Justices Hear Shipwreck Ownership Arguments

It was one of the worst maritime disasters in California history.

On July 28, 1865, the Brother Jonathan--a Gold Rush era steamer--struck a rock and sank off the North Coast. At least 145 passengers and half a million dollars in gold went down with the ship.

Now, the ship’s fate has raised one of the most difficult issues of maritime law: When is a wreck “abandoned” and can no longer be claimed as lost property?

The Supreme Court wrestled with that question Monday. Its answer, due in several months, will determine if California owns the wreckage, as well as whether states and the federal government can claim ownership of 5,000 historic shipwrecks that lie along the coast of the United States.

Lawyers for California say the Brother Jonathan belongs to the government because it was abandoned after being lost for more than a century.

But attorneys for the treasure hunters who discovered the Brother Jonathan four years ago say they own the wreckage because they bought the rights to it from the insurers who paid claims on the ship in 1868 and have never relinquished their claim to the vessel.

The dispute turns on an effort by Congress in 1987 to update maritime law to meet advances in technology.

Traditionally, the law at sea has relied on the “finders keepers” principle. But advances in underwater exploration in recent years have opened up a new world of discovery, with deep diving submersibles now finding ships presumed lost to history--the Titanic being the best-known example.

Congress responded by seeking to claim the many historic shipwrecks in U.S. territorial waters. Just as the government would not allow treasure hunters to plunder “ancient ruins” on land, lawmakers said, treasure hunters should not be allowed to plunder historic wrecks under the sea.

The Abandoned Shipwreck Act of 1987 also gave the states control of historic wrecks that were found near their coasts. The law specifically waived the traditional finders keepers principle for sunken wrecks with historic, educational or archeological value. A separate California law also lays claim to wrecks that are more than 50 years old.

Then along came the Brother Jonathan.

Four years ago, the San Diego-based Deep Sea Research Inc. found the wreck of the paddle steamer lying under 250 feet of water near Crescent City. The diving company paid several San Francisco insurers for the rights to the ship, after learning that they had paid claims on some of its cargo after the 1865 disaster.

When lawyers for California intervened to lay claim to the wreck, they were rebuffed by two federal courts in San Francisco. A U.S. district judge and the U.S. 9th Circuit Court of Appeals ruled that the Brother Jonathan was “not abandoned” because the insurers did not “voluntarily relinquish” their rights to it. Therefore, the diving company owned the wreck it found.

On Monday, the state’s lawyers urged the high court to reverse those rulings.

Because of “the long passage of time, the vessel has clearly been abandoned,” Deputy Atty. Gen. Joseph C. Rusconi told the court. Its original owners are long dead, and the insurers took no steps to find or salvage the ship, he said.

But Justice Antonin Scalia objected to that definition of abandonment.

“They left the wreck there because they didn’t know where it was,” he said. “If I drop a silver dollar down a grate and I can’t get it with a piece of gum stuck to a stick, I still think it is my silver dollar. I just can’t reach it.”

Justice Sandra Day O’Connor sympathized with the privately funded exploration team that found the wreckage.

Deep Sea Research says it has about 100 investors of modest means and has spent more than $1 million to find and excavate the ship

“If the ship is judged to be abandoned, your clients are out,” she said. “They will have done all the work, and they will get nothing. Isn’t that the bottom line?”

San Francisco attorney Fletcher C. Alford, representing the diving company, agreed. He urged the justices to rule that a shipwreck is not abandoned unless there is “some evidence of voluntary relinquishment” by the owners, their heirs or the insurers.

But other justices said that approach would make the federal law meaningless.

“Congress thought the [1987] statute would apply to lots of sunken ships,” Justice John Paul Stevens said. “If we take your view, it won’t apply to any.”

Stevens and other justices pointed out that no insurance company or heir is ever likely to announce that he or she has voluntarily “relinquished” the rights to lost property.

Later this week, the justices will meet privately to vote in the case of California vs. Deep Sea Research, 96-1400. A ruling will be issued by June.