Florida Department of State v. Treasure Salvors, Inc.

PETITIONER:Florida Department of State
RESPONDENT:Treasure Salvors, Inc.
LOCATION:Former land of Valley Forge General Hospital

DOCKET NO.: 80-1348
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 458 US 670 (1982)
ARGUED: Jan 20, 1982
DECIDED: Jul 01, 1982

ADVOCATES:
David Paul Horan – Argued the cause for the respondent
Susan Gamble Smathers – Argued the cause pro hac vice for the petitioner

Facts of the case

Immediately after Treasure Salvors, Inc. (“Treasure”) located a 17th-century Spanish wreck of its coast, Florida claimed ownership of the remains. Treasure contracted with the Florida Division of Archives (“Archives”) to salvage the wreck in exchange for 75% of the recovered artifacts’ appraised value. Meanwhile, in the unrelated proceedings of United States v. Florida, the United States won a judgment granting it ownership of the lands, minerals, and other natural resources in the area of the Spanish wreck’s discovery. Upon learning of this ruling, Treasure sought a declaration of title to the wreck. Following a second favorable appellate decision, Treasure sought and received a warrant to seize all artifacts from the Archives. Florida challenged the warrant and its issuing district court’s jurisdiction, but lost on both counts. On appeal from an unfavorable appellate ruling, the Supreme Court granted Florida certiorari.

Question

Does a district court’s issuance of a property seizure warrant against a state violate the Eleventh Amendment?

Warren E. Burger:

We will arguments next in Florida against Treasure Salvors.

Mrs. Smathers, I think you may proceed when you’re ready.

Susan Gamble Smathers:

Mr. Chief Justice, and may it please the Court:

It is respectfully submitted that the central issue involved in this petition is whether the federal courts below exceeded the bounds of their constitutional authority attesting the validity of an apparently sufficient contract which was the basis for the state’s assertion of sovereign immunity under the Eleventh Amendment.

We submit that the court’s authority is limited to determining whether the state has an genuine interest in the subject matter of a dispute, and that once the state’s interest is demonstrated, even though there may be defenses that may be asserted in another forum, that the inquiry of the federal court should cease.

This Court does not sit today to decide the merits of the parties’ contractual dispute; rather, the people of the State of Florida deserve to have a dispute over the ownership of historic artifacts, on display in many instances in their state museum, decided in a state court which is fully equipped to hear the issue and which, it must be assumed, can reach a decision which meets the ends of justice.

Briefly, the facts are in 1622 a flotilla of 28 Spanish ships was proceeding through the Florida straits and encountered a hurricane.

Eight of the ships were lost.

One of the ships, which was not subsequently recovered by the Spaniards, was the Nuestra Senora de Atocha.

She went down with a precious metal cargo as well as a vast amount of artifacts from the 17th century which today may be worth as much as $400 million.

Certainly the archaeological significance of those artifacts could have no price tag put on them.

In 1971 under the authority of Florida’s antiquities legislation the State of Florida Department of State entered into a contract with Respondents to search for and later recover the remains of the Atocha.

Under the contract the state was to retain 25 percent of the artifacts recovered, and the Respondents were to be paid in kind for their services consisting of 75 percent of the artifacts.

Then in March 1975 United States v. Florida was handed down which re established Florida’s boundaries for purposes of the Submerged Lands Act.

It was at this point that Respondents filed an in rem complaint in admiralty in the Southern District of Florida for possession and confirmation of title to the remains of the Atocha.

What is important for this Court to understand was that Respondents’ in rem complaint sought possession and title to the unidentified remains of a vessel which were scattered below on the ocean floor.

The artifacts in dispute in today’s action were not in dispute in that case.

Florida was not a party to that proceeding.

Why was Florida not a party to it?

Susan Gamble Smathers:

Well, Your Honor, at that time–

There was a conscious decision not to intervene on the part of the state.

Susan Gamble Smathers:

–That’s right.

It was a policy decision.

Certainly the state recognized that their authority to continue exercising jurisdiction in those waters was drawn seriously in question.

It was convenient to get the United States in.

Susan Gamble Smathers:

Certainly.

The United States did intervene in that proceeding and claimed ownership of the wreck under the Federal Antiquities Act and the Abandoned Properties Act.

There had never before this time been any dispute between the United States and Florida as to who could exercise ownership or control of these artifacts.

The United States intervened, as I said, and claimed ownership under the Antiquities Act and the Abandoned Properties Act.

Did the United States intervene at the behest of the State of Florida?

Susan Gamble Smathers:

As far as I know, Your Honor, they did not.

Certainly–

You can’t give me an assurance as to that answer, however.

Susan Gamble Smathers:

–Well, I would say no.

I will say that all of the parties, including the Respondents, met in Washington sometime before the initiation of these suits to talk about the wrecks, to talk about who would own them and to try to work out some agreement over who could salvage the wrecks.

At some point that broke down and Respondents filed their complaint in rem in the Southern District Court for possession and title.

But as I say, that in rem complaint sought ownership of that which had not even been raised yet.

The ownership of these artifacts was not in question in that proceeding.

Florida, at that point having made a decision no longer to exercise jurisdiction in that area, did not intervene in the proceeding because the artifacts under which possession had already passed to the state and were in fact being worked on in the state laboratory, in some cases already on display, those artifacts were not in dispute.

And how did they come into the possession of the states, Mrs. Smathers?

Susan Gamble Smathers:

They came into possession under the contracts in which both parties agreed at that time that the Atocha lay on sovereignty submerged lands owned by the State of Florida.

So this is only that portion which to that time had been recovered?

Susan Gamble Smathers:

That is right, Your Honor.

And the state got 25 percent and Respondents kept 75 percent of it?

Susan Gamble Smathers:

That’s right.

You say in the original libel the artifacts which had been distributed to Florida or were to be distributed to the State of Florida were not… their title was not challenged?

Susan Gamble Smathers:

No, Your Honor.

And, in fact, the Fifth Circuit when it affirmed that case or affirmed the trial court holding as between Treasure Salvors and the United States, expressly held that we do not approve that portion of the trial court’s order which held that Respondents had title against all the world.

We do not address any rights of ownership as to parties which are not before us.

And that’s very clear in their opinion.

Could I follow through on your answer to Justice Brennan?

Susan Gamble Smathers:

Certainly.

He asked whether the Respondents kept 75 percent.

Wasn’t there a time when the State of Florida had possession of all of them?

Susan Gamble Smathers:

No, Your Honor, unless by the fact that the Respondents were a contracting party with the state.

By virtue that the State of Florida was their principal I suppose you could say that we had possession of all of them.

However, the state had an agent on board the vessel at the time that all of these artifacts were recovered, and divisions were to be conducted under the contracts at different times, periodically at mutually agreed upon times.

Is there not an implication in the papers, however, that Florida’s release of 75 percent of them was with some reluctance?

Susan Gamble Smathers:

There may be that allegation, Your Honor, but it’s strongly contested by the state.

We undertook the divisions, as we do today, with 15 other salvage companies working off the coast.

Susan Gamble Smathers:

There’s no dispute.

It’s in the contract.

The parties each choose an appraiser, and they each choose a third.

Artifacts are given a point value.

The most valuable artifact gets a high point value; the lowest value gets a low point value.

Everything else is put in between, and the 75/25 split is made on that basis.

I have one more question, and it may be irrelevant to your basic legal argument, but there is an inference also in the papers that the contract was made under threat of arrest.

Is this correct?

Susan Gamble Smathers:

Well, certainly at that time it was the State of Florida’s belief that they had absolute control and ownership over that area, and if Respondents were found to have been salvaging in an area without a contract, yes, they would have been arrested.

That was the law.

And you think it’s a valid contract then.

Susan Gamble Smathers:

I think that whether or not it’s a valid contract should be decided in a state court.

We have a vast amount of contract jurisprudence in the State of Florida which a state court is certainly willing and able to decide.

And this was a dispute… if the basis of the parties’ dispute was a recision of the contract based on a mistake of fact or it could be argued a mistake of law, then that dispute is certainly to be determined in a state court.

May I ask a question at this point?

With respect to those artifacts that are in Florida’s possession is it Florida’s position that those belong entirely to the state or they’re to be shared 75/25?

Susan Gamble Smathers:

No.

That is their share.

They only have 25 percent of the artifacts which they recovered pursuant to four years of contracts with the Respondents.

I’m still not sure I understand what you’re telling me.

You’re saying that those which they have in their possession represent 25 percent of the total, is that it, and therefore–

Susan Gamble Smathers:

Twenty-five percent of what had been recovered up to that time, yes.

–Of those which were originally delivered to Florida, Florida has only retained 25 percent of those.

Susan Gamble Smathers:

That is absolutely correct.

Has Florida instituted any litigation in state courts to resolve any of these issues?

Susan Gamble Smathers:

No, they have not, although it has been contemplated and in fact gone so far as to have complaints drawn up.

They have not to date.

But nothing has been filed.

Susan Gamble Smathers:

No.

And what is the relative proportion of what’s been recovered and is in Florida’s possession as opposed to what remains… I guess some is still in the ocean, isn’t it?

Susan Gamble Smathers:

Oh, yes.

What percentage has been recovered?

Susan Gamble Smathers:

Well, the parties differ on their assessment of the value.

It could be as much as $13 million.

It could be $2 million.

Certainly, as I have stated–

You mean still in the ocean?

Susan Gamble Smathers:

–No.

What is in dispute today.

What is in dispute.

Well, what is the value of what remains?

Susan Gamble Smathers:

The total, including what’s in dispute today as well as that which is still in the ocean, could be as much as $400 million.

So that the major portion of what may have been on the Spanish ship is not in dispute here.

Susan Gamble Smathers:

That’s right.

And Florida has made no claim to that either in the state court or elsewhere.

Susan Gamble Smathers:

Not yet.

Well, the contract, I gather, covers that, too, doesn’t it?

The contract Florida made with Respondents covers, does it, what’s still in the ocean?

Susan Gamble Smathers:

Well, the parties quit dealing in 1975 right after U.S. v. Florida came down.

Are you telling me then that what’s still in the ocean is not subject to the contract?

Susan Gamble Smathers:

That’s right.

I see.

Susan Gamble Smathers:

Treasure Salvors, the Respondents, have continued to work on the wreck site, and what they brought up is presumably in their possession.

But if the argument you make in the last part of your brief is valid, Florida would have a claim to all that, wouldn’t it?

Susan Gamble Smathers:

Your Honor, we make that argument to show that at least we had a colorable claim to those artifacts, at least it didn’t deserve to be dismissed in so cavalier a fashion as to say well–

Well, but apparently notwithstanding the immense amount of value there, it’s not a claim that has enough merit to have persuaded you even to institute a lawsuit to assert it.

Susan Gamble Smathers:

–It was a policy decision made by the state at that time, made by the administration of the Department of State not to pursue it until the issue had been clearly settled.

We would argue that under the Submerged Lands Act that… or at least we could make the argument that the Submerged Lands Act applies to natural resources and that the state may in fact be able to continue to exercise jurisdiction in those waters.

Aren’t you a little worried about whether you do have… that that is in your waters?

Susan Gamble Smathers:

Certainly, but that’s not what’s in dispute in this case.

Is that why you didn’t file the lawsuit?

Susan Gamble Smathers:

That is exactly right.

I concede that there is a question as to whether the Atocha lies in Florida waters or not, but I would also make the argument that these parties contracted on the basis of the state’s constitutional boundaries as they were in 1868 when Florida was readmitted to the Union, which boundaries Congress approved in order to be readmitted, and that it was the Submerged Lands Act which has some very specific language that compelled the Special Master to draw an insular pocket of jurisdiction around the Dry Tortugas Islands and then to draw a line over here around the end of the Keys, and to hold that under the Submerged Lands Act that Florida could not own the land in between those two pieces of territory because of the three mile three league provision in the Submerged Lands Act.

But the boundaries is not something that we dreamed up for purposes of salvaging the Atocha; in fact, the state’s constitution today, if you look at a geodetic map it’s going to show that the state’s boundaries go all the way from the Marquesas Keys all the way and including the waters in between the Marquesas and the Dry Tortugas, which is where the Atocha is found.

May I ask one other question?

Supposing your maritime people who were going to make the arrests before this whole thing got started went out and used self help to go start taking some of these things off the bottom of the ocean themselves, and your adversaries then sought an injunction to force them to stop.

Would you have an Eleventh Amendment defense to that injunction action?

Susan Gamble Smathers:

I would think that under Alabama v. Pugh we would have a defense if the State of Florida was the party or if the State of Florida Department of State was a party.

Had it been an injunction against a specific official, perhaps under many cases in this Court it would lie.

However, the contract entered into by these parties was between the State of Florida Department of State and the Respondents.

It wasn’t entered into by the Secretary of State or by the Director of the Division of Archives.

And I think that what the court has held below, or it certainly could be construed in the future to hold that if a party wants to rescind a contract or if they want to question the state’s title to property, that they can now go into federal court and do that if they win or if the federal court is persuaded that they may have the more persuasive argument.

But under the Eleventh Amendment we have a right to assert a losing argument in state court.

And Judge Rubin below in dissent expressed it very well when he said that the rule now of the majority is that suits against the state are permitted by the Eleventh Amendment if the result is that the state loses.

I think that’s going much further than any of the cases of this Court have indicated.

And certainly in the Edelman decision, while these facts are not covered by the Edelman decision, Edelman did state that the Eleventh Amendment declares a policy of such compelling force that it is an explicit limitation on federal courts.

And in light of that thinking and that policy we think that the court in this case overstepped the bounds of its inquiry.

The court below justified its position that the Eleventh Amendment did not apply to the dispute based upon its reading of a 1921 decision In re New York, and the court below took this decision to mean that the Eleventh Amendment is merely a rebuttable presumption which may be defeated upon a showing of facts that it believed can refute a claim of state ownership of property.

In re New York held that the verified suggestion of ownership filed by New York’s Attorney General as to state ownership of a tugboat in that case was sufficient evidence of state ownership to trigger the Eleventh Amendment, at least in the absence of a special challenge.

It was the special challenge language that allowed the Fifth Circuit to infer that had the plaintiff in that case presented a genuine controversy as to the ownership of the tugboat that the court would have been obliged to take jurisdiction and hear the case.

We submit that In re New York holds, and it is the state of the law, that a court may initially examine a claim of state involvement to determine whether a state’s being genuinely sued in a case; but that once the state’s presence is discovered, the suit must be dismissed for lack of jurisdiction.

We would also submit that the reasoning, this rebuttable presumption argument, simply begs the jurisdictional question in the most fundamental way, since all it does is allow the plaintiff to reassert his position on the merits, the Eleventh Amendment notwithstanding.

Are you familiar with United States v. Lee?

Susan Gamble Smathers:

Yes, Your Honor.

If the defendants in that case had been state officials and the issue was the title to state property would the case have come out differently?

Susan Gamble Smathers:

I think that is possible.

I think that–

Possible.

So why isn’t U.S. v. Lee relevant here?

Susan Gamble Smathers:

–Because in this case–

Is it because it’s just a sovereign immunity case, or is it–

Susan Gamble Smathers:

–The reason U.S. v. Lee is not applicable is because the order to show cause, the trial court’s final judgment, as well as the Fifth Circuit, was against the State of Florida.

And under Alabama v. Pugh, this Court thought it important enough to dismiss the State of Alabama where an injunction was sought against it even where it was argued that the–

–So the Fifth Circuit didn’t take the way out that this was just against state officials.

Susan Gamble Smathers:

–No.

They said even if it’s against the state, the Eleventh Amendment doesn’t bar it because at the outset you have a jurisdictional question, namely the merits.

Susan Gamble Smathers:

That’s right.

What the majority holds is that the state must defend an action to rescind a contract in order to prevail on the question of Eleventh Amendment immunity.

It’s one thing to determine… to inquire into your jurisdiction and to see whether the state’s genuinely a party or to determine whether there’s even a contract that exists.

But once we came into court with a contract in our hand, if you please, and the possession of the artifacts already in the state museum, I would submit at that point it was obvious that the state was very involved and very interested in the litigation, and that the suit should have been dismissed to a state court which could hear the issue.

The majority, as I’ve stated, also used its jurisdiction to determine jurisdiction analysis, the question being that if the merits are so inextricably intertwined with the… if the question of jurisdiction is so intimately tied to the merits, then the majority can look to the merits to determine jurisdiction.

The District Court here went much further than inquiring into that question.

At least the State of Florida, as I’ve argued, did have a colorable claim which was a contract entered into on the basis of its constitutional boundaries and possession in the state museum.

And I would like to reserve the remainder of my time for rebuttal.

Warren E. Burger:

Very well.

Mr. Horan.

David Paul Horan:

Mr. Chief Justice, and may it please the Court:

This is the fourth major appellate argument in this action.

It was filed nearly seven years ago, and I filed it.

The case is not concerning a question of the relative merits of federal and state government, but a question of the right of an individual against the massive power of the State of Florida.

It involves the protection of private property rights and the power of the federal judiciary to determine constitutional jurisdiction over admiralty and maritime claims.

Now, the wreck of the Nuestra Senora de Atocha was found after three years of search by Treasure Salvors, and as previously determined by this Court, it was outside the territorial boundaries of the United States and that of Florida.

The factual findings of the trial court have for the most part not even been attacked on appeal, and none have ever been found to contain any error.

The 38-page memorandum of the trial court discloses one of the most interesting and relevant factual situations you could ever believe which must form the background of this Court’s final and at last unappealable opinion.

The Atocha’s association with Florida was tangential at best.

When it sank in 1622 it was outside the boundaries of a continent, largely unexplored, which was much later to be called Florida.

The State of Florida did not research, they did not find, and there is no basis in fact for even suggesting they could have found it, much less recovered it.

The trial court in its November 21st, 1978 order states as follows:

“Merely because the agents of the state covet the treasure does not give the agents the right to take it in the name of the state. “

And the court went on to say:

David Paul Horan:

“It’s ironic that the agents of the state are able to use resources of the state to deprive Treasure Salvors of what it justfully and rightfully owns, especially when the record reflects that Treasure Salvors was at one time willing to donate a portion of the salvage vessel to the state. “

Now, the record reflects that the State of Florida and the United States were working secretly in 1975 to completely vest title in the United States with Florida having the exclusive right to continue the salvage started by Treasure Salvors four years before.

When these covert activities were discovered, Treasure Salvors filed its in rem action against the Atocha, and this Court ruled on Florida’s boundaries in U.S. v. Florida, and the state rushed at that point, knowing that it was losing, under its contract which said that we had the right to do out and salvage on state owned sovereign submerged lands if we paid them $1,200 a year, the state at that time rushed to divide much of the salvaged treasure.

But they were only dividing… they had everything that we had recovered.

They had never given us a division.

We had asked for a division over and over and over again.

And they talk about these series of contracts.

The reason there was a series of contracts is that there was a total forfeiture provision if we stopped short of a total recovery; so we had no option but to continue the salvage.

And then with their plan… and the trial court found that this was an ongoing plan to keep all of it, and that was a factual finding of the trial court after the evidentiary hearing.

But what happened was one week prior to this Court issuing its opinion, after the oral arguments and after they went back and said boy, we just got cleaned, the state rushed to try this division; but they only divided about 80 percent of what was up there, and they kept the rest.

Now, frustrated in its desire to obtain the entire treasure, the state encouraged and worked with the United States to claim everything, past, present, and future.

There were negotiations which Mike Reed talks about in the San Diego Law Review, the Assistant Solicitor of the United States, when the State of Florida comes up and says hey, listen, we’ve lost this thing; you’ve got to protect our interest.

Now, after extensive evidentiary hearings the trial court found that the state chose not to enter a claim but to rely upon the United States to win the suit.

And they even went so far as to decide how they were going to divide up the spoils once the United States won.

Well, does that really bear on the Eleventh Amendment issue?

David Paul Horan:

Yes, it does, because there is no Eleventh Amendment, Justice Rehnquist, if it’s between the United States and Florida.

See, the United States came in and claimed–

I realize that.

David Paul Horan:

–And so certainly there would be no Eleventh Amendment; if the United States had won their claim saying they were the owner, then they’d have come down and just said okay, that’s ours.

No.

The Eleventh Amendment is strictly a defense between a state and an individual; but I take it Florida has sought to assert it here, and the Court of Appeals has said it can’t.

David Paul Horan:

Right.

The factual assertion or the factual finding of the trial court that the State of Florida was in privity with the United States puts it foreclosed, because at that point the United States was urging Florida’s claim.

Well, do you think that’s what the Court of Appeals rested on?

David Paul Horan:

No, sir.

The Court of Appeals rested primarily on the fact that the court must have jurisdiction at least to find out the propriety of the claim being put forward, and that’s why U.S. v. Lee is so much on point.

The state, after all this litigation, tremendous amount of litigation, working with the federal government in this two and a half years of litigation, then after the litigation is decided in a manner which the state didn’t like at all, tried to paint themselves as total strangers to litigation.

And the trial court on page 7 of its opinion says,

“It ill behooves the Division of Archives to play such a fast and loose game with the courts. “

It’s important to understand that the state knew that the title to all past salvage was being litigated in this suit.

David Paul Horan:

Had the original case been decided as hoped for by the Division of Archives, there would have been no Eleventh Amendment available to attempt to hold those portions of the salvage against the United States.

I can’t find that language on page 7.

Am I looking at the wrong 7?

David Paul Horan:

Sir?

The language you just read.

David Paul Horan:

That would be page 7 of the trial court’s opinion.

That would be–

The trial court’s opinion.

David Paul Horan:

–Yes, sir.

That would have been the opinion of the 28th of August 1976.

Where is that in this–

David Paul Horan:

It would be in the Appendix, Your Honor.

–What page, please?

The index doesn’t help me very much.

Well, don’t stop your argument now then.

I’ll get at it later.

David Paul Horan:

The trial court found that Florida was bound for failing to intervene and its participation in the previous litigation.

The trial court held that the extent of the state’s entanglement and reliance on the federal government in this case quite simply serves to highlight the fact that equitable principles call for the division to be bound.

Equity does cry out for Treasure Salvors to keep the property that it’s paid so dearly to find and possess.

This is an admiralty case, not an equity case, isn’t it?

David Paul Horan:

Yes, sir.

It is.

In this particular case, Your Honor, the federal courts have been in the middle of a modern tragedy and a real tragedy that has unfolded not only in the federal courthouse in the Southern District of Florida but 40 miles west of Key West out on the high seas, on the Continental Shelf of the United States outside Florida.

The world learned in the federal District Court during the court’s time of the striking of the salvage vessel North Wind and it going down with Mel Fisher, the president of Treasure Salvors son, Dirk Fisher, his wife, Angel, and a young diver, Rick Gage.

After the funerals the search and the salvage went on in this case, and certainly they wouldn’t have had it any other way.

After receiving a mandate in the Fifth Circuit it was clear that the court had in rem jurisdiction over that salvage.

An ancillary process was authorized, directed the two individuals holding the salvage in Tallahassee… not the State of Florida but two individuals, Ross Morrell and James MacBeth.

Now, the state attempted to block the service of that writ on those two individuals, even including emergency appeals to the Fifth Circuit; but the Fifth Circuit refused, and it said that the question of jurisdiction is for the District Court to determine on the basis of such record as may be developed in the trial court.

The only real question before the Court today is jurisdiction.

Does the trial court dismiss a salvage action after a mere suggestion by the state that it owns the salvage?

David Paul Horan:

That is, may admiralty courts look beyond a mere assertion of title to see if a claim is valid?

During the 360 years that the Atocha spent down there–

So I take it that you seem to agree that the Fifth Circuit decided the case on the assumption that the state was involved, just not two officials, and said even if the state is involved, a court may look beyond a mere assertion.

David Paul Horan:

–The state actually forced itself to become involved.

It was very similar to–

But the Fifth Circuit didn’t decide the case on the basis that this just involved state officials rather than the state.

David Paul Horan:

–No, it didn’t.

It didn’t.

Because once the two officials, once these two men that the writ was directed to were forced to give up the treasure, the state came in and said that’s ours.

They filed a claim to the vessel and said that vessel is ours, and everything that came up from it is ours, and it’s ours completely.

Well, does that mean that the first time the state became a party in its own name was pursuant to a paper that the state had filed?

David Paul Horan:

Yes, sir.

Absolutely.

We did the writ to those two individuals.

Then the state comes in, and they say hey, you can’t take that because it belongs to the state.

Well, what did the state file in that proceeding?

David Paul Horan:

The pleading that they filed was a motion to dismiss the writ of attachment, the warrant of arrest, the ancillary warrant.

On the ground that?

David Paul Horan:

On the ground that they owned it.

Eleventh Amendment?

David Paul Horan:

Now, it was later that they urged the Eleventh Amendment.

Not at that time?

David Paul Horan:

No, sir.

May I just be sure I have the right… is the document you refer to the one that’s entitled,

“State of Florida’s Motion to Quash Warrant for Arrest In Rem? “

David Paul Horan:

That’s correct.

That’s on page 43 of the–

David Paul Horan:

That’s correct.

During the 360 years that the Atocha spent abandoned on the high seas, all ownership was lost.

It was the property of no one.

David Paul Horan:

The finder and salvager was Treasure Salvors, and it filed its in rem claim against the vessel claiming ownership and validation of past and future salvage rights.

At separate times the State of Florida and the United States filed claims of ownership in the cause.

The federal claim was grounded on the sovereign prerogative of the English kings.

The federal claim was found to be entirely groundless.

The state’s claim was based on the state’s exercise of its sovereign prerogative.

However, the state statute even if constitutionally valid by its own terms did not apply to areas outside state territorial waters.

The first paragraph of the contract says that they’re talking about only state owned submerged lands.

The issue of the salvage of other vessels outside the territorial sea is presently pending before the Eleventh Circuit.

Now, much of the state’s argument in its reply brief and certainly a lot of the argument of the amici in this case centers on the fact that we’re talking about the salvage within territorial boundaries.

That is presently pending, and I have available the opinion of Judge James Lawerence King of the United States District Court for the Southern District of Florida which is on appeal to the Eleventh Circuit… briefs have not been submitted at this time… which has to do with inside state waters.

But it doesn’t have anything to do with salvage, a traditional maritime activity, on the Continental Shelf of the United States outside the State of Florida.

Now, the state’s argument does not even dispute or even discuss in the entire reply brief that the wreck is outside state waters.

It doesn’t even mention that fact.

It does not dispute the Florida Statute 267 only applies to wrecks on state owned lands, nor do they dispute that the trial court was correct in holding the salvage contract was invalid on five separate grounds, nor do they dispute that the salvaged articles had been forcefully taken by state agents who were not entitled to ownership or possession.

And finally, after so much argument below, the state never even mentions the Queen City cases… now, this is in their reply brief… the Navemar, which is the Spanish ship; In re Muir, which is the Glen Eden, the British ship; and the Baja, California, the Mexican ship… which hold that ownership… every one of these are cases out of the Supreme Court here that say that ownership is a jurisdictional fact that must be established before sovereign immunity or the Eleventh Amendment is a defense.

–I didn’t read Queen City as holding that.

David Paul Horan:

Well, the Queen City case said absent a special challenge, we’re going to accept that.

And it wasn’t even raised that there was a problem with ownership until the appellate time.

You draw from that a negative implication that if there were a special challenge, the Court would have not followed the doctrine of Queen City?

David Paul Horan:

I do, and that’s exactly what the trial court and the Fifth Circuit so held.

As I read Queen City it was more an application of principles traditionally applicable to municipal corporations, and saying that even if you’re a municipal corporation not protected by the Eleventh Amendment, you are still not subject to this sort of a libel and admiralty; and then saying if it’s true of municipal corporations it’s true of a fortiori of the state.

David Paul Horan:

Certainly.

I read the Queen City cases very similarly to say that ownership is the pivotal issue on whether the Eleventh Amendment applies, and if there is a showing of ownership, then the Eleventh Amendment is going to apply.

But that is a jurisdictional fact.

There is a little bit of a difference between sovereign immunity of a foreign state and the Eleventh Amendment, but in both of these there are similarities in both of them.

The application of sovereign immunity of foreign nation or foreign state or whatever, or the Eleventh Amendment turn on the question of the ownership.

If there is ownership and there is public service, then the Eleventh Amendment applies.

If there is not ownership and there is not public service, if these people are holding it wrongfully, as they did in Lee–

Would you say that a colorable claim to ownership would suffice for jurisdictional purposes, just a colorable claim?

David Paul Horan:

–Well, I would say this.

David Paul Horan:

I would say that the colorable claim, if there is a challenge… now, the colorable claim, we’re not talking about getting into the whole litigation at this point.

We’re talking about whether it applies, and the Court’s making this jurisdictional fact determination of jurisdiction.

At that point I think that when the state came up and said here we have a contract, the federal court is not–

But answer in the abstract, if you would, without reference to these disturbing facts.

David Paul Horan:

–Okay.

If you come up and you say okay, this property which is in the possession, and you allege in the wrongful possession, of these state agents here and that you own it, now this property here belongs to the state and here’s a contract, and it says that the property belongs to the state, and the court looks at that contract.

Now, I don’t think that the court has to put on blinders.

I think when the first paragraph of the contract says something which is just completely outrageous like we don’t really own this and we’re just taking it because we want it, even though that might be in the contract, I think the federal court has the right to look at that and say well, okay, if that’s what you say.

Now then the other party can come in and say listen, that contract right there is a forgery.

Those state agents that are in possession on that did not have the right to make us sign that.

We were coerced into signing that contract.

They can’t use that coercion to deprive this court of jurisdiction over a traditional maritime claim out on the Continental Shelf of the United States outside Florida boundaries.

And that’s exactly what we did.

Well, you think then that for jurisdictional purposes the entire dispute over ownership can be settled by the court before you even determine whether the Eleventh Amendment.

David Paul Horan:

Well, my version of Eleventh Amendment application–

That seems to be what the Court of Appeals said anyway.

David Paul Horan:

–Well, I believe that’s right.

I think that what the Court of Appeals, and what I’m insisting on is that Florida’s unsupported claim of ownership is at best clothed with the presumption of validity that if duly challenged and rebutted cannot operate as a jurisdictional bar.

Because Florida’s claim of ownership was duly challenged, the question of ownership was a jurisdictional matter to be judicially resolved on evidence to be presented.

Now, in this matter the state has not even attacked the trial court’s findings of fact which overwhelmingly controvert the state’s claim of ownership.

Before you can reach the claim of ownership don’t you have to… a question of ownership, as you put it, a jurisdictional matter, don’t you have to surmount the Eleventh Amendment?

David Paul Horan:

I don’t believe so, because I think the Eleventh Amendment turns on the ownership argument.

If it is not owned by the state, if it is being improperly held by the state, there is no Eleventh Amendment argument.

It’s the Tinsdale case, and the Tinsdale case is directly on point.

Here you had two state officers who were in possession of some property, and the court came along and said you’re in possession of that property, and they said oh, yes, but we’re state officials and it’s state property.

Well, in the Tinsdale case the only difference is that instead of pursuing all the way through the litigation like Florida did, in Tinsdale the state came in and filed an Eleventh Amendment defense and said we are the owner, but the Eleventh Amendment means that we don’t have to get into it.

And the court looked at that and said okay, stay out of it.

And they looked into it and said those people do not own it; they are in wrongful possession of that property; get off.

The fact is that the State of Florida was not a necessary party to this litigation.

They chose to come in and assert their claim and say we own the whole wreck and everything.

David Paul Horan:

The fact is that the defendant in this case was some property that came from a marine salvage operation.

Now, that’s what it was.

That was the res over which that we were fighting.

We never sued the State of Florida, never.

It was them coming in affirmatively.

The sovereign immunity rested in many cases.

We can go back and see that the sovereign immunity rested on the structure of the feudal system, the fiction that the king could do no wrong.

Yet, this Court’s doctrine in Ex parte Young is an integral part of our judicial fabric.

Neither sovereign immunity nor the Eleventh Amendment will bar a suit in federal court for relief against the wrongdoing of state or federal officials.

In this particular case there was–

Well, if the Fifth Circuit had rested its judgment on that ground, it might be one thing, but that isn’t the ground it rested on.

David Paul Horan:

–Well, the only party for the Fifth Circuit–

The ground it rested on was that this is an argument between the state and the individual, but the Eleventh Amendment doesn’t bar it because the state doesn’t own the property.

David Paul Horan:

–Well, the only reason that the Fifth Circuit–

Isn’t that the ground it used?

David Paul Horan:

–Yes.

The reason was because that’s the only parties that were before the court.

See, the state took the reins away from the two people that had possession, and they filed their claim of ownership, so the only people before–

Well, as I read the findings of the District Court, the District Court said that the property was in the possession of a certain named department of the state government.

That’s what he found.

David Paul Horan:

–Well, it was in the possession of Mr. Morrell and Mr. O’Brien who were state officials of the Department of–

Nevertheless, the court said it’s in possession of the state.

David Paul Horan:

–Okay.

Without conceding the constitutionality of Florida statute, the case resembles and is on point with a case that was decided 14 years before this Court decided Ex parte Young, and that was Reagan v. Farmers Loan and Trust Company, 154 U.S. 362.

And this Court held then that a valid law may be wrongfully administered by officers of the state so as to make such administration an illegal burden and an exaction on the individual.

They may go beyond the powers thereby conferred, and when they do the fact that they are assuming to act under a valid law will not oust the courts of jurisdiction to restrain their excessive and illegal acts.

Now, under the reasoning of Ex parte Young, the state had no interest in the lawsuit for it was incapable of authorizing an unconstitutional act.

The suit began when an ancillary writ was issued to Mr. Morrell and Mr. MacBeth.

Now, the claim made by the United States when the case was first filed and when the United States came in, they said move to dismiss, sovereign immunity; we are the owner.

That’s what the United States said.

David Paul Horan:

And ultimately when we got into the merits, because we went into the merits, the court said listen, I’m not going to decide this on the bare claim that the United States is an owner.

Why are you the owner?

And they said 1906 Antiquities Act.

And so ultimately we got actually a summary judgment against the United States, and it was upheld by the Fifth Circuit, and they sought to come before this Court.

In this particular case the state says well, because the United States failed in its claim, we should be the ones.

There must be a bureaucracy out there that can govern that wreck; but in fact, the state cannot enforce anything out there.

They cannot protect that wreck.

The federal court can enforce and can protect.

That’s Treasure Salvors III.

We’ve had some Panamanian pirates out there during the interim and had to go against them, and it was appealed to the Fifth Circuit, and the Fifth Circuit said you’ve got the jurisdiction.

Now, the fundamental issues here are do the rules established in Queen City and in Tindal v. Wesley, do they hold that the mere assertion of title in the state bars Eleventh Amendment ground suits against the state and state officers where the claim is specifically challenged.

Now, the issue here, as in Tinsdale, is whether there is an action brought against individuals to recover the possession of land which they have in their possession and control is to be deemed an action against the state within the meaning of the Constitution simply because those individuals claim to be in rightful possession as officers of the state and that title is in the state.

And can the court decline to inquire whether the individual defendants are in law entitled to possession.

Well, but here you have the State of Florida as concededly a party, do you not?

David Paul Horan:

Right.

On their motion.

They came in.

They did not have to.

They came in and intervened and said we are filing a claim of owner.

But I mean you don’t get to the Ex parte Young situation unless you dismiss the State of Florida and say that your action should go on just as between you and the two state officials.

That’s Alabama against Pugh.

David Paul Horan:

That’s correct, Your Honor, but in this particular case where the state came in, the state came in and said we are the owner.

Later they assert Eleventh Amendment.

They say we are the owner, and we’re going to act for those individuals.

We’re not going to let those people file any responses.

We can’t tell who to file responses.

We’re not going to let those people file responses.

We are going to file responses on their behalf.

And that’s what they did.

Now, the state intervened asserting on behalf of itself and those named individuals title.

David Paul Horan:

In this particular case do the principles of Queen City and Tindal apply, where the state’s defense of sovereign immunity or Eleventh Amendment rests upon the validity of this title and the state statute upon which that rests.

Isn’t this the special challenge?

Over the last 60 years this Court has had at least three admiralty actions where the ownership of a vessel determined the federal court’s jurisdiction: In re Muir where the Glen Eden was alleged to be in British service, and Britain came in and said that’s ours; you must dismiss on sovereign immunity grounds; the Navemar, which is a 1938 case, where Spain came in and said Eleventh… or not Eleventh Amendment but sovereign immunity; you must dismiss; Republic of Mexico versus Hoffman where the Republic of Mexico had a contract over the Baja, California, the ship in that, which was claimed by Mexico.

In all three of those this Court said that Britain, Spain, and Mexico’s claim of ownership must decide… the court, the trial court must decide for itself whether the requisites of immunity exist.

The trial court has never been bound to accept an ownership allegation is conclusive.

Now, we get into one other line of cases, and that is O’Neill v. Schoenbrod.

And so you don’t think that does some damage to the Eleventh Amendment aspect?

David Paul Horan:

No, sir.

The biggest damage in the whole world would be that envisioned in the Lee case where if you allow a state to come in with the mere assertion of ownership, to divest the federal court of jurisdiction to protect somebody’s individual rights, you are leading justice into a blind alley from which it will never emerge.

In this particular case you’ve got the Florida courts in O’Neill v. Schoenbrod which state very conclusively that admiralty salvage… that salvage is a creature of the federal courts, and the courts of Florida will not even entertain a claim for salvage.

And what other than a claim for salvage is a salvage contract to salvage a boat on the Continental Shelf of the United States outside of Florida?

And in that particular case–

Well, what’s at issue here are the things that were delivered to Florida.

David Paul Horan:

–Well, everything was delivered to Florida.

They took it all.

Up to a certain point, up to a certain point.

David Paul Horan:

Yes.

And it’s that material.

You mean the Florida courts wouldn’t entertain an action on a salvage contract?

David Paul Horan:

They have no jurisdiction over salvage contracts.

Under O’Neill v. Schoenbrod they dismissed it the first time because it was styled an in personam between O’Neill and Schoenbrod on salvage.

They dismissed it.

And O’Neill and Schoenbrod must have had attorneys that didn’t want to go into federal court because they tried to refile it on unjust enrichment.

This was something that had already been accomplished.

And the Florida court again, the trial court and the Third District Court of Appeals dismissed the action again saying listen, you’re just trying to disguise a salvage action, and if we entertain jurisdiction, we would be getting into a jurisdictional conflict with the federal courts, because the federal courts have a unique way of looking at federal salvage contracts and pure salvage, because there is a unique way of looking at that and determining the distribution of the goods salved, whether it is perspective or retrospective in effect.

And in O’Neill v. Schoenbrod that’s exactly what happened.

They said you can’t even disguise it as unjust enrichment.

In fact you are talking about salvage.

There is no doubt in this particular case we are talking about salvage.

In conclusion, Treasure Salvors I was the case where the United States lost its claim that it could control salvage operation on the high seas under the 1906 act giving jurisdiction over lands owned or controlled by the United States.

David Paul Horan:

Now Florida insists that it has greater control over salvage on the high seas than the United States.

The trial court’s holding that the state was in privity with the United States and was bound also for failure to intervene is a valid basis to affirm the lower court’s opinion because it would obviate the Eleventh Amendment arguments made by Florida.

If the state had intervened claiming against the United States, there would have been no Eleventh Amendment defense, and the state litigated by proxy, and it litigated very hard by proxy and it lost, and now they want to play another fast and loose game.

Warren E. Burger:

Your time has expired, counsel.

David Paul Horan:

Thank you.

Warren E. Burger:

Mrs. Smathers, do you have anything further?

Susan Gamble Smathers:

Yes, sir, I do.

First of all, I would like to say that the State of Florida has never presumed to tell the United States what cases to intervene in and what not to.

And I would also remind the Court that a bystander’s interest in litigation does not determine their rights.

And secondly and most importantly, I would remind the Court that although the facts in this case may summon emotional feelings and what not, this Court does not sit today to decide who wears the white hat and who wears a black hat.

The state courts are fully capable of determining whether there’s fraud that provided the impetus for a contract or whether–

Are you saying that the equities, whatever they may be in this case, are irrelevant to the issue that’s now before us?

Susan Gamble Smathers:

–That is precisely what I’m saying, Your Honor.

And I would also say that they made the claim that we didn’t controvert the facts found by the District Court.

We certainly did, and we happen to be stuck with the record, if you please, which every time a host of metallurgists and chemists and illustrators and archaeologists and historians literally reel in their seats every time they read it.

And we did controvert the allegations made.

The findings were made against us.

But the issue in this case is whether the federal court can try a suit to rescind a contract and then decide whether the Eleventh Amendment applies to the case.

Could I ask you what the first response of Florida was to the service of this writ?

Susan Gamble Smathers:

Gladly.

Florida filed a motion to quash the warrant for arrest in rem based also on another jurisdictional challenge which was the fact that the property did not lie within the territorial jurisdiction of the Southern District Court.

We lost on that.

The trial court denied our motion to quash, and then it ordered the State of Florida to show cause why the property held in its possession should not be turned over to the substitute custodians, the Respondents.

The State of Florida, not L. Ross Morrell, not the Secretary of State himself, not the Governor, the State of Florida owned the property.

That’s why the State of Florida had to come in and say we own this property, we have a contract, and the dispute should be heard in federal court.

We may not have asserted the Eleventh Amendment in that first motion to quash.

But when they issued the order to show cause was the state’s response to that in part the Eleventh Amendment?

Susan Gamble Smathers:

No, sir, it was not.

Didn’t you submit the question of your contract?

In response to that motion to show cause you showed up and submitted on the merits, didn’t you?

Susan Gamble Smathers:

Your Honor, it was established in the Ford Motor Company case and in the Edelman case–

Well, I just want to know what the chronology was.

Susan Gamble Smathers:

–That’s right.

We did not assert the Eleventh Amendment until it became clear that the trial court was going to try the issue on the merits.

Our other arguments were jurisdictional also, and they–

Your first response to the order to show cause as to why the state shouldn’t turn over the property did not contain the Eleventh Amendment.

Susan Gamble Smathers:

–That is correct.

But we take the position that the Edelman case as well as the Ford Motor Company case recognized that a state could come and try the entire action, go through an entire lawsuit, go through an appeal, and not even assert the Eleventh Amendment until it got to the Supreme Court of the United States.

Because it is a jurisdictional matter.

Susan Gamble Smathers:

That’s right, and it’s not waived.

But let me ask you.

Supposing you’d thought about the Eleventh Amendment when your two officials received the process.

You then decided to assert the Eleventh Amendment as a defense.

Could you have done so without alleging that the state owned the property.

Susan Gamble Smathers:

I’m sorry.

Could you have merely said these are state officials; they work for the State of Florida; therefore, the Eleventh Amendment is a bar to enforcement of this process.

Would that have been enough?

Susan Gamble Smathers:

It’s a possibility.

Certainly–

Well, is that your position here, that that’s all you had to do in order to win, or did you not in addition have to say that they’re in custody of property that belongs to the State of Florida?

Did you not have to raise the merits even to raise the jurisdictional issue?

Susan Gamble Smathers:

–Certainly, Your Honor.

We had a contract in our hand–

I know what you had.

I’m just asking in your view what did you have to do to prevent the federal court… say you did it as fast as you possibly could… from asserting jurisdiction over these two individuals?

What kind of a pleading would you have had to file?

Susan Gamble Smathers:

–We would have to say that we owned these artifacts pursuant to contracts that have already been fully executed and that are otherwise valid on the face, and under which possession is already–

And supposing in reply to that pleading there had been some response filed that had showed that there had been res judicata on the issue and you had no valid claim of ownership, could you then still have asserted the Eleventh Amendment?

Susan Gamble Smathers:

–We believe that we could.

Without any basis for really supporting the ownership claim.

Susan Gamble Smathers:

That’s right.

Why couldn’t you assert the Eleventh Amendment defense just to a possessory action, a possessory action against the state to make the state turn over property?

Susan Gamble Smathers:

We could do that, if the state was the party or the defendant.

Well, why do you say you have to claim ownership in order to assert the Eleventh Amendment?

All you have to claim is possession, isn’t it?

Susan Gamble Smathers:

That’s true.

However, we did claim that we had possession.

We claimed both.

Well, and the trial court found that the state was in possession of the property.

Susan Gamble Smathers:

That’s right.

But the state had possession of the property under color of title.

The state had entered into these contracts on the basis of the constitutional boundaries as they had existed for 100 years, and that–

Well, are you saying that the state has to go farther and say that it does have a colorable claim to title as well as possession?

Do you think the possessory action against the state is not barred by the Eleventh Amendment?

Susan Gamble Smathers:

–No.

In fact, I don’t think the state has to demonstrate a colorable title.

However, we did in this case which would make it even more–

But, Mrs. Smathers, if that’s your position, supposing you had an ordinary case of a police officer searching an individual’s car, taking possession of property, turning it over to the policy property custodian… a clear violation of the Fourth Amendment and the seizure.

And the individual brought suit against the property custodian and said I want my property back.

Would it be a sufficient Eleventh Amendment defense for the state to come and say well, that property’s in the custody of the state, period?

That’s your position, I think.

Susan Gamble Smathers:

–Yes, Your Honor.

Didn’t you earlier in your argument say you agreed with Ex parte Young?

Susan Gamble Smathers:

Yes, Your Honor, because Ex parte Young–

Do you still?

Do you still agree with it?

Susan Gamble Smathers:

–Certainly.

After that answer.

Susan Gamble Smathers:

Yes, Your Honor, I agree with the holding in Ex parte Young, but I understand that case to be distinguishable from this one because that case was brought against an Attorney General who was doing something which was unconstitutional in nature.

And the Court held that a suit can be brought against a state official when he is committing acts which are unconstitutional in nature, or in other cases in excess of his statutory authority.

Susan Gamble Smathers:

That’s not the case here.

The State of Florida Department of State was the party.

Does the State of Florida differ from other states that operate only through their officials?

Susan Gamble Smathers:

No, Your Honor.

Every state has to operate through its officials, and I think it would be a difference without a difference if we were to say that Ex parte Young could apply in any case where the state was the real party in interest, and yet, obviously the state’s interest has to be conveyed and carried out by its officials.

I don’t think that the Court in Ex parte Young intended to draw that fine a distinction, and certainly in Alabama v. Pugh this Court recognized even where the relief requested could still be achieved by not dismissing the State of Alabama, the Court recognized that it was important enough to dismiss the State of Alabama because of the Eleventh Amendment.

We would also dispute Respondent’s representation that the division of artifacts occurred after United States v. Florida.

The last division of artifacts occurred in February 1975.

United States v. Florida was handed down in March 1975, and that is in the record.

We would also argue with their interpretation of In re Muir, the Navemar, and the Republic of Mexico cases.

The Eleventh Amendment was not involved in those cases, and if the Eleventh Amendment is to continue to have the compelling force that this Court has held that it does in Edelman and in its most recent cases, that In re Muir and these cases should not be held to carve an exception.

Thank you.

Warren E. Burger:

Thank you, counsel.

The case is submitted.