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Magnolia Bravo, M.S., J.D.

The Fourth Circuit recently ruled that the R.M.S. Titanic salvor-in-possession did not have absolute title to all artifacts retrieved from the shipwreck. Instead, the salvor had the right to possess the artifacts and the right to be rewarded for its salvage activities through enforcement of a valid salvage lien.

Salvaging from the Titanic
In 1985, an expedition discovered the wreck of the Titanic and two years later, Titanic Ventures explored the wreck, ultimately salvaging about 1800 artifacts. Titanic Ventures later sold its interests to R.M.S. Titanic Inc. (RMST).

In 1993, RMST petitioned the district court to become salvor-in-possession1 of the Titanic and on June 7, 1994, the district court awarded RMST that right,2 with the understanding that RMST intended to display the salvaged artifacts rather than selling them and with the understanding that RMST had to periodically report to the court concerning the progress of its salvage operations. RMST continued to conduct salvage operations and display the artifacts recovered through 1999, when RMST's new management team revised the corporation's business plan to include the possible sale of artifacts to increase corporate revenues. RMST did not follow through with any sales, but in July 2000, when the district court heard about the revisions to the business plan, it entered an order directing RMST not to sell or dispose of any artifacts from the wreck. The district court explained that RMST's salvor-in-possession status was dependent on the understanding that any recovered artifacts would be displayed to the public and not sold.

In April 2001, RMST asked the district court for clarification of its July 2000 order, explaining its plans to form a new foundation to "explore the acquisition of the artifact collections at some time in the future."3 The district court directed RMST not to sell any artifacts from the wreck,4 but in July 2001, RMST issued a report to the district court outlining the formation of the Titanic Foundation, Inc. and the Foundation's plan to purchase artifacts from RMST. The district court ordered a full hearing, at which the court discovered that both the Foundation and RMST would be managed by the same people, creating irreconcilable conflicts of interest within each entity. The district court reaffirmed its original orders barring all artifact sales.

Rights of a Salvor-In-Possession
After ruling that the court had jurisdiction over the case,5 the court considered RMST's argument that the court's original order declared that RMST was the "true, sole and exclusive owner" of any salvaged artifacts.6

Traditionally in salvage law, someone who finds property at sea doesn't acquire absolute rights to what has been found. Instead, the person gains the right to possess the property with a reasonable reward for his or her services. The person secures the right to this reward through a salvage lien against the property. The court reasoned that when RMST found the shipwreck, performed the salvage service, and the district court declared RMST salvor-in-possession, RMST had a right to salvage artifacts and receive its rewards through liens on the artifacts. Likewise, if RMST abandoned the wreck in the future, the Titanic would remain in the sea, subject to salvage by others. The Court found that RMST overlooked "many of these basic principles of salvage and lien law" when it argued for its absolute right to salvage.7

Ownership vs. Possession
RMST further claimed that the court made no exceptions to RMST's ownership in the original declaration. The court ruled that because RMST only pursued salvage rights, it was not given title to the wreck in the court's original order. Even though the court used the term "ownership" in the original order, the court was plainly using salvage law when making its decision. Additionally, RMST repeatedly referred to itself as a salvor and understood the court's order to give it possession of artifacts for display, not authority to sell. Lastly, if RMST did want to sell the artifacts, it would have to gain title over them. To gain title, RMST would have to complete its salvage, have its reward determined, and only then enforce its liens on the artifacts. RMST did none of these necessary steps. Therefore, though RMST did have rights to salvage and possession, it never had ownership of the Titanic or its artifacts.8

Conclusion
The court therefore ruled that RMST did not have absolute ownership of the Titanic or any artifacts salvaged, but did have a right to possess the artifacts and place a salvage lien on them for possible future compensation.

ENDNOTES
1. A salvor-in-possession is someone who possesses property that he/she voluntarily saved at sea. R.M.S. Titanic v. The Wrecked and Abandoned Vessel et al., 286 F.3d 194, 202 (4th Cir. 2002).
2. The court ruled that RMST was the "true, sole and exclusive owner of any items salvaged from the wreck...in the past and, so long as [RMST] remains salvor-in-possession, items salvaged in the future, and is entitled to all salvage rights . . . ." Id. at 197.
3. Id. at 198.
4. At the same time, the court ruled that RMST could sell any coal recovered from the Titanic wreck, as it wasn't considered an artifact.
5. The jurisdictional issues mainly focused around RMST's failure to appeal any of the court's earlier orders regarding sale of the artifacts. The court ruled that though RMST failed to appeal the court's earlier orders, because circumstances had changed and RMST was seriously considering selling artifacts as of the court's September 2001 order, the order had a new substantial effect and was therefore appropriate for appeal.
6. Id. at 201.
7. Id. at 206.
8. The court dismissed RMST's additional arguments without much discussion because they were dependent on RMST's assertion that it was given absolute title to the salvaged artifacts. RMST's arguments were that maritime law does not allow the court to impose restrictions on artifact disposition, RMST's statements concerning its intention to display the artifacts were not binding because they were only in the company's business plan, and restrictions on artifact sales inhibits salvage law by curtailing salvage operations.

University of Mississippi