The Fifth Circuit recently revisited its own precedent on the nature of the six-month time bar contained in the Limitation of Liability Act. The Act allows vessel owners to limit their tort liability to the value of the vessel plus pending freight. See 46 U.S.C. §§ 30501-30512. Section 30511(a) of the Act requires vessel owners to bring a civil action in a district court of the United States for limitation of liability within six months after a claimant gives the owner written notice of a claim.
In the 2012 In re Eckstein Marine Servs., LLC decision, the Fifth Circuit officially categorized this six-month filing requirement as a statutory filing deadline that was jurisdictional, as opposed to other filing deadlines that were not. Eckstein, 672 F.3d 310 (5th Cir. 2012). In other words, an untimely filed limitation action would deprive the district court of subject matter jurisdiction.
The court was again confronted with this issue in In re Bonvillian Marine, 2021 U.S. App. LEXIS 35665. The district court found the limitation action untimely under § 30511(a), applying Fifth Circuit precedent that a challenge to the timeliness of a limitation action was a challenge to subject matter jurisdiction, and dismissed the action for lack of subject matter jurisdiction. See In re Bonvillian Marine Serv., Inc., 502 F. Supp. 3d 1078, 1083-84, 1088 (E.D. La. 2020) (citing In re Eckstein Marine Serv. L.L.C., 672 F.3d 310, 315-16 (5th Cir. 2012)).
Although the district court was bound by the Fifth Circuit’s precedent, the Fifth Circuit determined that subsequent Supreme Court decisions had effected an intervening change in the law that warranted a change in the law announced in Eckstein.
In United States v. Kwai Fun Wong, the United States Supreme Court deemed time limitations in the Federal Tort Claims Act (FTCA) to be nonjurisdictional and maintained a “clear statement” rule for interpreting statutory procedural rules in general. The Kwai Fun Wong Court observed that, given the “harsh consequences” of deeming such a rule jurisdictional, “procedural rules, including time bars, cabin a court’s power only if Congress has ‘clearly state[d]’ as much.” 575 U.S. at 409. Accordingly, even when a time limit is important and even when framed in mandatory terms, unless there is a clear statement by Congress otherwise, it should be considered nonjurisdictional.
The Fifth Circuit found that it was obliged to acknowledge the Supreme Court’s implicit overruling of Eckstein and held that the six-month time limitation set forth in 46 U.S.C. § 30511(a) was a claim-processing rule which had no bearing on a district court’s subject matter jurisdiction. Because the district court’s decision was based on precedent that was being overruled, the district court’s decision was no longer valid. The Fifth Circuit reversed the district court’s judgment and remanded for further proceedings consistent with its opinion.
Bonvillian Marine Serv. v. Pellegrin (In re Bonvillian Marine Serv.), 2021 U.S. App. LEXIS 35665, (5th Cir. Dec. 2, 2021)