# Petition — Florida Dept. of State v. Treasure Salvors, Inc.

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_1953%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1982
- **Citation:** 458 U.S. 670

## Text

|

Office -Supreme ‘ US.
80 FILED
=
. 3 4 8 JAN 13 1981
BD. encaszeeees ALEXAND. s .. SUEVAS,
CuLIAC
IN THE

SUPREME COURT OF THE UNITED STATES
October Term, 1980

STATE OF FLORIDA
DEPARTMENT OF STATE,

Petitioner,
-VS-

TREASURE SALVORS, INC.,
ARMADA RESEARCH CORP.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT

JIM SMITH
ATTORNEY GENERAL

SYDNEY H. MCKENZIE, III
CHIEF TRIAL COUNSEL
(Counsel of Record)

SUSAN E. GAMBLE
ASSISTANT ATTORNEY GENERAL

The Capitol - Suite 1501

Tallahassee, Florida 32301

Phone: 904/488-9935
Attorneys for Petitioner

QUESTION PRESENTED

I. Whether the Eleventh Amendment
to the United States Constitution bars an
in rem admiralty action seeking to

recover property owned by a state.

TABLE OF CONTENTS

QUESTION PRESENTED I
TABLE OF AUTHORITIES IV
OPINIONS BELOW 1
JURISDICTION 2
CONSTITUTIONAL PROVISIONS AND 2
STATUTES INVOLVED

STATEMENT OF THE CASE 3
ARGUMENT 7
CONCLUSION 12
APPENDIX

1. Order of the Court of
Appeals for the Fifth
Circuit denying the
Petition for Rehearing
and Petition for Rehearin
en banc on October 16, 1980. Al

2. Judgment of the Court of
Appeals for the Fifth Circuit
dated July 24, 1980, affirming
the judgment of the District
Court for the Southern
District of Florida. AG

II

5.

Opinion of the Court of

5 Sos for the Fifth

Circuit in In Re: State

of Florida Department of

State v. Treasure

Salvors, Inc., reported at 621
F. th Cir. 1980). A6

Opinion of the District
Court for the Southern
District of Florida in
Treasure Salvors, Inc. v.

Unidentified Wrecked and
Abandoned Sailin Vessel,

reported at F.Supp. 507
(S.D. Fla. 1978).

U.S. Constitution, Article
IIL, Section 2 A164

Florida Statutes, Chapter
267 (1979) A166

IIl

TABLE OF AUTHORITIES
CASES

In re New York 8
U.S. , 41 S.Ct. 588,
65 L.Ed. 1057 (1921) and 256
U.S. 503, 41 S.Ct. 592,
65 L.Ed. 1063 (1921)

In re State of Florida, Department 5, 10

of State v. Treasure Salvors, Inc.

Intracoastal Transportation, Inc. 10

v. Decatur Count Georgia
482 F.2d 361 Cth Cir. 1973)

Platero Ltd., Inc. v. Unidentified 10, 11

Remains of a Vessel
° th Cir. 1975)

Red Star Towing and Transportation 10

Co. v. Connecticut
Supp. (D. Conn. 1976)

Treasure Salvors, Inc. v. 5
Unidentified Wrecked and
Abandoned Sailing Vessel

459 F.Supp. 507 (S.D. Fla. 1978).
Treasure Salvors, Inc. v. 4
Unidentified, Wrecked and

andoned Sailin esse

569 F.2d 330 (eth Cir. 1978)

IV

TABLE OF AUTHORITIES CONTINUED

CONSTITUTIONAL PROVISIONS

U.S. Constitution, Article III, 3
Section 2
U.S. Constitution, 3, 0s ee Ss ess

Amendment Eleven

STATUTES
Florida Statutes (1979), Chapter 267 12

IN THE
SUPREME COURT OF THE UNITED STATES
October Term, 1980
STATE OF FLORIDA
DEPARTMENT OF STATE,
Petitioner,
-vs-

TREASURE SALVORS, INC.,
ARMADA RESEARCH CORP.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT

OPINIONS BELOW

The following opinions of the
lower courts are included in the Appendix

to the Petition:

1. Opinion of the United States
Court of Appeals for the Fifth Circuit,
rendered July 24, 1980, in this action.

2. Opinion of the United States
District Court for the Southern District
of Florida, rendered August 21, 1978, in
this action.

JURISDICTION

The opinion of the Court of
Appeals was entered on July 24, 1980.
Rehearing en banc was denied on October
16, 1980, and the mandate issued on
October 24, 1980. Jurisdiction to review
the judgment of the Court of Appeals is
conferred on this Court by 28 U.S.C.,
Section 1254 (1).

CONSTITUTIONAL PROVISIONS
AND STATUTES INVOLVED

U.S. Constitution, Article III,
Section 2

The judicial power shall extend
-, ~-to all cases of
admiralty and maritime
jurisdiction; .. (set out in
full in the appendix hereto).

U.S. Constitution, Amendment 11

The judicial power of the United
States shall not be construed to
extend to any suit in law or
equity, commenced or prosecuted
against one of the United States
by citizens of another State, or
by citizens or subjects of any
foreign State.

Florida Statutes, Chapter 267 (1979)

(set out in full in the appendix
hereto).

STATEMENT OF THE CASE

This case has its origin in an
action brought pursuant to Article III,
Section 2 of the U.S. Constitution (App.
Al64-165), conferring admiralty juris-
diction solely in the federal courts.

The State of Florida was not a party to

this first action, Treasure Salvors, Inc.

v. Unidentified, Wrecked and Abandoned
Sailing Vessel, 569 F.2d 330 (5th Cir.

1978) (hereinafter Treasure Salvors IL)

wherein it was held that the remains of a
vessel lying on that part of the
continental shelf outside the territorial
waters of the United States were there-
fore not situated on lands owned or
controlled by the United States under the
) provisions of the Antiquities Act. This
established title to the vessel and its
cargo in the Respondent as against the
United States only.

The instant case arose through
ancillary process issued by the district
court pursuant to the Court of Appeals'

decision in Treasure Salvors I. The

district court issued a warrant for

arrest in rem, directing the marshal to
take possession of all artifacts from the
vessel in the custody or control of the
State of Florida's Division of Archives
office in Tallahassee. On August 21,
1978, the district court entered final
judgment in behalf of the Respondent. In
a Memorandum Order reported at 459
F.Supp. 507 (S.D. Fla. 1978) (App.
A61-163), the court found the Eleventh
Amendment inapplicable to a suit to
determine title to artifacts, and
directed the State of Florida to
relinquish possession of the artifacts to
the district court.

The Court of Appeals affirmed the
decision of the district court as to.
jurisdiction over the State on July 24,
1980.(Rubin, J. dissenting). In re
State of Florida Department of State v.

5

Treasure Salvors, Inc., 621 F.2d 1340

(5th Cir. 1980) (hereinafter Treasure
Salvors II) (App. A6-60). Florida's

petition for rehearing en banc was denied
October 16, 1980, and the mandate issued
on October 24, 1980 (App. Al1-5).

The importance of this petition
for writ of certiorari to Court of
Appeals is monumental, for the issue of
subjecting a state to such suits and
requiring it to relinquish property under
the guise of an admiralty action in rem
has far-reaching ramifications not only
in the circumstances of this action, but
in any case wherein a state seeks to
retain title and possession of its

archaeological and historical resources.

ARGUMENT

This Court should grant its Writ
of Certiorari to review the decision of
the Court cf Appeals because the Court
has in effect. decided that if there is a
controverted claim of state ownership of
property, the controversy becomes an ap-
propriate subject for admiralty jurisdic-
tion and the district court may hear the
case.

The State of Florida contends that
it has title to the property within the
jurisdiction of the court pursuant to
contracts in which Treasure Salvors
agreed to relinquish twenty-five percent
of the items recovered from a sunken
Spanish galleon in return for the rig*.c
to salvage on state sovereignty submerged

lands; therefore the Eleventh Amendment

deprived the district court of
jurisdiction to adjudicate the State's
title or lack of it. The Court of
Appeals affirmed the District Court's
ruling that the Eleventh Amendment did
not preclude an action to recover the
artifacts in the possession of the State,
and ordered it to turn over all such
items to Treasure Salvors.

This action has been styled as an
in rem proceeding in admiralty; however,
the thrust of the Respondent's claim is
simply to bring suit to recover property
from the State of Florida. As pointed
out in the dissenting opinion of Judge
Rubin, the Eleventh Amendment is equally
applicable to admiralty actions, and
neither of the companion cases relied

upon by the panel majority, In re New

York, 256 U.S. 490, 41 S.Ct. 588, 65
L.Ed. 1057 (1921) and 256 U.S. 503, 41
S.Ct. 592, 65 L.Ed. 1063 (1921) holds
that a state may be involuntarily
divested of title to property in its
possession. Instead, the Supreme Court
in those cases held that the State's
suggestion of ownership, in the absence
of a special challenge, triggered the
application of the Eleventh Amendment and
thus the district court's jurisdiction
came to an end. However, Judge Rubin, in
his dissent below, stated:

- « « I do not understand

this to imply that, if

there is a controverted

claim of state ownership,

the controversy becomes an

appropriate subject for

admiralty jurisdiction.

Such a conclusion is

particularly difficult to

reconcile with the Eleventh
Amendment when, as here,

the determination of
ownership involves the
adjudication of an
underlying contract dispute
between a citizen of a
state and the state itself,
a purely local question.

Treasure Salvors II, at 1350-51 (App.
A53-54).

Indeed, the panel majority of the
Court of Appeals simply holds that an in
rem admiralty action may be brought to
recover property from a state, but fails
to distinguish its prior decisions which
directly hold that a state may invoke its
Eleventh Amendment defense in admiralty

actions. Intracoastal Transportation,

Inc. v. Decatur County, Georgia, 482 F.2d
361 (5th Cir. 1973); Platero Ltd., Inc.

v. Unidentified Remains of a Vessel, 508
F.2d 1113 (5th Cir. 1975). See also Red

Star Towing and Transportation Co. v.
Connecticut, 431 F.Supp. 1003
10

(D. Conn. 1976). Thus, the ultimate
result of this decision is that a citizen
in a contract dispute with a state may
recover property from the state so long
as there is some implied admiralty issue.
The application of the Eleventh
Amendment to admiralty actions against
states for the recovery of property is of
special significance not only to the
State of Florida in this petition, but to
all states which have extensive
historical coastal interests. See, i.e.,

Platero Ltd., Inc. v. Unidentified

Remains of a Vessel, supra. If the Court

of Appeals is allowed to recede from its
previous construction of the Eleventh
Amendment's application to suits in
admiralty, then the historical

11

preservation efforts of all coastal
states are jeopardized. See Chapter 267,
Fla. Stat. (1979) (App. Al66-219).

CONCLUSION

; The question of bringing a state
into federal court to test its title to
property far transcends the artifacts
which are involved in this case, and goes
to the fundamental constitutional
protections afforded the states. As
pointed out in Judge Rubin's dissent, the
decision of the Court of Appeals
summarily disposes of this issue without
distinguishing prior holdings, and the
resulting confusion wrought by the
Court's decision merits the granting of
certiorari.

For the foregoing reasons,
Petitioner respectfully urges this Court

12

to grant certiorari to review the
decision of the Court of Appeals for the
Fifth Circuit.

Respectfully submitted,

JIM SMITH

orney General
SH. de Gels

SYDNEY H-"MCKENZIE, IIL
Chief Trial Counsel

SUSAN E. GAMBLE
Assistant Attorney General

’ DEPARTMENT OF LEGAL AFFAIRS
The Capitol - Suite 1501
Tallahassee, Florida 32301
Phone: 904/488-9935

13

x
a

i

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 78-2950

IN RE: STATE OF FLORIDA,
DEPARTMENT OF STATE,
Petitioner-Appellant,

versus

TREASURE SALVORS, INC.,

a corporation and ARMADA

RESEARCH CORP., a corporation,
Plaintiffs-Appellees,

THE UNIDENTIFIED WRECKED AND
ABANDONED SAILING VESSEL, ETC.,
Defendant.

Appeal from the United States
District Court for the
Southern District of Florida

ON PETITION FOR REHEARING AND PETITION
FOR REHEARING EN BANC

(Opinion July 24, 1980 _, 5 Cir., 198,

( OCTOBER 16, 1980 )
Al

BS.

Before GEWIN, RUBIN and SAM D. JOHNSON,
Circuit Judges.

PER CURIAM:

( ) The Petition for Rehearing is DENIED
and no member of this panel nor Judge in
regular active service on the Court
having requested that the Court be polled
on rehearing en banc, (Rule 35 Federal
Rules of Appellate Procedure; Local Fifth
Circuit Rule 16) the Petition for
Rehearing En Banc is DENIED.

( ) The Petition for Rehearing is DENIED
and the Court having been polled at the
request of one of the members of the
Court and a majority of the Circuit
Judges who are in regular active service
not having voted in favor of it, (Rule 35
Federal Rules of Appellate Procedure;
Local Fifth Circuit Rule 16) the Petition
for Rehearing En Banc is also DENIED.

A2

(XX) A member of the Court in active
service having requested a poll on the
reconsideration of this cause en banc,
and a majority of the judges in active
service not having voted in favor of it,

rehearing en banc is DENIED.

ENTERED FOR THE COURT:

af Sam D. Johnson
e ates rcu udge

Form 704-2

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 78-2950

~D. C. Docket No. 75-1416-Civ-WM
IN RE: STATE OF FLORIDA, DEPARTMENT
OF STATE,
Petitioner-Appellant,
versus

TREASURE SALVORS, INC., a Corporation,
AND ARMADA RESEARCH CORP., a
Corporation,

Plaintiffs-Appellees,
THE UNIDENTIFIED WRECKED and ABANDONED
SAILING VESSEL, Etc.,

Defendant.

Appeals from the United States District
Court for the Southern District of
Florida

Before GEWIN, RUBIN AND SAM D. JOHNSON,
Circuit Judges.

JUDGMENT
This cause came on to be heard on
the transcript of the record from the

A4

United States District Court for the the
Southern District of Florida, and was
argued by counsel;

ON CONSIDERATION WHEREOF, It is now
here ordered and adjudged by this Court
that the judgment of the said District
Court in this cause be, and the same is
hereby, affirmed;

It is further ordered that
petitioner-appellant pay to plaintiffs-
appellees, the costs on appeal to be

taxed by the Clerk of this Court.
July 24, 1980
ALVIN B. RUBIN, Circuit Judge,

dissenting:
Issued as Mandate: OCT 24 1980

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 78-2950

IN RE: STATE OF FLORIDA
DEPARTMENT OF STATE,

Petitioner/Appellant,
VERSUS

TREASURE SALVORS, INC., etc.,
Plaintiffs/Appellees,

THE UNIDENTIFIED, WRECKED AND
ABANDONED SAILING VESSEL, ETC.,

Defendant.

Appeal From the United States
District Court For the Southern
District of Florida

(July 24, 1980)

Before GEWIN, RUBIN and SAM D.
JOHNSON, Circuit Judges.

SAM D. JOHNSON, Circuit Judge:

A6

This appeal offers this Court its
second opportunity to determine ownership
rights in artifacts recovered from the
Spanish vessel, Atocha. In this Court's
first opinion, Treasure Salvors, Inc. v.
Unidentified Wrecked and Abandoned Sail-
ing Vessel, 569 F.2d 330 (5th Cir. 1978)

(hereinafter Treasure Salvors I), it was

held that Treasure Salvors and Armada
Research Corp.! had title to the vessel
and its cargo as against the United
States. In the instant case this Court
affirms the district court's holding that

these two Florida corporations have

1 These two corporations will be re-
rear sy to as Treasure Salvors in this op-
nion.

A7

title to various artifacts as against the
State of Florida.2

Facts

The historical backdrop for this

case was detailed in Treasure Salvors I,

569 F.2d at 333, and was the subject of a
National Geographic article, Lyon, The
Trouble with Treasure, 149 National

Geographic 787 (June 1976), but is well
worth repeating. This case dates back to

the early 17th Century, when Spain was

2In November 1975, plaintiffs issued

and published a monition against all
potential claimants of the vessel and its
cargo, admonishing them to file their
claims to the vessel. Only two parties
did so--the United States and Florida.

On April 4, 1978, this Court issued a
mandate affirming the district court's
judgment in Treasure Salvors I, as mod-
ified, against the United States. On May
3, 1978, the district court issued a de-
fault judgment against all potential
claimants who had not filed their claims
and barred and precluded filing any
further claims to the vessel.

using the riches of the New World to fi-
nance her European military adventures.
On September 4, 1622, a fleet of 28
ships, known as the Tierra Firme Flota,,
commanded by the Marquis of Cadereita,
set sail from Havana for Cadiz laden with
bullion, spices, and tobacco for King
Phillip IV. As the ships entered the
Florida Straits in search of the favor-
able Gulf Stream currents, bad weather
set in, and the vessels soon found then-
selves in the midst of a hurricane. The
destructive winds from the northeast
stripped the vessels of their masts,
sails, and standing rigging. The winds
then shifted to the south and eight of
the ships were driven toward the dan-
gerous waters of the lower Florida Keys,
where they were soon lost. The remaining
vessels limped back to Havana. One of
AQ

the eight ships that went down was the

Nuestra Senora de Atocha. When the

Atocha set sail from'Havana, she was car-
rying in excess of one million pesos of
registered bullion and specie. Her hold
contained a treasure worth of Midas: 160
gold bullion pieces, 900 silver ingots,
over 250,000 silver coins, 600 copper
planks, 350 chests of indigo and 25 tons
of tobacco.3

The Spaniards began a salvage effort
as soon as the news of the disaster
reached Havana. Under the direction of
Captain Gasper de Vargas, the salvors
located the Atocha intact in 55 feet of
water, with her mast peering above the
surface. The divers, however, were
3In 1978, this cargo was valued at $250
million. Today's meteoric rise in the
price of precious metals has undoubtedly
substantially increased the present value

of the Spaniards’ booty.
A10

unable to enter the holds containing the
treasure, as they were all battened down.
Only two bronze cannons from the upper
deck of the stern castle could be
retrieved.

De Vargas opted to place surface
buoys to mark the position of the Atocha
and sail west to salvage the Rosario,
another of the eight vessels that sank in
the hurricane. In early October, another
hurricane ravaged the Lower Keys,
breaking up the hull of the Atocha and
spreading her treasure beneath the sands.
When Vargas returned, he found the storm
had removed the protruding mast and his
sur face buoys. He was unable to relocate
the vessel.

Early in 1623, the Marquis of

Cadereita sailed from Havana to

All

personally supervise the search.4 The
continued efforts proved fruitless. Fin-
ally, in late 1623, the Spaniards aban-
doned the search.

The Cuban authorities, however, did
not give up hope. They continued to keep
the general area buoyed in anticipation
of future salvage efforts.2 In 1626,
Francisco Nunez Melian began searching

for the Atocha and Santa Margarita under

a Royal salvage contract. Using state of
the art equipment, including a 600 pound
bronze diving bell with windows, Melian

was able to find the Santa Margarita and,

4The Marquis directed the salvage oper-
ation from his camp on one of the nearby
keys. These keys were named "Cayos de
Marques" after the Marquis and today are
known as the Marquesas Keys.

5In 1625 another vessel was lost and

all the crew members perished in this
continuing effort to mark the location of
the treasure-laden vessels.

Al2

over four years, salvage her cargo.
Dutch raiding parties, hostile Indians ,®&
and political opportunities’ eventually
brought the search for the Atocha to a
close in 1641. Finally, in 1683, the
Spanish House of Trade published a list
of ships still missing. The Atocha head-
ed the list. Melian's salvage accounts
were sent from Havana to the Archive of
the Indies in Seville, and the Atocha
passed into history.

Over three centuries later, in the
mid-1960's, treasure searchers renewed
their efforts to locate the Atocha and
her rich treasure. By 1968, the search
6The Indians burned a salvage vessel
that floundered just off the Marquesas
Keys and, eventually, the Spanish salvage
camp. ;
7Melian was appointed Governor at Car-
acas. Captain Juan de Anvez continued
the salvage of the Santa yapberita, but

only occasionally searche r the
Atocha.
A13

was concentrated in the Middle Keys, near
Upper Matecumbe Key. This area was iso-
lated by the searchers after pouring
through the Spanish archival records in
Seville.8 Years of searching yielded
nothing.

Finally, in the late 1960's, Dr.
Eugene Lyon, working as a consulting
historian for Treasure Salvors, uncovered
documentary evidence which indicated to
him that the current salvage efforts were
directed at the wrong set of keys. He
discovered that "Matecumbe" was a general
term used to denote the Florida Keys, as
a whole. A thorough search of Melian's
8pocuments drafted at the same time as
the Atocha went down indicated that the
vessel sank near "Matecumbe."" Searchers
concentrated their efforts in the Middle
Keys, hoping that the "Matecumbe”
referred to in the original documents
corresponded to the modern key bearing

that name.

Al4

salvage records revealed that the search
for the Atocha had centered near "Cayos
del Marques." This placed the wreck of
the Atocha somewhere between the Dry
Tortugas and Sand Key in the Lower Keys.
Once Dr. Lyon ascertained what he
believed to be the correct general area
of the Atocha's watery grave, "all" that
remained for Treasure Salvors was to
pinpoint the exact location. It was a
task easier said than done. For one year
they searched some 120,000 nautical miles
of seabed 24 hours a day before detecting
a large galleon-size anchor in the spring
of 1971. Additional shipwreck material
was recovered in the immediate vicinity

of the anchor. Soon the wreck was

A15

identified as part of the break-up of the
Atocha.9

In April 1971, Treasure Salvors and
the State of Florida executed a one year
contract allowing Salvors to conduct
their underwater salvage operations on
the Atocha. Both parties entered into
this agreement under the belief that the
Atocha was resting on land owned by
Florida. Eventually, four contracts were
signed (the last in November 1974) each
running about one year. Under the .
contracts, the State was entitled to 25%
of the finds. In June 1973, Florida's
9The wreck site is located near
some shoals known as the "Quicksands,"
nine and one half nautical miles west of
the Marquesas Keys and forty nautical
miles west of Key West. Those mariners
familiar with this area will recognize it
as being in the heart of a Naval
Operational Training Area and only three
nautical miles west of a Bombing and
Strafing Target Area.

A16

Division of Archives in Tallahassee re-
ceived its share! of the first batch of
artifacts recovered by Treasure Salvors.
In February 1975, the Salvors delivered
what turned out to be the State's last
batch.

The Atocha's legal odyssey began
with the Supreme Court's decision in
United States v. Florida, 420 U.S. 531,
95 S.Ct. 1162, 43 L.Ed.2d 375 (1975).

The Court affirmed the report of Special
Master Maris, rejecting Florida's owner-
ship claim of submerged lands, including
that part of the continental shelf on
which the Atocha rests. The report es-
tablished that Florida had never owned
\0Treasure Salvors kept many of the
artifacts recovered at their corporate
headquarters, a 168 foot reconstructed
galleon anchored at the foot of Margaret
Street in Key West, Florida. The pre-
cious stones were kept in a safety de-
posit box in Key West.

A17

an interest in any of the lands involved
in the case at bar. On July 18, 1975,
four months after the Supreme Court's
holding, Treasure Salvors filed an in rem
action in the Southern District of
Florida for possession or confirmation of
title to the abandoned vessel believed to

be the Nuestra Senora de Atocha.

The United States intervened in the
action and asserted title to the vessel.
The district court entered judgment for
Treasure Salvors and this court affirmed
the trial judge's ruling that as between
Treasure Salvors and the United States,
Treasure Salvors had title to and right
to possession of the vessel and its car-

go. Treasure Salvors I.

The State of Florida initially re-
frained from intervening in the action.
Instead, the State prepared for the

A18

eventuality of a judgment in favor of the
federal government. Florida assisted the
United States in the lawsuit!! and en-
tered into preliminary negotiations re-
garding the disposition of the Atocha's
treasure should the federal government
prevail.!2 The adverse judgment left
Florida in the cold.

In April 1978, after this Court's
judgment for Treasure Salvors, the dis-
trict court issued a warrant for arrest
in rem. The warrant directed the marshal
‘lan attorney for the Florida Secretary
of State, the agency that administers the
Division of Archives, worked with the
federal government on the case and mon-
itored, for Florida, the progress of the
litigation.

\2The Division of Archives was nego-
tiating with the Department of the Inter-
ior during the course of the litigation
for an oot taveece” permit. pipe fe if
the United States had been successfu

the Division would have received an anti-
quities permit for the wreck site.

Al9

to take possession of all artifacts from
the vessel in the custody or control of
the State's Division of Archives' office
in Tallahassee.!3 Florida filed a mo-
tion to quash the arrest warrant and
successfully sought an emergency stay of
the district court's order from this

Court. In Re: State of Florida,

Department of State, No. 78--1763 (5th

Cir. April 12, 1978). In accordance with
this Court's order, on April 14, the dis-
trict court stayed the execution of the
arrest warrant.

This temporary ban on the execution
of the warrant for arrest did not halt
the legal maneuvers. The district court
\3Tallahassee is located in the
Northern District of Florida. The
marshal was instructed to bring the rem-
nants of the vessel and her cargo into
the custody of the district court in the
Southern District.

A20

denied Florida's motion to quash the war-
rant and granted Treasure Salvors' motion
of April 17 to require the State of
Florida to show cause!4 why it should

not be ordered to transfer the artifacts
in its possession to the custodians ap-
pointed by the district court.!5 The
State answered, asserting that the court
lacked jurisdiction and that Florida
owned the artifacts in the possession of
the Tallahassee office of the Division of
Archives. On July 27 and 28 che district
judge held a full evidentiary hearing on

14This order to show cause is known as
ancillary process. Supplemental
Admiralty Rule C(5).

\5The district judge had previously
appointed Treasure Salvors substitute
custodians. Treasure Salvors, Inc. v.

The Unidentified Wrecked and Abandoned

A21

the jurisdictional issues and the merits
of the order to show cause.!6

After the hearing, the district
judge filed a Memorandum Order containing
extensive findings of fact and conelu-
sions of law. 459 F.Supp. 507. The
judge found that the order to show cause
was properly issued. The court then held
that the State of Florida was bound by

the earlier judgment in Treasure Salvors

I. Alternatively, the trial judge held
that the suit to determine title to the
artifacts was not barred by the eleventh
amendment and that Florida's claim of
ownership was without merit. The trial
judge directed the State to deliver the
16In order to expedite the litigation,
Treasure Salvors agreed to allow the
Division of Archives to serve as tem-

porary custodian of the disputed
artifacts.

A22

artifacts to the district court. The
State of Florida then instituted this ap-
peal. This Court is persuaded that the
district court's alternative holding is
correct, and we affirm.!7

Eleventh Amendment

Florida's initial jurisdictional
contention is that the order to show
cause directed at the Division of

Archives is barred by the eleventh

17This Court declines to either affirm

or reverse the trial judge's innovative
res judicata analysis. The preclusion
issues raised by the district court's op-
inion are reserved for another day.

A23

amendment.!8 The State asserts that it
owns the artifacts in dispute and thus
the district court's attempt to
adjudicate ownership is, in essence, a
suit against a state. Florida argues
that since it has not waived its eleventh
amendment protection by voluntary
assertion of a claim or defense, see

Gardner v. New Jersey, 329 U.S. 565, 67

18y.S. Const. amend. XI provides:

The Judicial power of the United States
shall not be construed to extend to any
suit in law or equity, commenced or
prosecuted against one of the United
States by Citizens of another State, or
by Citizens or Subjects of any Foreign
State.

Although the eleventh amendment is not
literally applicable to suits against a
state by her own citizens, the Supreme
Court has construed the amendment to
cover such actions. Edeiogn v. Jordan,
415 U.S. 651, 662, 66
§.Ct. 1347, 1355, 1362. n. 19, "39 L.Ed.2d
662 (1974).

A24

S.Ct. 467, 91 L.Ed. 504 (1947), the dis-
trict court lacked jurisdiction.

The Supreme Court has held that the
eleventh amendment applies to admiralty
in rem actions. In re State of New York,

256 U.S. 490, 41 S.Ct. 588, 65 L.Ed. 1057

(1921). In a companion case, In re State
of New York, 256 U.S. 503, 41 S.Ct. 592,
65 L.Ed. 1063 (1921), the Court provided

guidance for evaluating eleventh amend-
ment claims in admiralty in rem actions.
In that case the administrators of
Evelyn McGahan's estate filed a libel in
admiralty against a tug, the Queen City,

alleging that the negligent operation of
the tug caused McGahan's death. The
State of New York entered a special
appearance and filed a verified affidavit
suggesting that the district court lacked
jurisdiction because the vessel was the

A25

State's property, and had been in its
possession and control at the time of the
accident. The libelants offered nothing
to controvert the State's affidavits.

The district court rejected New York's
claim of immunity and the Supreme Court
reversed.

The Court first focused on the dis-
trict judge's refusal to accept the
State's assertion of ownership. "We deem
it clear . . that the verified suggestion
presented by the Attorney General of that
state . . ought to be accepted as suffi-
cient evidence of the fact [of owner-

ship], at least in absence of a special

challenge." Id. at 509 (emphasis added).
The Court held that the district judge,
given the vuncontroverted claim to the
vessel, should have acknowledged the
State's ownership. It went on to con-

A26

clude that admiralty in rem process can-
not be issued on public property of a
state "used and employed for public and
governmental purposes." Id. at 5ll.

The Queen City tells us that when a

state submits uncontroverted evidence of
ownership in an admiralty in rem action,
the district court is bound to accept the
assertion and apply the eleventh amend-
ment accordingly. In the case at bar,

however, we have a controverted claim of

ownership. Treasure Salvors offered
evidence and legal arguments to show that
it, and not Florida, owned the artifacts
from the Atocha. Such an offer is the
“special challenge” that the Supreme

Court envisioned in the Queen City. This

challenge operates to rebut the presump-
tion of validity attributed to a state's
ownership claim.

A27

| Once an appropriate chailenge is
made, a district judge is no longer com-
pelled to conclude that the state owns
the res in dispute. Instead, the Court
must make a jurisdictional determination
very similar to that made in the classic
“jurisdiction to determine jurisdiction"
line of cases. In that genre, the
pivotal jurisdictional question involves
essentially the same analysis as is posed

by the merits of the case. See United

States v. United Mine Workers, 330 U.S.
258, 67 S.Ct. 677, 91 L.Ed.2d 884 (1957).
Where "the issue of jurisdiction is

inextricably intertwined with the merits
of the controversy," the court retains
the cole’ and resolves the issue, since
federal courts "always have jurisdiction

to determine our jurisdiction." Nestor

A28

v. Hershey, 425 F.2d 504, 511 (D.C.Cir.
1969) .19

In the case at bar, ownership of the

salvaged items is determinative of both
the eleventh amendment and the merits.
Since we agree with the trial court's as-
sessment that Florida lacks an ownership
interest in the artifacts, see pp.
1348-1349 infra [A43-50], we affirm the
judge's holding that the order to show

'9This approach is especially desirable
in admiralty in rem actions. Federal
courts have exclusive jurisdiction over
admiralty in rem proceedings. Madruga v.

Superior Court of California, 3 U.S.
556, 74 S.Ct. 298, 98 L.Ed. 290 (1954),
G. Gilmore and C. Black, The Law of
Admiralty § 1-13 (2d ed. 1975). If the
mere assertion of ownership by a state of
a res was sufficient to invoke the elev-
enth amendment, petitioners such as
Treasure Salvors would find themselves
stranded without a forum in which to
litigate their claim.

A29

cause is not, in this case, a suit
against a state,20

Jurisdiction and Process

Given the lack of eleventh amendment
and sovereign immunity problems, it must
be determined whether the district court
had the power to issue the "show cause
order" and adjudicate the merits of the
ownership claims. A careful analysis of
the record establishes that admiralty
jurisdiction provided the district court
a firm foundation for its actions.

Admiralty in rem jurisdiction
generally requires that the res be

present in the district when the suit is

filed or during the pendency of the

200ur holding that this action does not
involve a suit against a state also
disposes of Florida's claim that it has
not waived sovereign immunity.

A30

action.2! Platoro Ltd., Inc. v. Uni-
dentified Remains of a Vessel, 508 F.2d
1113, 1115 (5th Cir. 1975). The fact

that a res was at one time within the
district is insufficient to establish in
rem jurisdiction. Id. at 1116. The crux
of the State's argument is that the
artifacts in dispute were not present in
the Southern District of Florida when
this litigation began back in 1975 and
never were present in the Southern Dis-
trict at any time during the litigation.
Given the general requirement of pre-
sence, the absence of the items in dis-
pute, the State argues, deprive the

21In Treasure Salvors I this Court held
that a party may waive the requirement
that a res ba present within the district
and consent to a court's admiralty in rem
urisdiction. 569 F.2d at 335. Florida,

owever, has not consented to waive the
usual jurisdictional requirements.

A31

district court of in rem jurisdiction and
thus the power to issue the order to show
cause and adjudicate the ownership inter-
est in the particular artifacts held in
Tallahassee.

The State misconceives the nature of
the district court's exercise of juris-
diction. It is undisputed that most of

the artifacts recovered from the Atocha

were present in the Southern District of
Florida when the litigation began.22

The district court clearly had the power
to adjudicate the ownership of the arti-
facts located in its district. The issue
before this Court is whether the presence
22under the salvage contract between
Treasure Salvors and Florida, Florida re-
ceived 25% of the finds. Treasure
Salvors kept-.its share of the artifacts
recovered either at its headquarters in

Key West or in a bank in Key West. See
note 9 supra.

A32

of the artifacts in the Southern District
provided a sufficient foundation for the
trial judge's order to show cause aimed
at artifacts being held by the State in
the Northern District of Florida. It is
this Court's conclusion that the trial
court was authorized to issue ancillary
process in this case by Supplemental
Admiralty Rule C(5).

Rule C(5)23 provides that where

23supplemental Admiralty Rule C(5):

(5) Ancillary Process. In any action
in rem in which process has been served
as provided by this rule, if any part of
the ta Sep that is the subject of the
action has not been brought within the
control of the court because it has been
removed or sold, or because it is intang-
ible property in the hands of a person
who has not been served with process, the
court may, on motion, order any person
having possession or control of such pro-
perty or its proceeds to show cause he
it should not be delivered into the
“custody of the marshal or paid into court
to abide the judgment; and, after hear-
ing, the court may enter such judgment as
law and justice may require.

A33

in rem process has already been served
and where part of the property that is
the subject of the action is not within
the control of the court "because it has
been removed or sold," the court may
order the party in possession to show
cause why the property should not be de-
livered to the custody of the marshal.
Rule C(5) goes on to state that after the
show cause hearing, "the court may enter
such judgment as law and justice may re-
quire."

There is no doubt that in rem pro-
cess was served with respect to the sal-
vaged articles from the Atocha,,,and some
of the artifacts were not within the
Southern District because they had been
removed to the Northern District pursuant
to the contract between Florida and
Treasure Salvors. In this case, these

A34

facts alone do not justify the show cause
order directed at the Division of
Archives. [It must also appear that: (1)
the district court had control over a
sufficient amount of the res to justify
ancillary process and (2) ancillary pro-
cess can be issued outside the district.
The rulemakers only contemplated the

use of ancillary process where the major

portion of the res is within the control

of the court. See Notes of Advisory Com-
mittee on Rules, 28 U.S.C.A. Supplemental
Rule C (1970); 7A Moore's Federal
Practice 4C.15 at 700.4, 700.5 (2d ed.
1979); The George Prescott, 10 Fed.Cas.

222 (E.D.N.Y. 1865) (holding that under
Admiralty Rule 9 ancillary process can
reach property appurtenant to the ar-
rested res, even though the property was
removed from the res prior to seizure).

A35

The draftsmen did not intend to allow the
presence of a portion of a res to support
the issuance of ancillary process when
the majority of the res is located out-
side the district. 7A Moore's supra at
700.4. Given the general requirement of
presence of the res to support in rem
jurisdiction, a rule allowing a small
part of the res to support issuing an-
cillary process against the major portion
of the res would be to allow the pro-
verbial tail to wag the dog. Jurisdiction
over the extra-territorial portion of the
res in such a situation can only be ob-
tained by original process. Id.

For the purposes of ancillary pro-
cess, it is apparent that the district
court in the case at bar had "control"
over a sufficient.portion of the res to
“warrant the use of ancillary process. In

A36

making the sufficiency determination, the
district court properly was entitled to
consider the main body of the Atocha
(that part still resting on the con-
tinental shelf) as being within its "con-
trol." The bulk of the Atocha lay buried
in international waters forty nautical
miles off the Florida coast, not in an-

other district. The district court did

everything possible to bring the vessel
within its control.24 Indeed, as a
practical matter, it was impossible to
bring the remainder of the vessel within

any court's territorial jurisdiction on

24The court ordered the marshal to ar-
rest the vessel and bring it within the
court's physical control. Alternatively,
the court sopernees Treasure Salvors as
custodian of the vessel "for possession
and safekeeping - « « until further order
of this court.” On the facts of this
case, this virtually placed the vessel in
custodia legis. Treasure Salvors I, 569
F.2d at 335, n.5.

A37

reasonable notice. Finally, there was
little danger that significant portions
of the res could escape an in rem decree.

Treasure Salvors I, 569 F.2d at 335. In

light of the realities of the situation,

the district court's assessment that it
had control over a sufficient portion of
the Atocha was correct and this was a ~-s-
proper case for ancillary process.
Cf£.Id. at 334 (Admiralty in rem jurisdic-
tion is a legal fiction designed to aid
courts in "finding the most practical and
efficacious means of resolving the dis-
putes before them").

Even given that this was a proper
case for ancillary process, it must still
be ascertained whether ancillary process

may be issued outside the district but

A38

within state boundaries.25 This deter-

mination hinges on the applicability of
Supplemental Admiralty Rule E(3)(a).
Rule E(3)(a) provides:
(3) Process.

a) Territorial Limits
of ective Service. Pro-
cess in rem and of mari-
time attachment and
garnishment shall be served
only within the district.

(emphasis added). In the Advisory Notes
the draftsmen, in commenting on Rule

E(3)(a), stated that "process requiring

seizure of property should continue to be

served only within the geographical

limits of the district." Notes of

Advisory Committee on Rules, 28 U.S.C.A.
Supplemental Rule E (1970) (emphasis
added). Ancillary process, however, does
25We pass no judgment, one way or an-

other, on whether ancillary process may
be effectuated across state lines.

A39

not require the seizure of property.
Rule C(5). The rulemakers appear not to
have intended for Rule E(3)(a) to govern
ancillary process.

There are two policy reasons that
also support the conclusion that Rule
E(3)(a) does not govern ancillary pro-
cess. First, as the district judge
noted, limiting ancillary process to the
district would produce a multiplicity of
lawsuits. 459 F.Supp. at 519. New law-
suits would have to be filed in each
district to which a portion of the res
had been removed. Such a procedure could
hardly be classified as a valuable ex-
penditure of judicial resources. Second,
"to the extent a decree in rem may be
said to affect all the normal incidents
of the arrested res, it may be necessary
to give extraterritorial effect to

A4O

ancillary process to enable the court to
bring within its control all property its
decree will affect." 7A Moore's, supra
at 700.10. The Advisory Committee Notes
and policy rationales compel the con-
clusion that Rule E(3)(a) was not de-
signed to govern ancillary process.

Supplemental Admiralty Rule A pro-

vides that the general Rules of Civil
Procedure govern actions in rem in the
absence of a contrary Supplemental
Rule.26 Federal Rule 4(f) controls the
general rule concerning the territorial
2$supplemental Admiralty Rule A, in
pertinent part, states:

The general Rules of Civil Procedure
for the United States District Courts
are also applicable to the foregoing
proceedings except to the extent that

they are inconsistent with these
Supplemental Rules.

A41

limits of process.27 In accordance with
Supplemental Rule A, Federal Rule 4(f)
controls the limits of effective service
in the case at bar. Rule 4(f) states

that all process, other than subpoenas,

27Federal Rule of Civil Procedure 4(f)
provides:

(f) Territorial Limits of Effective
Service. All Process other than a
subpoena may be served anywhere within
the territorial limits of the state in
which the district court is held, and,
when authorized by a statute of the
United States or by these rules, beyond
the territorial limits of that state. In
addition, persons who are brought in as
parties pursuant to Rule 14, or as
additional parties to a pending action or
a counterclaim or crossclaim therein
pursuant to Rule 19, may be served in the
manner stated in paragraphs (1)-(6) of
subdivision (d) of this rule at all
places outside the state but within the
United States that are not more than 100
miles from the place in which the action
is commenced, or to which it is assigned
or transferred for trial; and persons
required to respond to an order of
commitment for civil contempt may be
served at the same places. A subpoena
may be served within the territorial
limits provided in Rule 45.

A42

may be served anywhere within the bound-
aries of the state in which the dis-
trict court is located. Ancillary pro-
cess here was served on the Division of
Archive's [sic] office, located in the
northern part of the state. Rule 4(f)
was satisfied.

In sum, the trial judge had juris-
diction to issue ancillary process, and
the process was effectuated within the
state in accordance with Federal Rule
4(f£). The trial court properly reached
the merits of the dispute.

The Merits

Finally, this Court's attention is
Girected to Florida's contention that the
district court erred in holding that the
State had no interest in the artifacts
from the Atocha and ordering the trans-
fer of the items to the marshal for

A43

delivery to Treasure Salvors. A careful
review of the record and the basic legal
principles of contract law compel the
conclusion that the trial court's order
should be affirmed.

The facts underlying the merits of
this case are quite simple. Beginning in
1971, Treasure Salvors and the State of
Florida entered into a series of annual
contracts governing the salvage of the
Atocha. Both parties entered into these
agreements under the impression that the
seabed on which the Atocha lay was state
land. Treasure Salvors agreed to re-
linquish 25% of the items recovered in
return for the right to salvage on state
lands. In 1975 the Supreme Court, in
United States v. Florida, 420 U.S. 531,
95 S.Ct. 1162, 43 L.Ed.2d 375 (1975),
held that the part of the continental

A44

shelf on which the Atocha was resting had
never been owned by Florida. It was at
this point that Treasure Salvors sought
to be declared owner of the Atocha.

Even the briefest of glances at
these facts cannot help but invoke
thoughts of the doctrine of mutual
mistake28 and call to mind the seminal
case of Sherwood v. Walker, 66 Mich. 568,
33 N.W. 919 (1887). Sherwood involved

the classic remedy, “replevin for a cow."
Plaintiff had agreed to purchase Rose 2d
of Aberlone from defendants for $80.

When the plaintiff tendered the money,
the sellers refused to accept it and
declined to yield Rose. At trial the
28In determining the existence of

mutual mistake, there are no principles
peculiar to admiralty. Sicula Oceanica

S.A. v. Wilmar Marine engineering & Sales
rp.-, ° t Te e

A45

sellers introduced evidence establishing
that at the time of the argument both
parties thought Rose was barren and could
not breed. Only in the interim, between
the agreement to sell and the buyer's
tender of the funds, was it discovered
that Rose was with calf.29 This

mistake, sellers argued, went to the root
of the parties' agreement. The Michigan
Supreme Court agreed and allowed the
sellers to avoid their contractual ob-
ligation.

The case at bar presents another
example of mutual mistake. The parties
entered into the salvage contracts under
the mistaken assumption that the State of
Florida owned the land. But for this
belief, the Division of Archives and
29Rose, with calf, was worth

approximately seven times as much as a
barren Rose. i
A

Treasure Salvors would not have executed
the agreements. The trial court cor-
rectly heid that the parties made a
mutual mistake.

The facts of this case also raise
the common law doctrine of failure of
consideration.30 Courts have long been
reluctant to delve into the adequacy of

consideration. See e.g., Sir Anthony

Sturlyn v. Albany, 1 Cro.Eliz. 67 (Q.B.
1587); Westlake v. Adams, 5 C.V. (N.S.)
248, 265 (C.P. 1888) ("It is an ele-

mentary principle, that the law will not
enter into an inquiry as to the adequacy
of consideration . ..."). A different
approach, however, has been taken where
there is a failure of consideration.
30Like mutual mistake, there are no

principles of failure of consideration
peculiar to admiralty. [See A45, n. 28,

supra]. a
A47

The law aptly terms an
agreement to do an act or
to pay money or other thing
where there is no consider-
ation for it a nudum
pactum--a naked agreement--
a promise without legal
support, which the law will
not enforce, no matter
whether verbal or written,
or however earnestly and
solemnly made.

Jones v. McCallum, 21 Fla. 392, 393, 395
(1885).

In the case at bar we have a failure
of consideration. In return for 25% of
the finds, the State of Florida offered
Treasure Salvors the "right" to conduct a
salvage operation on lands in which the
state had no interest. There was a pro-
mise without legal support.

Where there is a failure of con-
sideration, the injured party is free,
upon discovery, to rescind the agreement

and recover back what he has paid. See

A48

fe

United States v. Haynes School Dist. No.
8, 102 F.Supp. 843 (E.D.Ark.1951).

Treasure Salvors sought to rescind the
contracts and recover back all the

artifacts as soon as United States v.

Florida was handed down. The district
judge was acting well within his author-
ity when he ordered the Division of Arch-
ives to deliver the artifacts in its
possession to the marshal so that the
salvaged items might be transferred to
Treasure Salvors.

The State argues that the contracts
between the parties should be declared
valid because, at the time they were ex-
ecuted, the Florida Constitution stated
that Florida owned the submerged lands

holding the Atocha. In United States v.

Florida, however, the Supreme Court held
that this ownership claim was without
A49

merit and that the lands never belonged
to Florida. A holding that the State's
incorrect claim of ownership is suf-
ficient to support the contracts would
operate to overturn the doctrines of
mutual mistake and failure of consider-
ation. The invitation to do so must be
declined .31

Conclusion

The district court had jurisdiction
pursuant to Supplemental Admiralty Rules
(C)}(5) and (A) to issue the "show cause
order" and adjudicate the merits of the
State's ownership claim. Neither the
eleventh amendment nor sovereign immunity

prohibited such action. This Court's re-

31There is some philosophical support

for the position advocated by the State.

ail s (Genito. Discourse on arene
37 Cogito, ergo sum"--"I think,

therefore I am.")

A50

view of the record reveals that the trial
judge's conclusion that the State did not
have an ownership interest in the arti-
facts is correct. The judgment of the
district court is

AFFIRMED.

ALVIN B. RUBIN, Circuit Judge, dis-
senting:

Respectfully, I dissent from the
conclusion reached by my brethren that
the district court had jurisdiction. Be-
cause the State of Florida contended that
it had title to the property within the
jurisdiction of the court, the eleventh
amendment deprived the district court of
jurisdiction to adjudicate the State's
title or lack of it. Moreover, if the
district court was not barred from
asserting jurisdiction by the eleventh

A51

amendment, it lacked in rem jurisdiction
over the wreck.

The Eleventh Amendment is sweeping:

"The Judicial power of the

United States shall not be

construed to extend to any

suit in law or equity, com-

menced or prosecuted

against one of the United

States by Citizens of an-

other State. . .."
While the amendment in terms applies only
to suits by citizens of another state, it
also precludes jurisdiction over a suit
by the citizens of a state against that
state. Hans v. Louisiana, 134 U.S. l, 3,
10 S.Ct. 504, 505, 33 L.Ed. 842 (1890).

Although, in briefs, the State of

Florida does assert that it owns the
artifacts in dispute, it has not waived
its eleventh amendment immunity. It cor-

rectly asserts that the plaintiffs cannot

A52

bring it into a federal court to test its
title to the artifacts.

Neither of the cases known as In re
New York, 256 U.S. 490, 41 S.Ct. 588, 65
L.Ed. 1057 (1921) and 256 U.S. 503, 41
S.Ct. 592, 65 L.Ed. 1063 (1921), holds
that a state can be brought involuntarily
into an admiralty court for an adjudica-
tion of its property rights. In those
cases, a tug had been libelled in a
federal court. The state asserted an un-
controverted claim to ownership of the
tug and intervened. The Supreme Court
held [sic] the admiralty court could not
issue in rem process against public pro-
perty of the state. While it said, in
reaching this conclusion, that the
state's suggestion of ownership ought to
be accepted in the absence of a special
challenge, I do not understand this to

A53

imply that, if there is a controverted

claim of state ownership, the controversy
becomes an appropriate subject for
admiralty jurisdiction. Such a conclu-
sion is particularly difficult to recon-
cile with the eleventh amendment when, as
here, the determination of ownership in-
volves the adjudication of an underlying
contract dispute between a citizen of the
state and the state itself, a purely
local question.

The doctrine that a court has juris-
diction to determine its own jurisdiction
does not permit it to decide the merits
of a suit against the state. Once the
state appears and asserts title to the
property in dispute the court's jurisdic-
tion is ended. In essence, the sugges-
tion by my brethren that the court can
determine whether it has jurisdiction of

A54

a suit over state-claimed property by
looking to the merits is equivalent to
asserting that suits against a state are
permitted by the eleventh amendment if
the result is that the state loses.

The decision in Tindal v. Wesley,
167 U.S. 204, 17 S.Ct. 770, 42 L.Ed. 137

(1897) is not apposite here because the
judgment in that dispute did not de-
termine the rights of the state. In de-
ciding that a claimant to property might
sue persons preventing him from obtaining
‘possession even though the possessors
held the property on behalf of the state,
the court reasoned that this was not an
action against the state within the mean-
ing of the Constitution because judgment
would not conclude the state. Id. at
221, 17 S.Ct. at 777. Here the district
court did precisely what was implicitly
A55

forbidden by Tindal: it concluded the
state from claiming ownership of the pro-
perty.

It is, I think, arguable that under
Tindal the writ of arrest of the salvaged
articles was proper because it was
directed to certain named individuals and
simply brought the articles into pos-
session of the court. However, when the
court went on to adjudicate the ownership
of these articles, it determined a claim
against the state. It decreed that
Treasure Salvors and Armada Research Cor-
poration have full title to the salvaged
articles and that the contract under
which the state had possessed some of the
salvaged treasure was invalid. It scons
to me that this is the precise result

barred by the eleventh amendment.

A56

Our decision on the first appeal is
not res judicata of this claim. We there
expressly modified the district court's
order adjudicating title to Treasure
Salvors as against all other possible
claimants and limited the effect of the
decree saying,

» « « the district court
properly adjudicated title
to all those objects within
its territorial juris-
diction and to those ob-
jects without its territory
as between plaintiffs and
the United States. In af-
Firming the district

court, we do not approve
that portion of its order
which may be construed as a
holding that plaintiffs
have « :clusive title to,
and the right to immediate
and sole possession of, the
vessel and cargo as to
other claimants, if any
there be, who are not par-
ties or privies to this
litigation. (Emphasis
supplied.)

569 F.2d at 335-36.

A57

The district court found that the
State of Florida was bound by the decree
on the basis that it was privy to the
litigation because it had stood by, let
the United States litigate and failed to
intervene. These actions are not, in my
opinion, sufficient to make the State of
Florida either a party to this litigation
or privy to it. The United States as-
serted a counterclaim; Florida did not.
If the United States had succeeded, it
would have been decreed owner of the pro-
perty; Florida could not have been.
Florida was doubtless interested in the
success of the United States, and hoped
to benefit if the federal government were
decreed to be owner. This bystander's
interest in the success of one litigant
over another is not equivalent to consent
to a decree adjudicating the bystander's

A58

title rights. Therefore, I cannot find
that Florida's rights are determined by
the district court's prior judgment, as
modified by us.

In addition to lacking jurisdiction
to adjudicate Florida's claim, the dis-
trict court also was without in rem
jurisdiction over a wreck that lay beyond
the contiguous waters. See United States
v. Williams, 617 F.2d 1063, 1073 (5th
Cir. 1980) (en banc) for a definition of

the extent of these waters. The court
did everything it could to obtain juris-
diction, but the fact remains that the
wreck was not within its territorial
domain or, so far as the record shows,
within the jurisdiction of any other
sovereign. There are indeed res that lie
beyond the jurisdiction of any court to
determine in rem ownership. The waters

A59

of the ocean are wide and deep. Many ob-
jects may sail on the ocean, float in it
or lie at the bottom outside the in rem
jurisdiction of any court.

This does not mean that disputes
must go unadjudicated. The Florida state
courts have in personam jurisdiction and
there is no reason why ownership rights
and contract issues cannot properly be
adjudicated in that forum.

I would, therefore, dismiss this

suit for lack of jurisdiction.

A60

IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF FLORIDA

No. 75-1416-Civ-WM

TREASURE SALVORS, INC.,
a corporation, and
Armada Research Corp.,
a corporation,

Plaintiffs,
vs.

THE UNIDENTIFIED WRECKED
AND ABANDONED SAILING
VESSEL, her tackle,
armament, apparel and
cargo located within 2500
yards of a point a coor-
dinates 24.31.5' north
latitude and 82.50 west
longitude, said sailing
vessel is believed to be
the NUESTRA SENORA de
ATOCHA,

Defendant.

ee a a a a a a a a a a a a a a a ae ee ee

MEMORANDUM INCLUDING FINDINGS
OF FACT AND CONCLUSIONS OF LAW

A61

INTRODUCTORY STATEMENT AND
CONCLUSIONS OF LAW

This proceeding follows the receipt

of the mandate from the United States

Court of Appeals in Treasure Salvors,

Inc. v. Unidentified Wrecked and

Abandoned Sailing Vessel, Nuestra Senora

de Atocha, etc., 5 Cir., 569 F.2d 330

(C.A. 5th 1978), which
certain modifications,
this Court determining
salvaged articles from

In order to effectuate

affirmed, with

the judgment of
the ownership of
the ship Atocha.

the mandate of the

Fifth Circuit, and carry out the judgment

of this Court, a warrant for arrest was

_ issued to seize certain salvaged articles

A62

in the possession of the Division of
Archives, History and Records Management,
Department of State, State of Florida,
hereinafter, Division of Archives. The
Division of Archives obtained a temporary
stay of the warrant from the Fifth
‘Circuit. Subsequently, the Court of
Appeals dissolved the stay and allowed
execution of the warrant. Pursuant to

- the warrant of arrest, the property in
question was seized and is now in control
and possession of this Court.

The Florida Division of Archives has
challenged the jurisdiction of this Court
and, subject to such objection, claims it
is entitled to the property in question
for various reasons, principally based
upon a purported contract between the

Division and Treasure Salvors.

A63

For the reasons that follow, this
Court holds: it had jurisdiction to
issue the warrant of arrest and seize the
property in question; the Division of
Archives is bound by the earlier judgment
of this Court; Treasure Salvors, under
the judgment of this Court, as affirmed
by the Fifth Circuit, is the owner of the
property and entitled to possession; the
claims of the Division of Archives to be
the owner of the property, and to be
accordingly entitled to the possession of
such, are wholly without merit; and the
present proceedings are not barred by the
Eleventh Amendment to the Constitution of
the United States nor by the Doctrine of
Sovereign Immunity.

Before proceeding with this
memorandum's discussion of the facts and
reasons in support of the Court's

A64

conclusions, prepared to satisfy the
requirements of Federal Rule of Civil
Procedure 52, it may be helpful to place
these proceedings in proper perspective,
in particular, the role of the agents and
employees of the State of Florida,
Division of Archives.

The Atocha was lost at sea because
of a hurricane in 1622. Spain initially
located the wreck and attempted salvage,
recovering two cannons. But due to
various perils of the sea the wreck was
shortly thereafter lost and remained lost
for over three centuries.

[T]hen, in 1971, after an

arduous search aided by

survivors’ accounts of the

1622 wrecks, and an

expenditure of more than $2

million, plaintiffs located

the Atocha. Plaintiffs

have retrieved gold,

silver, artifacts, and

armament valued at $6

million. Their costs have

A65

included four lives, among

them the son and daughter-

in-law of Melvin Fisher,

plaintiff's president and

leader of the expedition.

569 F.2d at 333.

As grave as the perils of sea are
and were, the gravest perils to the
treasure itself came not from the sea but
from two ‘et tie ty sources. Agents of two
governments, Florida and the United
States, who have the highest responsi-
bility to protect rights and property of
citizens, claimed the treasure as
belonging to the United States and
Florida.

The finding of a great treasure from
the days of the Spanish Main is not a
cherished dream of only the United States
and Florida citizens; countless people
from other lands have shared such

thoughts. It would amaze and surprise

A66

most citizens of this country, when their
dream, at the greatest of costs, was
realized, that agents of respective
governments would, on the most flimsy of
grounds, lay claim to the treasure. As
previously determined by this Court, the
wreck site is outside the territorial
boundaries of the United States and
Florida, and under provisions of
applicable treaties, which are the
supreme law of the land, no claim can be
made on the basis of sovereign ownership.
This Court and the Fifth Circuit rejected
a sovereign prerogative argument of the
United States that all treasure found by
its citizens anywhere in the world
belonged to the United States as the
American "Crown."

The zeal of the United States in
claiming the salvaged articles of the

A67

Atocha has been exceeded by the agents of
the State of Florida. Although
occasionally state employees are faulted
' for failure to protect state property,
certainly this does not apply to the
personnel of the Division of Archives
who, in their unstinting efforts to claim
property belonging to Treasure Salvors,
have reacted as though Treasure Salvors
were attempting to steal the old Capitol
Building as well as the great Seal of the
State.

The ship Atocha's association with
Florida is tangential at best and
certainly is not integral to the heritage
and development of the State. The ship
was bound on a voyage from Havana to
Cadiz when the storm of 1622 drove it
close to, but outside of, the boundaries
of the later State of Florida. Its cargo

A68

was not connected or associated with the
Florida peninsula. Nevertheless, agents
from the Division of Archives have
persisted in wrongfully attempting to lay
claim to the salvage recovered by
Treasure Salvors or an interest therein.
The Division of Archives did not find the
Atocha or its cargo, and there is no
basis in fact for suggesting that the
Division ever could have located it, much
less recovered it. Merely because agents
of the State covet the treasure, does not
give the agents the right to take it in
the name of the State. It is ironic that
the agents of the State are able to use
resources of the State to deprive
Treasure Salvors of what it justly and
rightfully owns, especially when the

record reflects that Treasure Salvors was

A69

willing at one time to donate a portion
of the salvaged articles to the State.

After presentation of evidence and
argument before this Court, both the
Division of Archives and Treasure Salvors
filed extensive briefs. The Court agrees
substantially with the reasons and
arguments of Treasure Salvors.

THE DIVISION OF ARCHIVES IS IN

PRIVITY AND BOUND BY JUDGMENT

OF THIS COURT AS AFFIRMED
BY THE FIFTH CIRCUIT

In resolving the jurisdictional
issues and the arguments advanced by the
Florida Division of Archives, it is
sianificent ‘that the present proceeding
is not a new independent action, but
concerns an appropriate issuance of an
ancillary warrant of arrest in a pending
admiralty case over which this Court's

A70

jurisdiction is not questioned and where
such ancillary warrant is necessary to
carry out the judgment of this Court and
the Fifth Circuit. Because of the
importance of the nature of this
proceeding and the relevancy of certain
facts to the jurisdictional issues
concerning the Eleventh Amendment and
sovereign immunity, the disussion of -
those issues will be made at the
conclusion of this memorandum.

If the Division of Archives is in
privity there is no question that it
would be bound by the judgment and its
argument against jurisdiction would be of
no avail. The Fifth Circuit ruled:

To summarize, the district

court properly adjudicated

title to all those objects

within its territoria

jurisdiction and to those

objects without its

territory as between

A7}

plaintiffs and the United
States. In affirming the
district court, we do not
approve that portion of its
order which may be
construed as a holding that
plaintiffs have exclusive
title to, and the right to
immediate and sole
possession of, the vessel
and cargo as to other
claimants, if any there be,
who are not parties or

rivies to this litigation.
Vimphasis added) S69°F.2d-

at 335-336.

The crux of the Division of
Archives’ argument on the jurisdiction of
this Court to issue the ancillary warrant
of arrest is the assumption that it is
not in privity nor bound by the judgment.
The Division of Archives contends, in
reference to the issuance of the warrant
filed in this Court:

The State of Florida was

not at any time a party to

this proceeding and had no

interest whatsoever therein

+ « « The State of Florida

was not a party on appeal.

A72

In affirming the District

Court, this Court expressly

ruled:
We do not approve that
portion of its order
which may be construed as
holding that plaintiffs
have exclusive title to,
and the right to
immediate and sole
possession of the vessel
and cargo as to other
claimants, if any there
be, who are not parties
or privies to the
Tit ation. Division of
Archives’ Reply to the
Order to Show Cause, P.3.

By the above argument, the Division
of Archives fully recognizess that, if it
is bound by the judgment, its argument on
lack of jurisdiction necessarily fails.
The record reflects an involvement by the
Division of Archives with the United
States, together with a bypassing of an
opportunity to intervene, which warrants
a holding that the Division is and should
be bound. |

A73

The Division of Archives did not
intervene in the proceeding below, though
it had an absolute right to do so. The
Division of Archives had a contract with
Treasure Salvors regarding the
disposition of the treasure and a dispute
arose concerning this contract. This
dispute as to the terms and rights under
the contract arose before Treasure
Salvors and the United States went to
court to settle the ownership of the
treasure. The Division of Archives had
notice of the initiation of the suit, and
at times thereafter knew of and
participated in the litigation of the
suit. Being thus involved in the
progress of the suit, the Division of
Archives was fully aware that this suit

was an in rem proceeding brought to

A74

settle, for all the world, the ownership
rights to the treasure. Furthermore, the
Division of Archives was content to sit
back and rely on the federal government
to represent and protect its interests,
which were now in repudiation of its
earlier dealings with Treasure Salvors.
The interest of the Division of
Archives was intertwined and interwoven
with that of the parties to the extent
that Division of Archives had a right to
intervene under general principles of
admiralty law in reference to the in rem
proceedings, and a right, as well, under
Rule 24. The conduct of the Division of
Archives is important and lends signif-
icance to its failure to intervene. Under
threats of arrest, the Division of

Archives coerced the acceptance of a

A75

salvage contract under which it gave
nothing but a site mistakenly claimed as
state submerged lands.

The Division of Archives had the
right under the purported contract to
divide the salvage, giving 75 percent to
Treasure Salvors and retaining 25 percent
at a time of its choosing. The contract
had various forfeiture provisions under
which the Division of Archives could
claim the entire treasure. Although
repeated requests were made to divide the
salvage recovered, the Division of
Archives refused. This refusal was in
bad faith as part of a scheme by the
Division to deprive Treasure Salvors of
all salvaged treasure. After the Special
Master in United States v. Florida, 420
U.S. 531, 95 S.Ct. 1162, 43 L.Ed.2d 375

A76

(1975), determined that Florida
boundaries did not in fact encompass the
wreck site, and immediately after oral
arguments in the Supreme Court, the
Division of Archives knew its contract
claim was invalid; therefore, it
proceeded to immediately divide the
treasure and take its purported share.
Based upon the decision of the
United States Supreme Court, Treasure
Salvors notified the Division of Archives
that the salvage contract was nullity.
Frustrated in its desire to obtain the
entire treasure under the initial
contract, the Division of Archives then
encouraged the United States to claim the
entire treasure. The Division of
Archives’ plan was to work out an
arrangement with the United States over

A77

division of treasure to the total
exclusion of Treasure Salvors. To that
end it did all it could to assist the
United States in the litigation and
relied upon the United States to prevail
and to protect the interests of the
Division of Archives.

After the United States’ claim (as
urged and supported by the Division of
Archives in its dealings) was determined
to be without merit by this Court and the
Fifth Circuit, the Division of Archives
attempted to paint itself as a total
stranger to the litigation. It ill
behooves the Division of Archives to play
such a fast and loose game with courts.
For all practical purposes, the Division
of Acchives was a party in fact, although
not technically in name, to the
litigation. Under all concepts of

A78

fairness, it should be treated as a party
and be bound by the decree--as indeed the
cases so hold.

There is no question, given the
contract claim regarding cights to the
treasure, that the Division of Archives
had a right to intervene under Rule 24(a)
of the Federal Rules of Civil Procedure.
The Division of Archives certainly had
“an interest relating to the property or
transaction which is the subject of the
action" and was "so situated that the
disposition of the action may as a
practical matter impair or impede [the
Division of Archives'] ability to protect
that interest, unless the applicant's
interest is adequately represented by
existing parties." Rule 24(a)(2)
Fed.R.Civ.P. In an analogous case to the
instant suit, the Fifth Circuit made it

A79

clear that rule 24(a) was to be
interpreted broadly to give it full,
practical effect. Atlantis Development
Corp. v. United States, 379 F.2d 818

(C.A. 5th 1967). As the Court noted,
intervention involves competing

interests:
[O]nm the one hand, there is*
the private suitor's
interests in having his own
lawsuit subject to no one
else's- direction or .
meddling. On the other
hand, however, is the great
public interest, especially
in these explosive days of
ever-increasing dockets, of
having a disposition at a
single time of as much of
the controversy to as many
of the parties as is fairly
possible consistent with
due process. Id. at 824.

Considering the Division of Archives’
contract, the in rem nature of the
proceeding, and the practial reading of
the rule on intervention, the Division

A80

iy
Wh pve:

of Archives undoubtedly could have
intervened had it so desired.

It is important to understand that
the Division of Archives was aware that
its rights were in jeopardy and purposely
chose to rely on the federal government
rather than to intervene. The Division
of Archives knew of the suit from its
initiation and chose to cooperate with
the federal government rather than assert
its own rights. During the course of the
litigation, the Division of Archives
engaged in several activities with the
federal government. The Division of
Archives negotiated with the federal
government to obtain an antiquities
permit. Had the United States prevailed
in the suit, the Division of Archives
would have received an antiquities permit
from the Department of the Interior for

A81

the wreck site. Furthermore, an attorney
for the Florida Secretary of State (the
agency which administers the Division of
Archives) worked with the federal
‘government on the case, and the Division
of Archives engaged in preliminary
negotiations regarding disposition of the
treasure should the federal government
win. The Division of Archives made the
purposeful choice to cooperate with the
federal government in prosecuting the
case, and generally relied on the United
States to protect its interest.

With the case decided differently
than the Division of Archives desired, it
now wishes to assert the interest which
it should have protected by intervening
in the initial suit. The policies

underlying res judicata dictate that the

Division of Archives should be bound
A8&2

by the previous judgment. James &

Hazard, in their text on Civil Procedure

discuss a variety of circumstances where
one not officially a party to an action
may nonetheless be bound by a court's
decree. In order to give effect to the
principles of finality embodied in the

doctrine of res judicata, courts may

invoke equitable preclusion where a
nonparty has been aware of the initial
litigation and failed to intervene to
protect its interests. James & Hazard,

Civil Procedure § 11.31 (1977).

A party who purposely fails to
intervene is bound under the law of this
Circuit. In Aerojet-General Corp. v.
Askew, 511 F.2d 710 (C.A. 5th 1975), the

plaintiff sought specific performance of
a contract, asserting a right to buy
various lands from a state agency. The

A83

Court held for the plaintiff.
Subsequently, a Florida government unit
(Dade County) came forward to halt
conveyance of the land asserting that a
state statute gave it absolute prior
right to buy the land. The state had not
utilized this argument in the eriginal

suit, nor had the local agency

intervened, although well aware of the

litigation. The Court held that the
county was bound by the judgment.

In Aerojet, the local government
contended that the district court should
not have held it bound since it was not a
party to the original suit. The Fifth
Circuit responded:

Under the federal law of

res judicata, a person may

be bound by a judgment even

though not a party if one

of the parties to the suit
is so closely aligned with

A84

his interests as to be his
virtual representative.
(Citations omitted).

The question whether a
party's interests in a case
are virtually
representative of the
interests of a nonparty is
one of fact for the trial
court. See Astron
Industrial Associates, Inc.

Ve cheyeier Motors Corps. 5

Ss :

961. We find no reason to
overturn the District
Court's determination that
Dade County "was in such
close relationship to the
parties to the first
lawsuit before this Court,
that its interests or the
interests of those which it
represents, were
represented in that
proceeding." D.C., 366
F.Supp. at 910.

Aerojet-General Corp. v.
skew, . a -20

(C.A. 5th 1975)

Because the Division of Archives

cooperated with the federal government,

relying on it to protect the Division of

Archives’ interests, it should be bound
A85

by the judgment and not permitted to ask
the court to consider matters which could
and should have been settled before.

The theory that a nonparty's failure
to intervene should result in the decree
being conclusive against that nonparty
has been suggested in the United States
Supreme Court. Justice Harlan in Pro-

vident Tradesmens Bank & Trust Co. v.

Patterson, 390 U.S. 102, 114, 88 S.Ct.
733, 740, 19 L.Ed.2d 936 (1968), stated
that:

It might be argued that
Dutcher should be bound by
the previous decision be-
cause, although tech-
nically a nonparty, he

had purposely bypassed an
adequate opportunity to
intervene.

Furthermore, this concept of
equitable preclusion has been applied in
admiralty cases. In Cummins Diesel

A86

Michigan, Inc. v. The Falcon, 305 F.2d
721 (C.A. 7th 1962), a nonparty was held

bound by a previous judgment where that
nonparty had notice and an opportunity to
intervene but failed to do so. Cummins
involved an action in admiralty where
plaintiff filed a libel in rem against a
vessel, "The Falcon." Various claimants
filed appearances and claimed interests
and liens against the vessel. Later, one
Holcomb, asserted that the court had no
authority to determine the ownership of
the vessel. Holcomb, however, had been
given actual as well as constructive
notice of the previous proceedings.
Answering Holcomb's contention that the
court had no authority to determine the
ownership of the vessel, the court said:

This, however, did not

create an issue between

appellant and Holcomb, who

A87

had an opportunity to
intervene and assert any

claim to ownership. This

he failed or refused to do
and, in our view, the >
decree is binding upon him

the same as on all other
parties who were in

default. Id. at 723

{Emphasis added].

The United States Supreme Court has
held that there mzy be times when the
opportunity to intervene may be enough to
bind a person not a party. Moore, 1B

Federal Practice 40.411 p. 94 (1977, 78

Supp.). In Penn-Central Merger and N. &

W. Inclusion Cases, 389 U.S. 486, 88
S.Ct. 602, 19 L.Ed.2d 723 (1968),

numerous plaintiffs challenged the
finding of the Interstate Commerce
Commission in connection with a proposed
railroad merger. These actions arose in
district courts in several states, and
all were continued in deference to the

A88

New York Federal District Court. All
plaintiffs were free to join the New York
proceedings, but some chose to rely on
others to represent their interests.
Subsequently, these plaintiffs who had
foregone their opportunity to intervene
attempted to go forward with their
complaints. On the issue cf whether
these plaintiffs should be bound, the
Supreme Court said:

[They] had an adequate
opportunity to join in the
litigation in that court
following the stay of
proceedings in the Middle
District of Pennsylvania.
As we noted, all district
courts in which actions to
review the Commission's
finding or for injunctive
relief were filed continued
their proceedings in
deference to the New York
court. All parties with
standing to challenge the
Commission's action might
have joined in the New York
proceedings. In these cir-
cumstances, it necessarily

A89

follows that the decision

of the New York court

which, with certain ex-

‘ ceptions, we have affirmed,
precludes further judicial

review or adjudication of

the issues upon which it

passes. Id. at 505-506, 88

SCG. at: Gi2.

The foregoing cases clearly
establish the principle that one who has
an opportunity to intervene is bound by a
judgment affecting his rights where he
could have intervened but failed to do so
to protect his interests. The facts
establish the Division of Archives was
fully aware of the preceding suit,
consulted with the United States while
they prosecuted the case and indeed
negotiated with the federal government
about securing a portion of the treasure.
Since the Division of Archives had the
opportunity but failed to intervene,
instead relying on the United States to

A90

further its interests, it should now be
bound by the judgment rendered previously
against the United States.

In addition to being bound be-
cause of failing to intervene to protect
its interests rather than relying on the
United States, the Division of Archives
is bound because of its participation in
the previous litigation. Professor Moore
discusses situations where nonparties may
be bound by previous judgments. Moore,
1B Federal Practice 40.411[6] p. 1552
(1974):

If a non-party who thus
participates in litigation
has an interest suffi-
ciently close to the matter
in litigation, and has
adequate opportunity to
litigate in support of or
in defense against the
cause of action on which
the suit is based, the
policies underlying the
doctrine of judicial final-
ity require that the par-

A91

ticipating non-party should

be bound by the resulting

judgment to the same extent

as though he were a party

to the action. Id. at

1552.

This policy of binding nonparties
who have notice of and participate in the
prosecution cf previous litigation has
been upheld by the United States Supreme
Court. Souffront v. Compagnie des
Sucreries, 217 U.S. 475, 30 S.Ct. 608, 54

L.Ed. 846 (1910). In Souffront, the

Supreme Court said:

The case is within the
principle that one who...
assists in the prosecution
or defense of an action in
aid of some interest of his
own, and who does this
openly, to the knowledge of
the opposing party, is as
much bound by the ey re
+ « « as he would be if he
had been a party to the
record. Id. at 487, 30
S.Ct. at 612.

The record shows that the Division of
A92

Archives knew of the suit and consulted
with the federal government in the
prosecution of the suit. Furthermore,
the Division of Archives had an interest
at stake in the previous action (an
interest very similar to that of the
United States) and worked with the United
States, counting on the United States as
a named party to represent its interest.
Testimony shows that the Division of
Archives had even preliminarily negoti-
ated division of the artifacts which the
United States sought to recover.

The Division of Archives was in
privity with the federal government.
Privity is a policy concept varying with
appropriate circumstances. With regard
to the principle of judicial finality
Moore suggests that privity is to be
found not so much in the fact that a

A93

party is acting as the representative of
a nonparty, but rather that the non-
party's participation justifies holding
him bound by the judgment. Moore, 1B
Federal Practice 40.411.[6] p. 1553

(1974). If a nonparty sits on the
sidelines m~-itoring litigation,
assisting in the suit, and at all times.
has the ability to intervene to protect
its interest, it would offend the theory
of judicial finality not to hold that
nonparty bound by the judgment.

In order to be bound, the
participating nonparty must have more
than a mere academic interest in the
outcome of the litigation. Moore
outlines three types of interests which
have been held sufficient to invoke res
judicata effect. See Moore, 1B Federal
Practice q 0.411 [6] pp. 1555, 1558, 1559

A94

(1974). While one of these interests
would be sufficient, Moore points out
that they often overlap, and a case will
have characteristics of two or more of
these interests. Id. at 1563.

The first type of interest is "[a]
legal right, interest or duty dependent
wholly or in part on the cause of action
before the court for adjudication." Id.
at 1555. Under this rule, a grantee who
cooperates in a title suit between a
third party and his grantor is bound when
the grantee acquired his interest before

the suit instituted. Souffront v.

Compagnie des Sucreries, supra.

Similarly, a lessee who participated as a
.nonparty in defending a condemnation suit
was held bound by a judgment of
condemnation. Sparks v. Gallagher, 114
Ok1l. 103, 243 P. 228 (Okla. 1925).

A95

The second kind of interest which
justifies binding a participating
nonparty is "a proprietary right that
will be affected favorably or detrimen-
tally by the outcome of the litigation."
Moore, 1B Federal Practice q% 0.411[6] p.

1558 (1974). In Hyman v. Regenstein, 258
F.2d 502 (C.A. 5th 1958), Hyman was an

inventor and former employee of
Regenstein's corporation, Velsicol. While
employed at Velsicol, Hyman purportedly
signed an agreement to assign all inven-
tions and patents over to Velsicol. Sub-
sequently, Hyman quit Velsicol and
started his own corporation utilizing
some of the inventions developed at
Velsicol. Velsicol sued Julius Hyman &
Co., and the Supreme Court of Colorado
enjoined further use of the inventions
finding the agreement to assign valid.
A96

Julius Hyman & Co. v. Velsicol Corp., 123
Colo. 563, 233 F.2d 977 (1951); cert.
denied 342 U.S. 870, 72 S.Ct. 113, %6
L.Ed. 654 (1951). Later Hyman sued

Regenstein for damages for loss of prof-
its on the inventions. The United States
Court of Appeals for the Fifth Circuit
held that the previous suit barred Hyman
from contesting the validity of the
agreement to assign. That issue had
already been decided, and though Hyman
had been sued in his corporate rather
than individual capacity, he was aware of
and involved in the previous litigation,
and thus was bound by that judgment.

The idea of binding a participating
nonparty is not novel in the Fifth Cir-
cuit. Before the Hyman case, Co-op Cab
Co. v. Settle, 171 F.2d 40 (C.A. 5th

1948), held a nonparty bound. In Co-op,
A97

the city of Athens, Georgia had denied
permits to operate a taxi business to
Co-op's competitors. The competitors
sought judicial aid in obtaining the
permits. The city defended with Co-op
assisting as a nonparty. The trial court
held that the permits must issue, and the
Georgia Supreme Court affirmed.
Thereafter, Co-op entered the picture as
a party and attempted to enjoin the
issuance of the permits. In affirming
the district court's decision, the Fifth
Circuit adopted the trial judge's
language:

I think the plaintiff,

Co-op Cab Company, is bound

by the decree in the

[previous] proceeding. It

is true that it was not a

formal party in the case,

but it had full knowledge,

and an active interest in

the litigation. It

furnished and paid its own

counsel to defend the

A98

defendant City. The issues
here could have been raised
in the proceeding.

It may fairly be said that
Co-op, in substance,
adopted the State Court
litigation for the
protection of its contract
and franchise, and relied
on sustaining the City's
refusal to grant Settle a
franchise. I think Co-op
is bound by the
consequences. Id. at 42.

A third type of interest which has
been held sufficient to bind a nonparty
“exists when the nonparty has some legal
right, interest or duty dependent on a
question of fact or mixed fact and law
that is in issue in the suit."" Moore, 1B

Federal Practice 4 0.411[6], p. 1559

(1974). After describing some cases
which take a somewhat narrow view, Moore

explains his position:

A99

But a different, and we are
inclined to believe better,
view, adopted by the
Restatement of Judgments,
[See Restatement of
Judgments (1942) § 84] is
that an interest in the
determination of a question
of fact or of mixed fact
and law, with reference to
the same subject matter or
transaction, is a
sufficient interest to —
bring a participating
nonparty within the scope
of the judgment's
conclusive force. And the
Restatement position
receives support from cases
in some areas. Id. at
1562. For a list of cases
see n.25. Id. .

Furthermore, Moore finds that some
cases will qualify for the use of res
judicata because all three types of
interests are involved. Id. at 1563. A
common example is a patent infringement
suit. Judge Brown explained the concept
in the case of Bros., Inc. v. W. E. Grace
Mfg. Co., 261 F.2d 428 (C.A. 5th 1958).

A100

The Division of Archives comes under all
three of the interests described by
Moore. The Division of Archives had a
proprietary right that was affected by
the litigation's outcome. Also, the
Division of Archives' interest depended
to an extent on questions of fact or
mixed law and fact questions in issue in
the previous suit. Having stood on the
sidelines and advised the federal govern-
ment in its prosecution of the case (in
fact even admitting that the General
Counsel for the Secretary of State worked
with the United States in presenting its
case), the Division of Archives cannot
now be allowed to escape the conclusive
effects of that judgment.

In addition to having an appropriate
interest in the litigation, a nonparty,
to be bound, must have a requisite degree

A101

of participation in the suit. Moore, 1B
Federal Practice q 0.411[6] p. 1564
(1974).

Generally speaking, the
rule as to participating
non-parties requires that
the non-party have control,
or at least joint control
of the prosecution of de-
fense of the suit...
The non-party's control,
however, need not be
absolute: joint control by
non-parties, or in con-
bag with a party,

s sufficient. Id. at
1564, 1566 [citing numerous
cases].

Logically, the requirement of con-
trol is based on the need to insure that
the nonparty truly had his day in court
before involving the binding effect of
the prior judgment. Where a nonparty
participated in the progress of the suit,
was at all times aware of the interests
being adjudicated, and had the op-
portunity to intervene, less control

A102

should be necessary to invoke the res
judicata effect of the judgment. Though
the Division of Archives did not control
every aspect of the case, their attorney
worked with the federal government; and
the state and federal government coop-
erated in negotiations regarding the dis-
position of the Atocha, its cargo, etc.
The Division purposely relied on the
United States to protect its interests in
the hope of obtaining a share without
having to come into the litigation to
assert its own claim. Being content to
accept the representation of the federal
government, and cooperate with the United
States behind the scenes, the Division of
Archives should be considered to have
participated sufficiently to be bound as
a nonparty. As the earlier discussion
pointed out, the failure to intervene

A103

should render the Division bound re-
gardless of the amount of participation.
The extent of the state's entanglement
with and reliance on the federal govern-
ment in this case simply serves to high-
light the fact that equitable principles
call for the Division to be bound.

ANCILLARY PROCESS AUTHORIZED TO
ARREST SALVAGED ARTICLES PERTAINING TO
RES THAT HAD BEEN REMOVED FROM THE
SOUTHERN DISTRICT.

In the alternative, even if the
Division of Archives were not bound by
the prior judgment, this Court had
jurisdiction to issue the warrant of ar-
rest and seize the salvaged articles in
question.

After receipt of the mandate, an-
cillary process was issued in reference
to certain articles of salvage. The

warrant for arrest to obtain the property

A104

in question is authorized by Supplemental
Admiralty Rule C(5). The Division of
Archives has attempted to block service
of the writ. The Court of Appeals for
the Fifth Circuit refused to issue a Writ
of Prohibition against the service of
such writ. The Fifth Circuit in denying
the Petition for Reconsideration and
Clarification stated:

The question of the juris-

diction of the District

Court for the Southern

District of Florida is for

that Court to determine in

the first instance on the

basis of such record as may

be developed in that Court.

The Division of Archives had taken
the position before the Fifth Circuit
that as a matter of law this Court could
have no possible jurisdiction to issue
the warrant for arrest in question under
Admiralty Rules C(3) and the Platoro

A105

Limited, Inc. v. Unidentified Remains of
a Vessel, 508 F.2d 1113 (C.A. 5th 1975).

Under the facts in this record, jurisdic-
tion to issue warrant for arrest exists.
The key fact is that this Court did
acquire valid in rem jurisdiction and in
personam jurisdiction in reference to the
res situated within the Southern District
and is merely seeking by ancillary pro-
cess to recover a portion of salvaged
articles that have been removed from the
Southern District. In the instant case
the warrant for arrest was ancillary in
aid of the Court's unquestioned jurisdic-
tion over the res previously arrested and
seized within the Southern District.
Further, Fed. R. Civ. P. 4(f£) provides
that all service of process, except sub-
poenas, by a Federal District Court is
co-extensive with the state in which

A106

it is sitting. Under Supplemental
Admiralty Rule A, the Rules of Civil Pro-
cedure apply except where “inconsistent
with these supplemental rules." Division
of Archives contends that the warrant for
arrest cannot issue to seize property in
the Northern District because
Supplemental Admiralty Rule E(3) limits
the service of process under Admiralty
Rule C(3) to the district. There is no
such limitation, however, on ancillary
process under Rule C(5).

The Division of Archives’ inter-
pretation is not warranted under the
rules and is not consistent with the
Platoro decision nor with the decision of
the Fifth Circuit in the present pro-
ceedings. Indeed, in Platoro, the Court
recognized in rem jurisdiction could be
acquired and, thus, the process could be

A107

issued, when the res was accidentally,
fraudulently, or improperly removed from
the District. 508 F.2d at 1116. The
holding in Platoro is stptbesita only if
no portion of the res had been validly
arrested within the Southern District of
Florida and if no other basis for the ex-
ceptions existe’. The facts in Platoro
differ markedly from the case at bar.
Platoro involved the problem of invoking
original in rem jurisdiction when no por-
tion of the res was present in the dis-
trict when the suit was filed. In con-
trast, the issue before this court cen-

ters on ancillary jurisdiction, since

original jurisdiction has been estab-
lished as stated. In Platoro, the

plaintiffs had removed the salvage from

the district. Im the present case, the
Division, rather than Treasure Salvors,

A108

removed the articles of salvage from the
Southern District. The Court finds this
removal was improper and was accomplished
pursuant to an invalid contract with
Treasure Salvors. The Division then
insisted on wrongfully detaining those
portions of the res over which this Court
had asied lary jurisdiction.

Professor Moore notes:

Moreover, to the extent a
decree in rem may be said
to effect alI normal
incidents of the arrested
res, it may be necessary to
give extraterritorial
effect to ancillary proces
to enable the court to
bring within its control
all property its decree
will affect. It would seem
that the verdict is not yet
in on whether Rule E(3)
prevents issuance of
ancillary process beyond
the gotgrans. boundaries
of the district in which a
major portion of that res
is physically located. 7A
Moore's Federal Practice

q C.15 p. 700.10.

A109

If the verdict is not in, it is now.
The use of ancillary process to protect
and perfect an existing in rem juris-
diction over articles removed to another
district is proper. A contrary result
would produce a multiplicity of lawsuits
and conflicting judgments, for it then
would be necessary even though one
federal district court had in rem
jurisdiction, to institute new and sepa-
rate proceedings in ever district where a
portion of the res has been removed --
hardly a desirable goal. Pursuasive, if
not controlling, authority for utiliza-
tion of the ancillary process to obtain
in rem jurisdictioin over some articles
beyond the Court's boundaries, predicated
on existence of a substantial portion of
the res within such district, is the
Fifth Circuit's opinion in this case.
A110

case. The Fifth Circuit was well aware
that although a substantial portion of
the vessel's cargo was within the juris-
diction of the district court, it was not
possible to physically bring all of the
res within the district.

Initially we note that for
all practical purposes it
was impossible to bring the
entire remains of the ves-
sel and her cargo within
the territorial jurisdic-
tion of the court. Thou-
sands of items retrieved
from the wreck site were
brought into the district,
but the bulk of the wreck
lies buried under tons of
sand in international
waters. The district court
did everything within its
power to have the marshal
arrest the vessel and bring
it within the custody of
the court. Thus, there is
little danger that the res,
against which any claims
might be satisfied, will
escape an in rem decree

: he it. 569 F.2d at

A111

Upholding jurisdiction in the in-
stant case will be fully in accord with
the admonition given by the Fifth
Circuit:

These decisions evidence
the common concern of the
courts with finding the
most practical and effica-
cious means of resolving
the disputes before them.
An interest in rendering
justice rather than an
automatistic reliance upon
rigid legalisms character-
izes each of them. It is
with these examples before
us that we turn to an exam-
ination of the merits of
the government's jurisdic-
tional challenge. 569 F.2d
at 334.

The validity of ancillary process
outside the district is supported by the
case of The Joseph Gorham, 13 F. Cas.
1136 (D. Conn. 1843). In Gorham, a ship

was arrested in the Southern District of
New York. Later, the ship was improperly
removed to the District of Connecticut.

A112

The federal court for the Southern
District of New York petitioned the fed-
eral court for the District of
Connecticut to arrest the vessel and re-
turn it to New York. The federal court
in Connecticut complied with the request,
noting that the right to possession prop-
erly belonged to the court in New York,
and the marshal for that court "[may]
have followed [the ship] anywhere and
retaken her." Id. at 1140. Similarly,
although this court has not petitioned
the Northern District to arrest the res
in the possession of the Division, the
marshal for this district, pursuant to
Gorham, could have come to the Northern
District and effected the arrest himself.
With regard to process, the case of

The Phebe, 19 F. Cas. 426 (D. Maine 1837)

is also instructive. The Phebe involved

A113

a challenge to the court's jurisdiction
to issue process against the purchaser of
a ship at a marshal's sale. The court |
stated that:

Process in rem is founded
on a right in the thing,
due in in re, and the object

the process is to obtain
the thing itself ... It
is not, therefore, a valid
objection to the issuing of
the process asked for, that
the person against whom it
is asked is neither a party
in the cause nor an officer
of the court. It is a
process that lies against
any person who by any
means, whether under color
of legal process from some
other tribunal or without
it, has obtained the
possession of that which is
in the a> ig custody of the
court. at 427.

The Division has obtained the pos-
session of property which is in the legal
custody of this Court. The property in
question is part of the entire vessel
over which this Court has complete juris-

A114

diction, regardless of whether the pro-
perty was removed from the vessel prior

to the vessel's arrest. The George

Prescott, 10 F. Cas. 222 (E.D.N.Y. 1865);
The Joseph Warner, 32 F. Supp. 532 (D.

Mass. 1939). Consequently, the warrant
for the arrest of the property in the
Northern District is a valid exercise of
ancillary process in aid of existing
jurisdiction, and, as such, the warrant
should be executed. ;

The language of Rule C(5) governing
ancillary process seems perfectly clear
and applicable:

In any action in rem in

which process has been

served as provided in this

rule, if any part of the

property that is the

subject of the action has

not been brought within the

control of the court be-

cause it has been removed .
- « The court may, on mo-

A115

tion, order . .. to show
cause why it should not be
delivered into the custody
of the marshall...

The provisions of Rule C(5) were
followed to the letter. This Court de-
nied the Division of Archives’ motion on
the show cause.

The upholding of jurisdiction is
also fully in accord with the provision
of 28 U.S.C. § 1692 regarding property in
different districts:

In proceedings in a dis-
trict court where a re-
ceiver is appointed for
property, real, personal or
mixed, situated in differ-
ent districts, process may
issue and be executed in
any such district as if the
property lay wholly within
one district, but orders
affecting the property
shall be entered of record
in each of such districts.

In the alternative, even if the Division
of Archives were not bound by the pre

A116

vious decree, this Court holds it
acquired in rem jurisdiction over the
articles of salvage in question through
proper issuance of the ancillary warrant
of arrest.
DIVISION OF ARCHIVES' CLAIM
TO PROPERTY WITHOUT MERIT

The portion of the res seized under
the warrant of arrest was comprised of
arti¢les of salvage recovered from a
wreck site located outside the juris-
diction of the State of Florida and on
lands not owned or possessed by the State
of Florida. Section 267.061(1)(b),
Florida Statutes, which purports to vest
title in the State does not apply since
the property was not on "sovereignty
lands of the State."" The Division of
Archives has no right nor interest in
such pnar ty other than what might exist

A117

under an ultra vires contract between the

Division and Treasure Salvors. Contrary
to the Division of Archives' argument,
the Supreme Court in United States v.
Florida, 420 U.S. 531, 95 S.Ct. 1162, 43
L.Ed.2d 375 (1976), did not modify nor

change the State of Florida's seaward
boundary but merely defined it as it was
and is. Nevertheless, the Division per-
sists in arguing that the State's juris-
diction extends beyond the sovereign
territorial waters of the United States
for purposes of salvage. This Court re-
jects as specious a claim that the State
for purposes of salvage has greater
extraterritorial rights than the United
States. The argument of Florida also
would be in contravention to the
Convention on the Outer Continental
Shelf. April 29, 1958, 15 U.S.T. 471
A118

(1964) T.1.A.S. No. 5578, 499 U.N.T.S.
31. The report of the International Law
Commission written in conjunction with
the Convention states:

It is clearly understood

that the rights in question

do not cover objects such

as wrecked or and their

cargos (includ bullion)

lying on the seabed or

covered by the sand of the

subsoil. 11 U.S. GAOR,

overs 9 at 42, U.N. Doc

A/3159 (1956).
The territorial rights and limits of the
United States were determined by the
Fifth Circuit in this case. 569 F.2d
330, supra. The Division of Archives has
offered no creditable factual evidence to
support its novel theories. This Court
finds the wreck site of the Atocha from
which the salvage articles in question
were recovered was outside of Florida's
jurisdiction.

A119

Although the Division of Archives
should have intervened earlier, at the
stage where the Court acquired in rem
jurisdiction over the present articles of
salvage, the Division of Archives had the
option to decide whether or not it would
claim an interest in the property. The
Division chose to assert, on the merits,
a claim to the property. Under the judg-
ment of this Court, as affirmed by the
Fifth Circuit, Treasure Salvors has a
valid claim to the property seized, un-
less the State asserts and establishes a
superior claim.

Since the state asserts a claim in
this proceeding to the property, it
necessarily waives any Eleventh Amendment
objections. Clark v. Barnard, 108 U.S.
436, 25 S.Ct. 878, 27 L.Ed. 780 (1883);
Gunter v. Atlantic Coast Line Railroad

A120

200 U.S. 273 (1906); Gardner v. State of
New Jersey, 329 U.S. 565, 67 S.Ct. 467,
91 L.Ed. 504 (1974). See discussion of

the Eleventh Amendment and Sovereign

Immunity, infra. The Division of
Archives obviously cannot ride both
horses; it cannot properly assert a claim
to ownership of the property and, simul-
taneously assert immunity under the Ele-
venth Amendment. These Supreme Court
cases hold that when a state voluntarily
places itself in the position of a suit-
or, it is deemed to have laid aside its
sovereignty and to have assumed the
status of an ordinary suitor so far as
concerns any matters properly defensive.
In Langley v. Irons Land and
Development Co., 94 Fla. 1010, 114 So.
769, 771-72 (1927), which remains the

principal Florida case on invalidation of

Al21

contract as a result of mistake, the
Florida Supreme Court adopted the
following statements from 4 Ruling Case
Law 506:

The jurisdiction of equity
to decree the cancellation
of an instrument because at
the time of its execution
the parties, or even one of
them, labored under a
mistake of fact, is well
recognized; and the rule is
the same whether the
instruments relate to an
executory agreement, or one
that has been executed
- « « [T)he authorities are
ractically unanimous in
olding that the mistake
must not result from the
want of that degree of care
and diligence which would
be exercised by persons of
reasonable prudence under
the same circumstances, or
equity will not relieve
against it. Moreover, a
mistake such as will
entitle one to cancellation
must be material to the
transaction and affect the
substance thereof, rather
than a mere incident or the
inducement for entering
into it.

A122

In this regard, the general mari-
time law, controlling here, is on ail
fours with that of Florida. See Norris,
supra §167; The Alert, 56 F. 721
(S.D.N.Y. 1893); The Clotilde, F.Cas.
2903 (D.C. Me. 1872) (contract declared

invalid for mutual mistake). Under mari-
time law, a misstatement of fact by one
of the parties will result in the con-
tract being set aside. The Clandeboye,
70 F. 631 (C.A. 4th 1895).

The coercive acts of the Division of
Archives in threatening arrest and con-
fiscation voids the contract under the
general maritime law. Crary v. The El
Dorado, F.Cas. 3362 (S.D.N.Y. 1856).

Contracts entered into because of com-
pulsion, or inequality of bargaining
position may be set aside. Norris, supra
§$169,170.

A123

Even without the compulsion and
coercion of the part of the Division of
Archives, in the present case, a mutual
mistake of material fact--the location of
the wreck site within Florida waters--
provided each party's motivation to con-
tract. Had the parties known that, in
fact, the property did not lay upon state
sovereignty lands there would have been
no reason to contract regarding salvage
operations. In addition, prior to the
litigation to determine the boundary of
the State, neither party exercising rea-
sonable diligence could have avoided the
mistake of fact. The contract was there-
fore invalid from the time of its ex-
ecution, and the fact that it has been
partially performed is of no consequence.

In addition to mutual mistake of
material fact, the contract between the

A124

Division of Archives and Treasure Salvors
is invalid for lack or failure of consid-
eration. See Marks v. Fields, 160 Fla.
789, 36 So. 2d 612 (1948); Jones v.
McCallum, 21 Fla. 392 (1885). The con-

tract between the parties dated December
3, 1974, included in Exhibit 1, recites
that the State of Florida owns the land
on which the wreck is located (page 1 of
contract) and further recites that the
State owns the wreck and all materials
found therein (page 2 of contract). In
consideration of Treasure Salvors'
payment of $1,200.00 and covenants to
salvage the sunken property, the Division
of Archives conveyed to Treasure Salvors
the salvage right to the property. The
Division of Archives agreed to convey, at
the completion of the salvage operation,
75 percent of the material salvaged.

A125

There was at the very least a
failure of consideration on the part of
the Division under the statute on which
the Division relies. Section 267.061(1)
(b), Florida Statutes, provides:

It is further declared to
be the public policy of the
state that all treasure
trove, artifacts and such
objects having intrinsic or
historical aad archeolog-
ical value which have been
abandoned on state-owned
lands or state-owned sover-
eignty submerged lands
shall belong to the state
with the title thereto
vested in the Division of
Archives, History, and
Records Management of the
Department of State for the
purpose of administration
and protection. [Emphasis
added].

Section 267.031(5), Florida

Statutes, authorizes the Division of
Archives to enter into contracts which
are "necessary, expedient, or incidental
to the performance of its duties or the

A126

execution of its powers under this
chapter."

Since the property was never actu-
ally located on Florida sovereignty
submerged lands, the property did not
belong to the State and, as a result, the
Division lacked all authority to enter
into a contract conveying salvage rights.
Additionally, since the property was not
owned by the State, because not located
on sovereignty submerged lands, the Divi-
sion was without authority to promise, as
consideration for the contract, 75 per-
cent of the property recovered. An early
Florida case which is still applicable
adequately expresses the controlling
legal maxim:

The law aptly terms an

agreement to do an act or

Suake ds wardbasideration

for it a nudum pactum...

A127

a promise without legal
support, which the law will
not enforce ... Jones v.
McCallum, 21 Fla. 392, 395

The contract at issue here must be deemed
invalid. Aside from thé coercion shown,
the contract was entered into on the
basis of mutual mistake of a material
fact and suffers from a complete lack or
failure of consideration.

Rescission of the contract is a
maritime remedy and courts have dis-
cretion in its application. Before re-
scission may be granted, it must appear
that the parties can be restored to the
positions they held prior to formation of
the contract. If restoration of the
status quo is not possible, rescission
should not be granted. See McDonald v.
Sanders, 103 Fla. 93, 137 So. 122, 126
(1931); Glass v. Craig, 83 Fla. 408, 36

A128

(1922). But the fact that a contract is
partially executed will not operate as a
bar to rescission of the contract if
rescission is otherwise warranted.
Langley v. Irons Land and Development
Co., 94 Fla. 1010, 114 So. 769, 771 (Fla.
1927).

Under facts of the present case the
prties can easily be restored to their
prior positions by distribution of the

property in the possession of this Court

to Treasure Salvors.

The right to rescission has not been
waived by Treasure Salvors. In Rood Co.
v. Board of Public Instruction, 102 So.2d
139 (Fla. 1958), the plaintiff was seek-

ing rescission, on the basis of mistake,

of a contract for sale of land and a deed

executed pursuant to the contract. The

court stated that the right to rescission
A129

may be waived if, after acquiring know-
ledge of the mistake, the party seeking
rescission either "remains silent when he
should speak or in any manner recognizes
the contract as binding upon him, rati-
fies or accepts the benefits thereof
» « «' Id, at 142. Treasure Salvors did
not remain silent after learning of the
mistake, nor did it thereafter recognize
the contract as binding upon either par-
ty. Instead, it notified the Division of
Archives of the Supreme Court decision,
suggested that the contract was null and
void, removed the state agent from its
vessel and, on July 19, 1975, formally
declared the contract null and void.
Further, the maritime courts require
of all parties to a maritime contract the
utmost good faith before they can assert
rights under the contract. Coercion and

A130

compulsion are evidence of bad faith.

The acts of the State, contrary to the
interests of Treasure Salvors, who it now
claims was their agent, are egregious
seta ot bad faith amounting to collusion
to defeat the claims of a person standing
in a fiduciary relationship to the State,
See Norris, Law of Salvage, Ch. VIII,
Misconduct of Salvors (1958). The mari-

time law allows the forfeiture of all
salvage claims for acts of extreme bad
faith of the nature outlined above. The
action of the Division, in seeking to
obtain an interest from the United
States, constituted a repudiation by the
Division of its contract with Treasure
Salvors. In occupying a mutually
inconsistent position in its dealings
with the United States and with Treasure
Salvors, the Division did not act in good
A131

faith towards Treasure Salvors' rights.
The Division performed no salvage service
of value.

Additionally, the contract is inval-
id because the states cannot constitu-
tionally alter general admiralty and
maritime jurisdiction and congressional
acts thereunder. The Fifth Circuit in
its decision in this case stated:

- « « although at least one
state court has invoked En-
glish Common Law to award
ownership of a sunken ves-
sel to the sovereign, the
“American Rule" vesting
title in the finder has
been widely recognized by
courts and writers. (Cita-
tions omitted). We accept
the “American Rule" as it
has been uniformly pro-
nounced in the courts of
this nation for over a cen-
tury. Treasure Salvors v.
Unidentified Wrecked, etc.,

By this pronouncement, the Fifth Circuit

puts into perspective the State's claim

A132

to wrecked and abandoned vessels such as
the one in the case at bar.
Norris observes:

It is the policy of the
general maritime law to
encourage the salvaging of
derelict marine poser ey
on, and in, navigable
waters. The presumption by
a state of title of pos-
session to abandoned marine
property on navigable
waters raises the serious
constitutional question of
the interference by a state
of what is essentially a
federal problem. Norris,

Law of Salvage, Section
157, p- 13/7 e195 74

Cummulative Supplement).

We are concerned with substantive
maritime law that has been the subject of
innumerable federal statues, rules and
regulations. The power of Congress to
enact substantive maritime law was
initially considered conferred by the
Commerce Clause, e.g., The Daniel Ball,10
Wall. (77 U.S.) 557, 564 (1871); The

A133

Robert W. Parsons, 191 U.S. 17, 24 S.Ct.
8, 48 L.Ed. 73 (1903). Later opinions

firmly establish that the source of the
Congress's power was the Admiralty grant
itself, as supplemented by the Necessary
and Proper Clause, as Justice Bradley
said in Butler v. Boston and S.S.S. Co.,
130 U.S. 527 9 S.Ct. 612, 619, 32 L.Ed.
1017(1889):

[A]s the Constitution ex-
tends the judicial power

of the United States to
“all cases of admiralty and
maritime jurisdiction and
as this jurisdiction," is
held to be exclusive, the
power of legislation on the
same subject must
necessarily be in the
national legislature and
not in the state

i Lp (Emphasis
added).

Accord: In re Garnett, 141 U.S. 1, 11
S.Ct. 840, 35 L.Ed. 631 (1891).

A134

The insistence of the State that a
finder of a wrecked and abandoned vessel
not only does not get title but that it
has the right or authority to prohibit
oudvens or, if granted, to regulate sal-
vage is in direct conflict with substan-
tive maritime law. Chapter 267, Florida
Statutes, cannot be used to alter or pre-
judice the rights of a finder or salvager
under applicable maritime law. For the
State to insist that Chapter 267, Florida
Statutes, governs the rights of a finder
or salvager would lead to unconstitu-
tionality of acts taken in such reliance.

This Court finds that Ch. 267.061,
Florida Statutes, is not applicable to
the articles of salvage in question.
Because of the Division of Archives’
insistence that the statute does control,
the Court further finds that under the

A135

provision of that chapter, the Division
still would not be entitled to prevail in
this action for the several reasons
previously stated. In the alternative,
Ch. 267.061, Florida Statutes, is
unconstitutional based upon the holding

in United States v. Diaz, 499 F.2d 113

(9th Cir. 1974), noted with apparent
approval of the Fifth Circuit in this
case. 569 F.2d at 340. The Diaz case
held the federal statute 16 U.S.C. §433
concerning objects of antiquity situated
on land owned and controlled by the
Government of the United States to be
unconstitutionally vague:

Nowhere here do we find any

definition of such terms as

"ruin" or "monument"

(whether historic or

prehistoric) or "object of

antiquity." The statute

does not limit itself to

Indian reservations or to

Indian relics. Hobbyists

A136

who explore the desert and
its ghost towns for arrow-
heads and antique bottles
could arguably find them-
selves within the Act's
{regedit ts ca 499 F.2d at

In our judgment the
statute, by use of
undefined terms of uncommon
usage, is fatally vague in
violation of the due
process clause of the

S CRarNSeiemte 499 F.2d at

The court relied upon Connally v. General
Const. Co., 269 U.S. 385, 46 S.Ct. 126,
70 L.Ed. 322 (1926), and Grayned v. City
of Rockford, 408 U.S. 104, 92 S.Ct. 2294,
33 L.Ed.2d 222 (1972).

The Florida staute claims ownership
of such items as artifacts, objects of
antiquity, monuments, memorials, treasure
trove, shipwrecks, etc., and is substan-
tially identical to the Federal Act. In

A137

only one instance does the Florida Act
attempt definition, and this definition
is. confusing. Treasure trove is defined
s "gold, silver bullion, jewelry,

pottery, ceramics, antique tools and
fittings, ancient weapons, etc." The
meaning of treasure trove at common law
would not include articles of salvage.

Treasure trove is a name
iven by the early common
aw to any gold or silver,

plate or Calahen. found

concealed in the earth or

in a house or other private

place, but not lying on the
round, the owner of the
iscovered treasure being

unknown. Livermore v.

White. 74 Me

), Sovern v. "Yoran, 16

Ore. 269, 20 P. T00, 8

Am.St. Rept. 293 (1888)

(Emphasis added.)

+ « « [I]t is essential to
the character of treasure
trove that it shall have
been concealed by the owner
for safekeeping. 1 Am.Jur.
2d p. 6, Perry, Sovereign

A138

Rights in Sunken Treasure,

Land and Natural Resources

Division Journal, U.S.

Dept. of Justice, Vol. 7,

No. 3, p. 89, 1969.

(Emphasis added).

The extent of control over which the
Division of Archives claims in reference
to maritime salvage operations also
raises a serious question of interference
with the jurisdiction of the federal
courts in admiralty and maritime matters.

No legislation is valid if it con-
travenes an essential purpose expressed’
by Act of Congress or works material
prejudice to characteristic features of
general maritime law, or interferes with
proper harmony and uniformity of that law
in its international and interstate re-
lations. Southern Pacific Co. v. Jensen,
244 U.S. 205, 37 S.Ct. 524, 61 L.Ed. 1086
(1917), Clyde S.S. Co. v. Walker, 244

A139

U.S. 255, 37 S.Ct. 545, 61 L.Ed. 116
(1917). No state has power to abolish
the well recognized maritime rule
concerning measure or recovery and
substitute, therefore the full indemnity
rule of the common law. See Chelentis
v. Luckenbach S.S. Co., 247 U.S. 372, 38
S.Ct. 501, 62 L.Ed. 1171 (1918). The

entire subject of maritime law including
its substantive as well as its procedural
features is under federal control. "The
Congress thus has the paramount power to
determine the maritime law which shall
prevail throughout the contry." Detroit
Trust Co. v., Barlum S.S. Co., 293 U.S.
21, 43, 55 S.Ct. 31, 38, 79 L.Ed. 176
(1934).

There can be no doubt that the at-

tempt by the Division of Archives, under

A140

the extremely vague terms of Chapter 267,
Florida Statutes, to alter general
maritime law is a new and unprecedented
concept. Chapter 267 and its
administrative interpretation in Chapter
1A-0.01 through 1A-31, Florida
Administrative Code, seeks to completely
govern search, salvage and the ultimate
division of recovered items. Section
1A-31.09, Florida Administrative Code,
goes so far as to claim all items
recovered and then leaving to the Divi-
sion of Archives the complete cont

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_1953%3A1. Public record. Not legal advice.