Aqua Log, Inc. v. Georgia

• Citation: 594 F.3d 1330
• Decision Date: 28 January 2010
• Docket Number: No. 08-16225.,No. 08-16274.,08-16225.,08-16274.
• Parties: AQUA LOG, INC., a Georgia corporation, Plaintiff-Appellee, v. State of GEORGIA, Claimant-Appellant. Aqua Log, Inc., Plaintiff-Appellee, v. State of Georgia, Interested Party-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

594 F.3d 1330

AQUA LOG, INC., a Georgia corporation, Plaintiff-Appellee, v. State of GEORGIA, Claimant-Appellant.

Aqua Log, Inc., Plaintiff-Appellee, v. State of Georgia, Interested Party-Appellant.

No. 08-16225.

No. 08-16274.

United States Court of Appeals, Eleventh Circuit.

January 28, 2010.

James Doyle Coots, Ga. Dept. of Law, John E. Hennelly, Isaac Byrd, Atlanta, GA, for State of GA.

John William Bass, Sr., Cairo, GA, for Aqua Log, Inc.

Appeals from the United States District Court for the Southern District of Georgia.

Before BLACK, WILSON and COX, Circuit Judges.

BLACK, Circuit Judge:

This appeal arises from two in rem admiralty actions filed by Appellee Aqua Log, Inc. (Aqua Log) seeking to salvage logs lying at the bottom of Georgia's rivers. Appellant the State of Georgia intervened as an interested party and alerted the courts to its claim to ownership of the logs. In each case, Georgia filed a motion to dismiss, arguing the court lacked subject matter jurisdiction because the Eleventh Amendment prohibited a federal court from adjudicating its interest in the logs. The district courts denied Georgia's motions to dismiss, holding Georgia could not claim Eleventh Amendment immunity because it lacked actual possession of the res. We affirm the district courts' orders.

I. BACKGROUND

During the nineteenth and early twentieth centuries, commercially harvested logs were commonly rafted down Georgia's rivers and streams to coastal markets. A small percentage of such logs sank while in transit and remain submerged in Georgia's waterways. These logs, referred to as deadhead logs, were cut from old growth forests and thus have certain valuable characteristics not found in modern timber.

In 1985, Georgia passed a statutory scheme governing the use and ownership of submerged cultural resources. See O.C.G.A. § 12-3-80 to -83. Under these statutes, the state is given title to all submerged cultural resources and the Georgia Department of Natural Resources (DNR) is empowered to enact such rules and regulations as may be necessary to protect or recover such resources. O.C.G.A. §§ 12-3-80 to -81.

At the time Aqua Log filed its complaints, Georgia had a permit procedure in place exclusively applicable to the removal of deadhead logs. See O.C.G.A. § 12-3-82.1 (repealed January 1, 2008).¹ This procedure required anyone who desired to recover deadhead logs to first submit an application to the DNR with a plan detailing the location, scope, and methods of the proposed recovery. O.C.G.A. § 12-3-82.1(c). The DNR was authorized to issue a permit only after considering the operation's effect on factors such as water quality, wildlife habitat, the state's commercial and recreational fisheries, endangered species, and land use. O.C.G.A. § 12-3-82.1(e)(1).² The applicant was required to pay an annual fee of $10,000, post a bond of up to $50,000, and pay the DNR adequate consideration for any recovered logs. O.C.G.A. § 12-3-82.1(f)-(h). Anyone who removes a submerged cultural resource without a permit is guilty of a misdemeanor. O.C.G.A. § 12-3-83.

The Wildlife Resources Division of the DNR contracted with the United States Department of the Navy to use sonar to survey portions of the Altamaha River for the presence of deadhead logs. The survey was completed on September 20, 2000, and revealed a relatively low number of logs, many of which have likely changed position since the time of the survey due to normal river conditions.

Aqua Log filed two nearly identical complaints against certain specified in rem defendant logs lying on the bottom of the Altamaha and Flint Rivers in the Southern District and Middle District of Georgia. In each case Aqua Log requested the court to grant a salvage award for its recovery of the in rem defendants, or, if the owners of the logs could not be determined, title to the logs under the law of finds.

The only pertinent difference between the two cases was the manner in which the logs were seized. In the case in the Southern District, several state officers were present at the time of the seizure, which was conducted pursuant to an order from the magistrate judge granting the U.S. Marshals control of the premises.³ In the case before the Middle District, a representative log was seized pursuant to an order from the magistrate judge without the presence of state officers soon after the complaint was filed.

Georgia filed a statement in each case for the limited purpose of alerting the court to Georgia's claim of ownership of the in rem defendants. The statements explicitly stated Georgia did not waive its sovereign immunity. Georgia also filed a motion to dismiss for lack of subject matter jurisdiction in each case, arguing the Eleventh Amendment barred the court from adjudicating its interest in the logs. Both district courts denied Georgia's motions, finding the Eleventh Amendment did not defeat federal jurisdiction because the state lacked actual possession of the res at issue in each case. Georgia appeals these orders in a consolidated appeal.⁴

II. JURISDICTION

The judicial power of the federal courts extends "to all Cases of admiralty and maritime Jurisdiction." U.S. Const. art. III, § 2, cl. 1. The jurisdiction of the federal courts is limited, however, by the Eleventh Amendment, which provides that "[t]he 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." U.S. Const. amend. XI. While early cases cast doubt on whether the Eleventh Amendment is applicable in this context, the Supreme Court has more recently held in rem admiralty actions are "not wholly exempt" from the Amendment's limitations on federal jurisdiction. See California v. Deep Sea Research, Inc., 523 U.S. 491, 502-03, 118 S.Ct. 1464, 1470-71, 140 L.Ed.2d 626 (1998).

"Although the Eleventh Amendment bars federal jurisdiction over general title disputes relating to state property interests, it does not" defeat federal jurisdiction over all in rem admiralty actions to which a state claims an interest. Id. at 506, 118 S.Ct. at 1472. As in all cases involving sovereign immunity, the state must not consent to the federal court's jurisdiction or otherwise waive its immunity. Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 675, 119 S.Ct. 2219, 2226, 144 L.Ed.2d 605 (1999). The state must also have "a colorable claim to possession" of the res. Fla. Dept. of State v. Treasure Salvors, Inc., 458 U.S. 670, 697, 102 S.Ct. 3304, 3321, 73 L.Ed.2d 1057 (1982). Finally, the state must be in possession of the res. Deep Sea Research, 523 U.S. at 507-08, 118 S.Ct. at 1473.

Georgia has not waived its immunity and has asserted at least a colorable claim to ownership of the res. The sole issue raised on appeal is thus whether Georgia had possession of the logs lying at the bottom of the Altamaha and Flint Rivers.⁵

III. DISCUSSION

In Deep Sea Research, the Supreme Court reaffirmed the vitality of a series of cases dating back to the nineteenth century that hold a government can assert sovereign immunity in an in rem admiralty proceeding only when it is in possession of the res. Deep Sea Research, 523 U.S. at 506-07, 118 S.Ct. at 1472-73. Although these cases hold a state lacking possession cannot assert sovereign immunity, courts have yet to provide a comprehensive definition of the possession requirement. To determine if Georgia possessed the res in this case, we must therefore analyze each case and, where the law remains uncertain, look to how possession is defined in other areas of the law.

This Court's analysis begins with The Davis, 10 Wall. 15, 77 U.S. 15, 19 L.Ed. 875 (1869), a Reconstruction era case decided under the analogous sovereign immunity of the United States.⁶ The Supreme Court has recently held that "[w]hile this Court's decision in The Davis was issued over a century ago, its fundamental premise remains valid in in rem admiralty actions." Deep Sea Research, 523 U.S. at 507, 118 S.Ct. at 1473.⁷ In The Davis, the United States shipped a cargo of cotton aboard a private vessel that, after meeting with disaster at sea, was transported to a place of safety by a group of salvors. 77 U.S. at 16. Upon the ship's arrival at port, and before the cargo was delivered, the ship's salvors filed an in rem action in state court requesting a lien against the vessel and its cargo for salvage services rendered in saving the property. The United States intervened, claiming immunity based on its ownership of the cargo. Id.

The Court in The Davis held an in rem action may be maintained against government property when the suit "does not require that the property shall be taken out of the possession of the United States." Id. at 21. The Court continued:

But what shall constitute a possession which, in reference to this matter, protects the goods from the process of the court? The possession which would do this must be an actual possession, and not that mere constructive possession which is very often implied by reason of ownership under circumstances favorable to such implication. We are speaking now of a possession which can only be changed under process of the court by bringing the officer of the court into collision with the officer of the government, if the latter should choose to resist. The possession of the government can only exist through some of its officers, using that phrase in the sense of any person charged on behalf of the government with the control of the property, coupled with its actual possession.

Id. at 21. Applying this test, the Court ultimately found the government lacked possession because the vessel was a common carrier and the goods had not yet been delivered to an officer of the United States. Id. at 21-22.

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