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HQ 114738





June 23, 2000

VES-10-01-RR:IT:EC 114738 GEV

CATEGORY: CARRIER

Richard L. Tapp, Jr.
Nexsen Pruet Jacobs Pollard & Robinson, LLP 200 Meeting Street, Suite 301
Post Office Box 486
Charleston, South Carolina 29402

RE: Salvage; 46 U.S.C. App. § 316(d)

Dear Mr. Tapp:

This is in response to your letter dated June 22, 2000, on behalf of your client, the “Friends of the Hunley, Inc.” (FOH), requesting a ruling regarding the use of a foreign-flag jack-up crane barge, the KARLISSA B, in raising the former Confederate submarine, the H.L. HUNLEY (“HUNLEY”). In the event of our issuance of a ruling adverse to your client, alternatively you seek a waiver of the salvage statute (46 U.S.C. App. § 316(d)). Our position in this matter is set forth below.

FACTS:

History of the HUNLEY

The HUNLEY was lost off the coast of Charleston, South Carolina, after successfully attacking the Union blockade vessel, the U.S.S. HOUSATONIC, on February 17, 1864. This action marked the first time in naval history that a submarine sank a ship in battle. The HUNLEY never returned from its mission and its location was unknown until 131 years later when it was located in U.S. territorial waters off South Carolina in 1995 by author Clive Cussler. This submarine is approximately forty-five feet long, constructed of ¼ inch steel plate, encrusted with marine barnacles, and is believed to be filled with sediment and contain the remains of the nine member crew.

The HUNLEY is located in approximately 30 feet of water and buried under approximately a meter of sediment and is laying on its starboard side, with its bow pointing almost directly toward land.

Organization of Operations

At the conclusion of the Civil War, the title to all of the Confederacy’s instruments of war became the property of the U.S. Government. One such instrument was the HUNLEY.

On July 13, 1995, pursuant to the Transfer Order, Excess Personal Property, the U.S. General Services Administration (“GSA”) transferred responsibility for the HUNLEY and its related artifacts to the U.S. Department of the Navy (“Navy”), represented by the Naval Historical Center.

Due to the HUNLEY’s historical significance, South Carolina desired to recover, restore, and display the HUNLEY. To that end, a state agency, the Hunley Commission, was created.

In turn, in July 1996, the State of South Carolina, through the Hunley Commission; the Navy, through the Naval Historical Center; GSA; and other related state agencies entered into the Programmatic Agreement relating to the HUNLEY. The Programmatic Agreement provides South Carolina with custody of the HUNLEY in perpetuity contingent upon proper maintenance and display.

As noted above, the FOH is tasked by the State of South Carolina through the Hunley Commission with the recovery, restoration, and conservation of the HUNLEY under the oversight of a Hunley Oversight Committee. The FOH has, in turn, contracted with Oceaneering International, Inc. (“Oceaneering”) to serve as the rough equivalent of a general contractor for the raising of the HUNLEY. Additionally, personnel from the Naval Historical Center have control over raising the vessel and actively participate in the daily recovery operations.

Proposed Plan

In a meeting with representatives from this office at Customs Headquarters on June 21, 2000, the proposed operations to raise the HUNLEY were explained in detail by Mr. Leonard T. Whitlock, LLC, an independent consultant to the marine industry, and Ms. Jeanne M. Grasso, Esq. of the law firm Dyer, Ellis & Joseph. In addition to an
audio-visual presentation, the above-referenced Programmatic Agreement and other pertinent historical literature were also provided. During the course of this meeting, it was emphasized that time was of the essence in completing this project in view of the onset of hurricane season as well as the threat of looting the submarine, the latter of which has necessitated the placement of a round-the-clock guard at the site provided by the Navy.

As was explained in the above-referenced meeting, a critical element of the aforementioned operations involves the use of a crane barge in lifting the HUNLEY off the ocean floor and placing it aboard a barge for transport into the Charleston harbor.

With respect to the crane barge in question, it is stated that such a vessel must meet the following criteria: (1) capability of lifting one hundred (100) tons at a boom radius of seventy-five (75) feet over the stern of the crane barge; (2) while lifting such amount, the crane must be positioned on a stable platform with zero hook movement in either vertical or lateral directions (i.e., fully isolated from wave action); and (3) be a jack-up barge possessing at least six (6) legs for stability and to prevent “punch through” of the sea bottom.

While the transport barge and other support vessels used in these operations will be coastwise-qualified, initial efforts to procure a U.S.-flag crane barge meeting the above-listed criteria for this project were unsuccessful. Consequently, it is proposed to use the foreign-flag vessel KARLISSA B. Subsequent consultations with the U.S. Maritime Administration (MARAD) regarding this issue have ensued.

ISSUE:

Whether, under the facts as described above, the use of a foreign-flag crane barge in raising the HUNLEY from the ocean floor in U.S. territorial waters constitutes salvage in violation of 46 U.S.C. App.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, § 316(d) (46 U.S.C. App. § 316(d)), provides, in pertinent part:

No foreign vessel shallengage in salvaging operations in territorial waters of the United StatesProvided, however, that if, on investigation, the Commissioner of

Customs is satisfied that no suitable vessel wholly owned by a person who is a citizen of the United States and documented under the laws of the United Statesis available in any particular locality he may authorize the use of a foreign vessel or vessels in salvaging operations in that locality and no penalty shall be incurred for such authorized use.

Consequently, whether the use of a foreign-flag vessel in the circumstances described above constitutes a violation of this statute is determined by a two-prong test: (1) does the activity in question constitute salvage; and (2) if the activity does constitute salvage, are there no suitable U.S. vessels available in this particular locality. Our analysis in this matter proceeds accordingly.

In order for a marine operation to constitute “salvage,” according to the law developed in this area (see B.V. Bureau Wijsmuller v. United States, 702 F.2d 333, 337 (1983), in which the history of salvage law is briefly discussed), three elements are necessary. These elements are: “marine peril; service voluntarily rendered, not required by duty or contract; and success in whole or in part, with the service rendered having contributed to the success.” (Wijsmuller, 702 F.2d at 338, citing The Sabine, 101 U.S. 384, 25 L.Ed. 982 (1880)) To quote further from Wijsmuller, 702 F.2d at 338: “[p]eril necessary to give rise to a claim for salvage must be present and impending, although it need not be immediate or absolute. ‘A situation of actual apprehension, though not of actual danger, is sufficient.’ Absent danger, any services rendered a vessel cannot properly be called salvage” (See also Cope v. Vallette Dry-Dock Co., 119 U.S. 625 (1887); Simmons v. The Steamship Jefferson, 215 U.S. 130 (1909); de Kerchove’s International Maritime Dictionary, 2d Ed., 1961, p. 680, and Black’s Law Dictionary, 5th Ed., 1979 p. 1202, 1203)

It is counsel’s position that, “[s]ince the Hunley has remained undisturbed underwater for over 136 years, is covered by sediment and encrusted, and, thus is in no further peril, efforts at raising it cannot be considered ‘salvage’.” This position is not supported by judicial precedent. In Treasure Salvors v. Unidentified Wrecked, etc., 569 F.2d 330 (1978), the court determined that the critical element of marine peril existed in efforts to raise the ATOCHA, a Spanish galleon laden with gold bullion that sank off the Florida Keys in 1622. Notwithstanding the fact that this vessel lay buried beneath sand for over three centuries, the court nonetheless stated that “[e]ven after discovery of the vessel’s location it is still in peril of being lost through
the actions of the elements.” Id. at p. 337 (See also Cobb Coin Co., Inc. v. Unidentified Wrecked, Etc., 549 F.Supp. 540, 557 (1982); Platoro Ltd., Inc. v. Unidentified Remains, Etc., 659 F.2d 893, 901 (1983); and Customs ruling letter 103091, dated November 15, 1977) Further evidence of marine peril in this matter is the urgency with which a ruling is requested in view of the onset of the hurricane season and the threat of looting to the HUNLEY.

The proposed use of a foreign-flag vessel in this case is stated to be consistent with the following Customs ruling letters: (1) 114642, dated March 25, 1999; (2) 114690, dated July 7, 1999, confirming the previous listed ruling; (3) 113838, dated February 25, 1997; and (4) 113405, dated April 19, 1995. These facts of these cases are distinguishable from those of the instant case as follows.

The first two of the above-cited cases addressed the use of foreign-flag jack-up barges in the removal of a wrecked vessel from the coastal waters of the State of Oregon where it had broken in half and separated. The bow portion had been successfully towed hundreds of miles out to sea and sunk. The stern section of the vessel to be recovered by the jack-up barges was to be cut in manageable proportions and scrapped. Consequently, since no further damage would be incurred to the remaining stern section, Customs concluded that the element of marine peril was nonexistent and the ensuing recovery operation therefore did not constitute salvage.

With respect to the third of the prior Customs rulings listed above, it addresses a myriad of activities herein inapplicable and is merely cited for the purpose of setting forth the definition of salvage discussed above. The final ruling cited for our consideration concerns the use of a Canadian-flag vessel to pull up discontinued submerged cables which were to subsequently be scrapped. As with the first two rulings discussed above, no further damage could have occurred with respect to these cables. Consequently, the element of marine peril was non-existent and the activity therefore did not constitute salvage.

Accordingly, it is our position that the HUNLEY is in marine peril thereby meeting the first criterion of salvage. Furthermore, the absence of a legal duty or obligation in this operation meets the second of the aforementioned criteria (See Wijsmuller at 339). Therefore, notwithstanding the probability of success in this project (the third criterion), we have determined that the first prong of the statute would be met with respect to the proposed operation to raise
the HUNLEY. With respect to the second prong (any availability of U.S. vessels in the locality), we are in receipt of a letter dated June 23, 2000, from Doris J. Bautch, Acting Director, Office of Ports and Domestic Shipping, MARAD, wherein she states as follows:

In advance of the determination whether U.S.-flag vessels are suitable and available in this particular locality, MARAD has contacted several companies active in lift work as well as the Offshore Marine Service Association (OMSA). The information gained from these parties indicates that when the full technical specifications and timing requirements for the salvage of the HUNLEY are known, these companies will be able to provide suitable equipment in the locality discussed as required. Further, we have taken the extra step of also contacting the U.S. Navy’s Supervisor of Salvage and Diving. In conversation with the naval experts on salvage operations, they are also in concurrence that suitable U.S.-Flag assets should be available for this task, based on the information available. An attachment stating point of contact information for the companies operating salvage and lift vessels and the Navy’s Supervisor of Salvage is provided.

Accordingly, in view of our analysis of this matter, we conclude that the proposed use of a foreign-flag vessel in raising the HUNLEY would constitute salvage in violation of 46 U.S.C. App. § 316(d).

In regard to your alternative request (i.e., a waiver of 46 U.S.C. App. § 316(d)), you should know that the navigation laws (including 46 U.S.C. App. § 316(d)) can only be waived under the authority provided by the Act of December 27, 1950 (64 Stat. 1120; note preceding 46 U.S.C. App. § 1). This statute provides that “[t]he head of each department or agency responsible for the administration of the navigation and vessel inspection laws is directed to waive compliance with such laws upon the request of the Secretary of Defense [and] [t]he head of such department or agency is authorized to waive compliance with such lawseither upon his own initiative or upon the written recommendation of the head of any government agency whenever he deems that such action is in the interest of national defense.”

With respect to the above-cited national defense criterion, the standard by which such a waiver is reviewed by the Department of Defense is whether the failure to approve such a request results in an
immediate and adverse impact to the national defense. It is readily apparent that your waiver request does not meet this standard. Notwithstanding our position in this matter, we urge you to continue consulting with MARAD for the purpose of obtaining a suitable U.S. vessel for this project.

HOLDING:

Under the facts as described above, the use of a foreign-flag crane barge in raising the HUNLEY from the ocean floor in U.S. territorial waters constitutes salvage in violation of 46 U.S.C. App. § 316(d).

Sincerely,

Acting Chief

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