A Right to a Salvage Award, Not Title
R.M.S. Titanic v. The Wrecked and Abandoned Vessel et al., 323 F. Supp. 2d 724 (E.D. Va. 2004).

Shannon McGhee1

On July 2, 2004, the Eastern District Court of Virginia held that it would not recognize a 1993 “Proces-Verbal” issued by a French maritime official that purportedly granted R.M.S. Titanic, Inc. (RMST) title to 1,800 artifacts salvaged from the Titanic in 1987. RMST would also be estopped from claiming title to 5,900 Titanic artifacts under the law of finds at its October 18, 2004 salvage award hearing.

Background
Since 1987, RMST has salvaged 5,900 Titanic artifacts. 1,800 of these artifacts were salvaged prior to RMST being awarded the exclusive right to recover artifacts from the Titanic wreck in 1994 as salvor-in-possession. Eight months before the U.S. District Court granted RMST exclusive salvor-in-possession status, a French Maritime Affairs Administrator, M. Chapalain, on behalf of the Headquarter of Lorient executed a “Proces-Verbal”2 which transferred title of the 1,800 artifacts salvaged in 1987 to RMST’s predecessor-in-interest, Titanic Ventures limited partnership (TVLP).3 In 2004, RMST filed a “Motion for Salvage and/or Finds Award” to collect on the salvage liens it had acquired from the Titanic artifacts recovered. In the alternative, RMST asked the court to recognize RMST’s title to all 5,900 artifacts under the 1993 “Proces-Verbal” and the “law of finds.”4

The 1993 Proces-Verbal
In applying principles of international comity,5 the court declined to recognize the 1993 Proces-Verbal. The court explained “where a foreign court renders a judgment following what appears to have been a fair trial with the participation of all interested parties, an American court should give effect to the court’s judgment and should not evaluate its merits.”6 The court pointed out, however, that the Proces-Verbal was not carried out in a full and fair proceeding because the Administrator failed to make any factual findings regarding the value of the artifacts, TVLP’s cost of salvage service, the artifacts’ importance, or a proposed monetary salvage award for TVLP’s approval as required by French law at the time the agreement was executed.

Specifically, the court found the whole Proces-Verbal proceeding suspicious after the Administrator cited a French provision which allowed him to “remit to the salvor (“TVLP”), as his property, all salvage of little value which would produce no appreciable amount at sale.”7 The salvaged property referred to by the Administrator was the first 1,800 artifacts ever collected from the Titanic wreck. The court refused to accept that the Administrator found the first ever salvaged Titanic artifacts valueless, especially when RMST itself estimates all 1,800 artifacts as worth $16,687,316.8

Additionally, the court held even if the Proces-Verbal was legitimate, recognizing it would be contrary to U.S. public policy. The United States’ public policy of keeping all Titanic artifacts together was adequately expressed, the court reasoned, in 2001 when the National Oceanic and Atmospheric Administration (NOAA), in implementing the Titanic Maritime Memorial Act of 1986, produced guidelines for the research, exploration, and salvage of the Titanic wreck, stating “all artifacts recovered from R.M.S. Titanic should be . . . kept together and intact as project collections.”9 Awarding RMST title to 1,800 of the 5,900 Titanic artifacts, the court concluded, would surely result in their dispersal.

Finders Keepers
After holding the status as exclusive salvor-in-possession of the Titanic wreck for ten years, RMST asked the court to convert its salvage case into a finds case. Such a change would allow RMST to gain title over all 5,900 Titanic artifacts already in its possession. Under the common law of finds, a salvor must establish by clear and convincing evidence (1) the abandonment of property, (2) possession of the property and (3) intent to reduce that property to ownership, before he or she can be awarded title to the property.10 In contrast, under the law of salvage, a salvor does not gain title over property found but instead receives a salvage lien against the property to ensure a reasonable reward for his or her salvage services.

The court rationalized it would be inequitable and inconsistent under the doctrine of judicial estoppel for RMST to claim title to the 5,900 artifacts already collected while simultaneously retaining the exclusive right to recover the remaining artifacts in and surrounding the Titanic wreck. Because the court was persuaded for the last ten years by RMST’s repeated assertions that it would recover and preserve Titanic artifacts (in part for the public’s benefit since RMST believed the public had partial ownership of the Titanic artifacts because of their historical and cultural importance), they therefore lacked the intent to acquire complete ownership as required under the law of finds. Furthermore, under the law of finds a court has no authority to stop other would-be salvors from recovering abandoned property, which it does have under the law of salvage. Thus, awarding RMST title to the artifacts under finds law at this point would give RMST a significant unfair advantage over the entire world or, in other words, a ten-year commercial head start.

Conclusion
For the reasons cited above, the court ruled it would not recognize the 1993 Proces-Verbal under principles of international comity, and would not allow evidence or argument at the October 18, 2004 hearing for the purpose of awarding RMST title to the Titanic artifacts under the law of finds. Moreover, the October 18, 2004 hearing will determine an appropriate salvage award for all 5,900 Titanic artifacts in RMST’s current possession based on (1) the market value, (2) expert testimony and evidence of co-venturers’ contributions and RMST’s past remunerations received for the display of Titanic artifacts, and (3) RMST’s portion of the total salvage award, based on the evidence presented.

On August 2, 2004, the district court granted RMST a stay and continuance of the October 18, 2004 proceeding until the Fourth Circuit determines whether it has jurisdiction to hear RMST’s interlocutory appeal of the district court’s July 2, 2004 decision.11

Endnotes
1. Shannon is a third-year law student at the University of Georgia School of Law.
2. A ‘proces-verbal,’ according to RMST, is “most accurately described as a detailed and authenticated account drawn up by a magistrate, police officer, or other person having authority of acts or proceedings done in the exercise of his duty.” Black’s Law Dictionary (7th ed. 1999) defines ‘proces verbal’ as an “official record of oral proceedings.”
3. R.M.S. Titanic v. The Wrecked and Abandoned Vessel et al., 323 F. Supp. 2d 724, 727 (E.D. Va. 2004).
4. Id. at 730.
5. Comity “is the recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protection of its laws.” Hilton v. Guyot, 159 U.S. 113, 163-164 (1895).
6. R.M.S. Titanic, 323 F. Supp. 2d at 731.
7. Id. at 732.
8. Id. at 733.
9. Id.
10. Id. at 735.
11. R.M.S. Titanic v. The Wrecked and Abandoned Vessel et al., 2004 WL 1745922 (E.D. Va.).