Odyssey Marine Exploration, Inc. v. the Unidentified Shipwrecked Vessel

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
SEP 21, 2011
No. 10-10269
JOHN LEY
________________________ CLERK
D. C. Docket No. 8:07-cv-00614-SDM-MAP
ODYSSEY MARINE EXPLORATION, INC.,
Plaintiff-Appellant,
versus
THE UNIDENTIFIED SHIPWRECKED VESSEL,
its apparel, tackle, appurtenances and cargo located within center point
coordinates, In Rem.
Defendant,
KINGDOM OF SPAIN,
Claimant-Appellee,
REPUBLIC OF PERU,
GONXALO DE ALIAGA,
the Count of San Juan de Lurigancho,
AGUSTIN DE ALIAGA,
the current Marques de Zalada del Fuente,
GONZALO ALVAREZ DEL VILLAR, et al.,
Claimants.
________________________
No. 10-10317
________________________
D. C. Docket No. 8:07-cv-00614-SDM-MAP
ODYSSEY MARINE EXPLORATION, INC.,
Plaintiff,
versus
THE UNIDENTIFIED SHIPWRECKED VESSEL,
its apparel, tackle, appurtenances and cargo located within
center point coordinates, In Rem,
Defendant,
GONZALO DE ALIAGA,
the Count of San Juan de Lurigancho,
AGUSTIN DE ALIAGA,
the current Marques de Zelda del Fuente,
GONZALO ALVAREZ DEL VILLAR,
IGNACIO DE COLMENARES,
the 11th Count of Polentinos,
ALBERTO EMILIO THIESSEN,
ENRIQUETA PITA DUTHURBURU,
FLORA LEONOR PERALES CALDERON DE COLMENARES,
FELIPE VOYEST,
ADELA ARMIDA DE IZCUE BAZO,
CAROLA DAIREAUX KINSKY,
ELEONORA DIAREAUX KINSKY,
MATILDE DAIREAUX KINSKY,
JULIO VEGA EURASQUIN,
INEZ MARQUEZ OSORIO,
2
JAVIER DE GOYENECHE,
the current Count of Guaqui and Marques de Villafuente,
JUAN MARIANO DE GOYENECHE Y SILVELA,
the current Marques of Casa Davila,
Claimants-Appellants,
KINGDOM OF SPAIN,
Claimant-Appellee.
________________________
No. 10-10318
________________________
D. C. Docket No. 8:07-cv-00614-SDM-MAP
ODYSSEY MARINE EXPLORATION, INC.,
Plaintiff,
versus
THE UNIDENTIFIED SHIPWRECKED VESSEL,
its apparel, tackle, appurtenances and cargo located within
center point coordinates, In Rem,
Defendant,
ELSA DORCA WHITLOCK,
f.k.a. Elsa Dorca Ruiz,
Claimant-Appellant,
KINGDOM OF SPAIN,
Claimant-Appellee.
3
________________________
No. 10-10319
________________________
D. C. Docket No. 8:07-cv-00614-SDM-MAP
ODYSSEY MARINE EXPLORATION, INC.,
Plaintiff,
versus
THE UNIDENTIFIED SHIPWRECKED VESSEL,
its apparel, tackle, appurtenances and cargo located within
center point coordinates, In Rem,
Defendant,
REPUBLIC OF PERU,
Claimant-Appellant,
KINGDOM OF SPAIN,
Claimant-Appellee
________________________
No. 10-10320
________________________
D. C. Docket No. 8:07-cv-00614-SDM-MAP
ODYSSEY MARINE EXPLORATION, INC.,
Plaintiff,
4
versus
THE UNIDENTIFIED SHIPWRECKED VESSEL,
its apparel, tackle, appurtenances and cargo located within
center point coordinates, In Rem,
Defendant,
SANTIAGO DE ALVEAR,
EMILIO DE ALVEAR,
MARIA EUGENIA SOLVEYRA,
ALEJANDRO JULIAN PERA BARTHE’,
AGUSTINA SOLVEYRA,
IGNACIO SOLVEYRA,
Claimants-Appellants,
KINGDOM OF SPAIN,
Claimant-Appellee.
________________________
No. 10-10374
________________________
D. C. Docket No. 8:07-cv-00614-SDM-MAP
ODYSSEY MARINE EXPLORATION, INC.,
Plaintiff,
versus
THE UNIDENTIFIED SHIPWRECKED VESSEL,
its apparel, tackle, appurtenances and cargo located within
center point coordinates, In Rem,
5
Defendant,
DR. JAIME DURAND PALACIOS,
Claimant-Appellant,
KINGDOM OF SPAIN,
Claimant-Appellee.
________________________
No. 10-10375
________________________
D. C. Docket No. 8:07-cv-00614-SDM-MAP
ODYSSEY MARINE EXPLORATION, INC.,
Plaintiff,
versus
THE UNIDENTIFIED SHIPWRECKED VESSEL,
its apparel, tackle, appurtenances and cargo located within
center point coordinates, In Rem,
Defendant,
JOSE ANTONIO RODRIGUEZ-MENENDEZ,
a.k.a. Joseph Anthony Rodriguez,
Claimant-Appellant,
KINGDOM OF SPAIN,
Claimant-Appellee.
6
________________________
Appeals from the United States District Court
for the Middle District of Florida
_________________________
(September 21, 2011)
Before HULL, BLACK and STAPLETON,* Circuit Judges.
BLACK, Circuit Judge:
In 2007, Odyssey Marine Exploration, Inc. (Odyssey) discovered the
remains of a 19th Century Spanish vessel in international waters west of the Straits
of Gibraltar. Odyssey filed a verified admiralty complaint in rem against the
shipwrecked vessel and its cargo in the Middle District of Florida and also sought
a warrant of arrest. The Kingdom of Spain (Spain), the Republic of Peru (Peru),
and twenty-five individuals filed claims against the res. Upon receiving additional
information about the vessel’s identity, Spain also filed a motion to dismiss. Spain
argued, without waiving its sovereign immunity, that the res was a Spanish
warship and the district court thus lacked subject matter jurisdiction over
Odyssey’s claims because the vessel was immune from judicial arrest under the
Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. §§ 1602-1611. The district
*
Honorable Walter K. Stapleton, United States Circuit Judge for the Third Circuit, sitting
by designation.
7
court granted Spain’s motion to dismiss, concluding the res was the shipwreck of a
sunken Spanish warship and was entitled to sovereign immunity. Having
determined that the res is “immune from . . . arrest” in United States courts, we
affirm. 28 U.S.C. § 1609.
I. BACKGROUND
Odyssey is a deep-ocean exploration and shipwreck recovery business. In
2006, Odyssey began what it called the Amsterdam Project, researching ships that
sank in a heavily-traveled area, which included an area off the coast of Gibraltar.
Odyssey developed a list of target vessels to search for, one of which was the
Nuestra Senora de las Mercedes (Mercedes), a Spanish vessel that sank in 1804.
According to Odyssey, it “recogniz[ed] that Spain may have had a cultural (if not
legal) interest in vessels that may be located within the Amsterdam area, [and]
invited Spain to participate in the project.” Odyssey’s Resp. to Spain’s Motion to
Dismiss, Dkt. 138 at 3. Odyssey’s CEO and counsel then met with a
representative from Spain’s Ministry of Culture. What occurred at the meeting is
disputed, but both Odyssey and Spain agree Spain did not give Odyssey approval
to salvage any sunken Spanish vessels.
In March 2007, while Odyssey was surveying the Amsterdam area,
Odyssey discovered a shipwreck in international waters 100 miles west of the
8
Straits of Gibraltar at a depth of 1,100 meters. The remains of the shipwrecked
vessel were spread over the seabed in an area 368 meters long and 110 meters
wide. Odyssey conducted a detailed survey of the shipwreck before disturbing any
artifacts on the ocean floor and then began to recover objects from the site.
Odyssey ultimately recovered approximately 594,000 coins and a number of other
small artifacts.
On April 9, 2007, Odyssey filed a verified complaint against “The
Unidentified Shipwrecked Vessel, its apparel, tackle, appurtenances and cargo” in
the Middle District of Florida. The complaint listed a possessory and ownership
claim pursuant to the law of finds (Count One), as well as a salvage award claim
pursuant to the law of salvage (Count Two).1 It also noted Odyssey’s intent to
deposit with the court for symbolic arrest in rem a small bronze block recovered
from the shipwreck.
On April 11, Odyssey filed a motion for an order directing the clerk to issue
a warrant of arrest in rem against the shipwrecked vessel, its apparel, tackle,
appurtenances, and cargo. Odyssey explained its intent to continue to recover
artifacts from the site, and the motion provided that all artifacts and objects
1
The complaint also sought a declaratory judgment that no government had the authority
to interfere with Odyssey’s exploration or recovery of the vessel. This claim is not before us on
appeal.
9
recovered would be turned over to the U.S. Marshal or to a substitute custodian
appointed by the court for symbolic arrest in rem. Upon order of the magistrate
judge, the clerk issued a Warrant of Arrest In Rem against the shipwrecked vessel
and its apparel, tackle, appurtenances, and cargo. The warrant commanded the
U.S. Marshal to take possession of the bronze block and any future artifacts
recovered from the shipwrecked vessel. The court then issued an order appointing
Odyssey as substitute custodian of the shipwrecked vessel and any recovered
artifacts “until further order of this Court.”2 Ord. Appointing Substitute Custodian
at 2.
After Odyssey published a notice of arrest, Spain filed a verified claim to
the vessel and its contents and cargo. On June 19, 2007, Spain filed a motion for a
more definite statement and for disclosure of other information identifying the
vessel and its contents. In the alternative, Spain sought an order dismissing the
complaint, vacating the arrest, and terminating Odyssey’s appointment as
substitute custodian. Spain claimed Odyssey had not complied with the
heightened pleading requirements for in rem complaints in admiralty, see Fed. R.
Civ. P., Adm. Supp. R. C(2)(b), and had failed to provide information indicating
2
The district court found Odyssey was “duly qualified to serve as the Substitute Custodian
of artifact recovered from the Defendant Shipwrecked Vessel” and had “agreed to assume the
responsibility of safekeeping the salvaged artifacts.” Ord. Appointing Substitute Custodian at 2.
10
the origin or nationality of the vessel and whether the vessel was a military ship or
other sovereign property of a foreign nation. Spain stated that such information
was relevant to the court’s subject matter jurisdiction, as the property of a
sovereign nation would be immune from arrest under the FSIA. In addition, Spain
argued the details provided in the complaint were insufficient to allow Spain to
determine whether to invoke sovereign immunity of the res from arrest.
Odyssey responded by filing an amended complaint on August 6, 2007. It
included the same in rem possessory and salvage claims as Odyssey’s original
complaint (Counts One and Two).3 The amended complaint also stated Odyssey
would present its Preliminary Site Assessment to the court under seal, and
Odyssey would release information from the assessment to Spain as directed by
the court. Odyssey claimed, however, it had “found no evidence which would
confirm the identity of a ship or an interest of Spain or any other third party in this
particular site.” Amended Compl., Dkt. 21 at 6.
On September 19, 2007, Spain filed a motion to dismiss Odyssey’s amended
complaint, claiming Odyssey’s in rem claims once again failed to meet the
3
Odyssey’s amended complaint also raised in personam claims against Spain that did not
appear in the original complaint. These in personam claims, as well as Odyssey’s declaratory
judgment claim raised in both the original and amended complaints, were later dismissed by the
district court and are not at issue in this appeal.
11
pleading requirements for admiralty actions in rem. Spain also asked the court to
vacate the arrest and terminate Odyssey’s appointment as substitute custodian.
Although the district court ultimately denied this motion, it directed Odyssey to
disclose certain information relating to the vessel’s possible identity. In response
to interrogatories from the court, Odyssey stated there was no confirmation the site
represented any specific vessel, but disclosed it was considering the possibility the
site was related to the Spanish vessel, the “Nuestra Senora de las Mercedes y las
Animas.”
Upon this disclosure, Spain claimed the Mercedes was a Spanish Royal
Navy Frigate that exploded and sank in combat in 1804 and was therefore subject
to sovereign immunity from all claims or arrest in the United States pursuant to the
FSIA. Spain accordingly filed a motion to dismiss for lack of subject matter
jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) or, in the alternative, to grant
summary judgment in Spain’s favor pursuant to Fed. R. Civ. P. 56(a). Spain
claimed it was “indisputable” the res was the Mercedes, “a warship of the Royal
Navy of Spain which is subject to immunity from Odyssey’s claims in this Court
and is not subject to salvage against the wishes of Spain.” Spain’s Mot. to Dismiss
or for Summary Judgment, Dkt. 131 at 1-2. Spain requested the Court dismiss the
claims against the res, vacate the arrest, withdraw Odyssey’s designation as
12
substitute custodian, and direct that the artifacts in Odyssey’s custody be turned
over to the custody of Spain. Odyssey responded there was insufficient evidence
to determine the res was the Mercedes, the FSIA was not a jurisdictional bar in
this case, and sovereign immunity would not bar Odyssey’s salvage claim. In
addition, Odyssey argued that if, as Spain contested, the court did not have
jurisdiction over the res, the court was without power to order the artifacts turned
over to Spain.
The possible identification of the vessel as the Mercedes brought forward a
number of additional claimants. Twenty-five claimants filed claims, arguing they
had an interest in the cargo aboard the vessel. Twenty-four of the individuals
alleged they were descendants of individuals with cargo aboard the Mercedes, and
one individual claimed an ancestral interest in any of Spain’s treasure in Florida.
In addition, Peru filed a claim contending it had sovereign rights to property
aboard the Mercedes that originated in its territory or was produced by its people.
On June 3, 2009, the magistrate judge issued a Report and Recommendation
finding the res was the Mercedes and was the property of Spain. The magistrate
judge concluded that under the FSIA the court was without jurisdiction to
adjudicate the in rem salvage and possessory claims against the Mercedes and its
13
cargo. The magistrate judge recommended the district judge grant Spain’s motion
to dismiss and direct Odyssey, as substitute custodian, to return the res to Spain.
Odyssey, Peru, and the descendant claimants objected to the magistrate
judge’s report. The United States filed a Statement of Interest as Amicus Curiae in
Support of the Kingdom of Spain. It argued the United States had a treaty
obligation to afford sunken Spanish warships the same protections and immunities
from implied abandonment and uncontested access and salvage as a sunken United
States warship would receive in United States courts.
The district court adopted the magistrate judge’s report and recommendation
in full on December 22, 2009. The district court dismissed Odyssey’s amended
complaint for lack of subject matter jurisdiction, vacated the in rem arrest, and
ordered Odyssey to return the res to Spain. The order to return the res was stayed
pending this appeal.
On appeal, Odyssey, Peru, and the twenty-five individual claimants contend
the district court erred by: (1) failing to use a Rule 56 summary judgment standard
when analyzing Spain’s Rule 12(b)(1) motion to dismiss; (2) failing to conduct an
oral evidentiary hearing before ruling on the motion to dismiss; (3) finding the res
is the Spanish warship the Mercedes and holding the FSIA grants it sovereign
14
immunity; (4) failing to distinguish between the Mercedes and the private cargo
aboard; and (5) ordering the recovered res returned to Spain’s custody.
II. STANDARD OF REVIEW
When evaluating a district court’s conclusions on a Rule 12(b)(1) motion,
“[w]e review the district court’s legal conclusions de novo and its factual findings
for clear error.” Carmichael v. Kellogg, Brown & Root Servs., Inc., 572 F.3d 1271,
1279 (11th Cir. 2009); see also Lawrence v. Dunbar, 919 F.2d 1525, 1530 (11th
Cir. 1990) (“The usual standard of reviewing a district court’s findings of
jurisdictional facts is the clearly erroneous standard.”). “As we have repeatedly
held, the ‘clearly erroneous’ standard is highly deferential.” Carmichael, 572 F.3d
at 1280. We must affirm the district court’s determination “so long as it is
plausible in light of the record viewed in its entirety.” Merrill Stevens Dry Dock
Co. v. M/V YEOCOMICO II, 329 F.3d 809, 816 (11th Cir. 2003) (quotation marks
omitted); see also Univ. of Ga. Athletic Ass'n v. Laite, 756 F.2d 1535, 1543 (11th
Cir. 1985) (“While the ‘clearly erroneous’ standard of review is less stringent than
the well-known sports rule, ‘The referee is always right,’ it nevertheless presents a
formidable challenge to appellants who . . . seek to overturn the factual findings of
a district court.”).
15
We review a district court’s decision not to hold an evidentiary hearing for
an abuse of discretion. See Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 171-
72 (5th Cir. 1994) (reviewing a district court’s failure to conduct an evidentiary
hearing on a party’s Rule 12(b)(1) motion for lack of subject matter jurisdiction
under the FSIA for an abuse of discretion).
III. DISCUSSION
A. Did the district court apply the correct standard in evaluating Spain’s
motion to dismiss?
The district court evaluated Spain’s Fed. R. Civ. P. 12(b)(1) motion to
dismiss for lack of subject matter jurisdiction under the standard applied to Rule
12(b)(1) motions asserted on factual grounds. This Court has explained that when
a party raises a factual attack to subject matter jurisdiction–as opposed to a facial
challenge based merely on the allegations in the complaint–the district court is not
obligated to take the allegations in the complaint as true. Carmichael, 572 F.3d at
1279. Instead, the “court may consider extrinsic evidence such as deposition
testimony and affidavits.” It may independently weigh the facts and is not
constrained to view them in the light most favorable to the non-movant. Id.Applying this standard, the district court weighed the facts and determined that the
res was a sunken Spanish warship over which it lacked jurisdiction. As we
16
explain in Part III. C. 1, we conclude the district court did not clearly err in its
factual determinations.
Odyssey argues the district court should not have independently weighed
the facts under the Rule 12(b)(1) standard, but instead should have evaluated the
facts under the standard applied to a motion for summary judgment under Fed. R.
Civ. P. 56. Under this standard, Odyssey asserts, the court should have viewed the
evidence in the light most favorable to Odyssey and drawn all justifiable
inferences in its favor. Odyssey argues the Rule 56 standard is necessary because
a motion to dismiss implicates the merits of the underlying claim in the case.
This Court has explained “[w]hen the jurisdictional basis of a claim is
intertwined with the merits [of the claim], the district court should apply a Rule 56
summary judgment standard when ruling on a motion to dismiss which asserts a
factual attack on subject matter jurisdiction.” Dunbar, 919 F.2d at 1530.
“[J]urisdiction becomes intertwined with the merits of a cause of action when a
statute provides the basis for both the subject matter jurisdiction of the federal
court and the plaintiff’s substantive claim for relief.” Morris v. Amway Corp., 323
F.3d 920, 926 (11th Cir. 2003) (citation and quotations omitted).
17
In this case, jurisdiction is not intertwined with the merits of the cause of
action. Although the FSIA governs the subject matter jurisdiction of the federal
courts to hear this case, Odyssey has two substantive claims for relief: an in rem
salvage claim, which is governed by salvage law; and an alternate claim of
possessory rights and ownership under the law of finds. Since the FSIA provides
only subject matter jurisdiction, and is not the basis for Odyssey’s substantive
claims, the same statute does not provide the basis for both the subject matter
jurisdiction of the court and the plaintiff’s substantive claims for relief such that
jurisdiction is intertwined with the merits of the claim. Although Odyssey
contends the motion to dismiss implicates the merits of the underlying claim, that
a lack of subject matter jurisdiction bars a party’s claim does not mean the
jurisdictional question is itself related to the cause of action. See Moran, 27 F.3d
at 172-73. Accordingly, the district court correctly applied the Rule 12(b)(1)
standard for factual challenges to jurisdiction to Spain’s motion for dismiss.
B. Should the district court have held an evidentiary hearing when ruling on
Spain’s Rule 12(b)(1) motion?
Odyssey contends the district court erred by failing to conduct an
evidentiary hearing when deciding the Rule 12(b)(1) motion. Odyssey claims it
should have been given an opportunity to orally cross examine Spain’s experts.
18
“When a party challenges subject matter jurisdiction, the court is given the
authority to resolve factual disputes, along with the discretion to devise a method
for making a determination with regard to the jurisdictional issue.” Id. at 172; see
also Land v. Dollar, 330 U.S. 731, 735, 67 S. Ct. 1009, 1011 n. 4 (1947) (“As
there is no statutory direction for procedure upon an issue of jurisdiction, the mode
of its determination is left to the trial court.”(quotation marks and citation
omitted)). When resolving factual disputes underlying a Rule 12(b)(1) motion, a
court “‘may’ consider oral evidence along with written, but an evidentiary hearing
is not required.” Moran, 27 F.3d at 173.
Both the magistrate judge and the district court had before them what the
district court referred to as “an encyclopedic treatment of the issues attendant to
this controversy.” Spain’s motion to dismiss, Odyssey’s response and Spain’s
reply were accompanied by a combined total of 125 attachments, including
affidavits of multiple historians, counter-affidavits, copies of original Spanish
documents from the Nineteenth Century with translations, photographs from the
shipwreck site, and photographs of the artifacts recovered. Further, Odyssey
introduced even more exhibits with its objections to the magistrate judge’s report,
including copies of original historical documents, translated documents, articles,
19
and excerpts from histories. Each party had a full opportunity to present evidence,
including the ability to present counter-affidavits. The district court did not abuse
its discretion by evaluating Spain’s Rule 12(b)(1) motion based on the extensive
record before it.4
C. Did the district court have subject matter jurisdiction over the res?
The Constitution empowers the federal courts to hear “all Cases of
admiralty and maritime Jurisdiction.” U.S. Const. art. III § 2, cl. 1. “‘An in rem
suit against a vessel is . . . distinctively an admiralty proceeding, and is hence
within the exclusive province of the federal courts.’” Bd. of Comm’rs of the
Orleans Levee Dist. v. M/V Belle of Orleans, 535 F.3d 1299, 1314 (11th Cir. 2008)
(quoting Am. Dredging Co. v. Miller, 510 U.S. 443, 446-47, 114 S. Ct. 981, 985
(1994)).
Although federal courts have the exclusive power to adjudicate in rem suits
against a vessel, that power is dependent on the court’s jurisdiction over the res,
the property named as the defendant. R.M.S. Titanic, Inc. v. Haver, 171 F.3d 943,
4
Odyssey claims that Chalwest (Holdings) Ltd. v. Ellis, 924 F.2d 1011, 1014 (11th Cir.
1991), requires the district court to conduct an evidentiary hearing. The Court in Chalwest held
“in a motion to dismiss for want of jurisdiction decided without an evidentiary hearing, the
plaintiff must only present a prima facie case of jurisdiction to defeat the motion where it is the
defendant’s domicile that is at issue.” Id. at 1013. No party’s domicile is at issue here.
20
964 (4th Cir. 1999) (citing Pennoyer v. Neff, 95 U.S. 714, 724 (1877), overruled in
part by Shaffer v. Heitner, 433 U.S. 186, 97 S. Ct. 2569 (1977)). “Only if the
court has exclusive custody and control over the property does it have jurisdiction
over the property so as to be able to adjudicate rights in it that are binding against
the world.” Haver, 171 F.3d at 964. Therefore, when a party files an in rem
complaint, the court issues a warrant for the arrest of the res and the res remains in
the court’s custody for the remainder of the proceedings. Crimson Yachts v. Betty
Lyn II Motor Yacht, 603 F.3d 864, 868 (11th Cir. 2010); see also United States v.
$38,570 U.S. Currency, 950 F.2d 1108, 1113 (5th Cir. 1993) (“No in rem suit can
be maintained without a valid arrest of the res by the marshal.”)
If the res at issue is the property of a foreign state, the federal courts only
have jurisdiction to arrest the res if authorized by the FSIA. See 28 U.S.C § 1609;
see also Beg v. Islamic Republic of Pakistan, 353 F.3d 1323, 1324 (11th Cir.
2003) (“Federal courts have jurisdiction to hear claims against foreign
governments only if authorized by the Foreign Sovereign Immunities Act.”).
Therefore, in order to determine if we have jurisdiction in this in rem action, we
must determine first whether the res at issue is the property of a foreign state, and
21
second, if it is, whether the federal courts have jurisdiction over the res under the
FSIA.
1. Is the res the shipwreck of the Mercedes?
Odyssey argues there was insufficient evidence for the district court to
conclude the res was the Mercedes. After an extensive review of the record, we
conclude the evidence before the district court supports its factual determination
that the res is the shipwreck of the Mercedes for the purposes of sovereign
immunity.
a. The Mercedes and its historical context
To determine whether the res is the Mercedes for the purposes of sovereign
immunity, it is necessary to first understand the history of the Mercedes and the
facts surrounding its final mission.5 The facts surrounding the demise of the
Mercedes are best understood in light of the geopolitical context of early 19th
Century Spain.
Spain and Great Britain fought as allies against revolutionary France in the
War of Convention from 1793 to 1795. In 1795, Spain signed the Peace of Basel
with France, ending the hostilities between Spain and France. While they were
5
All of the following facts are in the record before the district court.
22
technically at peace, Spain still feared French expansionism and France’s stronger
military and quickly entered into the Treaty of San Ildefonso with France on
August 18, 1796. Under the treaty, Spain pledged support to France and became
allied with France in its war against Great Britain. In 1800, Spain signed a second
Treaty of San Ildefonso, reaffirming Spain’s alliance with France. The second
treaty also included significant Spanish concessions to France, including the
cession of Louisiana by Spain to France. In March of 1802, France and Great
Britain signed the Treaty of Amiens, which effected a short-lived peace between
France and Great Britain, but did not abrogate Spain’s alliance with France.
In 1803, Spain entered into a secret agreement with France where Spain
agreed to pay France a large monthly sum equivalent to and in lieu of its military
obligation to France under the Treaty of San Ildefonso. Spain hoped this
agreement would allow it to maintain its alliance with France without provoking
the British, thereby staving off a potential French invasion of Spain. However,
Great Britain informed Spain it considered the financial support of France as
grounds for attacking Spain.
In light of its extensive monetary obligations to France and the tenuous
peace with Great Britain, Spain needed to marshal its funds and resources in
23
peninsular Spain. Spain thus utilized the peace from the Treaty of Amiens as an
opportunity to collect funds from its various Viceroyalties. The Spanish
Generalisimo of sea and land forces, Manuel Godoy, ordered warships be
dispatched to the port of El Callao in Lima, part of the Spanish Viceroyalty of
Peru, to collect and bring back to peninsular Spain specie6 and other precious
cargo. Following the Generalisimo’s orders, the Spanish Minister of the Navy
dispatched two frigates of war to Lima, the Mercedes and the Clara.
The Mercedes was built by Spanish Navy engineers in 1788 at the Spanish
Navy shipyard in Havana, Cuba. It had a distinguished naval career and took part
in multiple military missions, including fighting against the British in both the
Battle of the Cape of Saint Vincent in 1797 and in the defense of El Ferrol, Spain
in 1800. It also conducted multiple missions transporting valuable Spanish effects,
including transporting 500,000 pesos fuertes of the King and other valuables of
Spanish citizens from the Spanish Viceroyalties of New Grenada and New Spain to
peninsular Spain in 1798.
6
“Specie” is defined as “[c]oin of the precious metals, of a certain weight and fineness,
and bearing the stamp of the government, denoting its value as currency. Metallic money; e.g.
gold or silver coins.” Black’s Law Dictionary 1398 (6th ed. 1990).
24
The Mercedes and the Clara set sail for Lima on February 27, 1803, from the
Spanish naval base in El Ferrol. After stopping for repairs at the Spanish naval
base in Montevideo, in present day Uruguay, the Mercedes reached Lima on
August 7, 1803.
In Lima, the Mercedes took on board an extensive amount of specie and
other cargo, including copper and tin ingots of the Royal Treasury, products of the
Royal Revenue of Mails, proceeds of patriotic loans, ecclesiastic funds, military
payroll and tree husks. It also took aboard specie of Spanish citizens. According
to Spanish naval historians, it was an accepted practice at this time for a country to
provide military transport for private property when the transport would pass
through areas patrolled by hostile nations’ warships. In all, the Mercedes was
loaded with approximately 900,000 silver pesos, 5,809 gold pesos, and almost
2000 copper and tin ingots. The Mercedes was also loaded with two obsolete
bronze cannons, commonly called culverins. The culverins were being returned to
Spain for reuse of the bronze for other military purposes.
Shortly after the Mercedes arrived in Lima, the Viceroy of Peru was
informed the Treaty of Amiens had been abrogated and France and Great Britain
were once again at war. In light of the resumed hostilities between France and
25
Great Britain, the Mercedes’ departure from Lima was delayed. The Mercedes
ultimately left Lima on March 31, 1804, along with the Clara and another Spanish
Navy frigate, the Asuncion. The three ships stopped in Montevideo on June 5,
1804. There, the Clara and the Mercedes were placed under the command of
Royal Navy Commander General Jose de Bustamente y Guerra and joined a
squadron of two other Spanish Navy frigates, the Medea and the Fama. The
squadron thereafter consisted of four frigates: the Mercedes, the Clara, the Medea,
and the Fama.
According to the official registry of the Mercedes, when it arrived at
Montevideo its crew of 337 included eight Spanish naval officers, 63 marines, 69
artillerymen and gunners, 51 sailors, 103 sailors-in-training, and various other men
performing different jobs aboard the ship. It was also armed according to Spanish
Navy regulations for war frigates and carried 12-pounder and 6-pounder cannons,
as well as 24-pounder and 3-pounder obuses or pedreros.7
The day before the squadron left Montevideo, the second in command of the
squadron fell ill and had to be replaced. Captain Diego de Alvear, who was aboard
7
The exact number of cannons the Mercedes carried is disputed. Spain and one of
Odyssey’s experts claims the Mercedes carried 50 cannons, while another one of Odyssey’s
experts claims it carried only 33-40 cannons.
26
the Mercedes and was returning to Spain with his family, was moved from the
Mercedes to the Medea to replace the second in command. Captain Alvear’s
family, including his wife, four daughters, three sons, and one nephew, stayed
aboard the Mercedes.
The squadron set sail from Montevideo for Cadiz on August 9, 1804. On the
morning of October 5, 1804, when the Spanish squadron was only one day’s sail
from Cadiz, it was intercepted by a British squadron. Four Royal British Navy
ships, under the command of Commodore Graham Moore, had been sent by the
British Navy Admiralty to intercept Spanish warships transporting treasure back to
Spain. The Spanish frigates, having sighted the British frigates headed towards
them, assumed a combat formation. A British officer was sent aboard the Medea
and informed the Spanish that the British King had ordered the British Navy to
detain the Spanish squadron and take it to England. The Spanish refused the British
order, and what was to become known as the Battle of Cape Saint Mary soon
commenced.
Only a few minutes after the battle began, the Mercedes exploded. Captain
Alvear, whose family was aboard the Mercedes, later wrote “The Mercedes jumped
through the air making a horrible racket, covering us [on the Medea] with a thick
27
rain of debris and smoke.” Except for fifty sailors, everyone aboard the Mercedes
was killed, including Captain Alvear’s entire family. The remaining three Spanish
frigates surrendered and were taken by the British squadron to England. Partly as a
consequence of the Battle of Cape Saint Mary, Spain declared war against Great
Britain and entered into the Napoleonic Wars as an ally of France.
b. The res is the Mercedes
In this historical context, the entirety of the record evidence supports the
district court’s conclusion that the res is the Mercedes. The res was found within
the zone Spain had plotted as the likeliest area of the Mercedes’ demise, and no
other naval vessels matching the Mercedes’ type sank within that zone during the
same time period. The site, essentially a scattered debris field, is consistent with a
vessel that exploded at the surface. Moreover, the composition of the examined
sampling of coins found on the res matches that of the 900,000 mostly silver coins
aboard the Mercedes: almost all the coins are silver; they were all minted in the late
18th and early 19th Centuries and none were minted later than 1804; and they were
almost exclusively minted in Lima and Bolivia. The 17 cannons found at the site,
consisting of 6- and 12-pounder cannons, match the type the Mercedes would have
carried. The site contains at least one bronze culverin, matching the distinctive
28
cannons the Mercedes was carrying to be recycled. The site also includes large
quantities of copper and tin ingots, matching the large quantity carried by the
Mercedes, and contains copper plates like those used to sheath the hull of the
Mercedes.
Despite this evidence, Odyssey contends the artifacts recovered do not match
the cargo of the Mercedes. It points out that the Mercedes was carrying 900,000
coins and 33-50 cannons, whereas Odyssey has only recovered 595,000 coins and
seventeen cannons. We find this argument unconvincing. The failure to fully
recover all artifacts carried by the Mercedes is understandable considering the
Mercedes exploded at the surface, sank 1,100 meters, scattered over a large area,
and has been sitting on the ocean floor for more than 200 years.
Odyssey also argues the res cannot be the Mercedes because Odyssey did not
find an intact vessel. Although it is undisputed the shipwreck site does not contain
an “intact” vessel, this fact is not determinative. As one of Odyssey’s own experts
acknowledged, the site is consistent with a vessel that broke up at the surface and
descended through the water. There is evidence of an actual vessel at the site,
including copper plates like those used to sheath a hull. The site and thus the res is
a shipwreck, even though no intact vessel was found.
29
Furthermore, Odyssey acknowledged when it found the shipwreck that it was
the remains of a vessel. Odyssey filed both its original complaint against and a
motion seeking the arrest of “The Unidentified Shipwrecked Vessel, its apparel,
tackle, appurtenances and cargo.” The district court, at Odyssey’s request, issued a
warrant for the arrest of “The Unidentified Shipwrecked Vessel, its apparel, tackle,
appurtenances and cargo.” Therefore, the evidence in the record fully supports the
finding of the district court that the res is the Mercedes for the purposes of
sovereign immunity.8
2. Does the FSIA apply to the Mercedes?
As we previously noted, in order for the federal courts to have jurisdiction
over this in rem action, we must first determine whether the res at issue is the
8
The fact that the Mercedes has been sitting on the ocean floor for over 200 years does not
negate Spain’s property interest in the shipwreck. Under the 1902 Treaty of Friendship and
General Relations between the United States of America and Spain, shipwrecked “Spanish
vessels, like those belonging to the United States, may only be abandoned by express acts.” Sea
Hunt, Inc. v. The Unidentified Shipwrecked Vessel or Vessels, 221 F.3d 634, 638, 642 (4th Cir.
2000); see also Sunken Military Craft Act, Pub. L. No. 108-375, § 1406, 118 Stat. 1811, 2097
(2004) (“The law of finds shall not apply to . . . any foreign sunken military craft located in
United States waters,” and “[n]o salvage rights or awards shall be granted with respect to . . . any
foreign sunken military craft located in United States waters without the express permission of
the relevant foreign state.”); Protection of Sunken Warships, Military Aircraft and Other Sunken
Government Property, 69 Fed. Reg. 5647-01, 5648 (Feb. 5, 2004) (President Clinton’s January
19, 2001, statement that the United States “recognizes that title to a United States or foreign
sunken State craft, wherever located, is not extinguished by passage of time, regardless of when
such sunken State craft was lost at sea”). The shipwreck of the Mercedes is thus unquestionably
the property of Spain.
30
property of a foreign state, and second, if it is, whether the federal courts have
jurisdiction over it under the FSIA. The district court did not err in determining the
res is the Mercedes. It is uncontested the Mercedes is the property of Spain. We
must now determine if the district court correctly decided that FSIA immunity
applies to the arrest of the Mercedes.
a. Section 1609 provides the Mercedes with presumptive
immunity from arrest
Section 1609 of the FSIA states: “Subject to existing international
agreements to which the United States is a party at the time of enactment of this
Act the property in the United States of a foreign state shall be immune from
attachment[,] arrest[,] and execution except as provided in sections 1610 and 1611
of this chapter.” 28 U.S.C. § 1609. The Mercedes is Spain’s sovereign property
that is within the United States. While the Mercedes itself is not within the United
States, that alone does not defeat the court’s ability to obtain jurisdiction over it. A
court may have either actual or constructive possession over the res. See The Brig
Ann, 13 U.S. 289, 291 (1815). A court can exercise constructive possession over a
shipwreck when part of the shipwreck is presented to the district court. See, e.g.,
California v. Deep Sea Research, Inc., 523 U.S. 491, 494, 118 S. Ct. 1464, 1467
(1998). A salvor is thus able to bring a shipwreck found in international waters
31
constructively within a court’s territorial jurisdiction by having a portion of the
shipwreck within the jurisdiction. R.M.S. Titanic, Inc. v. Haver, 171 F.3d 943,
967-69 (4th Cir. 1999) (concluding a shipwreck found in international waters can
“constructively” be considered within the jurisdiction of the district court, although
the district court’s sovereignty over the wreck is a “‘shared sovereignty,’ shared
with other nations enforcing the same [law of all nations]”). Odyssey has deposited
parts of the Mercedes with the district court, constructively bringing the shipwreck
within the court’s territorial jurisdiction. Because this is an in rem action based on
the arrest of sovereign property, § 1609 provides the Mercedes with presumptive
immunity from arrest.
b. The Mercedes does not fall within any of the FSIA exceptions
to in rem immunity
Because § 1609 provides the Mercedes with presumptive immunity from
arrest on these facts, the only way a federal court can obtain jurisdiction is if an
exception to § 1609 applies. Odyssey has the burden of overcoming the
presumption that the Mercedes is immune from arrest. See S & Davis Int’l, Inc. v.
The Republic of Yemen, 218 F.3d 1292, 1300 (11th Cir. 2000) (“To establish
subject matter jurisdiction under the FSIA, a plaintiff must overcome the
presumption that the foreign state is immune from suit in the United States’ courts.
32
. . . In order to overcome the presumption of immunity, a plaintiff must prove that
the conduct which forms the basis of its complaint falls within one of the statutorily
defined exceptions.”) (citing Republic of Argentina v. Weltover, Inc., 504 U.S. 607,
610-11, 112 S. Ct. 2160 (1992)). If Odyssey offers evidence one of the FSIA
exceptions to immunity applies, the burden shifts to Spain to show, by a
preponderance of the evidence, that the exception does not apply. Id.Although §§ 1610 and 1611 are the only statutory exceptions to a sovereign
property’s immunity from arrest, see § 1609, Odyssey fails to invoke either of these
exceptions. Because Odyssey has failed to satisfy its burden by proving that either
§ 1610 or § 1611 applies, we would normally end the analysis at this point.
Odyssey, however, argues the Mercedes was engaged in commercial activity and is
exempt from any FSIA protection by virtue of the FSIA’s incorporation of existing
international agreements that exempt commercial vessels from sovereign immunity.
See U.S.C. § 1609 (explaining that immunity from arrest is “[s]ubject to existing
international agreements which the United States is a party at the time of
enactment.”). Specifically, Odyssey points to language in the 1958 Geneva
Convention on the High Seas stating, “Ships owned or operated by a state and used
only on government non-commercial service shall, on the high seas, have complete
33
immunity from the jurisdiction of any State other than the flag State.” Art. 9,
entered into force Sept. 30, 1962, 13 U.S.T. 2312, 450 U.N.T.S. 11.9 On its face,
this language creates an affirmative grant of immunity to vessels engaged in “non-
commercial service.” It does not, as Odyssey contends, appear to create a
commercial activity exception to § 1609's immunity to arrest. However, even if it
did, this argument fails because the Mercedes was not engaged in commercial
activity.10
The FSIA defines a “commercial activity” as: “[e]ither a regular course of
commercial conduct or a particular commercial transaction or act. The commercial
character of an activity shall be determined by reference to the nature of the course
of conduct or particular transaction or act, rather than by reference to its purpose.”
28 U.S.C. § 1603(d).11 The Supreme Court acknowledged in Weltover that this
9
Odyssey also cites to the 1926 Brussels Convention for the Unification of Certain Rules
Relating to the Immunity of State-Owned Vessels, entered into force Jan. 8, 1937, 176, L.N.T.S.
199. However, as the United States has not ratified this Convention and was not a party to it at
the time the FSIA was enacted, it would not apply under the terms of the FSIA. See 6B Benedict
on Admiralty § 8-41 (Frank L. Wiswall, Jr. ed., 7th ed. 2011).
10
Odyssey did not raise a commercial activity argument under § 1610, which provides for
exceptions from attachment for property “used for a commercial activity in the United States,”
and would thus not apply. See 28 U.S.C. § 1610. Instead, Odyssey improperly invoked
§ 1605(b)’s commercial activity exception, which as we explain in Part III. C. 2. c., also does not
apply.
11
The 1958 Geneva Convention on the High Seas does not define “commercial.”
34
definition “leaves the critical term ‘commercial’ largely undefined.” 504 U.S. at
612, 112 S. Ct. at 2165. The Supreme Court clarified that an activity is commercial
under the FSIA: “when a foreign government acts, not as regulator of a market, but
in the manner of a private player within it.” Id. at 614, 112 S. Ct. at 2166. It
elaborated:
[B]ecause the Act provides that the commercial character of an act is
to be determined by reference to its ‘nature’ rather than its ‘purpose,’
28 U.S.C. § 1603(d), the question is not whether the foreign
government is acting with a profit motive or instead with the aim of
fulfilling uniquely sovereign objectives. Rather, the issue is whether
the particular actions that the foreign state performs (whatever the
motive behind them) are the type of actions by which a private party
engages in ‘trade and traffic or commerce,’ Black’s Law Dictionary
270 (6th ed. 1990).
Id. In Guevara v. Peru, this Court explained that “[w]e read Weltover to mean that
‘[a] foreign state is commercially engaged when it acts like an ordinary private
person, not like a sovereign, in the market.’” 468 F.3d 1289, 1298 (11th Cir. 2006)
(quoting Hond. Aircraft Registry, Ltd. v. Gov’t of Hond., 129 F.3d 543, 548 (11th
Cir. 1997)).
Odyssey points to several facts suggesting the Mercedes was serving in a
commercial capacity. Specifically, Odyssey claims the Mercedes was carrying
goods and specie for freight, 75% of the cargo measured by value was privately
35
owned, private merchants were charged a 1% freight rate to ship their goods aboard
the Mercedes, and Spain was not at war when the Mercedes sunk. In addition,
Odyssey argues the Mercedes was serving as a commercial transport vessel for the
Spanish Correos Maritimos (Maritime Mail Service).
After reviewing the record evidence, we conclude the Mercedes was not
“act[ing] like an ordinary private person” in the marketplace. See id. At the time it
sank, the Mercedes was a Spanish Navy vessel. According to the 1804 official
registry of ships of the Royal Spanish Navy, the Mercedes was assigned to the
Spanish Navy fleet based at El Ferrol as one of nine frigate class ships. It was
under the command of a Spanish Navy captain both when it left El Ferrol and when
it was sunk. It delayed its departure from Lima to comply with Spanish Navy
orders to prepare for war with the British. The crew was made up of Spanish Navy
officers, sailors and marines, its armament was the standard armament of Spanish
warships, and Captain Alvear’s family and servants were traveling with official
authorization. It was also carrying a substantial amount of Spanish Government
specie and cargo, including money at the Minister of the Treasury’s disposal, war
donations, and copper and tin ingots.
36
Although the Mercedes did transport private cargo of Spanish citizens for a
charge, the transport was of a sovereign nature. According to Spanish naval
historians, providing protection and safe passage to property of Spanish citizens
was a military function of the Spanish Navy, especially in times of war or
threatened war. This function was particularly important during the late 18th and
early 19th Centuries, when ships traveling between Spain and its American
Viceroyalties had to pass through areas patrolled by hostile nations’ warships.
Therefore, the Mercedes was “act[ing] . . . like a sovereign” by transporting specie
during a time of threatened war. Guevara, 468 F.3d at 1298.12
In support of its position that the Mercedes was engaged in commercial
activity, Odyssey also contends the Mercedes was a part of the Correos Maritimos,
an official entity of the Spanish government dedicated to handling and transporting
mail. The Correos Maritimos generally consisted of small, fast and lightly armed
vessels that sailed to Spain’s overseas Viceroyalties from their home base in La
Coruna, Spain. Spain presented ample evidence the Mercedes was not part of the
Correos Maritimos, including: historical records listing the Mercedes as part of the
12
Odyssey argues the Mercedes cannot be a warship because Spain was not at war with
the British when it was sunk. Odyssey has failed to point to any law supporting this argument.
Further, this argument would negate the warship status of many sunken military vessels,
including the U.S.S. Arizona at Pearl Harbor. A country need not be at war for a sunken navy
vessel to be a warship, as countries have navies both during times of war and times of peace.
37
Spanish Navy and a warship; records listing vessels that were part of the Correos
Maritimos, which do not include the Mercedes; and records showing the Mercedes’
orders came from the Minister of the Navy rather than the Minister of State, who
controlled the Correos Maritimos. The district court did not clearly err in
concluding the Mercedes was a warship and not part of the Correos Maritimos.
Because Spain was acting like a sovereign, not a private person in the
marketplace, we conclude the Mercedes was not conducting commercial activity
and is immune from arrest under the FSIA.
c. Section 1605(b) does not apply to the Mercedes
Odyssey also attempts to circumvent § 1609 by arguing that § 1605(b),
which refers to the immunity of a foreign state from claims when a suit is brought
to enforce a maritime lien, provides this court with jurisdiction. This interpretation
is inconsistent with the plain language of the FSIA.
The FSIA establishes two broad grants of immunity, which apply to different
types of claims and are subject to different sets of exceptions. Section 1609, which
we have explained applies to Odyssey’s in rem claims, provides the property of a
foreign state with immunity from arrest, attachment, and execution and states that
exceptions are provided in §§ 1610 and 1611. 28 U.S.C. § 1609. In contrast,
38
§ 1604 provides immunity to the foreign state itself and states that exceptions are
provided in §§ 1605 to 1607. 28 U.S.C. § 1604. The structure of the statute and
the clear language of § 1609 and § 1604 thus preclude reading § 1605(b) to control
the in rem arrest in this case. See Mangattu v. M/V IBN HAYYAN, 35 F.3d 205, 209
(5th Cir. 1994) (stating the plain language of § 1609 precludes reading the
language of §§ 1605 and 1606 to control an issue of attachment). Section 1605(b)
is an exception only to the general immunity of the foreign state itself from claims
under § 1604 and thus does not apply to Odyssey’s in rem claims against Spain’s
property. 28 U.S.C. § 1604.
d. The FSIA does not contain a possession requirement
Finally, Odyssey posits the Mercedes is not immune from arrest because the
FSIA only applies when sovereign property is in the sovereign’s possession, and
Spain was not in possession of the res. This argument does not rest on any
language in the statute, but on Odyssey’s interpretation of California v. Deep Sea
Research, 523 U.S. 491, 118 S. Ct. 1464 (1998), and Aqua Log, Inc. v. Georgia,
594 F.3d 1330 (11th Cir. 2010), two cases that addressed the sovereign immunity
of a state’s property under the Eleventh Amendment. Odyssey claims these cases
39
establish a sovereign may claim immunity in an in rem admiralty action only when
the sovereign is in possession of the res.
We note first that neither of these cases contain any holding regarding the
immunity of a foreign sovereign’s property. Rather, these cases concerned state
property and the Eleventh Amendment. See Deep Sea Research, 523 U.S. at494,
507-08, 118 S. Ct. at 1467, 1473 (holding the Eleventh Amendment does not bar
jurisdiction over vessels that are not in the State’s possession and stating the case
“requires us to address the interaction between the Eleventh Amendment and the in
rem admiralty jurisdiction of the Federal Courts”); see also Aqua Log, 594 F.3d at
1335 (holding the Eleventh Amendment does not bar jurisdiction over a case where
Georgia claimed to own logs sunk at the bottom of a river that were not within
Georgia’s actual possession). Regardless of any possession requirement the courts
have imposed on a U.S. state claiming immunity of its property, there is no support
to conclude these cases alter the immunity Congress specifically provided to
property of foreign states under the FSIA.
Moreover, it is clear we look only to the FSIA to determine if any possession
requirement exists. Subject matter jurisdiction of the “lower federal courts is
determined by Congress in the exact degrees and character to which Congress may
40
seem proper for the public good.” Argentine Republic v. Amerada Hess Shipping
Corp., 488 U.S. 428, 433, 109 S. Ct. 683, 688 (1989) (quotation marks omitted).
Congress has mandated “[c]laims of foreign states to immunity should [] be
decided by courts . . . in conformity with the principles set forth in [the FSIA].” 28
U.S.C. § 1602. The Supreme Court has made clear the FSIA “provides the sole
basis for obtaining jurisdiction over a foreign state.” Amerada Hess Shipping
Corp., 488 U.S. at 443, 109 S. Ct. at 693 (emphasis added); see also Verlinden B.V.
v. Cent. Bank of Nigeria, 461 U.S. 480, 497-98, 103 S. Ct. 1962, 1973 (1983)
(stating “deciding whether statutory subject matter jurisdiction exists under the
Foreign Sovereign Immunities Act entails an application of the substantive terms of
the Act to determine whether one of the specified exceptions to immunity applies”)
(emphasis added).
An examination of the FSIA reveals no possession requirement exists in any
part of the statute.13 When Congress determined “the exact degree[] and character”
of subject matter jurisdiction over the property of foreign sovereigns under the
FSIA, it did not provide an exception to immunity for property not in a foreign
13
Odyssey asserts the FSIA contains a possession requirement in § 1605(b). As we have
previously stated, § 1605 does not apply because it is an exception to the sovereign immunity of
a foreign state provided by § 1604, whereas immunity here is granted under § 1609. See 28
U.S.C. § 1604. Regardless, an examination of § 1605(b) shows it does not impose a possession
requirement.
41
sovereign’s possession. Amerada Hess Shipping Corp., 488 U.S. at 433, 109 S. Ct.
at 688.
Finally, Odyssey, as well as Peru, cites to Compania Espanola de
Navegacion Maritima, S.A. v. The Navemar, 303 U.S. 68, 58 S. Ct. 432 (1938), as
holding a foreign government cannot claim sovereign immunity over a vessel not in
its possession.14 The Navemar was decided before the FSIA was enacted. Even if
cases prior to the enactment of the FSIA imposed a possession requirement, the
FSIA preempts any prior possession requirement. See Amerada Hess Shipping
Corp., 488 U.S. at 443, 109 S. Ct. at 693 (stating the FSIA “provides the sole basis
for obtaining jurisdiction over a foreign state”) (emphasis added); see also H.R.
Rep. 94-1487, at 12 (1976) (noting the FSIA “is intended to preempt any other
State or Federal law (excluding applicable international agreements)”). We hold
FSIA immunity applies regardless of whether the property of a foreign sovereign is
in that sovereign’s possession at the time of arrest.
D. Is the cargo aboard the Mercedes severable from the shipwreck of the
Mercedes in determining immunity?
14
We do not address whether this is an accurate representation of The Navemar’s holding.
42
Odyssey, Peru, and all twenty-five individual claimants assert that even if the
Mercedes is immune from arrest, the cargo aboard the Mercedes, and therefore the
treasure that has been salvaged from the shipwreck, is not immune. The individual
claimants argue they have a right to the cargo because they are descendants of
those who had an interest in cargo on the Mercedes, and Peru claims it has a
patrimonial interest in cargo that originated in its territory. Together, they argue
the treasure is not immune because the cargo aboard the Mercedes is private
property that is severable from the shipwreck. Indeed, Peru’s and the individual
claimants’ entire arguments regarding their rights to the treasure are premised on
the notion that the cargo, not the shipwreck, is the relevant res.
No party has pointed us to any case or statute that directly answers the
question of whether cargo aboard a sunken military vessel is entitled to the same
sovereign immunity as the sunken vessel. None of the cases cited by Odyssey in
support of its argument that cargo is separate from a vessel concern cargo aboard a
sunken military vessel.
As we discuss below, we are persuaded that in the context of a sunken
Spanish military vessel, the cargo and the shipwreck are interlinked for immunity
purposes. Two reasons support this conclusion: first, other statutes governing
43
shipwrecks, including the Sunken Military Craft Act (SMCA), Pub. L. No. 108-
375, §§ 1401-08, 118 Stat. 1811, 2094-98 (2004), which would govern the salvage
claims against the Mercedes, treat cargo as part of the shipwreck; and second, the
principles of comity discussed in the Supreme Court’s decision in Republic of the
Philippines v. Pimentel, 553 U.S. 851, 128 S. Ct. 2180 (2008), lead us to consider
the potential for injury to the interest of the sovereign.
1. Cargo treated as part of the shipwreck
In 1902, the United States and Spain signed a treaty mandating “[i]n cases of
shipwreck . . . each party shall afford to the vessels of the other, whether belonging
to the state or to individuals, the same assistance and protection and the same
immunities which would have been granted to its own vessels in similar cases.”
1902 Treaty of Friendship and General Relations Between the United States of
America and Spain, art. X, July 3, 1902, 33 Stat. 2105. Under this treaty, the
United States must afford the Mercedes, as a shipwrecked Spanish warship, the
same protection it would give a shipwrecked United States military vessel.
The United States considers the cargo of a shipwrecked U.S. military vessel
part of the shipwreck and gives it the same immunities as the shipwreck. Under the
SMCA, the rights, title and interest of the United States in any sunken military craft
44
are protected absent an “express divestiture of title.” § 1401, 118 Stat. at 2094.
The definition of a “sunken military craft” includes a sunken warship or other
military vessel, as well as “all or any portion of . . . the associated contents of a
craft.” § 1408(3)(C), 118 Stat. at 2098. “Associated contents” are defined as “the
equipment, cargo, and contents of a sunken military craft that are within its debris
field . . . [and] the remains and personal effects of the crew and passengers of a
sunken military craft that are within its debris field.” § 1408(1), 118 Stat. at 2097
(emphasis added). Thus, under the 1902 treaty, the Mercedes and its cargo are
entitled to the same immunities provided by the SMCA.
Treating the cargo as part of the shipwrecked Mercedes is also consistent
with the Abandoned Shipwreck Act (ASA), Pub. L. 100-298, § 2102(d), 102 Stat.
432 (1988). Under the ASA, the Federal Government asserts and transfers title of
any “abandoned shipwreck” to the state in whose submerged lands the wreck is
embedded. Like the SMCA, the ASA defines “shipwreck” as “a vessel or wreck,
its cargo and other contents.” Id. (emphasis added); see also U.S. Dep’t of Interior,
National Park Service Abandoned Shipwreck Act Guidelines, 55 Fed. Reg. 50116-
01, 50121 (Dec. 4, 1990) (“Any cargo aboard a vessel entitled to sovereign
immunity also generally remains the property of the flag nation unless the cargo
45
had earlier been unlawfully captured by that nation.”). Therefore, under the ASA,
the cargo that was aboard the Mercedes would not be considered separate from the
shipwreck.15
While the SMCA and the ASA do not state cargo is part of the vessel for
immunity purposes, they show the protections awarded to a sunken sovereign
vessel also extend to the cargo aboard that vessel. As evidenced by the SMCA,
those protections are heightened when the sunken vessel is a military vessel. We
grant the cargo on a sunken Spanish military vessel the same sovereign immunity
protection we grant the vessel.
2. The promotion of Spain’s comity interest
Granting the cargo on a sunken Spanish military vessel the same sovereign
immunity protection as the vessel is also consistent with the heightened protection
15
In addition, a site where the remains of a vessel are strewn on the ocean floor is still a
shipwreck even if an intact vessel no longer remains. Our conclusion is based on the plain
meaning of “shipwreck,” which is defined as “a ship’s wreckage.” See Black’s Law Dictionary
1504 (9th ed. 2009) (citing 4 James Kent, Commentaries on American Law at 323 n. (b) (George
Comstock ed., 11th ed. 1866) (stating a shipwreck includes a vessel which “is dashed to
pieces”)). Under its plain definition, a shipwreck covers not only a sunken intact vessel, but also
a vessel that was “dashed to pieces” or exploded at the surface and then sank to the ocean floor.
Our plain-meaning interpretation of “shipwreck” is supported by statutory definitions.
Furthermore, Odyssey filed both its original complaint against and a motion seeking the
arrest of “The Unidentified Shipwrecked Vessel, its apparel, tackle, appurtenances and cargo.”
The district court, at Odyssey’s request, issued a warrant for the arrest of “The Unidentified
Shipwrecked Vessel, its apparel, tackle, appurtenances and cargo.”
46
we grant sovereigns when there is a potential of injury to the sovereign’s interest.
In Pimentel, the Republic of the Philippines and a sovereign Filipino Commission
were dismissed as defendants in an interpleader action pursuant to the FSIA. 553
U.S. at 859, 128 S. Ct. at 2186. The action concerned various parties’ claims
against assets in a Merrill Lynch brokerage account, which included funds
allegedly illicitly obtained by an ex-President of the Philippines. Id. at 857, 128 S.
Ct. at 2185. After the Philippines and the Commission were dismissed, the district
court awarded the assets to another party, reasoning the Philippines’ and the
Commission’s claims against the assets had so little likelihood of success on the
merits that the action could proceed without them. Id. at 860, 128 S. Ct. at 2187.
The Supreme Court reversed, concluding that when a sovereign that is a required
party in an interpleader action asserts sovereign immunity and raises non-frivolous
claims, “dismissal of the action must be ordered where there is a potential for injury
to the interest of the absent sovereign.” Id. at 867, 128 S. Ct. at 2191. The Court
explained that in failing to dismiss the action, the district court failed to give full
effect to sovereign immunity and the promotion of the comity interest that
underlies that doctrine. Id. at 865-66, 128 S. Ct. at 2190. It stated the “Republic
and the Commission have a unique interest in resolving the ownership of or claims
to the [] assets,” and a “specific affront [] could result to the Republic and the
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Commission if the property they claim is seized by the decree of a foreign court.”
Id. at 866, 128 S. Ct. at 2190.
While Pimentel is factually distinguishable, we find its reasoning instructive.
The same “promotion of the comity interest” that led the Supreme Court to dismiss
the action in Pimentel compels this Court to treat the cargo and the Mercedes as
one for sovereign immunity purposes. Id. There is an undeniable potential for
injury to Spain’s interest if we separated the Mercedes from its cargo and upheld an
arrest of the cargo found and salvaged from a warship that is entitled to immunity.
The silver coins and all other artifacts Odyssey has salvaged and flown to Tampa
came from the Mercedes. While various parties may have cognizable claims
against parts of the recovered res, even by Odyssey’s own estimate approximately
25% of the cargo, measured by value, was Spanish government property.
Moreover, Spain has an even greater interest in the sovereign immunity of its
sunken warships. Thus, the FSIA immunity from in rem suits in U.S. courts given
to the Mercedes applies to the shipwreck as a whole, including the cargo, even if
such cargo was owned by private individuals or has been salvaged from the
wreck.16
16
We do not hold the recovered res is ultimately Spanish property. Rather, we merely
hold the sovereign immunity owed the shipwreck of the Mercedes also applies to any cargo the
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Because the cargo aboard the Mercedes is treated as part of the shipwreck of
the Mercedes for sovereign immunity purposes, the Mercedes’ immunity precludes
Peru’s attempt to institute an action in United States courts against any part of the
Mercedes or any cargo it was carrying when it sank. This applies whether or not
Peru has a patrimonial interest in the cargo. This also applies to the claims against
the res by the twenty-five individual claimants.17
E. Did the district court err when it ordered the res released to the custody of
Spain?
The district court vacated the arrest and ordered Odyssey, as the substitute
custodian, to return the recovered res to Spain. Odyssey argues this order serves as
a substantive ruling on the merits that is beyond the district court’s power because
the court lacks subject matter jurisdiction. Odyssey contends the court is only
empowered to return the parties to their positions prior to the arrest of the res and,
therefore, the recovered res should be returned to Odyssey because Odyssey was in
possession of the res immediately prior to the arrest. It argues the district court’s
Mercedes was carrying when it sank.
17
This holding is limited to the facts in this case, where the cargo was found aboard a
sunken active duty Spanish military vessel and was legally placed aboard the vessel.
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order “transferred” the property from Odyssey to Spain, which the district court had
no authority to do. We disagree.
When this action was initiated, Odyssey filed a motion for an order directing
the clerk to issue a warrant of arrest in rem against the shipwrecked vessel, its
apparel, tackle, appurtenances, and cargo. Odyssey stated “[a]ny further artifacts
recovered from the Defendant Shipwrecked Vessel will be recovered under the
jurisdiction of this Court, and will be within the actual and/or constructive
possession of this Court or its duly-appointed substitute custodian during the
pendency of this action.” Odyssey’s Verified Complaint in Admiralty In Rem at 4-
5, Dkt. 1. The court issued a Warrant of Arrest In Rem against the shipwrecked
vessel and its apparel, tackle, appurtenances, and cargo. The warrant commanded
the U.S. Marshal to take possession of the res and any future artifacts recovered
from the shipwrecked vessel. The district court appointed Odyssey as substitute
custodian of the shipwrecked vessel and any recovered artifacts “until further order
of this Court.” Ord. Appointing Substitute Custodian at 2, Dkt. 8.
By virtue of the issuance of the arrest warrant, the court is currently in
possession of approximately 594,000 recovered coins and other artifacts. It
necessarily follows that the court, after determining the res was immune from
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arrest, must have the ability to release the res from its custody. A contrary
conclusion would lead inexorably to court custody in perpetuity. We have
determined the arrest of the recovered res must be vacated, and therefore the
district court must now release the property.
The Fed. R. Civ. P. Supplemental Admiralty Rules provide little instruction
on how a court should release previously arrested property when the court does not
have subject matter jurisdiction over the property. Supplemental Rule E(5)(d)
states “the property arrested shall be released only by order of the court, on such
terms and conditions . . . as the court may require.” The rule does not state to
whom the res should be released, only that it should be released according to the
“terms and conditions” best seen fit by the court.
We note, the release from custody sought by Odyssey would not, as Odyssey
contends, return matters to the status quo at the commencement of this suit. The
U.S. Marshal seized the res approximately one month after Odyssey discovered the
site in March of 2007. Odyssey continued recovery operations after the order of
arrest. While Odyssey may have had prior custody of some items from the site, the
remainder of the recovered res was received in Odyssey’s capacity as custodian for
and under the authority and protection of the court.
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Moreover, releasing the res to the custody of Spain is not, as Odyssey
attempts to characterize it, a “transfer.” Odyssey holds the res as a substitute
custodian of the district court; the res remains in custodia legis (in the court’s
possession). By ordering Odyssey, as substitute custodian, to release the res into
Spain’s custody, the court is relinquishing its control of the res and releasing it to
the party that has a sovereign interest in it. Further, Spain’s sovereign interest in
the res existed before Odyssey initiated this action and deposited the parts of the
res it had salvaged from the shipwreck.
In fact, releasing the res to Odyssey rather than Spain would be inconsistent
with Spain’s rights under the 1902 Treaty of Friendship and General Relations
between the United States of America and Spain. As discussed previously, this
treaty requires the United States to extend to Spanish shipwrecked vessels the
same protection and immunities afforded to its own shipwrecked vessels in similar
circumstances. 1902 Treaty of Friendship and General Relations Between the
United States of America and Spain, art. X, July 3, 1902, 33 Stat. 2105. The
United States protects its sunken warships from unauthorized private party access
and possession. See SMCA, §§ 1402(b), 1408, 118 Stat. 2094. Thus, the 1902
Treaty requires the Mercedes be afforded the same protection and immunities from
unauthorized access and salvage.
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Finally, the Supreme Court’s reasoning in Pimentel, which led us to
conclude the cargo recovered from the Mercedes must receive the same sovereign
immunity protection as the Mercedes itself, also supports our decision to affirm
the district court’s order to release the res into Spain’s custody. The Supreme
Court noted the “specific affront that could result” to a foreign state “if property
they claim is seized by the decree of a foreign court.” Pimentel, 553 U.S. at 866,
128 S. Ct. at 2190. The same affront would result here if the res, which the
district court improperly arrested, was then released to Odyssey. This would force
Spain to file suit against Odyssey to retrieve property that is protected by Spain’s
sovereign immunity.
For the foregoing reasons, the district court did not err when it ordered
Odyssey to release the recovered res to the custody of Spain.
IV. CONCLUSION
We AFFIRM the district court’s grant of Spain’s motion to dismiss.
AFFIRMED.
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