NC court rules in favor of company that discovered Blackbeard's flagship

Intersal, the company that discovered the wreck of the pirate Blackbeard's flagship, filed an $8.2 million lawsuit against the state in Superior Court in July 2015, alleging North Carolina officials breached their contract with the company over the site.

On Feb. 23, the N.C. Superior Court made a decision, ruling in favor of Intersal.

The lawsuit

The ship "Queen Anne's Revenge," deliberately grounded in 1718 by Capt. Edward Teach, was discovered by the private salvaging firm Intersal in November 1996, searching the waters off the North Carolina coast under a state permit. That permit gave the company media, touring and replica rights in exchange for giving up any claim to any artifacts found onboard the legendary ship, which has captured the imaginations of the North Carolina coastal tourists and residents for decades.

Under a salvage permit from the state, Florida-based Intersal Inc. found the Queen Anne's Revenge in 1996 about a mile off the coast of Atlantic Beach. In several agreements with the state since then, the company gave up rights to treasure and artifacts in exchange for shared rights to photos and video, potential artifact tours and proceeds from replica sales.

The lawsuit filed in Wake County Superior Court accuses the state of violating several parts of those agreements, including improperly displaying thousands of images from the Queen Anne's Revenge site and not including the company in plans for commercial video opportunities. It also says state officials have been dragging their feet over the operations of a business panel, which would determine how the two parties might share potential revenue.

"We feel like we've been good faith partners from beginning to end," Intersal Board Chair John Masters said in a phone interview. "We've gone above and beyond to follow the rules, and we don't feel like we've gotten the same courtesy back."

Masters said his company, which he took over following the death of his father, Phil, in 2007, spent "a considerable amount of money" finding the QAR with the idea that replica and media rights would bring some return on that investment.

"Like it or not, this process is costing us money, and we feel like we've done it in good faith," Masters said. "Intersal is committed to protecting its rights."

Intersal says in the filing that state officials have demonstrated "a pattern of obstruction, delay and failure" during the renewal process for the salvager's permit to hunt for El Salvador, a 1700s-era Spanish treasure ship believed to have gone down in an area near Cape Lookout.

The Department of Cultural Resources provided a written statement.

"The many treasures entrusted to the North Carolina Department of Cultural Resources are owned by the people of this state," DCR spokesperson Cary Cox wrote. "The Department acknowledges Intersal Inc. and Mike Daniel’s discovery of Blackbeard’s shipwrecked flagship, the Queen Anne’s Revenge, off the North Carolina coast in 1996, but denies any breach of contract occurred."

Intersal calculated the $8,187,000 lawsuit based on the claim that the state used more than 2,000 photos of the Queen Anne's Revenge site and more than three hours of video.

"We believe that amount will go up once we get to discovery," Masters said.

It’s the second time the company has sued the state. In May, Intersal dropped a $14 million suit against Cultural Resources filed in the Office of Administrative Hearings, saying it would bring the case to federal court instead.

"Intersal does have intellectual property and rights involved in this project and we feel like our rights have been violated," Masters said. "We are going to do whatever we need to do to protect our rights and our interest and our intellectual property."