Sindia Expedition, Inc. v. Wrecked and Abandoned Vessel, Known as THE SINDIA

• Decision Date: 08 February 1990
• Docket Number: No. 89-5485,89-5485
• Citation: 895 F.2d 116
• Parties: , 15 Fed.R.Serv.3d 1236 The SINDIA EXPEDITION, INC., Appellant, v. The WRECKED AND ABANDONED VESSEL, KNOWN AS "THE SINDIA," which ran aground off Ocean City, New Jersey, her tackle, armament, apparel and cargo located within 3,000 yards of a point at coordinates 74? 35' 12" West Longitude and 39? 16' 00" North Latitude.
• Court: U.S. Court of Appeals — Third Circuit

Page 116

895 F.2d 116

1990 A.M.C. 305, 15 Fed.R.Serv.3d 1236

The SINDIA EXPEDITION, INC., Appellant, v. The WRECKED AND ABANDONED VESSEL, KNOWN AS "THE SINDIA,"

which ran aground off Ocean City, New Jersey, her tackle,

armament, apparel and cargo located within 3,000 yards of a

point at coordinates 74? 35' 12" West Longitude and 39? 16'

00" North Latitude.

No. 89-5485.

United States Court of Appeals, Third Circuit.

Argued Dec. 12, 1989.

Decided Feb. 8, 1990.

Peter E. Hess (argued), Wilmington, Del., David Paul Horan, Key West, Fla., for appellant.

John M. Van Dalen (argued at Court Request), Deputy Atty. Gen., State of N.J., Trenton, N.J., for State of N.J.

Before HUTCHINSON, COWEN, and ROSENN, Circuit Judges.

OPINION OF THE COURT

ROSENN, Circuit Judge.

In 1901, the British-flagged ship, the Sindia, with her four towering masts, successfully and happily navigated the high seas from Shanghai, China to the seacoast of New Jersey. It is believed that when the 329 foot steel-hulled barque proudly sailed into the waters off New Jersey, her cargo hold swelled with fine porcelain, carved ivory, silk, camphor oil, and bamboo matting. Much of her exotic goods and antiquities is believed to have been brought aboard by British and American soldiers from plundering following the Chinese Boxer Rebellion.

When the ship was nearly within sight of her destination, apparently the crew began to prematurely celebrate their arrival. On December 15, 1901, the Sindia's sailing days sadly suffered a jarring end when she ran aground just off the beach of Ocean City, New Jersey. Today, the Sindia's tillerpost, still protruding from her steel hull and plainly visible in the relatively shallow waters in which she lies, marks her watery grave. ¹

The Sindia Expedition (Expedition), a maritime treasure hunter incorporated in New Jersey, commenced this in rem admiralty action in the United States District Court for the District of New Jersey seeking either, or both, title to the vessel and a liberal salvage award. ² Attempts to salvage the ship have continued sporadically since her unfortunate demise. Other hopefuls intervened. The Seaview Beach Condominium Association, Inc. (Seaview) and McHale, Kissane & Pennypacker (McHale) intervened on the basis of their claims to land on which the Sindia is embedded. Noreaster Marine Salvage L.P. (Noreaster) intervened as a competing salvor.

Although the Expedition's complaint contains a request that all "governmental agencies be enjoined from interfering with the Plaintiff's title, possession and property," the Expedition did not specifically name any state, state agency, or state official in its complaint. The State of New Jersey (the State), however, informed the district court by letter that it claimed ownership to the wreck of the Sindia and her cargo and that it would not waive its Eleventh Amendment immunity by appearing in the litigation.

Thereafter, McHale filed a motion to dismiss the action contending that the district court lacked jurisdiction, that service of process was defective and that the Expedition had failed to join the State of New Jersey, an indispensable party. The court, 710 F.Supp. 1020, granted McHale's motion on the ground that the State had colorable title and, therefore, the Expedition had failed to join an indispensable party as required under Federal Rule of Civil Procedure 19(b). The Expedition appeals. We reverse and remand.

I.

On appeal, the Expedition vigorously contends that New Jersey does not have colorable title to the Sindia and, therefore, is not an indispensable party to the action. Upon request of this court and reserving its right to asserts its rights to sovereign immunity, the State submitted a memorandum statement and participated at oral argument. In its statement, the State informs us that its claim to colorable title of the wrecked vessel rests on a number of bases, including New Jersey's abandoned property law, N.J.S.A. 2A:37-13, New Jersey common law, the Federal Submerged Lands Act of 1953, 43 U.S.C. Sec. 1311(a), and finally an agreement reached with the Expedition in 1988 granting the Expedition salvage rights. ³ The agreement, however, provides that it will terminate upon final order of the district court or on appeal in the Expedition's admiralty action. Although it asserts that the district court lacks jurisdiction to decide New Jersey's claims because of the eleventh amendment, the State suggests that the district court could exercise jurisdiction over all the non-state parties before it so that the primacy of one salvage group versus another could be decided, leaving to the State the option of protecting its rights through negotiations or contract.

Rather than focus on the question, as did the district court, of whether New Jersey has a colorable claim of title to the Sindia so as to make New Jersey an indispensable party, we believe that there is a more direct and pragmatic resolution of this appeal. Relying on the opinion of the Supreme Court in its landmark decision in Florida Dep't of State v. Treasure Salvors, Inc., 458 U.S. 670, 102 S.Ct. 3304, 73 L.Ed.2d 1057 (1982), we prefer to assume for the purpose of our discussion that the State has colorable title, as held by the district court here, and meet the dominant issue whether the Eleventh Amendment deprives the court of jurisdiction because the State, though a non-party, asserts an interest in the res. We therefore consider whether the Expedition's complaint in rem is barred by the Eleventh Amendment of the Constitution with the consequential effect that this would per se render the State an indispensable party to the action.

A. The Eleventh Amendment

The district court did not expressly address whether the action was barred by the Eleventh Amendment but instead focused its attention on the Expedition's failure to join an indispensable party. Although New Jersey and the Expedition are satisfied that the federal court has jurisdiction over the action, we have "a special obligation" to satisfy ourselves of our own and the district court's jurisdiction, "even though the parties are prepared to concede it." Bender v. Williamsport Area School Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 1331, 89 L.Ed.2d 501 (1986), quoting Mitchell v. Maurer, 293 U.S. 237, 244, 55 S.Ct. 162, 165, 79 L.Ed. 338 (1934). We will, therefore, sua sponte, consider the effect of the Eleventh Amendment on our jurisdiction. See Fitchik v. New Jersey Transit Rail Operations, Inc., 873 F.2d 655, 658 n. 1 (3d Cir.), cert. denied, --- U.S. ----, 110 S.Ct. 148, 107 L.Ed.2d 107 (1989).

The Eleventh Amendment provides:

The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

Congress enacted the Eleventh Amendment to protect the sovereign immunity of the individual states. Over the years, the rule has evolved that suits of private parties seeking to impose a liability which must be met by public funds of the state treasury are barred by the Eleventh Amendment. Edelman v. Jordan, 415 U.S. 651, 662-63, 94 S.Ct. 1347, 1355-56, 39 L.Ed.2d 662 (1974); Fitchik v. New Jersey Transit Rail Operations, Inc., 873 F.2d at 659. The States' Eleventh Amendment protection extends to actions brought under federal admiralty jurisdiction. In re New York, No. 1, 256 U.S. 490, 500, 41 S.Ct. 588, 590, 65 L.Ed. 1057 (1921). Thus, a private party may not bring an in personam action, even in admiralty, against an unconsenting state. Id.

The Court in Florida Dep't of State v. Treasure Salvors, Inc., 458 U.S. 670, 102 S.Ct. 3304, 73 L.Ed.2d 1057 (1982), directly addressed the issue of whether an admiralty in rem action may be barred by the Eleventh Amendment. In Treasure Salvors, the plaintiffs filed an admiralty in rem action in federal district court seeking declaration of title to an abandoned vessel. Two Florida state officials of the Florida Division of Archives held possession of some of the artifacts of the vessel recovered from the floor of the ocean in international waters. However, neither the state agency nor the State of Florida was named as a party to the suit.

The Treasure Salvor plaintiffs requested the district court to "arrest" the artifacts held by the two named state officials. The court issued the warrant and denied the State's motion to quash. Florida appealed the arrest order claiming Eleventh Amendment immunity. The Court of Appeals for the Fifth Circuit affirmed, 621 F.2d 1340, and the Supreme Court granted certiorari. 451 U.S. 982, 101 S.Ct. 2312, 68 L.Ed.2d 838 (1981).

A plurality of the Supreme Court held that the Eleventh Amendment did not bar the warrant. Justice Stevens, for the plurality, explained that a classic admiralty in rem action in which the plaintiffs claim only an ownership interest in property and are not seeking personal jurisdiction over the State by seizure of the vessel is not barred by the Eleventh Amendment. See Treasure Salvors, 458 U.S. at 699, 102 S.Ct. at 3322. On the other hand, an admiralty action brought in rem solely for the purpose of giving the court jurisdiction over a damage claim against a State is barred by the Eleventh Amendment. Id. The reasoning behind such a bar is that the action has no connection to the typical admiralty in rem action, but is a calculated attempt by the plaintiff to acquire personal jurisdiction by doing an end-run around the Eleventh Amendment by seizing property. See In re New York, 256 U.S. 490, 501, 41 S.Ct. 588, 591 ("the proceedings ... have no element of a proceeding in rem").

The Treasure Salvors plurality held that a legitimate admiralty in rem action directed only to the derelict property is not barred by the Eleventh Amendment for two reasons. First, the in rem arrest warrant merely seeks possession of specific property; it does not "seek any attachment...