Opinion ID: 1239866
Heading Depth: 2
Heading Rank: 2

Heading: analysis

Text: This court reviews a district court's legal conclusions de novo and its findings of fact under the clearly erroneous standard. D.A.B.E., Inc. v. City of Toledo, 393 F.3d 692, 695 (6th Cir.2005). We review the dismissal of a complaint for failure to comply with a court order under the abuse-of-discretion standard, and will reverse the district court's ruling only if we have a definite and firm conviction that it has committed a clear error of judgment. Link v. Wabash R. Co., 370 U.S. 626, 632, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962); Logan v. Dayton Hudson Corp., 865 F.2d 789, 790 (6th Cir.1989). Likewise, we apply the abuse-of-discretion standard to review the denial of a protective order under Rule 26(c) of the Federal Rules of Civil Procedure and the denial of a request for a preliminary injunction under Rule 65 of the Federal Rules of Civil Procedure. Rolex Watch U.S.A., Inc. v. Crowley, 74 F.3d 716, 722 (6th Cir.1996).
Under federal law, title to lands beneath navigable waters within a state is held by the state. Submerged Lands Act, 43 U.S.C. § 1311(a). Title to shipwrecks, however, is governed by the ASA. 43 U.S.C. §§ 2101-2106. The ASA provides that the United States has title to all abandoned shipwrecks embedded in submerged lands of a State, and that it transfers that title to the State in or on whose submerged lands the shipwreck is located if a state can prove that the shipwreck is both (1) abandoned, and (2) embedded in the submerged lands of the state (i.e., the bottomlands). 43 U.S.C. § 2105(a)(1) & (c). The ASA is significant because the 1987 statute overrides the old maritime laws of salvage and find and provides a method for states to assert claims of title to abandoned shipwrecks. Fairport Int'l Exploration, Inc. v. The Shipwrecked Vessel, known as the Captain Lawrence, 177 F.3d 491, 498 (6th Cir.1999) (citing 43 U.S.C. § 2106(a)). Consequently, under the ASA, [i]f a diver now discovers a long-lost ship embedded in the submerged lands of a State, a finding of abandonment leaves the diver with neither title nor a salvage award. Id. Because the ASA intersects with the Eleventh Amendment, the Supreme Court has had to address when the Eleventh Amendment bars federal jurisdiction over shipwrecks to which a state claims title. The Court made clear in California v. Deep Sea Research, Inc., 523 U.S. 491, 507-08, 118 S.Ct. 1464, 140 L.Ed.2d 626 (1998), that when a state does not have actual possession over the res (i.e., the vessel), the Eleventh Amendment does not bar federal courts from determining the rights of the parties under maritime law or the ASA. As a result, so long as a state has not yet taken actual possession of a shipwreck, federal courts have jurisdiction to determine whether the ASA is applicable. Id. If a state has actual possession, however, or if the state otherwise satisfies the requirements of title under the ASA, the federal courts lack jurisdiction over a salvor's in rem admiralty claims. See Fathom Exploration, LLC v. Unidentified Shipwrecked Vessel or Vessels, 352 F.Supp.2d 1218, 1227 (S.D.Ala.2005) (explaining that the Eleventh Amendment does not bar a federal court from determining salvage rights so long as the state is not in actual possession of the res ); Zych v. Unidentified, Wrecked, and Abandoned Vessel, Believed to be SB Seabird, 811 F.Supp. 1300, 1315 (N.D.Ill.1992) (holding that if a state holds title to a shipwreck, federal courts lack jurisdiction over claims for salvage). Because the Eleventh Amendment permits federal courts to hear claims under the ASA only if a shipwreck is not already in the actual possession of the state, the definition of possession is significant. Possession has been defined to mean actual possession, not merely constructive possession. Deep Sea Research, 523 U.S. at 507-08, 118 S.Ct. 1464; Fairport, 177 F.3d at 497 n. 3. There is no question in the present case that Michigan did not have actual possession over The Griffin at the time GLEG brought its in rem admiralty claim in federal court. As evidenced by its motion to dismiss, Michigan does not even know where the vessel is located. No Eleventh Amendment bar, therefore, prevented the district court from hearing GLEG's admiralty claim or from determining the rights of the parties under the ASA in the first instance. This case presents an issue of first impression because prior cases decided under the ASA have centered around whether a particular shipwreck is abandoned or is within a state's territorial watersnot whether a shipwreck is embedded in the state's bottomlands. See Seena Foster, Annotation, Validity, construction and appellation of Abandoned Shipwreck Act of 1987, 163 A.L.R. Fed. 421 § 2b (2000) (noting that no court has analyzed what is required to establish that wreckage is `embedded.' Rather the parties have stipulated to this fact.); see also Fairport, 177 F.3d at 498-501 (remanding the case to the district court to determine whether the shipwreck had been abandoned for the purposes of the ASA and noting that there was no dispute over whether the shipwreck was embedded); Fathom, 352 F.Supp.2d at 1227 (granting a motion for a more definite statement regarding the specifics of a shipwreck in order to determine, in part, if the vessel was within the state's territorial waters). As a result, the disclosure of the precise location of the shipwreck was not necessary in those cases. In the present case, however, the question of whether the shipwreck is embedded in the bottomlands is what is in dispute. The precise location of the vessel is therefore of critical importance to Michigan, which needs access to the site in order to gather information about the shipwreck's embedded status for its responsive pleadings. As the district court noted, to determine any rights it may have or wish to assert in this matter, the State must be given basic information, such as the precise location of [The Griffin], so that it can investigate its claim under the ASA and other law. Relying on the Supplemental Rules, the district court found that GLEG had failed to comply with Rules C(2)(b) and E(2)(a), which govern pleadings in admiralty. Supplemental Rule C(2)(b) requires an admiralty complaint to describe with reasonable particularity the property that is the subject of the action, while Supplemental Rule E(2)(a) requires that a complaint state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading. Fed.R.Civ.P. Suppl. C(2)(b), E(2)(a) (emphases added). The district court interpreted the Supplemental Rules to require GLEG to disclose the precise location of the vessel in an amended pleading before the court could arrest the shipwreck. GLEG refused to disclose the information, arguing that (1) if it revealed the precise location of the shipwreck before the district court had perfected federal jurisdiction, Michigan would be able to take actual possession of the vessel and invoke the Eleventh Amendment to divest the district court of jurisdiction over its claim, and (2) a protective order was required to prevent proprietary information and trade secrets from being leaked to the general public. Although the district court issued a protective order sufficient to satisfy GLEG's interest in not disclosing the location of the shipwreck to the general public, the court refused to arrest the vessel or to otherwise perfect federal jurisdiction before requiring GLEG to reveal the shipwreck's precise location. We must therefore determine whether and under what circumstances (1) a district court must take steps to protect federal jurisdiction before requiring such a disclosure, and (2) the Supplemental Rules may be read to compel a party to disclose the precise location of a shipwreck at the pleading stage. We note at the outset that the facts of the present case require us to reconcile the centuries-old maritime law of salvage with the 21-year-old ASA. The ASA, which has supplanted many traditional maritime concepts, clearly requires federal courts to give due weight to the important interests that states have in abandoned shipwrecks embedded in their territorial waters. Maritime law, on the other hand, is premised on the notion that salvors have a right to have their claims heard in a federal forum. Yukon Recovery, L.L.C. v. Certain Abandoned Prop., 205 F.3d 1189, 1196 (9th Cir.2000) (stating that maritime law is designed to encourage[] salvors to undertake risks to rescue imperiled maritime property); Int'l Aircraft Recovery, L.L.C. v. Unidentified, Wrecked and Abandoned Aircraft, 218 F.3d 1255, 1261 (11th Cir. 2000) (same). The two parties before us likewise have differing interests that must be given due consideration. Michigan has a legitimate interest in learning the precise location of the vessel in question so that it may determine whether the shipwreck is embedded in its bottomlands, thereby allowing Michigan to fully litigate its claim of title of the shipwreck under the ASA. GLEG, on the other hand, has a clear interest in retaining federal jurisdiction for the adjudication of its salvage claiman interest compromised by requiring it to disclose the precise location of the vessel before federal jurisdiction has been perfected. Although only a handful of cases have adjudicated the rights of parties under the ASA, each court to do so has taken a decisively practical approach and fashioned remedies and rules designed to balance the competing interests of the salvors and the states. See, e.g., Ventura Packers, Inc. v. F/V Jeanine Kathleen, 424 F.3d 852, 860-61 (9th Cir.2005) (protecting federal jurisdiction in an admiralty case by holding that the district court retained jurisdiction over a shipwreck pending the outcome of the first appeal even in the absence of a bond to preserve jurisdiction); California v. Deep Sea Research, 523 U.S. 491, 507, 118 S.Ct. 1464, 140 L.Ed.2d 626 (1998) (holding that, based on longstanding precedent respecting the federal courts' assumption of in rem admiralty jurisdiction over vessels that are not in the possession of a sovereign, the Eleventh Amendment will not bar courts from hearing claims under the ASA to determine if title belongs to the salvor or to the state); Fairport v. The Shipwrecked Vessel, known as the Captain Lawrence, 177 F.3d 491, 499-500 (6th Cir.1999) (allowing the state to rely on both circumstantial evidence and inference to prove that a shipwrecked vessel has been abandoned); 3A-XXIII Benedict on Admiralty § 287 (explaining that admiralty courts have often relied on equitable principles and that the overall object of doing justice to the parties has never yielded to the dogma of strictly following technical rules or arbitrary procedures). In reconciling the conflicting bodies of law and the diverging interests of the parties before us, we will likewise attempt to fashion a sensible remedy in this case. To do so, we first determine whether the Supplemental Rules require a salvor to disclose the precise location of a shipwreck at the pleading stage. We then turn to a discussion of federal-court jurisdiction in the context of the ASA and the Eleventh Amendment and analyze what steps a federal court should take to protect federal jurisdiction.
Whether a complaint satisfies the particularity requirements of the Supplemental Rules is a legal question that appellate courts review de novo. United States v. Mondragon, 313 F.3d 862, 864 (4th Cir. 2002). In the present case, GLEG argues that the precise location of The Griffin should not be required at the pleading stage because pleadings in admiralty have historically been liberal. See, e.g., Dupont De Nemours & Co. v. Vance, 60 U.S. (19 How.) 162, 171, 15 L.Ed. 584 (1856) (holding, before the existence of the Supplemental Rules, that [t]he rules of pleading in the admiralty are exceedingly simple); 3A-XXIII Benedict on Admiralty § 287 (same). As Michigan points out, however, the cases discussing admiralty's liberal pleading standards preceded the passage of both the Supplemental Rules and the ASA. Recent caselaw addressing the Supplemental Rules supports Michigan's position and suggests that the standard of particularity for complaints filed pursuant to the Supplemental Rules is more stringent than is that of the Federal Rules. See United States v. $38,000.00 in U.S. Currency, 816 F.2d 1538, 1547 n. 20 (11th Cir.1987); see also Mondragon, 313 F.3d at 864-65 (explaining that the Supplemental Rules are designed to protect due process by guard[ing] against the improper use of admiralty seizure proceedings). The court in Riverway Co. v. Spivey Marine & Harbor Service Co., 598 F.Supp. 909, 913 (S.D.Ill.1984), explained that because [a]n admiralty action in rem involves arrest and seizure of the offending vessel simply upon filing a verified complaint, the Supplemental Rules require pleading information sufficient to give all parties with a potential interest in the newly discovered shipwreck notice that the vessel has been discovered and an opportunity to undertake an investigation so that they may assert their claims. See also Taylor v. Carryl, 61 U.S. (20 How.) 583, 599-600, 15 L.Ed. 1028 (1857) (discussing the notice process that accompanies an arrest). Unfortunately, however, there is a dearth of caselaw addressing the scope and requirements of the Supplemental Rules as applied to shipwreck claims. The only court thus far to address whether an admiralty claim may be dismissed at the pleading stage for lack of specificity under the Supplemental Rules noted the paucity of precedents interpreting [the Supplemental Rules] in the context of salvage operations and unidentified wreck sites. Fathom Exploration, LLC v. Unidentified Shipwrecked Vessel or Vessels, 352 F.Supp.2d 1218, 1224 (S.D.Ala.2005). That court did, however, interpret the Supplemental Rules to require a salvor to reveal whatever information it had about the location of a shipwreck when that information was necessary to address the issues in dispute by the parties and was readily available to the salvor. Id. at 1225-27. In Fathom, the parties disputed whether a vessel was located in navigable waters owned by the state of Alabama or was within United States waters. Alabama filed a motion to dismiss, claiming that the salvor had failed to describe the location of the shipwreck with reasonable particularity as required by the Supplemental Rules. Alternatively, Alabama filed a motion for a more definite statement as to the location of the vessel. Rejecting what it called the state's unduly formalistic, draconian construction of the Supplemental Rules that dismissal is mandated if a salvor brings an action for arrest of a shipwreck before it can positively identify the wreckage, the district court denied Alabama's motion to dismiss. Id. at 1224. The Fathom court reasoned that because the salvor did not yet know many of the details related to the location of the shipwreck, which was spread out over a great distance on the ocean floor, there was no reasonable basis to slam the federal courthouse door on a salvor at the pleading stage simply because it had not yet divined . . . an exhaustive description of a sunken vessel [it] has discovered. Id. at 1225. Nevertheless, the court did grant the state's request for a more definite statement, holding that the salvor was required to provide the state with the basic information in its possession that might aid potential claimants in assessing the validity of their claims, and noting that salvors are required to reveal all information that is reasonably available about the shipwreck in their complaint. Id. at 1226-27. The court in Fathom refused to dismiss the salvor's claim because (1) the salvor had very little information about the exact location of the vessel at the time of the proceeding, and (2) the general location provided by the salvor was sufficient to allow the state to form its responsive pleadings. Id. In the present case, however, GLEG knows the precise location of The Griffin and its artifacts, and there is a clear need for Michigan to have access to the actual location of the vessel in order to investigate whether it is embedded in the state's bottomlands. Because GLEG was able to comply with the district court's order to provide a more specific location, the district court had the authority to dismiss GLEG's claim for failing to comply with its order. See United States v. Reyes, 307 F.3d 451, 458 (6th Cir.2002) (holding that dismissal for failure to comply with a court order is not an abuse of discretion if the party had the ability to comply but chose not to). A look at the language of Supplemental Rule E(2)(a) further supports the conclusion that courts should attempt to resolve disputes over the specificity of the pleadings by allowing the parties to amend their pleadings rather than granting a motion for a more definite statement. Supplemental Rule E(2)(a) specifically states that a complaint must state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading. Fed.R.Civ.P. Suppl. E(2)(a) (emphasis added). The problem in the present case, therefore, was not the district court's decision to require specific details about the location of the shipwreck at the pleading stage, but rather its enforcement of that requirement before assuring the continuance of federal jurisdiction over GLEG's salvage claim. We note that the kind of highly detailed and precise information as to the location of a shipwreck necessary in the present case will not be necessary in most admiralty cases. If the only dispute between the parties is whether a shipwreck is abandoned, which is often the case, the precise location of the shipwreck is largely irrelevant and need not be disclosed. A general location will likewise be sufficient in most instances to allow the parties to determine in whose territorial waters a vessel lies. When the dispute between the parties is over whether a shipwreck is embedded, however, the precise location of the shipwreck will be necessary in order for the state to undertake an investigation and to frame its responsive pleadings. A district court may therefore require a salvor to amend its pleadings to reveal the precise location of a shipwreck where (1) there is a clear need for a more precise location (e.g., the embedded status of the shipwreck under the ASA is in dispute), and (2) the requested information is available and in the salvor's possession. We now turn to the question of what steps a district court should take to protect federal jurisdiction before requiring such a disclosure.