Michael Williamson, et al v. Recovery Limited Partnership, et al

Filing

OPINION and JUDGMENT filed: AFFIRMED, decision for publication. Danny J. Boggs (AUTHORING); Richard F. Suhrheinrich, Circuit Judges and Stephen J. Murphy , III, U.S. District Judge for the E. D. of MI. [11-3723, 12-3949]

Case: 11-3723

Document: 006111836948

Filed: 10/02/2013

Page: 1

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 13a0288p.06

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
MICHAEL WILLIAMSON, et al.,
Plaintiffs-Appellees, Nos. 11-3723/12-3949
v.
>
,
RECOVERY LIMITED PARTNERSHIP,
COLUMBUS EXPLORATION, LLC, and
COLUMBUS-AMERICA DISCOVERY GROUP
INC. (11-3723); RECOVERY LIMITED
PARTNERSHIP, COLUMBUS EXPLORATION,
LLC, and THOMAS G. THOMPSON (12-3949),
Defendants-Appellants. N
Appeal from the United States District Court
for the Southern District of Ohio at Columbus.
No. 2:06-cv-00292—Edmund A. Sargus, Jr., District Judge.

Argued: June 14, 2013
Decided and Filed: October 2, 2013
Before: BOGGS and SUHRHEINRICH, Circuit Judges; and MURPHY, District Judge.*
_________________
COUNSEL
ARGUED: Christopher L. Trolinger, FARLOW & ASSOCIATES LLC, Dublin, Ohio,
for Appellants. Michael J. Frevola, HOLLAND & KNIGHT, LLP, New York, New
York, for Appellees. ON BRIEF: Christopher L. Trolinger, FARLOW &
ASSOCIATES LLC, Dublin, Ohio, for Appellants. Michael J. Frevola, HOLLAND &
KNIGHT, LLP, New York, New York, Michael R. Szolosi, Sr., MCNAMARA AND
MCNAMARA, L.L.P., Columbus, Ohio, for Appellees.

*

The Honorable Stephen J. Murphy, III, United States District Judge for the Eastern District of
Michigan, sitting by designation.

1

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 2

Page 2

_________________
OPINION
_________________
BOGGS, Circuit Judge. This appeal is the latest skirmish in the legal battle over
the treasures recovered from the of the 19th-century steamship S.S. Central America, a
battle that has spanned three decades and numerous courts. Dubbed the “Ship of Gold,”1
the Central America sank in the Atlantic Ocean in September 1857, taking over 400
passengers and many tons of gold with her. Her wreckage was discovered over 130
years later by a group of explorers led by Thomas Thompson, in what remains one of the
most significant finds in maritime history. One jurist described the feat as “a paradigm
of American initiative, ingenuity, and determination.”2
Ominously, the same jurist opened his opinion with words that are equally fitting:
“Quid non mortalia pectora cogis, Auri sacra fames!”3 The individuals who dedicated
their time and talent to the recovery of the Central America have not seen a dime of their
promised share of the spoils; Thompson is a fugitive from the law, actively pursued by
United States Marshals; and the vast wealth representing the ship’s golden cargo is as
lost today as it was before September 1988.
The instant consolidated appeal concerns a suit brought by a group of plaintiffs
who assisted Thompson in locating the wreckage of the Central America. All signed
non-disclosure agreements with Thompson, through his business entities, promising to
hold his projects and ideas in confidence in exchange for a percentage of the net
recovery of the Central America. All claim to have upheld their respective ends of the
bargain, yet none have received payment. The business entities respond by asserting a

1

See generally GARY KINDER, SHIP OF GOLD IN THE DEEP BLUE SEA: THE HISTORY AND
DISCOVERY OF THE WORLD’S RICHEST SHIPWRECK (1998).
2

Columbus–Am. Discovery Grp. v. Atl. Mutual Ins. Co. [CADG II], 56 F.3d 556, 576 (4th Cir.
1995) (Hall, J.).
3

“To what cannot you compel the hearts of men, O cursed lust for gold!” Id. at 561 (quoting
Virgil, Aeneid, Bk. III 56).

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 3

Page 3

two-year statute of limitations for actions in salvage and three counterclaims. The
district court rejected the business entities’ time-bar argument and granted summary
judgment against all of their counterclaims. The defendants took an interlocutory appeal
of that decision. During the pendency of that appeal, the district court granted a motion
for prejudgment attachment and an injunction against one of the business entities and
Thompson, forbidding them from divesting certain assets. The two defendants took an
interlocutory appeal of that order as well. We consolidated the two appeals.
This appeal requires us to resolve several complex questions of federal
jurisdiction and admiralty law. We must first decide which issues we have jurisdiction
to hear. In response to the parties’ jurisdictional motions in the two appeals, we will
assert jurisdiction over the time-bar issue, all of the entity defendants’ counterclaims,
and the injunction defendants’ appeal of the attachment and injunction order insofar as
the district court issued a preliminary injunction. As to other issues, we refuse to
entertain the appeal for want of jurisdiction.
We must then turn to the substantive issues over which we have jurisdiction. We
must first determine whether or not the plaintiffs’ action is time barred. We hold that the
time bar does not apply. Next, we must address the district court’s grant of summary
judgment against the entity defendants’ counterclaims. As the entity defendants have
failed to raise an issue of fact material to the disposition of the case, we affirm the
district court’s order. Finally, we must assess whether or not the district court abused
its discretion in granting a preliminary injunction against Thompson and one of the
business entities. We hold that it did not. For the reasons discussed in detail below, we
affirm the district court in full as to all issues over which we have jurisdiction.
I
A
The tale of the last days of the S.S. Central America has been retold many times
by many courts throughout the many years of litigation in this case. None, however,

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Page: 4

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page 4

match the excellence of the narrative given by the late Judge Donald Russell of the
Fourth Circuit:
The year 1857 is justly famous in American history for its many
notable events. Among these was the beginning of a fairly serious
financial decline, the aptly named Panic of 1857. Associated with the
Panic, and another reason why the year is so famous, is one of the worst
disasters in American maritime history, the sinking of the S.S.
CENTRAL AMERICA.
The CENTRAL AMERICA was a black-hulled, coal-fired,
three-decked, three-masted sidewheeler with a cruising speed of eleven
knots. Built in 1852, and launched the following year, she carried
passengers, mail, and cargo between Aspinwall, Colombia (on the
Caribbean side of the isthmus of Panama), and New York City, with a
stopover in Havana. Most, if not all, of her passengers were headed to
or from California, the route being one leg of the then quickest way
between the west coast and the eastern seaboard-from California to the
Pacific side of the isthmus of Panama aboard a steamship, across the
isthmus on the Panama Railroad, and then from Aspinwall to New York
aboard another steamship. Owned by the U.S. Mail and Steamship
Company and originally named the S.S. GEORGE LAW (until June
1857), the CENTRAL AMERICA completed forty-three voyages
between Panama and New York in her four years of operation. During
this period, the California gold rush was in full swing, and it has been
said that the ship carried one-third of all gold shipped at that time from
California to New York.
In August of 1857, over four hundred passengers and
approximately $1,600,000 (1857 value) in gold (exclusive of passenger
gold) left San Francisco for Panama aboard the S.S. SONORA. Many of
the passengers were prospectors who had become rich and were returning
home, either for good or to visit. Also on board were California Judge
Alonzo Castle Monson, who resigned from the bench after losing his
house and all his money in a famous poker game, and Mrs. Virginia
Birch, a.k.a. “the notorious Jenny French,” a former dance hall girl well
known in San Francisco. As for the gold, it was being shipped by
California merchants, bankers, and express companies, including Levi
Straus and Wells Fargo, to New York banks, the banks wanting specie
to stave off the effects of the financial downturn.
The travellers and the cargo reached Panama without incident,
and they crossed the isthmus by rail. On September 3, over six hundred
people came aboard the CENTRAL AMERICA, as well as $1,219,189
of the gold shipped on the SONORA, the remainder being shipped to
England aboard a different vessel. The CENTRAL AMERICA first
headed for Havana, which was reached on September 7. There, the ship

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Page: 5

Williamson, et al. v. Recovery Ltd. P’ship, et al.

lay over for a night, and some of the passengers debarked to catch
another vessel for New Orleans. On September 8, under clear skies, the
CENTRAL AMERICA left Havana for New York, carrying
approximately 580 persons and her golden treasure.
On the second day out of Havana, the weather changed and a
mighty storm came up. What the passengers and crew could not know
was that they were headed directly into the teeth of a ferocious hurricane.
As the storm worsened around the CENTRAL AMERICA, a leak
developed and soon water was rushing into the boat. The water
extinguished the fires in the ship’s boilers, and this in turn caused the
ship’s pumping system to fail. All able male passengers began a
systematic bailing of water out of the ship, but it was to no avail; after
thirty frantic hours, the boiler fires would still not light and the water
level continued to rise.
Knowing the situation was hopeless, Captain William Lewis
Herndon managed to hail a passing ship, the brig MARINE, and one
hundred persons, including all but one of the women and children aboard,
were safely transferred to the other ship. Time and conditions would not
allow for any more transfers, however, and shortly after 8 p.m. on
September 12, the CENTRAL AMERICA began making its quick
descent to the bottom of the ocean.
After being flung into the sea, many of the men managed to come
to the top and float there, desperately holding onto any buoyant material
available. Six to nine hours after the sinking, fifty of these men were
rescued by the Norwegian bark ELLEN. Earlier, a small bird had thrice
circled the ELLEN and flown directly into the face of the ship’s captain.
Taking this as a sign, the captain changed his course to follow from
whence the bird had come, and in so doing discovered the fifty floating
survivors. Three other men were also rescued when, nine days later and
450 miles away, a ship spotted their lifeboat, which had been riding the
Gulf Stream.
In all, 153 persons were rescued, while approximately 425 lost
their lives. Also lost were hundreds of bags of mail and the $1,219,189
in gold. At the time, there were rumors that other commercial shipments
of gold were aboard, but these were quickly discounted. It is true,
though, that a significant amount, probably several hundred thousand
dollars worth (1857 valuation), of passenger gold was lost. Many
passengers had with them their earnings from several years’ labor in the
California gold fields. Some kept this gold on their person, while others
carried it in carpetbags or trunks. Also, passenger gold could have been
checked with the ship’s purser, although these records were lost with the
ship. Captain Thomas W. Badger is one example of a passenger carrying
gold, he having lost $17,500 of it stored in a carpetbag. Also, the
newspapers reporting the disaster contained vivid accounts of men

Page 5

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Page: 6

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page 6

flinging down their hard earned treasure in disgust upon realizing their
impending doom.
Needless to say, for the next several weeks newspapers around
the country devoted much space to the disaster which befell the
CENTRAL AMERICA. While people mourned the over four hundred
persons who had valiantly lost their lives, they also feared that the loss
of such a large amount of specie would exacerbate the country’s already
serious financial situation. The commercial shipments of gold had been
insured, though, and the insurance underwriters began advertising in the
newspapers that they would pay off their commitments upon the proper
proofs being presented. Approximately one-third of the treasure had
been underwritten by New York insurers while the rest was underwritten
in London. Without doubt, most, if not all, of the claims were promptly
paid off by the underwriters.
Under applicable law, then and now, once the underwriters paid
the claims made upon them by the owners of the gold, the treasure
became theirs. Thus, less than two weeks after the disaster, the
underwriters began negotiating with the Boston Submarine Armor
Company about possibly raising the ship and her cargo. Also, on June
28, 1858, two of the underwriters (Atlantic Mutual Insurance Company
and Sun Mutual Insurance Company) contracted with Brutus de Villeroi,
a Frenchman then living in Pennsylvania, to salvage the gold. The
contract states that de Villeroi, “by means of his Invention of a
Submarine boat” and at his own expense, would raise the treasure and
receive a salvage award of seventy-five percent. At this time, though, no
one was quite sure where the boat had gone down, or in how deep of
water. At first, some estimated the ship was in only twenty-eight
fathoms of water (168 feet), when in fact it was over 8,000 feet below the
surface. As would be expected, nothing came of the salvage attempts in
the late 1850s, and the issue, and the gold, would lie dormant for over a
hundred and twenty years.
Columbus–Am. Discovery Grp. v. Atl. Mutual Ins. Co. [CADG I], 974 F.2d 450, 455–57
(4th Cir. 1992).
B
Advances in sonar-search and deep-sea-recovery technology brought renewed
interest in locating the Central America in the late 1970s and 1980s. Thomas Thompson
incorporated the Columbus–America Discovery Group in order to lead the efforts to
recover the ship and her golden payload. Through a related business entity, Recovery
Limited Partnership, Thompson began soliciting investors to back his venture and

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 7

Page 7

assembling a crew to help him locate the Central America. Relevant to this matter,
Thompson executed two documents with each employee—an employment contract and
a non-disclosure agreement. The employment contracts were fairly standard, promising
a modest daily wage in exchange for services rendered. The non-disclosure agreements,
on the other hand, were far more valuable. In exchange for maintaining the secrecy of
Thompson’s operations, theories, work product, and the like, each employee was to
receive a share of the “net recovery” of the venture. In addition to employing the crew,
Recovery Limited rented a side-scan sonar from plaintiff International Deep Sea Survey,
Inc. Again, the parties executed a lease agreement and a separate non-disclosure
agreement.
Thompson and his colleagues located the Central America in September 1988
off the coast of South Carolina.

Using a submersible robot invented by

Columbus–America, they began removing millions of dollars in gold coins, ingots, and
bars from the wreckage. As one might expect, however, the discovery of such a vast
sum of wealth inevitably attracted unwanted attention: dozens of attorneys descended
upon Columbus–America, hoping to secure a piece of the golden booty for the numerous
insurance companies, underwriters, and banks that claimed title to the ship and her
payload. Thus began the first round of litigation over the treasures of the S.S. Central
America.
The insurance companies initially succeeded in establishing ownership over the
gold in the face of Columbus–America’s claim under the law of finds. CADG I, 974
F.2d at 468. The case was remanded back to district court to determine a proper award
for Thompson and his colleagues under the law of salvage. Ibid. The court indicated
in no uncertain terms that Columbus–America should receive “by far the largest share
of the treasure” as just compensation for their efforts. Id. at 468–69. Indeed, the group
did receive the largest share—90% of a golden haul that remains today one of the largest
treasure finds in history. CADG II, 56 F.3d at 562. As a salvor, Columbus–America
never took title to the gold, but it remained in possession of the entire haul as the central
marketing authority responsible for liquidating the treasure. Id. at 574–75. The Fourth

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Page: 8

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page 8

Circuit closed this chapter of the litigation by applauding Thompson’s efforts: “What
Thompson and Columbus–America have accomplished is, by any measure,
extraordinary. We can say without hesitation that their story is a paradigm of American
initiative, ingenuity, and determination.” Id. at 576.
C
One might have hoped that the Fourth Circuit’s 1995 opinion would have marked
the end of the litigation over the Central America. Alas, efforts to market the treasure
generated further legal woes. Thompson initially tried to sell the gold through Christie’s
New York. These efforts failed and resulted in a lawsuit. Thompson looked next to the
West Coast, signing an agreement in 1999 with California Gold Marketing Group, LLC
on behalf of Recovery Limited and Columbus–America. By this time, Thompson’s crew
had grown nervous about not having been paid their share of the treasure. Thompson’s
lawyer responded to these concerns in a March 2000 letter:
On the marketing front, retail sales have been very robust to date.
Three of the largest numismatic dealers in the world are involved, and
progress has been encouraging. (Coin World and Numismatic News have
been carrying information about the gold tours, and should be a good
source for announcements by the California Gold [Marketing]
Group). . . .
The California Gold [Marketing] Group’s purchase of 92.4% of
the treasure awarded to Columbus–America has resulted in settlements
with Christie’s and the Bank of California. The end result appears
essentially to be the elimination of those claims, with a pay-off of
approximately $43 million. (The newspaper reports on payments of $50
million and $100 million, respectively, are inaccurate).
While the terms of the agreement are confidential, essentially it
provides, in addition to the sums paid Christie’s and the Bank of
California, for a split of profits between Columbus–America and the
California Gold [Marketing] Group, with the percentages varying
depending on who procures the buyer's [sic] and the amount of sales
made.
To date, there has been no net profit to Columbus–America. The
Group is very hopeful that profits may be obtained within the next 6–12
months, as sales progress.
It has been, and remains, Tommy’s intention to make payment to
Don Craft and others of like standing their pro rata portion of the profits
due to them under the Non–Disclosure Agreements simultaneously with

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Page: 9

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page 9

his receipt of any net profits. Tommy is grateful for the work done and
is as anxious for net profits as anyone.
We should have a much better idea of the nature and size of those
net profits as sales progress over the next several months.
The plaintiffs allege that Thompson’s lawyer further represented that Thompson
retained a reversionary interest in the treasure, from which the plaintiffs would assuredly
be paid. Subsequent litigation reveled, however, that Thompson sold this reversionary
interest, allegedly in a June 2001 amendment to his agreement with California Gold
Marketing Group.
D
The latest salvo of litigation began in 2005 and 2006, when various parties
brought suit against the defendants in three separate actions filed in the Court of
Common Pleas for Franklin County, Ohio. The matters were consolidated, and the
defendants removed the action to the United States District Court for the Southern
District of Ohio in April 2006. The plaintiffs involved in the instant appeal, referred to
throughout the litigation as the “Williamson Plaintiffs,” are a group of employees hired
to assist in the location and recovery of the Central America (Michael E. Williamson,
the estate of Don C. Craft,4 Kirk O’Donnell, John Lettow, Timothy McGinnis, Fred
Newton, William Watson, Chris Hancock, and Dale Schoeneman), as well as the
company from which Thompson rented a side-scan sonar, International Deep Sea
Survey, Inc. The plaintiffs brought suit against Thompson and the board of directors of
Columbus Exploration, LLC5 (“the individual defendants”) and numerous business
entities, including Recovery Limited, Columbus–America, and Columbus Exploration
(“the entity defendants”). The plaintiffs demanded monetary relief for breach of their
non-disclosure agreements, conversion of the recovered gold, and breach of fiduciary
duty. The plaintiffs also requested the imposition of a constructive trust upon the

4

Mr. Craft passed away early in the course of this litigation, and his estate was substituted as the
successor party-in-interest.
5

Columbus Exploration was formed in 1998 in order to market the recovered gold and fulfill the
contractual obligations of Recovery Limited.

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 10

Page 10

defendants and an accounting of the defendants’ finances. The entity defendants
answered by raising a host of affirmative defenses and lodging three counterclaims of
their own: breach of contract, civil conspiracy, and unfair competition.
In early 2011, the parties filed cross-motions for summary judgment. In a
detailed opinion, the district court: (1) granted summary judgment for all of the
defendants as to plaintiffs’ claims for conversion, formation of a constructive trust,
breach of fiduciary duty, and request for an accounting; (2) granted summary judgment
for three entity defendants and four individual defendants on the plaintiffs’ breach-ofcontract claims, thereby dismissing them from the case entirely; (3) granted summary
judgment for the plaintiffs on all of the entity defendants’ counterclaims; and (4) ruled
that the remaining defendants will be judicially estopped from arguing that the plaintiffs
did not perform their contractual obligations under the non-disclosure agreements.
Williamson v. Recovery Ltd. P’ship, No. 2:06–CV–292, 2011 WL 2181813, at *32 (S.D.
Ohio June 3, 2011). The remaining entity defendants gave timely notice of interlocutory
appeal of the grant of summary judgment on their counterclaims. This appeal is before
us as case number 11-3723.
After the entity defendants filed their initial appeal, the plaintiffs moved for
prejudgment attachment to certain assets belonging to Columbus Exploration and
Thompson (“the injunction defendants”), as well as a preliminary injunction to prevent
both parties from divesting themselves of property that could be used to fulfill a
judgment against them. The plaintiffs filed their motion after Columbus Exploration
allegedly thwarted a state receivership action by filing a sham bankruptcy petition,
which it withdrew several weeks later. In light of this, the plaintiffs sought a security
interest in the $250,000 corpus of a severance trust established for the benefit of
Thompson, in 500 commemorative gold restrike coins, and in other artifacts recovered
from the Central America.
The location of the severance-trust corpus and the gold restrike coins was
initially unknown to the plaintiffs. During the course of litigating the preliminaryinjunction motion, it was discovered that both had gone missing. Over an objection to

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 11

Page 11

the court’s jurisdiction to entertain the motion, the district court: (1) gave the plaintiffs
a prejudgment interest in seven crates of artifacts stored in a warehouse in Columbus,
Ohio; (2) enjoined Thompson from transferring or selling any portion of the gold restrike
coins or the severance-trust res in his possession or his residence in Vero Beach, Florida;
and (3) enjoined Columbus Exploration from transferring or selling any assets that could
be used to satisfy a judgment against it, other than those necessary in the ordinary course
of its business. The district court further ordered Thompson to explain what happened
to the severance-trust corpus and the gold restrike coins. When he failed to comply with
a subsequent order to appear in person before the court, the judge issued a bench warrant
for Thompson’s arrest. He remains at large today. Through counsel, Thompson and
Columbus Exploration took an interlocutory appeal of the injunction order, which is
currently before the panel as case no. 12-3949.
II
Neither of the orders appealed is final, and this matter accordingly falls outside
our jurisdiction to hear appeals from final orders of the district court. See 28 U.S.C.
§ 1291. The plaintiffs do not contest our jurisdiction to hear the appeal of the salvage
time bar and the preliminary injunction. They do, however, assert that we lack
jurisdiction to hear the entity defendants’ appeal of the summary adjudication of their
counterclaims and the injunction defendants’ prejudgment-attachment order. The entity
defendants cite as a jurisdictional basis for the summary-judgment appeal 28 U.S.C.
§ 1292(a)(3), which gives us authority to hear appeals of “[i]nterlocutory
decrees . . . determining the rights and liabilities of the parties to admiralty cases in
which appeals from final decrees are allowed.”

For the order of prejudgment

attachment, the injunction-defendants claim that the order had the “practical effect” of
a preliminary injunction, and that we thus have jurisdiction under § 1292(a)(1).
A
We have not had a prior opportunity to speak authoritatively on 28 U.S.C.
§ 1292(a)(3). The plain language of the statute announces a rather broad exception to
the final-judgment rule—the term “admiralty cases” appears to sweep up any claim

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 12

Page 12

presented in a case in which admiralty jurisdiction has been invoked. The entity
defendants argue the same, citing Roco Carriers, Ltd. v. M/V Nurnberg Express,
899 F.2d 1292 (2d Cir. 1990). In that case, the Second Circuit allowed Aid Export, a
land-based transportation company brought into federal court on a claim pendent to a
maritime-shipping suit, to bring an immediate appeal under of § 1292(a)(3) of a grant
of summary judgment against it on a state-law conversion claim. Id. at 1297. Citing the
use of the word “cases,” as opposed to “claims,” the Second Circuit held that § 1292(a)
allowed the state-law defendant to bring an interlocutory appeal simply because its claim
was part of a broader suit in admiralty. Ibid.
Such a reading gives us pause, however, as it would render the final-judgment
rule a nullity in admiralty cases. The Supreme Court has cautioned lower courts to
construe exceptions to § 1291 narrowly, so as not to “swallow the general rule that a
party is entitled to a single appeal, to be deferred until final judgment has been entered.”
Digital Equipment Corp. v. Desktop Direct, Inc., 511 U.S. 863, 868 (1994).
Furthermore, it is widely accepted that Congress passed § 1292(a)(3) with the
peculiarities of maritime litigation in mind:
In admiralty, trials were traditionally bifurcated. First, there would be a
trial before the court on the issue of liability. If there was a finding of
liability, there would then be a separate hearing before a special master
to ascertain damages. These damages hearings were often both lengthy
and costly. Congress intended 28 U.S.C. § 1292(a)(3) to permit parties
to appeal the finding of liability on the merits, before undergoing the
long, burdensome, and perhaps unnecessary damages proceeding.
Section 1292(a)(3) was not intended to clutter the federal docket with
interlocutory odds and ends.
City of Fort Madison v. Emerald Lady, 990 F.2d 1086, 1089 (8th Cir. 1993) (citations
and internal quotation marks omitted). In light of this, the majority of our sister circuits
have eschewed the reading adopted by Roco Carriers for a narrower interpretation that
looks to the nature of each individual claim involved in the interlocutory appeal, as
opposed to the nature of the broader suit. Wingerter v. Chester Quarry Co., 185 F.3d
657, 664 (7th Cir. 1998); Evergreen Int’l Corp. v. Standard Warehouse, 33 F.3d 420,

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 13

Page 13

424–25 (4th Cir. 1994); City of Fort Madison v. Emerald Lady, 990 F.2d 1086, 1089
(8th Cir. 1993); Bodden v. Osgood, 879 F.2d 184, 186–87 (5th Cir. 1989).
Though the majority’s interpretation is not without force, we cannot accept this
reading of § 1292(a)(3). Contextual exegesis notwithstanding, it is axiomatic that the
clearest evidence of congressional intent is the plain language of statute itself. Where
the text is plain and unambiguous, we must apply a statute according to its terms.
Carcieri v. Salazar, 555 U.S. 379, 387 (2009). Section § 1292(a)(3) allows for
interlocutory appeal of decrees “determining the rights and liabilities of the parties to
admiralty cases.” There is no ambiguity in Congress’s word choice, and we thus cannot
adopt a reading that would effectively strike out the word “cases” and replace it with the
word “claims.” See Roco Carriers, 899 F.2d at 1297.
This plain-text reading is bolstered by Rule 9(h)(2) of the Federal Rules of Civil
Procedure, which states: “A case that includes an admiralty or maritime claim within this
subdivision (h) is an admiralty case within 28 U.S.C. §1292(a)(3).” Neither party cited
this highly relevant provision or the compelling notes to Rule 9 from the 1997 Advisory
Committee, which specifically and clearly address the issue before us:
A single case can include both admiralty or maritime claims and
nonadmiralty claims or parties. This combination reveals an ambiguity
in the statement in present Rule 9(h) that an admiralty “claim” is an
admiralty “case.” An order “determining the rights and liabilities of the
parties” within the meaning of §1292(a)(3) may resolve only a
nonadmiralty claim, or may simultaneously resolve interdependent
admiralty and nonadmiralty claims. Can appeal be taken as to the
nonadmiralty matter, because it is part of a case that includes an
admiralty claim, or is appeal limited to the admiralty claim?
The courts of appeals have not achieved full uniformity in
applying the §1292(a)(3) requirement that an order “determin[e] the
rights and liabilities of the parties.” It is common to assert that the
statute should be construed narrowly, under the general policy that
exceptions to the final judgment rule should be construed narrowly. This
policy would suggest that the ambiguity should be resolved by limiting
the interlocutory appeal right to orders that determine the rights and
liabilities of the parties to an admiralty claim.
A broader view is chosen by this amendment for two reasons.
The statute applies to admiralty “cases,” and may itself provide for

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 14

Page 14

appeal from an order that disposes of a nonadmiralty claim that is joined
in a single case with an admiralty claim. Although a rule of court may
help to clarify and implement a statutory grant of jurisdiction, the line is
not always clear between permissible implementation and impermissible
withdrawal of jurisdiction. In addition, so long as an order truly disposes
of the rights and liabilities of the parties within the meaning of
§1292(a)(3), it may prove important to permit appeal as to the
nonadmiralty claim. Disposition of the nonadmiralty claim, for example,
may make it unnecessary to consider the admiralty claim and have the
same effect on the case and parties as disposition of the admiralty claim.
Or the admiralty and nonadmiralty claims may be interdependent. An
illustration is provided by Roco Carriers, Ltd. v. M/V Nurnberg Express,
899 F.2d 1292 (2d Cir. 1990). Claims for losses of ocean shipments
were made against two defendants, one subject to admiralty jurisdiction
and the other not. Summary judgment was granted in favor of the
admiralty defendant and against the nonadmiralty defendant. The
nonadmiralty defendant’s appeal was accepted, with the explanation that
the determination of its liability was “integrally linked with the
determination of non-liability” of the admiralty defendant, and that
“section 1292(a)(3) is not limited to admiralty claims; instead, it refers
to admiralty cases.” 899 F.2d at 1297. The advantages of permitting
appeal by the nonadmiralty defendant would be particularly clear if the
plaintiff had appealed the summary judgment in favor of the admiralty
defendant.
The parties do not dispute that Rule 9(h) has been properly invoked in this case—indeed,
the plaintiffs argued this very point in the district court when they successfully
challenged the defendants’ attempt to force a jury trial. While the plaintiffs do argue that
§ 1292(a)(3) applies only when the appellant has pled admiralty as the jurisdictional
basis for the issues raised on appeal, such a requirement is without basis in either the text
of the statute or the text of Rule 9.
The entity defendants claim that the only issue remaining for trial is the
calculation of damages. The plaintiffs do not contest this, and our review of the record
has revealed nothing to the contrary. Because the case before the court is an admiralty
case under Rule 9(h) and because the district court’s summary-judgment order
determined the rights and liabilities of the parties, we hold that the order is amenable to
interlocutory review under § 1292(a)(3) and we will thus address the merits of the entity
defendants’ appeal in their entirety.

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 15

Page 15

B
We next turn to the injunction defendants’ appeal of the order of prejudgment
attachment and preliminary injunction. The principles to be applied here are relatively
straightforward. To the extent that the district court issued a preliminary injunction, we
have jurisdiction to review the order. 28 U.S.C. § 1292(a)(1). To the extent that it
granted prejudgment security under the laws of Ohio, via Rule 64 of the Federal Rules
of Civil Procedure, we lack jurisdiction to hear an immediate appeal. 15A Charles Alan
Wright, Arthur R. Miller, et al., Federal Practice and Procedure § 3914.2 (West 2013)
(“For many years it has been safe to say that generally appeal can be taken from orders
that deny security but cannot be taken from orders that grant security.”); see also Hitachi
Zosen Clearing, Inc. v. Tek–Matik, Inc., 846 F.2d 27, 28–29 (6th Cir. 1988).
According to its order of July 18, 2012, the district court granted the following
pretrial relief:
1. The Court orders the attachment of seven (7) crates (or more)
of artifacts warehoused on Joyce Avenue, Columbus, Ohio, and owned
by Columbus Exploration LLC or any other Defendant Entity. These
creates are not to be moved, encumbered or sold without further order of
this Court.
2. The court issues a preliminary injunction against Thomas G.
Thompson with regard to the five hundred (500) re-strike or
commemorative gold coins transferred to him by Columbus Exploration,
LLC. . . . [H]e shall not sell, encumber, transfer or diminish in value such
coins. . . .
...
3. The Court issues a preliminary injunction against Thomas G.
Thompson related to the Termination Trust. In the event that the funds
received by Thompson from the Termination Trust are still in his
possession, such funds are restrained from any transfer or dissipation of
any kind subject to further order of this Court. . . .
4. The Court issues a preliminary injunction against Thomas G.
Thompson regarding his house located at 135 9th Avenue, Vero Beach,
Florida 32962. Thompson shall not sell, encumber, transfer or diminish
the value of that real proper[t]y without further order of this Court.
5. The Court issues a preliminary injunction against the
Defendant entities prohibiting them from making any transfer of assets
beyond those within the normal or ordinary course of business for such

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 16

Page 16

recurring expenses as are anticipated. Any other transfers require further
approval of this Court after notice and hearing.
In large part, the district court ordered injunctive relief, reviewable under
§ 1292(a)(1). The litigants disagree, however, on whether we may review the order
insofar as it relates to the crates of artifacts warehoused in Columbus.
On first blush, it would appear that the plaintiffs are correct that we lack
jurisdiction. The relief is styled as an “attachment” and granted under Ohio Revised
Code § 2715, the section of the state code devoted exclusively to attachment to property.
The injunction defendants counter that we must treat the putative attachment order as an
injunction because it forbids encumbrance or disposal of the property, giving it the
practical effect of an injunction.

They correctly note that, for the purposes of

determining our jurisdiction under § 1292(a)(1), we look past the labels used by the trial
court and to the “nature of the order and the substance of the proceeding below to
determine whether the rationale for denying appeal applies.” N.E. Ohio Coal. for
Homeless & Serv. Employees Int’l Union, Local 1199 v. Blackwell, 467 F.3d 999, 1005
(6th Cir. 2006). Orders that have the practical effect of an injunction are subject to
interlocutory appeal under § 1292(a)(1) “only if the order has a ‘serious, perhaps
irreparable, consequence’ and the order can be ‘effectively challenged’ only by means
of an immediate appeal.” Booher v. N. Ky. Univ. Bd. of Regents, 163 F.3d 395, 397 (6th
Cir. 1998) (quoting Carson v. American Brands, Inc., 450 U.S. 79, 84 (1981)).
Even if we were to assume that this portion of the order had the practical effect
of an injunction, the injunction defendants do not explain how the order results in serious
harm to them or why interlocutory appeal is the only avenue of relief available to them.
Issues adverted to in a perfunctory manner, without some effort to develop an argument,
are deemed forfeited. United States v. Johnson, 440 F.3d 832, 846 (6th Cir. 2006).
Additionally, it is clear from the record that the district court sought to make the order
as minimally invasive as possible, stating that though it was specifically ordering the
artifacts to “stay put,” the court would timely consider, and be inclined to grant, any
reasonable request to make use of the artifacts. We see no serious or irreparable

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 17

Page 17

consequence flowing from the attachment order, regardless of whether it had an
injunctive element to it, and we therefore decline to entertain these issues under
§ 1292(a)(1).
III
Having determined our jurisdiction, we now turn to a complex procedural issue.
The entity defendants argue that the entirety of the plaintiffs’ case is time barred under
46 U.S.C. § 80107(c):
A civil action to recover remuneration for giving aid or salvage services
must be brought within 2 years after the date the aid or salvage services
were given, unless the court in which the action is brought is satisfied
that during that 2-year period there had not been a reasonable opportunity
to seize the aided or salvaged vessel within the jurisdiction of the court
or within the territorial waters of the country of the plaintiff’s residence
or principal place of business.
According to the entity defendants, the plaintiffs provided services to assist in the
salvage of the Central America and, by the plain text of the statute, their suit for
compensation is subject to a two-year statute of limitation. The entity defendants urge
a broad reading of the statute, citing in support the words immediately preceding
“salvage services”—“[a] civil action to recover remuneration.” The plaintiffs claim that
this is not a salvage action and they do not seek a salvage award. Rather, they assert that
this is a simple maritime-contract dispute: they complied with the non-disclosure
agreements by holding Thompson’s works in confidence, but he did not pay according
to the terms of the contract.
To be sure, salvage actions have long presented numerous complexities for the
federal courts. Add to this the factual peculiarities of a recovery operation for treasures
long, and assumed forever, lost at the bottom of the ocean, and even the most seasoned
jurist can find himself navigating uncharted waters. We may resolve this issue, however,
by noticing two basic points. First, the plaintiffs are not suing on their employment
contracts. Rather, they are suing on their non-disclosure agreements, in which they
exchanged confidentiality for a percentage of the net recovery from the Central America.

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 18

Page 18

Under no conceivable definition of the term may such a contract be deemed an
agreement to provide “salvage services.”
Second, to the extent that the entity defendants would have us consider the
broader nature of the plaintiffs’ job descriptions, it is a fundamental principle of
admiralty that one who provides services pursuant to a contract of employment may not
be considered a “pure” salvor. Contract salvors are not entitled to a number of special
protections afforded to pure salvors, including the right to a salvage award and the right
to seize a vessel pending payment. Reading the limitations provision in context with the
remainder of the statute, which includes a tolling provision for those who have been
unable to arrest the aided or salved vessel, § 80107(c) applies only to pure salvors.
Accordingly, the limitations provision cannot apply to the plaintiffs.
A
The term “salvage services” is not defined in Title 46. However, the term
“salvage” has a long-accepted definition within the law of admiralty:
Salvage is well defined as the compensation allowed to persons
by whose assistance a ship or vessel, or the cargo of the same, or the
lives of the persons belonging to the ship or vessel, are saved from
danger or loss in cases of shipwreck, derelict capture, or other marine
misadventures.
Other jurists define it as the service which volunteer adventurers
spontaneously render to the owners, in the recovery of property from loss
or damage at sea under the responsibility of making restitution and with
a lien for their reward.
Persons who render such service are called salvors, and a salvor
is defined to be a person who, without any particular relation to the ship
in distress, proffers useful service and gives it as a volunteer adventurer
without any pre-existing contract that connected him with the duty of
employing himself for the preservation of the vessel.
Enough appears in those definitions to show that the elements
necessary to constitute a valid salvage claim are as follows: (1.) A marine
peril to the property to be rescued. (2.) Voluntary service not owed to the
property as matter of duty. (3.) Success in saving the property or some
portion of it from the impending peril.
The Clarita and the Clara, 90 U.S. (23 Wall.) 1, 16 (1874) (footnotes omitted).

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 19

Page 19

We may glean from this definition a simple, yet fundamental, characteristic of
a salvage action: the assistance provided must be on a volunteer basis, that is, provided
without expectation of compensation under a pre-existing agreement. Volunteer, or
“pure,” salvors hold special place in maritime law that is “utterly at variance with terrene
common law.” 3A Benedict on Admiralty § 1 (Lexis 2013). Two unique entitlements
of a pure salvor are the right to a liberal salvage award, typically in excess of the
quantum meruit of the service provided, The Blackwall, 77 U.S. (10 Wall.) 1, 13–14
(1870), and the right to obtain a lien upon and arrest the aided or salved vessel, The
Sabine, 101 U.S. 384, 386 (1880).
If, however, the services for which the plaintiff seeks payment are due within the
scope of a valid contract, he is not entitled to an award as a pure salvor. See The
Camanche, 75 U.S. (8 Wall.) 448, 477 (1869); accord Solana v. GSF Dev. Driller I,
587 F.3d 266, 271 (5th Cir. 2009); Flagship Marine Servs., Inc. v. Belcher Towing Co.,
966 F.2d 602, 605 (11th Cir. 1992). Though the mere existence of an agreement to
provide a given type of service will not necessarily defeat a claim for a pure salvage
award, Fort Myers Shell & Dredging Co. v. Barge NBC 512, 404 F.2d 137, 139 (5th Cir.
1968), “a contract to pay a given sum for the services to be rendered, or a binding
engagement to pay at all events, whether successful or unsuccessful in the enterprise,
will operate as a bar to a meritorious claim for salvage.” The Camanche, 75 U.S. (8
Wall.) at 477. Loss of status as a pure salvor strips a plaintiff not only of his right to a
salvage award, but also of his ability to seize the aided or salved vessel through a salvage
lien. 3A Benedict on Admiralty § 159.
B
At the outset, it is questionable whether the plaintiffs are salvors of any kind visà-vis the entity defendants. The plaintiffs are not seeking compensation for any act that
may even colorably be called salvage. Indeed, the quid for which they now seek the
promised quo is no affirmative act at all—it is silence. The entity defendants ignore that
the plaintiffs’ breach-of-contract claims are predicated on an alleged breach of the nondisclosure agreements, in which the parties exchanged promises of confidentiality for

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 20

Page 20

a percentage of the net recovery from the Central America. The entity defendants make
no attempt to argue that the confidence held pursuant to the non-disclosure agreements
constitutes “salvage services.” As the previous discussion of “salvage” illuminates, this
is with good reason: it would strain all credulity to accept that one who maintains
secrecy of his employer’s works and writings is the same as one who “assist[s]a ship or
vessel, or the cargo of the same, or the lives of the persons belonging to the ship or
vessel,” thereby saving them “from danger or loss in cases of shipwreck, derelict
capture, or other marine misadventures.” See The Clarita and the Clara, 90 U.S. (23
Wall.) at 16.
The entity defendants’ briefing ignores the plain distinction between the
compensation due under the employment contract and the compensation due under the
non-disclosure agreements, asserting that the plaintiffs’ claims “arise from their having
provided services in the salvage of the SS Central America.” Appellant’s Br. 34. They
seemingly invite us to judge the nature of the plaintiffs’ claims based upon the broader
context of the recovery operation. Even if we did, their argument would still fail. It is
beyond debate that, to the extent that the plaintiffs provided any salvage services, they
did so pursuant to pre-arranged agreements. Accordingly, they cannot be pure salvors.
The question thus becomes whether the term “salvage services,” as used in § 80107(c),
refers solely to acts of pure salvage or includes acts of contractual salvage.
Though § 80107(c) does not define the term, and a precise definition of the term
is not readily apparent, “[i]t is a fundamental canon of statutory construction that the
words of a statute must be read in their context and with a view to their place in the
overall statutory scheme.” Greenbaum v. EPA, 370 F.3d 527, 535 (6th Cir. 2004)
(quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132–33 (2000)).
The subordinate clause at the end of subsection (c) gives courts discretion to toll the twoyear statute of limitations if “during that 2-year period there had not been a reasonable
opportunity to seize the aided or salvaged vessel . . . .” Of course, a prejudgment lien
on an aided or salved vessel is a privilege enjoyed specifically by pure salvors. See The
Sabine, 101 U.S. at 386 (“Salvors, under the maritime law, have a lien upon the property

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 21

Page 21

saved . . . . Such a remedy is the one usually pursued, and in view of the fact that the lien
is maritime and exists quite independently of possession, it ordinarily affords the best
mode of securing the payment of their salvage claims.”). It would be exceedingly odd
for Congress to have intended to bring both pure and contract salvors within the ambit
§ 80107(c)’s statute of limitation, and then, without providing any textual delineation,
create a tolling provision that is relevant to only one of the two categories of salvors.
The more sensible reading of the statute is that it applies only to the group of salvors to
whom the entirety of the statute speaks—pure salvors. Accordingly, § 80107(c) cannot
apply to the plaintiffs.
IV
The district court granted summary judgment against all three of the entity
defendants’ counterclaims. The court found that the evidence submitted by the entity
defendants was either vague or irrelevant, and thus could not establish the elements of
any of the counterclaims, even when viewed in a favorable light. We affirm that
decision.
We review the district court’s grant of summary judgment de novo. Trs. of the
Mich. Laborers’ Health Care Fund v. Gibbons, 209 F.3d 587, 590 (6th Cir. 2000). The
decision below may be affirmed only if the pleadings, affidavits, and other submissions
show “that there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In determining whether a
genuine issue of material fact exists, we draw all reasonable inferences in favor of the
nonmoving party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 587–88 (1986).
The counterclaims are interlinked. The entity defendants claim that the plaintiffs
breached their non-disclosure agreements and then conspired to file frivolous suits
across the country, all alleging that the defendants were in fact the breaching party, as
a means of frustrating business with the California Gold Marketing Group. The breachof-contract counterclaim is the foundation upon which the civil-conspiracy and unfair-

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 22

Page 22

competition counterclaims are built. If the breach-of-contract counterclaim does not
survive summary judgment, then the remaining counterclaims are doomed as well.
As they did in the court below, the entity defendants refer us to two sets of
documents to substantiate their counterclaims: declarations from their attorneys, Robert
Robol and David Douglas; and an affidavit from plaintiff Timothy McGinnis, with two
attached newspaper articles in which he is quoted discussing his work on the recovery
of the S.S. Central America. The declarations from the two attorneys contain no
evidence relevant to any of the entity defendants’ counterclaims. Rather, they are
oriented towards refuting the testimony of one of the plaintiffs’ witnesses, James Shirley,
a retired attorney who represented some of the plaintiffs early on in the litigation and
upon whom the plaintiffs rely to introduce documents tending to prove their entitlement
to compensation under the non-disclosure agreements.
The statements from McGinnis’s affidavit are quotations from two newspaper
articles appearing in the Seattle Times. In the first of these articles, McGinnis broadly
discusses how the deep-sea-sonar scan worked. The second article states that “McGinnis
has collected everything he could about the U.S. Central America [sic]” and that he has
“17-year-old records and folded handwritten notes about the sunken ship” that he intends
to pass on to his children. The newspaper clippings confirm the same.
Nothing in McGinnis’s affidavit establishes any element of any of the
counterclaims against any of the other plaintiffs. To the extent that the entity defendants
offer the affidavit and the attached articles as proof that McGinnis himself breached his
non-disclosure agreement, this represents nothing more than a scintilla of evidence. See
Hirsch v. CSX Trans., Inc., 656 F.3d 359, 362 (6th Cir. 2011). McGinnis’s statements
are highly generalized in nature and give no indication as to the substance of the
documents in his possession. While it is not outside the realm of possibility that some
of the documents are covered by the non-disclosure agreement, it is equally possible that
they are nothing more than his personal, handwritten reflections on the adventures.
Without any evidence of the subject matter of these documents in the record, no
reasonable factfinder could conclude that McGinnis violated his agreement without

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 23

Page 23

engaging in a large degree of impermissible speculation. See Fed. R. Evid. 602.
Accordingly, the plaintiffs are entitled to summary judgment on the entity defendants’
breach-of-contract claim.

Because the civil-conspiracy and unfair-competition

counterclaims are predicated on the breach-of-contract counterclaim—and because both
are wholly unsubstantiated by the record before us—the plaintiffs are entitled to
summary judgment on those issues as well.
V
Finally, the injunction defendants, Thompson and Columbus Exploration, raise
a plethora of issues with the district court’s injunction order. They challenge the district
court’s jurisdiction to entertain the preliminary-injunction motion, its authority in equity
to grant a preliminary injunction, and the proper exercise of the court’s discretion in
granting the injunction. They further assert that the $500 bond set by the district court
was unconstitutionally low. We reject all of these arguments and affirm the district
court.
A
1
The injunction defendants’ first two arguments go to the district court’s
jurisdiction to entertain the plaintiffs’ motion for a preliminary injunction and its
authority in equity to issue the injunction. They first argue that the Supreme Court’s
decision in Grupo Mexicano de Desarrollo v. Alliance Bond Fund, 527 U.S. 308 (1999),
prohibits the issuance of a preliminary injunction on the sale or transfer of assets absent
a claim in equity or a valid judgment on which the plaintiff seeks to execute. While the
holding of Grupo Mexicano provides a colorable basis for the merits of their argument,
id. at 333, the injunction defendants run into a more basic problem—forfeiture.
Curiously, the injunction defendants seemingly frame the issue before this court
as a jurisdictional argument. Appellant’s Br. 20 (“[T]he Trial Court did not have
jurisdiction in equity to issue a preliminary injunction.”). To the extent that they
intended to do so, they are several centuries too late in making this argument. See

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 24

Page 24

Judiciary Act of 1789, 1 Stat. 74, 78 (vesting district courts with jurisdiction over “all
suits of a civil nature at common law or in equity”). Perhaps the explanation for this odd
presentation lies in the manner in which the injunction defendants presented their
arguments in the court below. They spent a great deal of time arguing that the district
court was deprived of jurisdiction to entertain the preliminary-injunction motion due to
the entity defendants’ interlocutory appeal. However, they do not once suggest that,
jurisdiction notwithstanding, the district court lacked authority to grant the equitable
remedy of a preliminary injunction in order to protect a future potential remedy at law.
This latter point is the crux of Grupo Mexicano, see 527 U.S. at 333 (“Because such a
remedy was historically unavailable from a court of equity, we hold that the District
Court had no authority to issue a preliminary injunction preventing petitioners from
disposing of their assets pending adjudication of respondents’ contract claim for money
damages.” (emphasis added)); yet they do not even once cite the opinion, let alone
present the argument, in their pleadings below. Accordingly, their argument is forfeited
before this court. Jolivette v. Husted, 694 F.3d 760, 770 (6th Cir. 2012) (“As a rule, we
will not review issues if they are raised for the first time on appeal.”).
2
The injunction defendants also argue that the district court was stripped of
jurisdiction to entertain the preliminary-injunction motion when the entity defendants
took an interlocutory appeal to this court. “The filing of a notice of appeal is an event
of jurisdictional significance—it confers jurisdiction on the court of appeals and divests
the district court of its control over those aspects of the case involved in the appeal.”
Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58 (1982); see also United States
v. Garcia–Robles, 562 F.3d 763, 767–68 (6th Cir. 2009). This transfer of power,
however, does not effect a total divestiture of jurisdiction from the district court: it
retains jurisdiction to enforce its judgment, City of Cookeville v. Upper Cumberland
Elec. Membership Corp., 484 F.3d 380, 394 (6th Cir. 2007), to proceed with matters that
will aid the appellate process, Cochran v. Birkel, 651 F.2d 1219, 1221 (6th Cir. 1981),
and to adjudicate matters unrelated to the issues on appeal, Weaver v. Univ. of

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 25

Page 25

Cincinnati, 970 F.2d 1523, 1528–29 (6th Cir. 1992). In Weaver, in particular, we held
that “an appeal from an interlocutory order does not divest the trial court of jurisdiction
to continue deciding other issues involved in the case.” 970 F.2d at 1528–29.
The preliminary injunction here is one of those “other issues” over which the trial
court retains jurisdiction. The plaintiffs moved for the injunction upon information that
Columbus Exploration was approaching insolvency. The plaintiffs’ desire for security
is particularly understandable in light of the fact that the plaintiffs had information
suggesting that Columbus Exploration was abusing the federal bankruptcy courts to
evade a state receivership action.
The injunction defendants assert that the injunction is inextricably intertwined
with their interlocutory appeal. However, it is a basic legal principle that the right and
the remedy are two analytically distinct aspects of a suit. Cf. Davis v. Passman, 441
U.S. 228, 239 (1979) (“[T]he question whether a litigant has a ‘cause of action’ is
analytically distinct and prior to the question of what relief, if any, a litigant may be
entitled to receive.”). Even if we accept arguendo the injunction defendants’ assertion
that their appeal may negate the plaintiffs’ entitlement to a remedy by disproving their
cause of action, the plaintiffs’ efforts to ensure that a remedy may still be had if they
prevail on appeal does not affect the merits of the defendants’ appellate argument against
the cause of action. We therefore affirm the district court’s jurisdiction to entertain the
request for a preliminary injunction.
B
We next move to the substance of the preliminary injunction. When considering
a motion for a preliminary injunction, the district court must consider and balance four
factors: “(1) whether the movant has a strong likelihood of success on the merits;
(2) whether the movant would suffer irreparable injury without the injunction;
(3) whether issuance of the injunction would cause substantial harm to others; and
(4) whether the public interest would be served by issuance of the injunction.” Chabad
of S. Ohio & Congregation Lubavitch v. City of Cincinnati, 363 F.3d 427, 432 (6th Cir.
2004). We review the district court’s overall decision to grant the injunction for an

Case: 11-3723

Nos. 11-3723/12-3949

Document: 006111836948

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 26

Page 26

abuse of discretion, deferring to its fact finding under a clear-error standard and
reviewing its decisions of law de novo. Ibid.
The injunction defendants claim that the district court erred as a matter of law in
its analysis of the first, second, and fourth factors. Scrutiny of their argument reveals,
however, that all of their complaints against the district court’s ruling relate to its fact
finding and general balancing of the factors. We must therefore give deference to the
district court in our analysis of each of the defendants’ arguments.
They first claim that the district court erred in finding that the plaintiffs had a
substantial likelihood of success on the merits of their breach-of-contract claims. The
district court previously held that all of the defendants are judicially estopped from
claiming that the plaintiffs did not fulfill the terms of their non-disclosure agreements,
as the defendants previously claimed in the initial round of litigation in the Fourth
Circuit that their salvage award should take into account the money they will have to pay
the plaintiffs pursuant to their non-disclosure agreements. Williamson, 2011 WL
2181813, at *24–25. Accordingly, the district court focused its injunction analysis on
whether the plaintiffs had a substantial likelihood of showing a net recovery from the
salvage operation, thus triggering the plaintiffs’ contractual entitlements to a share of the
profits. The court found a substantial likelihood of successfully proving profits by
referring to data produced during an external audit of Recovery Limited and Columbus
Exploration. The data revealed that Thompson and a number of outsiders, many of
whom with a lower payment priority than the defendants, had received substantial sums
of money despite repeated representations to the plaintiffs that no one had yet been paid.
The injunction defendants offer no evidence demonstrating that the district court clearly
erred in this determination.
The injunction defendants next charge that the court abused its discretion in
finding that Columbus Exploration’s precarious financial situation demonstrated that the
plaintiffs would suffer irreparable harm without the injunction. They claim that,
regardless of Columbus Exploration’s financial situation, the equitable remedy of an
injunction is inappropriate in a situation such as this, where the ultimate remedy sought

Case: 11-3723

Document: 006111836948

Nos. 11-3723/12-3949

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 27

Page 27

by the plaintiffs is a remedy in law compensable with money. To a substantial degree,
this is a repackaging of the defendants’ forfeited Grupo Mexicano argument. It is
sufficient to note, however, that the majority in Grupo Mexicano specifically reserved
the question of whether an injunction to protect a legal remedy would be appropriate in
cases where the defendants have engaged in fraudulent behavior, 527 U.S. at 325 n.7,
and a number of our sister circuits have interpreted Grupo Mexicano to “exempt[] from
its

proscription

against

preliminary

injunctions

freezing

assets

cases

involving . . . fraudulent conveyances.” Iantosca v. Step Plan Servs., Inc., 604 F.3d 24,
33 (1st Cir. 2010) (internal quotation marks omitted); see also Johnson v. Couturier,
572 F.3d 1067, 1083–84 (9th Cir. 2009); Animale Grp., Inc. v. Sunny’s Perfume, Inc.,
256 F. App’x 707, 709 (5th Cir. 2007); Kennedy Bldg. Assocs. v. CBS Corp., 476 F.3d
530, 535 (8th Cir. 2007). We agree and join our sister circuits.
The district court was well within its sound discretion to grant an injunction in
this case. Indeed, the genesis of the motion for a preliminary injunction was a
bankruptcy filing by Columbus Exploration that reeked of fraud. We further note that
a panel of this circuit has previously upheld a substantial sanction against Columbus
Exploration, Thompson, and others for their bad-faith failure to comply with a courtordered audit. See generally Williamson v. Recovery Ltd. P’ship, 467 F. App’x 382 (6th
Cir. 2012). The aforementioned audit itself, as referenced by the district court, suggests
that Columbus Exploration engaged in a number of accounting irregularities and
questionable financial transactions. And, though it occurred after the issuance of the
injunction, it is a rather damning indictment of the defendants’ behavior that one of the
parties to this very issue, Thomas Thompson, is presently a wanted fugitive for his
behavior during the course of this litigation.6
The injunction defendants also contend that the district court erred in finding that
the public interest would be served by issuing the injunction. By the district court’s own
statment, the public-interest factor did not weigh heavily in the plaintiffs’ favor. But
6

Though we decline to exercise our discretion to dismiss Thompson’s appeal sua sponte under
the fugitive-disentitlement doctrine, his flagrant contempt may well serve as a basis for this court and the
district court to deny him future access to judicial process, unless and until he turns himself in.

Case: 11-3723

Document: 006111836948

Nos. 11-3723/12-3949

Filed: 10/02/2013

Williamson, et al. v. Recovery Ltd. P’ship, et al.

Page: 28

Page 28

neither did it weigh against them. The injunction defendants’ analysis of this factor
consists of yet another block quote from Grupo Mexicano. Appellant’s Br. 39. Their
cursory analysis fails to demonstrate that the district court abused its discretion in
assessing this element or in its overall decision to grant the injunction. We therefore
affirm the district court.
C
As a final matter, the injunction defendants assert that the district court abused
its discretion by setting a $500 bond for the preliminary injunction. The district court,
however, did not set the bond for the preliminary injunction. It set the bond for the
prejudgment attachment on the crates of artifacts. As discussed earlier, the injunction
defendants have not demonstrated how the order results in serious or irreparable
consequence to them, and we therefore do not have jurisdiction to entertain arguments
on this issue. Furthermore, the district court explained that it chose to set this lower
bond amount because it was leaving the crates in the possession of the defendants and
allowing them wide latitude to move the court for permission to use the artifacts. This
decision strikes us as eminently reasonable.
VI
For the foregoing reasons, we AFFIRM the judgments of the district court,
except as to its order of prejudgment attachment of certain artifacts, as to which we lack
jurisdiction to entertain the appeal.