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Admiralty & Maritime Law

11th Circuit Nixes ‘Finders Keepers,’ Says Massive Treasure Trove from 1804 Shipwreck Goes to Spain

Posted Sep 21, 2011 4:22 PM CDT
By Martha Neil

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Some 17 tons of silver coins from the 1804 wartime shipwreck of a Spanish galleon must be returned to the government of Spain, which owns the Nuestra Senora de las Mercedes, a federal court has ruled.

Affirming a trial court's decision, the Atlanta-based 11th U.S. Circuit Court of Appeals held today that Odyssey Marine Exploration Inc., a Tampa, Fla.-based salvage company that found the wrecked warship in international waters west of the Straits of Gibraltar, must return the Spanish government's property, according to the Associated Press.

Agreeing with Spain that the federal district court lacked subject-matter jurisdiction over the warship under the Foreign Sovereign Immunities Act, the 11th Circuit held in its opinion (PDF) that the district court correctly granted the country's motion to dismiss.

Odyssey, as the AP puts it, had argued for a "finders keepers" rule to apply and sought a federal court ruling that would establish its right to the sunken cargo.

The appeals court also concludes that the sunken vessel was indeed the Mercedes, which Odyssey had questioned, after a lengthy discussion of the history of the vessel and the international political situation at the time of the shipwreck.

A Spanish Royal Navy frigate, the ship exploded and sank in combat in 1804 as British warships were attempting to take possession of it and hence qualifies for sovereign immunity from all U.S. claims or arrest, the appellate panel said.

In addition to Odyssey, the country of Peru and 25 individual claimants were also disappointed, after intervening to argue that they were entitled to some of the treasure. The individuals were descendants of those who had cargo aboard the Mercedes, and Peru claimed an interest because the cargo allegedly had originated in its country.

Whether sovereign immunity applied to the cargo as well as the sunken vessel itself was a question of first impression, the 11th Circuit said, finding that it did.

Principles of comity and other statutes governing shipwrecks support this conclusion, the court said. "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."

However, "we do not hold the recovered res is ultimately Spanish property," the court notes. "Rather, we merely hold the sovereign immunity owed the shipwreck of the Mercedes also applies to any cargo."

The Odyssey may seek a rehearing en banc, the AP reports.

Earlier coverage:

ABAJournal.com: "Spain Claims US ‘Pirates’ Stole Sunken Treasure from Underseas Galleon"

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