RALEIGH — A Florida-based company engaged in a legal battle over alleged misuse of Queen Anne’s Revenge photos by North Carolina has decided to drop its $14 million state case and take it to federal court.
An attorney representing Intersal Inc. gave notice to the state Office of Administrative Hearings (OAH) on Tuesday of voluntary dismissal of the case without prejudice. However, that still leaves the door open to pursue a claim, according to John Masters of Beaufort and Gainsville, Fla., chairman of the board of Intersal Inc.
“Intersal has decided to take this matter to federal court because of the intellectual property issues,” Mr. Masters stated in an email statement this morning. “Intersal brought the case to OAH (which does not award damages) as the court of original jurisdiction for the QAR settlement, with the hope this situation could be resolved for the benefit of all concerned.
“Based on DCR’s prehearing statement and motion to dismiss – which were strictly procedural, and did not address the breach of contract issues – Intersal has no choice but to seek redress, damages and enforcement of the QAR settlement in federal court.”
Intersal discovered the Queen Anne’s Revenge in Beaufort Inlet in 1996 and got a contract for rights to photos and videos of the wreck and of the recovery, study and preservation of historic artifacts.
Meanwhile, North Carolina developed the discovery into museum exhibits and photos and video on websites as well as on social media.
Intersal said the state violated the contract with its displays. The company sought $7 million for alleged misuse and $7 million from the state Department of Cultural Resources.
In response to the dismissal, Kevin Howell, general counsel for the N.C. Department of Cultural Resources, said in an email statement Tuesday, “I am pleased with this result, and I hope that Intersal and the department can resolve any future differences without resorting to litigation.”
Intersal filed a petition against the state March 2 with the state hearing office, accusing the state’s cultural resources department of violating the company’s media rights to photos and videos created of the wreck and its recovery, study and conservation of artifacts.
In turn, the State Attorney General’s Office filed a motion to dismiss the Intersal complaint May 14. State attorneys stated that Intersal filed its petition more than 60 days after receiving notice that the state had renewed Intersal’s permit to continue searching for two other shipwrecks, the El Salvador and another vessel, the Adventure, a ship operated by Blackbeard that is believed to have sunk near the QAR. Intersal’s permit to continue searching for the El Salvador and Adventure was part of the petition complaint.
The limitation for the filing of a petition in a contested case is 60 days, according to Barry H. Bloch, assistant attorney general, and John R. Green Jr., special deputy attorney general, who filed the motion to dismiss. They pointed out that Intersal received the permit in November 2014, but did not file the contested case hearing with the OAH until March 2, 2015.
In addition, the attorneys claimed that the hearing office does not have “subject matter jurisdiction over such claims.” They maintained the contested case petition should have been filed in the General Court of Justice, which oversees such claims.
Intersal discovered Blackbeard’s flagship, the Queen Anne’s Revenge, while searching for the El Salvador, a Spanish merchant vessel that sank off North Carolina in 1750. It’s believed the El Salvador contains millions of dollars in gold and silver, as well as other precious cargo.
Normally the state and a company such as Intersal would have split the proceeds of any treasure found, with 75 percent going to the company and 25 percent to the state. But with the lack of treasure on the QAR, the state instead in 1998 granted Intersal exclusive media rights. The state also agreed to split profits with the company on any replicas of the ship’s artifacts that were sold.
In addition, the state agreed to extend a permit agreement that allowed Intersal to continue its search for the El Salvador and the Adventure. The 1998 contract lasted 15 years. It had an option upon its expiration in 2013 to be extended another 10 years.
Intersal wanted the 10-year extension, but the Department of Cultural Resources did not. This led to litigation in 2013 that was resolved with an October 2013 settlement agreement.
But since the signing of the 2013 contract, violations have continued to occur, according to Mr. Masters.
Contact Cheryl Burke at 252-726-7081, ext. 255; email Cheryl@thenewstimes.com; or follow on Twitter @cherylccnt.