Who gets to keep shipwreck treasure? Supreme Court declines Spain case.

Lower courts ruled that $500 million in coins that US treasure hunters had recovered belongs to Spain. The Supreme Court turned away the salvagers’ appeal Monday.

The US Supreme Court on Monday declined to take up the appeal of American treasure hunters who were forced earlier this year to surrender $500 million in silver and gold coins they recovered from the wreck of a Spanish warship 3,000 feet deep in international waters.

The high court took the action without comment.

A federal judge in Tampa, Fla., and the 11th Circuit Court of Appeals in Atlanta ordered Odyssey Marine Exploration Inc. of Tampa to surrender the coins and other artifacts to Spain.

The courts ruled that the recovered cargo had come from the Spanish frigate Mercedes, which exploded and sank in 1804 while returning from South America. The ship’s remains and its cargo were the sovereign property of Spain, the courts said.

Urging the high court to take up the case, lawyers for Odyssey Marine argued that Spanish sovereignty did not apply to the coins and other artifacts because Spain was not in possession of the cargo. 

The lawyers also argued that 75 percent of the recovered cargo had been privately owned and was merely being transported by the warship at the time it sank.

The case made headlines in February when the 17-ton treasure was loaded onto two Spanish Air Force cargo planes at a military base near Tampa and flown to Spain.

Madrid’s ambassador to the United States said the operation was completing a military delivery two centuries overdue. The coins and artifacts are being cataloged and will be displayed in museums, according to the Spanish government.

Since the salvage operation began in 2007, Odyssey Marine spent an estimated $2.6 million recovering the cargo. Spain has offered the company no compensation.

Melinda MacConnel, a lawyer with Odyssey Marine, said in her Supreme Court brief that the lower-court decisions could endanger the future of marine archaeology.

“This Court should address this nationally compelling issue because, with the advent of new underwater technology, more archaeological recoveries of shipwrecks and cargo are occurring around the world. With the Eleventh Circuit’s decision supporting them, foreign sovereigns without possession for hundreds of years will now conflictingly demand federal courts convey a salvage operator’s find to them,” Ms. MacConnel wrote.

“By the very nature and definition of a lost or sunken treasure, no party possesses it until recovery,” the lawyer wrote. But the appeals-court decision allows a foreign government to trump possession by claiming sovereignty over the sunken vessel and its cargo, she said.

There is no indication that Congress sought this outcome, MacConnel wrote.

Lawyers for Spain countered that the American treasure hunters desecrated a sacred burial site without the knowledge or permission of Madrid. Any artifacts recovered from the ship, they added, are an important part of Spanish history.

“Citing the ‘sad loss of the Frigate Mercedes,’ King Carlos IV declared war on Great Britain,” Spain’s brief to the high court said. “Spain entered the Napoleonic Wars as an ally of France, launching a decade of conflict that included destruction of the Spanish Navy at the Battle of Trafalgar, French invasion of Spain and installation of Napoleon’s brother Joseph as King of Spain, war within Spain, and interdiction of Spain’s links to its overseas viceroyalties.”

The brief continues: “As one of Odyssey’s experts put it, ‘the loss of the Mercedes on October 5, 1804 was a pivotal event in the history of Spain and of the Spanish Empire more broadly.’ ”

Claims were also filed on behalf of Peru and 25 individuals who said they were descendants of those who died aboard or owned cargo on the ship.

The claims were rejected.

The Odyssey Marine project began in 2006, when the company decided to focus on an area heavily trafficked by European merchant ships in the 19th century. They discovered the cargo roughly 100 miles west of the Strait of Gibraltar, or about a day’s voyage from the port at Cadiz.

The company recovered 594,000 coins and filed a claim for the treasure in federal court in Tampa in April 2007. Odyssey said it had been unable to verify the identity of the ship. Lawyers for Spain argued successfully that it was the Mercedes.

The US government filed a friend-of-the-court brief in support of Spain’s claim. It cited a 1902 treaty in which sunken Spanish warships would be afforded the same sovereign protections that sunken US warships would receive in US courts.

The Mercedes sank Oct. 5, 1804, during an encounter with the British Navy. The Mercedes was part of a four-ship group returning from Peru.

The British ordered the Spanish ships to go to England. After refusing, the warships engaged in what became known as the Battle of Cape St. Mary. The 34-gun Mercedes suffered a catastrophic explosion. The ship carried 337 individuals, and all but 50 died.

After the sinking, the three other Spanish ships surrendered and were escorted to England.