(Id. at 10-11.) Herbert also testified that he was unable to locate any reference to salvage efforts undertaken by the ship's owners, but he did find references to other salvage attempts. (Id. at 12-14, 17-18.) Finally, Herbert testified that, although he found evidence that insurance claims were paid for the loss of the vessel, he was unable to determine from his research which portion of the ship or its cargo was covered by insurance. (Id. at 15-17.)
During cross-examination, Herbert admitted that he was retained by the State just eight days before the second hearing, despite the fact that the State had more than five months to prepare for the court's hearing on its motion to dismiss. (Id. at 21.) Herbert testified that he conducted just 22 hours research, which consisted almost entirely of reviewing newspaper articles during three visits to the library. (Id. at 21-22, 23.) He admitted that he did not research any insurance records, nor did he attempt to contact any of the underwriters who paid claims for the loss of the Brother Jonathan. (Id. at 25-26.) Herbert also admitted that he did not know, one way or another, whether the owner of the Brother Jonathan or the insurance underwriters attempted to salvage the vessel. (Id. at 23-24, 26.) More importantly, Herbert admitted that he did not find any evidence that the owner of the Brother Jonathan, or the insurance underwriters, had publicly disclaimed any further ownership interest in the vessel. (Id. at 22.)
Herbert's testimony, by itself, does not provide a sufficient basis for the court to conclude that the owners of the Brother Jonathan have taken a "clear and unmistakable affirmative act to indicate a purpose to repudiate ownership" in the Brother Jonathan, or its cargo. In addition, the State has failed to provide sufficient evidence to demonstrate that the Brother Jonathan has been abandoned due to the lapse of time, or because the owners of the vessel have failed to undertake salvage efforts.
The facts of this case are similar to two recent cases where courts have been called upon to decide the issues of abandonment and competing claims of ownership in the era of insurance: Columbus-America Discovery Group v. Atlantic Mut. Ins. Co., 742 F. Supp. 1327 (E.D. Va. 1990), rev'd, 974 F.2d 450 (4th Cir. 1992), cert. denied, 123 L. Ed. 2d 183, 113 S. Ct. 1625 (1993); and Zych v. Unidentified, Wrecked and Abandoned Vessel, Believed to be SB "Lady Elgin", 755 F. Supp. 213 (N.D. Ill. 1991), rev'd on other grounds, 960 F.2d 665 (7th Cir. 1992).
In Columbus-America, a consortium of insurance companies filed competing claims of ownership against a salvor who discovered the S.S. Central America, a wooden-hulled, side-wheeled steamship which sank 160 miles off the coast of South Carolina in 1857. The District Court held that the successors in interest to the original insurance companies who paid claims for the loss of the vessel obtained ownership interests in the S.S. Central America and its cargo by right of subrogation, but the insurance companies affirmatively abandoned their ownership interests by failing to undertake salvage efforts and deliberately destroying certain documentation. 742 F. Supp. at 1343-48. Applying the common law of finds, the court held that the salvor was entitled to, and vested with, ownership of all of the cargo and artifacts recovered from the S.S. Central America. Id. at 1348.
On appeal, however, the Fourth Circuit held that the insurers' abandonment could not be presumed due to inaction because it was not technologically feasible to salvage the vessel until recently. 974 F.2d at 461-68. The appellate court found that the law of finds is properly applied in situations where the previous owners are found to have abandoned their property, but such abandonment must be proven by clear and convincing evidence, such as an owner's express declaration that he is abandoning title.
Id. at 464. The Fourth Circuit held that the District Court erred when it found an abandonment and applied the law of finds. Id. at 468. Therefore, the Fourth Circuit remanded the case to the District Court with instructions to hold a trial to determine the value of the cargo insured by each underwriter, and to determine the proper salvage award for the plaintiff. Id.
In the Lady Elgin case, two parties asserted competing claims to the wreck of the Lady Elgin, a 300 foot side-wheeled steamship which sank in Lake Michigan in 1860. The finder of the Lady Elgin asserted title to the vessel under the law of finds, arguing that the underwriter who originally paid claims for the loss of the Lady Elgin effectively abandoned the vessel through the lapse of time and by its failure to take any steps to recover the vessel. At the same time, a charitable foundation that obtained an ownership interest in the Lady Elgin from the successor to the original insurance underwriter disputed the salvor's claim that the ship was abandoned, arguing that the original underwriter instructed its agents not to abandon the vessel, and, therefore, never intentionally surrendered its interest as subrogee of the vessel's owner. The District Court agreed with the foundation, finding that the underwriter's documents showed a specific intent not to abandon the vessel, and that the underwriter's failure to attempt salvage efforts was excusable because the technology did not exist to recover the wreck until the late 1980s. 755 F. Supp. at 217. The court stated:
In light . . . of the law's hesitancy to find abandonment and the concomitant requirement that abandonment be supported by strong and convincing evidence, the Court finds that [the underwriter] was not required to engage in efforts to recover the wreck in order to avoid abandoning its interest when such efforts would have had minimal chances for success.
In this case, the state of the art technology necessary to accurately locate the Brother Jonathan, or to safely salvage the vessel at a depth of 250 feet, did not exist until just recently. (Jackson Decl. at PP 4-5; Groom Decl. at PP 4-5.) Within the last three years, advances in sonar technology have made it possible to locate shipwrecks in deep water with greater precision, and for less money, than with the technology that was previously available. (Groom Decl. at PP 4-5.) Also within the last three years, scientific advances in the use of mixed breathing gasses to combat decompression sickness have increased the safety factor in diving at great depths. (Jackson Decl. at PP 4-5.) As in the Columbus-America and Lady Elgin cases, the owners of the Brother Jonathan and its cargo were not required to engage in efforts to recover the wreck in order to avoid abandoning their interests when such efforts would have had minimal chances for success. The mere fact that the owners of the Brother Jonathan have not undertaken salvage efforts, if it is true, does not provide sufficient evidence for the court to conclude that the Brother Jonathan has been legally abandoned.
As an alternative theory of abandonment, the State argues that, because a newspaper article published in 1865 stated "probably two-thirds of the cargo was uninsured," and the owners of the uninsured cargo have not come forward to date, the uninsured portion of the Brother Jonathan's cargo has been abandoned due to the lapse of time. The State also asserts that the personal property of the passengers and crew has been abandoned for the same reason. The State claims an ownership interest in the uninsured cargo and personal property under California Public Resource Code § 6313.
While the State is correct in its assertion that the court may infer abandonment of cargo and personal property if an owner fails to appear in court, at this time, based on the showing that the State has made, it would be premature for the court to find that any individual items of cargo or personal property have been abandoned. At this stage in the litigation, DSR is not asking the court to award it salvage fees from the res of the wreck, or to otherwise make any order regarding title to or distribution of the wreck or its contents. (DSR Memo. of Points and Authorities in Support of Mot. for Issuance of Warrant of Arrest at 3, n. 2.) DSR is currently seeking only a warrant for arrest of the vessel and an order appointing DSR custodian of the wreck. (Id.) DSR has suggested that any final determination regarding title should be made after the salvage operation is completed. (Id.) The court agrees that this is the most prudent way to proceed with the case at this time. To date, there has been very little publicity generated by the discovery of the Brother Jonathan, and only a few artifacts have been recovered. Upon the issuance of a warrant for arrest of the vessel, DSR will be required to publish notice of this action and the arrest in a newspaper of general circulation. See Supp. Fed. R. Civ. P. C(4). In addition, any future salvage operations will undoubtedly generate additional publicity, and it is likely that this publicity will cause additional claimants to come forward.
At this time, the State has failed to demonstrate that it has a colorable claim to any cargo or personal property which ultimately may be found to be abandoned. The State's assertion that any abandoned personal property and uninsured cargo automatically becomes the property of the State is incorrect. As is discussed in Section II.B.4., infra, § 6313 is preempted by the ASA. More importantly, the ASA does not support the State's theory that the State obtains title to an entire shipwreck if a portion of its contents are found to be abandoned, but the entire ship is not otherwise abandoned and embedded.
The State does not cite to any case law to support its argument, and the court is not aware of any if it exists. In fact, in another case with similar facts, the State of Florida's argument that it could declare title to abandoned property under the sea through legislative pronouncement was rejected by the court. See Cobb Coin, 525 F. Supp. at 198, 215-16.
In sum, after considering all of the evidence, the court finds that the State has failed to produce sufficient evidence to demonstrate that the Brother Jonathan is legally abandoned.
2. The Brother Jonathan Is Not "Embedded"
The second class of shipwrecks protected by the ASA are abandoned shipwrecks that are embedded in either the submerged lands of a state, or in coralline formations that are protected by the state.
43 U.S.C. § 2105(a). The ASA defines the term "embedded" as:
firmly affixed in the submerged lands or in coralline formations such that the use of tools of excavation is required in order to move the bottom sediments to gain access to the shipwreck, its cargo, and any part thereof[.]