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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 1999 FED App.
0171P (6th Cir.)
File Name: 99a0171p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
Fairport International Exploration, Inc.,
Plaintiff-Appellant,
No. 95-1783
v.
The Shipwrecked Vessel, known as the
Captain Lawrence, in rem,
Defendant,
and
The State of Michigan,
Intervenor-Appellee.
On Remand from the United States
Supreme Court.
No. 94-00164 Robert Holmes Bell,
District Judge.
Reargued: December 10, 1998
Decided and Filed: May 13, 1999
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Fairport Intl. Exploration, Inc. v. Shipwrecked Vessel, et al.
No. 95-1783
Before: BOGGS and MOORE, Circuit Judges; and DOWD,{*} District Judge.
_________________
COUNSEL
ARGUED: Michael L. Donner, KAUFMAN & CANOLES, Norfolk, Virginia,
for Appellant.
Stephen F. Schuesler, OFFICE OF THE ATTORNEY GENERAL, NATURAL RESOURCES
DIVISION, Lansing, Michigan, for Appellee. ON BRIEF: Michael
L. Donner, KAUFMAN &
CANOLES, Norfolk, Virginia, for Appellant. Stephen F. Schuesler,
OFFICE OF THE
ATTORNEY GENERAL, NATURAL RESOURCES DIVISION, Lansing, Michigan, for Appellee.
Richard T. Robol, COLUMBUS AMERICA DISCOVERY GROUP, Columbus, Ohio, for
Amicus
Curiae.
BOGGS, J., delivered the opinion of the court,
in which DOWD, D.J., joined.
MOORE, J. (pp. 20-22), delivered a separate opinion concurring in part
and
concurring in the result.
_________________
OPINION
_________________
BOGGS, Circuit Judge. "Don't give up the
ship," ordered Captain James
Lawrence in 1813 as HMS Shannon engaged his frigate Chesapeake. One
hundred
twenty years later, Wilfred H. Behrens left his boat, the Captain Lawrence,
as
it sank in Lake Michigan. Decades later, Fairport International Exploration,
Inc. acquired an interest in the vessel and, in
_________________
{*} The Honorable David D. Dowd, Jr., United States District Judge
for the
Northern District of Ohio, sitting by designation.
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No. 95-1783
1994, brought an in rem action seeking to perfect title to the Captain
Lawrence, which is embedded in the bottom of Lake Michigan. The State
of
Michigan intervened under the Abandoned Shipwreck Act of 1987, 43 U.S.C.
2101 2106, contending that Behrens chose to give up the ship.
Thus,
claimed Michigan, the Captain Lawrence was an abandoned shipwreck embedded
in
State lands, and it belonged to Michigan. The district court found
that
Michigan established a "colorable claim" of ownership of the wreck and
that
the Eleventh Amendment therefore divested the court of jurisdiction.
This
court affirmed, see Fairport Int'l Exploration, Inc. v. The Shipwrecked
Vessel
Known as the Captain Lawrence, 105 F.3d 1078 (6th Cir. 1997), vacated,
118 S.
Ct. 1558 (1998), and the Supreme Court vacated that decision in light of
its
ruling in California v. Deep Sea Research, Inc., 523 U.S. 491, 118 S. Ct.
1464
(1998). Now, this court again confronts the controversy surrounding
the
Captain Lawrence. Specifically, we consider the burden of proof faced
by
Michigan regarding whether Behrens abandoned the Captain Lawrence, and
we
decide whether the State may offer circumstantial evidence to prove
abandonment by Behrens.
I. Background
This case arises from two men's "obsession" with
a "mystery legend" of
gold lost in northern Lake Michigan during the Civil War. The modern
story
begins with the Captain Lawrence, which sank in northern Lake Michigan
in
1933. Built in 1898 and christened the Alice, the Gay Captain Lawrence
served
as a training vessel for the Sea Scouts (a branch of the Boy Scouts) from
1925
to 1931. In 1931, the boat sank in deep water of Lake Michigan, was
towed to
the shallow water of the Menominee River in Wisconsin, and was purchased
for
$150 by Wilfred H. Behrens, who renamed it the Captain Lawrence.
Behrens's
daughter Alice described her father as a "deep sea diver, salvage diver,"
obsessed with sunken treasure. The Captain Lawrence left Milwaukee
on August
26, 1933, bound for
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No. 95-1783
Summer Island in Lake Michigan, but never reached its destination.
At 3 a.m.
on September 19, 1933, a sudden wind blew the vessel onto the rocky shore
of
Lake Michigan's Poverty Island. Behrens and his crew of four escaped
and took
refuge on Poverty Island. Pounded to pieces, the ship eventually
sank.
On November 2, 1933, Behrens filed a "Record of
Casualties to Vessel."
In it, he assigned the uninsured boat a value of $200,{1} alleged that
it
carried no cargo, and described the boat as a "total loss." He wrote
that the
Coast Guard offered assistance, which he declined, on the morning of the
stranding. No evidence shows that Behrens ever returned to salvage
the boat,
although his daughter Alice testified that he told her that he intended
to
raise money to repair it. After the wreck, Behrens purchased a new
vessel and
engaged in river salvaging, but could not afford a boat "worthy of the
lake
waters up around Poverty Island." Behrens died intestate in 1959,
survived by
several children and his ex-wife.
Years later, Steven Libert, president of Fairport
International
Exploration, Inc. ("Fairport"), learned of the legend of the sunken gold.
While researching the legend in library archives, he encountered references
to
a vessel called the "Saint Lawrence" that sank while searching for the
gold.
Libert discovered the boat's true name, the Captain Lawrence, and began
diving
off Poverty Island to recover the vessel. In 1984 and 1985, he uncovered
debris, a propeller blade, and an anchor that he believes came from the
ship.
He researched Behrens and his associates, and he tracked down Behrens's
ex-
wife and children. Libert believed that Behrens discovered the long-lost
gold
and that the Captain Lawrence contained Behrens's logbook and, possibly,
a
chest of the gold.
_________________
{1} At the time, new vessels of that size sold for $14,500.
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No. 95-1783
In 1993, Libert petitioned Michigan for permits
to dredge an area of the
lake bed in which he believes the Captain Lawrence is embedded. The
State
refused to issue the permits. In 1994, Behrens's surviving heirs
assigned
their interests in the Captain Lawrence to Behrens's daughter, Gladys Nally,
who executed a "Salvage Bill of Sale" with Fairport, assigning Libert's
corporation the exclusive right to salvage the vessel's remains.
II. Procedural History
On June 28, 1994, Fairport filed a verified complaint
in admiralty.{2}
Fairport asked the district court to declare it the sole owner of the Captain
Lawrence; to give Fairport a salvage award; to enjoin third parties from
interfering with salvage operations; and to issue an in rem arrest warrant
for
the vessel. The district court allowed Michigan to intervene.
On June 15,
1995, the district court issued an opinion and an order granting Michigan's
motion to dismiss for lack of jurisdiction.
The district court held that it lacked jurisdiction
to adjudicate claims
against States pursuant to the Abandoned Shipwreck Act of 1987 ("ASA"),
43
U.S.C. 2101-2106. The court found that Michigan proved that it
had a
colorable claim of ownership of the Captain Lawrence and, therefore, that
the
Eleventh Amendment prohibited the action against the State. To reach
this
result, the court turned to the ASA, which reads:
_________________
{2} In the verified complaint, Fairport attested that it discovered
the
Captain Lawrence in 1993, even though Libert found the artifacts in 1984
and
1985. When cross-examined, Libert explained that he could not confirm
until
1993 that the artifacts came from the Captain Lawrence. While Congress
did
not pass the Abandoned Shipwreck Act until two years after the original
discoveries, Fairport does not advance any retroactivity defense.
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No. 95-1783
(a) United States title
The United States
asserts title to any abandoned shipwreck
that is
(1) embedded in
submerged lands of a State;
. . . .
(c) Transfer of title to States
The title of the
United States to any abandoned shipwreck
asserted under subsection (a) of this section
is transferred to
the State in or on whose submerged lands the shipwreck
is located.
43 U.S.C. 2105. Preliminarily, the court held that Michigan need
not
definitively establish that it owned the vessel. Rather, interpreting
Justice
Stevens's plurality opinion in Florida Dep't of State v. Treasure Salvors,
Inc., 458 U.S. 670 (1982), the district court ruled that the Eleventh
Amendment would bar the suit if Michigan could prove that it had a "colorable
claim" to the res. The court held that a colorable claim required
Michigan to
show, by a preponderance of the evidence, that the Captain Lawrence was
embedded in submerged lands and abandoned.
After questioning whether Fairport proved that
it actually found the
ship and whether any of the recovered artifacts came from the Captain
Lawrence, the district court assumed for argument's sake that Fairport
recovered parts of the vessel. It found that the evidence proved
that the
ship was embedded in the submerged lands of Michigan. It turned to
the status
of the wreck.
The ASA does not define "abandoned." In
a statement of findings,
Congress assigns to states the responsibility of managing natural resources,
which include "abandoned shipwrecks, which have been deserted and to which
the
owner has relinquished ownership rights with no retention." 43 U.S.C.
2101(b). The district court concluded that the ASA intended "abandoned"
to
have "the traditional interpretation of that term by courts sitting in
admiralty." It held that a party may prove abandonment from circumstantial
evidence (the
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No. 95-1783
"inferential abandonment" theory) and that a party need not show that a
vessel's owner expressly renounced his claim on a ship ("express
abandonment").
The district court discussed its findings of fact,
concluding: "The
evidence, although circumstantial, clearly demonstrates Wilfred Behrens'
intent to abandon the vessel." Fairport Int'l Exploration, Inc. v.
The
Shipwrecked Vessel Known as the Captain Lawrence, 913 F. Supp. 552, 558
(W.D.
Mich. 1995) ("Fairport I"), aff'd, 105 F.3d 1078 (6th Cir. 1997), vacated,
118
S. Ct. 1558 (1998). The court relied on the following findings of
fact:
1) The boat, smashed on the rocks of Poverty Island,
now lies
under only 40-60 feet of water close to shore,
not in deep water,
and not far from land;
2) In the 1930s, technology existed to salvage
the boat;
3) Behrens did not insure the boat; he valued
it at $200, and he
called it a "total loss";
4) No evidence shows that Behrens took measurable
steps to recover
the boat, although he salvaged in rivers for years
after it sunk;
5) Behrens did not discuss the boat's location
with his family,
and he left no will disposing of the boat;
6) Until Libert approached them, Behrens's heirs
took no steps to
find or salvage the boat.
The court found that Michigan established a colorable claim by showing
by a
preponderance of the evidence that Behrens abandoned the Captain Lawrence.
Once Michigan made this showing, the court held that Michigan set forth
a
colorable claim of ownership, because a finding of abandonment implicated
the
ASA, which transfers to Michigan the shipwreck's title. The court
decided
that, "Because the State has met its burden of showing that it has a colorable
claim of interest in the vessel, this Court concludes that the Eleventh
Amendment bars this court from adjudicating the State's rights in this
vessel
. . . ." Fairport I, 913 F. Supp. at 559. It dismissed the
claim for lack of
jurisdiction.
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Fairport Intl. Exploration, Inc. v. Shipwrecked Vessel, et al.
No. 95-1783
Fairport appealed. On January 30, 1997,
a panel of the Sixth Circuit
issued an opinion affirming the district court's judgment. See Fairport
Int'l
Exploration, Inc. v. The Shipwrecked Vessel Known as the Captain Lawrence,
105
F.3d 1078 (6th Cir. 1997) ("Fairport II"), vacated, 118 S. Ct. 1558 (1998).
The opinion in Fairport II interpreted the Eleventh Amendment and the ASA
to
divest federal courts of jurisdiction over claims to embedded shipwrecks.
See
id. at 1082-83. It held that "the sole question before us is whether
the
Captain Lawrence was 'abandoned' within the meaning of the statute.
That
question, in turn, has two components: one, the substantive meaning
of the
term, and two, the proper burden of proof." Id. at 1083.
The court turned to Michigan's claim that the
district court erred when
it required Michigan to show by a preponderance of the evidence that a
ship
has been abandoned. Michigan argued that the district court need
only engage
"in a cursory review of the merits to determine if Michigan's claim was
colorable." Ibid. This court rejected Michigan's argument and
upheld the
district court. The Fairport II court adopted the reasoning of the
Ninth
Circuit in Deep Sea Research, Inc. v. The Brother Jonathan, 89 F.3d 680
(9th
Cir. 1996), amended and superseded on denial of reh'g by 102 F.3d 379 (9th
Cir. 1996), aff'd in part, vacated in part, California v. Deep Sea Research,
Inc., 523 U.S. 491, 118 S. Ct. 1464 (1998), which treated Eleventh Amendment
immunity in ASA proceedings as an affirmative defense, which a State must
prove by a preponderance of the evidence. See Fairport II, 105 F.3d
at 1084.
The court next disposed of Fairport's claim that
the district court
clearly erred when it found that Michigan proved by a preponderance of
the
evidence that Behrens abandoned the Captain Lawrence. The Fairport
I court
defined "abandonment," discussing two interpretations: one view,
embodied in
the Brother Jonathan opinion, which finds abandonment from express acts
or by
inference from circumstantial evidence ("inferential abandonment"), and
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No. 95-1783
another view, which finds abandonment only where the owner performs a "clear
and unmistakable affirmative act" of abandonment ("express abandonment").
Columbus-America Discovery Group v. Atlantic Mut. Ins. Co., 974 F.2d 450,
461
(4th Cir. 1992) (discussing abandonment under the laws of salvage and of
finds), cert. denied, 507 U.S. 1000 (1993). This court adopted the
Brother
Jonathan's approach, noting "that there is ample authority that abandonment
may, for some purposes at least, be inferred from the surrounding
circumstances." Fairport II, 105 F.3d at 1085. After ruling
that a party
could prove abandonment by inference, this court held that the district
court
did not clearly err when it found abandonment by Behrens. See ibid.
It
affirmed the judgment of the district court.
Over a year later, on April 22, 1998, the Supreme
Court decided
California v. Deep Sea Research, Inc., 523 U.S. 491, 118 S. Ct. 1464 (1998)
(unanimous opinion), the appeal from the Ninth Circuit's judgment in the
Brother Jonathan. Justice O'Connor, writing for the Court, explained
that,
where a State does not possess the vessel that is the subject of an in
rem
admiralty action, the Eleventh Amendment does not bar federal jurisdiction
over the vessel and, therefore, federal courts may adjudicate competing
claims
to the shipwrecked vessel. See Deep Sea Research, 118 S. Ct. at 1473.
The
Court vacated the judgment in the Brother Jonathan to the extent that the
"assumption that the Eleventh Amendment was relevant to the courts' inquiry"
influenced the conclusion that the Brother Jonathan was not abandoned for
purposes of the ASA. See ibid. The Court concluded, "In
light of our ruling
that the Eleventh Amendment does not bar complete adjudication of the
competing claims to the Brother Jonathan in federal court, the application
of
the ASA must be reevaluated." Ibid. The Court left to the Brother
Jonathan
district court the question whether the vessel had been abandoned, but
the
Court clarified "that the meaning of 'abandoned' under the ASA conforms
with
its meaning under admiralty law." Ibid.
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Fairport Intl. Exploration, Inc. v. Shipwrecked Vessel, et al.
No. 95-1783
Five days later, the Court granted Fairport's
petition for writ of
certioriari, vacated Fairport II, and remanded the case to this court for
reconsideration in light of Deep Sea Research. See Fairport Int'l
Exploration, Inc. v. The Shipwrecked Vessel Known as the Captain Lawrence,
118
S. Ct. 1558 (1998). Aided by amicus curiae Columbus-America Discovery
Group,
a "multidisciplinary team of scientists, engineers, historians, and
entrepreneurs devoted to exploring the deep ocean," this court now revisits
the dispute between Fairport and the State of Michigan.
III. Determining The Owner of
the Captain Lawrence
A. The Eleventh Amendment Red Herring
Under the ASA, if a State proves that a shipwreck
is embedded in the
submerged lands of the State and abandoned by its owner, title to the
shipwreck vests in the State. See 43 U.S.C. 2105(a). The
Captain Lawrence
is embedded in the submerged lands of Michigan. The district court
in
Fairport I reasoned that, if Behrens had abandoned the shipwreck, Michigan
owned the Captain Lawrence, and the Eleventh Amendment prevented the court
from refereeing an ASA dispute about ownership. Thus, the district
court
conducted a preliminary inquiry into "abandonment" to see whether the case
implicated the ASA. See Fairport I, 913 F. Supp. at 555 ("If the
State bears
its burden of showing . . . that the Captain Lawrence has been abandoned
. . .
the Court would be divested of jurisdiction to adjudicate the merits of
the
State's claim."). The court did not seek conclusively to determine
whether
Behrens abandoned the ship; rather, it ended the inquiry after finding
that
the State proved that it had a "colorable claim" to the shipwreck (i.e.,
that
a preponderance of the evidence showed that Behrens abandoned the ship).
Under this logic, once Michigan established its colorable claim, the Eleventh
Amendment prevented the court from adjudicating any dispute under the ASA.
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Fairport Intl. Exploration, Inc. v. Shipwrecked Vessel, et al.
No. 95-1783
The Supreme Court's recent decision in Deep Sea
Research rejects this
approach. That opinion definitively instructs us that, if a State
does not
possess a shipwreck, the Eleventh Amendment does not prevent a federal
court
from entertaining claims under the ASA to the shipwreck. See Deep
Sea
Research, 118 S. Ct. at 1473. The Court explicitly distinguished
past cases
on this ground. See, e.g., id. at 1471 ("In this case, unlike in
Treasure
Salvors, DSR asserts rights to a res that is not in the possession of the
State.").
In the Brother Jonathan dispute, as in Fairport
I, the district court
believed that the Eleventh Amendment barred federal jurisdiction over
shipwrecks claimed by States through the ASA's transfer of title.
The Supreme
Court vacated the Brother Jonathan opinion and remanded because the
Court
found that this evaluation of abandonment "was necessarily influenced by
the
[mistaken] assumption that the Eleventh Amendment was relevant to the courts'
inquiry." Deep Sea Research, 118 S. Ct. at 1473. It continued:
"In light of
our ruling that the Eleventh Amendment does not bar complete adjudication
of
the competing claims to the Brother Jonathan in federal court, the application
of the ASA must be reevaluated." Ibid. This implies that, because
no
jurisdictional barrier exists, the district court should conduct only one
"abandonment" inquiry, and that that inquiry does not ask a preliminary
jurisdictional question, but rather resolves whether Behrens abandoned
the
ship, and thus whether the ASA transfers title to Michigan.
The Court's reasoning in Deep Sea Research applies
to Fairport's claims.
The Fairport I district court believed that the Eleventh Amendment foreclosed
jurisdiction if Michigan indeed owned the Captain Lawrence. Thus,
the
district court dismissed the case after it found that Michigan proved,
by a
preponderance of the evidence, that Behrens abandoned his ship. Michigan
did
not possess the boat, however: the Captain Lawrence remained embedded
in the
lake bed during trial, and the State did not claim any of the artifacts
recovered
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Fairport Intl. Exploration, Inc. v. Shipwrecked Vessel, et al.
No. 95-1783
from the vessel.{3} Believing a jurisdictional bar existed if Michigan
had
title to the boat, the district court conducted only a preliminary inquiry
to
assess whether Michigan owned the vessel. Once the court decided
that
Michigan proved by a preponderance of the evidence that Behrens abandoned
the
boat, it dismissed the case without resolving the competing claims for
title.
It held that Michigan had a "colorable claim" to the Captain Lawrence under
the ASA; it did not hold that Michigan certainly owned the shipwreck.
The Supreme Court has clarified that, because
Michigan did not possess
the res, the district court should not have undertaken a preliminary Eleventh
Amendment inquiry. Rather, Michigan's claim under the ASA should
receive an
evaluation consistent with the requirements of the ASA and maritime law.
The
Supreme Court remanded the Brother Jonathan case "[i]n light of [the Court's]
ruling that the Eleventh Amendment does not bar complete adjudication of
the
competing claims to the Brother Jonathan in federal court . . . ."
Ibid. (emphasis added). Thus, we remand this case to the district
court for
complete adjudication of the competing claims to the Captain Lawrence.
We
write to guide the district court in its consideration of two issues:
the
means of proving abandonment, and the burden of proof placed upon Michigan.
_________________
{3} Deep Sea Research drew upon Civil War-era precedent to define
"possession," for purposes of the ASA, as actual (not constructive)
possession. See Deep Sea Research, 118 S. Ct. at 1472-73; see also
The Davis,
77 U.S. (10 Wall.) 15, 21 (1869) ("The possession which would do this must
be
an actual possession, and not that mere constructive possession which is
very
often implied by reason of ownership under circumstances favorable to such
implication."). When the district courts ruled in both the Brother
Jonathanand Fairport I, neither State had raised the contested ships nor
registered
them as historic sites. Nor has Michigan brought before the district
court
items recovered from the Captain Lawrence.
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No. 95-1783
B. Abandonment
Under maritime law, those who wish to raise sunken
ships are governed by
either the law of salvage or the law of finds. The law of salvage
applies
when the original owner retains an ownership interest in the ship; a salvor
receives a salvage award, but not title to the ship. See, e.g., Treasure
Salvors, Inc. v. Unidentified Wrecked and Abandoned Sailing Vessel, 640
F.2d
560, 567 (5th Cir. 1981). Where the owner has abandoned the ship,
however,
recent doctrine applies the law of finds, vesting title in the finder of
the
ship. See Columbus-America, 974 F.2d at 464; Martha's Vineyard Scuba
Headquarters, Inc. v. Unidentified, Wrecked and Abandoned Steam Vessel,
833
F.2d 1059, 1064-65 (1st Cir. 1987); Treasure Salvors, 640 F.2d at 567.
Whether the owner abandoned the ship thus determines which law applies,
and,
subsequently, who owns the ship. Intent on protecting the property
rights of
owners, admiralty courts recognize a presumption against finding abandonment.
See, e.g., Hener v. United States, 525 F. Supp. 350, 356-57 (S.D.N.Y. 1981).
The 1987 passage of the ASA altered this approach.
The ASA transfers to
a State the title to all abandoned shipwrecks embedded in the submerged
lands
of the State. See 43 U.S.C. 2105. The ASA expressly rejects
the
application of the maritime laws of salvage and finds. See 43 U.S.C.
2106(a) ("The law of salvage and the law of finds shall not apply to
abandoned shipwrecks to which section 2105 of this title applies.").
If a
diver now discovers a long-lost ship embedded in the submerged lands of
a
State, a finding of abandonment leaves the diver with neither title nor
a
salvage award (unless state law provides otherwise).
Deep Sea Research teaches that at least where
a State does not possess
the contested res a court should not engage in an Eleventh Amendment inquiry.
A separate threshold question persists: is the shipwreck abandoned?
If the
owner abandoned the ship, the ASA automatically, perhaps instantaneously,
takes title for the United States and transfers
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No. 95-1783
title to a State, resolving the legal issue and ending the court's inquiry.
If the owner did not abandon the ship, the claim to the ship does not
implicate the ASA, because the statute applies only to "abandoned" shipwrecks.
The ownership of the wreck turns on the meaning of "abandoned."
The Supreme Court remanded the Brother Jonathan
with a one-sentence
"clarification that the meaning of 'abandoned' under the ASA conforms with
its
meaning under admiralty law." Deep Sea Research, 118 S. Ct. at 1473.
Until
the 1987 passage of the ASA, admiralty courts interpreted "abandoned"
primarily when deciding whether to apply the law of salvage or of finds.
The
ASA departs from maritime law by insulating abandoned shipwrecks from the
law
of salvage and finds, see 43 U.S.C. 2106(a), although the Act did not
affect
the meaning of "abandoned," which serves as a precondition for the invocation
of the ASA's provisions.
In this court's opinion in Fairport II, we adopted
the inferential
abandonment test, which allows parties to prove abandonment even if the
original owner has not expressly renounced her claim to a vessel.
The
Fairport II court believed that the inferential abandonment test comported
with the weight of maritime authority, see Fairport II, 105 F.3d at 1084
(favorably relating the Brother Jonathan court's discussion of the test,
and
contending that "[t]his reasoning accords with the vast majority of decisions
that have discussed the issue") and sound policy reasons, see id. at 1085
("[A]pplication of [the express abandonment test] would render the ASA
a
virtual nullity."). We recognize that the legislative history of
the ASA also
supports this view. See 1988 U.S.C.C.A.N. 365, 366 ("[T]he term 'abandoned'
does not require the original owner to actively disclaim title or ownership.
The abandonment or relinquishment of ownership rights may be implied or
otherwise inferred . . . ."); id. at 373-74.
The appeals court decisions in Fairport II and
the Brother Jonathan
rejected the holding of Columbus-America
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No. 95-1783
Discovery Group v. Atlantic Mut. Ins. Co., 974 F.2d 450 (4th Cir. 1992),
which
appears to adopt the express abandonment theory. See id. at 464.
A court
following the rule of Columbus-America may find abandonment only where
it
finds "a strong actus element required to prove the necessary intent,"
id. at
461; the decision offers as an example "an owner's express declaration
abandoning title." Ibid. (quoting "T. Schoenbaum, Admiralty and Maritime
Law
15-7, at 512 (1987)"). Cases support this proposition, see, e.g.,
Hener,
525 F. Supp. at 357 ("[A] finding that title to such property has been
lost
requires strong proof, such as the owner's express declaration abandoning
title."); Wilkie v. Two Hundred and Five Boxes of Sugar, 29 F. Cas. 1247,
1247
(D.S.C. 1796) (No. 17,662), although few explain their reasoning.
We think that the apparent divergence of authority
masks a degree of
underlying agreement. A close reading of the cases reveals a uniform
concern
that courts impose a high burden on those who argue that an owner abandoned
property that sank against his will. To overcome this significant
hurdle, the
claimant may prove abandonment by inference as well as by express deed.
This
proposition finds support even from those cases cited as examples of the
doctrine of "express abandonment." See, e.g., Columbus-America, 974
F.2d at
464-65 ("Such abandonment must be proved by clear and convincing evidence,
though, such as an owner's express declaration abandoning title.
Should the
property encompass an ancient and longlost [sic] shipwreck, a court may
infer
an abandonment."); Wiggins v. 1100 Tons, More or Less, of Italian Marble,
186
F. Supp. 452, 456 (E.D. Va. 1960) ("While lapse of time and nonuser [sic]
are
not sufficient, in and of themselves, to constitute an abandonment, these
factors may, under certain circumstances, give rise to an implication of
intention to abandon."). Once these opinions recognize an exception
to a rule
of express abandonment, the question becomes after what length of years
may a
court infer abandonment; rather than draw arbitrary (time) lines separating
express from implied tests, we choose to view
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No. 95-1783
length of time as one factor among several relevant to whether a court
may
infer abandonment.
We agree that lapse of time, alone, does not necessarily
establish
abandonment, see e.g., Wilkie, 29 F. Cas. at 1247, and an owner's failure
to
return to a shipwreck site does not necessarily prove abandonment, but
we
recognize that a combination of several facts, proved clearly and
convincingly, see Part III.C infra, may support a finding that an owner
has
abandoned a shipwreck. Rigid adherence to a doctrine requiring express
abandonment would require courts to "stretch[] a fiction to absurd lengths,"
Treasure Salvors, Inc. v. Unidentified Wrecked and Abandoned Sailing Vessel,
569 F.2d 330, 337 (5th Cir. 1978), where courts encounter claims to ancient
shipwrecks with long-forgotten and undiscoverable owners. Permitting
proof by
inference reconciles maritime law's presumption against finding abandonment
with the apparently-conflicting caselaw, and it explains the decisions
upholding inferential abandonment. See, e.g., Brother Jonathan,
102 F.3d at
387-88; Fairport II, 105 F.3d at 1084-85; Moyer v. Wrecked and Abandoned
Vessel, Known as the Andrea Doria, 836 F. Supp. 1099, 1105 (D.N.J. 1993)
("Abandonment may be inferred from circumstantial evidence. Factors
such as
lapse of time and nonuse by the owner may give rise to an inference of
an
intent to abandon. Other factors include the place of the shipwreck
as well
as the actions and conduct of the parties having ownership rights in the
vessel.") (citation omitted).
Hence, we hold that a State may prove by inference
that a shipwreck last
owned by a private party is "abandoned," for the purposes of admiralty
law and
the ASA. Proof by inference still requires proof, not conjecture
a
requirement bolstered by the exacting burden of proof admiralty law imposes
on
those who allege abandonment. See Part III.C infra. We limit
our holding to
vessels formerly owned by private parties, and express no view as to the
application of the express abandonment test to vessels initially owned
by the
United States. See, e.g., United States v. Steinmetz, 973 F.2d
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Fairport Intl. Exploration, Inc. v. Shipwrecked Vessel, et al.
No. 95-1783
212, 222-23 (3d Cir. 1992), cert. denied, 507 U.S. 984 (1993); cf. United
States v. Pennsylvania & Lake Erie Dock Co., 272 F. 839, 843 (6th Cir.
1921)
(explaining that, once the government acquires title to land, it cannot
abandon it without an express congressional declaration).
C. Burden of Proof
The district court in Fairport I required only
that Michigan establish a
colorable claim to the shipwreck. The court permitted Michigan to
prove by a
preponderance of the evidence that Behrens abandoned the Captain Lawrence.
See Fairport I, 913 F. Supp. at 559. The Supreme Court disapproved
of a
similar threshold inquiry by the Brother Jonathan district court, holding
that
federal courts may engage in "complete adjudication of the competing claims"
under the ASA. Deep Sea Research, 118 S. Ct. at 1473.
When the district court revisits this case on
remand, it will not
conduct a threshold inquiry to determine whether Michigan has a colorable
claim under the ASA. Instead, it will decide whether Behrens abandoned
the
shipwreck; if he did, the ASA vests title in Michigan. If he did
not, the ASA
does not apply. Michigan may prove abandonment by circumstantial
evidence,
see supra, but Michigan must prove with clear and convincing evidence that
Behrens abandoned the ship.
The district courts in Fairport I and the Brother
Jonathan applied the
"preponderance of the evidence" standard not because admiralty law required
it, but instead because they reasoned that parties asserting an affirmative
jurisdictional defense must establish the defense by a preponderance of
the
evidence. See Deep Sea Research, Inc. v. Brother Jonathan, 883 F.
Supp. 1343,
1349 (N.D. Cal. 1995) ("[A] party asserting sovereign immunity will have
to at
least prove, by a preponderance of the evidence, that the privilege
applies."), aff'd, 102 F.3d 379 (9th Cir. 1996), aff'd in part, vacated
in
part, California v. Deep Sea Research, Inc., 523 U.S. 491,
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Fairport Intl. Exploration, Inc. v. Shipwrecked Vessel, et al.
No. 95-1783
118 S. Ct. 1464 (1998); Fairport I, 913 F. Supp at 554-54 (adopting the
Brother Jonathan court's reasoning).
The uniform rule in admiralty law is that a finding
of abandonment
requires proof by clear and convincing evidence. See, e.g., Columbus-America
Discovery Group, 974 F.2d at 467-68 ("[W]hen a previous owner claims long
lost
property that was involuntarily taken from his control, the law is hesitant
to
find an abandonment and such must be proved with clear and convincing
evidence."); Falgout Bros., Inc. v. S/V Pangaea, 966 F. Supp. 1143, 1145
(S.D.
Ala. 1997) ("Abandonment must be proven by clear and convincing evidence
. . .
."); Moyer, 836 F. Supp. at 1104-05 (requiring proof of abandonment by
clear
and convincing evidence); cf. Ries v. Thiesse, 61 F.3d 631, 631 (8th Cir.
1995) (requiring creditors to prove by clear and convincing evidence a
debtor's abandonment of a homestead).
The Fairport I and Brother Jonathan district courts
also recognized
that, if no jurisdictional defense applies, maritime law requires proof
by
clear and convincing evidence. See Brother Jonathan, 883 F. Supp.
at 1351
("Finally, the finding of abandonment must be supported by strong and
convincing evidence."); Fairport I, 913 F. Supp. at 558 (citing Columbus-
America, 974 F.2d at 468). The district courts rejected the admiralty
standard only because they applied a burden of proof appropriate for
assertions of sovereign immunity. The Supreme Court has clarified,
however,
that where, as here, a State does not possess a shipwreck, the State cannot
assert the Eleventh Amendment as a defense to the ASA action. See
Deep Sea
Research, 118 S. Ct. at 1473. On remand, the district court will
decide
whether the ASA applies, not whether the Eleventh Amendment bars the action.
The court should consider whether Michigan can prove that it owns the
shipwreck that is, whether clear and convincing evidence shows that Behrens
abandoned the Captain Lawrence. This burden of proof accords with
maritime
law and with the protection of private property rights against appropriation
by the state.
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Fairport Intl. Exploration, Inc. v. Shipwrecked Vessel, et al.
No. 95-1783
Finally, we observe that the district court must
reexamine, and
supplement if necessary, the evidence adduced in the earlier proceedings.
When the Supreme Court remanded the Brother Jonathan case, it remarked
that
the district and circuit courts' conclusion about whether the ship was
abandoned "was necessarily influenced by the assumption that the Eleventh
Amendment was relevant to the courts' inquiry." Ibid. The Court
concluded
that "the application of the ASA must be reevaluated," ibid., and we agree,
urging the district court to conduct its inquiry under the exacting standard
of clear and convincing evidence. In light of the conflicting evidence
regarding whether Behrens had access to the technology necessary to salvage
the ship, the lack of evidence concerning whether Behrens ever returned
to
Poverty Island, and the testimony regarding Behrens's intention to return,
the
district court must determine "whether the evidence is fit to induce
conviction in the minds of reasonable persons under this elevated, relatively
stringent evidentiary standard." Miller's Bottled Gas, Inc. v. Borg-Warner
Corp., 955 F.2d 1043, 1050 (6th Cir. 1992).{4}
IV. Disposition
We REMAND this case to the district court for
proceedings consistent
with this opinion. In light of our ruling, we find that Fairport's
June 29,
1998 motion for reconsideration of this court's denial of Fairport's May
20,
1998 motion to remand is MOOT.
_________________
{4} While the record might support a logical inference that Behrens
did not
intend to reclaim his ship, it also appears to support a finding that Behrens
passed away before he raised the funds to effect a salvage operation; his
lack
of overt efforts to claim the ship may comport as much with a concern for
secreting the putative gold as with an intent to abandon the ship.
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Fairport Intl. Exploration, Inc. v. Shipwrecked Vessel, et al.
No. 95-1783
________________________
CONCURRING IN PART
________________________
KAREN NELSON MOORE, Circuit Judge, concurring
in part and concurring in
the result. I agree with the majority's conclusion that under the
Abandoned
Shipwreck Act of 1987 ("ASA"), 43 U.S.C. 2101-2106, a state may rely
on
circumstantial evidence or inference to prove that a shipwrecked vessel
has
been abandoned. This result is dictated by a fair reading of the
admiralty
law precedents, to which the Supreme Court referred us in California v.
Deep
Sea Research, Inc., 118 S. Ct. 1464, 1473 (1998), and by the legislative
history. Moreover, it is clear that the state bears the burden of
proving
abandonment. Because I believe the standard of proof to be an open
question,
however, I do not concur in Part III.C. of the majority opinion.
Normally the party bearing the burden of persuasion
as to an issue in a
civil action must prove its point by a preponderance of the evidence.
See 2
McCormick on Evidence 340 (John William Strong ed., 4th ed. 1992).
The
question is whether Michigan should face a greater burden in establishing
abandonment under the ASA. The majority believes that it should
that
Michigan must prove abandonment with clear and convincing evidence.
For
several reasons I disagree.
First, there is surprisingly little case support
for the "uniform rule"
put forward by the majority. We are directed to a Fourth Circuit
case that
adopts the clear and convincing evidence standard and to several district
court opinions that follow the Fourth Circuit. For additional support
we must
turn to earlier cases and treatises that speak not of a requirement of
clear
and convincing evidence but of a need for "strong proof" of abandonment.
See,
e.g., Thomas J. Schoenbaum, Admiralty and Maritime Law 16-7, at 338 (2d
ed.
1994). To be sure, I can point to no conflicting
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Fairport Intl. Exploration, Inc. v. Shipwrecked Vessel, et al.
No. 95-1783
cases that explicitly adopt a preponderance of the evidence standard for
a
showing of abandonment. It appears to me, however, that the precedent
supporting deviation from the default standard of proof is meager.
Still, however, we must deal with the Supreme
Court's "clarification
that the meaning of 'abandoned' under the ASA conforms with its meaning
under
admiralty law." Deep Sea Research, 118 S. Ct. at 1473. Although
one could
argue that "meaning" encompasses the standard of proof and that the precedent,
albeit meager, favors something more than a preponderance of the evidence,
I
think it more likely that the Court invoked the admiralty law precedents
only
to define the substantive content of "abandonment." In other words,
we are
directed to look to the cases to determine what kind of evidence can be
used
to show abandonment. I do not think that this statement obligates
us to
derive the standard of proof from the admiralty law precedents.
Finally and most importantly, it is clear from
the statute and the
legislative history that Congress wants the states to take title to abandoned
shipwrecks embedded in state waters. Recognizing the conflicting
demands
placed on abandoned wrecks by divers, archaeologists, and salvors, Congress
passed the ASA in order to vest title and management authority in the states.
See H.R. Rep. No. 100-514(I) (1988). The statute directly transfers
title to
these shipwrecks to the states, and the legislative history indicates that
abandonment may be shown by inference as well as through express
relinquishment of title. Permitting proof of abandonment by inference,
of
course, broadens the applicability of the statute and facilitates the
achievement of Congress's goals. Although neither the statute nor
its history
addresses the standard of proof applicable to the abandonment showing,
adopting a clear and convincing evidence standard over the more typical
preponderance of the evidence standard would run counter to the expressed
intention of Congress to place title to these abandoned shipwrecks in the
hands of the states.
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No. 95-1783
Without clear direction to the contrary, I cannot endorse the adoption
of a
clear and convincing evidence standard.
Accordingly, I concur in the majority opinion
with the exception of Part
III.C. |
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