Found and Lost?

Forgive me if this is old news, but I’m just hearing about the legal dispute between Odyssey Marine Exploration, Inc. and the government of Spain.  In case anyone else has missed this story so far, the dispute is about who owns $500 million in gold and silver coins that Odyssey Marine retrieved from the bottom of the ocean.  I don’t know which side has the better legal argument, but if it’s Spain — backed by our own Department of Justice — then it seems like a real miscarriage of justice to me.

Here are the basic facts: 

Odyssey Marine is a Tampa company in the business of finding and salvaging treasure and historical artifacts from shipwrecks.  To do this, Odyssey spends millions of dollars every year, first researching records of shipwrecks to identify high-value salvage candidates, and then searching the ocean floor with high-tech equipment to find the ships.  Odyssey Marine’s legal claim to the treasure in this case is by right of salvage under international maritime law.  (I’m no admiralty lawyer, but I think all parties agree that if the shipwreck in question had belonged to a private citizen rather than a government, Odyssey Marine would be entitled to keep it all.)  Odyssey Marine’s moral claim, it seems to me, is quite Lockean — namely, that Odyssey Marine expended great labor to recover the treasure that would otherwise have remained at the bottom of the ocean.

Spain, on the other hand, claims the treasure on the ground that it is believed to have come from a Peruvian military ship (the Nuestra Señora de las Mercedes) at a time when Spain ruled Peru.  (Odyssey apparently contests this factual allegation, and calls the shipwreck by the name “Black Swan.”)  That would make Spain the sovereign, and according to Spain, admiralty law dictates that property from a military vessel cannot be claimed by the international right of salvage, and instead reverts back to the sovereign.  I wish I could say what the moral theory behind this claim is, particularly in light of the twist that Spain ruled Peru at the time by conquest.  Indeed, the government of Peru has also filed a claim, saying that Spain owns the wreck of the ship and all of its military contents, but Peru owns the coins, which were “mined, refined, and minted by Peruvians in Peru.”

Our Department of Justice is backing Spain, which surprises some observers who seem to think a U.S. government entity would be expected to favor U.S. citizens rather than a fellow member of the government club.  Personally, I wasn’t too surprised to learn that the Department of Justice is in favor of a very strong notion of sovereign immunity, even for other sovereigns. But what do Reasonable Minds think?  Among other things,does anyone think Odyssey Marine’s moral claim depends in any way on whether the treasure was carried on a military vessel?

Actually, this seems like a good opportunity to try out a relatively new WordPress feature:  Internet polling.

The government of the UK seems to me to have taken a much more defensible position than the Spanish/U.S. position:  The UK has an agreement with Odyssey Marine that harmonizes the private and public interests, so that Odyssey Marine recovers treasure and artifacts on the UK government’s behalf and thereby earns a substantial commission.  Good old voluntary agreement!  Can the law resolve the competing interests as fairly?

9 Responses to “Found and Lost?”

  1. David Fitzgerald Says:

    A few thoughts, without actually knowing any of the law on this.

    I believe that one perfects a claim under the law of salvage by being the first to bring the property in question to the surface. If that is so, it makes perfect sense to have an exception for military vessels. It would be unseemly indeed to encourage scavangers to hang around the edge of naval battles waiting for ships to be sunk, only to swoop in and be the first to despoil what is essentially the tomb of seamen fighting under their flag.

    Further, as admiralty law is part of the law of nations and, like the Geneva Conventions, therefore relies on mutual benefit, incentives and reciprocity in order to enforce such extra-territorial law, a rule whereby every nation retains title, as against profiteers, to the cargo of its military vessels, acts to strengthen the incentives of each nation to enforce the admiralty laws generally.

    Finally, me thinks you have been spending too much time with Metcalfe. Some legal positions are perfectly defensible even if they offend the sensibilities of the International Proletariat of Libertarians. It makes perfect sense for the Justice Department to be siding with Spain here. The US has the largest navy in the world, its ships are engaged in more action than any other navy and therefore, are more likely to be sunk with precious cargo, including such things as weapons grade uranium and the engineering secrets inherent in our nuclear powered vessels. Why in the world would the US government ever support a position whereby any crazy with a speed boat can claim enforceable title in The Hague to the materiel on a US warship?

    As to the case at issue, I have some sympathy for the notion that the military exception to the general rule of salvage might no longer extend, given the passage of time, to the vessels of His Most Excellent Catholic Majesty Philip II. However, as a litigator, you have to admire their b*lls.

    • Timothy Peach Says:

      “…me thinks you have been spending too much time with Metcalfe…..”

      What an interesting accusation.

      David, and this is something I’ve thought about a lot…. do you have a sense of what would be the right amount of time to spend with Ken?

  2. george kolibar Says:

    I feel that after finding and recovering the artifacts Odyssey Marine should have 100% claim on any finds regardless of what ancient laws exist. If they are ordered to turn over the find to Spain, they should be allowed to dump it back in the ocean at the sight. Thank you, George Kolibar

  3. Mark Grannis Says:

    David, I agree with you about DOJ’s position — it makes perfect sense to me. As for spending too much time with Metcalfe, that’s true almost by definition but I don’t think it’s relevant here.

    I also understand your defense of the legal rule. I think in fact we can make it even stronger by imagining a nuclear sub that goes down with warheads aboard — few people would say Odyssey Marine should have the warheads if it’s first to the scene. But that’s a pretty far cry from recovery of treasure hundreds of years later.

    I think George Kolibar gets to the heart of the matter with his “dump it back” proposal. Even if we assume that the gold is Spain’s, it can only be Spain’s on the bottom of the ocean. Gold on dry land has got to be at least partly Odyssey’s, or else Spain is just expropriating Odyssey’s labor and the use of Odyssey’s equipment.

    Of course, in the post-cash-for-clunkers society, some might think that we should pay Odyssey for dumping the treasure back in the ocean, so that we could pay Odyssey or someone else to bring it back up again. If we paid Odyssey $1 million to dump it back, and then paid Odyssey or someone else $4 million to raise it, and we did that ten times, we could raise nominal GDP by $50 million to help support our purely statistical recovery — all without the bother of actually doing anything to create any real-life wealth.

    • Ken Metcalfe Says:

      Is there NOWHERE in real or etherworld that a nice guy like me can go without getting abused?? :-)

      Mark–I’m surprised you had just heard about the Odyssey Black Swan saga (given it touches on two things of interest to you–the rule of law and gold.

      It has been closely watched by many for a long time for the same two reasons by those in the “Proletariat of Libertarians”. (I do wonder, Dave, if you know what a Libertarian is?? And is it just with irony that you use a Marxist derogatory adjective; or are you just against all classical liberals and economists–from the Locke and the Founders to Smith and Hayek?)

      There were many years of prep for this search and find. Many dollars spent and many risks taken. A detailed agreement, as Mark toched on, was worked out with Britain as to sharing of the proceeds for that risk and expense. While both Odyssey and Gibraltar clearly believe the find was in international waters and Spain has no right to it whatsoever, Spain has argued the find was in territorial waters and might be a different ship. To add insult to injury, Spain still contests vigorously that it doesn’t indeed own Gibraltar–a long-standing point of contention with Britain.

      While Spain’s position, to-date, has appeared suspicious and fairly weak, it would all be well and good I think if the dispute was fairly settled under established maritime law. But to introduce the idea that a government gets some kind of special privilege is another issue entirely. If a government wants one of its vessels sunk in international waters, it can darn well go get it. You almost had me teary eyed thinking about the desecration of the wonderful ocean-bottom tombs of those poor seamen unfortunate enough to be fighting under their (then-submerged) flag.

      And to then go from centuries-old gold coins to weapons grade uranium and warheads, I mean come on–where does such a leap come from?? First (and history already has good examples of this, unfortunately), governments are quick indeed to find such weapons that have been sunk. Second, it’s like discussing the right to bear arms with someone. When they’ve lost all logical positions against the right, invariably they’ll come back with “well, what about nuclear weapons–should everyone have the right to have nuclear weapons? Huh?? Huh???”

      In the end, as a rule of law prevails that is constant and consistently applied, no problem. Everyone knows what his risks and rewards will be and, MOST IMPORTANTLY BUT SELDOM THOUGHT ABOUT

      • Ken Metcalfe Says:

        (inadvertently posted before completing–sorry… :-), HE OR SHE CAN PLAN FOR THE FUTURE. When rules change midstream, as when Statists believe governments can come in and do at their whim, then everyone loses. The ability to plan is reduced or eliminated, risks cannot be properly measured and, as drastic as it sounds, the progress of all mankind suffers. Unfortunately, we’re in an age where such actions by governments are increasing in number–and moxy…

        Now, in this instance, I too agree with Mr. Kolibar with one important exception. While if not allowed to keep the legally-gotten fruits of its labor, the Odyssey should dump it back in the ocean, it should NOT do so at the site it was found, but rather at some undisclosed location. As I’d started with, Odyssey spent much time and money just FINDING the wreck. Let Spain do the same–a none-too–simple fleet for a country who’s best navy, some would argue, was mostly sunk off the Northern and Western coasts of Ireland…


    • Brian Freeman Says:

      Hmm. Not impressed with the UK government’s approach either. All well and good for it to say that the finder and the property owner of the Staffordshire treasure get to split the proceeds, but what about the great(to the power of 50 or so)grandchildren of King Aethelred and his minions? Sounds like the best turn of events in the past thirteen centuries for the royal family of Mercia.

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