Supreme Court Refuses Appeals In Treasure Hunter Cases

As a follow up to my post of September 21, 2011 detailing the 11th Circuit Court of Appeals' decision finding treasure found by Odyssey Marine Exploration was the property of the Spanish Goverment, the U.S. Supreme Court denied appeals from that decision yesterday (see page 12 of linked Order list).

Three separate appeals, or Petitions for Certiorari, for the U.S. Supreme Court to hear the appeals were denied on May 14, 2012. They included appeals by Odyssey Marine, the Government of Peru, and claimed descendants of owners of cargo from the shipwreck.

Contrary to conventional wisdom, it is not always "finders keepers" and possession is not 9/10ths of the law, at least when it comes to the spoils from a sunken warship.

Supreme Court Resolves LHWCA Circuit Split

Yesterday, the U.S. Supreme Court ruled that under the Longshore and Harbor Worker's Compensation Act (LHWCA, 33 U.S.C. Sec. 901), an employee is "newly awarded compensation" when he first becomes disabled, and therefore entitled to benefits calculated in that fiscal year, not a later year when a compensation order is issued. This decision by Justice Sotomayor resolves a split among U.S. Courts of Appeals that had calculated benefits based either on date of disability, or, the date of an award Order.

The LHWCA generally functions like a workers compensation program, where an employer is obligated to pay benefits to an employee injured on the job. The Act caps disability benefits at "twice the applicable national average weekly wage" for the fiscal year where an employee is "newly awarded compensation." 33 U.S.C. 906(b)(1). In most cases employers pay benefits without contesting liability, but if an employer does contest the claim, the Dept. of Labor will adjudicate the claim, which if decided in the employee's favor, results in a compensation award.

In the case before the Court, the issue was whether the employee was due the wage rate for the year he was injured, or the year in which the an Order requiring payment under the Act was issued. The rate for the year in which the Order was issued was higher than the rate for the year the injury occurred. Justice Sotomayor, and seven other members of the Court, held that the date of disability controls the benefit amount, not the date of a potential order issued in the future. The Court cited the possibility of unequal treatment of similarly situated claimants, where one claimant could potentially garner a higher rate by delaying or contesting a LHWCA benefit being voluntarily paid by an employer. Also the Court recognized the potential for "gamesmanship in the claims process" if the benefit rate were based on an adjudication date as opposed to the date of disability onset.

Supreme Court Rules States Do Not Own Non-Navigable Portions of Rivers

In a decision issued February 22, 2012, the United States Supreme Court reversed a decision by the Supreme Court of Montana, which assessed $41 million in "rent" due to the State for river beds used by hydroelectric power plants. Under the "Equal Footing Doctrine," which provides that upon statehood, a State gains title to beds of waters "then navigable." However, any land beneath waters which were not navigable at the time of statehood are retained by the federal government.

The Court rejected the Montana Supreme Court's finding that the various rivers in question, and particularly the portions where the power company made use, were navigable for title purposes, and thus property of the State. The Court applied a segment by segment approach, which the lower Court had deemed inapplicable for "short interruptions" of navigability, and found non-navigable sections of river, including portages, do defeat navigability for title purposes. In other words, the U.S. Supreme Court essentially concluded that a state can't claim title, and charge rent for, sections of its rivers which were not navigable upon statehood, and that no exception for "short interruptions" applies.

The Court distinguished navigability determinations under the equal footing doctrine from navigable waters determinations for admiralty jurisdiction, noting a much more expansive definition of navigable waters for jurisdiction purposes.