RMS Titanic, Inc. v. Wrecked & Abandoned Vessel, 742 F. Supp. 2d 784 - Dist. Court, ED Virginia 2010 - Google Scholar 10/22/12 6:08 PM 742 F.Supp.2d 784 (2010) R.M.S. TITANIC, INC., successor-in-interest to Titanic Ventures, limited partnership, Plaintiff, v. The WRECKED AND ABANDONED VESSEL, Its Engines, Tackle, Apparel, Appurtenances, Cargo, etc., Located Within One (1) Nautical Mile of a Point Located at 41 43' 32" North Latitude and 49 56' 49" West Longitude, Believed to be the R.M.S. Titanic, In Rem, Defendant. No. 2:93cv902. United States District Court, E.D. Virginia, Norfolk Division. August 12, 2010. 788 *788 Brian Andrew Wainger, RMS Titanic Inc., Virginia Beach, VA, Matthew D. Pethybridge, Carr & Porter LLC, Portsmouth, VA, Robert William McFarland, McGuirewoods LLP, Norfolk, VA, David J. Bederman, Emory University School of Law, Atlanta, GA, for Plaintiff. OPINION REBECCA BEACH SMITH, District Judge. This matter comes before the court on R.M.S. Titanic, Inc.'s ("RMST") Motion for a Salvage Award ("Motion") filed on November 30, 2007.[1] The court held an evidentiary hearing on RMST's Motion on October 26-29, 2009, and on November 2 and 23, 2009. For the reasons set forth below, the court GRANTS RMST's motion for a salvage award in the amount of ONE HUNDRED PERCENT (100%) the fair market value of the artifacts recovered in the 1993, 1994, 1996, 1998, 2000, and 2004 expeditions to the wreck of the R.M.S. Titanic. The court specifically reserves the right to determine at a later time whether to pay such award in currency or via an in specie award. I. Factual and Procedural History It has been nearly one hundred years since the R.M.S. Titanic ("Titanic") sank in the waters of the North Atlantic in the early hours of April 15, 1912, killing more than 1,500 of the 2,228 people onboard. For over half a century, the Titanic lay undetected, 12,500 feet below the surface, in international waters four hundred nautical miles southeast of Newfoundland, until a joint American-French expedition discovered the wreck in 1985. In 1987, RMST's predecessor-in-interest, Titanic Ventures Limited Partnership ("TVLP"), participated in a joint expedition with the Institut français de recherche pour l'exploitation de la mer ("IFREMER") to begin salvage operations at the site. Over the course of thirty-two dives to the Titanic wreck, TVLP recovered approximately 1,800 artifacts ("1987 artifacts"), which were taken to France for conservation and restoration.[2] On May 4, 1993, RMST, formerly known as First Response Medical, Inc., acquired all the assets and liabilities of TVLP, including TVLP's interest in the Titanic salvage operations and the 1987 artifacts. In the summer of that year, RMST conducted another expedition to the Titanic wreck site, pursuant to a charter with IFREMER,[3] recovering approximately 800 artifacts ("1993 artifacts") and producing 105 hours of videotape over the course of fifteen dives. After bringing the 1993 artifacts to Norfolk, Virginia, RMST commenced the current in rem action on August 26, 1993. http://scholar.google.com/scholar_case?case=1500478274150354361&q=742+f.+supp.+2d+784&hl=en&as_sdt=2,47 Page 1 of 32 RMS Titanic, Inc. v. Wrecked & Abandoned Vessel, 742 F. Supp. 2d 784 - Dist. Court, ED Virginia 2010 - Google Scholar 10/22/12 6:08 PM The court issued a warrant directing the United States Marshal to arrest the wreck and all the artifacts that had already been salvaged and that were yet to be salvaged. The court also ordered that RMST be substituted for the Marshal as custodian of the Titanic wreck, the wreck site, and the artifacts. Formal notice of the court's order appeared in The Virginian-Pilot, The Wall 789 Street Journal, and The Journal of Commerce, directing persons who had any *789 claim to the wreck, or any of the associated property, to appear and state their claims. The only party to file a claim was Liverpool and London Steamship Protection and Indemnity Association Limited ("Liverpool & London"), which had insured passenger personal property and baggage on board the Titanic. On October 20, 1993, a French administrator in the Office of Maritime Affairs of the Ministry of Equipment, Transportation, and Tourism awarded TVLP title to the 1987 artifacts. The 1987 artifacts are not included in the present Motion.[4] After RMST reached a settlement agreement with Liverpool & London, the court dismissed Liverpool & London's claim on June 7, 1994. By separate order that same day, the court awarded RMST exclusive rights to salvage the Titanic wreck as salvor-in- possession. Thus, in the summer of 1994, RMST and IFREMER conducted another expedition to the wreck, recovering over 1000 more artifacts ("1994 artifacts") and producing approximately 125 hours of videotape. Pursuant to Federal Rule of Civil Procedure 60(b), John Joslyn ("Joslyn") filed a motion on February 20, 1996, asking the court to reconsider the June 7, 1994, Order making RMST salvor-in-possession. Joslyn argued that RMST was not fulfilling its duty as salvor-in-possession on the grounds that RMST had not made an expedition to the site in nearly two years and that it did not have the financial means to do so. On May 10, 1996, the court upheld RMST's status as salvor-in-possession in a Memorandum Opinion and Order, finding RMST had exercised due diligence, had maintained ongoing salvage operations, and had demonstrated its efforts were clothed with a prospect of success. R.M.S, Titanic, Inc. v. Wrecked & Abandoned Vessel, 924 F.Supp. 714, 722-724 (E.D.Va. 1996). The court's holding was partially based on the fact that RMST had "promised the Court that it would keep the artifacts together and preserve them for the public," and, at least until that point, RMST had kept that promise. Id. at 723. RMST's 1996 expedition to the Titanic, again in conjunction with IFREMER, led to the recovery of 74 artifacts ("1996 artifacts") and the production of approximately 125 hours of videotape. With the cooperation of RMST, Discovery Communications, Inc. ("Discovery") joined the expedition, from which it produced three hours of television programming for The Discovery Channel.[5] Also on the 1996 expedition, efforts began to recover a section of the Titanic hull, known as the "Big Piece," measuring approximately 26 feet by 20 feet and weighing approximately 20 tons. Nevertheless, efforts to raise the Big Piece on the 1996 expedition were ultimately unsuccessful. In the summer of 1998, pursuant to another charter with IFREMER, RMST returned to the Titanic site, recovering approximately 70 artifacts ("1998 artifacts"), which included the Big Piece, and producing 350 hours of videotape. Once again, Discovery joined the expedition, producing five hours of television programming, which included the first-ever live broadcast from the Titanic wreck site. On May 4, 1998, RMST sought an injunction to prohibit Deep Ocean Expeditions ("DOE") from organizing tourist expeditions to the Titanic wreck site for the purposes of photographing it. That same day, Christopher Haver ("Haver"), an individual who had 790 paid DOE $32,000 to participate *790 in such an expedition, filed an action in this court seeking a declaratory judgment that he was entitled to enter the Titanic wreck site. After consolidating Haver's action with this in rem proceeding, the court granted RMST's motion for an injunction on June 23, 1998, enjoining DOE, Haver, and others from photographing the Titanic wreck. The court found an injunction necessary, in part, to compensate RMST for its efforts as salvor-in-possession, given that RMST could not sell the artifacts in its care. R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, 9 F.Supp.2d 624, 636 (E.D.Va.1998). On appeal, the Fourth Circuit reversed the court's decision to grant an injunction, holding that the court could not enjoin DOE, Haver, and others from traveling to and photographing the Titanic wreck. R.M.S. Titanic, Inc. v. Haver, 171 F.3d 943, 970 (4th Cir.1999) ("Titanic 1999"). The Fourth Circuit affirmed, however, this court's decision to name RMST as salvor-in-possession. Id. at 966. On remand, this court entered an order consistent with the Fourth Circuit's ruling, monitoring http://scholar.google.com/scholar_case?case=1500478274150354361&q=742+f.+supp.+2d+784&hl=en&as_sdt=2,47 Page 2 of 32 RMS Titanic, Inc. v. Wrecked & Abandoned Vessel, 742 F. Supp. 2d 784 - Dist. Court, ED Virginia 2010 - Google Scholar 10/22/12 6:08 PM RMST's salvor-in-possession status with periodic reports and hearings. See R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, No. 2:93cv902 (E.D.Va. July 7, 1999). RMST completed another expedition to the Titanic wreck site in the summer of 2000, in conjunction with the P.P. Shirshov Institute of Oceanology of Moscow, Russia ("Shirshov Institute"), which provided the research vessel "Akademik Mstislav Keldysh" and two deep manned submersibles, the "MIR-1" and the "MIR-2." The 2000 expedition consisted of twenty-eight dives and resulted in the recovery of over 900 artifacts ("2000 artifacts"), as well as the discovery of a new debris field. In the summer of 2001, the court learned that RMST had plans to transfer interest in the Titanic artifacts. After holding a hearing, the court issued an order on September 26, 2001, finding that its previous orders to prevent sales of individual Titanic artifacts "were proper and were necessary when entered." R.M.S. Titanic, Inc. v. The Wrecked & Abandoned Vessel, No. 2:93cv902, at 2 (E.D.Va. Sept. 26, 2001) ("Titanic 2001").[6] After RMST appealed the September 26, 2001, Order, the court amended that order on October 19, 2001, to further explain its position. RMST then filed an amended notice of appeal, appealing both orders. The Fourth Circuit held an expedited hearing on the matter, and on June 6, 2002, affirmed the position of the court: The Titanic was a historic ship, and the artifacts recovered from its wreckage therefore have enhanced value. RMST currently has a unique role as the Titanic's exclusive salvor, and, having performed salvage services, it 791 has a lien in the artifacts and is entitled to a reward enforceable against those artifacts. At *791 this stage of the proceedings, however, we cannot conclude that RMST has title to any artifacts. We also cannot conclude that the course that the district court is pursuing violates the law of salvage or amounts to an abuse of discretion. R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, 286 F.3d 194, 210 (4th Cir. 2002) ("Titanic 2002"). On February 12, 2004, RMST filed a "Motion for Salvage and/or Finds Award," pursuant to which the court held a hearing on May 17, 2004. In a Memorandum Opinion and Order, dated July 2, 2004, the court refused to recognize the French administrative judgment awarding title of the 1987 artifacts to RMST's predecessor, under principles of international comity. R.M.S. Titanic, Inc. v. The Wrecked & Abandoned Vessel, 323 F.Supp.2d 724, 730-34 (E.D.Va.2004) ("Titanic 2004"). Moreover, the court held that RMST, as salvor-in-possession, could not seek title to the artifacts under the law of finds because it would be "inequitable and inconsistent" for the court "to award a party both the exclusive right to recover objects on the premise that the recovery is being performed for the benefit of the objects' owners, and to award title to the objects once they are recovered on the premise that they were previously unowned." Id. at 737. On August 2, 2004, the court issued an order staying its proceedings pending RMST's interlocutory appeal. R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, 327 F.Supp.2d 664, 666-67 (E.D.Va. 2004). In the summer of 2004, RMST conducted its most recent expedition to the Titanic wreck site, pursuant to charters with Phoenix International, Incorporated ("Phoenix International") and Secunda Marine Services Limited ("Secunda Marine"). For the first time, RMST relied exclusively on a deep ocean remotely operated vehicle ("ROV"), which permitted round-the-clock underwater operations. The expedition resulted in the recovery of 75 artifacts ("2004 artifacts"), as well as the discovery of another debris field, with remnants of the first class a la carte restaurant. In 2006, on appeal of this court's decision in Titanic 2004, the Fourth Circuit affirmed this court's ruling that it is the law of salvage and not the law of finds that governs this case. See R.M.S. Titanic, Inc. v. Wrecked & Abandoned Vessel, 435 F.3d 521, 535 (4th Cir.2006) ("Titanic 2006"),[7] The Fourth Circuit remanded the case to this court to provide RMST with "an appropriate reward, which may include awards in specie, full or restricted ownership of artifacts, limitations on use of the artifacts, rights to income from display and shared research, and future rights to salvage." Id. at 538. On October 1, 2007, the court conducted a status hearing, and on October 16, 2007, the court issued a Memorandum Opinion and Order directing RMST to file a motion for a salvage award within sixty days, including all salvage costs through December 31, 2006, or RMST would waive the right to a salvage award up to and including that date. R.M.S. Titanic, Inc. v. The Wrecked http://scholar.google.com/scholar_case?case=1500478274150354361&q=742+f.+supp.+2d+784&hl=en&as_sdt=2,47 Page 3 of 32 RMS Titanic, Inc. v. Wrecked & Abandoned Vessel, 742 F. Supp. 2d 784 - Dist. Court, ED Virginia 2010 - Google Scholar 10/22/12 6:08 PM & Abandoned Vessel, 531 F.Supp.2d 691, 693 (E.D.Va.2007) ("Titanic 2007"). Further, the court entrusted the United States 792 Attorney for the Eastern District of Virginia to continue reviewing RMST's operations as salvor-in-possession, *792 as well as responding to any motion for salvage award RMST might file. Id. On November 30, 2007, RMST filed the instant Motion, along with several volumes of exhibits, seeking a salvage award for all of its efforts salvaging the Titanic wreck site through December 31, 2006.[8] In the Motion, RMST represented that the fair market value of the artifacts at that time, excluding the artifacts from the 1987 expedition, was $110,859,200. (Motion ¶ 10.) RMST further stated that it was seeking a salvage award between ninety to one hundred percent of the artifact's fair market value. (Id. ¶ 11.) After receiving an extension of time from the court, on March 17, 2008, the United States filed a motion seeking leave of the court to submit its views on RMST's Motion. With written consent from RMST, the court granted the United States' request, on March 25, 2008, to participate as amicus and ordered that the United States' amicus brief be filed. In its brief, the United States indicated that "an interim in specie award with limitations could serve as an appropriate award mechanism in this case," and therefore, the United States proposed certain limitations for the court's consideration. (United States' Resp. to RMST's Motion for Salvage Award at 10-16 (Mar. 17, 2008).) On April 15, 2008, the court issued an order directing RMST to submit proposed restrictive covenants. The court stated: At minimum, these proposed covenants must ensure that the artifacts are conserved and curated in an intact collection that is available to the public and accessible for historical research, educational purposes, and scientific research, in perpetuity. The proposed covenants shall incorporate safeguards to ensure that they will remain effective in perpetuity, notwithstanding any further changes in circumstances. Furthermore, the proposed covenants shall guard against contingencies that might impair their future effectiveness. R.M.S. Titanic, Inc. v. The Wrecked & Abandoned Vessel, No. 2:93cv902, at 6 n. 12 (E.D.Va. Apr. 15, 2008). With regard to the content of the covenants, the court indicated: Specifically, these covenants, at minimum, must ensure the following: (1) that the collection is maintained as an intact collection that joins those artifacts from the R.M.S. Titanic awarded to RMST by a French maritime tribunal; (2) that the collection is managed according to the professional standards recognized in the NOAA Guidelines, the International Agreement and the Annexed Rules, and the federal regulations governing the curation of the federally owned and administered archaeological collections; (3) that reasonable, ongoing oversight by NOAA is implemented in order to protect the United States' interests in the Titanic wreck site and the artifacts recovered therefrom, and to ensure compliance with all court-imposed covenants; (4) that the collection is protected in perpetuity by ensuring that the covenants run with the collection to any subsequent purchasers and/or successors-in-interest to RMST; and (5) that the collection is protected in the event of insolvency or bankruptcy by RMST. 793 Id. at 4-5 (footnotes omitted). Further, the court stressed that the covenants would need to protect the Titanic and its *793 artifacts as an international treasure for posterity, as expressed by the R.M.S. Titanic Maritime Memorial Act of 1986, 16 U.S.C. § 450rr et seq., the National Oceanic and Atmospheric Administration's ("NOAA") Guidelines for Research, Exploration, and Salvage of R.M.S. Titanic, 66 Fed.Reg. 18,905-18,913 (Apr. 12, 2001), the International Agreement Concerning the Shipwrecked Vessel R.M.S. Titanic, and the proposed legislation to implement the International Agreement. Id. 3-4. RMST submitted its proposed covenants and conditions ("C & Cs") on June 11, 2008, and a revised version on June 23, 2008. After extensive consultation with the United States, RMST submitted another revised version of the C & Cs on September 12, 2008, in compliance with the court's schedule.[9] Generally, the C & Cs provide for oversight by NOAA, extensive trustee obligations, a reserve fund, trustee default procedures, collection management, deaccession, bankruptcy procedures, and possible sale in the event of a rival collection. On October 14, 2008, the United States filed its amicus response to the C & Cs, http://scholar.google.com/scholar_case?case=1500478274150354361&q=742+f.+supp.+2d+784&hl=en&as_sdt=2,47 Page 4 of 32 RMS Titanic, Inc. v. Wrecked & Abandoned Vessel, 742 F. Supp. 2d 784 - Dist. Court, ED Virginia 2010 - Google Scholar 10/22/12 6:08 PM which approved of most provisions, objected to several provisions, and attached an edited version of the C & Cs. The court granted RMST leave to reply to the United States' concerns. At a hearing on November 18, 2008, the parties addressed the disputed issues, and the court oversaw further revisions. Specifically, the parties agreed to alter language about the trustee's obligations, deaccession, the reserve account, and the bankruptcy proceedings; delete a section about selling the collection if a rival collection emerges; and incorporate extrinsic sources. Taking into account these revisions, the court is satisfied that the current version of the C & Cs complies with the court's order dated April 15, 2008.[10] Finally, pursuant to the instant Motion for a Salvage Award, the court conducted an evidentiary hearing on October 26-29, 2009, and on November 2 and 23, 2009. On December 21, 2009, RMST submitted its Post-Hearing Memorandum in Support of its Motion for a Salvage Award. The United States opted to make no further submissions to the court. After almost seventeen years since the commencement of this in rem action, RMST's Motion for an interim salvage award is ripe for decision. II. Analysis A. Entitlement to a Salvage Award Principles of salvage law emerged over three thousand years ago, in the days of Rhodian civilization, and have since become an important part of the maritime law of nations. The purpose of salvage law is "to encourage persons to render prompt, voluntary, and effective service to ships at peril or in distress by assuring them compensation and reward for their salvage efforts." Titanic 1999, 171 F.3d at 962 (citing The Akaba, 54 F. 197, 200 (4th Cir.1893)). In that regard, a salvage award "is not viewed by the admiralty courts merely as pay, on the principle of a quantum meruit, or as a remuneration PRO OPERE ET LABORE, but as a reward given for perilous services, voluntarily rendered, and as an inducement to seamen and others to embark in such undertakings to save life and property." The Blackwall, 77 U.S. (10 Wall) 1, 14, 19 L.Ed. 870 (1869). Thus, in order to encourage salvage operations, a salvor is entitled to "liberal compensation." Id. Rather than obtaining title to the salvaged property, a salvor acts on behalf of the property's owner, thereby obtaining a lien 794 against the property saved. The *794 "Sabine", 101 U.S. 384, 386, 25 L.Ed. 982 (1879). The salvor's lien is exclusive and prior to all others, including the res owner, and it grants the salvor a possessory interest in the res pending satisfaction of the lien. Titanic 1999, 171 F.3d at 963. A salvor may enforce its lien on the salved property by pursuing an in rem action before an admiralty court. Id. A salvor must establish three elements to prove entitlement to a salvage award: (1) that the salved property faced a marine peril; (2) that the salvor's services were voluntarily rendered without any preexisting contractual obligation; and (3) that the salvage efforts were successful, in whole or in part. The "Sabine", 101 U.S. at 384. If any ambiguity still remains as to whether RMST has demonstrated these elements, the court explicitly finds that the prerequisites to a salvage award have been satisfied and that a salvage award is, therefore, warranted in this case. See Titanic 2006, 435 F.3d at 538 (directing this court on remand to "apply the principles of traditional salvage law to the wreck of the Titanic in a manner that ... provides an appropriate award to the salvor"). First, there can be little doubt that the Titanic, which now lies 12,500 feet below the surface, has faced, and continues to face, marine peril. See, e.g., Bemis v. RMS Lusitania, 884 F.Supp. 1042, 1051 (E.D.Va.1995) ("Courts will usually find that underwater shipwrecks are in marine peril, because sunken vessels and their cargoes are in danger of being lost forever." (citing Treasure Salvors, Inc. v. Unidentified Wrecked & Abandoned Sailing Vessel, 569 F.2d 330, 336-37 (5th Cir. 1978))). Second, RMST's salvage efforts were voluntary, in that RMST owed no contractual duty to perform the salvage. Last, RMST's efforts have been successful in retrieving thousands of artifacts from the wreck site. Thus, having determined a salvage award is appropriate, the court must now determine the amount of that award. http://scholar.google.com/scholar_case?case=1500478274150354361&q=742+f.+supp.+2d+784&hl=en&as_sdt=2,47 Page 5 of 32 RMS Titanic, Inc. v. Wrecked & Abandoned Vessel, 742 F. Supp. 2d 784 - Dist. Court, ED Virginia 2010 - Google Scholar 10/22/12 6:08 PM B. Factors to be Considered in Calculating the Salvage Award There is no precise formula for calculating a salvage award. Allseas Maritime, S.A. v. M/V Mimosa, 812 F.2d 243, 246 (5th Cir.1987). Because salvage cases are rarely alike, comparisons to previous awards are of little help, and the court must instead focus on the particular circumstances of the case at hand. See B.V. Bureau Wijsmuller v. United States, 702 F.2d 333, 339-40 (2d Cir.1983) (citations omitted).[11] In the Fourth Circuit, the fashioning of a salvage award is informed by seven factors, including six factors drawn from The Blackwall: (1) the labor expended by the salvors in rendering the salvage service; (2) the promptitude, skill, and energy displayed in rendering the service and saving the property; (3) the value of the property employed by the salvors in rendering the service, and the danger to which such property was exposed; (4) the risk incurred by the salvors in securing the property from the impending peril; (5) the value of the property saved; and (6) the degree of danger from which the property was rescued. 77 U.S. (10 Wall) at 14. In Columbus-America Discovery Group v. Atl. Mut. Ins. Co., 974 F.2d 450 (4th Cir. 1992) ("Columbus-America I"), the Fourth Circuit added a seventh factor: "the degree to which the salvors have worked 795 to protect the historical and archeological *795 value of the wreck and the items salved." Id. at 468. When calculating a salvage award, "the court of admiralty becomes a court of equity," such that the award "may properly be increased, diminished, or wholly forfeited, according to the merit or demerit of the salvor, in relation to the property saved." Id. (citations omitted). The amount of the salvage award "is primarily a matter of judgment to be exercised by the trial court, and, beyond a careful examination of the facts, little remains for the appellate court except to determine whether the judgment has been exercised in accordance with the general principles respecting salvage." Columbus-America Discovery Group v. Atl. Mut. Ins. Co., 56 F.3d 556, 569 (4th Cir.1995) ("Columbus-America II") (citation omitted). Thus, appellate courts apply an "extremely deferential standard of review" to salvage awards. Id. Traditionally, the maximum amount that a court would award for a successful salvage was the present market value of the salved property. See Platoro Ltd., Inc. v. The Unidentified Remains of a Vessel, 695 F.2d 893, 904 (5th Cir.1983). Any award higher than that value would have burdened rather than benefited the property's owner, a "result contrary to the goals of salvage law." Id. (citation omitted). Nevertheless, the Fourth Circuit has held, "[i]f it becomes apparent to the court that the proceeds of any sale would clearly be inadequate to pay the salvor its full reward, then the court might, as a matter of discretion, award the salvor title to the property in lieu of the proceeds of sale, thus saving the costs of sale." Titanic 2002, 286 F.3d at 204. Because whether to grant title is a matter of discretion for the court, the court must first determine the amount of the award and then determine how it ought to be paid. [12] 1. The Value of the Property Saved ( Blackwall Factor 5) When performing its analysis under The Blackwall factors, the court need only determine "a rough approximation of the worth of the salved property." Rand v. Lockwood, 16 F.2d 757, 759-60 (4th Cir. 1927). The salved property currently before the court includes all artifacts RMST recovered over the course of six expeditions: 1993, 1994, 1996, 1998, 2000, and 2004 (collectively, the "artifacts").[13] If the court decides to grant a monetary award, the ceiling for such an award would be the fair market value of the artifacts currently before the court. See Platoro, 695 F.2d at 904. According to RMST's experts, Paul Zerler ("Zerler") and Stephen Rogers ("Rogers") (collectively, the "appraisers"), the fair market value of the artifacts is currently over one hundred and ten million dollars. (See RMST Evid. Hr'g Ex. 50 at 18 ("2009 Update").)[14] That current valuation represents an update of their original appraisal, which began in 2000 and took approximately three and a half years to complete. In performing their initial appraisal, Zerler and Rogers took a "bottom-up" 796 approach, individually inspecting almost every Titanic artifact. *796 (Zerler Decl. ¶ 5 (Nov. 28, 2007) (hereinafter "Zerler Decl.").) The value of each object was determined based upon "the character of the object, its state of conservation, the scarcity of the item, and other relevant factors." (Id.) Although the appraisers determined fair market value by comparing the artifacts to "other reasonably comparable assemblages of artifacts and collectibles, ... because of the uniqueness of these artifacts, there http://scholar.google.com/scholar_case?case=1500478274150354361&q=742+f.+supp.+2d+784&hl=en&as_sdt=2,47 Page 6 of 32 RMS Titanic, Inc. v. Wrecked & Abandoned Vessel, 742 F. Supp. 2d 784 - Dist. Court, ED Virginia 2010 - Google Scholar 10/22/12 6:08 PM are no precise comparables." (Id.) Because the artifacts before the court are the only ones to originate from the Titanic wreck site, the appraisers believe that the artifacts are worth more as a collection than individually. (See id.) In 2007, Zerler and Rogers generated an updated appraisal based upon the values established in the original report ("2007 Update"). (See id. Ex. B.) The 2007 Update removed the 1987 artifacts, added the 2004 artifacts, and updated the appraisal figures to reflect market conditions. The appraisers determined that the 1993-2002 artifacts had doubled in value since their initial appraisal. (Id. Ex. B. at "2007 Update Addendum with 2004 Expedition Added.")[15] The 2004 artifacts were then appraised by multiplying the 2002 valuation of comparable artifacts by one hundred fifty percent. (Id.) The appraisers justified the increases based on the "art market, the collectables market, the notoriety of the Titanic, the mystery of the Titanic and the fact that it has become a household word and a metaphor for great or major tragedies or mistakes." (Id.) The increase is also due, in part, to increased notoriety following numerous exhibitions of the artifacts. (See id. at App. A at "Titanic Artifact Appraisal Summary" (2007).) The 2009 Update, other than correcting a relatively small error in calculation, maintains the findings of the 2007 Update, valuing the collection at $110,859,200. (2009 Update at 18.) The appraisers are of the opinion that the "current financial market volatility does not appear to be affecting unique, high end collectible values." (Id.) As evidence, the appraisers provide recent sales data from unique collectibles, including items from the Titanic that were recovered either from survivors or from the ship's flotsam and jetsam.[16] Among those items, the key to the E-Deck of the Titanic recently sold, in April 2009, for £ 60,000 (approximately $90,000). (2009 Update at 16.) A third-class manifest sheet, written in eight languages, also sold in 2009 for £ 23,000 (approximately $34,000). (Id. at 14.) In September 2007, the key to the ship's crow's nest sold for £ 90,000 (approximately $145,000). (Id. at 16.) The appraisers were careful to emphasize, however, that even these items from the Titanic are not directly comparable to the artifacts before the court. Zerler and Rogers assert that the carefully documented provenance of each artifact recovered from the wreck site drives up that artifact's value by a factor of ten, over any comparable item. (Id. at 6.) Nevertheless, the appraisers maintain that the "current valuation of the collection remains extremely conservative, and may be seen as a bottom beneath which lower valuation does not appear feasible." (Id. at 10.) The current valuation excludes RMST's "hard costs," such as the cost of salvage, preservation, lab operation, exhibition, and 797 storage, as well as the value of slides and *797 video films. (Id. at 18.)[17] The appraisers indicate those costs could be an additive to the current valuation of as much as $44,000,000 (as of 2007). (Id.) Moreover, Zerler and Rogers properly assumed, for purposes of the appraisal, that the artifacts would stay together as a collection and that none of the artifacts would be sold, either individually or in groups. (Id. at 10-11.) As evidence of the reliability of the Zerler-Rogers appraisal, RMST also submitted the report and testimony of Richard- Raymond Alasko ("Alasko"), an accredited senior appraiser for the American Society of Appraisers and principal in the Alasko Company. In the report, Alasko "confirms the reliability of the Zerler-Rogers conclusion of the Fair Market Value of the subject properties as $110,859,200 on 23 October 2009." (RMST Evid. Hr'g Ex. 52 at 22.) At the evidentiary hearing, upon questioning by the court, Alasko testified that he believed, were the court to hire an independent expert to value the collection, that the valuation would be substantially similar to that of Zerler and Rogers. The court recognizes the inherent difficulty in placing a fair market value on a collection of artifacts that has no real market equivalent. However, other methods of valuation are equally unsatisfactory, as there is no way to calculate the replacement cost of an irreplaceable collection. Similarly, the income method would overlook the intrinsic value of ownership, independent of income potential, possessed by truly rare historic and artistic collections. In the absence of a more attractive alternative, the court embraces the fair market value approach taken by the appraisers. Under The Blackwall factors, the court is charged with determining a "rough approximation" of the value of the property saved. Rand, 16 F.2d at 759-60. In assessing the reliability of the submitted appraisal, the court notes that Zerler has been a renowned http://scholar.google.com/scholar_case?case=1500478274150354361&q=742+f.+supp.+2d+784&hl=en&as_sdt=2,47 Page 7 of 32 RMS Titanic, Inc. v. Wrecked & Abandoned Vessel, 742 F. Supp. 2d 784 - Dist. Court, ED Virginia 2010 - Google Scholar 10/22/12 6:08 PM appraiser of artifacts, fine art, and collectibles for over forty-two years. (2009 Update at 3.) Along with Rogers, Zerler spent over 3600 hours valuing the Titanic artifacts. (Zerler Decl. Ex. B. at "Appraisal of Artifacts from the Wreck R.M.S. Titanic September 2000-June 2004 with 2007 Update Supplement" at 1.) Although Zerler could not testify at the evidentiary hearing on account of severe and current health issues, Rogers, a licensed civil engineer who served as a United States Navy Salvage Officer and has worked with Zerler since 1989, did testify. (See RMST Evid. Hr'g Ex. 52; 2009 Update at 4.) Rogers testified that items assessed by Zerler typically sell within ten to twelve percent of their appraised value, with the Atocha artifacts selling within eight percent of Zerler's appraisal.[18] Moreover, the Zerler-Rogers appraisal was independently reviewed by Alasko, who vouched for its accuracy. Taking into account the entire record before the court, the court FINDS $110,859,200 to be an appropriate approximation of the fair market value of the artifacts. That figure is representative of the invaluable service that RMST has provided in its salvage of the Titanic. 2. The Labor Expended by the Salvors in Rendering the Salvage Service ( Blackwall Factor 1) 798 The amount of time, money, and energy that RMST has expended since *798 1993 represents an enormous investment for the salvors. Over the course of six expeditions to the wreck site, RMST has spent over 180 days at sea, logged more than 100 dives, and spent a combined total in submersible operations in excess of 1000 hours. (Geller Decl. ¶¶ 3, 10 (Nov. 29, 2007) (hereinafter "Geller Decl.").) In expedition costs alone, RMST has spent $9,049,000. (See RMST Evid. Hr'g Ex. 67.)[19] When considered in conjunction with its efforts conserving and exhibiting the artifacts, RMST has devoted well over 500,000 hours of labor to the salvage of the Titanic. (Geller Decl. ¶ 17.) The vast majority of salvage operations in search of sunken property last a matter of hours or days, with only a few known cases to have lasted longer than a month. See Columbus-America II, 56 F.3d at 571 ("Our research has revealed only two other sunken property cases in which it was reported that the salvor's operations lasted longer than a month." (footnote omitted)). Although the time spent on a project is no sure indication of its success, the court recognizes the sheer magnitude of the resources that have been devoted to the salvage of the Titanic. In determining the amount of an appropriate salvage award, the labor expended by RMST weighs greatly in its favor. 3. The Promptitude, Skill, and Energy Displayed in Rendering the Service and Saving the Property ( Blackwall Factor 2) The Titanic lies two and a half miles below the surface of the North Atlantic. Without question, recovering artifacts at such a depth requires state of the art equipment and expertise. As of 2007, there were only five manned submersibles in the world capable of descending to this depth, three of which were employed by RMST. (Dettweiler Decl. ¶ 8 (Nov. 28, 2007) (hereinafter "Dettweiler Decl.").) Because those vessels were designed for purposes of research, not salvage, RMST was required to invent approximately twenty new tools with which to equip the submersibles. (RMST Evid. Hr'g Ex. 3 (Nargeolet Decl. ¶ 6 (Nov. 28, 2007)).) For example, to avoid crushing fragile objects with the manipulator arm of the submersible, RMST developed a vacuum system for the collection of small artifacts. (Id.) Indeed, such inventions were often artifact-specific, such as the long, flat shovel, designed to recover a stained glass window. (Id.) By far the most impressive innovation, however, was the system used to raise the Big Piece of the hull. For that task, RMST positioned lift bags, full of diesel fuel, around the Big Piece, and when weights were released, the diesel fuel, being less-dense than water, hoisted the Big Piece towards the surface. (Id. ¶ 5.) The difficulty arose in controlling the ascent of the lift bags, and the first attempt to raise the Big Piece, in 1996, was a failure. (Dettweiler Decl. ¶¶ 14, 15.) The Big Piece was successfully http://scholar.google.com/scholar_case?case=1500478274150354361&q=742+f.+supp.+2d+784&hl=en&as_sdt=2,47 Page 8 of 32 RMS Titanic, Inc. v. Wrecked & Abandoned Vessel, 742 F. Supp. 2d 784 - Dist. Court, ED Virginia 2010 - Google Scholar 10/22/12 6:08 PM recovered in 1998, and, as it weighed over fifteen tons, it was the largest artifact ever to be recovered from the deep ocean. (Id.) 799 In addition to RMST's successes, however, the court is equally cognizant as to *799 some of its failures. Kenneth Vrana ("Vrana"), President and Chairman of the Center for Maritime and Underwater Resource Management ("CMURM"), submitted a report to the court on the 2004 expedition, in which he estimated that the damage rate to recovered artifacts was around twenty-one percent (i.e., thirteen out of sixty-three artifacts). (RMST Evid. Hr'g Ex. 64 at 3.) Moreover, due to technical difficulties in operating the ROVs, RMST failed to recover thirteen artifacts, despite serious attempts at their recovery. (Id. at 2.) Lastly, eight out of the ten ROV dives were terminated due to equipment failure, with three dives being terminated before reaching the ocean floor. (Id. at 1.)[20] While the court is obviously displeased to learn that some artifacts have been damaged due to ROV operations, that fact also emphasizes the fragility of the artifacts that RMST has recovered. Indeed, the salvage operations are far from complete when the artifacts emerge from the ocean. Each artifact undergoes an extensive cataloguing and conservation process that is dictated by the composition of the artifact, whether it be metal, ceramic, paper, or textile. (Savatsky Decl. ¶ 10 (Nov. 29, 2007) (hereinafter "Savatsky Decl.").) Although most conservation efforts, aside from desalination, are carried out by contract conservators (see RMST Evid. Hr'g Ex. 68 at 4), this action bespeaks the level of care and expertise required, as well as RMST's commitment to preserving the condition of the artifacts.[21] Considering the immense level of difficulty in retrieving and caring for the Titanic artifacts, the court finds that RMST has shown a high level of skill in its salvage operations. 4. The Value of the Property Employed by the Salvors in Rendering the Service, and the Danger to which such Property was Exposed ( Blackwall Factor 3) As previously mentioned, as of 2007, there were only five manned submersibles in the world capable of descending to the depth of the Titanic wreck site, 12,500 feet below the ocean surface.[22] For that reason, RMST entered into a series of charters over the course of its six expeditions to obtain access to manned submersibles, ROVs, and surface support ships. (See RMST Evid. Hr'g Ex. 3 at Ex. 1 ("Schedule of Vessels and Major Equipment Used in Titanic Salvage Operations").) The most frequently used vessels include the Nadir, a surface support ship, and the Nautile, a manned submersible, which RMST chartered from IFREMER for the 1993, 1994, 1996, and 1998 expeditions. At the time of these expeditions, the Nadir had an estimated value of $10,000,000, whereas the Nautile was worth approximately $44,000,000. (Id.) The court accepts these figures as representative of the highly specialized equipment necessary to perform the salvage of the Titanic wreck site. As RMST did not own this equipment, however, the court views this factor to be less important than the others.[23] This factor's 800 *800 relevance exists solely in exemplifying the technological demands of salvaging the Titanic wreck site, and to that extent, the factor weighs in RMST's favor. 5. The Risk Incurred by the Salvors in Securing the Property from the Impending Peril ( Blackwall Factor 4) In order to induce salvors to come to the aid of distressed persons and property, salvage law must reward those who risk their own safety and property when assisting the distressed vessel. See The Blackwall, 77 U.S. (10 Wall) at 14. As discussed under the previous factor, however, RMST did not actually own the vessels it used in salvaging the Titanic. Moreover, under the 1993, 1994, and 1996 charters, IFREMER explicitly assumed the risk of loss to property and liability for personal injury arising out of http://scholar.google.com/scholar_case?case=1500478274150354361&q=742+f.+supp.+2d+784&hl=en&as_sdt=2,47 Page 9 of 32 RMS Titanic, Inc. v. Wrecked & Abandoned Vessel, 742 F. Supp. 2d 784 - Dist. Court, ED Virginia 2010 - Google Scholar 10/22/12 6:08 PM the operation of the leased vessels, with the exception of injury to persons specifically invited on board by RMST (e.g., journalists and media). (See RMST Evid. Hr'g Exs. 4, 5, and 6 at ¶ 24.2.)[24] In 2000, the Shirshov Institute also assumed the risk of loss to its equipment, unless due to the direct negligence of RMST, as well as the risk of injury or death to its employees, unless caused by RMST's acts, omissions, or negligence. (See Geller Decl. Ex. 3 at ¶¶ 2.6, 13.1.) Lastly, in 2004, both Phoenix International, the owner of the ROV employed, and Secunda Marine, the owner of the surface ship, assumed the risk of loss to their vessels and the risk of personal injury to their employees, even if caused by RMST's negligence. (See Geller Decl. Ex. 2 at ¶ 6(c),(d), and Ex. 1 at Part II.12(a).) Taking these provisions together, the courts finds it improper, in conducting the Blackwall analysis, to reward RMST for any risk that it expressly contracted away. Nevertheless, the court is cognizant of the risks that RMST did face, not the least of which is the possibility of death or serious bodily injury faced by those RMST personnel participating in expeditions. In Columbus-America II, the Fourth Circuit noted that the vessel's 160-mile distance from shore "meant that treatment for the most severe injuries was hours away." 56 F.3d at 572. By comparison, the Titanic wreck site lies approximately 400 nautical miles offshore, in an area of the North Atlantic in which the only "open weather window" occurs in the summer, in the midst of hurricane season. (Geller Decl. ¶ 11.) Indeed, salvage operations were suspended on several occasions due to approaching hurricanes and storms. (Id.) The dangers on the surface, however, pale in comparison to the dangers faced by the passengers of the manned submersibles diving to the ocean floor. The water pressure at that depth is 6,300 pounds per square inch, meaning that a breach in, or even significant damage to, the hull of the submersible would cause the instantaneous death of the entire crew. (Dettweiler Decl. ¶ 11.) Moreover, it takes approximately three hours to travel to the wreck site and four hours to return, with approximately eleven hours spent on the bottom. (RMST Evid. Hr'g Ex. 9 (Sinclair Dep. at 18:1-11 (Oct. 9, 2009)).) With temperatures inside the submersible dipping below 50 degrees Fahrenheit, and tight quarters requiring crew members to remain flat on their stomachs during the dives (Dettweiler Decl. ¶¶ 12, 13), crew members faced not only the risk of death, but also continuous hours of physical discomfort. 801 Although RMST was not contractually liable for all of the risks involved with salvaging the Titanic, particularly the risk *801 of loss to the vessels, employees of RMST were amongst those that took their lives in their hands to descend to the wreck site in order to collect the artifacts that are the subject of this proceeding. It is that type of risk-taking that the salvage award is meant to compensate, in order to encourage and induce such efforts in the future, and the court recognizes the high level of risk faced by those individuals with RMST. 6. The Degree of Danger from which the Property was Rescued (Blackwall Factor 6) In Columbus-America II, the Fourth Circuit evaluated the danger from which the salvaged gold was rescued as follows: While it is true that the ocean itself presents no danger to the essential nature of gold and similar substances, it is also true that any value that our society attributes to gold depends entirely on the ability of someone to assert a property interest in it. Because property is far less certain of being recovered once it has sunk, especially when it has sunk in deep water, we perceive that its sinking sharply increases the degree of danger to its continued existence and utility as property. We have little doubt that, if the BLACKWALL Court were transported over 125 years into the future to decide this case, it would consider Columbus-America's salvage of the CENTRAL AMERICA to be the ultimate rescue from the ultimate peril. 56 F.3d at 573. Similarly, the Titanic artifacts were previously lost on the bottom of the ocean, depriving the public of all social utility in their historic symbolism and cultural beauty. Instead, RMST has recovered those items from a fate of being lost to future generations. As in Columbus-America II, such a rescue can be considered "the ultimate rescue from the ultimate peril," Id. http://scholar.google.com/scholar_case?case=1500478274150354361&q=742+f.+supp.+2d+784&hl=en&as_sdt=2,47 Page 10 of 32