The 1851 Limitation of Liability Act allows qualifying vessel owners to limit their liability following a maritime accident. See 46 U.S.C. § 30501 et seq. An action under the Limitation of Liability Act “must be brought within 6 months after a claimant gives the owner written notice of a claim.” Id. § 30511(a). In a consolidated pair of cases, the United States Court of Appeals for the Ninth Circuit considered what constitutes adequate “written notice of a claim” to trigger this six-month period. Martz v. Horazdovsky, No. 20-35985, 2022 WL 1464717 (9th Cir. May 10, 2022). In each of the two cases, counsel for maritime-accident victims wrote a letter to vessel owners suggesting that the victim might be interested in pursuing litigation. And in both cases, the vessel owners brought actions under the Limitation of Liability Act more than six months after receiving the letters. The Ninth Circuit held that, because neither of the letters at issue informed the vessel owners of the claimant’s intention to bring a claim covered by the Limitation of Liability Act against the owners, neither constituted “written notice of a claim” that triggered the Act’s six-month limitations period. As such, the court deemed both vessel-owner actions timely.

One of the actions concerns a collision in Alaska between a boat and a raft which killed one of the occupants of the raft. After a pair of attorneys asked the vessel’s owners for insurance information, the decedent’s family’s attorney sent the vessel owners a letter on December 4, 2018, advising that he was “not yet certain whether [the vessel owners] bear any responsibility” for the accident, that he “would like to avoid unnecessarily naming parties to a lawsuit,” and requesting information and insurance policies. On June 4, 2020, a representative of decedent’s estate sued the vessel owners in Alaska state court. Two weeks later, the vessel owners filed a Limitation of Liability Act suit in the District of Alaska. The district court deemed this action untimely under the Act.

The other Limitation of Liability Act case concerns a minor’s drowning during a scuba-diving excursion near Honolulu. The company that led the excursion and the company that owned the vessel on which the child drowned were owned by the same person. On January 7, 2019, an attorney for the child’s family issued a letter to the owner advising that she had been retained to investigate the child’s death, requesting that the owner preserve “any and all evidence potentially related to this incident,” and warning against spoliation of evidence. On September 19, 2019, the child’s family sued the owner in Hawaii state court. On November 5, 2019, the owner filed a Limitation of Liability Act suit in the District of Hawaii. The district court deemed this action untimely under the Act.

On appeal, a Ninth Circuit panel reversed both the District of Alaska and the District of Hawaii. According to the court, for a writing to qualify as a “notice of a claim” under the Limitation of Liability Act, it must be formulated to “actually inform a shipowner of the claimant’s intentions to seek recovery from the owner” and include at least one claim that is reasonably likely to be covered by the Limitation of Liability Act. 

Applying this standard to the Alaska case, the court held that the attorney’s letter did not qualify as “notice of a claim” because it did not demonstrate intent to seek a recovery from the vessel owners. Instead, the letter stated that it was “not yet certain whether [the vessel owners] bear any responsibility” and that the attorney “would like to avoid unnecessarily naming parties to a lawsuit.” Accordingly, the court held that this letter did not trigger the Limitation of Liability Act’s six-month limitation period and that the vessel owners’ action under the Act was thus timely.

As for the Hawaii case, the court held that the attorney’s letter was also insufficient for purposes of triggering the Act’s limitation period. According to the court, that letter did not state any intent to bring a claim against the vessel owner or his companies. Moreover, in the court’s view, because the letter did not mention the involvement of any vessel, “[e]ven assuming that the letter could be read to give notice of a claim against [the vessel owner and his excursion company], it would be a claim against them for operating [a] scuba diving experience” and “not for their ownership of [a] vessel.” The court noted that this claim was not reasonably likely to be covered by the Limitation of Liability Act. Accordingly, the court held that the attorney’s letter did not trigger the Act’s six-month limitation period and the action under the Act was thus timely.