How treasure-hunter Odyssey lost another US court fight

Appeals panel upholds federal judge's order to return coins to Spain; legal ruling is based on 1902 "friendship" treaty between the two nations

A US federal appeals court sided with Spain in all its legal arguments when it awarded the Spanish government full custody of the estimated 594,000 silver and gold coins plucked from a 19th-century shipwreck at the bottom of the Atlantic by Odyssey Marine Exploration.

Among the judicial issues that were being challenged by the Tampa, Florida-based salvage company were whether the ship was on a military mission or commercial voyage, and if the treasure it found was exempt from the 1976 Foreign Sovereign Immunities Act (FSIA), which establishes limits as to whether foreign governments can be sued in US federal courts.

A three-judge panel at the 11th Circuit US Court of Appeals in Atlanta ruled on Wednesday that the treasure salvaged by Odyssey in 2007 should be turned over to Spain. The 60-page decision upholds a lower federal court judge's ruling handed down on December 22, 2009 that ordered the marine underwater explorer to hand over the coins and other artifacts it recovered from the Nuestra Señora de las Mercedes navy frigate to the Spanish government.

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Spain wins US legal battle against Odyssey for shipwreck coins

Lawyers for Odyssey say they will now ask the 11th Circuit for an en banc or full court hearing to reconsider the judges' panel ruling, which is the final step before taking the case to the US Supreme Court.

"The Court rules say that such requests are 'not favored' and are only granted in exceptional circumstances. The Court has no obligation to review the decision - it can and usually does deny such requests with a single sentence saying it denies the request," says James Goold, Spain's lawyer in the case.

And a final appeal to the Supreme Court also doesn't guarantee that the nine justices in Washington will take on the case. The United States' top court hears between 65-70 oral arguments each year and reviews a similar number on paper. This represents less than two percent of all the petitions for review submitted annually.

"We are certainly disappointed by the 11th Circuit's ruling," said Melinda MacConnel, Odyssey's vice president and lawyer, in a statement posted on the marine company's website. "We believe the US Constitution and all other applicable laws give jurisdiction to the US courts to determine the rights of Odyssey, Spain and all other claimants in this case. Furthermore, we believe this ruling contradicts other 11th Circuit and Supreme Court opinions." Wednesday's ruling was Odyssey's second defeat in its US legal battle to keep the treasure.

The Florida shipwreck hunter, which embarked on an enthusiastic public relations campaign about its find after secretly shipping the coins to the United States from Gibraltar, has been unsuccessful in questioning whether the shipwreck was indeed the Mercedes in an effort to defeat the Spanish government's ownership claims.

The Mercedes blew up and sank about 100 miles west of the Straits of Gibraltar during an 1804 battle with the British navy under the command of Commodore Graham Moore while it was ferrying passengers and cargo- including 900,000 silver pieces and 5,809 gold pesos- from Spain's South American colonies to Cádiz.

Odyssey tried to throw into question whether the ship was in fact the Mercedes because its cargo, including the number of cannon found, didn't match records. But Spain's lawyers provided enough historical evidence, including expert testimony, to convince the appeals court judges that the find came from the Spanish ship.

"The failure to fully recover all artifacts carried by the Mercedes is understandable considering the Mercedes exploded at the surface, sank 1,100 meters, scattered over a large area, and has been sitting on the ocean floor for more than 200 years," wrote US Appeals Court Judge Susan H. Black for the panel.

Odyssey had asked the appeals court to review US District Judge Steven Merryday's ruling in 2009 that the treasure was exempt from claims because Spain was immune from lawsuits under the FSIA. In effect, the district court had dismissed Odyssey's challenge to the treasure.

At issue was whether the Mercedes was a "warship"- which would strengthen Spain's case- or was engaging in commercial activity, which would remove the Spanish government's immunity under the FSIA.

The Peruvian government, and 25 descendants of the passengers on board the ship, also filed claims to the treasure. Peru argued that because the coins were minted in the South American nation, they should be given back to the Peruvian government, while the descendants claimed that the treasure was their ancestors' private property. Among the plaintiffs filing claims on the coins were several marquis and counts, including Ignacio de Colmenares, the 11th Count of Plentinos, and Juan Mariano de Goyeneche y Silvela, the marchioness of Casa Dávila.

If the court had found that the Mercedes was on a commercial mission, Odyssey said that it would exempt Spain's ownership under the FSIA. The treasure hunter argued that the ship was part of the Correos Maritimos fleet, which was responsible for transporting mail between Spain and its colonies. But the federal appeals panel concluded that when it sank, the Mercedes was a Spanish navy vessel.

"After reviewing the record evidence, we conclude the Mercedes was not 'act[ing] like an ordinary private person' in the marketplace," Judge Black wrote. "According to the 1804 official registry of ships of the Royal Spanish navy, the Mercedes was assigned to the Spanish navy fleet based at El Ferrol as one of nine frigate class ships. It was under the command of a Spanish navy captain both when it left El Ferrol and when it was sunk."

The US appeals court also based its ruling on the 1902 Treaty of Friendship and General Relations signed between Spain and the United States, in which the two countries promised to respect each other's shipwrecks. "The fact that the Mercedes has been sitting on the ocean floor for over 200 years does not negate Spain's property interest in the shipwreck," the court said.

The coins, which were flown to Tampa, have been in the court's possession under the custody of the US Marshals Service from around the time the legal battle began in April 2007. As Judge Merryday did, the appeals court ordered that the treasure must be given to the Spanish government. But in what appears to be a contradictory statement, Judge Black wrote: "We do not hold the recovered [treasure] is ultimately Spanish property." Until Odyssey exhausts all its appeals, it may be some time before the coins are returned to Spain.

In a statement, the descendants of Captain Diego de Alvear, the second-in-command who lost his family in the Mercedes disaster, applauded the court's decision. "The only thing Odyssey is worried about is obtaining economic benefits by exploiting not only Spanish history but also that of our ancestors," said José María Moncasi de Alvear.

"The decision will clearly have a major impact on treasure hunting in the future. Odyssey tried every possible tactic to frustrate and delay enforcement of Spain's rights. Spain has delivered a clear and strong message that it will protect its patrimony from treasure hunters," concludes Spanish legal representative Goold.

Odyssey Explorer enters the Bay of Algeciras in 2007, unde the watchful eye of two civil guards.
Odyssey Explorer enters the Bay of Algeciras in 2007, unde the watchful eye of two civil guards.FP
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