Brown v. Nabors Offshore Corp.

• Decision Date: 06 August 2003
• Docket Number: No. 02-31138.,02-31138.
• Citation: 339 F.3d 391
• Parties: Stephen Brown, Plaintiff-Appellee, v. Nabors Offshore Corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

339 F.3d 391

Stephen Brown, Plaintiff-Appellee, v. Nabors Offshore Corporation, Defendant-Appellant.

No. 02-31138.

United States Court of Appeals, Fifth Circuit.

August 6, 2003.

Kristi Ann Post (argued), Randy Jay Ungar, Ungar & Byrne, New Orleans, LA, for Plaintiff-Appellee.

Thomas Howard Wilson (argued), Tara Porterfield, Vinson & Elkins, Houston, TX, Thomas J. Smith, Galloway, Johnson, Tompkins, Burr & Smith, New Orleans, LA, for Defendant-Appellant.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before KING, Chief Judge, and DAVIS and BENAVIDES, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Nabors Offshore Corporation (Nabors) challenges the district court's order, denying Nabors' motion to compel arbitration and stay Brown's Jones Act, general maritime action pending arbitration. The question we must address is whether Brown's action against his employer, Nabors, falls within the exclusion to the Federal Arbitration Act (FAA) which exempts from its application "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." For the reasons that follow, we conclude that the district court correctly concluded that, because Brown is a seamen, the arbitration clause Nabors contends is included in his contract of employment is outside the scope of the FAA.

I.

Stephen Brown was employed as a roustabout for Nabors on the DOLPHIN-110, a jack-up rig located in the Gulf of Mexico off the coast of Louisiana. In late April or early May of 2001 (after Brown's employment by Nabors had already begun), Nabors sent Brown a letter notifying him of the adoption of the Nabors Dispute Resolution Program ("NDRP"), which required inter alia that all disputes between Nabors and its employees be resolved through arbitration. Enclosed with the letter was a separate acknowledgment form for the employee to sign confirming his notice and understanding of the agreement. The NDRP documents, however, provided that in the event the employee failed to return the acknowledgment form, "[y]our continued employment after the date you receive the enclosed documents will constitute your acceptance of the Program." Brown did not return the signed acknowledgment form, and the materials were not returned as undeliverable.¹

On October 19, 2001, Brown slipped on a piece of waste packaging while descending a staircase on the rig and fell, suffering injuries to his lower back. At the time of Brown's injury, the rig was engaged in workover operations on a well in preparation for oil and gas production.

In February 2002, Brown filed suit against Nabors in federal district court under the Jones Act and general maritime law seeking damages predicated on negligence and unseaworthiness, along with a claim for maintenance and cure. Nabors filed a motion to compel arbitration and to stay or dismiss this action pending such arbitration, arguing that Brown had agreed under the terms of the NDRP to submit any grievances to mandatory, binding arbitration. Brown opposed Nabors' motion on the grounds that, as a "seaman," he was exempt from being compelled to arbitrate.

Section 1 of the Federal Arbitration Act ("FAA") exempts from arbitration "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 9 U.S.C. § 1 (2000). Nabors argued that Brown fell outside of the § 1 exemption because he was not involved in the transportation of goods in commerce.

The district court held that, because Brown was a seamen and a member of an enumerated class of persons exempt from the application of the FAA, he was expressly excluded from FAA's coverage. More particularly, the court concluded that, because Brown was a seamen, he was expressly excluded from coverage without the necessity of establishing that he was actually engaged in foreign or interstate commerce. Alternatively, the court concluded that no record evidence negated that Brown's work as a crewmember aboard the DOLPHIN-110 — producing oil and gas for use in interstate commerce — was work engaged in interstate or foreign commerce.

In this appeal, Nabors argues that although Brown is a seamen for purposes of the Jones Act, he does not fall within the scope of the FAA exemption because he was not engaged in the transportation of goods in foreign or interstate commerce.

II.

Nabors does not — indeed it could not — challenge that Brown is considered a seamen and member of the crew of the DOLPHIN-110 for purposes of the Jones Act.² Nabors argues that it is not enough for Brown to show that he is a seamen; to trigger the exemption, Brown must also show that he was engaged in interstate or foreign commerce.

In other words, Nabors would have us read the statutory language — "engaged in... commerce" as limiting all three named groups-seamen, railroad employees and "any other class of workers." Specifically, he argues that the "engaged in ... commerce" would limit the exemption to those seamen directly involved in the transportation of goods in foreign or interstate commerce. Because Brown was a roustabout or general laborer on a jack up drilling or workover rig, Nabors contends that he cannot qualify as a worker engaged in transportation of goods in foreign or interstate commerce.

Brown argues, on the other hand, that the § 1 exemption applies to all seamen, all railroad employees and further that the exemption applies to all other transportation workers engaged in commerce whose jobs are sufficiently similar to those in the enumerated classes, seamen and railroad workers.

We have not before specifically addressed the precise question presented to us. In Rojas v. TK Communications, Inc.,³ we considered whether a disc jockey who sought recovery against her employer for sexual harassment fell within the "engaged in foreign commerce" exemption to the FAA. In rejecting Rojas' argument that she fell within the exemption, we followed a Sixth Circuit opinion Asplundh Tree Expert Co. v. Bates,⁴ and stated that "the exclusionary clause of § 1 in the Arbitration Act should be narrowly construed to apply to employment contracts of seamen, railroad workers, and any other class of workers actually engaged in the movement of goods in interstate commerce in the same way that seamen and railroad workers are." Id. at 748. Although this language is dicta, our analysis supports Brown's argument that the limiting phrase "engaged in foreign or interstate commerce" only applies to "any other class of workers" and not to the specific categories of workers enumerated, seamen and railroad employees.

Nabors argues that the Supreme Court decision in Circuit City Stores, Inc. v Adams,⁵ supports its interpretation of the exemption. In Circuit City Stores, the Court considered whether an employee of Circuit City, a national retailer of consumer electronics, fell within the § 1 exemption. The employee argued that the words "contract of employment of ... any other class of workers engaged in ... commerce" included all contracts of employment so long as they involved commerce within the reach of Congress under the Commerce Clause. Id. at 114, 121 S.Ct. 1302. The court rejected this argument and reasoned that "... the words any other class of workers engaged in ... commerce" constitute a residual phrase following, in the same sentence, explicit reference to "seamen" and "railroad employees." Id. Construing the residual phrase to exclude all employment contracts fails to give independent effect to the statute's enumeration of the specific categories of workers which precedes it; there would be no need for Congress to use the phrases "seamen" and "railroad employees" if those same classes of workers were subsumed within the meaning of the "engaged in commerce residual clause." Id. The court then explained that § 1 called for the application of the maxim ejusdem generis and that "[u]nder this rule of construction, the residual clause should be read to give effect to the term `seamen' and `railroad employees' and should itself be controlled and defined by reference to the enumerated categories of workers which are recited just before it; the interpretation of the clause pressed by respondent fails to" produce these results. Id. at 114-115, 121 S.Ct. 1302.

We are satisfied that the Supreme Court's reading of this exemption is fully consistent with our reasoning in Rojas. The Supreme Court referred to seamen and railroad employees as "enumerated categories of workers" and held that the residual class of workers — "any other class of workers engaged in commerce" — should be limited by reference to the enumerated workers. Circuit City Stores, 532 U.S. at 114-115, 121 S.Ct. 1302. Contrary to Nabors' argument, the Court gave no signal that it would limit the meaning of the enumerated workers by the limitation placed on the residual class of workers, those "engaged in ... commerce."

Further language in the...