War Story Wednesdays
California Lawyer

War Story Wednesdays

March 2013

Every other month, the Hanson Law Firm hosts "War Story Wednesdays," a lunchtime forum for lawyers to share their tales of triumph and struggle in the legal profession. In February three lawyers told their stories at San Francisco's City Club, and all who attended earned CLE credit. Here is a yarn about sunken treasure, from Fletcher Alford, a partner at SNR Denton.

I'm here to talk to you today about my first and only Admiralty case. It involves the SS Brother Jonathan, a ship that sank off the coast of Crescent City in 1865.

In the 1800s, there was a large migration of people westward, seeking gold and fortune and new lives. Many people walked across the country, literally, but those who could afford it took a ship down the East Coast of the continent and took a steamer back up the West Coast.

Brother Jonathan, a luxury vessel for her time, ran that West Coast route. She left Crescent City harbor on July 30th in the face of quite a storm, and hit an uncharted rock. There was no hope of saving the ship, and in the end, only one lifeboat with 19 people (out of 244) made it to Crescent City's shore (most of them crew members). The rest of the passengers and crew perished-the accident remains the worst maritime tragedy in California waters.

There were rumors, for years, about the cargo on the ship. My clients, the Deep Sea Research Company, had been looking for the ship for 20 years off and on, and they finally found it, about a mile or two from the rock that struck it. They came to me in 1993 and presented me with a bottle of champagne (that it still had the cork in it) from the wreck, and said, "We want you to file an in rem action against the ship." And I thought, "OK, in rem ... I think I remember that from law school. In rem is an action against property."

I did some research, and I learned that ancient concepts in Admiralty law date back hundreds, if not thousands, of years. The law of finds says that if you find abandoned property on the high seas and you're the first to claim possession of it, you take title to it. The law of salvage is a related concept under which if you find a vessel in distress on the high seas and you render aid to it, you have a maritime lien against the property.

My clients had found several thousand gold coins with the wreck, which went directly from the San Francisco mint onto the boat. They salvaged 1,207 of them, most of which were in near-perfect condition. Most of the coins were sold at auction. I then assisted my clients in establishing a museum in Crescent City where all of the non-gold artifacts were preserved.

As technology improved, more and more individuals and companies like my clients were discovering these historic ships and claiming title to them. Policy makers thought that these shipwrecks really should be admitted for historic preservation. So in the early '80s, Congress passed the Abandoned Shipwreck Act, which essentially says if any historically significant shipwreck is found in state waters embedded in the sea floor, it belongs to the federal government who can then convey title to the state.

The state was not interested in settling, so I filed an Admiralty law action against the vessel. The first challenge was to arrest the ship because in in rem Admiralty cases, the court gets its jurisdiction by arresting the vessel as you would arrest an individual. The judge was a very practically minded individual, and he agreed that we could put the arrest warrant in a bottle and sink it down over the general location of the wreck.

The state of California filed a motion to dismiss, and said, "Supposedly this is an in rem action against the vessel, but we all know that the state is the primary claimant here and this is really a ruse. It's really a suit against the state, in federal court, in violation of the Eleventh Amendment and the Abandoned Shipwreck Act."

And yet, after hearing all the evidence, the judge ruled in our favor and denied the motion to dismiss. The state filed an interlocutory appeal in the Ninth Circuit. The Ninth Circuit affirmed, and then the state and the federal government also intervened with the case. Both petitioned the Supreme Court for review. And I thought to myself, "What are the chances that this weird little case involving sunken treasure is ever going to catch the attention of the Supreme Court?" Well ... it did. I'll never forget the moment when I got that news.

I was ready for a hostile reception when I got to the Supreme Court. The state was the petitioner, so they went first and to my surprise, they're the ones that got the hostile reception. The Court didn't see it as a state's rights case, but as a property rights case. When I got up it was kind of a cakewalk. Justice O'Connor asked one question that cut through all the legal technicalities and went right to the basic equity. She looked at me and said, "Now counsel, your clients have spent 20 years looking for this vessel and they've spent hundreds of thousands of dollars. And if we rule for government they're just out-they get nothing, right?" And I said, "Yeah." And I sat my butt down. A good lawyer knows when to shut up.

In the spring of 1998 the Supreme Court issued a decision unanimously in my clients' favor. My clients gave me one of the coins, and I bought another, so I have mementos of the case. The moral of my war story is: Never be afraid to stretch your boundaries. Never be afraid to try something new.

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