Salvors, Inc. v. Unidentified Wrecked & Abandoned Vessel

Decision Date05 July 2017
Docket NumberNo. 16-11246,16-11246
Parties SALVORS, INC., a Florida corporation, f.k.a. Cobb Coin Company, Inc., Plaintiff, 1715 Fleet-Queens Jewels, LLC, c/o 608 Whitehead Street, Key West, FL 33040, Plaintiff–Appellee, Gold Hound LLC, Intervenor Plaintiff–Appellant, v. UNIDENTIFIED WRECKED & ABANDONED VESSEL, Defendant–Appellee.
CourtU.S. Court of Appeals — Eleventh Circuit

Gerard Joseph Sullivan, Jr., Sullivan & Company, Jacksonville, FL, for IntervenorAppellant.

Ernest Leroy Reddick, III, Florida Department of State, Tallahassee, FL, Eric Joseph Taylor, Attorney General's Office, Orlando, FL, David Paul Horan, Darren Michael Horan, Horan Wallace & Higgins, LLP, Key West, FL, for DefendantsAppellees.

Cara Anne Higgins, Horan Wallace & Higgins, LLP, Key West, FL, for Salvors, Inc., a Florida corporation, f.k.a. Cobb Coin Company, Inc.

Before MARCUS, JILL PRYOR, and SILER,* Circuit Judges.

MARCUS, Circuit Judge:

This in rem admiralty proceeding began in 1979, when Cobb Coin Company retrieved a cannon from wreckage discovered off the coast of Florida. That cannon was part of a shipwreck dating back to 1715, when eleven Spanish galleons carrying gold, silver, and precious jewels perished off the Florida coast in a hurricane. Over the next 264 years, the shifting tides spread and then buried the remains of these ships and their cargo along the coastline. In 1982, Cobb Coin was awarded exclusive salvaging rights to the shipwreck of one of those galleons, and the district court held (and continues to hold) a yearly distribution hearing to adjudicate title to the recovered artifacts and allow competing claimants to be heard. This process has been carried out faithfully since 1982.

Sometime in 2010, Cobb Coin's successor-in-interest assigned its exclusive salvaging rights to plaintiff-appellee 1715 Fleet-Queens Jewels, LLC ("Fleet-Queens"). By this time, the wreckage had spread out along forty-one miles of the South Florida coastline. Fleet-Queens worked with subcontractors, including intervenor-appellant Gold Hound, LLC, to assist it in its salvaging operations. Gold Hound utilized allegedly proprietary maps, data, and software to salvage a specific area on behalf of Fleet-Queens. In 2013, Fleet-Queens sought to renegotiate its contract with Gold Hound and asked Gold Hound to relinquish ownership of this proprietary information; Gold Hound refused and the parties did not renew the contract.

During the 2015 salvage season, Fleet-Queens recovered approximately four hundred gold coins, among other treasures, from an area that Gold Hound had allegedly been salvaging while acting as a subcontractor for Fleet-Queens. Gold Hound claimed that this discovery was made using its proprietary maps and software, and accordingly it sought to intervene in the in rem action to assert a maritime lien over some of these artifacts and to assert several state-law claims. It also sought to contest Fleet-Queens's exclusive salvage rights because Fleet-Queens allegedly mishandled the artifacts in violation of the district court's 1982 order. The district court denied the motion to intervene. Gold Hound then filed a claim asserting a maritime lien and participated in the 2015 distribution hearing, but the district court concluded that it was not entitled to a maritime lien. Gold Hound now appeals these rulings and also challenges the district court's continued exercise of subject-matter jurisdiction over the entire dispute.

After review, we conclude that the district court properly determined that it had and continues to have subject-matter jurisdiction over the res . However, Gold Hound should be granted leave to intervene in this proceeding to assert its in rem claims. On remand, we leave it to the district court's sound discretion to determine whether to exercise supplemental jurisdiction over Gold Hound's related state-law claims, including, inter alia , its claims for breach of contract, misappropriation of trade secrets, breach of fiduciary duty and constructive trust, and tortious interference. As for Gold Hound's claimed maritime lien, we cannot decide on this record whether Gold Hound may succeed because basic facts remain in dispute. We, therefore, vacate the district court's denial of Gold Hound's motion to intervene and its denial of Gold Hound's claim to a maritime lien and remand the case to the district court for further proceedings consistent with this opinion.


This case began long ago as an in rem action brought by Cobb Coin Company against the "remains of what is believed to be the Almiranta of the New Spain Group of the 1715 Plate Fleet, known to the Spanish by two names: San Christo del Valle and Nuestra Senora de la Concepcion," which rests somewhere off the coast of Florida near Vero Beach ("the 1715 wreck"). Cobb Coin Co. v. Unidentified, Wrecked & Abandoned Sailing Vessel , 549 F.Supp. 540, 545 (S.D. Fla. 1982). The complex procedural history of this lawsuit began on August 17, 1979, when Cobb Coin filed an in rem admiralty complaint against the vessel in the United States District Court for the Southern District of Florida to notify the district court and the U.S. Marshal that it intended to retrieve a cannon from the 1715 wreck; the cannon served as the basis for in rem jurisdiction. Id. at 547. Cobb Coin sought a declaration that it was the owner in possession of the wrecked vessel and sought exclusive salvage rights over the wreck. Cobb Coin Co. v. Unidentified, Wrecked & Abandoned Sailing Vessel , 525 F.Supp. 186, 190 (S.D. Fla. 1981). Because the area and cargo at issue lay within the territorial limits of the state of Florida, the State intervened, claiming ownership of the vessel and its cargo under the Florida Archives and History Act, Fla. Stat. ch. 267. See Cobb Coin , 525 F.Supp. at 197, 200.

Three days later, on August 20, 1979, Cobb Coin retrieved the cannon from the wreck site. Id. at 191. The district court concluded that it had subject-matter jurisdiction under 28 U.S.C. § 1333 and that Cobb Coin's possession of the cannon "constituted constructive possession of the wreck itself and everything that is a part thereof, wherever located, and whenever removed therefore, past, present or future." Id. (quotations omitted). Florida then sought injunctive relief designed to prevent Cobb Coin from continuing to salvage the site; the district court denied that request and Cobb Coin continued to salvage the 1715 wreck. Id. at 191–92.

On July 7, 1981, the district court entered a temporary restraining order for Cobb Coin and enjoined the State from interfering with Cobb Coin's ongoing salvage operations. Id. at 192–93. The district court subsequently converted this order into a preliminary injunction. Id. at 220. And on August 31, 1982, after a two-day bench trial, the district court made the preliminary injunction permanent, concluding that "Cobb Coin ha[d] established a right to the protection of this Court to conduct further salvage activities, for as long as it demonstrates the requisite diligence and success in its efforts." Cobb Coin , 549 F.Supp. at 561.

The district court retained jurisdiction "[t]o protect the Plaintiff's valid salvage operations on the defendant wreck," "to adjudicate its rights vis-a-vis competing salvors who may assert a superior right to salve the defendant wreck," and "[t]o adjudicate the plaintiff's claim to a salvage award on a periodic basis." Id. The district court set a schedule accordingly: on February 1 of each year, Cobb Coin would be required to file a claim stating the value of the salvage services performed and cataloguing the artifacts salvaged in the previous calendar year. Id. Failure to file by that date would constitute prima facie evidence that Cobb Coin had abandoned the wreck, and it would have thirty days to rebut that presumption through appropriate pleadings. Id. The state of Florida, in turn, was "invited to intervene and seek certain artifacts to be exhibited throughout the State for the benefit of the People of Florida."Id.

This injunction was never appealed or reversed and remains in effect today. In accordance with the district court's 1982 order, Cobb Coin and the state of Florida entered into a settlement agreement on June 3, 1983, adopting the order. On August 29, 1983, the district court issued a binding consent judgment approving the settlement. Salvage proceeded as dictated by the terms of the district court's 1982 order for the next twenty-seven years. Other parties would occasionally appear at the distribution hearings to assert claims over some of the recovered artifacts, and often the State would appear to reserve a portion of the recovered artifacts for display in museums.

Over the centuries, the wreckage had spread out along forty-one miles of the Florida coastline. Cobb Coin's successor-in-interest thus began working with various subcontractors to assist in salvaging the wreck; Gold Hound, LLC, was one of them. In the spring of 2010, Gold Hound entered into an agreement with Cobb Coin's successor-in-interest under which it would perform salvage services as a subcontractor and would be entitled to 50 percent of the value of the treasure it recovered. A few months later, Cobb Coin's successor-in-interest assigned its exclusive salvaging rights to the plaintiff-appellee 1715 Fleet-Queens Jewels, LLC. That assignment was approved by the district court and by the state of Florida. Fleet-Queens then became a party to this action and continued the salvage operations in accordance with the district court's 1982 order.

In 2011, Gold Hound and Fleet-Queens entered into a contract to engage in joint exploration of the 1715 wreck. Gold Hound acted as a subcontractor for Fleet-Queens and salvaged a specific area of the 1715 wreck on Fleet-Queens's behalf. Gold Hound purportedly used proprietary maps and computer software to conduct its salvaging work. On May 1, 2013, Fleet-Queens attempted to renegotiate its contract with Gold Hound to add new terms requiring that...

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