Section 11.46 Practice and Procedure

• Library: Tort Law 2016

H. (§11.46) Practice and Procedure

The governing jurisdiction and procedure in limitation of liability proceedings are set forth in 46 U.S.C. § 30511. The U.S. Supreme Court has issued Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions as a part of the Federal Rules of Civil Procedure. Rules relating to limitation of liability appear in Federal Rule of Civil Procedure, Supplemental Rule F. These rules are comprehensive and detailed and must be closely followed.

A ship owner has two procedural methods by which to limit liability. Signal Oil & Gas Co. v. Barge W-701, 654 F.2d 1164 (5^th Cir. 1981). Under 46 U.S.C. § 30511, a vessel owner may, within six months after first notice of a claim in writing, file a petition in federal district court to limit liability. The six-month period has been construed to operate as a statute of limitations, and a petitioner filing a petition later than six months will be time barred. A vessel owner may also, at any time, have the benefit of the LLA by way of defense, and the vessel owner is permitted, in either state or federal court proceedings, to plead limitation of liability by way of answer or other defensive pleadings. See Sana v. Hawaiian Cruises, Ltd., 181 F.3d 1041 (9^th Cir. 1999); Signal Oil & Gas Co., 654 F.2d 1164. But in Cincinnati Gas & Elec. Co. v. Abel, 533 F.2d 1001 (6^th Cir. 1976), it was held that an owner may not plead and obtain limitation of liability in a state court proceeding if more than six months have elapsed since the date of first written notice and if the vessel owner did not file a limitation proceeding in a federal court within the six-month period. Once the owner’s right to limit liability is contested in state court, "only a federal court may exercise jurisdiction of the matter because the cause becomes cognizable only in admiralty." Vatican Shrimp Co. v. Solis, 820 F.2d 674, 677 (5^th Cir. 1987) (citing Langnes v. Green, 282 U.S. 531, 543 (1931)).

The LLA does not provide an independent basis for federal admiralty jurisdiction. To file a complaint seeking limitation of liability in a federal admiralty court, the petitioner must show that the claim falls within the two-part test (locality plus nexus to traditional maritime activity) for federal court admiralty jurisdiction. See, e.g.:

· Seven Resorts, Inc. v. Cantlen, 57 F.3d 771, 773 (9 ^th Cir. 1995)

· Sea Vessel, Inc. v. Reyes, 23 F.3d 345, 348 n.6 (11 ^th Cir. 1994)

· David Wright Charter Serv. of N.C., Inc. v. Wright, 925 F.2d 783, 785 (4 ^th Cir. 1991)

· In reThree Buoys Houseboat Vacations U.S.A. Ltd. v. Morts, 921 F.2d 775 (8 ^th Cir. 1990)

· Guillory v. Outboard Motor Corp., 956 F.2d 114, 115 (5 ^th Cir. 1992)

There is, however, a split of authority, and at least one federal district court has held that the LLA does provide an independent basis of federal admiralty jurisdiction. In re...