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United States v. Maritime Exchange Museum

United States District Court, E.D. Michigan, Southern Division

March 26, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
MARITIME EXCHANGE MUSEUM, et al, Defendants.

          OPINION & ORDER (1) GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (DKT. 26) AND (2) DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (DKT. 25)

          MARK A. GOLDSMITH, United States District Judge

         This matter is before the Court on the parties' competing motions for summary judgment. The issues were fully briefed, and a hearing was held on November 8, 2017. For the reasons stated below, the Court grants the Government's motion for summary judgment (Dkt. 26) and denies Defendants Maritime Exchange Museum and Steven Gronow's motion for summary judgment (Dkt. 25).[1]

         I. BACKGROUND

         Defendant Steven Gronow runs the Maritime Exchange Museum out of his home. Pl. Mot. for Sum. Judg. ¶ 4. The museum displays a collection of lighthouse lenses. Id. Two particular lenses previously used by the United States are at issue: one Fresnel lens marked H.L. 331, which was formerly used at the light house at Spring Point Ledge, Maine (the “Spring Point Ledge lens”) and another Fresnel lens marked B.F. 53, which was formerly used in the Belle Isle Light Station in Detroit, Michigan (the “Belle Isle lens”). Id. ¶¶ 1-2. Both lenses had fallen out of the possession of the United States and were purchased by Gronow. Id. ¶¶ 14-15, 21. The Government brought this suit seeking a declaratory judgment that the United States is the owner of both lenses, and also seeking a judgment for possession for the lenses. See Compl. ¶¶ 1-2 (Dkt. 1).

         The material facts of the case are, for the most part, undisputed. Around 1960, the Spring Point Ledge Light Station transitioned to an automatic and unattended operation, necessitating the replacement of the Spring Point Ledge lens. Spring Point Ledge Light Station Change A, Ex. F to Pl. Mot. for Sum. Judg., at 266-267 (Dkt. 26-7). According to a government work order, the lens was to be returned to a Coast Guard base in Portland, Maine; if it was deemed beyond repair, that work order mandated that the lens be discarded overboard in deep waters. Id. at 267. There is no written record of the location of the Spring Point Ledge lens after 1960, Def. Mot. for Sum. Judg. ¶ 5, until, in 1998, the United States deeded the Spring Point Ledge Light Station to the Spring Point Ledge Light Trust, while maintaining all right, title, and interest in the lenses associated with the property. Quit Claim Deed, Ex. E to Pl. Mot. for Sum. Judg., at 153 (Dkt. 26-6). In 2003, the Spring Point Ledge lens was put up for auction on eBay by a person named Pat Jones. eBay Listing, Ex. G to Pl. Mot. for Sum. Judg. (Dkt. 26-8). In lieu of bidding on the auction, Gronow contacted the seller and made an offer for the lens, ultimately buying the lens for around $46, 000. Gronow Dep., Ex. C to Pl. Mot. for Sum. Judg., at 41 (Dkt. 26-4).

         The other lens at issue was formerly used in the Belle Isle Light Station. In or around 1930, the Coast Guard decommissioned the lighthouse, and the lens was removed and decommissioned later that decade. Def. Mot. for Sum. Judg. ¶ 8. The Government's last known custody and control of the lens was in 1937. Id. ¶ 9. In January 1946, the Coast Guard announced that it would make antiquated navigational aids available to museums, schools, and maritime societies “in a loan status.” USCG memo, Ex. L to Pl. Mot. for Sum. Judg. (Dkt 26-13). The memo made clear that the aids could be loaned indefinitely, but that the Coast Guard, due to legal restrictions, could not dispose of them as gifts. Id. In October 1946, the Henry County Historical Society Museum in Henry County, Indiana announced that it was “obtaining the loan of a light house lens, the loan probably culminating into permanent ownership by the museum.” Henry County Historical Society Meeting Notes, Ex. K to Pl. Mot. for Sum. Judg. (Dkt. 26-12).[2] Decades later, in 2005, Gronow learned that the lens was located in the basement of the Henry County Historical Society in Henry County, Indiana. Gronow Dep. at 53. Gronow purchased the lens from the Historical Society for $25, 000 in February 2006. Wire Transfer, Ex. J to Pl. Mot. for Sum. Judg. (Dkt. 26-11).

         The Government brought this suit seeking a declaratory judgment that the United States is the owner of the two lenses, and seeking an order directing the return of the two lenses to the Coast Guard's possession and control. The parties do not dispute that the United States once owned both lenses and that it is no longer in possession of them. The disagreement between the parties at this juncture centers on how current ownership is proven and who must prove it. Both parties bring summary judgment motions arguing accordingly.

         II. STANDARD OF REVIEW

         A motion for summary judgment under Federal Rule of Civil Procedure 56 shall be granted “if the movant shows 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). A genuine dispute of material fact exists when there are “disputes over facts that might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “[F]acts must be viewed in the light most favorable to the nonmoving party only if there is a ‘genuine' dispute as to those facts.” Scott v. Harris, 550 U.S. 372, 380 (2007). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         Once the movant satisfies its initial burden of demonstrating the absence of any genuine issue of material fact, the burden shifts to the nonmoving party to set forth specific facts showing a triable issue of material fact. Scott, 550 U.S. at 380; Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts, ” Scott, 550 U.S. at 380 (quoting Matsushita, 475 U.S. at 586), as the “mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment, ” id. (quoting Anderson, 477 U.S. at 247-248) (emphasis in original); see also Babcock & Wilcox Co. v. Cormetech, Inc., 848 F.3d 754, 758 (6th Cir. 2017) (“A mere scintilla of evidence or some metaphysical doubt as to a material fact is insufficient to forestall summary judgment.”).

         III. ANALYSIS

         Both sides agree that the lenses were originally property of the United States. Where they disagree is whether the record of subsequent events, presented at this summary judgment stage, establishes that the United States has lost its ownership interest. The Government contends that only properly authorized acts by Government employees are sufficient to terminate its ownership, and that the record shows no such events. Gronow's response is two-fold: (i) because the Government no longer possesses the property, it bears the burden of establishing that no acts extinguishing its interest took place, and it has not met this burden; and (ii) as a good faith purchaser, Gronow has rights superior to the Government, regardless of whether such acts took place. The Government replies that (i) it has no burden to establish that there were no ownership extinguishing acts, but if so, it has met that burden; and (ii) the good faith purchaser doctrine has no application here. The Court agrees with the Government.

         The Government's property rights are grounded in the Constitution itself, which assigns to Congress the power to establish rules governing the property of the United States. See U.S. Const. Art. IV, § 3, Cl. 2 (“The Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States . . . .”). From this bedrock grant of authority, the Supreme Court has concluded that individual Government officials have no power to dispose of property, except as Congress has authorized. As explained in Royal Indemnity Co. v. United States, 313 U.S. 289 (1941), where the Court invalidated a purported abatement of tax by a collector who lacked the statutorily required approval of the IRS Commissioner or Treasury Secretary:

Power to release or otherwise dispose of the rights and property of the United States is lodged in the Congress by the Constitution. Art. IV, s 3, Cl. 2. Subordinate officers of the United States are without that power, save only as it has been conferred upon them by ...

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