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Williamson v. Recovery Limited Partnership

November 30, 2006

MICHAEL WILLIAMSON, ET AL., PLAINTIFFS,
v.
RECOVERY LIMITED PARTNERSHIP, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Sargus

OPINION AND ORDER

This case was filed by a number of individuals and/or entities who claim that they were promised a percentage of the proceeds of treasure sold by defendants. Those plaintiffs will be referred to as the "Williamson plaintiffs" because there were also other plaintiffs in this case who have made different claims. The treasure that is the subject of the Williamson plaintiffs' claims was recovered through defendants' salvage operation of the shipwrecked S.S. Central America, a sidewheel steamer that sank in the Atlantic Ocean in 1857. The vessel was carrying, among other things, a cargo of gold bars destined for New York. The Williamson plaintiffs all provided service, equipment, or other assistance for the salvage effort. In their complaint (which was filed in the Franklin County, Ohio Court of Common Pleas and removed to this Court), they claim a contractual entitlement to a share of the proceeds from sales of the recovered gold.

Defendants have moved for a change of venue. They argue that this Court is either required to, or ought to, transfer the case to the United States District Court for the Eastern District of Virginia at Norfolk. That Court presided over, and still retains jurisdiction over, litigation involving these defendants and the insurers who claimed ownership of the Central America's treasure. According to defendants, the Eastern District of Virginia has great familiarity with the issues surrounding the recovery of the treasure, the need to maintain absolute secrecy concerning the defendants' novel methods of operation, and the terms under which the treasure was to be marketed, and is therefore in the best position to evaluate the plaintiffs' claims. For the following reasons, the motion to change venue will be denied.

I.

The facts surrounding the motion to change venue are largely undisputed. For purposes of ruling on this motion, the Court assumes the truth of the Williamson plaintiffs' allegations that they have a contract with defendants (or some of them) which promises them a percentage of the proceeds of the sale of treasure recovered from the Central America, and that although some amount of gold has been brought to the surface and sold, they have not received any money.

The Williamson plaintiffs do not appear to have any substantial connection with Ohio. However, at least at one time, the defendants were headquartered in Columbus, and the contracts at issue were apparently signed here.

The shipwreck itself does not lie within the territorial waters of the United States. However, once the defendants located the ship and proposed to conduct salvage operations, other claimants to the treasure surfaced. In order to resolve the issues of ownership of the treasure and salvors' rights, litigation was commenced in the Eastern District of Virginia. That court has now rendered a final decision on how the proceeds of sale of the treasure are to be divided among the defendants here and other claimants. The Williamson plaintiffs were never a part of that litigation. That court has also retained jurisdiction to resolve certain disputes concerning the shipwreck, although the issues raised by the Williamson plaintiffs do not appear to be disputes over which the Virginia District Court has specifically retained jurisdiction.

The parties have filed affidavits relating to the location of documents and witnesses. Defendants state that the Virginia District Court has "exclusive access" to various documents and sealed transcripts relating to the marketing and confidentiality issues that defendants assert are crucial to this case. They note that the defendant business entities are all headquartered in Florida, and that although many of the individual defendants live in Ohio, they would not object to appearing in Virginia for court proceedings. From their perspective, the two key witnesses in this case are defendant Thompson, a Florida resident, and the Clerk of the District Court for the Eastern District of Virginia. They also note that the Eastern District of Virginia is the location of the legendary "rocket docket" and that the case would progress more swiftly in that jurisdition.

Plaintiffs point out that, in addition to many defendants being Ohio residents and the contracts having been signed in Ohio, the contracts include a forum selection clause which provides that any disputes concerning the contracts shall be resolved in this Court. The contracts also state that they are to be construed according to Ohio law. Finally, plaintiffs note that at least two of the District Judges who presided over the Virginia case are now deceased. The Court will make its venue decision on the basis of these facts.

III.

Before turning to the question of whether, as an exercise of discretionary authority, the Court should transfer this action to the Eastern District of Virginia, the Court must first address plaintiffs' argument that such a transfer is legally impermissible. According to plaintiffs, this action could not have been brought in the Eastern District of Virginia under any applicable venue statute. 28 U.S.C. §1404(a) permits the Court to transfer a case only to a judicial district in which the case might properly have been brought. Further, under Hoffman v. Blaski, 363 U.S. 335 (1960), the defendants' consent to the jurisdiction of the Virginia District Court does not cure the venue problem. Consequently, plaintiffs argue, the transfer requested by defendants may not be ordered under §1404(a).

Defendants counter by arguing that, under 28 U.S.C. §1391(b), an action such as this one may be brought in any district where "a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property which is the subject of the action is situated ...." They contend that under this test, this action could have been brought in the Eastern District of Virginia even if some or all of the defendants are not otherwise subject to personal jurisdiction in that district. Therefore, the transfer they request would not violate the rule announced in Hoffman v. Blaski.

The Court notes that the basis upon which the defendants removed this case is that at least one of the Williamson plaintiffs' claims sounds in admiralty law. The plaintiffs appear to concede that point, noting in their responsive brief that the contracts they are suing under are maritime contracts and that federal maritime law applies to their claims. If that is so, it would appear that a different set of rules applies when determining the proper venue of an admiralty case.

Fed.R.Civ.P. 82 provides that an admiralty or maritime claim is not treated as a civil action for the purposes of 28 U.S.C. §1391-1392. See also St. Paul Fire & Marine Ins. Co. v. Tug EAST COAST, 2002 WL 1906912 (E.D. La. 2002). Thus, although the statutes relating to changing venue (28 U.S.C. §1404 and 1406) apply in admiralty cases, the statutes for determining venue do not. Id. Rather, venue in an admiralty case is proper wherever the defendant has ...


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