United States District Court, E.D. Virginia, Norfolk Division
Rebecca Beach Smith Chief Judge.
matter comes before the court on the Motion for Salvage Award
("Motion") and accompanying Memorandum in Support,
filed by the Plaintiff, Recovery Limited Partnership
(''RLP"), on January 29, 2016. ECF Nos. 206,
rem action, involving the wreck of the S.S.
Central America ("Central America"),
was commenced in 1987 by RLP's agent, Columbus-America
Discovery Group, Inc. ("CADG"). The numerous prior
opinions and orders in this case thoroughly review the
relevant factual and procedural history, and that history
will not be repeated in detail here.
Central America was traveling from Aspinwall,
Colombia, to New York City, with a stop in Havana, Cuba, when
it sank in 1857. It left Havana on September 8, 1857,
carrying approximately 580 people and commercial gold worth
over $1.2 million (1857 value), along with an unknown
quantity of personal passenger gold. The vessel sank off the
coast of South Carolina on September 12, 1857, taking with it
approximately 425 people, the personal and commercial gold,
and hundreds of bags of mail. Initial efforts to locate the
shipwreck and salvage the gold were unsuccessful.
filed this action in 1987, after locating what it believed
was the Central America. That wreck turned out to be
the wrong ship, but two years later, CADG discovered the
actual Central America, approximately 160 miles off
the coast of Charleston, South Carolina. CADG was then
awarded the status of first salvor, entitled to salvage the
Central America without interference, by the
court's Order of August 18, 1989.
insurance companies filed claims to the recovered gold,
alleging they had insured the commercial gold shipments and
paid for the losses. On August 14, 1990, the court found that
the insurance companies had abandoned any right or claim to
the gold, and CADG was entitled to and vested with the sole
ownership of the gold. Columbus-Am. Discovery Grp. v.
Unidentified, Wrecked & Abandoned Sailing Vessel,
742 F.Supp. 1327, 1344-48 (E.D. Va. 1990) ("CADG
I") . On appeal, the Court of Appeals for the
Fourth Circuit held that the district court erred in applying
the law of finds, rather than the law of salvage, to the gold
recovered from the wreck. Columbus-Am. Discovery Grp. v.
Atl. Mut. Ins. Co., 974 F.2d 450, 468 (4th Cir. 1992)
remand, the court found that CADG was entitled to a salvage
award of ninety percent (90%) of the recovered gold, and
directed the parties to develop a marketing plan for the
gold. Columbus-Am. Discovery Grp. v. Unidentified,
Wrecked & Abandoned Sailing Vessel, No. 87-363-N,
1993 WL 580900, at *32-33 (E.D. Va. Nov. 18, 1993)
("CADG 111"). The Fourth Circuit affirmed
this decision, but instructed the district court, on remand,
to decide whether the insurance underwriters as a whole were
entitled to the remaining ten percent (10%), and whether each
insurance underwriter actually owned the gold it claimed.
Columbus-Am. Discovery Grp. v. Atl. Mut. Ins. Co.,
56 F.3d 556, 562, 576 (4th Cir. 1995)
("CADG IV") . CADG and the insurance
underwriters eventually agreed to a settlement, which divided
the gold in specie and dismissed all claims of the
parties, including "the possibility of claims between
the parties over future salvage." Columbus-Am.
Discovery Grp. v. Atl. Mut, Ins. Co., 203 F.3d 291, 297,
300 (4th Cir. 2000) ("CADG V").
were then only infrequent filings in this case, until RLP
moved to be substituted as the real-party-in-interest for
CADG on January 3, 2014. ECF No. 1.On April 17, 2014, RLP filed
an In rem complaint against the Central
America, which opened a new civil action, Case No.
2:14cvl60. ECF No. 1 ("2014 Case") . The
court ordered a warrant for the arrest of portions of and
artifacts from the ship, and directed RLP to publish notice
of the action and arrest of the Central America for
four successive weeks. Order to Issue Warrant of Maritime
Arrest at 1-2, ECF No. 4 (2014 Case). RLP complied with the
court's Order, and four parties filed timely claims,
asserting a right and interest in the Central
America: (1) CADG, ECF No. 16 (2014 Case); (2) Richard
T. Robol and the Robol Law Office ("Robol"), ECF
No. 76 (2014 Case); (3) Collette Davidson
("Davidson"), ECF No. 8 4 (2014 Case); and (4)
Milton T. Butterworth Jr. ("Butterworth"), ECF No.
85 (2014 Case).
9, 2014, the court granted RLP's Motion to Substitute
Party, and named RLP as the salvor-in-possession of the
Central America. Mem. Op. & Order at 26, ECF No.
92. Accordingly, the court denied CADG's claim to the
Central America. Mem. Order at 7, ECF No. 94 (ECF
No. 95 (2014 Case)) . The court also reopened Case No.
2:87cv3 63, and consolidated Case No. 2:14cvl60 with Case No.
2:87cv363. Mem. Order at 6, ECF No. 94 (ECF No. 95 (2014
Case)). Further, on August 8, 2014, the court dismissed, for
failure to state a claim under salvage law, the claims of
Robol, Davidson, and Butterworth. Mem. Order at 1-2, ECF No.
114. Robol, Davidson, and Butterworth each filed a notice of
appeal, and the Fourth Circuit affirmed the district
court's judgment on each claim. See ECF Nos.
173, 181, 187. Therefore, RLP was left as the only party
asserting an interest in the Central America.
September 5, 2014, RLP filed a Motion for Award of Title. ECF
No. 139. Robol, whose claim the court dismissed in the
Memorandum Order of August 8, 2014, filed a Response,
opposing RLP's motion because "it does not
acknowledge [Robol's] right to a salvage award."
Resp. at 1, ECF No. 143 . RLP filed its Reply on September 15,
2014. ECF No. 156. The Motion for Award of Title became ripe
on July 31, 2015, after the Fourth Circuit decided the
appeals of this court's dismissal of the third-party
claims brought by Robol, Davidson, and Butterworth.
See ECF No, 191 (Fourth Circuit Mandate on last
pending appeal). By Opinion of August 11, 2015, the court
denied the Motion for Award of Title, finding that the
admiralty law of salvage, not the common law of finds,
applies to the Central America wreck. Op. at 17, ECF
No. 192. The court advised RLP that it could move for a
salvage award under maritime law, and detailed the factors to
be considered for a salvage award. Id. at 16-17.
January 29, 2016, RLP filed the instant Motion and Memorandum
in Support. RLP requests a salvage award of not less than one
hundred percent (100%) of the value of the salvaged items
recovered in 2014, to be made in specie by conveying
title to the salvaged items, and prejudgment interest on
RLP's expenses in planning and conducting the salvage.
Mem. Supp. at 3-4. No responses to the Motion were filed.
court held a three-day evidentiary hearing on the Motion, and
directed that RLP file any supplemental brief by July 25,
2016. RLP filed its Supplemental Memorandum in Support on
July 25, 2016. ECF No. 228. It attached Proposed Findings of
Fact and Conclusions of Law ("Proposed Findings").
ECF No. 228-1. This matter is ripe for decision.
ADMIRALTY LAW OF SALVAGE
Determination of Salvage Award
salvage award is "a reward given for perilous services,
voluntarily rendered, and as an inducement to seamen and
others to embark in such undertakings to save life and
property." The Blackwall, 77 U.S. (10 Wall) 1,
14 (1859). To encourage salvage operations, a salvor is
entitled to "liberal compensation." Id.
Rather than obtaining title to the salvaged property, a
salvor acts on behalf of the property's owner, thereby
obtaining a lien against Che property saved. The
"Sabine", 101 U.S. 384, 386 (1879). The
salvor's lien is exclusive and prior to all others, and
grants the salvor a possessory interest in the res,
pending satisfaction of the lien. R.M.S. Titanic, Inc. v.
Haver, 171 F.3d 943, 963 (4th Cir. 1999}. A salvor may
enforce its lien on the salved property by pursuing an In
rem action. Id.
salvor must establish three elements to prove entitlement to
a salvage award: (1) that the salved property faced a marine
peril; (2) that the salvor's services were voluntarily
rendered without an existing contractual duty; and (3) that
the salvage efforts were successful, in whole or in part.
The "Sabine", 101 U.S. at 384.
the court has determined that a salvor is entitled to a
salvage award, there are seven factors to consider in
determining the amount of the award. The first six factors
have been described by the Supreme Court as the "main
ingredients" in determining the amount of an award for
salvage. The Blackwall, 77 U.S. (10 Wall) at 13-14.
These six factors are; (1) the labor expended by the salvors
in rendering the salvage service; (2) the promptitude, skill,
and energy displayed in rendering the service and saving the
property; (3) the value of the property employed by the
salvors in rendering the service, and the danger to which
such property was exposed; (4} the risk incurred by the
salvors in securing the property from the impending peril;
(5) the value of the property saved; and (6) the degree of
danger from which the property was rescued. Id. at
14. In this case, the Fourth Circuit added a seventh factor:
the degree to which the salvors have worked to protect the
historical and archaeological value of the wreck and the
items salved. CADG II, 974 F.2d at 468.
calculating a salvage award, the court of admiralty becomes a
court of equity, and the award may ''be increased,
diminished, or wholly forfeited, according to the merit or
demerit of the salvor." Id. (quoting W. Marvin,
A Treatise on the Law of Wreck and Salvage §
218, at 226 (1858)). The amount of the award is
"primarily a matter of judgment to be exercised" by
the court. CADG IV, 56 F.3d at 569 (quoting
Waterman S.S. Corp. v. Dean, 171 F.2d 408, 411 (4th
Cir. 1948)). However, an award typically cannot exceed the
market value of the property; even if it does, the judgment
is limited to the value of the property because the action is
against the property itself. R.H.S. Titanic, Inc. v.
Wrecked & Abandoned Vessel, 286 F.3d 194, 204 (4 th
Cir. 2002); All seas Maritime, S .A. v. M/V Mimosa,
812 F.2d 243, 246 (5th Cir. 1987).
Grant of Award In Specie
owner comes forward to claim the recovered property,
"the salvor is normally awarded its total value."
CADG II, 974 F.2d at 459. In such a case, after
determining the salvage award, the court may sell the
property and pay the salvor from the proceeds. R.M.S.
Titanic, Inc., 286 F.3d at 203-04. If the sale yields
too little to satisfy the salvor's lien, the judgment is
limited to the value of the property. Id. at 204.
However, if the court determines that "the proceeds of
any sale would clearly be inadequate to pay the salvor its
full reward, " the court may, as a matter of discretion,
award title to the property instead. Id.; see
also Cobb Coin Co. v. Unidentified, Wrecked & Abandoned
Sailing Vessel, 52 5 F.Supp. 186, 198 (S.D. Fla. 1981)
(stating that the salvaged items are normally sold to satisfy
the judgment, but if the "'proceeds' of the
salvor's find are items uniquely and intrinsically
valuable beyond their monetary worth, an award in
specie is more appropriate"). An award of title
should be granted, only if the sale of the property would
prove insufficient to fairly compensate the salvor.
Haver, 171 F.3d at 966. In sum, the court must first
determine the amount of any salvage award, and then determine
how it should be paid. See R.M.S. Titanic, Inc. v.
Wrecked & Abandoned Vessel, 742 F.Supp.2d 784, 795
(E.D. Va. 2010).
awarding of prejudgment interest in maritime law "is the
rule rather than the exception." U.S. Fire Ins. Co.
v. Allied Towing Corp., 966 F.2d 820, 828 (4th Cir.
1992). Typically, prejudgment interest serves "as
compensation for the use of funds to which the claimant was
rightfully entitled." Noritake Co., Inc, v. M/V
Hellenic Champion, 627 F.2d 724, 728 (5th Cir. Unit A
1980). The prejudgment interest generally accrues from the
date of the loss, or the time at which the salvor became
entitled to a salvage award. Platoro Ltd., Inc. v.
Unidentified Remains of a Vessel, Her Cargo, Apparel,
Tackle, & Furniture, in a Cause of Salvage, Civil &
Mar., 695 F.2d 893, 906-07 (5th Cir. 1983). However, a
district court may decline to award prejudgment interest,
when "peculiar circumstances" would render such an
award inequitable. Orduna S.A. v. Zen-Noh Grain
Corp., 913 F.2d 1149, 1157 (5th Cir. 1990).
Factors in Salvage Award Calculation
is no doubt that RLP has established the three threshold
requirements for a salvage award: a marine peril, voluntary
rendering of the salvor's services, and success of the
salvage efforts. The Central America lies 7, 200
feet below the surface, placing it and its cargo in maritime
peril. See CADG IV, 56 F.3d at 572-73. RLP's
salvage efforts were voluntary, in that it owed no
contractual duty to perform the salvage. Lastly, RLP's
efforts have been successful in recovering approximately 16,
000 artifacts from the wreck site in an archaeologically
sensitive manner. Thus, having determined that a salvage
award is appropriate, the court must now determine the amount
of that award. The seven
Blackwall/Columbus-America factors are
discussed in turn.
Labor Expended by the Salvors
contracted with Odyssey Marine Exploration
("Odyssey") to perform the at-sea recovery
operations, using Odyssey's research vessel, the
Odyssey Explorer, and its remotely operated vehicle
("ROV"), Zeus. Together, the professionals
at RLP and Odyssey spent an impressive amount of time, money,
and energy in the 2014 salvage efforts, as detailed below.
The labor expended has been thorough and commendable at every
stage, from the initial planning of the operations through
post-salvage storage and conservation.
recovery operations, the Odyssey Explorer carried
seventeen ship crew members, and a technical crew of up to
eighteen individuals. RLP Evid. Hr'g Ex. 1A (Deposition
of Andrew Craig}. The crew worked two, twelve-hour shifts to
maintain twenty-four-hour ship operations. Id.; RLP
Evid. Hr'g Ex. 47 at 7. The shifts often lasted longer;
for example, crew members worked extra hours as needed to
finish processing artifacts and complete daily reporting. RLP
Evid. Hr' g Ex. 47 at 7 .
starting any recovery work, the team created a photomosaic of
the entire wreck site, composed of approximately 12, 500
individual high-resolution images spliced together to create
one detailed image. Second Report on Activities at S. S,
Central America Shipwreck Site at 1, ECF No. 90 (2014
Case) (RLP Evid. Hr'g Ex. 7). Pre-disturbance work also
included a multi beam sonar survey of the site, producing
images of the topography of the wreck site and surrounding
seafloor. Id. After the site surveys, the crew
commenced the exacting work of clearing sediment and coal
from the ship's keel and collecting artifacts, coins, and
ingots, one-by-one. Over the course of 129 days at the wreck
site, the crew performed eighty-three dives, for a total of
2, 093 hours of dive time. RLP Evid. Hr' g Ex. 4 7 at 36.
The longest dive lasted over 129 hours. Fifth Report on
Activities at S. S. Central America Shipwreck Site
at 1, ECF No. 163-1 (RLP Evid. Hr'g Ex. 10). During these
dives, the crew excavated 2, 614 square meters of the wreck
site, moving 1, 307 cubic meters of sediment to reach
additional items of treasure. RLP Evid. Hr'g Ex. 47 at
spent approximately $7.6 million in direct expenses on the
2014 at-sea recovery operations and post-recovery storage and
conservation of the salvaged items. RLP Evid. Hr'g Exs.
24-33. The court recognizes the magnitude of
resources and manpower devoted to the salvage of the
Central America since 2014. In determining the
amount of an appropriate salvage award, the labor expended by
RLP weighs greatly in its favor.
Promptitude, Skill, and Energy Displayed in Rendering the
Service and Saving the Property
treasure located over a mile below the surface of the
Atlantic Ocean, and covered with 150 years of accumulated
sediment, unquestionably requires great skill. As with its
initial recovery operations beginning in the late 1980s, RLP
has again assembled a highly experienced team to perform the
2014 recovery operations. It gathered experts in marine
archeology, marine salvage, geology, engineering,
conservation, and numismatics, among other disciplines. A key
step in assembling these professionals was RLP's thorough
selection process to find a partner to perform the at-sea
operations. See RLP Evid. Hr'g Ex. 47 at 2-4. It
ultimately selected Odyssey as the company best able to
perform the required work, given Odyssey's deep-sea
archeology experience and technological
brought experienced personnel and sophisticated equipment to
the salvage efforts. The Zeus ROV is specially
designed for deep-sea archaeological survey and recovery
operations, with advanced positioning technology,
photographic and video equipment, and deep-sea excavation and
artifact recovery tools. First Report on Activities at
S.S. Central America Shipwreck Site at 1, ECF No.
21-1 (2014 Case) (RLP Evid. Hr'g Ex. 6). These recovery
tools include two manipulator arms, a limpet suction device
that attaches to a manipulator arm, and the proprietary
Sediment Removal and Filtration System. See Id. at
1-2; RLP Evid. Hr' g Ex. 3. Operating the ROV to excavate
portions of the wreck site and collect gold and cultural
heritage items in an archaeologically-sensitive manner
required great skill and dedication by the crew.
these existing tools were not sufficient to collect specific
items or remove obstacles, the crew designed and constructed
new tools, using the onboard mechanical/welding shop.
See Third Report on Activities at S.S. Central
America Shipwreck Site at 1-3, ECF No. 110-1 (RLP Evid.
Hr'g Ex. 8); RLP Evid. Hr' g Ex. 4 at 9. For example,
the crew fabricated a spatula-type tool to collect a sextant
without damaging it, and experimented with various tools,
constructed while at ...