R.M.S. Titanic Inc. v. the Wrecked

• Decision Date: 12 August 2010
• Docket Number: No. 2:93cv902.,2:93cv902.
• Citation: 742 F.Supp.2d 784
• Court: U.S. District Court — Eastern District of Virginia
• Parties: R.M.S. TITANIC, INC., successor-in-interest to Titanic Ventures, limited partnership, Plaintiff,v.The WRECKED AND ABANDONED VESSEL, Its Engines, Tackle, Apparel, Appurtenances, Cargo, etc., Located Within One (1) Nautical Mile of a Point Located at 41 43' 32? North Latitude and 49 56' 49? West Longitude, Believed to be the R.M.S. Titanic, In Rem, Defendant.

742 F.Supp.2d 784

R.M.S. TITANIC, INC., successor-in-interest to Titanic Ventures, limited partnership, Plaintiff,

v.The WRECKED AND ABANDONED VESSEL, Its Engines, Tackle, Apparel, Appurtenances, Cargo, etc., Located Within One (1) Nautical Mile of a Point Located at 41 43' 32? North Latitude and 49 56' 49? West Longitude, Believed to be the R.M.S. Titanic, In Rem, Defendant.

No. 2:93cv902.

United States District Court, E.D. Virginia,Norfolk Division.

Aug. 12, 2010.

Brian Andrew Wainger, RMS Titanic Inc., Virginia Beach, VA, Matthew D. Pethybridge, Carr & Porter LLC, Portsmouth, VA, Robert William McFarland, McGuirewoods LLP, Norfolk, VA, David J. Bederman, Emory University School of Law, Atlanta, GA, for Plaintiff.

OPINION

REBECCA BEACH SMITH, District Judge.

This matter comes before the court on R.M.S. Titanic, Inc.'s (“RMST”) Motion for a Salvage Award (“Motion”) filed on November 30, 2007.¹ The court held an evidentiary hearing on RMST's Motion on October 26–29, 2009, and on November 2 and 23, 2009. For the reasons set forth below, the court GRANTS RMST's motion for a salvage award in the amount of ONE HUNDRED PERCENT (100%) the fair market value of the artifacts recovered in the 1993, 1994, 1996, 1998, 2000, and 2004 expeditions to the wreck of the R.M.S. Titanic. The court specifically reserves the right to determine at a later time whether to pay such award in currency or via an in specie award.

I. Factual and Procedural History

It has been nearly one hundred years since the R.M.S. Titanic (“Titanic”) sank in the waters of the North Atlantic in the early hours of April 15, 1912, killing more than 1,500 of the 2,228 people onboard. For over half a century, the Titanic lay undetected, 12,500 feet below the surface, in international waters four hundred nautical miles southeast of Newfoundland, until a joint American–French expedition discovered the wreck in 1985.

In 1987, RMST's predecessor-in-interest, Titanic Ventures Limited Partnership (“TVLP”), participated in a joint expedition with the Institut français de recherche pour l'exploitation de la mer (“IFREMER”) to begin salvage operations at the site. Over the course of thirty-two dives to the Titanic wreck, TVLP recovered approximately 1,800 artifacts (“1987 artifacts”), which were taken to France for conservation and restoration.²

On May 4, 1993, RMST, formerly known as First Response Medical, Inc., acquired all the assets and liabilities of TVLP, including TVLP's interest in the Titanic salvage operations and the 1987 artifacts. In the summer of that year, RMST conducted another expedition to the Titanic wreck site, pursuant to a charter with IFREMER,³ recovering approximately 800 artifacts (“1993 artifacts”) and producing 105 hours of videotape over the course of fifteen dives. After bringing the 1993 artifacts to Norfolk, Virginia, RMST commenced the current in rem action on August 26, 1993.

The court issued a warrant directing the United States Marshal to arrest the wreck and all the artifacts that had already been salvaged and that were yet to be salvaged. The court also ordered that RMST be substituted for the Marshal as custodian of the Titanic wreck, the wreck site, and the artifacts. Formal notice of the court's order appeared in The Virginian–Pilot, The Wall Street Journal, and The Journal of Commerce, directing persons who had any claim to the wreck, or any of the associated property, to appear and state their claims. The only party to file a claim was Liverpool and London Steamship Protection and Indemnity Association Limited (“Liverpool & London”), which had insured passenger personal property and baggage on board the Titanic.

On October 20, 1993, a French administrator in the Office of Maritime Affairs of the Ministry of Equipment, Transportation, and Tourism awarded TVLP title to the 1987 artifacts. The 1987 artifacts are not included in the present Motion. ⁴

After RMST reached a settlement agreement with Liverpool & London, the court dismissed Liverpool & London's claim on June 7, 1994. By separate order that same day, the court awarded RMST exclusive rights to salvage the Titanic wreck as salvor-in-possession. Thus, in the summer of 1994, RMST and IFREMER conducted another expedition to the wreck, recovering over 1000 more artifacts (“1994 artifacts”) and producing approximately 125 hours of videotape.

Pursuant to Federal Rule of Civil Procedure 60(b), John Joslyn (“Joslyn”) filed a motion on February 20, 1996, asking the court to reconsider the June 7, 1994, Order making RMST salvor-in-possession. Joslyn argued that RMST was not fulfilling its duty as salvor-in-possession on the grounds that RMST had not made an expedition to the site in nearly two years and that it did not have the financial means to do so. On May 10, 1996, the court upheld RMST's status as salvor-in-possession in a Memorandum Opinion and Order, finding RMST had exercised due diligence, had maintained ongoing salvage operations, and had demonstrated its efforts were clothed with a prospect of success. R.M.S, Titanic, Inc. v. Wrecked & Abandoned Vessel, 924 F.Supp. 714, 722–724 (E.D.Va.1996). The court's holding was partially based on the fact that RMST had “promised the Court that it would keep the artifacts together and preserve them for the public,” and, at least until that point, RMST had kept that promise. Id. at 723.

RMST's 1996 expedition to the Titanic, again in conjunction with IFREMER, led to the recovery of 74 artifacts (“1996 artifacts”) and the production of approximately 125 hours of videotape. With the cooperation of RMST, Discovery Communications, Inc. (“Discovery”) joined the expedition, from which it produced three hours of television programming for The Discovery Channel. ⁵ Also on the 1996 expedition, efforts began to recover a section of the Titanic hull, known as the “Big Piece,” measuring approximately 26 feet by 20 feet and weighing approximately 20 tons. Nevertheless, efforts to raise the Big Piece on the 1996 expedition were ultimately unsuccessful.

In the summer of 1998, pursuant to another charter with IFREMER, RMST returned to the Titanic site, recovering approximately 70 artifacts (“1998 artifacts”), which included the Big Piece, and producing 350 hours of videotape. Once again, Discovery joined the expedition, producing five hours of television programming, which included the first-ever live broadcast from the Titanic wreck site.

On May 4, 1998, RMST sought an injunction to prohibit Deep Ocean Expeditions (“DOE”) from organizing tourist expeditions to the Titanic wreck site for the purposes of photographing it. That same day, Christopher Haver (“Haver”), an individual who had paid DOE $32,000 to participate in such an expedition, filed an action in this court seeking a declaratory judgment that he was entitled to enter the Titanic wreck site. After consolidating Haver's action with this in rem proceeding, the court granted RMST's motion for an injunction on June 23, 1998, enjoining DOE, Haver, and others from photographing the Titanic wreck. The court found an injunction necessary, in part, to compensate RMST for its efforts as salvor-in-possession, given that RMST could not sell the artifacts in its care. R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, 9 F.Supp.2d 624, 636 (E.D.Va.1998). On appeal, the Fourth Circuit reversed the court's decision to grant an injunction, holding that the court could not enjoin DOE, Haver, and others from traveling to and photographing the Titanic wreck. R.M.S. Titanic, Inc. v. Haver, 171 F.3d 943, 970 (4th Cir.1999) (“ Titanic 1999”). The Fourth Circuit affirmed, however, this court's decision to name RMST as salvor-in-possession. Id. at 966. On remand, this court entered an order consistent with the Fourth Circuit's ruling, monitoring RMST's salvor-in-possession status with periodic reports and hearings. See R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, No. 2:93cv902 (E.D.Va. July 7, 1999).

RMST completed another expedition to the Titanic wreck site in the summer of 2000, in conjunction with the P.P. Shirshov Institute of Oceanology of Moscow, Russia (“Shirshov Institute”), which provided the research vessel “Akademik Mstislav Keldysh” and two deep manned submersibles, the “MIR–1” and the “MIR–2.” The 2000 expedition consisted of twenty-eight dives and resulted in the recovery of over 900 artifacts (“2000 artifacts”), as well as the discovery of a new debris field.

In the summer of 2001, the court learned that RMST had plans to transfer interest in the Titanic artifacts. After holding a hearing, the court issued an order on September 26, 2001, finding that its previous orders to prevent sales of individual Titanic artifacts “were proper and were necessary when entered.” R.M.S. Titanic, Inc. v. The Wrecked & Abandoned Vessel, No. 2:93cv902, at 2 (E.D.Va. Sept. 26, 2001) (“ Titanic 2001”).⁶ After RMST appealed the September 26, 2001, Order, the court amended that order on October 19, 2001, to further explain its position. RMST then filed an amended notice of appeal, appealing both orders. The Fourth Circuit held an expedited hearing on the matter, and on June 6, 2002, affirmed the position of the court:

The Titanic was a historic ship, and the artifacts recovered from its wreckage therefore have enhanced value. RMST currently has a unique role as the Titanic's exclusive salvor, and, having performed salvage services, it has a lien in the artifacts and is entitled to a reward enforceable against those artifacts. At this stage of the proceedings, however, we cannot conclude that RMST has title to any artifacts. We also cannot conclude that the course that the district court is pursuing violates the law of salvage or amounts to an abuse of discretion.R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, 286 F.3d 194, 210 (4th Cir.2002) (“ Titanic 2002”).

On February 12, 2004, RMST filed a “Motion for Salvage and/or Finds Award,” pursuant to which the court held a hearing...