286 F.3d 194 (4th Cir. 2002), 01-2227, R.M.S. Titanic, Inc. v. Wrecked and Abandoned Vessel

Docket Nº:01-2227
Citation:286 F.3d 194
Party Name:R.M.S. Titanic, Inc. v. Wrecked and Abandoned Vessel
Case Date:April 12, 2002
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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286 F.3d 194 (4th Cir. 2002)

R.M.S. TITANIC, INCORPORATED, successor in interest to Titanic Ventures, limited partnership, Plaintiff-Appellant,

v.

The WRECKED AND ABANDONED VESSEL, its engines, tackle apparel, appurtenances, cargo, etc., located within one (1) nautical mile of a point located at 41° 43' 32"' North Latitude and 49° 56' 49"' West Longitude, believed to be the R.M.S. Titanic, in rem; Robert C. Blumberg, Attorney-Advisor, Office of Oceans Affairs, United States Department of State; Ole Varmer, Attorney-Advisor, National Oceanic and Atmospheric Administration, United States Department of Commerce; Madeleine K. Albright, Secretary of State, United States Department of State; William M. Daley, Secretary of Commerce, United States Department of Commerce; D. James Baker, Administrator, National Oceanic and Atmospheric Administration, United States Department of Commerce, Defendants,

Liverpool and London Steamship Protection and Indemnity Association, Limited, Claimant,

Deep Ocean Expeditions; Wildwings Worldwide Travel; Bakers World Travel; Quark Expeditions, Incorporated; Mike McDowell; Ralph White; Don Walsh, Ph.D.; Alfred S. McLaren, Ph.D.; Christopher S. Haver; R/V Akademik Mstislav Keldysh; United States of America; Blackhawk Television, Parties in Interest,

John A. Joslyn, Movant.

University of Virginia Appellate Litigation Clinic; David Shuttle, Amici Curiae.

No. 01-2227.

United States Court of Appeals, Fourth Circuit

April 12, 2002

Argued Feb. 25, 2002.

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[Copyrighted Material Omitted]

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ARGUED:

Mark Steven Davis, Carr & Porter, L.L.C., Portsmouth, Virginia, for Plaintiff-Appellant.

Neal Lawrence Walters, Appellate Litigation Clinic, University of Virginia School of Law, Charlottesville, Virginia, for Amicus Curiae Clinic.

ON BRIEF:

Robert C. Scaro, Jr., Mark A. Stallings, Carr & Porter, L.L.C., Portsmouth, Virginia, for Plaintiff-Appellant.

Craig A. Markham, Elderkin, Martin, Kelly & Messina, Erie, Pennsylvania, for Amicus Curiae Shuttle.

Before WILKINS, NIEMEYER, and KING, Circuit Judges.

Affirmed by published opinion. Judge NIEMEYER wrote the opinion, in which Judge WILKINS and Judge KING joined.

OPINION

NIEMEYER, Circuit Judge.

R.M.S. Titanic, Inc. ("RMST"), as salvor-in-possession of the submerged wreck of the R.M.S. Titanic and the artifacts salvaged from it, challenges the district court's orders of September 26, 2001, and October 19, 2001. These orders were entered after the court discovered RMST's plans to sell some of the artifacts and confirmed that the court's earlier orders prohibiting the sale of artifacts "were proper and were necessary when entered." RMST contends that, because in 1994 it was granted absolute title to all the artifacts it retrieved, the district court cannot now restrict its right, as owner of the artifacts, to sell them at its discretion.

Finding that RMST's arguments are grounded on a fundamental misunderstanding of its role as salvor-in-possession, we reject its arguments and affirm the orders of the district court.

I

In 1985, a joint American-French expedition discovered the wreck of the Titanic in the North Atlantic Ocean in international waters. Two years later, Titanic Ventures, a limited partnership, explored the wreck, bringing up approximately 1,800 artifacts. Thereafter, it sold its interests in the salvage operations and the artifacts to RMST.

In 1993, RMST commenced this in rem action against the Titanic to become its salvor-in-possession. In its complaint, RMST requested, among other things, that, under the law of finds, it be declared "the true, sole and exclusive owner of any items salvaged from the wreck" or, alternatively, that, under salvage law, it be "awarded a liberal salvage award ... as may be determined by this Court." Acting under principles of salvage law and consistent with the inchoate lien that RMST obtained as salvor, the district court exercised in rem jurisdiction and issued a warrant directing the United States Marshal to arrest the wreck and all artifacts already salvaged and yet to be salvaged. Simultaneously, it ordered that RMST be substituted for the Marshal as the custodian of the wreck, the wreck site, and the artifacts. Notice of the proceedings was duly published. Following a claim made by an insurance company and settlement of that claim, the court approved the settlement

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and issued an order, dated June 7, 1994, declaring RMST salvor-in-possession. In its order, the court stated:

The Court FINDS AND ORDERS that R.M.S. Titanic, Inc. is the salvor-in-possession of the wreck ... and that R.M.S. Titanic, Inc. is the true, sole and exclusive owner of any items salvaged from the wreck of the defendant vessel in the past and, so long as R.M.S. Titanic, Inc. remains salvor-in-possession, items salvaged in the future, and is entitled to all salvage rights....

During the course of the hearing leading to this order, the district court confirmed its understanding that it was RMST's "intention to display these artifacts and to try to get [its] money back out of admissions to the display rather than selling them off." Counsel for RMST affirmed that understanding and explained further "that the process [of] going forward with the exhibition of the artifacts and not sell[ing them] continues and ... that is the position of the salvors in this case, that the 1987 artifacts and the 1993 artifacts will not be sold, but rather will be exhibited."

Two years after entry of the June 1994 order appointing RMST salvor-in-possession, John A. Joslyn filed a motion in this action requesting that the district court rescind its June 1994 order naming RMST salvor-in-possession because RMST had failed to salvage the Titanic diligently and lacked the financial capacity to undertake future salvage operations. The district court rejected Joslyn's claims and denied his motion. But in doing so, it ordered RMST to make more frequent reports to the court about its salvage efforts. R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, the R.M.S. Titanic, 924 F.Supp. 714, 724 (E.D.Va.1996). In addition, the district court entered a preliminary injunction prohibiting Joslyn, as well as anyone else, from visiting the site of the wreck and from photographing it. R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, No. 2:93CV902, 1996 WL 650135 (E.D.Va. Aug. 13, 1996). The court reasoned that because RMST was "not selling artifacts like traditional salvors, it must be given the rights to other means of obtaining income." Id. at *2.

In 1998, when a British Virgin Islands corporation headquartered on the Isle of Man, Great Britain, began marketing to the public an expedition to visit the Titanic wreck, which it called "Operation Titanic," RMST filed a motion for a more specific injunction to prevent that corporation as well as its principals and customers from visiting and photographing the wreck site. The district court issued an expanded injunction, enjoining that corporation, as well as its principals and a named passenger, from visiting a yet more generously defined site in the North Atlantic and from photographing the wreck. R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, 9 F.Supp.2d 624, 626 (E.D.Va.1998). The court reasoned that because RMST was not selling the artifacts, it needed a stream of income, and the exclusive photographic and visitation rights would help insure this income. Id. at 635-36. We reversed that order, concluding that it was beyond the power of the district court and inconsistent with salvage law to confer those rights: "Neither prohibition is justified by the law of salvage or allowed by the law of free navigation on the high seas." R.M.S. Titanic, Inc. v. Haver, 171 F.3d 943, 970 (4th Cir. 1999). RMST maintains that this refusal to give it exclusive visitation and photographic rights has had a substantial adverse impact on its income stream and has impaired its ability to finance further salvage operations.

RMST has continued to conduct salvage operations and to display the artifacts recovered in order to obtain income. In

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November 1999, the management of RMST changed, and the new management articulated a new business plan designed "to maximize shareholder value while still protecting the archeological and historical value of the wreck." While the financial strategy of RMST's previous management had focused on generating earnings through the exhibition of artifacts, RMST's new management expanded this strategic plan to include "the possible disposition of artifacts to increase revenues" and thereby to maintain its status as salvor-in-possession. But these plans were undeveloped, and during a hearing in March 2000, the new president of RMST testified before the district court that RMST had "no plans to sell any portion of the collection."

Several months later, however, "it [came] to the attention of the court that there ha[d] been a change in management in R.M.S. Titanic, Inc. and that there [was] a concern held by some persons and organizations that R.M.S. Titanic, Inc. [was] considering disposal of some artifacts recovered." In response to this information, the district court issued an order sua sponte, dated July 28, 2000, directing RMST "not [to] sell or otherwise dispose of any artifacts or any object recovered from the wreck site and further that it must continue to treat and preserve any such artifacts and objects recovered from the wreck site." In its order, the court noted that "[t]his court has continued R.M.S. Titanic, Inc. as salvor-in-possession of the wreck of the Titanic from year to year on the understanding that R.M.S. Titanic, Inc. would treat and preserve all artifacts recovered and would exhibit them to the public and would not sell or...

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