Fairport Intern. Exploration, Inc. v. Shipwrecked Vessel, Captain Lawrence

• Decision Date: 23 June 1999
• Docket Number: No. 95-1783,95-1783
• Parties: FAIRPORT INTERNATIONAL EXPLORATION, INC., Plaintiff-Appellant, v. THE SHIPWRECKED VESSEL, known as the CAPTAIN LAWRENCE, in rem, Defendant, and The State of Michigan, Intervenor-Appellee. . Re
• Court: U.S. Court of Appeals — Sixth Circuit

Page 491

177 F.3d 491

FAIRPORT INTERNATIONAL EXPLORATION, INC., Plaintiff-Appellant, v. THE SHIPWRECKED VESSEL, known as the CAPTAIN LAWRENCE, in

rem, Defendant,

and

The State of Michigan, Intervenor-Appellee.

No. 95-1783.

United States Court of Appeals, Sixth Circuit.

Reargued Dec. 10, 1998.

Decided May 13, 1999.

Rehearing Denied June 23, 1999.

Donald C. Adams, Jr., Ralph F. Mitchell, Rendigs, Fry, Kiely & Dennis, Cincinnati, OH, Michael L. Donner (argued and briefed), Kaufman & Canoles, Norfolk, VA, for Plaintiff-Appellant.

Richard T. Robol (briefed), Columus America Discovery Group, Columbus, OH, for Amicus Curiae.

Stephen F. Schuesler (argued and briefed), Office of Attorney General, Natural Resources Division, Lansing, MI, for Intervenor-Appellee.

Before: BOGGS and MOORE, Circuit Judges; and DOWD, ^* District Judge.

BOGGS, J., delivered the opinion of the court, in which DOWD, D.J., joined. MOORE, J. (pp. 502-03), delivered a separate opinion concurring in part and concurring in the result.

OPINION

BOGGS, Circuit Judge.

"Don't give up the ship," ordered Captain James Lawrence in 1813 as HMS Shannon engaged his frigate Chesapeake. One hundred twenty years later, Wilfred H. Behrens left his boat, the Captain Lawrence, as it sank in Lake Michigan. Decades later, Fairport International Exploration, Inc. acquired an interest in the vessel and, in 1994, brought an in rem action seeking to perfect title to the Captain Lawrence, which is embedded in the bottom of Lake Michigan. The State of Michigan intervened under the Abandoned Shipwreck Act of 1987, 43 U.S.C. §§ 2101--2106, contending that Behrens chose to give up the ship. Thus, claimed Michigan, the Captain Lawrence was an abandoned shipwreck embedded in State lands, and it belonged to Michigan. The district court found that Michigan established a "colorable claim" of ownership of the wreck and that the Eleventh Amendment therefore divested the court of jurisdiction. This court affirmed, see Fairport Int'l Exploration, Inc. v. Shipwrecked Vessel, known as Captain Lawrence, 105 F.3d 1078 (6th Cir.1997), vacated, --- U.S. ----, 118 S.Ct. 1558, 140 L.Ed.2d 790 (1998), and the Supreme Court vacated that decision in light of its ruling in California v. Deep Sea Research, 523 U.S. 491, 118 S.Ct. 1464, 149 L.Ed.2d 626 (1998). Now, this court again confronts the controversy surrounding the Captain Lawrence. Specifically, we consider the burden of proof faced by Michigan regarding whether Behrens abandoned the Captain Lawrence, and we decide whether the State may offer circumstantial evidence to prove abandonment by Behrens.

I. Background

This case arises from two men's "obsession" with a "mystery legend" of gold lost in northern Lake Michigan during the Civil War. The modern story begins with the Captain Lawrence, which sank in northern Lake Michigan in 1933. Built in 1898 and christened the Alice, the Gay Captain Lawrence served as a training vessel for the Sea Scouts (a branch of the Boy Scouts) from 1925 to 1931. In 1931, the boat sank in deep water of Lake Michigan, was towed to the shallow water of the Menominee River in Wisconsin, and was purchased for $150 by Wilfred H. Behrens, who renamed it the Captain Lawrence. Behrens's daughter Alice described her father as a "deep sea diver, salvage diver," obsessed with sunken treasure. The Captain Lawrence left Milwaukee on August 26, 1933, bound for Summer Island in Lake Michigan, but never reached its destination. At 3 a.m. on September 19, 1933, a sudden wind blew the vessel onto the rocky shore of Lake Michigan's Poverty Island. Behrens and his crew of four escaped and took refuge on Poverty Island. Pounded to pieces, the ship eventually sank.

On November 2, 1933, Behrens filed a "Record of Casualties to Vessel." In it, he assigned the uninsured boat a value of $200, ¹ alleged that it carried no cargo, and described the boat as a "total loss." He wrote that the Coast Guard offered assistance, which he declined, on the morning of the stranding. No evidence shows that Behrens ever returned to salvage the boat, although his daughter Alice testified that he told her that he intended to raise money to repair it. After the wreck, Behrens purchased a new vessel and engaged in river salvaging, but could not afford a boat "worthy of the lake waters up around Poverty Island." Behrens died intestate in 1959, survived by several children and his ex-wife.

Years later, Steven Libert, president of Fairport International Exploration, Inc. ("Fairport"), learned of the legend of the sunken gold. While researching the legend in library archives, he encountered references to a vessel called the "Saint Lawrence " that sank while searching for the gold. Libert discovered the boat's true name, the Captain Lawrence, and began diving off Poverty Island to recover the vessel. In 1984 and 1985, he uncovered debris, a propeller blade, and an anchor that he believes came from the ship. He researched Behrens and his associates, and he tracked down Behrens's ex-wife and children. Libert believed that Behrens discovered the long-lost gold and that the Captain Lawrence contained Behrens's logbook and, possibly, a chest of the gold.

In 1993, Libert petitioned Michigan for permits to dredge an area of the lake bed in which he believes the Captain Lawrence is embedded. The State refused to issue the permits. In 1994, Behrens's surviving heirs assigned their interests in the Captain Lawrence to Behrens's daughter, Gladys Nally, who executed a "Salvage Bill of Sale" with Fairport, assigning Libert's corporation the exclusive right to salvage the vessel's remains.

II. Procedural History

On June 28, 1994, Fairport filed a verified complaint in admiralty. ² Fairport asked the district court to declare it the sole owner of the Captain Lawrence; to give Fairport a salvage award; to enjoin third parties from interfering with salvage operations; and to issue an in rem arrest warrant for the vessel. The district court allowed Michigan to intervene. On June 15, 1995, the district court issued an opinion and an order granting Michigan's motion to dismiss for lack of jurisdiction.

The district court held that it lacked jurisdiction to adjudicate claims against States pursuant to the Abandoned Shipwreck Act of 1987 ("ASA"), 43 U.S.C. §§ 2101-2106. The court found that Michigan proved that it had a colorable claim of ownership of the Captain Lawrence and, therefore, that the Eleventh Amendment prohibited the action against the State. To reach this result, the court turned to the ASA, which reads:

(a) United States title

The United States asserts title to any abandoned shipwreck that is--

(1) embedded in submerged lands of a State;

....

(c) Transfer of title to States

The title of the United States to any abandoned shipwreck asserted under subsection (a) of this section is transferred to the State in or on whose submerged lands the shipwreck is located.

43 U.S.C. § 2105. Preliminarily, the court held that Michigan need not definitively establish that it owned the vessel. Rather, interpreting Justice Stevens's plurality opinion in Florida Dep't of State v. Treasure Salvors, Inc., 458 U.S. 670, 102 S.Ct. 3304, 73 L.Ed.2d 1057 (1982), the district court ruled that the Eleventh Amendment would bar the suit if Michigan could prove that it had a "colorable claim" to the res. The court held that a colorable claim required Michigan to show, by a preponderance of the evidence, that the Captain Lawrence was embedded in submerged lands and abandoned.

After questioning whether Fairport proved that it actually found the ship and whether any of the recovered artifacts came from the Captain Lawrence, the district court assumed for argument's sake that Fairport recovered parts of the vessel. It found that the evidence proved that the ship was embedded in the submerged lands of Michigan. It turned to the status of the wreck.

The ASA does not define "abandoned." In a statement of findings, Congress assigns to states the responsibility of managing natural resources, which include "abandoned shipwrecks, which have been deserted and to which the owner has relinquished ownership rights with no retention." 43 U.S.C. § 2101(b). The district court concluded that the ASA intended "abandoned" to have "the traditional interpretation of that term by courts sitting in admiralty." It held that a party may prove abandonment from circumstantial evidence (the "inferential abandonment" theory) and that a party need not show that a vessel's owner expressly renounced his claim on a ship ("express abandonment").

The district court discussed its findings of fact, concluding: "The evidence, although circumstantial, clearly demonstrates Wilfred Behrens' intent to abandon the vessel." Fairport Int'l Exploration, Inc. v. Shipwrecked Vessel, known as Captain Lawrence, 913 F.Supp. 552, 558 (W.D.Mich.1995) ("Fairport I "), aff'd, 105 F.3d 1078 (6th Cir.1997), vacated, --- U.S. ----, 118 S.Ct. 1558, 140 L.Ed.2d 790 (1998). The court relied on the following findings of fact:

(1) The boat, smashed on the rocks of Poverty Island, now lies under only 40-60 feet of water close to shore, not in deep water, and not far from land;

(2) In the 1930s, technology existed to salvage the boat;

(3) Behrens did not insure the boat; he valued it at $200, and he called it a "total loss";

(4) No evidence shows that Behrens took measurable steps to recover the boat, although he salvaged in rivers for years after it sunk;

(5) Behrens did not discuss the boat's location with his family, and he left no will disposing of the boat;

(6) Until Libert approached them, Behrens's heirs took no steps to find or salvage the boat.

The court found that Michigan established a colorable claim by showing by a preponderance of the evidence that Behrens abandoned the Captain Lawrence. Once Michigan made this showing, the court held that Michigan set forth a colorable claim of ownership, because a finding of...