Deep Sea Research, Inc. v. Brother Jonathan

• Decision Date: 04 December 1996
• Docket Number: No. 95-15693,95-15693
• Citation: 102 F.3d 379
• Parties: , 96 Cal. Daily Op. Serv. 8743, 96 Daily Journal D.A.R. 14,470 DEEP SEA RESEARCH, INC., Plaintiff-Appellee, v. The BROTHER JONATHAN, her Appurtenances, furniture, cargo, etc., Defendant, and State of California; State Lands Commission, Defendants-Intervenors-Appellants, United States of America, Defendant-Intervenor.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 379

102 F.3d 379

1997 A.M.C. 315, 96 Cal. Daily Op. Serv. 8743,

96 Daily Journal D.A.R. 14,470

DEEP SEA RESEARCH, INC., Plaintiff-Appellee, v. The BROTHER JONATHAN, her Appurtenances, furniture, cargo, etc., Defendant, and State of California; State Lands Commission,

Defendants-Intervenors-Appellants,

United States of America, Defendant-Intervenor.

No. 95-15693.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 13, 1996.

Decided July 17, 1996.

As Amended on Denial of Rehearing

and Rehearing En Banc Dec. 4, 1996. ^*

Joseph Rusconi, Linus Masouredis, Deputy Attorneys General, Oakland, California, for defendant-intervenor-appellant State of California.

Peter Pelkofer, California State Lands Commission, Sacramento, California, for defendant-intervenor-appellant California State Lands Commission.

Fletcher Alford, Gordon & Rees, San Francisco, California, for plaintiff-appellee.

Barbara B. O'Malley, United States Department of Justice, Washington, D.C., for defendant-intervenor United States of America.

Appeal from the United States District Court for the Northern District of California, Louis Charles Bechtle, District Judge, Presiding. D.C. No. CV-91-03899-LCB.

Before: SCHROEDER, D.W. NELSON and KOZINSKI, Circuit Judges.

D.W. NELSON, Circuit Judge:

Appellee Deep Sea Research ("DSR") brought this in rem admiralty action seeking salvage rights and title to the wreck of the Brother Jonathan, a double paddle wheel steamer that sank in 1865 off the coast of Crescent City, California. After nineteen years of searching, DSR claims to have discovered the Brother Jonathan and has stipulated for the purposes of these proceedings that it is located upon submerged lands of the State of California. The State of California intervened for the limited purpose of asserting that it has a colorable claim of ownership to the wreck and that as a result, the district court is barred by the Eleventh Amendment from adjudicating DSR's claim.

The State argues that it has a colorable claim to ownership under the Abandoned Shipwreck Act of 1987 ("ASA"), 43 U.S.C. §§ 2101-2106, the Submerged Lands Act ("SLA"), Chs. 65, 67 Stat. 29 (1953) (codified in relevant parts at 43 U.S.C. §§ 1311-1315), and Cal.Pub.Res.Code § 6313. After an evidentiary hearing, the district court held that the State had failed to establish a colorable claim to ownership and rejected its motion to dismiss the claim. Deep Sea Research, Inc. v. Brother Jonathan, 883 F.Supp. 1343, 1363-64 (N.D.Cal.1995). The State appeals.

The United States intervened to defend the constitutionality of the ASA. The Columbus-America Discovery Group ¹ has filed an amicus curiae brief in which it argues that this circuit should not adopt the rule of the Fourth Circuit, which requires an express renunciation of ownership in order to establish abandonment.

We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

DSR filed this in rem admiralty action in November, 1991, seeking to perfect its title to and salvage rights in the wreck of the Brother Jonathan. At the initiative of DSR, the case was dismissed without prejudice in June 1992, and reopened in February 1994, a few months after DSR actually discovered the wreck. DSR had been searching for the wreck of the Brother Jonathan for almost twenty years. Until DSR discovered the wreck, neither the State nor anyone else knew its location, and the State had not made any attempt to locate the wreck. DSR asserts title to the wreck as the assignee of the subrogation rights of two insurance companies that paid claims on the cargo of the Brother Jonathan. However, according to newspaper accounts published at the time of the disaster (the only records anyone has unearthed), about two thirds of the cargo on board was uninsured. Neither is there any evidence that the ship itself was insured.

The State intervened and moved to dismiss, arguing that the wreck belonged to the State under both the ASA and Cal.Pub.Res.Code § 6313. It asserted that even though the State was not named in the complaint, the suit was, in reality, against the State and therefore barred by the Eleventh Amendment. The State also argued that because the wreck met the requirements of the ASA Under the ASA, the federal government asserts title to certain historic wrecks and transfers it to the states on whose submerged lands the wrecks are found. 43 U.S.C. § 2105. A shipwreck meets the requirements of the ASA if it is 1) abandoned; 2) located on a state's submerged lands; and 3) either embedded in the sea floor or determined eligible for listing in the National Register of Historic Places ("National Register"). Id.

the district court lacked subject matter jurisdiction over DSR's claim.

In cases involving wrecks that fall under the ASA, the traditional admiralty law of salvage ² and finds ³ does not apply. 43 U.S.C. § 2106(a). Instead, these wrecks are governed by the provisions of the ASA. As a result, the fate of these vessels may be determined in state or federal court. However, the statute makes clear that the "laws of the United States relating to shipwrecks" shall continue to apply to all other wrecks. Thus, the federal courts retain exclusive admiralty jurisdiction over cases involving wrecks that do not meet the requirements of the ASA. 43 U.S.C. § 2106(b).

Section 6313 of the California Public Resources Code is broader than the ASA, because under that provision California asserts title to all abandoned shipwrecks on state-owned submerged lands. Under the SLA, the state owns all submerged lands within three miles of the mean high tide. 43 U.S.C. §§ 1301, 1311.

The district court held two evidentiary hearings on the State's motion to dismiss. The first hearing, in September 1994, was devoted to the issue of whether the Brother Jonathan was located on state submerged lands. DSR subsequently stipulated that it was. At the second hearing, the parties addressed the issues of abandonment, embeddedness and the historical significance of the wreck.

The district court denied the State's motion to dismiss, holding that the State had not established a colorable claim to the wreck of the Brother Jonathan under the ASA. Deep Sea Research, 883 F.Supp. at 1357. The court reasoned, based on ITSI TV Productions, Inc. v. Agricultural Ass'ns, 3 F.3d 1289 (9th Cir.1993), that a party asserting sovereign immunity must prove by a preponderance of the evidence that the privilege applies. Deep Sea Research, 883 F.Supp. at 1349. The court determined that the State did not establish by a preponderance of the evidence that the wreck of the Brother Jonathan was abandoned, embedded or eligible for listing in the National Register. Id. at 1357. It further held that the ASA preempts Cal.Pub.Res.Code § 6313 to the extent that § 6313 asserts title to shipwrecks that are beyond the scope of the ASA. Because it held that the ASA did not apply to the Brother Jonathan, the court did not reach DSR's challenge to the constitutionality of the ASA.

The State appeals, arguing that it need not demonstrate by a preponderance of the evidence that the wreck of the Brother Jonathan meets the requirements of the ASA in order to make a colorable claim of ownership and qualify for Eleventh Amendment immunity. It asserts that under Marx v. Government of Guam, 866 F.2d 294 (9th Cir.1989), it has demonstrated all that is necessary to make a colorable claim to the Brother Jonathan. It also asserts that the district court erroneously held that the ASA preempts Cal.Pub.Res.Code § 6313. Finally, the State

challenges the district court's exclusion of the audio portion of a video tape that suggests that the Brother Jonathan is, in fact, embedded in the ocean floor.

STANDARD OF REVIEW

The district court's determination that the State was required to demonstrate by a preponderance of the evidence that it had a colorable claim to the Brother Jonathan in order to qualify for Eleventh Amendment immunity is a legal question, which we review de novo. Twenty-Three Nineteen Creekside, Inc. v. Commissioner, 59 F.3d 130, 131 (9th Cir.1995), cert. denied, 516 U.S. 1154, 116 S.Ct. 1034, 134 L.Ed.2d 111 (1996). Similarly, we review de novo the district court's holding that the ASA preempts Cal.Pub.Res.Code § 6313. Id. We review for clear error the district court's factual determination that the Brother Jonathan does not meet the requirements of the ASA. Fed.R.Civ.P. 52(a); Campbell v. Wood, 18 F.3d 662, 681 (9th Cir.) (en banc), cert. denied, 511 U.S. 1119, 114 S.Ct. 2125, 128 L.Ed.2d 682 (1994). Finally, the district court's exclusion as hearsay of the audio portion of the video tape that may suggest the Brother Jonathan is embedded is reviewed for abuse of discretion. United States v. Gilbert, 57 F.3d 709, 711 (9th Cir.1995).

ANALYSIS

I. Preemption of Cal.Pub.Res.Code § 6313 by the ASA

The State challenges the district court's holding that the ASA preempts Cal.Pub.Res.Code § 6313 insofar as § 6313 asserts title to shipwrecks that are not covered by the ASA. See Deep Sea Research, 883 F.Supp. at 1359. This provision grants the state title to all abandoned shipwrecks located on its submerged lands that are more than fifty years old or of special historical significance. ⁴ According to the State, the district court erroneously construed § 7 of the ASA as explicitly preempting the California provision. Section 7 provides that the Act "shall not change the laws of the United States relating to shipwrecks other than those to which this chapter applies." 43 U.S.C. § 2106(b). The State argues that because state law is incorporated into federal maritime law, § 7 of the ASA does not preempt Cal.Pub.Res.Code § 6313. The State's argument is incorrect.

Federal law can preempt a state statute either by explicit language in the statute or when the intent of Congress to preempt state action is "implicit from a pervasive scheme of federal regulation that leaves no room for state and local supplementation." Barber v....