices split 4-4-1, mostly over details and rationales. The plurality opinion that became law held that the Eleventh Amendment did not apply because only individual state officials, not the state or its agency, were named in the warrant to seize the artifacts. The officials exceeded their legal authority when they hung onto the artifacts even though the state had no claim to them after the Court held that state waters did not extend to the wreck area. Therefore, this was an “ex parte Young” exception case. However, the district court should not have decided about ownership of the artifacts as part of its Eleventh Amendment analysis. This decision adroitly gave the Atocha artifacts to TSI while reassuring state governments that federal courts can only seize artifacts from the state if the state’s claim of ownership, like Florida’s here, really doesn’t have a leg to stand on.
- Treasure Salvors v. the Unidentified, 691 F.2d 510 (Table) (11th Cir. (Fla.) 1982. Here the Appeals Court affirmed something without opinion, but it isn’t clear exactly what. From the history, it was probably an unpublished district court opinion about the other salvors, so this probably represents TWO more court proceedings about the Atocha.
- State of Fla., Dept. of State v. Treasure Salvors, Inc, 689 F.2d 1254 (5th Cir. (Fla.) 1982). Although the Supreme Court reversed part of the Appeals Court’s prior decision, it didn’t remand the case, which would have required that the Appeals Court hold another hearing. It did anyway. Florida wanted the Appeals Court to remand the case to the district court and order it to return all the artifacts to Florida. TSI wanted a remand too, but wanted the Appeals Court to order the district court to force Florida to fish or cut bait – voluntarily appear and defend its claim to the artifacts, or forever hold its peace.Neither got its wish: the Appeals Court pointed out that the Supreme Court had upheld the transfer of the artifacts to TSI, and also that ordering Florida to “put up or shut up” would amount to coercing a state to appear in federal court, which would violate the Eleventh Amendment. Nor could the court dismiss the state as a party to the in rem case because it had never technically been one. The Appeals Court’s order was a very uncomfortable one: the artifacts could stay in TSI’s possession, TSI’s ownership could be confirmed against everyone EXCEPT Florida, but the district court could not issue a judgment that “determine[d] in any way whether the State of Florida [wa]s the owner of these artifacts.”
- Treasure Salvors, Inc. v. Unidentified, Wrecked and Abandoned Sailing Vessel, 556 F.Supp. 1319 (D.C. Fla.(1983)). This dispute was only tangentially about the Atocha. Another ship sailing with the Tierra Firme fleet, the Santa Margarita, was wrecked by the same hurricane. Spanish officials had recovered some, but not all, of its cargo of silver ingots and gold coins.When TSI found the Atocha, it reasoned that the Santa Margarita could not be far away, and wanted to get there first. TSI hired contractors, including Capt. Robert Jordan, to temporarily swell their ranks and augment their resources of vessels and equipment. TSI paid Jordan according to the contract, gave him some equipment for free, and loaned him some proprietary advanced technology. Using this technology, Jordan found a deposit of metal on the ocean floor. Joined by TSI employees, he and his crew investigated the deposits and found what looked like part of a werck that was not the Atocha. After finding gold bars, TSI, with Jordan’s knowledge, petitioned the district court for an in rem proceeding on the new wreck, which was evetually identified as the Santa Margarita.
After seeing the gold,Jordan tried to re-negotiate his contract for better terms, which TSI refused. He then filed his own in rem action in the district court claiming salvage rights to the wreck for himself. Afterward, with TSI employees and equipment on board and a fresh batch of fuel and groceries charged to TSI’s account, Jordan went back to the wreck. He found a major deposit of precious metals, but would not let anyone radio TSI about them. Instead, he radioed his wife in a secret code and told her to add the new find to his in rem claim. Instead of dropping off the new haul at TSI as he had been doing, he went to his backer’s house, told him to keep the TSI employees there incommunicado and not to answer any calls from TSI (of which there were several that night because of the prolonged radio silence), and tied up his vessel in one of the Florida Keys’ many hidden channels.
When TSI realized what was going on, it filed a stack of motions in district court. When it asked for a temporary restraining order, the judge went one better and gave them a preliminary injunction, finding that Jordan had abused his position as TSI’s agent, willfully breached his duty of loyalty by filing a competing in rem claim, and disobeyed a court order by hiding the find.
TSI claimed it was the first finder because Jordan was acting as its contracted agent. Jordan claimed that he was the first finder and was not acting as TSI’s agent. Florida initially intervened, claiming the right of a sovereign to protect the wreck’s archeological heritage, but later admitted that the wreck lay outside state waters and withdrew.
After reviewing the facts, the court held that the TSI employees aboard Jordan’s vessel were the “first finders” of the Santa Margarita. Because they were acting within the scope of their employment, the wreck belonged to TSI whether or not Jordan’s contract made him TSI’s agent (implying that all he did was drive the boat). The court also ruled that Jordan’s contract was valid; there was no up-front misrepresentation, no mutual mistake, and no lack of consideration. Because the contract was valid, Jordan was acting as TSI’s agent, and was in breach of his duty beginning on the day he found the large deposit he failed to report. Therefore, Jordan was not entitled to any payment for services rendered to TSI after that day.
The court awarded TSI the salvage rights to the Santa Margarita and a permanent injunction barring Jordan from the site. Jordan was found in contempt of court and ordered to pay TSI’s attorney’s fees.
TSI won all these cases. (Several of the courts mentioned TSI’s assiduous following of approved legal procedures and conscientious custodianship of the artifacts, which no doubt weighed in their favor). But TSI spent at least as long in court as it had looking for the wreck.
Court time is expensive in terms of costs actually paid, but often more so in terms of time lost in pursuing one’s actual occupation. Even when you win, you can lose. How ’bout it – any of my readers feel like financially backing a sunken treasure hunt now? And this was just Part 1 – stay tuned!
*Though Florida is a notorious legal minefield (they tried to nail registered non-lawyer patent agents for “practicing law without a license” when they prosecuted patents, which is what the Feds license them to do – pre-emption city, obviously), Florida is a perfect place for a treasure-salvage museum for a variety of reasons. It’s near the Caribbean, that historical source of prodigious colonial wealth whose enticing jewel-like waters can suddenly turn so nasty on unsuspecting captains. Many early Floridians also made a surprisingly dependable living on salvage. It’s not so surprising when you realize that they did it by building bonfires at night on the rocky shores. Ships would mistake the fires for lighthouses and crash on those beautiful coral reefs today’s divers and snorkelers so enjoy. The helpful Floridians would then save the passengers and crew. . . for a small compensation, such as all their stuff and even some of the people, if the market for slaves was lively. Compared to drowning, these contracts of adhesion might not have seemed that unconscionable at the time.
** In those days, coral reefs were not natural treasures to be conserved, but ship-eating hazards to be avoided. Many natural spendors, such as the Grand Canyon and the Rocky Mountains, were initially regarded as useless obstacles.
***There are a couple of exceptions, but none applied here.