Ehorn, Paul L. v. Abandoned Shipwreck

In the
United States Court of Appeals
For the Seventh Circuit
____________

Nos. 01-3882 & 01-4326
PAUL L. EHORN,
Plaintiff-Appellee,
v.

SUNKEN VESSEL KNOWN AS THE “ROSINCO,” her tackle,
appurtenances, furnishings, and cargo,
Defendant.
Appeal of:
STATE OF WISCONSIN,
Intervening Defendant.
____________
Appeals from the United States District Court
for the Eastern District of Wisconsin.
No. 00-C-1086—William E. Callahan, Jr., Magistrate Judge.
____________
ARGUED MAY 20, 2002—DECIDED JUNE 21, 2002
____________

Before EASTERBROOK, ROVNER, and EVANS, Circuit
Judges.
EASTERBROOK, Circuit Judge. Between 1916 and 1928 the
Rosinco—the first diesel-electric vessel berthed in Chi-
cago—was one of the largest (at 95 feet and 82 gross tons)
and most opulent yachts on the Great Lakes. While en
route from Milwaukee to Chicago early on September 19,
1928, the Rosinco struck something and sank in 185 feet of
2 Nos. 01-3882 & 01-4326

water about 12 miles off Kenosha, Wisconsin. Paul Ehorn
was arrested in October 1998 after he retrieved one of its
portholes. Wisconsin commenced a criminal prosecution,
charging Ehorn with looting from a vessel that (the state
believes) belongs to it under the Abandoned Shipwreck Act
of 1987, 43 U.S.C. §§ 2101-06. Ehorn countered that he dis-
covered the wreck and thus became its owner under ad-
miralty law, because (he asserts) the state’s claim does not
satisfy the statutory requirements. States own two catego-
ries of vessels: those that have become “embedded” (a de-
fined term, see 43 U.S.C. §2102(a)) and those “included
in or determined eligible for inclusion in the National Reg-
ister” of Historic Places. 43 U.S.C. §2105(a)(3). After the
criminal prosecution had been pending for about eight
months, Ehorn filed this federal admiralty action, seeking
a declaration good against the world that he is the wreck’s
owner.

The Rosinco
In lieu of serving any documents on the Attorney General
of Wisconsin, Ehorn had notice published in two newspa-
Nos. 01-3882 & 01-4326 3

pers and posted in the federal courthouse. Publication is
essential in an in rem proceeding, in case someone has a
previously unsuspected interest in the vessel. But why not
notify Wisconsin? Ehorn’s only explanation is that his
lawyer had told the criminal prosecutor that he would file
an admiralty action eventually. The prosecutor was the
wrong person to inform; what is more, notice that an action
will be filed differs from notice that an action has been
filed—for it is the latter deed that starts the procedur-
al clock. No one representing Wisconsin in any capacity
learned that an admiralty action was under way until
October 31, 2000, when the prosecutor in Kenosha received
a gloating letter from Ehorn’s attorney, informing her that
the time to file a claim had expired, that the wreck now
belonged to Ehorn, and that the criminal prosecution there-
fore must be dismissed. (It has been stayed, not dismissed,
pending the outcome of the federal action.)
Counsel miscalculated, counting time from the action’s
filing rather than from the notice’s appearance in the news-
paper. The letter backfired by alerting the prosecutor to the
proceeding just in time to file a claim—which she did on
November 3, the last possible date. But she did not file
an answer within the 20 additional days specified by
the published notice. The prosecutor alerted the Attorney
General’s office in mid-December 2000, and counsel there
understood Admiralty Supp. R. C(6)(b) to dispense with
formal answers for proceedings in rem until the claimant
receives a copy of the complaint. Ehorn then moved for
judgment, contending among other things that lack of an
answer entitled him to prevail. This motion prompted the
Attorney General to file on February 9, 2001, an answer,
together with a request to accept it out of time. The answer
alleged that the Rosinco had been determined to be eligible
for inclusion on the National Register of Historic Places and
thus belongs to the state under 43 U.S.C. §2105(a)(3). See
66 Fed. Reg. 33,555 (June 22, 2001); see also the nomina-
4 Nos. 01-3882 & 01-4326

tion,† which includes much interesting information about
the vessel and its history. The district court, acting through
a magistrate judge on the parties’ consent, see 28 U.S.C.
§636(c), denied this motion and awarded Ehorn ownership
of the Rosinco without further ado. Ehorn v. Abandoned
Shipwreck known as the Rosinco, 185 F. Supp. 2d 965 (E.D.
Wis. 2001). The court first concluded that an action against
the vessel itself is proper, even though the Marshal had not
arrested the ship (normally essential to a proceeding in
rem, see Admiralty Supp. R. C(3)(a)). The court wrote that
posting of notice in the courthouse is a satisfactory substi-
tute to posting on the vessel—indeed preferable when it
is submerged. Then it held that counsel’s error in failing to
answer within the time specified by the notice did not sup-
ply good cause for a belated filing. Because this left Ehorn
as the only claimant, he prevailed by default.
The district court’s assumption that only “good” cause
permits an untimely answer in an admiralty case is incor-
rect, as we have held recently (though after the district
court’s decision). “Cause” is enough, and in admiralty an
attorney’s mistake can be “cause.” See Alter Barge Line,
Inc. v. Consolidated Grain & Barge Co., 272 F.3d 396, 397
(7th Cir. 2001). Error is understandable in a case such
as this, where the filing deadline appears in a notice that
was never served on the only rival claimant. Criminal
prosecutors, who do not represent the state in civil cases,
let alone in admiralty litigation—a body of law whose
arcane rules sometimes befuddle even grizzled veterans—
cannot be expected to handle these matters flawlessly. Not
until well after the deadline for the answer (set by the
notice at 20 days from the claim) did the proceeding first
come to the attention of a lawyer authorized to represent

† http://www.seagrant.wisc.edu/shipwrecks/michigan/Rosinco/
Rosinco1.html
Nos. 01-3882 & 01-4326 5

the State of Wisconsin in civil litigation, and even then the
state lacked the benefit of service. That the state managed
to file an answer within two months of (some) notice to the
Attorney General’s office is a sign of its good faith, not of
the sort of truculence that might justify a judgment against
a party otherwise entitled to win—for recall that the an-
swer, when filed, showed that the wreck belongs to the state
under the statutory criteria.
True, the Department of the Interior did not list the
Rosinco as eligible for the National Register until February
8, 2001, the day before Wisconsin filed its answer. Ehorn
speculates that, if the state had answered by the end of
November 2000, the court might have decided in his favor
before the wreck was listed as eligible. That seems unlikely;
the state also contends that the wreck is “embedded” in the
lake bottom, and a court could not have come to a responsi-
ble conclusion on that question before February 2001. All
that an earlier answer would have precipitated was discov-
ery about the status of the wreck, and before the discovery
process could have run its course the declaration of eligibil-
ity for listing would have handed victory to the state on a
silver platter. (The Rosinco was finally listed on July 18,
2001. As far as we know, there was no opposition to the
nomination.)
We need not determine whether the district court abused
its discretion in declining to accept an untimely answer—a
subject on which Alter Barge may be a ticket good for one
ride only, see 272 F.3d at 398 (“[w]e limit our holding to the
facts of this case”)—because the state was entitled to
withhold an answer until it had been served. Let us assume
without deciding that a vessel may be “arrested” without a
visit from the Marshal. (That question remains open for de-
cision when the answer matters.) Still, even in an in rem
proceeding personal service may be essential. Admiralty
Supp. R. C requires publication but does not forbid personal
service, nor would a prohibition make sense. Usually the
6 Nos. 01-3882 & 01-4326

arrest and posting on the vessel affords notice to the ves-
sel’s owner. The normal admiralty in rem proceeding follows
a collision, allision, or other accident of which the owner is
bound to be aware. As this case shows, though, arrest
in admiralty does not always ensure that the principal
competing claimant has actual knowledge of the contest.
There was no accident or equivalent event, no notice that
was likely to come to the attention of Wisconsin—which
Ehorn knew from the criminal prosecution to be his major,
if not only, rival for ownership. These circumstances make
it impossible to excuse Ehorn from sending written notice
of the pending action. Even in an in rem action, the initia-
tor must give notice reasonably calculated to alert any
known competing claimant. See Dusenbery v. United States,
534 U.S. 161 (2002). The due process clause of the fifth
amendment requires no less. See Mullane v. Central
Hanover Bank & Trust Co., 339 U.S. 306, 315 (1950) (pub-
lication is inadequate when you know who the interested
parties are and how to contact them). See also, e.g., Greene
v. Lindsey, 456 U.S. 444 (1982) (posting a notice on affected
property not necessarily adequate); Schroeder v. New York
City, 371 U.S. 208 (1962) (riparian rights; publication
inadequate); Walker v. Hutchinson, 352 U.S. 112 (1956)
(eminent domain; publication inadequate); New York City
v. New York, New Haven & Hartford R.R., 344 U.S. 293
(1953) (bankruptcy; publication inadequate).
Ehorn readily could have served the persons authorized
to represent Wisconsin in admiralty proceedings. Yet he has
not done so to this day. Wisconsin’s time to file an answer
thus has not started to run, see Admiralty Supp. R. B(3)(b)
(“defendant shall serve an answer within 30 days after
process has been executed”), and the district court was not
entitled to enter a default judgment for lack of a timely
answer.
REVERSED AND REMANDED
Nos. 01-3882 & 01-4326 7

A true Copy:
Teste:

________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit

USCA-97-C-006—6-21-02