Atlantis Development Corporation v. United States

Decision Date12 June 1967
Docket NumberNo. 22958.,22958.
Citation379 F.2d 818
PartiesATLANTIS DEVELOPMENT CORPORATION, Ltd., Appellant, v. UNITED STATES of America et al., Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

Louis W. Adams, Jr., Fort Lauderdale, Fla., J. Francis Hayden, New York City, for appellant.

Charles E. Davis, Orlando, Fla., Aaron A. Foosaner, First Asst. U. S. Atty., Miami, Fla., Roger P. Marquis, George S. Swarth, Attys., Dept. of Justice, Washington, D. C., for appellees.

Before TUTTLE, Chief Judge, and BROWN and GODBOLD, Circuit Judges.

JOHN R. BROWN, Circuit Judge:

This case involves a little bit of nearly everything — a little bit of oceanography, a little bit of marine biology, a little bit of the tidelands oil controversy, a little bit of international law, a little bit of latter day Marco Polo exploration. But these do not command our resolution since the little bits are here controlled by the less exciting bigger, if not big, problem of intervention. The District Court declined to permit mandatory intervention as a matter of right or to allow intervention as permissive. As is so often true, a ruling made to avoid delay, complications, or expense turns out to have generated more of its own. With the main case being stayed by the District Court pending this appeal, it is pretty safe to assume that the case would long have been decided on its merits (or lack of them) had intervention of either kind been allowed. And this seems especially unfortunate since it is difficult to believe that the presence of the attempted intervenor would have added much to the litigation. All of this becomes the more ironic, if not unfortunate, since the intervenor1 and the Government sparring over why intervention ought or ought not to have been allowed, each try to persuade us the one was bound to win, the other lose on the merits which each proceeds to argue as though the parties were before or in the court. Adding to the problem, or perhaps more accurately, aiding in the solution of it, are the mid-1966 amendments to the Federal Rules of Civil Procedure including specifically those relating to intervention. We reverse.

What the jousting2 is all about is the ownership in, or right to control the use, development of and building on a number of coral reefs or islands comprising Pacific Reef, Ajax Reef, Long Reef, an unnamed reef and Triumph Reef which the intervenor has called the "Atlantis Group" because of the name given them by Anderson, its predecessor in interest and the supposed discoverer. Discovery in the usual sense of finding a land area, continent or island heretofore unknown could hardly fit this case. For these reefs are, and have been for years, shown on Coast and Geodetic Charts3 and, more important, they are scarcely 4½ miles off Elliott Key and 10 miles off the Coast off the Florida Mainland. Although the depth of water washing over them at mean low water is likely one of the factual controversies having some possible significance, it seems undisputed that frequently and periodically the bodies of these reefs become very apparent especially in rough seas when the rock or the top surface of the rock becomes plainly visible in the troughs of the seas.

Just how or in what manner these reefs were "discovered" is so far unrevealed. Some time in 1962 William T. Anderson discovered the reefs apparently by conceiving the idea of occupying them through the construction of facilities for fishing club, marina, skin diving club, a hotel, and, perhaps as the chief lure, a gambling casino. Anderson made some sort of claim to it and with facilities unavailable to the adventurous explorers of the long past, he gave public notice of this in the United States and in England by newspaper advertisements in late 1962 and early 1963. These "rights" were acquired by Atlantis Development Corporation, Ltd., the proposed intervenor. Reflecting the desire manifested now by the persistent efforts to intervene to have legal rights ascertained in a peaceful fashion through established tribunals and not by self-help or the initiation of physical activities which would precipitate counter moves, physical or legal, or both, Atlantis (and predecessors) patiently sought permission from all governmental agencies, state and federal — just short of the United Nations — but to no avail. The State of Florida through the Trustees of the Internal Improvement Fund4 responding to a formal request stated that the property is "outside the Constitutional Boundaries of the State of Florida and therefore, not within the jurisdiction of the T.I.I.F." Undaunted, Atlantis turned to the Federal Government. To these entreaties the Department of Interior on September 14, 1962, replied: "The Department of the Interior has no jurisdiction over land that is outside the territorial limits of the United States. Questions concerning such land should be taken up with the Department of State." This was soon echoed by the answer of the Department of State on November 9, 1962, through the Assistant Legal Advisor. "The areas in question are outside of the jurisdiction of the United States and constitute a part of the high seas. The high seas are open to all nations and no state may validly subject any part of them to its sovereignty. * * *." Subsequently, Atlantis spent approximately $50,000 for surveys and the construction of four prefabricated buildings, three of which were destroyed by a hurricane in September 1963. Thereafter upon learning that the United States Corps of Engineers was asserting that permission was needed to erect certain structures on two of the reefs, Triumph and Long Reef, Atlantis commenced its long, but unrewarding, efforts either to convince the Corps of Engineers, the United States Attorney General, or both, that the island reefs were beyond the jurisdiction of United States control or to initiate litigation which would allow a judicial, peaceful resolution. The Engineers ultimately reaffirmed the earlier decision to require permits. In December 1964 on learning that the defendants in the main case had formally sought a permit from the Engineers, Atlantis notified the Government of its claim to ownership of the islands and the threatened unauthorized actions by the defendants. This precipitated further communications with the Department of Justice with Atlantis importuning, apparently successfully, the Government to initiate the present action.

It was against this background that the litigation commenced. The suit is brought by the United States against the main defendants.5 The complaint was in two counts seeking injunctive relief. In the first the Government asserted that Triumph and Long Reefs are part of the bed of the Atlantic Ocean included in the Outer Continental Shelf subject to the jurisdiction, control and power of disposition of the United States. The action of the defendants (note 5, supra) in the erection of caissons on the reefs, the dredging of material from the seabed, and the depositing of the dredged material within the caissons without authorization was charged as constituting a trespass on government property. In the second count the Government alleged that the defendants were engaged in the erection of an artificial island or fixed structure on the Outer Continental Shelf in the vicinity of the reefs without a permit from the Secretary of the Army in violation of the Outer Continental Shelf Lands Act, 43 U.S.C.A. § 1333(f) and 33 U.S.C.A. § 403. Denying that the complaint stated a claim, F.R.Civ.P. 12 (b), the defendants besides interposing general denial asserted that the Secretary of the Army lacks jurisdiction to require a permit for construction on the Outer Continental Shelf and that the District Court lacks jurisdiction since the reefs and the defendants' actions thereon are outside the territorial limits of the United States. As thus framed, the issues in the main case are whether (1) the District Court has jurisdiction of subject matter, (2) the defendants are engaged in acts which constitute a trespass against government property, and (3) the defendants' construction activities without a permit violate 43 U.S.C.A. § 1333(f) and 33 U.S.C.A. § 403.6

Atlantis seeking intervention by proposed answer and cross-claim against the defendants admitted the jurisdiction of the District Court. It asserted that the United States has no territorial jurisdiction, dominion or ownership in or over the reefs and cannot therefore maintain the action for an injunction, and that conversely Atlantis has title to the property by discovery and occupation. In the cross-claim, Atlantis charged the defendants as trespassers against it. Appropriate relief was sought by the prayer.7

The District Court without opinion declared in the order that intervenor "does not have such an interest in this cause as will justify its intervention, either as a matter of right or permissively." Leave was granted to appear amicus curiae.

We think without a doubt that under former F.R.Civ.P. 24(a), intervention as a matter of right was not compelled under (a) (2).8 The situation did not present one in which the intervenor "is or may be bound" by a decree rendered in his absence in the sense articulated most recently in Sam Fox9 in terms of res judicata. Although not quite so clear, we also think it did not measure up to the notions loosely reflected in a case-by-case development under which, although res judicata was technically lacking, the decree is considered "binding" since in a very practical sense it would have an immediate operative effect upon the intervenor.10 In none of these cases was it suggested that if the only effect of the decree in intervenor's absence would be to raise the hurdle of stare decisis, this would amount to the absentee being bound as a practical matter.11

This brings us squarely to the effect of the 1966 Amendments and the new F.R.Civ.P. 24(a).12 Before examing its intrinsic meaning and purpose, the question arises, of...

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