Appendix — Texas v. Platoro Ltd.

—_—_ ee a re

82-187] MAY 17 1983

No. mener~t - STEVAS,

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1982

THE STATE OF TEXAS

¥.

PLATORO LIMITED, INC.,

Respondent,

IN RE THE UNIDENTIFIED REMAINS OF A

VESSEL, HER CARGO, APPAREL, TACKLE AND

FURNITURE

Petitioner,

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

APPENDIX TO

PETITION OF THE STATE OF TEXAS

FOR WRIT OF CERTIORARI

JIM MATTOX JAMES F. PARKER

Attorney General of Texas Oppenheimer, Rosenburg,

Kelleher & Wheatley, Inc.

DAVID R. RICHARDS 711 Navarro, Suite 620

Executive Assistant San Antonio, Texas 78205

Attorney General of Texas (512) 224-2000

LOU McCREARY Counsel of Record for

Chief, State and County Defendant - Petitioner,

Affairs Division The State of Texas

EVA LOUTZENHISER

Assistant Attorney General

of Texas

P.O. Box 12548, Capitol Station

Austin, Texas 78711

(512) 475-3131

APPENDIX A -

APPENDIX B -

APPENDIX C -

APPENDIX D-

APPENDIX E -

APPENDIX F -

TABLE OF CONTENTS

Page

Opinion of the United States Court

of Appeals for the Fifth Circuit -

Rendered January 20, 1983 - Platoro

Limited, Inc. v. The Unidentified

Remains of a Vessel, etc. - No.81-1257 -

og Peer A-l

Memorandum Opinion and Order of

the United States District Court for the

Western District of Texas - Rendered

a 6, 1981 - Platoro Limited, Inc.

v. The Unidentified Remains of a Vessel,

etc. - No. A-77-CA-112-518 F.Supp. 816

GEE va kava dds oo eae aha eee B-1

Judgment of the United States District

Court for the Western District of Texas -

Rendered May 6, 1981 - Platoro Limited,

Inc. v. The Unidentified Remains of a

Vessel, etc. - No. A-77-CA-112 ......... C-1

Memorandum Opinion and Order

Denying New Trial and Entry of Additional

Findings of Fact and Conclusions of Law

of the United States District Court for

th Western District of Texas - Rendered

June 5, 1981 - Platoro Limited, Inc.

v. The Unidentified Remains of a Vessel,

re OW err a D-1

Order of the United States District

Court for the Western District of Texas -

Rendered June 8, 1981 - Plutoro Limited,

Inc. v. The Unidentified Remains of a

Vessel, etc. - No. A-77-CA-112 ......... E-1

Opinion of the United States Court

of Appeals for the Fifth Circuit - Rendered

April 4, 1980 - Platoro Limited, Inc.

v. The Unidentified Remains of a Vessel,

etc. - No. 78-1052 - 614 F.2d 1951

PA re re eee ere re F-1

APPENDIX G -

APPENDIX H -

APPENDIX I -

APPENDIX J -

APPENDIX K -

APPENDIX L -

APPENDIX M -

Memorandum and Order of the United

States District Court for the Western

District of Texas - Rendered November

14, 1977 - Platoro Limited, Inc. v.

The Unidentified Remains of a Vessel,

etc.-No. A-77-CA-112 .......... G1

Memorandum Opinion and Order of the

United States District Court for the

Western District of Texas - Rendered

August 13, 1976 - Platoro Limited,

Inc. v. The Unidentified Remains of a

Vessel, etc. - No. A-76-CA-99 ......... H-1

Opinion of the United States Court of

Appeals for the Fifth Circuit - Rendered

February 27, 1975 - Platoro Limited,

Inc. v. The Unidentified Remains of a

Vessel, etc. - No.74-1540-508F.2d1113 . I-l

Opinion of the United States District

Court for the Southern District of Texas

- Rendered December 26, 1973 - Platoro

Limited, Inc. v. The Unidentified Remains

of a Vessel, etc. - Civ. A. No. 69-B-86

SLES cp vd eviesbiecesteees J-1

Judgment of the United States Court

of Appeals for the Fifth Circuit - Rendered

January 20, 1983 - Issued as Mandate

February 28, 1983 - Platoro Limited, Inc.

v. The Unidentified Remains of a Vessel,

ccc e veep eee ee eeb es K-l

Order on Petition for Rehearing of the

United States Court of Appeals for the Fifth

Circuit - Rendered February 17, 1983 -

Platoro Limited, Inc. v. The Unidentified

Remains of a Vessel, etc. -No.81.1257 ... L-l

Temporary Restraining Order and Order

Appointing Temporary Receiver of Specific

Assets, entered by the 28th Judicial

District Court, Kenedy County, Texas -

Entered December 13, 1967 - State of

Texas v. Platoro Limited, Inc.-No.81 ..M-1

APPENDIX A

Opinion of the United States Court of

Appeals for the Fifth Circuit

Rendered January 20, 1983

Platoro Limited, Inc. v. The Unidentified

Remains of a Vessel, etc.

No. 81-1257

695 F.2d 893 (1983)

Al

PLATORO LIMITED, INC.,

Plaintiff-Appellee,

Jefferson T. Burke and Billy Russell

Algoe, Intervenors-Appellees,

Vv.

The UNIDENTIFIED REMAINS OF A

VESSEL, HER CARGO, APPAREL,

TACKLE, AND FURNITURE, IN A

CAUSE OF SALVAGE, CIVIL AND

MARITIME, Defendant,

State of Texas, Claimant-Appellant.

No. 81-1257.

United States Court of Appeals,

Fifth Circuit.

Jan. 20, 1983.

Appeals from the United States District Court for the

Western District of Texas.

Before BROWN, WISDOM and RANDALL, Circuit

Judges.

RANDALL, Circuit Judge:

This case arises out of a dispute between the State of

Texas and Platoro, Ltd., a corporation organized to find

and recover treasure from ancient shipwrecks, over the

results of a successful operation by Platoro. The two

parties have been in litigation over this operation since

the late 1960's, and this appeal marks their third ap-

pearance in this court. We are unfortunately unable to

put an end to the controversy here: while we affirm in

part the district court's judgment for Platoro, we must

remand the case for recalculation of the proper award.

A-2

I. FACTUAL AND PROCEDURAL BACKGROUND.

This case has a long and complex history. In 1555,

the Spanish galleon Espiritu Santo sank in a storm. The

ship was lost beneath the sea for over four centuries, un-

til the plaintiff, Platoro, located it in 1967. Platoro

recovered various items from the wreck and removed

them to Indiana, Platoro’s home state.

The State of Texas applied to a state court for and

received a temporary restraining order preventing

Platoro from continuing its recovery activities. Negotia-

tions ensued, and Platoro believed that an agreement

was reached to divide the recovered items equally bet-

ween it and Texas. In this belief, Platoro sent the items

to Texas, and the State took steps to clean and preserve

them.

It became clear, however, that Texas did not believe it

was bound by the agreement. Platoro then brough an in

rem suit in federal court against the vessel, claiming the

compensation due a salvor. The suit was in the

Southern District of Texas, which included the site of

the wreck. The district court ruled that Platoro was en-

titled to a salvage award. Platoro, Ltd. v. Unidentified

Remains of a Vessel, 371 F.Supp. 351 (S.D.Tex.1970).

The Fifth Circuit reversed and remanded the case with

instructions to dismiss it, because the items had not

been in the Southern District of Texas since their

recovery: when Platoro returned them to Texas, the

State kept them in Austin, in the Western District.

Platoro, Ltd. v. Unidentified Remains of a Vessel, 508

F.2d 1113 (5th Cir.1975) (Platoro I). The Fifth Circuit

also pointed out that, since Texas was asserting owner-

ship rights in the items, there were potential eleventh

amendment problems. /d. at 1115 n. 3. Platoro sought

an eleventh amendment waiver from the Texas legis-

lature, but did not receive one. In 1976. Platoro sued

again, this time in the Western District of Texas. The

A-3

district court ruled in an unpublished opinion that Tex-

asa owned the items and Platoro’s salvage claim was

therefore barred by the eleventh amendment.

Platoro did not appeal; instead, it returned to the

Texas legislature, from which it received a resolution of

waiver. Platoro then filed this suit, only to have the

district court dismiss it on the ground that the statute

of limitations had run. Platoro appealed to this court,

which held that the running of the statute was tolled

and remanded the case for trial. Platoro, Ltd. v. Uniden-

tified Remains of a Vessel,614 F.2d 1051 (5th Cir.1980)

(Platoro II).

On remand, the district court, 518 F.Supp. 816, held

that Platoro’s salvage services should be recompensed,

and that their value was at least equal to that of the

res. The district court therefore ordered that Texas

either surrender the artifacts to Platoro or auction them

and give Platoro all auction proceeds. The court also

awarded attorneys’ fees to Platoro.°

What is before this court now is Texas’ appeal from

that judgment. Texas raises several arguments but

they fall into four basic categories. The first is that the

legislature’s resolution of waiver only authorized suit in

state court, and thus the eleventh amendment still bars

this action. The second category consists of allegations

that the proper predicate for making a salvage award

1. The precise scope of the waiver is a subject of controversy

here. See part II, infra.

2. There were two intervenors below, Jefferson T. Burke and Bil-

ly Russell Algoe. They were members of Platoro’s crew who

asserted individual salvage claims. The district court found that

they had proved their claims, but no relieve could be granted them

because Texas’ eleventh amendment waiver did not extend to

them. They filed a notice of appeal, but the appeal was later

dismissed on their own motion.

A-4

did not exist. Third, Texas contests the nature and

amount of the salvage award. Finally, it has various ob-

jections to the award of attorneys’ fees and prejudg-

ment interest.’ We will discuss each of Texas’ claims in

turn.

Il. ELEVENTH AMENDMENT WAIVER

The eleventh amendment prohibits suits in federal

court against a state unless the state has con-

sented to the suit. E.g., Florida Department of Health &

Rehabilitative Services v. Florida Nursing Home

Association, 450 U.S. 147, 101 S.Ct. 1032, 67 L.Ed.2d

132 (1981); Edelman v. Jordan, 415 U.S. 651, 94 S.Ct.

1347, 39 L.Ed.2d 662 (1974); Ford Motor Co. v. Depart

ment of Treasury, 323 U.S. 459, 65 S.Ct. 347, 89 L.Ed.

389 (1945). Platoro does not argue that the eleventh

amendment does not apply to this suit; indeed, given

Platoro’s failure to appeal the district court decision

that Texas owned the res and that suit was therefore

barred by the eleventh amendement issue here is raised

by Texas: whether the Texas Legislature’s resolution

waived immunity to suit in federal court or restricted

Platoro to an action in state court. It is clear that Texas

could put such a restriction on the waiver, Ford Motor

Co., supra; Great Northern Life Insurance Co. v. Read,

322 U.S. 47, 64 S.Ct. 873, 88 L.Ed. 1121 (1944); Smith v.

Reeves, 178 U.S. 436, 20 S.Ct. 919, 44 L.Ed. 1140 (1900);

the question here is whether it did. We hold that it did

not.’

3. The court below did not explicitly grant prejudgment interest,

but Texas apparently read the opinion as doing so. See part V.B., in-

fra, for a full discussion of the issue.

4. It could be argued, although neither party has raised the ques-

tion, that the eleventh amendment issue was decided by the Platoro

II and is thus the law of the case. The doctrine of the law of the case

is not restricted to express rulings of the earlier court. Morrow v.

Dillard, 580 F.2d 1284 (5th Cir.1978); Carpa, Inc. v. Ward Foods,

(footnote continued on following page)

A-5

The resolution passed by the Texas Legislature reads:

WHEREAS, Platoro Limited, Incorporated,

a foreign corporation authorized to transact

business in the State of Texas, alleges that it

recovered the remains of a vessel and its cargo,

tackle. and furniture; and

WHEREAS, Platoro Limited, Incorporated,

alleges that the State of Texas has taken

possession of those remains without compen-

sating Platoro Limited, Incorporated, for its ex-

pense in the salvage operation; now, therefore,

be it

RESOLVED by the House of Represen-

tatives of the State of Texas, the Senate concur-

ring, That Platoro Limited, Incorporated, is

hereby granted permission to sue the State of

Texas for whatever relief to which it may be en-

titled as a result of the state’s taking posses-

sion of these remains; and, be it further

RESOLVED, That in the event suit is filed,

service of citation and other required process be

made on the Attorney General of the State of

Texas, and that the suit be tried as other civil

suits; and, be it further

RESOLVED, That nothing in this resolution

may be construed as an admission by the State

(footnote continued from previous page)

Inc., 567 F.2d 1316 (5th Cir.1978); Terrell v. Household Goods Car-

riers’ Bureau, 494 F.2d 16 (5th Cir.), cert. dismissed, 419 U.S. 987,

95 S.Ct. 246, 42 L.Ed.2d 260 (1974). Nevertheless, we decline to rely

on the law of the case here, since the eleventh amendment issue was

not contested before the Platoro II court and it is now of central im-

portance to the case. Our decision is made easier by the fact that we

reach the same result on the merits as we would were we to apply

the law of the case: Texas has waived its eleventh amendment im-

munity.

A-6

of Texas, or by any of its employees, agents,

departments, agencies, or political subdivisions

of liability or of the truth of any allegation

asserted by the claimant, but the alleged cause

of action must be proved under the laws of this

state as in other civil suits; and, be it further

RESOLVED, That nothing in this resolution

may be construed as a waiver of any defense, of

law or fact, available to the State of Texas or to

any of its employees, agents, departments,

agencies, or political subdivisions, but every

defense is specifically reversed.

(emphasis added). Texas argues that the italicized por-

tions indicate that the legislature intended to limit

Platoro to Texas courts. The State implies this result

because: (1) admiralty actions are technically not civil

suits; (2) in an in rem action, arrest of the res takes the

place of service of process; and (3) an admiralty court

would apply federal admiralty law, not ‘‘the laws of this

state.’”

The Supreme Court has addressed eleventh amend-

ment issues many times. A number of its cases dealt on-

ly with whether the suit was one against the state, and

5. We note that none of Texas’ textual implications would

preclude a federal diversity suit. Platoro is an Indiana corporation

and more than $10,000 is at stake, so that a diversity action would

be at least theoretically possible, and in such a suit (which would be

a civil action) service would be on the Texas Attorney General and

the law of Texas would almost certainly apply. We are uncertain

what Platoro could allege as a cause of action, however, since the

salvage action is only available in admiralty. The only possibility

would seem to be a quantum meruit claim.

Nevertheless, the point is that, even treating Texas’ arguments as

conclusive, they do not limit Platoro to state courts. We need not

decide whether Texas may permit a diversity action while forbid-

ding an admiralty one, however, since we find that the waiver also

applies to admiralty cases.

A-7

therefore concerned merely whether the eleventh amend-

ment applied, not whether it was waived. Many of the

waiver cases involve the interpretation of Congressional

action to determine either whether it directly abrogated

eleventh amendment immunity or whether it condition-

ed state participation in a program or business on

waiver of the eleventh amendment. Insofar as the ques-

tion in those cases was the intent and power of Con-

gress, they are not controlling here.

There are, however a number of cases dealing with

alleged state waivers of the eleventh amendment. In

Florida Department of Health & Rehabilitative Services

v. Florida Nursing Home Association, 450 U.S. 147, 101

S.Ct. 1032, 67 L.Ed.2d 132 (1981), the Court reaffirmed

its holding in Edelman v. Jordan, 415 U.S. at 673, 94

S.Ct. at 1360-61, that ‘‘[iJn deciding whether a State has

waived its constitutional protection under the Eleventh

Amendment, we will find waiver only where stated ‘by

the most express language or by such overwhelming im-

plications from the text as [will] leave no room for any

other reasonable construction.’ (quoting Murray uv.

Wilson Distilling Co., 213 U.S. 151, 171, 29 S.Ct. 458,

464, 53 L.Ed. 742 (1909)). Both of these cases dealt with

state participation in federal programs as an alleged

waiver, but the Court’s language and citation (in

Edelman, 415 U.S. at 673, 94 S.Ct. at 1360) of Great Nor-

thern Life Insurance Co. v. Read, 322 U.S. 47, 64 S.Ct.

873, 88 L.Ed. 1121 (1944), a case dealing with a state

statute alleged to waive the eleventh amendment, in-

dicate that use of the standard is not restricted to the

evaluation of congressional action.

Nonetheless, the Supreme Court has never confronted

a situation precisely like this. No Supreme Court case

has involved a state waiver which was enacted to permit

one particular suit alone; in the cases from the Supreme

Court and this circuit, the alleged waivers were in

statutes of general application, usually state tort claims

A-8

acts or statutes providing for suits for refund of excess

state taxes. See, e.g., Kennecott Copper Corp. v. State

Tax Commission, 327 U.S. 573, 66 S.Ct. 745, 90 L.Ed.

862 (1946) (tax refund statute); Ford Motor Co. v.

Department of Treasury, 323 U.S. 459, 65 S.Ct. 347, 89

L.Ed. 389 (1945) (same); Great Northern Life Insurance

Co. v. Read, 322 U.S. 47, 64 S.Ct. 873, 88 L.Ed. 1121

(1944) (same); Chandler v. Dix, 194 U.S. 590, 24 S.Ct.

766, 48 L.Ed. 1129 (1904) (statute authorizing suits to

contest validity of sales of land for back taxes); Smith v.

Reeves, 178 U.S. 436, 20 S.Ct. 919, 44 L.Ed. 1140 (1900)

(tax refund statute); Jagnandan v. Giles, 538 F.2d 1166

(5th Cir. 1976), cert. denied, 432 U.S. 910, 97 S.Ct. 2959,

53 L.Ed.2d 1083 (1977) (law creating state university

Board of Trustees with capacity to ‘‘sue and be sued’’);

Kiesel v. Florida Department of Natural Resources, 479

F.2d 1261 (5th Cir. 1973) (tort claims act); Mifsud v.

Palisades Geophysical Institute, Inc., 484 F.Supp. 159

(S.D.Tex.1980) (tort claims act).

We note that, even under the rationale of these

cases, Texas’ argument is weak.® The portions of the

resolution the State relies on are not designed to specify

the substantive law applicable. The provision requiring

Platoro to prove its case ‘‘under the laws of this state as

in other civil suits,’’ when read as a whole, is simply in-

tended to emphasize that Texas is not admitting liabili-

ty, but merely permitting suit; the point is that the

burden of proof still rests on Platoro as in an ordinary

suit. We are not persuaded that the legislature meant to

invoke the technical distinction between admiralty ac-

tions and civil suits. Finally, we do not read the provi-

sion for service of process on the Attorney General of

Texas as mandatory, thus impliedly excluding an in rem

proceeding: it merely directed that any “service of cita-

6. Our analysis of the resolution includes no reference to its

legislative history because our research has not located any.

AY

tion and other required process’’ (emphasis added) be

made on the Attorney General, so that Platoro would

know whom to serve if personal service were required. In

Kiesel v. Florida Department of Natural Resources,

supra, an admiralty case, we held that the Florida tort

claims act, which made the state subject to suit ‘“‘in the

same manner as a private individual”’ and thus was not

on its face limited to state court, did not become so

limited by a further provision that venue of such suits

would lie in the county where the cause of action

arose. 479 F.2d at 1262. We believe that the alleged

restrictions in the Texas resolution similarly do not alter

its character as a general waiver.

Further, it is reasonable in a case like this, where

the waiver is directed only to a single suit and has no

clearly expressed limitations, to look beyond the text of

the waiver to the circumstances of its enactment. The

case for so doing is even stronger where, as here, there

had already been litigation on the subject between the

parties. Edelman speaks only of looking to the text and

the implications to be drawn from it, but Edelman and

the other Supreme Court cases deal with statutes of

general application. It is less likely to be a state’s intent

to permit a large class of suits to be brought against it in

federal court than to permit a single one, and a waiver

for a single suit will clearly be enacted only upon an

evaluation by the legislature of the circumstances of

that particular suit. We still require that the waiver

meet the Edelman test of such ‘“‘overwhelming implica-

tions ... as [will] leave no room for any other reasonable

construction,’’ 415 U.S. at 673, 94 S.Ct. at 1361; we

merely permit the implications to be drawn from the cir-

cumstances as well as the text.

In this case, the circumstances indicate that Texas

must have intended to permit suit in federal court.

There had already been two suits in federal court before

the resolution was passed. Both had been suits in ad-

miralty claiming salvage, an area of exclusive federal

A-10

jurisdiction. M. Norris, The Law of Salvage § 14 (1958

& Supp. 1974). Indeed, in the first suit, the Southern

District of Texas actually enjoined the state court which

apparently then had custody of the artifacts from tak-

ing any action with respect to them. Platoro, Ltd. v.

Unidentified Remains of a Vessel, 371 F.Supp. 351, 355

(S.D.Tex.1970). This court held in Platoro I that the

Southern District had had no jurisdiction, 508 F.2d at

1116, but we did not comment on the propriety of the in-

junction. The State must then have known that it was

possible that a federal court might hold a state-court

suit barred.’ In Platoro I, this court noted the potential

eleventh amendment problems. 508 F.2d at 1115 n.

3. Platoro then sought a waiver resolution, which the

legislature refused. Platoro filed another suit in federal

court; the district court dismissed it on eleventh amend-

ment grounds; and then the legislature passed the

resolution in question.

Given the facts that the litigation had been entirely

in federal court,* that at least one district court was

willing (properly or improperly) to enjoin state court ac-

tion, that Platoro’s claim had always been in admiralty,

and that the legislature changed its mind about the

waiver only after there had been a dismissal on eleventh

7. We express no opinion on the correctness of the issuance of the

injunction. We simply point out that, since there had been an in-

junction which was not overturned on the merits, the Texas

legislature must have realized that suit in state court might be held

impermissible. This strengthens the inference that the legislature

intended to permit a federal suit, since the legislature might well

have thought that a limitation to state court would make the waiver

meaningless.

8. Texas alleges in its reply brief that Platoro has used the waiver

of sovereign immunity to file suit in state court. This has no bear-

ing on the situation at the time the legislature passed the resolution;

the only state court action at that point had been the suit enjoined

by the district court before Platoro I.

A-th

amendment grounds, we believe that the only

reasonable construction of the resolution is as a waiver

of Texas’ eleventh amendment immunity. This suit

may therefore be maintained in federal court.

III. PREREQUISITIES OF SALVAGE CLAIM.

Texas argues that, even if it has waived its eleventh

amendment immunity, Platoro, is still not entitled to a

salvage award. The first ground is that Platoro failed to

establish ‘‘marine peril,’’ one of the elements of a

salvage claim; the second is that Texas rejected the

salvage services, and that therefore it was improper to

make an award.

A. Marine Peril.

This court addressed the marine peril element of a

salvage claim under strikingly similar circumstances in

Treasure Salvors, Inc. v. Unidentified Wrecked & Aban-

doned Sailing Vessel, 569 F.2d 330 (5th Cir.1978), aff'd in

part and rev'd in part sub nom. Florida Department of

State v. Treasure Salvors, Inc., U.S. , 102

S.Ct. 3304, 73 L.Ed.2d 1057 (1982) (the Supreme Court

did not discuss the salvage issue). In Treasure Salvors,

another Spanish galleon had sunk off the Florida coast

and remained undisturbed for over three hundred years.

The United States argued on appeal that the district

court had erroneously made a salvage award in the

absence of marine peril. This court held first, that the

district court had applied the law of finds, not that of

salvage; and second, that the result could alternatively

be upheld as a salvage award, because marine peril ex-

isted as a matter of law where the ship’s location was

unknown.” Treasure Salvors, 569 F.2d at 336-37. We

9. Texas argues that the Fifth Circuit in Treasure Salvors re-

quired that the vessel still be in peril after its location was

discovered, but we believe that is a misreading of the opinion. In

any event the Espiritu Santo was still in peril after its position was

(footnote continued on following page)

A-12

find no basis for distinguishing Treasure Salvors from

the case now before us, and therfore find that there was

marine peril.

B. REJECTION OF SALVAGE SERVICES.

A salvage award may be denied if the salvor

forces its services on a vessel despite rejection of them

by a person with authority over the vessel. The Indian,

159 F. 20, 25 (5th Cir.1908); Norris, supra, §§ 114-16; see

Legnos v. M/V Olga Jacob, 498 F.2d 666, 672 (5th

Cir.1974); Fort Myers Shell & Dredging Co. v. The Barge

NBC 512, 404 F.2d 137, 139 (5th Cir.1968). In this case,

Texas argues that it rejected the salvage services by

having two laws that were then on its books: Tex.Penal

Code art. 147b(3) (Vernon 1952) (repealed 1969), which

required nonresidents to get a permit from the state

before engaging in ‘‘any exploration or excavation in or

on any ... archaeological ... site in Texas ...’’; and

Tex.Rev.Civ.Stat.Ann. art. 5421 (Vernon 1962) (repeal-

ed 1977), which authorized the Attorney General to sue

anyone who had “‘appropriated ... any minerals or other

value ...”’ from state lands.”®

(footnote continued from previous page)

discovered. Texas’ only argument to the contrary is that the vessel

was effectively sealed under a thick layer of sand and thereby pro-

tected; we observe first, that this is information which would be

available only in hindsight and thus should not be considered in

evaluating Platoro’s actions, and second, that it is far from clear

that the sand would remain sufficient protection from the various

perils of the Gulf of Mexico.

The Platoro II court also decided the issue of marine peril in

Platoro’s favor. We will not use the doctrine of the law of the case

here, though, because the issue was raised in Platoro II by a motion

to dismiss for failure to state a salvage claim. The Platoro IJ court

did not specify the standards by which it decided the question, so

we do not rely on its determination.

10. Texas does not argue that its state court suit under article

5421 to enjoin Platoro’s excavation constituted a rejection. Indeed,

it could not, since the services at issue were rendered before the in-

junction was issued.

A-13

We note at the outset that we can find no case

where a salvage award was denied because of a construc-

tive rejection of salvage services. The cases involve

direct and unequivocal rejection, usually by the master

of the distressed ship. See, e.g., The Indian, supra; Nor-

ris, supra, §§ 114-16. At the very least, constructive re-

jection of salvage services should bar an award only if

the rejection must reasonably have been understood by

the salvor.

Platoro had no reason to understand that its ser-

vices had been rejected. In the first place, it was far

from clear in 1967 that Texas owned the vessel; that was

not established until Platoro failed to appeal the 1976

district court decision awarding the res to Texas. Fur-

ther, even if Platoro should have known that Texas was

the owner, which we do not believe it should have, the

statutes were not calculated to put Platoro on notice

that its services had been rejected. There was nothing

in the penal statute to indicate to Platoro that a sunken

Spanish galleon was an ‘‘archaeological site’’ within the

meaning of the statute.'' Texas had apparently made no

attempt to designate such sites, or indeed even to define

them.

11. It is interesting to note that the Texas Antiquities Code,

Tex.Nat.Res.Code Ann. §§ 191.-001-.174 (Vernon 1978 &

Supp.1982), which was enacted in 1969 and thus does not apply to

this case, makes extensive and pointed reference to sunken

ships. See § 191.002 (Texas public policy to preserve and protect

‘“‘pre-twentieth century shipwrecks" and ‘‘sunken or abandoned

ships and wrecks of the sea’’ and their contents); §§ 191.053-.056

(providing for contracts, permits, and compensation for salvage ser-

vices and supervision thereof by the state); § 191.091 (entitled

“Ships, Wrecks of the Sea, and Treasure Imbedded in Earth’’ and

designating ‘‘[slunken or abandoned pre-twentieth century ships

and wrecks of the sea’’ and their contents state archaeological land-

marks); and §§ 191.093, 191.095 (limiting conditions under which

landmarks may be ‘‘salvaged’’). The contrast to the statutes in

force in 1967 could scarcely be greater.

A-14

Similarly, the civil statute in question did not

provide adequate notice. It was under the heading

‘Suits for Minerals and Timber.”’ Further, it did not re-

ject salvage services, for salvage awards are available

only when the salvaged property is returned to the

owner, not when it is ‘“‘appropriated.’’ See Norris, supra,

§§ 102-03.

We therefore find that there was marine peril and that

neither of the statutes that Texas relies upon effectively

rejected Platoro’s salvage services. Texas raised no

other objections that would totally bar any salvage

award; we thus move on to consideration of the amount

awarded.

IV. THE SALVAGE AWARD.

The district court, after evaluating the traditional

elements by which the amount of a salvage award is

determined,” held that Platoro was entitled to an award

at least equal to the value of the res. The court therefore

ordered Texas to surrender the res to Platoro or have it

sold by the court, with the entire proceeds, less court

costs and costs of sale, to go to Platoro.

12. In a footnote, Texas argues that Plator’s attempt to ap-

propriate the res should bar a salvage award. While embezzlement

of the res can forfeit an award, the proof must be beyond a

reasonable doubt. Norris,supra, § 101. We cannot make such a fin-

ding here. Platoro took the property to Indiana under a good-faith

belief of ownership. Belief that they own the vessel, however, may

be insufficient to protect embezzling salvors. See Danner v. United

States, 99 F.Supp. 880 (S.D.N.Y.1951); Norris, supra, § 106. Never-

theless, the facts here do not justify a finding of embezzlement. The

issue of ownership was genuinely in doubt, there was no destruction

of the res, and Platoro voluntarily returned the res to Texas. The

salvage suit is thus not barred.

13. See note 16, infra, for the factors to be considered in making a

salvage award.

ALS

Texas objects to this award for several reasons. First,

it claims that the district court, in making the award, ig-

nored the fact that there were co-salvors who were not

before the court and whose shares should rightfully have

gone to the owner, not to the suing co-salvor. Second,

Texas protests the award of the res itself, and requests

that the award be expressed as a number of dollars.

Third, the State argues that the award should be

diminished to take into account the sums expended by

the State in cleaning, preserving, restoring, and catalog-

ing the items.

The standard by which we evaluate salvage a-

wards is set out in Compania Galeona, S.A. v. M/V

Caribbean Mara, 565 F.2d 358, 360 (5th Cir.1978):

‘“{A]ppellate courts will not disturb a salvage award

unless it is based on erroneous principles or a misap-

prehension of the facts or is so grossly excessive or in-

adequate as to be deemed an abuse of discretion.’’ Under

this standard, we find several problems with the district

court’s award.

A. Co-Salvors.

It is undisputed that Platoro performed its salvage

services as a joint venturer with two others, William E.

Kenon, Jr. and George K. Purvis, and that each joint

venturer had a one-third interest in the project. Texas

argues that a well-established rule, that the share of a

salvage award due to nonsuing co-salvors goes to the

owner rather than the suing co-salvors, requires that

Platoro’s recovery be limited to one-third of the

award. Platoro responds that Texas has not raised this

point before, and that in any event Platoro was suing as

a representative of the joint venture.

We find that Platoro was not suing in a representa-

tive capacity, since it nowhere raised the point in its

pleadings. It is also unclear whether the Texas

legislature authorized a representative suit, since the

A-16

resolution merely permits ‘‘Platoro Limited, Incor-

porated” to sue ‘‘for whatever relief to which it may be

entitled.’’ (emphasis added).

There are no indications of intent to permit a represen-

tative suit similar to those which compelled us to find

that the resolution permitted a suit in admiralty.

Platoro never alleged in the pre-resolution litigation that

it was suing as a representative, nor did the earlier opi-

nions focus on the issue. The facts that all the previous

litigation had been in admiralty and that the legislature

changed its mind about a waiver once there was a

definitive eleventh amendment ruling carried great

weight in our decision that the waiver applied to a suit in

admiralty. There are no similar circumstances in-

dicating intent to permit a representative suit. We

therefore find that the waiver does not permit a

representative suit, and thus Platoro could not recover

for its co-salvors;'* we also find that Platoro did not in

fact sue in a representative capacity.

It is a well-established rule of salvage law that,

when one co-salvor sues but others do not, the share of

the award due to the nonsuing co-salvors goes to the

owner, not to the suing co-salvor. The Blackwall, 77

U.S. (10 Wall.) 1, 19 L.Ed. 870 (1869); Norris, supra, §

222. Ordinarily, once a court determines the total

salvage award, which takes into account the contribu-

tions of both suing and nonsuing co-salvors, its alloca-

tion among co-salvors is made according to each co-

salvor’s contribution to the recovery. The Blackwall,

14. The fact that there is an eleventh amendment problem ob-

viates any need for Texas to have raised this issue below. Ford

Motor Co. v. Department of Treasury, 323 U.S. at 467, 65 S.Ct. at

352 (eleventh amendment issue sufficiently jurisdictional to be rais-

ed for first time on appeal). The Platoro IJ court did not deal with

the question, which indeed could not then have arisen, since Platoro

II dealt with pretrial motions. 614 F.2d at 1053. Our consideration

of this issue is thus not foreclosed by the law of the case.

AN-17

supra; Norris, supra, §§ 229-30. In this case, however,

once the amount due to the joint venture is determined,

we see no reason to disturb the arrangement made by

the venturers to share equally in the results of their

work. Platoro is therefore entitled to only one-third of

the salvage award to the joint venture.

B. The Nature of the Award.

We cannot find a case where the salvage award was

expressed in terms of the res rather than in dollars, ex-

cept where the salvage award was made alternatively

with an award of title to the res under the law of

finds. See Treasure Salvors, 569 F.2d at 337; Brady v.

The Steamship African Queen, 179 F.Supp. 321, 324

(E.D.Va.1960). In this case, where Texas has a strong

interest in keeping the res because of its historical

significance to the State, it is particularly inequitable to

compel its sale at this juncture.

It is also unfair simply to establish the salvage

award as equal to the present value of the res, because

Texas has expended a great deal of money cleaning,

preserving, and cataloging the artifacts, thus

presumably increasing their value. It is a general princi-

ple of property salvage law that the award should not

exceed the value of the res as recovered. If the award

exceeded that value, the owner would be not benefited

but burdened by the service, a result contrary to the

goals of salvage law. See, Norris, supra, §§ 1, 232. This

is true even where the salvor’s expenses exceed the

value of the res; in that case, the salvor’s actions have

caused a net economic loss to society, also contrary to

the result sought by salvage law. See id. § 235. The

maximum allowable total award in this case, then,

would be the value of the res as it was recovered by

Platoro and its co-salvors.'”

15. The total award must include the contributions of allco-

salvors. If the intervenors Burke and Algoe, or indeed anyone other

(footnote continued on following page)

A J8

On remand, the district court should establish a

dollar value for the res as recovered, and use that in its

consideration of the factors on which a salvage award is

based.”* The court should arrive at a dollar figure for the

total value of the salvage services rendered, which

should not exceed the value of the res. It must then

determine what portion of the award should go to the

joint venturers. Platoro will be entitled to a judgment

for one-third of the award to the joint venturers, and toa

lien against the res to secure payment of the judgment.

V. ATTORNEYS’ FEES AND INTEREST.

Finally, Texas attacks the trial court’s award of at-

torney’s fees and interest. Texas alleges that the court

failed to consider the factors to evaluate in awarding at-

torney’s fees set forth in Johnson v. Georgia Highway

Express, Inc., 488 F.2d 714 (5th Cir.1974), and that the

(footnote continued from previous page)

than the joint venturers rendered compensable salvage services,

their contributions must also be taken into account in determining

the total award.

16. The district court correctly set forth the relevant factors in its

opinion:

1. the degree of danger from which the lives and property

are rescued;

the vaule of the property saved;

3. the risk incurred by the salvors in securing the property

from the impending peril;

4. the promptitude, skill and energy displayed by the

salvors in rendering the service and saving the property;

5. the value of the property employed by the salvors in

rendering the service and the danger to which such pro-

perty was exposed; and

6. the time and labor expended by the salvors in rendering

the salvage services.

Platoro, Ltd. v. Unidentified Remains of a Vessel, 518 F.Supp. 816,

821 (W.D.Tex.1981). They were originally delineated in The

Blackwall, 77 U.S. (10 Wall.) 1, 14, 19 L.Ed. 870 (1869).

ad

A-19

amount of the award is unsupported by the evidence.

Texas also seeks clarification whether the attorneys’

fees are to come from the salvage award or directly from

the State. The State’s final assertions are that the

award of prejudgment interest at a rate of 9% was ex-

cessive, since Texas law would only permit a rate of 6%,

and that interest should only be awarded from the date

Platoro filed this suit, not from the date Texas received

the res.

A. Attorneys’ Fees.

The district court’s entire discussion of attorneys’ fees

was four sentences long, and made no reference to the

Johnson v. Georgia Highway Express standards."

Because of that, we would vacate the award and remand

for specific findings on those factors even if the award

were otherwise justifiable. We hold, however, that it is

not.

Platoro concedes in its brief on appeal that the at-

torneys’ fees should be charged against the ‘‘salvage

fund.’ We have held, however, that Platoro is not en-

17. In Johnson,we instructed district courts to award attorneys’

fees only after making findings on: (1) the time and labor required of

the attorneys; (2) the novelty and difficulty of the case; (3) the skill

required to perform the legal services properly; (4) the extent to

which the attorneys’ acceptance of the case precluded other employ-

ment opportunities; (5) the customary fee for similar legal work in

the community; (6) whe -her the arrangement between the attorneys

and the client was for a iixed or a contingent fee; (7) the time limita-

tions imposed on the attorneys by the client or by circumstances; (8)

the amount involved in the case and the result obtained by the at-

torneys; (9) the experience, reputation, and ability of the attorneys;

(10) the ‘‘undesirability’’ of the case and the possible economic

repercussions for attorneys who take an unpopular case; (11) the

nature and length of the attorneys’ professional relationship with

the client; and (12) fee awards made in similar cases. 488 F.2d at

717-19. In the absence of such findings, we have no basis on which

to review an award of attorneys’ fees.

A-20

titled to the entire fund; we must therefore consider

whether the attorneys’ fees must come entirely out of

Platoro’s portion.

In Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S.Ct.

745, 62 L.Ed.2d 676 (1980), the Supreme Court faced a

related question: Whether attorneys’ fees awarded in a

class action suit could be assessed proportionately

against the unclaimed portion of the fund. The Court

recognized that a lawyer who recovers a common fund

for the benefit of persons in addition to his client is en-

titled to receive his fees from the fund as a whole; this is

‘“‘a well-recognized exception to the general principle

that requires every litigant to bear his own attorney’s

fees.’ Id. at 478, 100 S.Ct. at 749 (citing Alyeska

Pipeline Service Co. v. Wilderness Society, 421 U.S. 240,

95 S.Ct. 1612, 44 L.Ed.2d 141 (1975)). The basis for the

exception is to spread the costs proportionately among

those benefited by the suit. Jd. The Court held that the

requirements for the application of the common-fund

doctrine were met by a class action, where ‘each

member of a lump-sum judgment ... [and] members of

the class can obtain their share of the recovery simply

by proving their individual claims against the judgmert

fund.” Id. at 479, 100 S.Ct. at 749-50. The Court noted

the inequity of permitting claimants to benefit from the

fund without bearing the costs of the litigation.

The Court stated that the use of the common-fund

doctrine in the case before it was ‘‘consistent with the

American rule against taxing the losing party with the

victor’s attorney’s fees.’’ Jd. at 481, 100 S.Ct. at 750-51

(citing Alyeska Pipeline Service Co. v. Wilderness Socie-

ty, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975)).

This was because the district court had awarded the en-

tire fund to the class, so that Boeing had no interest in

the fund. All it had was the possibility of asserting a

right to the refund of any money left unclaimed.

A-21

Boeing clearly differs from the case before us in

vital respects. Platoro has not established a fund from

which the nonsuing co-salvors can simply claim their

shares; on the contrary, the co-salvors must receive their

own waivers of Texas’ eleventh amendment immunity

before they can recover anything, and such waivers are

wholly within the discretion of the Texas legislature.

Further, Texas has an immediate right to the portion of

the fund not awarded to Platoro. Thus in this case there

is not basis for the application of the common-fund doc-

trine: there is no danger that the nonsuing co-salvors

would be unjustly enriched, and application of the doc-

trine would effectively tax attorneys’ fees against

Texas. The entire award of attorneys’ fees would

therefore have to come out of Platoro’s share of the

fund.”

In admiralty cases, however, it is the general rule

that attorneys’s fees are not awarded. Noritake Co.

v. M/V Hellenic Champion, 627 F.2d 724 (5th Cir.1980).

Platoro cites Compania Galeana, S.A. v. M/V Carribean

Mara, 565 F.2d 358 (5th Cir.1978), for the proposition

that such an award lies in the discretion of the admiralty

court. We pointed out in Noritake, however, that Com-

pania Galeana clearly referred to an exception to the

rule: that attorneys’ fees may be awarded where the non-

prevailing party has acted in bad faith. Noritake, 627

F.2d at 731 n. 5. Aside from the fact that there is no

proof that Texas acted in bad faith, it makes no sense to

apply the exception to a case such as this, where the at-

torneys’ fees would come from the client’s recovery

18. We thus need not address the question whether an award of

attorneys’ fees against Texas would be barred by the eleventh

amendment, and if so, whether the waiver extended to such an

award.

A-22

rather than from the opposing party.’ We therefore

vacate the award of attorneys’ fees and instruct the

district court to allow Platoro and its counsel to settle

the question between themselves.

B. Interest.

Finally, Texas disputes the award of prejudgment in-

terest accruing at a rate of 9% rather than 6%, and from

the time Platoro returned the res to Texas (1968 or 1969)

rather than from the time Platoro filed this suit (1977).

We do not find merit in the State’s contentions.

Texas somewhat misconceives the trial court’s action.

The only mention of interest occurs in the court’s discus-

sion of the value of the time and labor expended by the

salvors. The court found that value to be $140,000, ‘‘to

which Platoro is entitled plus 9% prejudgment interest

dating from the time Texas took the res.’’ The value of

time and labor, however, is only a factor in the award,

not the award itself. Since the court never established a

dollar amount for the award, it never explicitly

calculated interest theron. There was thus evidently no

award of interest from which to appeal. We will

nonetheless discuss the issue, for the district court will

confront it on remand.

As a general rule, prejudgment interest is allowed

in admiralty cases. It is not a penalty, but compen-

sation for the use of funds wrongfully withheld. In

may be denied only where peculiar circumstances make

its granting inequitable. Noritake Co. v. M/V Hellenic

19. There is another exception to the rule against the award of at-

torneys’ fees in admiralty cases: they may be allowed to an indem-

nitee in a suit against his indemnitor, as part of the reasonable ex-

penses of defending against the claim. Noritake, 627 F.2d at 731-32

n. 5. This exception is clearly inapplicable to the case before us.

A-23

Champion, 627 F.2d at 728-30; In re M/V Vulcan, 553

F.2d 489 (5th Cir.), cert. denied, 434 U.S. 855, 98 S.Ct.

175, 54 L.Ed.2d 127 (1977). On remand, the district

court should determine whether such circumstances ex-

ist, and if they do not it should award prejudgment in-

terest. The interest should be calculated on Platoro’s

share of the fund, not on the element of time and labor.”

Texas’ argument that interest should accrue only

from the date of filing suits disregards the purpose

of the award. It is to compensate Platoro for the fact

that Texas has had the use of the artifacts since 1968 or

1969, while Platoro has not had the use of the salvage

award to which it was entitled. Noritake, 627 F.2d

at728. Any interest awarded should therefore accrue

from the time at which Platoro became entitled to a

salvage award, i.e., when the res was returned to Texas.”

20. Because prejudgment interest is as a rule granted in admiral-

ty cases, Noritake, supra, we hold that the resolution of waiver,

since it permitted an admiralty suit, necessarily consented to an

award of prejudgment interest. Further, the policies of salvage law

do not require that the salvage award plus interest thereon be less

than the value of the res as recovered. The salvage award itself

must be so limited to discourgage economically inefficient acts of

salvage. Interest, however, attempts to compensate the salvor for

the delay between rendition of the service and compensation for

it. Since it is merely compensatory, it does not provide additional

incentive to salvage property not worth the cost of rescuing. On the

other hand, restricting the salvage award plus interest to the value

of the res would give the owner a reason to delay payment, at least

where the salvage award alone would be near the value of the res,

because during the delay the owner would in effect have the free use

of the money to which the salvor was entitled.

21. We have no difficulty in finding that the resolution of waiver

permits an award of interest antedating it. Interest from the date

of loss is the usual admiralty rule. Jn re M/V Vulcan, 553 F.2d 489

(5th Cir.), cert. denied, 434 U.S. 855 98 S.Ct. 175, 54 L.Ed.2d 127

(1977), Texas consented to a suit in admiralty, and thus absent an

express limitation in the waiver consented to the usual incidents of

such a suit.

A-24

This is the usual rule: admiralty courts ordinarily award

interest from the date of loss. In re M/V Vulcan, supra;

Geotechnical Corp. v. Pure Oil Col, 214 F.2d 476 (5th

Cir.1954).

Texas’ final contention is that the rate of any prejudg-

ment interest allowed should be limited to 6%, rather

than the 9% rate used by the district court in its discus-

sion. The premise of this argument is that the admiral-

ty court is bound by the rate set by the law of the state

in which it sits.

This premise is false. Admiralty courts have dis-

cretion in setting the rate of prejudgment interest.

Gator Marine Service Towing, Inc. v. J. Ray McDermott

& Co., 651 F.2d 1096 (5th Cir.1981); In re M/V Vulcan,

supra; Geotechnical Corp. v. Pure Oil Co., supra. They

may be guided by state law, Gator Marine, supra;

Geotechnical Corp., supra, but they are not bound by

it. The court in M/V Vulcan, supra, for instance, looked

to the injured party’s costs of borrowing. 553 F.2d at

491. We cannot therefore instruct the district court to

use any particular rate; the decision in the first instance

must lie with the district court after it evaluates the cir-

cumstances of the case.

VI. SUMMARY.

We find that Texas had waived its eleventh amend-

ment immunity and consented to this suit. We further

find that there was marine peril, that Texas did not re-

ject Platoro’s services, and that Platoro did not embez-

zle the res so as to forfeit its right to a salvage

award. We therefore affirm that portion of the district

court’s judgment which held that Platoro was entitled

to a salvage award.

We vacate the district court’s award of the res,

however, and remand for a determination of a dollar

A-25

amount, not to exceed the value of the res. We further

instruct the district court to award Platoro one-third of

the joint venture’s share of that amount, and to grant

prejudgment interest on Platoro’s award from the time

Texas took possession of the res, unless the district

court finds that the circumstances of the case would

make the grant of interest inequitable. The rate of in-

terest is in the sound discretion of the district

court. Finally, we vacate the award of attorneys’ fees

and instruct the district court not to grant them on re-

mand.

Each party shall bear its own costs.

The judgment of the district court is AFFIRMED in

part, VACATED in part, and REMANDED with in-

structions.

APPENDIX B

Memorandum Opinion and Order

of the United States District Court

for the Western District of Texas

Rendered May 6, 1981

Platoro Limited, Inc. v. The Unidentified

Remains of a Vessel, etc.

No. A-77-CA-112

518 F. Supp. 816 (1981)

B-1

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

PLATORO LIMITED,

INC.,

THE UNIDENTIFIED

REMAINS OF A VESSEL

her cargo, apparel,

tackle, and furniture in a

cause of salvage, civiland §

maritime §

§

§

§

§

v. § No. A-77-CA-112

§

§

§

§

§

MEMORANDUM OPINION AND ORDER

This is a proceeding in rem brought by Platoro, Ltd.,

Inc., Salvors, under the admiralty jurisdiction of this

Court for title to the res found under the maritime law of

finds or, alternatively, for title as a salvage award for

services rendered in the recovery of certain artifacts

from a 16th century Spanish galleon found in Texas’ ter-

ritorial gulf waters. The State of Texas appeared

originally in this suit as an intervenor claiming title as

owner by sovereignty. Jefferson T. Burke and Billy

Russell Algoe also appear as intervenors, claiming also

as salvors.

I. Introduction

In 1967, Platoro located the wreck of the sunken

galleon in navigable waters just off the coast of Texas.

In September of 1967, salvors proceeded to remove 10 to

15 feet of sand covering the vessel and to recover sume

B-2

of its treasures. The State of Texas learned of Platoro’s

salvage efforts and, in December of 1967, was successful

in obtaining an injunction in state court enjoining

Platoro from further salvage operations. The matter

has been in litigation ever since.

Platoro first filed this same cause of action for salvage

in 1969 in the Southern District of Texas. Immediately

prior to hearing in that court, the State dismissed its

cause of actior (under Texas Penal Code art. 147b)

against Platoro in a state district court. In 1973, the

Court in the Southern District entered judgment for

Platoro, which the Fifth Circuit reversed and remanded

with directions to dismiss for lack of jurisdiction.

Platoro Ltd., Inc.v. Unidentified Remains of a Vessel,

371 F.Supp. 356 (S.D. Tex. 1970), reversed, 568 F.2d

1113 (5th Cir. 1975).

In reversing the Court in the Southern District, the

Fifth Circuit noted in dictum that the district court’s

disposition of the res (title to the State, recovery for

salvage services to be had from the State) raised serious

Eleventh Amendment questions.

Platoro, therefore, sought consent from the Texas

Legislature to bring suit against the Treasury of Texas

in the event that adjudication on the merits in the pro-

per federal court would again result in Platoro’s having

to recover for its salvage services from the State. Con-

sent was denied in the next legislative session; never-

theless, in 1976, Platoro again filed suit, this time in the

Western District, ostensibly to toll the running of the

statute of limitations. The Western District promptly

dismissed the suit for want of jurisdiction, citing the

Eleventh Amendment. This 1976 order was not appeal-

ed, but in May of 1977 Platoro was successful in obtain-

ing the Legisiature’s permission to sue the State, and

this suit was filed in June, !977. In November, 1977,

this Court, Judge Roberts presiding, held that the ac-

B-3

tion was barred by the statute of limitations and

dismissed the suit. In 1980 the Fifth Circuit reversed

and remanded for a determination of the merits. Platoro

Ltd., Inc. v. Unidentified Remains of a Vessel, 614 F.2d

1051. Trial on the merits was had in this court beginn-

ing on March 30, 1981.

II. Title

In an in rem proceeding of this type, the salvor brings

suit against the res salved to recover for his services. He

has an automatic lien and a right to possession of the res

against all others, including the owner. To execute his

lien, the salvor files suit in a court of admiralty and

other parties having claims to the res appear by way of

intervention, declaring their claims to the res. The court

reviews the interests claimed, orders the res sold by the

Marshal at a public sale, and distributes the proceeds ac-

cording to its findings on the various interests claimed.

In this suit, however, the State of Texas claimed it

owned the res as a matter of law and, therefore,

Platoro’s salvage claim against the State/owner was

barred by the Eleventh Amendment.

The State asserted ownership of the sunken treasure

ship under several theories. The first of these was the

British common law doctrine of sovereign perogative,

which allows ownership of an abandoned wreck to revert

to the sovereign a year and a day after abandonment by

the true owner. Texas claimed under this theory by vir-

tue of the succession of governments which owned the

land in which the ship was found buried. This theory is

without merit’, but the Court is bound by the doctrine of

res judicata to rule as though it were the law.

1. The last transfer of sovereignty supposedly was the Submerg-

ed Lands Act of 1953, by which Congress released to Texas the ex-

tent of the federal government's ownership and control over the

(footnote continued on following page)

B-4

In 1976, this Court, speaking through Judge Roberts,

entered an order awarding title to the State of Texas by

virtue of its sovereignty, dismissing Platoro’s salvage

(footnote continued from previous page)

land submerged three leagues out into the Gulf of Mexico. The Act

did not, however, purport to erode maritime law which governs any

activity relating to navigation or commerce on navigable waters.

Historically, federal courts sitting in admiralty have had jurisdic-

tion in actions concerning salvage where the service has been per-

formed on navigable waters and operated to reintroduce items of

value to streams of commerce. To read the Act to encroach upon

traditional maritime jurisdiction would present a conflict of laws of

constitutional dimension. Salvage service is performed upon and in

navigable waters and is unrelated to law governing the submerged

land beneath those waters. Conceivably, the owner of the submerg-

ed land could have an action in trespass against a salvor who was

disturbing the submerged land, but action for trespass would have

to arise from a state statute specifically setting forth the proscribed

activity. Texas proffered its own statute governing submerged

lands which in 1967 read: ‘‘Unauthorized encroachment upon and

use of the submerged lands and islands owned by the state shail be

prevented....’” TEX.REV.CIV.STAT.ANN.art. 5415(e)(c) (as it ex-

isted in 1967). Reading further, however, the statute defines

submerged lands to exclude ‘‘land within the jurisdiction of the

State of Texas which lies beneath the open waters of the Gulf of

Mexico.”’ Jd. at (2)(e). Hence, that statute does not control.

Texas next proffered another statute from the same chapter govern-

ing public lands, Art. 5421 T.R.C.S., which says that the Land Com-

missioner shall report to the Attorney General the names of persons

who have appropriated any property of value from public lands, and

the Attorney General shall bring suit for the value of such property

in the county where the injury occurs. No such suit was filed by the

Attorney General, and this Court sitting in admiralty has no

jurisdiction over such claim.

The third statute Texas urged was Art. 147b of the Texas Penal

Code which regulates the exploration for archaeological objects

within the State of Texas. This statute was passed before any of

the submerged Gulf lands became part of Texas; obviously, the

Texas Legislature never intended it to apply to digs in the submerg-

ed Gulf lands. Moreover, it is not clear from the statute that the

(footnote continued on following page)

B-5

claim as jurisdictionally barred by the Eleventh Amend-

ment. That order was not appealed, apparently because

the Fifth Circuit had already indicated that a salvage

suit against the State had Eleventh Amendment pro-

blems. Platoro did not oppose the State’s Motion to

Dismiss nor did it appeal the order which reached and

adjudicated the substantive issue of title which was an

essential prerequisite to the dismissal for want of

(footnote continued from previous page)

salvaging of a sunken ship is an excavation of an archaelogical

site. In order to withstand constitutional muster, the statute would

have to more specifically proscribe the salvaging of buried treasure

ships.

Assuming arguendo that the Texas Legislature intended for the

statute to apply to excavations of sunken ships, the law of Texas

regarding finds precludes the State from claiming title to the

find. Schley v. Counch, 284 S.W.2d 333 (Tex. 1915). In Texas, ac-

cording to Schley, the finder of lost buried property is

keeper. Other jurisdictions distinguish between lost property and

lost property found embedded in the soil. See Burdick v.

Chesebrough, 88 N.Y.S. 13 (NY App. 1904) (earthenware found

embedded in soil, Allred v. Biegel, 219 S.W.2d. 665 (Mo. App. 1949)

(ancient Indian canoe embedded in river bank) and Elwes v. Brigg

Gas Co., 33 Chancery Division English Law Reports 562 (1886)

(prehistoric boat found buried in mud). Texas, however, does

not. Therefore, even according to Texas common law, the finder of

buried treasure is keeper

It is the Court’s impression at this time that the State’s interven-

tion in this suit has been misconceived ab initio; the State of Texas,

by claiming title by sovereign perogative, has ignored the fact that

the British common law doctrine of sovereign perogative has been

absorbed into the law of admiralty; the courts sitting in admiralty

take the res into their registries, as did the British sovereign, and

disburse the expense for salvage and other costs concerning the res

as they are claimed or incurred. The State of Texas has tried

relentlessly to divest this Court of its admiralty jurisdiction by

asserting its claims of sovereignty. This effort misconstrues the

laws of admiralty.

B-6

jurisdiction. See Kerbow v. Kerbow, 421 F.Supp. 1253

(N.D.Tex.1976). Therefore, regardless of the accuracy

of the application of the law reflected in that order, this

Court is precluded from applying the maritime law of

finds as recently enunciated by the Fifth Circuit in a

very similar and instructive case, Treasure Salvors, Inc.

v. The Unidentified Wrecked & Abandoned Sailing

Vessel, 569 F.2d 330 (5th Cir. 1978).

The Court is aware of authorities which imply that res

judicata is not an absolute bar where between the time

of the first and second judgments an important new

decision alters the state of the law. State Farm Mutual

Automobile Ins. Co. v. Duel, 324 U.S. 154 (1945). None

of the cases which follow that line of authority appear to

involve a party who actually failed to appeal an ap-

pealable judgment, and this Court declines to reach for

an exotic exception to the doctrine of res judicata when

Platoro failed to assert its rights at the proper time.

An interesting hypothesis that the Court does not en-

dorce at this point is that Texas’ ownership of the res

(by virtue of the doctrine of res judicata) does not

preclude application of the maritime law of finds in

awarding the res to the salvor. Norris suggests in his

treatise on admiralty that an owner may lose or abandon

his property without being deprived of his title to

it. Therefore, if the State insists that it has title to the

res, the Court could find that the State had abandoned

the res (by never exerting any control or otherwise in-

dicating possession of the res), and the finder of the

abandoned’ property gets to keep the find. The Court

2. The maritime law of finds is well established in American

courts. See cases cited in Treasure Salvors and 63 A.L.R.2d 1369.

3. The Court recognizes that this is a fiction since the State never

‘“‘possessed”’ the res to lose it.

-

B-7

finds it unnecessary to indulge this hypothesis, since the

same result is reached by following a clearer path.

Although consideration of the title question is barred,

the salvage lien is not barred because in 1977 Platoro did

succeed in obtaining the Texas Legislature’s consent to

sue the State on its salvage lien and immediately filed

this lawsuit. The jurisdictional defect was cured. See

49 A.L.R.2d 1036, at § 6(c) and cases cited therin.

III. The Salvage Award

The dispute as to whether this is a valid salvage claim

was fully explicated previously by Judge Garza when

the case was before him in the Southern District. 371

F.Supp. 351 (1970). The three elements of a valid

salvage claim are:

(1) that marine peril exists;

(2) that the service was voluntarily rendered; and

(3) that the effort was successful in whole or in part.

Lagnos v. M/V Olga Jacob, 498 F.2d 666 (5th Cir. 1974).

The State claims that the res was in no marine peril.

We dispose of this contention by noting that the res was

lost and had been lost for four centuries when it was

discovered by Platoro. Texas’ claim that the ship was

not lost is based on the fact that authorities knew the

‘general vacinity’’ of the vessel; when put to closer ex-

amination, this assertion amounted to a suspicion that

it lay somewhere between Brownsville and Corpus

Christi, Texas, or within a 150-mile expanse. Actual

loss and subjection to the elements constitutes ‘‘marine

peril’” for the purpose of making a valid salvage

claim. See Thompson v. One Anchor and Two Chains,

221 F. 770 (W.D.Wisc. 1915).

B-8

There is no exact measure to determine the amount of

a salvage award. Comparable cases may be referred to

but cannot serve as a rigid yardstick, The Neto and

Cargo, 15 F. 819 (D.Fla. 1883); the common law rule of

moiety has been “long exploded,’’ Taylor v. the Cato,

F.Cas. 13,786 (D.Pa. 1806); and fixed percentages are

not always equitable, The Craster Hall, 213 F. 436 (5th

Cir. 1914); see also Post v. Jones, 60 U.S. 150 (1856).

Public policy has long mandated a liberal salvage

award so that a salvor, recognizing a vessel in distress,

will have the pecuniary incentive to prompt his efforts.

The Missouri, F.Cas. 9654f (D.Mass. 1854) and Seven

Coal Barges, F.Cas. 12,677 (C.C.Ind. 1870). The prac-

ticality underlying the policy of encouragement is that,

unless seamen are encourged to go to the aid of disabled

vessels, property and sometimes life will be needlessly

lost. The Morzhovoi, 20 F.2d 265 (D.Wash. 1927).

The elements considered by most courts in arriving at

an award for salvage service are:

1. the degreee of danger from which the lives and

property are rescued;

2. the vaule of the property saved;

3. the risk incurred by the salvors in securing the

property from the impending peril;

4. the promptitude, skill and energy displayed by

the salvors in rendering the service and saving

the property;

5.the value of the property employed by the

salvors in rendering the service and the danger

to which such property was exposed; and

B-9

6. the time and labor expended by the salvors in

rendering the salvage services.

Norris, 3A Benedict on Admiralty, The Law of Salvage,

7th ed, §244.

1. The Degree of Danger from Which the Property was

Rescued

The State’s contention that the vessel was safely

embedded in and even preserved by the 10-15 foot layer

of sand is not at all compelling. Platoro had no way of

knowing how well preserved the vessel and its cargo

would be—if and when it was found. When Platoro

researched the location of the ship and even when engag-

ed in removing the sand, it had no inkling that the sand

and water would have the preserving effect they

had. Moreover, Platoro has no real reason to believe

that the treasure cargo was not scattered all over the

floor of the Gulf, rather than collected and reposed as it

actually was. The Gulf is renowned for its ferociuos hur-

ricanes which threaten annually. This obvious danger

has an effect on the topography of the sea floor, as

several of Platoro’s witnesses testified from personal ex-

perience.

The State’s contention that the salved goods were in

no danger and were exposed to no ‘‘marine peril’ is bas-

ed on hindsight and ignores the obvious problem that

the goods were absolutely lost. The fact that the sand

and salt water preserved the goods is a boon rather than

a bar to a salvage claim. In addition, there was

testimony that extensive seismic operations have been

conducted in this area. Drilling operations for oil and

gas are ongong activities. Obviously, these exploratory

procedures in the quest for oil and gas might well have

caused all the artifacts to be destroyed or scattered so

that they never would be recovered.

B-10

It is noted that the Santa Maria, a sister ship of the

Espiritu Santu (the Platoro find), sank a few scant miles

away. The Corps of Engineers in constructing the chan-

nel for Port Mansfield dug right through the remains of

this ship and destroyed many artifacts and ruined many

others.

2. The Value of the Property Saved

Both Platoro and the State put on evidence of the

value of the artifacts salved. Platoro’s experts were cur-

rent in their knowledge of the field of marine artifacts

and based their estimates on commercial value both at

the time of the find and presently. Particularly was the

Court impressed (as was Judge Garza at the trial in the

Southern District) by the testimony of Mendel Peterson

who evaluated the market value of the metal artifacts

(before the State’s restoration) at $241,082.00. Another

credible witness testified that the market value of the

armaments (presumably the non-metal artifacts) was ap-

proximately $26,000.00.

In addition, the State’s witnesses testified extensively

to the great contribution this find made to the fields of

history and marine archaeology. The State, of course,

did not assign a dollar figure to such value.

3. The Risk Incurred by the Salvors

The salvors testified concerning the varied dangers to

which they were exposed during the salvage operation:

severe undertow, fish of the deep, inclement surface

weather, and the danger of the salving vessel’s propeller

in conjunction with the use of the deflection shield. This

testimony was virtually uncontroverted.

4. The Promptitude, Skill & Energy in Rendering the

Service

B-11

This element is the least applicable to Platoro’s

salvage service since promptitude is relative to the

necessity for promptitude; however, the evidence was

that Platoro’s crew was diligent in its efforts, stopping

its operation only when the weather and the State so dic-

tated. Most of the salvors were experienced divers, and

several were experienced salvors. This Court declines to

hold them to the standard of expertise required of

marine archaeologists, as the State has urged.

5. The Vaule of the Property Employed by the Salvors

and the Danger to Which It was Exposed

The salvors put on evidence that, to move the thick

layer of land covering the vessel, they designed and used

special innovative equipment which has been successful-

ly copied and used in other salvage efforts. Witnesses

testified that the equipment they used was standard

salvaging equipment used in Gulf salvage operations.

The equipment was not exposed to any extraordinary

danger (other than hurricane Beulah).

6. The Time and Labor Expended by Salvors

Platoro submitted a reasonable estimate of the man-

hours and equipment-hours expended in the salvage ef-

fort, totaling approximately $140,000.00 to which

Platoro is entitled plus 9% prejudgment interest dating

from the time Texas took the res. See M/V Vulcan, 553

F.2d 489 (5th Cir. 1977).

intervenors Burke and Algoe submitted similarly

reasonable estimates of their time, but, although they

were party to the salvage effort from the beginning,

their claim is impeded by an Eleventh Amendment

jurisdictional bar. The 1977 legislative consent to sue

the State extends only to Platoro. Algoe and Burke

were independent salvors and did not obtain consent to

sue the State.

IV. Conclusion

Based on the above facts and underlying policy con-

siderations, the Court finds that Platoro’s adequate and

just salvage award is equal to or perhaps in excess of the

sum which a sale would bring. Therefore, it will allow

the State to satisfy judgment by relinquishing title of.

the res to Platoro. If the State chooses not to follow this

suggestion, the Court will order a public sale of the res

and will award the entire proceeds of sale to Platoro, less

court costs and costs of sale. Accord, Brady v. The SS

African Queen, 179 F.Supp. 321 (D.Va. 1960). Such an

award is not excessive in view of the great historical and

archaelogical value the State’s witnesses attributed to

the find. The salvors should be amply rewarded.

The State has asked for an offset for its time and ex-

pense in restoring the artifacts after they were

recovered from Platoro. The Court can find no prece-

dent for this type of claim on an action for salvage and,

therefore, holds that it is without jurisdiction to con-

sider it. Even if the claim for offset sounded in admiral-

ty, the Court would be reluctant to grant it since the

State has had the artifacts in its exclusive possession

and control since 1969.

There remains only the issue of attorney’s fees. The

award of attorney’s fees in admiralty actions is discre-

tionary and is_ specifically permitted in salvage

cases. See Compania Galeana, S.S. v. Motor Vessel

CARRIBBEAN, 565 F.2d 358 (5th Cir. 1978). Par-

ticularly here, where the State has refused to negotiate

or recognize a valid salvage claim, is an award of at-

torney’s fees appropriate. Therefore, Platoro is entitled

to recover $63,800.00 in attorney’s fees and court costs.

IT IS SO ORDERED.

B-13

SIGNED and ENTERED this 30th day of April,

1981.

/S/

LUCIUS D. BUNTON

United States District Judge

APPENDIX C

Judgment of the United States District Court for

the Western District of Texas

Rendered May 6, 1981

Platore Limited, Inc. v. The Unidentified

Remains of a Vessel, etc.

No. A-77-CA-112

C-1

UNITED STATES DISTRICT COURT

for the

WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

Civil Action File No. A-77-CA-112

Platoro Limited, Inc. §

§

Vs. § JUDGMENT

§

§

The Unidentified Remains of a

Vessel, her cargo, apparel, tackle, §

and furniture in a cause of §

salvage, civil and maritime §

This action came on for trial before the Court,

Honorable LUCIUS D. BUNTON, United States

District Judge, presiding, and the issues having been

duly tried and a decision having been duly rendered,

It is Ordered and Adjudged and Decreed that judg-

ment is hereby entered in favor of Plaintiff, Platoro lim-

ited, Inc., and Plaintiff is granted a salvage award and is

entitled to recover $63,800.00 in attorney fees and court

costs. The Court finds that Plaintiff's adequate and

just salvage award is equal to or perhaps in excess of the

sum which a sale of the res would bring. Therefore, the

State of Texas may satisfy judgment by relinquishing

title of the res to Plaintiff. If the State chooses not to

follow this suggestion, the Court will order a public sale

of the res and award the entire proceeds of sale to Plain-

tiff, less court costs and costs of sale.

It is FURTHER ORDERED, ADJUDGED and

DECREED that Intervenors Jefferson T. Burke and

Billy Russell Algoe’s salvage claim is impeded by an

Eleventh Amendment jurisdictional bar.

C-2

Dated at Austin, Texas, this 6th day of May, 1981.

CHARLES W. VAGNER

Clerk of Court

By: Sally Looke, Denutv

APPENDIX D

Memorandum Opinion and Order Denying

New Trial and Entry of Additional Findings

of Fact and Conclusions of Law of the

United States District Court for the

Western District of Texas

Rendered June 5, 1981

Platoro Limited, Inc. v. The Unidentified

Remains of a Vessel, etc.

No. A-77-CA-112

D-1

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

PLATORO LIMITED,

INC., an Indiana Corpora-

tion, as Salvor

Vv. No. A-77-CA-112

The Unidentified

Remains of a Vessel,

Her Cargo, Apparel,

Tackle, and Furniture ina §

Cause of Salvage, Civil and §

Maritime §

OM Or OP Or 0? Or OP Hr

MEMORANDUM OPINION AND ORDER

DENYING NEW TRIAL AND ENTRY OF

ADDITIONAL FINDINGS OF FACT AND

CONCLUSIONS OF LAW

Came on to be considered this date Intervenor’s Mo-

tion for New Trial which has been considered as a Mo-

tion for Amendment of Judgment, and the Court, fin-

ding the motion to be without merit, hereby DENIES

said motion.

Intervenors have approached the Court in a strange

posture. At trial they put on evidence indicating that

they considered themselves as part of PLATORO’s crew

yet they now claim that they were independent salvors

who were not bound by the 1976 Order awarding title of

the res to the State. The Court looked to Intervenors’

conduct to determine whether their claims should be

treated (1) as independent salvors claiming a salvage

award under the maritime law of finds under which there

D-2

is no Eleventh Amendment jurisdictional bar or (2) as

PLATORO’s crew members, who were bound by the

1976 Order, and if so whether the Legislature implicitly

consented to their suit. The court finds that:

1. Intervenors agreed to work with PLATORO in the

salvage effort and performed as agreed.

2. Intervenors had a very loose oral agreement with

PLATORO that the proceeds from the salvage effort

would be split among the salvors.

3. Intervenors and PLATORO never agreed on a

percentage for the split but seemed to agree that they

would agree after the effort was complete.

4. At the time of the agreement, both PLATORO and

Intervenors intended Intervenors’ claim to be derivative

of PLATORO’s.

5. At some time during the salvage effort but before

trial in the Southern District, Intervenors and

PLATORO became disenchanted with each other and

Intervenors hired their own counsel to represent them in

their claim for a salvage award.

6. There was no evidence presented at trial to show

whether Intervenors joined PLATORO in its effort or

initiated their own effort to get legislative consent to

sue the State after the Fifth Circuit indicated in its 1976

opinion that the salvors might have Eleventh Amend-

ment problems with recovery.

7. Intervenors tried to intervene in the 1976 suit but

were precluded by an early dismissal.

8. Intervenors did not join in the 1977 suit until

December, 1980 when the Court orally granted their Mo-

tion to Intervene.

D-3

9. Intervenors never filed an independent cause of ac-

tion against the res as independent salvors.

As independent salvors now claiming under the

maritime law of finds, Intervenors are barred by the

statute of limitations. See 46 U.S.C. §730. The con-

siderations outlined in Platoro v. Unidentified Remains,

614 F.2d 1051 (5th Cir. 1980), which tolled the statute as

to PLATORO do not apply to Intervenors since:

10. A period of four years ran without the interven-

tion of legal action by Intervenors; and

11. Because of Intervenors’ inactivity during this

time, neither the State nor PLATORO had reason to

believe that Intervenors intended to pursue their claims.

The Court’s Order dated May 6, 1981, implicitly found

that Intervenors considered themselves as members of

PLATORO’s crew at the time of the agreement with

PLATORO and intended that their salvage claim be

derivative of PLATORO’s. Intervenors’ later

disassociation with PLATORDO is inconclusive as to In-

tervenors’ standing in this lawsuit. The Court con-

cludes that the only effect of the disassociation was to

necessitate that Intervenors either join in PLATORO’s

effort or initiate their own effort to get legislative con-

sent to sue the State. Since there is not proof as to

either, the Court finds that:

12. Intervenors did not seek nor obtain legislative

consent to sue the State.

Intervenors, therefore, are now barred from recovery

by the doctrine of collateral estoppel by virtue of Judge

Roberts’ 1976 Order.

For these reasons, Intervenors’ Motion is DENIED

and the Findings of Fact and Conclusions of Law includ-

D-4

ed in this Memorandum Opinion and Order are added to

the Order dated May 6, 1981.

IT IS SO ORDERED.

SIGNED and ENTERED this 3rd day of June, 1981.

IS/

LUCIUS D. BUNTON

United States District Judge

APPENDIX E

Order of the United States District

Court for the Western District of Texas

Rendered June 8, 1981

Platoro Limited, Inc. v. The Unidentified

Remains of a Vessel, etc.

No. A-77-CA-112

E-1

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

PLATORO LIMITED, §

INC., an Indiana Corpora-

tion, as Salvor

Vv. No. A-77-CA-112

THE UNIDENTIFIED

REMAINS OF A VESSEL,

her cargo, apparel,

tackle, and furniture in a

cause of salvage, civiland §

maritime §

§

8

§

8

a

8

§

§

§

ORDER

Came on to be considered this day Intervenors’ Mo-

tion for New Trial and the Court, finding it to be without

merit, hereby DENIES said motion. In the Memoran-

dum Opinion and Order entered May 6, 1981, the Court

held that Intervenors’ claims were jurisdictionally bar-

red by the Eleventh Amendment. This conclusion was

based on the doctrine of collateral estoppel. The order

failed to mention the Court’s corollary conclusion that

Intervenors’ claim for a salvage award was independent

of PLATORO’s claim yet Intervenors did nothing to

pursue the merits of their cause of action from 1976 un-

til July, 1980 when they moved to intervene in this

lawsuit. The statute of limiatitons precludes In-

tervenors from pursuing a cause of action at this late

date. 46 U.S.C. §730. The considerations which allowed

PLATORO to sue in spite of 46 U.S.C. §730 do not apply

to Intervenors. See Platoro v. Unidentified Remains,

614 F.2d 1051, 1055 (5th cir. 1980).

E-2

Although the Court has judicial power to toll statutes

of limitations on equitable grounds, the Court declines

to do so where the parties have so apparently abandoned

their claims and where their conduct indicates quite

clearly that they considered themselves in privity with

PLATORO as PLATORO’s agents and therefore bound

by the 1976 order. Therefore, the Motion for New Trial

and the implicit motion to amend the Judgment is

DENIED.

SIGNED and ENTERED this 3rd day of June, 1981.

/S/

LUCIUS D. BUNTON

United States District Judge

eC

APPENDIX F

Opinion of the United States Court of Appeals for the

Fifth Circuit

Rendered April 4, 1980

Platoro Limited, Inc. v. The Unidentified Remains of a

Vessel, etc.

No. 78-1052

614 F.2d 1051 (1980)

F-1

PLATORO LIMITED, INC.,

Plaintiff-Appellant,

v.

The UNIDENTIFIED REMAINS OF A VESSEL, her

cargo, apparel, tackle, and furniture, in a cause of

salvage, civil and maritime, Defendants-Appellees.

No. 78-1052.

United States Court of Appeals,

Fifth Circuit.

April 4, 1980.

Rehearing and Rehearing En Banc

Denied May 8, 1980.

Appeal from the United States District Court for the

Western District of Texas.

Before AINSWORTH and HENDERSON, Circuit

Judges, and HUNTER,* District Judge.

AINSWORTH, Circuit Judge:

Plaintiff Platoro Limited, Inc. appeals from a judge-

ment of the United States District Court for the

Western District of Texas dismissing its suit en rem to

obtain title to the unidentified remains of a Spanish

vessel abandoned over 400 years earlier (in 1554) and

resting on the bottom of the Gulf of Mexico off the coast

of Padre Island, Texas. Alternatively, plaintiff sought

* District Judge of the Western District of Louisiana, sitting by

designation.

F-2

reasonable compensation for salvage services in recover-

ing the vessel. Plaintiff requested issue of process

against the State of Texas pursuant to a resolution of

the Texas Legislature which authorized suit against it.

The court held that plaintiff's suit was barred by the ap-

plicable statute of limitations and granted the State of

Texas’ motion to dismiss. We reverse and remand.

On September 11, 1967, Platoro, an Indiana cor-

poration, commenced operations for recovery of the re-

mains of a 16th century Spanish ship which was found

buried under a layer of sand 30-40 feet of water in the

Gulf of Mexico.' Thereafter, on December 13, 1967, the

State of Texas filed suit in the 28th Judicial District

Court of Kenedy County, Texas, to enjoin Platoro from

further recovery operations. The injunction was issued

on December 31 and Platoro ceased all activities.

Negotiations between Platoro and the Texas Land Com-

missioner followed and a settlement was reached

whereby Platoro and the Commissioner agreed to divide

the artifacts from Indiana to state custody in Texas.

1. The State of Texas points out in its brief that Platoro com-

menced recovering the artifacts in question ‘‘without permission to

do business in Texas, without a permit to explore or excavate an ar-

cheological site, and without any notice to the State of Texas.”’

However, the Texas Antiquities Code, Tex.Rev.Civ.Stat.Ann. art.

56145-9 (Vernon), which deals explicitly with the State’s re-

quirements for salvaging vessels abandoned at sea, had not been

enacted at the time Platoro engaged in its salvaging operations.

Texas also argues that Platoro violated Tex.Pen.Code Ann. art.

147b (Vernon) (repealed 1969) by failing to obtain a permit or license

to explore or excavate ‘in or on any prehistoric ruins or ar-

cheological or vertbrate paleontological site in Texas,’’ and

(footnote continued on following page)

F-3

On August 6, 1969, approximately 19 months after its

operations had ceased, and upon realizing that the Stae

was not going to honor its agreement with the Commis-

sioner, Platoro filed an in rem action in federal court in

the southern District of Texas to obtain title to the ar-

tifacts recovered or, alternatively, reasonable compensa-

tion for salvage services. The district court held that

plaintiff Platoro was entitled to compensation for its

salvaging operations and awarded judgement in the

amount of $131,248. Platoro Limited, Inc. v. The

Unidentified Remains of.a Vessel, 371 F.Supp. 356

(S.D.Tex.1973). On appeal, this court reversed the judg-

ment on the ground that the district court lacked in rem

jurisdiction, since the artifacts were not located within

(footnote continued from previous page)

Tex.Bus.Corp.Act. Ann. art. 8.01 (Vernon), by failing to obtain a

certificate to transact business in the State of Texas. Whether ap-

pellant’s activities were in violation of the Texas Penal Code is ir-

relevant to the issues involved here.

With regard to Platoro’s failure to obtain a certificate to transact

business in Texas, appellant may reasonably have assumed that

such a certificate was not necessary considering the nature of its ac-

tivities and the fact that they took place off the coast of Texas.

Nonetheless, subsequent to the seizure of the artifacts by the State,

Platoro filed for a Certificat of Authority to transact business in

Texas, which was granted in 1969 and is still in force.

Moreover, Platoro’s failure to obtain the above permits prior to

commencing its salvaging activities does not prohibit it from seek-

ing compensation in this case.

F-4

the Southern District of Texas when the suit was filed.’

Platoro Limited, Inc. v. The Unidentified Remains of a

Vessel, 508 F.2d 1113 (5th Cir. 1975). The court remand-

ed the case to the district court to dismiss the suit,

which it did on May 17, 1975.

In a footnote to its opinion, this court also noted that

the ‘‘preceding raises serious Eleventh Amendment

questions.” Jd. at 1115 n.3. Platoro, therefore, attemp-

ted to obtain permission from the State of Texas at the

next legislative session to bring suit against it. Its ef-

forts were unsuccessful, so on May 21, 1976 it again fil-

ed suit against the State of Texas, in federal court in

Western District of Texas, alleging the same claims

which were set forth in the prior suit. On August 13,

1976, the district court dismissed the suit based on the

Eleventh Amendment's bar to the court's jurisdiction,

since the State had failed to waive sovereign immunity.

At the next session of the Texas Legislative, Platoro

succeeded in obtaining a waiver of sovereign immunity

by virtue of a resolution which was signed by the Gover-

nor on May 27, 1977. This suit was then commenced on

June 23, and on July 18, the State of Texas moved to

dismiss plaintiff's complaint for lack of jurisdiction over

the subject matter and for failure to state a claim on

which relief could be granted. In its motion, the State

asserted, among other things, that Platoro’s complaint

2. Although the sunken vessel was buried in territorial waters

within the Southern District of Texas and the salvaging operations

took place there prior to the time suit was brought, Platoro had

removed the artifacts recovered to date to its home office in Indiana

and later, pursuant to an agreement with the State of Texas, had

relinquished possession of them to Texas which has continually held

them in Austin in the Western District of that state.

3. When the motion was orally argued, plaintiff Platoro’s counsel

stated that it was proceeding solely on its claim for compensation

for salvage services, and no longer asserted a claim of title to the

property.

F-5

failed to state a claim for remuneration for salvage ser-

vices within the court’s admiralty and maritime jurisdic-

tion; also that the claim was barred by the applicable

statute of limitations, 46 U.S.C. § 730.‘ The district

court held that Platoro’s action was barred by the two-

year limitation period set out in section 730, and thus

expressly found it unnecessary to decide whether plain-

tiff’s complaint stated a salvage claim within the court’s

admiralty and maritime jurisdiction. Accordingly, on

November 14, 1977, the district cout dismissed

plaintiff's suit and plaintiff brought this appeal.

The pertinent statutory provision, 46 U.S.C. § 730,

establishes a two-year limitation period for suits for the

recovery of remuneration for rendering salvage services,

which period runs from the date the services were

rendered. The statute contains a proviso, however, that

suit may be brought after two years if ‘“‘during such

period there had not been any reasonable opportunity of

arresting the ... salvaged vessel within the jurisdiction

of the court.’’ The action which precipitated this appeal

was not commenced until July 1977, more than nine

years after the slavage services were rendered. The ar-

tifacts made the subject of the suit were physically

within the Western District of Texas at Austin since

1969 when plaintiff brought them there from Indiana.

Thus, Platoro does not come within the above-quoted

language of the tolling provision of the statute.

4. 46 U.S.C. § 730 states:

A suit for the recovery of remuneration for rendering assistance

or salvage services will not be maintainable if brought later than

two years from the date when such assistance or salvage was

rendered, unless the court in which the suit is brought shall be

satisfied that during such period there had not been any reasonable

opportunity of arresting the assisted or salved vessel within the

jurisdiction of the court or within the jurisdiction of the court or

within the territorial waters of the country in which the libelant

resides or has his principal place of business.

F-6

Nevertheless, the mere fact that a federal statute

providing for substantive relief also sets a time limita-

tion upon the institution of suit under the statute does

not restrict the power of the federal courts to hold that

the statute of limitations is tolled under certain cir-

cumstances not inconsistent with the legislative pur-

pose. American Pipe and Construction Co. v. Utah, 414

U.S. 538, 559, 94 s.Ct. 756, 769, 38 L.Ed. 713 (1974);

Leake v. University of Cicinnati, 605 F.2d 255, 259 (6th

Cir. 1979); cf. Mizell v. North Broward Hospital District,

427 F.2d 468 (5th cir. 1970). Judicial power to toll

statutes of limitations on equitable grounds was firmly

established in Burnett v. New York Central Railroad,

380 U.S. 424, 85 S.Ct. 1050, 13 L.Ed.2d 941 (1965).

Burnett involved the dismissal for improper venue of an

action filed in state court under the Federal Employers’

Liability Act. At the time suit was later commenced in

the proper district but in federal court, the limitations

period established by the Act had already run. The

Court noted that the period is not totally inflexible, but

under appropriate circumstances may be extended. The

basic question is whether tolling the statute in a par-

ticular case is in keeping with the legislative intent

underlying the Act itself. 380 U.S. at 426, 85 S.Ct. at

1053. In noting that statutes of limitations are designed

primarily to assure fairness to defendants by preventing

the revival of claims that have been allowed to slumber

until evidence has been lost and witnesses have disap-

peared, the Court pointed out that this ‘‘policy of

repose”’ is frequently outweighted where ‘‘the interests

of justice require the vindiction of the plaintiff’s rights.”’

380 U.S. at 428, 85 S.Ct. at 1054-55.

Tolling of the statute of limitations under the cir-

cumstances here is warranted to allow Platoro an oppor-

tunity properly to pursue its claim on the merits. Here,

the vessel from which the artifacts were retrieved was

located in the Southern district of Texas at the time

Platoro’s first suit was instituted, and the recovery

F-7

operations made the basis of the suit took place there. It

was not unreasonable for Platoro to assume these facts

were sufficient for a determination that the court had

proper jurisdiction over the rest. In fact, the district

court so held, although erroneously. Platoro Limited,

Inc., supra, 371 F.Supp. at 358-59. It would not be incon-

sistent with the legislative intent underlying the statute

at issue to avoid the injustice that would result from the

dismissal of Platoro’s claim because it made an er-

roneous choice with regard to the true location of the

subject matter of the suit.

Furthermore, filing of Platoro’s first lawsuit showed

‘proper diligence on the part of the plaintiff which such

statutes of limitation were intended to insure.”

Goldlawr, Inc., v. Heiman, 369 U.S. 463, 467, 82 s.Ct.

913, 916, 8 L.Ed.2d 39 (1962). Appellant was not

dilatory in attempting to preserve its claim. After the

State of Texas filed suit, Platoro negotiated an agree-

ment with the State Land Commissioner to divide the

artifacts. When it appeared that the State was not going

to honor the agreement, appellant filed its suit well

within the two-year period. When the decision in that

case was reversed on appeal and this court noted that

the proceeding raised serious Eleventh Amendment

questions, Platoro apparently realized that a waiver of

sovereign immunity would likely be necessary for a suc-

cessful claim against the State. After failing to get a

consent to suit resolution from the State at the next

legislative session, Platoro filed suit once again in order

to protect its claim. After that action was dismissed, ap-

pellant successfully obtained a waiver of sovereign im-

munity from the Texas Legislature. Platoro brought the

present suit within three weeks of the signing of the

Texas Legislature resolution. At no time did a period of

two years run without the intervention of legal action by

appellant. Moreover, the State of Texas has been cogni-

zant of this claim from almost the beginning. Texas in-

itiated the controversy by filing suit for injunctive relief

.

F-8

in 1967. At that time the State was aware that Platoro

claimed compensation for salvaging the artifacts.

In the final balance, therefore, the circumstances

favor tolling the statute of limitations and granting

Platoro the right to have its claim adjudicated.°

We next consider the question whether Platoro’s

complaint states a claim for compensation for salvage

services cognizable within the court’s admiralty and

maritime jurisdiction. The State of Texas argues that

one of the elements of a salvage action—the existence of

a marine peril—is absent from this controversy,° since

the vessel has been ‘‘rest[ing] peacefully on the floor of

the Gulf of Mexico for over 400 years,”’ and is not “‘suf-

fering from an impending peril of the sea.’’ We disagree.

In a strikingly similar case, this court recently de-

cided that a party claiming an award for the salvage

of a vessel abandoned at sea could properly proceed

under the court’s admiralty jurisdiction. Treasure

Salvors, Inc. v. The Unidentified Wrecked and Abandon-

ed Sailing Vessel, 569 F.2d 330 (5th Cir. 1978). We said

in that case that a ‘‘[mJarine peril includes more than the

5. In view of our holding, we find it unnecessary to announce a

broad rule regarding Platoro’s contention that the statute of limita-

tions did not begin to run until Texas gave its consent to suit. See

United States v. Fuston, 143 F.2d 76 (10th Cir. 1944). Platoro’s ef-

forts to preserve its claim have operated in each instance to toll the

statute sufficient to prevent a bar to maintaining its present suit.

6. it is well established that in order to present a valid salvage

claim three elements must be shown: ‘‘(1) a marine peril, (2) service

voluntarily rendered when not required as an existing duty or from

a special contract, and (3) success in whole or in part, or that the ser-

vice rendered contributed to such success.’’ Legnos v. M/V Olga

Jacob, 498 F.2d 666, 669 (5th Cir. 1974). Texas complains that only

the first of these elements is lacking.

F-9

threat of storm, fire or piracy to a vessel in navigation.’”’

Id. at 337. Thus, a marine peril existed in a wrecked and

abandoned vessel, which sank in 1622 off the Marquesas

Keys in waters off the Florida coast, and whose location

was unknown for over 300 years. Further, the court said

that this peril existed even after discovery of the loca-

tion of the vessel, since it was ‘‘still in peril of being lost

through the actions of the elements.’’* /d. at 337.

Our decision in Treasure Salvors is thus dispositive

for the issue whether appellant properly invoked the

court’s admiralty jurisdiction in its claim for compensa-

tion here.’ We therefore, hold that Platoro’s complaint

state a valid salvage claim and remand this case to the

district court for a determination of the merits.

REVERSED AND REMANDED.

7. In a footnote, the court noted that ‘‘‘[tJhe peril required in a

salvage service need not necessarily be one of imminent and ab-

solute danger. The property must be in danger, either presently or

reasonably to be apprehended.’’’ Treasure Salvors, Inc. v. The

Unidentified Wrecked and Abandoned Sailing Vessel, 569 F.2d 330,

337 n.13 (5th Cir. 1978), quoting Norris, The Law of Salvage § 185

(1958).

8. In our earlier statement that the vessel was resting on the bot-

tom of the Gulf of Mexico, 30 to 40 feet under water, covered by 4 to

10 feet of sand, thus ‘“‘impervious to weather conditions above the

surface of the seas,’’ with the “‘sand prevent{ing] deterioration

underwater,’’Platoro Limited, Inc. v. Unidentified Remains of a

Vessel, 508 F.2d 1113, 1114-15 n.1 (5th Cir. 1975), the court was not

addressing the issue whether amarine peril existed for puroposes of

determining if plaintiff presented a valid salvage claim. Later, when

we squarely considered the question in Treasure Salvors, supra, we

determined that such conditions present a marine peril for purposes

of meeting the requirements of a valid salvage action.

9. The State of Texas makes much of the fact that in Treasure

Salvors, supra, the vessel was abandoned partially in international

waters, wheeas here the wreck lay in territorial waters off the Texas

coast. This distinction, however, is not determinative of whether a

marine peril existed for purposes of meeting the requirement of a

salvage action.

APPENDIX G

Memorandum and Order of the United States District

Court for the Western District of Texas

Rendered November 14, 1977

Platoro Limited, Inc. v. The Unidentified

Remains of a Vessel, etc.

No. A-77-Ca-112

G-l

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

Platoro Limited, Inc. *

*

V. * Civil Action No.

* A-77-Ca-112

The Unidentified Remains *

of a Vessel *

MEMORANDUM AND ORDER

This is a suit in admiralty to gain title to, or alter-

natively to recover monetary compensation for the

salvage of, certain items recovered from the shipwreck

of a Spanish galleon off the coast of Padre Island. On

November 4, 1977, the Court heard oral arguments on

the motion of the State of Texas, a claimant, to dismiss

the suit. After considering the motion, pleadings, briefs,

and arguments, the Court is of the opinion the motion to

dismiss should be granted.

This suit has had a checkered history which must be

set out to understand fully the posture of the case in this

Court. The Spanish galleon involved sank off the coast

of Padre Island in the 1550’s. The wreck was soon

covered by a layer of sand and silt. Plaintiff, an Indiana

corporation, started recovery operations in September

of 1967, and ceased on December 13, 1967, pursuant toa

state court injunction. Plaintiff had apparently removed

many of the recovered items to Indiana. The items were

returned to Austin, Texas by at least August 5, 1969,

apparently pursuant to some sort of understanding bet-

ween Plaintiff and the State of Texas that the parties

would split the proceeds of the recovery 50-50. The

Texas Land Commissioner then repudiated this

understanding.

G-2

On August 6, 1969, Plaintiff filed suit in federal district

court in Brownsville, Texas, making basically the same

allegations as are made in this suit. That district court

ultimately rendered a judgment for Plaintiff, Platoro

Limited, Inc. v. The Unidentified Remains of a Vessel,

371 F. Supp. 356 (S.D. Tex. 1973), but that judgment

was later reversed for lack of in rem jurisdiction, 508

F.2d 1113 (5th Cir. 1975). The suit was then dismissed at

the direction of the 5th Circuit on May 17, 1975.

In its opinion the 5th Circuit intimated that sovereign

immunity might be a bar to the suit, 508 F.2d 1115 at

n.3, and apparently taking this warning to heart, Plain-

tiff says it sought permission to sue from the next ses-

sion of the Texas legislature, but was not successful.

This first attempt to obtain a waiver of sovereign im-

munity would have occured some 7’ to 8 years after the

cessation of salvage operations in 1967. On May 21,

1976, Plaintiff filed suit in this court (Civil Action No.

A-76-CA-99), making the same allegations as made in

the Brownsville suit and as are made in the present suit.

This Court confirmed Plaintiff's fears and dismissed for

failure of the State to consent to suit. Memorandum

Order of August 13, 1976. No appeal was taken from

that dismissal.

Plaintiff approached the following session of the state

legislature and obtained a resolution, signed by the

governor on May 27, 1977, authorizing suit, but express-

ly reserving all defenses other than that of sovereign im-

munity. The instant suit was then filed on June 23,

1977.

The State characterizes this suit as one in which Plain-

tiff is 1) suing for a declaration of title to the property

recovered or, alternatively, 2) for an award for salvage

services, to be secured by a maritime lien. Plaintiff says

that it is not seeking a judgment of present ownership or

‘present title,’’ but is only seeking an ‘‘award”’ of title

G-3

as part of its salvage claim. Alternatively it seeks the

monetary award for salvage services.

The State has moved to dismiss for failure to state a

claim or for lack of jurisdiction in admiralty. The State

contends that the title issue is res judicata because of

the earlier Brownsville and Austin suits. Alternatively

it says that the prior statements by this Court and the

Brownsville court to the effect that title of the recovered

goods was in the State were correct as a matter of

substantive law. As to the salvage claim, the State

argues that the suit is barred by the 2-year statute of

limitations in 46 U.S.C. § 730, or if not barred, that there

is no jurisdiction because of a failure to allege (or be able

to prove) ‘‘maritime peril,’’ which is said to be an ele-

ment of a salvage claim.

The ‘“‘Title’’ Claim:

The Court need not devote much attemtion to the title

question inasmuch as Plaintiff’s counsel, during argu-

ment, expressly disavowed any claim to title and said

Plaintiff was pursuing only its claim for a monetary

salvage award. We note only that the disagreement bet-

ween the parties concerning how to characterize the title

claim appears to result from two distinc: lines of cases

on this type of situation. One line awards title to items

recovered from an abandoned shipwreck to the first per-

son to take possession of the goods, applying a

‘‘finders”’ theory. The other line of cases treats a wreck-

ed or sunken ship as a “‘derelict”’ or ‘‘wreck of the sea’”’

which, upon recovery, belongs to the sovereign unless

claimed by the true owner within a year and a day. See

63 A.L.R. 2d 1360. This Court has already indicated,

although perhaps only in dictum, that it feels that the

latter line of cases applies to the facts alleged by Plain-

tiff.

G-4

The ‘‘Salvage”’ Claim:

46 U.S.C. § 730 states that a ‘‘...suit for the recovery

of remuneration for rendering assistance or salvage ser-

vices shall not be maintainable if brought later than two

years from the date when such assistance or salvage was

rendered...’’ The statute contains its own tolling provi-

sion which provides that the suit may be brought after

two years if ‘‘...during such period there had not been

any reasonable opportunity of arresting the...salvaged

vessel within the jurisdiction of the court...”’

We note intitally that ‘‘46 U.S.C. § 730 is a federal

statute of limitations which contains its own tolling pro-

visions” and that ’’[t]here has been no tendency on the

part of the judiciary to erode the plain meaning of this

statute.’’ People of the Living God v. Star Towing Co.,

289 F. Supp. 635, 638-39 (E.D. La. 1968)(order of quota-

tions reversed). See also Basic Boats, Inc. v. United

States, 311 F. Supp. 596 (E.D. Va. 1970); Tice Towing

Line v. James McWilliams Blue Line, 57 F.2d 183 (2d

Cir. 1932); Cavanaugh v. The Lenco II, 102 F. Supp. 213

(S.D. N.Y. 1951); Canadian Government Merchant

Marine v. Virginia Coaling Corp., 1929 A.M.C. 192 (E.D.

N.Y. 1929).

It is clear to the Court that Plaintiff cannot place itself

within the literal wording of § 730’s tolling provision.

The recovered items were within the Western District of

Texas since at least August 5, 1969, and of course at all

times were subject to the jurisdiction of some federal

court. Thus it is clean that there was an opportunity to

‘“‘arrest’’ the salved goods within two years after the ren-

dition of any salvage services. That a suit might not

have been maintainable during that period because of a

sovereign immunity defense on the part of the other clai-

mant does not mean that the goods could not have been

arrested, just as the presence of an affirmative defense

does not affect the validity of process in an ordinary

G-5

civil suit. Similarly, even assuming that the pendency of

the two prior federal suits might in some manner have

tolled limitations, it is clear that for a total of some 42

months since the cessation of salvage operations and

prior to the filing of this suit, there was no suit pending

with regard to these matters. Moreover, the Brownsville

suit, the only one filed within the two year limit, was fil-

ed in a court lacking jurisdiction. Consequently, the only

way Plaintiff could hope to avoid limitations is simply to

argue the limitations started running only after the

State gave its consent to suit. Even then, Plaintiff did

not actually seek the State’s consent until many years

after the end of salvage operations.

While Plaintiff's arguments might have considerable

merit if an equitable theory of laches were being applied,

this Court does not feel that it is in a position to ignore

the literal wording of a Congressional statute. 46 U.S.C.

§ 730 states that the limitations period begins to run

‘from the date when such assistance or salvage was

rendered”’ and contains its own tolling provisions which,

as noted, is inapplicable to Plaintiff.

Commencement of the limitation period on the date

when assistance or salvage services were rendered con-

trasts significantly with the frequent commencement of

limitations periods on the date when the “‘cause of ac-

tion accrued.”’ Indeed most, if not all, of the cases cited

by Plaintiff for the proposition that limitations does not

begin to run in favor of the sovereign until the sovereign

consents to suit involve limitation statute using the

“accrual” language. See, e.g., United States v. Fuston,

143 F.2d 16 (10th Cir. 1944); Walker v. State, 103

S.W.2d 404 (Tex. Civ. App.—Waco 1937, no writ). The

Supreme Court has noted the importance of such a dif-

ference in wording of the limitations statute in another

context:

G-6

“{I]f Congress had intended that the cause of

action of the shipper to recover damages for

unreasonable charges should accrue when the

shipment was received, or when it was delivered

by the carrier, we cannot doubt that a simple

and obvious form for expressing that intention

would have been used, instead of the expression

‘from the time the cause of action accrues.’”’

Louisville Cement Co. v. Interstate Commerce

Comm'n, 246 U.S. 638, 644 (1918).

The Court feels that in 46 U.S.C. § 730 Congress did

adopt a ‘“‘simple and obvious form of expression”’ to in-

dicate its itention that the period of limitations should

begin to run from the date of rendition of services, and

not from the date a suit might first be legally instituted.

The language of Congress is specific and controlling; it

is not for this Court to ignore it.

Having decided that Plaintiff's action is barred by

limitations, the Court need not discuss the question of

‘“‘marine peril.”’ é

It is accordingly

ORDERED that the State’s motion to dismiss be

GRANTED, and that this suit be DISMISSED for

failure to state a claim upon which relief can be granted.

Entered this 14th day of November, 1977, at Austin,

Texas.

is/ Jack Roberts

~ JACK ROBERTS

UNITED STATES

DISTRICT JUDGE

APPENDIX H

Memorandum Opinion and Order

of the United States District Court

for the Western District of Texas

Rendered August 13, 1976

Platoro Limited, Inc. v. The Unidentified

Remains of a Vessel, etc.

No. A-76-CA-99

H-1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

Platoro Limited, Inc. *

*

V. * Civil. Action No.

* A-76-CA-99

The Unidentified Remains *

of a Vessel *

MEMORANDUM OPINION AND ORDER

Came this day for consideration by the Court the

above styled cause. The Court, having considered the

pleadings, motions and briefs in support of the motions,

is of the opinion that the State of Texas’s unopposed

Motion to Dismiss ought to be granted.

This is a suit under the federal admiralty and

maritime laws in which Plaintiff seeks to recover, as

salvor, for the salvaging of items which were lost when a

Spanish galleon sank near Padre Island in the 1550's.

Under the common law, adopted by Texas and the

United States, abandoned ‘’wrecks of the sea,’’ in-

cluding both vessels and cargo, belong, on recovery, to

the sovereign, unless claimed by the owner within a year

and a day. Platoro Limited, Inc. v. Unidentified Re-

mains of a Vessel, 371 F.Supp. 356, 360 (S.D.Tex. 1973),

rev'd on other grounds, 508 F.2d 1113 (5th Cir. 1975); 63

A.L.R.2d, p. 1376, §5. Since the salvaged items in the in-

stant case were not claimed by the owner within a year

and a day of the wreck, title devolved on the sovereign,

and thus, under the common law, the State of Texas now

has title to all the recovered items. Because title to the

recovered items is in the State of Texas, the effect of the

Eleventh Amendment on the power of the Court to hear

this suit must be considered. The Eleventh Amendment

applies to admiralty suits, just as it does to suits in law

H-2

and equity. Jn Re New York, 265 U.S. 490 (1920), Jn-

tracoastal Transportation Inc. v. Decatur County,

Georgia, 482 F.2d 361 (5th Cir. 1973). Those suits in-

volved in personam actions against the state in admiral-

ty suits, but since the state is here the owner of the res

which is the subject matter of this in rem action, the

State of Texas is just as surely the real party in interest

in this suit as if it were an in personam action against

the State of Texas. Thus, since the State of Texas is the

real defendant at interest in this suit, and since the state

has not given its consent to be sued, this action cannot

be maintained in federal court because the federal courts

have not power, under the Eleventh Amendment, to

hear it. Edelman v. Jordan, 415 U.S. 651 (1974). Thus,

this suit must be dismissed for want of jurisdiction. This

disposition makes it unnecessary to rule on the state’s

motion to dismiss for failure to state a claim under the

admiralty laws and because the statute of limitations

had run. Likewise, it is not necessary to rule on the join

motion for intervention by Jefferson T. Burke and Billy

Russell Algoe, Accordingly, it is

ORDERED, ADJUDGED and DECREED that the

State of Texas’s motion to Dismiss this cause of action

should be, and hereby is, GRANTED.

Entered this 13th day of August, 1976, at Austin,

Texas

/s/ Jack Roberts

JACK ROBERTS

UNITED STATES

DISTRICT JUDGE

APPENDIX I

Opinion of the United States Court of

Appeals for the Fifth Circuit

Rendered February 27, 1975

Platoro Limited, Inc. v. The Unidentified

Remains of a Vessel, etc.

No. 74-1540

508 F.2d 1113

I-]

PLATORO LIMITED, INC.

Plaintiff-Appellee-Cross-Appellant,

Vv.

The UNIDENTIFIED REMAINS OF A VESSEL, her

cargo, etc.,Defendants,

State of Texas, Movant-Appellant-Cross Appellee,

Jefferson T. Burke and Billy Russell Algoe,

Intervenors-Appellees.

No. 74-1540

United States Court of Appeals,

Fifth Circuit

Feb. 27, 1975.

Appeals from the United States District Court for the

Southern District of Texas.

Before THORNBERRY, MORGAN and CLARK, Cir-

cuit Judges.

THORNBERRY, Circuit Judge:

In 1555 several Spanish vessels sank off the coast of

Padre Island, Texas, in the Gulf of Mexico during a

huricane. The wreckage remained there practically un-

disturbed until September 9, 1967.' On that date Platoro

Limited, Inc., an Indiana corporation, began operations

1. The artifacts came to rest on the clay bottom of the Gulf of

Mexico, thirty to forty feet underwater. Eventually they were

covered by four to ten feet of sand. Under these conditions, the

items were effectively impervious to weather conditions above the

surface of the sea, and the sand prevented deterioration underwater.

The items remained in this state of equilibrium until 1967 when

Platoro commenced recovery operations.

1-2

to recover the remains of the vessels. Platoro successful-

ly located some artifacts, and, as the items were

recovered, it shipped them to Gary, Indiana. Recovery

operations took place from September until December

13, 1967, when the 28th Judicial District Court for the

State of Texas issued a temporary restraining order pro-

hibiting Platoro from conducting further salvage opera-

tions. The State of Texas had instituted the state court

suit under former §§ 147a & 147b of the Texas Penal

Code.’

Shortly after the state court suit was filed, Jerry

Sadler, then the Texas Land commissioner, opened

negotiations with Platoro regarding the recovered

items. After considerable negotiation, Platoro and

Sadler agreed to a contract dividing the articles already

recovered, and arranging for continued exploration of

the Padre Island area. An officer of Platoro signed the

contract, but no representative of the State of Texas

ever did. Pursuant to the negotiations, Platoro returned

the recovered items to Austin, Texas, where they were

held by the General Land Office. In September 1969, the

state judicial district court ordered the items transfer-

red to the Texas Archaeological Research Library, also

located in Austin.

On August 6, 1969 Platoro filed an in rem suit in

the federal district court for the Southern District of

Texas. Platoro’s complaint sougt a declaration that title

to the recovered items was vested in Platoro, or alter-

natively a salvage award for the recovery operations.

The State of Texas appeared in the district court, filing a

plea of immunity from suit and requesting dismissal for

lack of jurisdiction. The district court refused to dismiss

the suit, and enjoined the state district court from

2. Tex.Laws 1931, 42d Leg., Ist C.S., ch. 32 at 71; Tex.Laws

1939, 46th Leg. at 60.

1-3

disposing of the res. After a hearing, the court ruled that

Platoro was entitled to a salvage award for its actions in

recovering the items. In its memorandum and order of

December 26, 1973, the district court held that (1) the

district court had in rem jurisdiction and subject matter

jurisdiction over Platoro’s claim; (2) that Texas had title

to the artifacts; (3) and Platoro should receive a salvage

award of $131,248.00. The State of Texas appeals the

district court’s judgment on several grounds: (1) lack of

in rem jurisdiction; (2) lack of subject matter jurisdic-

tion since (a) Texas did not waive sovereign immunity,

and (b) no maritime peril existed; and (3) improper com-

putation of the salvage award. We reverse on the in rem

jurisdiction point, and therefore find in unnecessary to

consider the other claims.*

To establish in rem jurisdiction in admiralty the

res must be present in the district when the suit is filed

or during the pendency of the action. Rule C(2), Sup-

plemental Rules for Certain Admiralty and Maritime

Claims provides: ‘‘In actions in rem the complaint ...

shall describe with reasonable particularity the property

that is the subject of the action and state that it is

3. The parties did not extensively brief or argue the sovereign im-

munity question. We feel compelled to point out, however, that this

proceeding raises serious Eleventh Amendment questions. That

Amendment provides: ‘“The Judcial 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 another State, or by Citizens or Subjects of any Foreign State.”’

U.S.Const. Amend. XI. Through the language of the Amendment is

narrow, the Supreme Court has construed the provision broadly.

See Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 65

S.Ct. 347, 89 L.Ed. 389 (1959); Hans v. Louisiana, 134 U.S. 1, 10

s.Ct. 504, 33 L.Ed. 842 (1890). Thus there are Eleventh Amendment

considerations in an admiralty suit as well as a ‘‘suit in law or equi-

ty.”’ In re New York, 256 U.S. 490, 41 S.Ct. 588, 65 L.Ed. 1057

(1921); Intracoastal Transp., Inc. v. Decatur Cty., Georgia, 482 f.2d

361 (5th Cir. 1973). See also Edelman v. Jordan, 415 U.S. 651, 94

S.Ct. 1347, 39 L.Ed.2d 662 (1974).

1-4

within the district or will be during the pendency of the

action.’ Rule E(3)(a) of the Supplemental Rules states:

‘Process in rem and of maritime attachment and gar-

nishment shall be served only within the district.’’ The

fact that the artifacts originally lay within the Southern

District does not establish in rem jurisdiction. See

American Bank of Wage Claims v. Registry of District

Court, 431 F.2d 1215 (9th Cir. 1970). Platoro itself

removed the artifacts from the Southern District of

Texas long before filing the suit there, and, when the

monition issued the artifacts were in the Western

District of Texas.

In its jurisdictional ruling, the district court ac-

knowledged that the artifacts were not within the

Southern District. It felt, however, that this case fell

within exception to the general rule that removal of the

res destroys a court’s jurisdictional base. Where the res

is accidentally, fraudulently, or improperly removed

from the district, the court’s in rem jurisdiction is not

destroyed. The Rio Grande, 90 U.S. (23 Wall.) 458, 23

L.Ed. 158 (1874); American Bank of Wage Claims v.

Registry of District Court, supra; Martin v. The Bud,

172 F.2d 295 (9th cir. 1949). The exception cannot apply,

however, where the district court did originally establish

its in rem jurisdiction. Furthermore, Platoro was the

party who removed the artifacts from the Southern

District. The fraud, if any, occurred in effecting removal

of the artifacts from Gary, Indiana to Austin, Texas.

The district court relied on an alternative theory to

establish its jurisdiction. In December 1967, the State of

Texas sued Platoro in state court to enjoin the recovery

operations. The court below reasoned that the state

district court’s assumption of jurisdiction over Texas

and Platoro, gave the federal court the requisite jurisdic-

tional base. We cannot divine the basis for the district

court’s assertion of jurisdiction is unclear, but it does

not appear that the state court had in rem jurisdiction of

1-5

the artifacts that are the subject of this suit. When

Texas filed its state court action, Platoro had already

removed those items to Gary, Indiana. Further, the

state voluntarily dismissed the sate court suit before the

federal suit went to trial. The district judge below

specifically found that the dismissal was in good faith,

and not an attempt to destroy the federal court’s

jurisdiction. Thus the basis for the district court’s novel

custodia legis theory was removed by the trial date.

The res in question was not actually or constructively

present in the Southern District of Texas when Platoro

filed suit. The service of process by publication did not

operate to establish in rem jurisdiction since Platoro had

previously removed the artifacts. Therefore we reverse

and remand this cause to the district court with direc-

tions to dismiss for lack of jurisdiction.

APPENDIX J

Opinion of United States District Court

for the Southern District of Texas

Rendered December 26, 1973

Platoro Limited, Inc. v. The Unidentified

Remains of a Vessel, etc.

Civ, A. No. 69-B-86

371 F. Supp. 356

J-1

PLATORO LIMITED, INC., an Indiana corporation, as

Salvor,

V.

The UNIDENTIFIED REMAINS OF A VESSEL, her

cargo, apparel, tackle and furniture, in a cause of

salvage, Civil and Maritime.

Civ. A. No. 69-B-86.

United States District Court,

S.D. Texas,

Brownsville Division.

Dec. 26, 1973.

GARZA, District Judge.

Platoro Limited, Inc., an Indiana corporation, brought

this suit in a cause of salvage, civil and maritime,

against the unidentified remains of a vessel, her cargo,

apparel, tackle and furniture on August 6, 1969. The

plaintiff-salvors had located the remains of Spanish

vessels, which sank during a hurricane in the year 1554,

off the shores of historic Padre Island, located in the

Gulf of Mexico. The recovery of the artifacts made the

subjects of this lawsuit were recovered by the plaintiff

in September, October, November and December of

1967, until restrained on December 13, 1967, by a tem-

porary restraining order out of the 28th Judicial District

Court of Kennedy County, Texas. Because of the

pendency of the state suit, notice was given to the State

of Texas, although the plaintiffs in this case proceeded

in their salvage claim by the issuance of monition.

The State of Texas appeared and filed its plea of im-

munity from suit and asked that the same be dismissed

for want of jurisdiction. After holding a hearing on

January 17, 1970, this Court issued a Memorandum

dated the 12th of June, 1970, 371 F.Supp. 351, in which

J-2

it held that this, in truth and in fact, was a true salvage

claim, retained jurisdiction, and left the question of a

salvage award for a later hearing. This Court’s

Memorandum of June 12, 1970, is hereby adopted by

reference and must be read in connection with this

Memorandum to fully understand what this Court is

holding, and any findings of facts or conclusions of law

reached in said Memorandum of June 12, 1970, are

hereby adopted by reference.

At the time of its Memorandum and Order of June 12,

1970, this Court certified its interlocutory decree, under

28 U.S.C. § 1292(b), allowing the State of Texas to seek

an immediate appeal of the Order, but the Honorable

Circuit Court of Appeals for the Fifth Circuit, on August

11, 1970, denied the interlocutory appeal on the order of

Judges Ainsworth, Bell and Godbold. In the meantime

and subsequent to the denial of the interlocutory appeal,

two intervenors sought leave of the Court to intervene.

They were Jefferson T. Burke and Billy Russell Algoe.

They were also making salvage claims on the items

recovered from the sunken Spanish galleon.

The Court was interested in finding out what the value

of the artifacts salvaged was, so as to be in a position to

make the salvage award. A haphazard attempt was

made to comply with the Court’s wishes to get experts

to put a value on the artifacts that were recovered, but it

was not until a hearing held in this Court on November

1, 1973, that the Court was able to get sufficient

evidence into the record of the value of the goods salvag-

ed.

There is not question that the artifacts recovered are

of great historical value, but unfortunately we cannot

put a dollar sign on an historic work and we are

relagated to the recognized rule of commercial or market

value.

J-3

The State of Texas is still stressing and urging

vehemently its position that this Court is without

jurisdiction in this matter. They say that the res made

the subject of this salvage claim was not physically

within the boundaries of the jurisdiction of this Court at

the time the salvage claim was filed; that the artifacts

were in Austin, Texas, which is in the Western District

of Texas, and outside the jurisdiction of this Court.

They also urge that this Court has never arrested the res

and has no control over it. They say that this Court’s

possession of the res is contructive, at best, and con-

structive possession is not enough to confer jurisdiction

on this Court. They cite to this Court the case of The

Zev, 63 U.S.App.D.C. 146, 70 F.2d 750 (1934), in which

an in rem action was dismissed for lack of jurisdiction.

This Court does not disagree with that case, but the

facts in this case are distinguishable from the case of

The Zev. There is not question that the salvage opera-

tions made the basis of this lawsuit took place with the

jurisdiction of this Court. The artifacts recovered were

entered through Customs within this District, and then

removed to Indiana, by the salvors who were of the

mistaken belief that they were sole owners under some

theory of ‘‘finders’keepers’’.

When the state suit above referred to was filed and

the plaintiffs enjoined from further salvage operations,

the then Land Commissioner of Texas Jerry Sadler,

began extensive negotiations with the plaintiffs herein

with regard to a division of the salvaged items and the

future exploration of the sunken vessesl, which resulted

in a contract being drawn dividing the salvaged articles

then existing on a fifty-fifty basis. This contract was

signed by the plaintiff, but apparently never executed

by the Commissioner. Acting on the assumption that

they had a contract, the salvors in this case returned

most of the artifacts to the Land Commissioner’s office

in Austin, and those that were not returned at that time

were returned latter under orders of the State District

J-4

Court in the suit above referred to. Once the artifacts

found by the salvors were in the custody of the Land

Commissioner, he disowned the contract that he had

been discussing with the plaintiffs, and stated the he

had only done what he had done to get the artifacts back

to the State of Texas. I find that if the res in this case is

in the Western District of Texas, it is there by the fraud

committed by the then Land Commissioner of Texas, or

under the orders of a State Judge, and it cannot be urg-

ed by the State now that the jurisdiction lies in the

Western District of Texas because of the fraudulent ac-

tions of its then Land Commissioner.

At the time the suit was filed in the State Court of

Kennedy County, the State Judge, on his own motion,

had taken custodia legis of the res in this lawsuit and at

first ordered the res held in the Land Commissioner’s of-

fice and latter transferred it by order to the Texas Ar-

cheological Research Laboratory in Austin, Texas, for

restoration and to be fully and completely studied,

described, photographed and analyzed, with a view toa

full preservation of all the data that could be ac-

cumulated about it. When the State Court, which is

within the jurisdiction of this Court, took custodia legis

of the res made the subject of this suit, it recognized

that the plaintiffs here had voluntarily returned some of

their articles to Austin, but required all articles to be

returned. The State Court appointed an Inventory Com-

mittee and it was this Inventory Committee that

brought the final artifacts to Texas.

This Court is aware of the ancient and important

rule that where the property is in the actual possession

of one Court of competent jurisdiction, such possession

cannot be disturbed by any other Court, and if the Stae

Court has first acquired custody, the Federal Court

must decline jurisdiction. 1 Barron and Holtzoff,

(Wright Ed.), Section 46.1, p.245. However this rule

does not apply when the subject matter of a suit involv-

J-5

ing the res is not subject to concurrent jurisdiction. The

28th Judicial district Court of Kennedy County, a Court

within the jurisdiction of this Court, had custodia legis

of the res, but as this Court maintained in its Memoran-

dum of June 12, 1970, this Court, and this Court only,

had jurisdiction to determine the salvage lien claimed by

plaintiffs, something that the State Court could not do.

The Court did not disturb the custodia legis or

possession of the State Court, but in aid of this Court’s

jurisdiction enjoined the State Court from disposing of

the res until further orders of this Court. An old

Supreme Court case of ancient vintage, but still being

cited with approval, Moran v. Sturges (1894), 154 U.S.

256, pp. 283-285, 14 S.Ct. 1019, 38 L.Ed. 981, is ample

authority for this Court to have ignored the ancient rule

above referred to.

No warrant of arrest out of this Court was neces-

sary, for such warrant of arrest would have precipi-

tated the collision between two Courts that the

ancient rule above referred to and cited in Wright’s Edi-

tion of Barron and Holtzoff was aimed to avoid. A Court

that had custodia legis was enjoined by this Court from

disposing of the res made the subject of this lawsuit un-

til further orders of this Court, and the res was in this

Court just as if the United States Marshall had gone to

arrest the property, for the res was in this Court from

that point forward for the purpose of enforcing a

maritime lien.

At the hearing on November 1, 1973, it was made

known to the Court that the state suit in the 28th

Judicial District Court of Kennedy County had been

dismissed the day before by the State, with the costs

charged against the State. This Court inquired of the

First Assistant Attorney General of Texas if this action

had been taken to defeat the jurisdiction of this Court,

for if it had, this Court would have been forced to take

J-6

further action on its injunction, but the Honorable State

Assistant Attorney General assured the Court that the

dismissal of the state suit was not for that purpose.

There is no question that this Court, as a United

States District Court, has jurisdiction over a salvage

maritime lien, and that only a Federal Court such as

ours has that jurisdiction. The points raised by the

State have to do more with which Federal Court should

have taken cognizance of this action. The salvage opera-

tion took place and the res was first salvaged in this

District. Since the artifacts found were of foreign vin-

tage, the salvors entered them through Customs at

Brownsville, Texas, in this District. As explained above,

the res was transferred by the salvors to Indiana and

then returned to Austin, Texas, in the Western District

of Texas, in large part by the fraud explained above.

This action, therefore, could have been brought in only

three Federal District Courts: one in Indiana, the one in

the Western District of Texas, and here. Taking the

State’s argument at face value, the suit could not have

been brought in Indiana, because the res had left that

jurisdiction. If it is in the Western District of Texas by

fraud, it should not be brought there. There remains on-

ly this District and for the reasons above stated, this

Court reiterates its jurisdiction over the subject matter.

The salvage lien, if any, arose here in this District, and

here it will be enforced.

The Plaintiffs, on the other hand, are re-urging to the

Court their right to outright title to the res on some

theory of ‘‘finders-keepers’’, claiming that this was

abandoned property and have cited to the Court Schley

v. Couch, 155 Tex. 195, 284 S.W.2d 333 (1955). They

claim that the State of Texas does not have any right to

claim this property as owner, as the owner was the

government of Spain, and they have not appeared pur-

suant to the monition issued out of this Court. Short

work can be made of this claim of the plaintiffs, for if

J-7

they are not claiming a salvage or maritime lien, but in-

stead are claiming outright ownership under the law of

‘‘finders-keepers’’, they have no business in this Court

sitting as a Court in admiralty, but could have pursued

their claims in the State suit file in Kennedy County.

The plaintiffs are attempting to bring this suit on the

basis of diversity and amount. It should be further

noted that if this was simply a title suit to the salvaged

items, concurrent jurisdiction would then exist between

the State Court of Kennedy County and this Court, and

since the State Court had taken custody of the salvaged

items, this Court would have had to decline jurisdiction

because of the rule above referred to. But this Court has

already held that this is a true salvage claim by its

Memorandum of June 12, 1970, and it will proceed on

that basis.

Under the better view and what this Court

believes to be the common law adopted by Texas and the

United States, abandoned ‘‘wrecks of the sea’’, in-

cluding both vessels and cargo, belong, on recovery, to

the sovereign, unless claimed by the owner within a year

and a day. 63 A.L.R.2d, p. 1376, § 5. This Court has no

evidence of who owned the galleon that sank in 1554. It

was neither owned by the government of Spain or some

private Spanish owner, but regardless, ownership

reverted to the crown of Spain within one year and one

day, and thence to Texas through the seccession of

governments. The fact that Texas had no statute such

as Florida in the case of State by Ervin v.

Massachusetts Co., 95 So.2d 902, 63 A.L.R.2d 1360,

cert. den’d, 355 U.S. 881, 78 S.Ct. 147, 2 L.Ed.2d 112,

makes no difference. The State of Texas had a perfect

right to come into this Court and claim as owner the res

involved in this lawsuit, for more than a year and a day

had passed since the finding of the res when the lawsuit

was filed. The claim of the plaintiffs that they should be

granted outright title to all of the res involved here is

denied.

J-8

At the hearing on November 1, 1973, the Court heard

evidence as to the value of the goods salvaged by Plain-

tiffs. Testifying on the question of value was Mr.

Mendel Peterson, who from 1948 until his retirement in

1973, held several curatorial and administrative posi-

tions with the Smithsonian Institute. His offered

qualifications as an expert were more than adequate.

He, like all others involved in this case, realized that the

historic value of the articles recovered was priceless.

The State offered the testimony of Miss B. Weingast, an

appraiser for Sotheby Parke Bernet, Inc. The witness

Peterson put a market value on the artifacts recovered

at $294,618.00, and Miss Weingast a value of

$98,000.00. After hearing both parties testify in person,

noting their qualifications, their background and their

knowledge of the subject matter, this Court believes

that the appraisal of Mendel Peterson is more

believable, and finds the market value of the salvaged

items to be as he testified. His appraisal surely seems

the more authoritative of the two, and more in line with

a generally held view that these priceless finds by the

salvors were worth millions of dollars. The Plaintiffs in

this case are claiming that they spent a total of

$139,301.80, in their salvage costs. The State of Texas,

on the other hand, is claiming that they spent some

$200,000.00 in restoring the items to their present state

and value. What the slavors have spent is something to

be considered in arriving at their salvage lien, and it will

be so considered. What the State claims in restoration

costs is something else. The testimony of Mendel Peter-

son was to the effect that the most valuable items in the

find needed no restoration, or very little if any, and that

appraised items consisting of gold, silver, brass and

bronze were not enhanced in value by the restoration,

and this amounted to $241,082.00 of the total market

value, There is no testimony before this Court that the

State of Texas appropriated any special funds for the

restoration claimed, but it was done by employees of the

State under the regularly budgeted line item funds.

J-9

While there is evidence that a building was constructed

to take care of the restoration, this building will still re-

main to the State, and can be used for years to come in

its arheological studies.

The witness Peterson gave extensive testimony regar-

ding the effect of restoration on market value. On many

items, as noted above, restoration did nothing to in-

crease their value. Some of the items needed extensive

restoration. From his testimony, we can find that items

which he testified were worth $53,536.00 and which re-

quired extensive restoration, were worth only forty

(40%) per cent of the $53,536.00, at the water’s edge.

Taking his testimony, we can safely say that restoration

by the State amounted to an increase in value of items

salvaged of $32,122.00.

The State’s contention that the cost of restoration and

so forth and the value placed on it by its appraiser would

make the res have no market value is totally without

merit.

The market value of the salvaged items being

$294,000.00, minus a reasonable restoration cost ex-

panded by the State of $32,122.00, is the true market

value of the salvaged items when brought up by the

salvors.

The remaining question is how much should this

Court award to the salvors.

While the State of Texas and many others knew of

the existence of the sunken Spanish galleons off the

Texas coast, it took the Plaintiffs here to bring up the

items recovered. The galleon was at a place where the

public could enter. Texas had no statute as it does now

protecting them. This Court from the very beginning

has thought that the parties in this case, the State of

Texas through its then Land Commissioner and the

J-10

plaintiffs themselves have always thought, that a fifty-

fifty division was the correct measure of the salvage

claim. Where the parties at interest have so agreed

among themselves, this Court sees no reason why it

should interfere, if the negotiations carried on amounted

in the eyes of this Court, to a pre-determined contract of

salvage, and therefore, this Court finds that the

plaintiff-salvors are entitled to one-half of the value of

$294,618.00, less one-half of the restoration costs, or a

total award of $131,248.00.

The intervenors, Jefferson T. Burke and Billy Russell

Algoe, both testified in this cause. They stand in the

same shoes as Platoro, and apparently were working

with Platoro, and are making claims for monies not yet

received from Platoro, the plaintiff is this cause. In-

tervenor Burke is claiming $17,500.00, and Intervenor

Algoe is claiming $6,000.60. From the evidence before

me, I find that out of the salvage award of $131,248.00,

the Intervenor Burke is entitled to the sum of $8,750.00,

and the Intervenor Algoe is entitled to the sum of

$3,000.00, for in this Court’s view, they were sort of

joint venturers with Platoro, and some of the claims

made by them were actually in aid of the main salvor,

Platoro, and services rendered to it, and not actually ex-

pended in the bringing up of the salvaged items, and at

least one-half of the claims should have been for services

rendered to Platoro and not on behalf of the salvaged

items. In this Court’s view, many of the items testified

to by Burke and Algoe were included in the sum that the

main salvor, Platoro, the plaintiff in this case, testified

w_5 spent by them in this salvage operation.

The State of Texas and some of those who appeared in

this Court as amicus curiae in the past have expressed

great desire in having the State keep the res in its

museums. The State of Texas will, therefore, be given a

reasonable time in which to pay this salvage award in

cash. Failing in this, the salvaged items will be divided

J-11

in kind following the value of the salvaged items as

found by Mendel Peterson. If the parties cannot agree

on the division, this Court will retain jurisdiction to ap-

point a Master to accomplish the task.

This Memorandum includes the Findings of Fact and

Conclusions of Law of this Court, and is a Final Judg-

ment.

The Clerk will send copies of this Memorandum and

Order to counsel for the parties.

APPENDIX K

Judgment of the United States Court of

Appeals for the Fifth Circuit

Rendered January 20, 1983

Issued as Mandate February 28, 1983

Platoro Limited, Inc. v. The Unidentified

Remains of a Vessel, etc.

No. 81-1257

K-1

UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 81-1257

D.C. Docket No. A-77-CA-112

PLATORO LIMITED, INC.

Plaintiff-Appellee,

JEFFERSON T. BURKE

AND BILLY RUSSELL ALGOE,

Intervenors-Appellees,

versus

THE UNIDENTIFIED REMAINS OF A

VESSEL, HER CARGO, APPAREL, TACKLE

AND FURNITURE, IN A CAUSE

OF SALVAGE, CIVIL AND MARITIME,

Defendant,

STATE OF TEXAS,

Claimant-A ppellant.

Appeals from the United States District Court for the

Western District of Texas

Before BROWN, WISDOM and RANDALL, Circuit

Judges.

JUDGMENT

This cause came on to be heard in the record on appeal

and was argued by counsel;

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this Court that the judment of

the said District Court in this cause be, and the same is

K-2

hereby, affirmed in part; vacated in part; and that this

cause be, and the same is hereby remanded to the said

District Court with instructions.

IT IS FURTHER ORDERED that each party shall

bear its own costs cn appeal in this Court.

January 20, 1983

ISSUE AS MANDATE: FEB. 28, 1983

APPENDIX L

Order on Petition for Rehearing of the

United States Court of Appeals for the

Fifth Circuit

Rendered February 17, 1983

Platoro Limited, Inc. v. The Unidentified

Remains of a Vessel, etc.

No. 81-1257

L-1

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 81-1257

PLATORO LIMITED, INC.,

Plaintiff-Appellee,

JEFFERSON T. BURKE and

BILLY RUSSELL ALGOE,

Intervenors-Appellees,

versus

THE UNIDENTIFIED REMAINS OF A VESSEL,

HER CARGO, APPAREL, TACKLE AND

FURNITURE, IN A CAUSE OF SALVAGE,

CIVIL AND MARITIME

Defendant,

STATE OF TEXAS,

Claimant-Appellant.

Appeal from the United States District Court

for the Western District of Texas

ON PETITION FOR REHEARING

(February 17, 1983)

Before BROWN, WISDOM and RANDALL, Circuit

Judges.

PER CURIAM:

L-2

IT IS ORDERED that the petition for rehearing filed

in the above entitled and numbered cause be and the

same is hereby denied.

ENTERED FOR THE COURT:

/s/ Carolyn Denise Randall

United States Circuit Judge

CLERK‘S NOTE:

SEE RULE 41 FRAP AND LOCAL

RULE 17 FOR STAY OF THE MADATE

APPENDIX M

Temporary Restraining Order and Order

Appointing Temporary Receiver of Specific

Assets, entered by the 28th Judicial

District Court, Kenedy County, Texas

Entered December 13, 1967

State of Texas v. Platoro Limited, Inc.

No. 81

M-1

No. 81-1257

THE STATE OF TEXAS § IN THE DISTRICT

§ COURT

VS. § OF KENEDY COUNTY,

8

PLATORO LIMITED, § TEXAS, 28th JUDICIAL

INC., ET AL § DISTRICT

TEMPORARY RESTRAINING ORDER

AND

ORDER APPOINTING TEMPORARY RECEIVER

OF SPECIFIC ASSETS

On this the 13th day of December, 1967, came on to be

heard; in the above entitled and numbered cause wherein

the State of Texas is Plaintiff; and Platoro Limited, In-

corporated, and Indiana corporation; Quest Geo-Marine

Research, a California nonprofit corporation; Paul

Znika, Clyde Means, Max Znika, Joe Ensick, Steve Gur-

sak, John Selterich, Kurt Purvis, Fritz Carr, Richard

Pasqual and Billy Kenon, Jr., are Defendants; the ap-

plication of the State of Texas, represented herein By the

Attorney General, for a temporary restraining order and

a temporary receiver of specific assets, and it appearing

to the court that the above entitled cause is an action by

the State of Texas through its Attorney General, under

the authority and directive of the Constitution and laws

of this State, and the court having considered Plaintiff's

verified petition, is of the opinion and so finds that the

law and facts are what the Plaintiff nas alleged in its

petition and that there exists a present and urgent

necessity for the immediate entry of an order, without

notice, appointing and directing a temporary receiver, in

this instance, being Clark Slater, to take possession of

and to preserve and protect all personal property of any

character and kind belonging to Platoro Limited, Inc,

and Quest Geo-Marine Research, found within the State

M-2

of Texas, specifically including any and all artifacts and

things of value taken by any of the above named Defen-

dants, or by anyone else, from the site of a sunken ship

on public lands of the State of Texas, and found within

the possession or control of any of the said Defendants,

and to preserve and protect the same, pending hearing

on Plaintiff's Original Petition; and,

Further, that the said above named Defendants, and

each of them, should be restrained and enjoined as

hereinafter specifically provided; and in support thereof

the court finds that unless temporarily restrained, such

Defendants will continue to conduct such activities, and

transact such business contrary to the laws of the State

of Texas and too the public in general before notice can

be served and a hearing had hereon unless said Defen-

dants be restrained pending hearing; and that the in-

terest of the State seem to require that such temporary

receiver be appointed.

It is, therefore, ORDERED, ADJUDGED and

DECREED by this court that Clark Slater, of Kenedy

County, Texas, be, and he is hereby, directed as tem-

porary receiver to take possession of, and to preserve

and protect, all personal property of any character and

kind belonging to Platoro Limited, Inc. and Quest Geo-

Marine Research, found within the State of Texas,

specifically including any and all artifacts and things of

value taken by any of the above named Defendants, or

by anyone else, from the site of a sunken ship on public

lands of the State of Texas, and found within the posses-

sion or control of any of said Defendants, pending final

hearing hereof; and,

Said Clark Slater, as such temporary receiver, is

hereby granted and given all equitable powers and

authority under any and all applicable statutes and

under the common law of this State authorizing the ap-

pointment of a receiver.

M-3

Such appointment to become effective upon his taking

and filing the oath as required by law, and making the

bond required by law in the sum of $500.00, to be ap-

proved by the court.

Said receiver shall make and file with this court an in-

ventory of the property which comes into his hands as

such receiver, and shall do and perform such other

things in connection with such receivership as the court

may, from time to time, order and direct.

It is further, ORDERED, ADJUDGED and

DECREED that said Defendants, and each of them, are

restrained and enjoined as follows:

(1) From committing waste on public lands of the

State of Texas;

(2) From appropriating or taking any property of

value from the public lands of the State of Texas; and

(3) From engaging in the act or business of diving for,

excavating, mining, destroying or removing any ar-

tifacts or things of value from any historic ruin or ar-

cheological site located on public lands of the State of

Texas and in particular the site of a sunken ship lying

approximately 2.8 miles north of the Port Mansfield cut,

and % mile east of the seaward shore of Padre Island, at

a depth of approximately 30 feet of water; and

It is further ORDERED, ADJUDGED and

DECREED that said corporate Defendants, Platoro

Limited, Inc. and Quest Geo-Marine Research, and each

of their officers, directors and employees, be and the

same are hereby restrained and enjoined from transac-

ting business in either of such corporations in this State

without first obtaining a charter or certificate of

authority to do so; and,

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Further, that each and every named Defendant is

hereby restrained and enjoined from removing any ar-

tifact or thing of value heretofore excavated by them

from the public lands of the State of Texas;

It is further Ordered that the Clerk of this court shall

issue a temporary restraining oreder in accordance

herewith.

It is further Ordered by this court that this temporary

restraining order here and now granted shall continue in

effect for a period of not more that ten (10) days, and

unless otherwise continued in effect by order of this

court, shall expire at 10 o’clock a.m. on the 20th day of

December, 1967.

Hearing on Plaintiff's application for a temporary in-

junction is set for the 20th day of December, 1967, at 10

o'clock a.m. at the courtroom of the 28th Judicial

District Court, at the Courthouse in the city of Sarita, in

Kenedy County, Texas, at which time the court shall

consider whether the appointment of such temporary

receiver shall be continued.

All of the foregoing is subject to “urther orders of the

court.

Done at Corpus Christi, in Nueces County, Texas, this

the 13th day of December, 1967, at 10 o'clock a.m.

/s/ Paul A. Martineau

Judge, 28th Judicial

District

Court of Kenedy County,

Texas.

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E-517 Certificate of True Copy of Papers on File-Class 1

(Arts. 6600-6625) Texas Standard Form

THE STATE OF TEXAS

County of KENEDY

I, FAYE CHANDLER, clerk of the 28th DISTRICT Court of

Kenedy County, Texas, do hereby certify that the foregoing is a true

and correct copy of the original TEMPORARY RESTRAINING

ORDER AND ORDER APPOINTING TEMPORARY

RECEIVER OF SPECIFIC ASSETS Styled: THE STATE OF

TEXAS VS. PLATORO LIMITED, INC., ET AL. #81 now on file

in said Court.

Given under my hand and seal of said Court, at office in Sarita

this 24th day of March 1981

FAYE CHANDLER Clerk

by /s/ Deputy

FILED

at 1:30 O'clock p..m.

December 13, 1967

Faye Chandler

Clerk, Dist Court, Kenedy

Co., Tex.

by Deputy