The Fifth Circuit Holds Steady on Reasonable Notice Requirements Under the Limitation of Liability Act in In re RLB Contracting, Inc.

David A. Bury | Note

RLB Contracting, Inc. (RLB), owned the JONATHAN KING BOYD, a dredging vessel that was engaged in operations near Anahuac, Texas. In 2011, while on a family fishing trip, the Butler family’s boat collided with the vessel’s floating dredge pipe, violently throwing all occupants from the craft and killing twelve-year-old Sammie Butler. The Butlers filed suit against RLB in Texas state court, claiming that the vessel’s dredge pipe was improperly marked and that RLB was negligent in failing to post signs warning of its dredging activity. In response, RLB filed a limitation of liability action in the United States District Court for the Southern District of Texas, seeking to invoke federal subject matter jurisdiction and limit its liability to the $750,000 value of the vessel, pursuant to the federal Limitation of Liability Act (Limitation Act). The Butlers challenged the federal court’s jurisdiction, contending that RLB failed to file a petition seeking limitation within six months of receiving written notice of a claim, a requirement necessary to invoke the Limitation Act’s protections.

RLB filed its limitation of liability action within six months of receiving service of the Butler’s state court complaint. However, controversy existed over whether the Butlers provided RLB with written notice of a claim sufficient to trigger the six-month time bar governing *296 limitation actions prior to filing the complaint. The magistrate and district court judge paid special attention to the exchange of letters between both parties’ respective counsels, which began a few weeks after the incident and concluded more than six months prior to RLB filing its limitation action in district court. The district court accepted the magistrate judge’s Report and Recommendation, concluding that RLB received sufficient written notice of a potential claim and granting summary judgment in favor of the Butlers. RLB appealed, which afforded the United States Court of Appeals for the Fifth Circuit its first opportunity to address the requirements for adequate written notice of a claim besides the filing of a formal complaint. In upholding the district court’s decision, the Fifth Circuit held that an aggregated series of precomplaint letters constitutes sufficient notice under the Limitation Act if those letters confer both the reasonable possibility of a potential claim and the reasonable possibility of damages in excess of the vessel’s value. In re RLB Contracting, Inc., 773 F.3d 596, 603-06, 2015 AMC 147, 155-59 (5th Cir. 2014).