Spanish War Ship Sunk Since 1804, and Its Cargo, Immune from Suit in U.S. Under FSIA

Spanish War Ship Sunk Since 1804, and Its Cargo, Immune from Suit in U.S. Under FSIA

 

By Louis M. Solomon

Odessey Marine Exploration, Inc. v. The Unidentified Shipwrecked Vessel, et al., No. 10-10269 (11th Cir. Sept. 2011) [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law], offers a glimpse into the fascinating world of maritime jurisdiction of the federal courts, 200+-year old shipwrecks of Spanish war ships, wars between England and France, secret agreements Spain made with France, and the business of Odyssey, a deep-ocean exploration and shipwreck recovery company.  Even for international law firms practicing international dispute resolution or international transactions, the topics are not typical.  However, the decision also addresses several timely topics of international litigation and dispute resolution and thus deserves a read.

Odessey, as part of its Amsterdam Project, located what has now been found to be the Nuestra Senora de las Mercedes (Mercedes), a Spanish vessel that sank in 1804 off the coast of Gibraltar.  Asserting claims in the Middle District of Florida under the "law of finds" and the "law of salvage", Odeyssey's claim was in rem and sought the arrest of the ship as well as "its apparel, tackle, appurtenances, and cargo".  Spain, Portugal, and others - 25 claimants - all made claims arguing that they had an interest in the cargo.  The Magistrate Judge determined that the ship belonged to Spain, that the Foreign Sovereign Immunities Act precluded U.S. jurisdiction, and that Spain should be given possession of both the ship and its cargo (only a token, symbolic piece of cargo was in the U.S.).

In affirming, the Eleventh Circuit ruled, among other things:

First, the Court of Appeals determined that the District Court was not obliged to take the allegations of the complaint as true when the subject matter jurisdiction of the federal court was challenged.  The court below was entitled to rely on extrinsic evidence.

Second, in making the subject matter determination, the court was entitled to weigh the evidence independently, "and is not constrained to view [the evidence] in the light most favorable to the non-movant". 

Third, the District Court was not required to use the Rule 56 standard and was also not required to grant a hearing or permit cross-examination.  See Land v. Dollar, 330 U.S. 731 (1947) [enhanced version / unenhanced version ] ("As there is no statutory direction for the procedure upon an issue of jurisdiction, the mode of its determination is left to the trial court").

Fourth, the section of the FSIA found applicable was Section 1609, which, as we just blogged, has been viewed by other Courts of Appeals as relating, not to finding original jurisdiction, but finding jurisdiction to enforce judgments or secure the attachment or (in this case) the "arrest" of assets or other property.  At the same time, "[w]hile the Mercedes itself is not within the United States that alone does not defeat the court's ability to obtain jurisdiction over it.  This too should be compared to the Second Circuit's decision in Walters v. Industrial and Commercial Bank of China, Ltd, et al., Dkt. No. 10-806-cv (2d. Cir. July 2011) [enhanced version  / unenhanced version], which held that Section 1609 was available only with respect to property located in the U.S.

Fifth, even acknowledging that the Supreme Court has left the "critical term" "commercial" largely undefined, the Court of Appeals found that the Mercedes was not engaged in commercial activity even though "75% of the cargo measured by value was privately owned, . . . , and Spain was not at war when the Mercedes sank.

Finally, the Court of Appeals determined that comity dictated that the Court treat the cargo like the vessel itself in terms of granting it sovereign immunity protection.   For this holding the Court of Appeals needed to rely on the specific facts of the case - i.e., "where the cargo was found aboard a sunken active duty Spanish military vessel and was legally placed aboard the vessel".

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