NEW YORK (AP) -- A 19th century schooner at the bottom of Lake Erie that salvagers claim played a critical role in the War of 1812 and was later an Underground Railroad freedom boat belongs to New York state rather than the salvagers who found it, a federal appeals court said Thursday.
The ruling by the 2nd U.S. Circuit Court of Appeals in Manhattan was another blow to Massachusetts-based North East Research LLC's plans to raise the well-preserved, two-mast schooner intact and install it as a tourist attraction in an ice-cold freshwater aquarium on Buffalo's waterfront.
The state has said it views the shipwreck as a cultural and historic asset — although it doesn't believe the ship is the former U.S. Navy vessel salvagers say it is — and that its primary goal is to preserve and protect it.
"It's very frustrating," North East founder Richard Kullberg said of multiple obstacles in a two-decade quest to raise the shipwreck and establish a watery museum. "Buffalo needs to have something spectacular to get people to come up here."
The state attorney general's office referred questions to the New York State Parks, Recreation & Historic Preservation, which said it is reviewing the decision.
The appeals court upheld a 2011 decision by a federal judge in Buffalo on grounds the vessel can be considered abandoned by its owners because it has "rested at the bottom of Lake Erie, utterly forgotten and undisturbed, for at least 150 years."
A three-judge panel noted no owner had ever tried to find or recover the wreck, a location the National Park Service found eligible for placement on the National Register of Historic Places in March 2009 at the request of the state.
The company claimed title to the 80-foot wooden ship under maritime law but the state intervened, citing the Abandoned Shipwrecks Act of 1987. The act gives the state ownership of vessels embedded in submerged state property. The boat lies 170 feet underwater near Dunkirk, N.Y.
The state has argued the ship is an abandoned and nameless 1830s schooner that sank carrying grain and hickory nuts. The state suspended Northeast's permit to explore the ship in 2008, saying divers had mishandled human remains. North East denies the allegation.
North East argued, and the appeals court accepted as true for the purposes of its ruling, that the boat is the "Caledonia," a wooden schooner built in 1799 as a merchant vessel used in the fur trade. The British installed cannons when Lake Erie became a battleground in the War of 1812, but the Caledonia was later captured on the Niagara River and converted into an American warship before playing a role in a key victory in the Battle of Lake Erie.
After the war, the Caledonia was sold and was not mentioned in reports after 1818.
A North East expert, James Sinclair, had told the lower court the sunken vessel's lack of identifying markings and the fact that its owners were active in the abolitionist movement in Erie, Pa., was consistent with the boat's purported use in smuggling slaves across Lake Erie to Canada. Sinclair said the Pennsylvania merchants renamed it the "General Wayne." It is believed to have sunk, fully intact, during a storm in the 1830s with no known survivors.
Kullberg said the revelation of the wreck's location through the court case has attracted recreational divers and damage.
"It's a shame," he said. "It's just going to collapse."