Lobo v. Celebrity Cruises, Inc., 04-22132-CIV-GOLD.

• Decision Date: 27 March 2006
• Docket Number: No. 04-22132-CIV-GOLD.,No. 04-22132-CIV-TURNOFF.,04-22132-CIV-GOLD.,04-22132-CIV-TURNOFF.
• Citation: 426 F.Supp.2d 1296
• Parties: Inacio Eufemio LOBO Plaintiff, v. CELEBRITY CRUISES, INC., Defendant.
• Court: U.S. District Court — Southern District of Florida

426 F.Supp.2d 1296

Inacio Eufemio LOBO Plaintiff, v. CELEBRITY CRUISES, INC., Defendant.

No. 04-22132-CIV-GOLD.

No. 04-22132-CIV-TURNOFF.

United States District Court, S.D. Florida.

March 27, 2006.

COPYRIGHT MATERIAL OMITTED

Charles Lipcon of Lipcon, Margulies & Alsina, P.A., Miami, FL, Elizabeth K. Russo and Jonathan Gaines of Russo Appellate Firm, PA., Miami, FL, Counsel for Plaintiffs.

Sanford L. Bohrer and Scott D. Ponce of Holland & Knight LLP, Miami, FL, Counsel for Defendant.

ORDER AFFIRMING REPORT AND RECOMMENDATION AND DISMISSING CASE WITH PREJUDICE

GOLD, District Judge.

THIS MATTER comes before the Court on the "Plaintiffs Objection to Magistrate's Recommendation and Report on Defendant's Motion to Dismiss Second Amended Complaint" [D.E. 57]. The Defendant filed a response essentially arguing that the objections, with the exception of its "Introduction" and the last sentence of its "Conclusion" were verbatim reproductions of Plaintiffs Response to Celebrity's Motion to Dismiss the Second Amended Complaint [D.E. # 45]. I held oral argument on Plaintiffs objections on Wednesday, March 22, 2006.

Upon reviewing the matter, I find no factual disputes and conclude that the Magistrate Judge's legal conclusions are correct. Accordingly, I adopt the Report and Recommendations [D.E. # 56] in its entirety and hereby dismiss the Second Amended Complaint [D.E. # 38] with prejudice in that any further amendment to the Second Amended Complaint would be futile and the legal issues addressed are ripe for resolution on appeal by the Eleventh Circuit Court of Appeals. I hereby briefly add to the Magistrate Judge's well-reasoned Report and Recommendation.

The Plaintiff's employment agreement [Exhibit B to the Second Amended Complaint] is a commercial legal relationship under the Convention Act, regardless of the FAA seamen exemption. Under that agreement, grievances and disputes arising on the vessel or in connection with the agreement ". . . which cannot be resolved onboard or between the parties shall be referred to the arbitration as elsewhere provided herein." [Exhibit B, Article 26, page 12]. The place of arbitration shall be either the country of the seaman's citizenship or Miami, Florida. Id.

Under such circumstances, the Eleventh Circuit has determined that the seamen employment contract exemption to the Federal Arbitration Act does not remove from the Convention Act's scope a subset of commercial employment agreements such as Plaintiffs signed contract. Bautista v. Star Cruises, 396 F.3d 1289, 1298 (11th Cir.2005). This Court must order arbitration if four conditions are met: (1) there is an agreement in writing to arbitrate the dispute, (2) the agreement provides for arbitration in the territory of a signatory to the Convention, (3) the agreement to arbitrate arises out of a commercial legal relationship, and (4) there is a party to the agreement who is not an American citizen. Id. at 396 F.3d 1289. 1294 n. 7.

Here, the Magistrate Judge correctly concluded that the allegations answered each of these questions affirmatively. Thus, the Court must send this matter to arbitration unless one of the permissible defenses applies-i.e. that the agreement is null and void, inoperative or incapable of being performed. While Plaintiff has raised allegations about disparity in bargaining position, the Eleventh Circuit, in Bautista, has rejected such arguments when the Plaintiff does not explain how this makes for a defense under the Convention. Id. at 1301.

The only other argument that requires further comment is Plaintiffs contention that the arbitration clause does not defeat an individual seaman's right to proceed in Federal Court on the Statutory Wage Claim provided for in Title 46, U.S.C. § 10313. In essence, Plaintiff argues that his claims brought under 46 U.S.C. §§ 10313(f) and (g) are exempt from the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("the Convention"), and its implementing legislation, 9 U.S.C. §§ 202-209 ("the Convention Act"). Plaintiff bases his position on U.S. Bulk Carriers, Inc. Arguelles, 400 U.S. 351, 375, 91 S.Ct. 409, 27 L.Ed.2d 456 (1971). There, the Supreme Court held that claims for unpaid wages and penalty wages under § 10313 cannot be forced into arbitration, and that a seaman may assert such claims in federal court regardless of whether the seaman employment contract contains an arbitration provision.

The difficulty with the Arguelles decision as being despositive of this case is that the Court did not address, or even mention, the Convention and Convention Act, because what was at issue in Arguelles was the duty to follow the collective bargaining grievance procedures under § 301 of the Labor Management Relations Act. The United States implemented the Convention in 1970 through the enactment of the Convention Act, while Arguelles was argued before the circuit court on January 12, 1968-at least two years before the Convention was implemented. Accordingly, the Supreme Court did not, in Arguelles, address the underlying policy and goals of the Convention, especially in the context of enforcing arbitration provisions contained in international seamens' employment contracts.

Specifically, at the core of the Supreme Court's decision in Arguelles, was its conclusion that:

Enforcement by or against labor unions was the main burden of § 301, though standing by individual employees to secure declarations of their legal rights under the collective agreement was recognized. Since the emphasis was on suits by unions against unions, little attention was given to the assertion of claims by individual employees and none whatsoever concerning the impact of s 301 on the special protective procedures governing the collection of wages of maritime workers. We can find no suggestion in the legislative history of the Labor Management Relations Act of 1947 that grievance procedures and arbitration procedures were to take the place of the old shipping commissioners or to assume part or all of the roles served by the federal courts protective of the rights of seaman since 1790. Arguelles, 400 U.S. at 355-56, 91 S.Ct. 409.

In contrast, subsequent to Arguelles, the United States Supreme Court, in Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n. 15, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974), recognized the importance of the Convention by stating:

The goal of the Convention, and the principal purpose underlying American adoption and implementation of it, was to encourage the recognition and enforcement of arbitration agreements in international contracts and to unify the standards by which agreements to arbitrate are observed and arbitral awards are enforced in the signatory countries.

The Eleventh Circuit has cited to Scherk in Bautista, id., 396 F.3d at 1299-1300, in support of the proposition that to read Industry-specific exceptions into the broad language of the Convention Act would be to hinder the Convention's purpose.

Based on this broad language of the Convention Act, the Eleventh Circuit held that if . . . in the context of the framework of title 9 and the purposes of the Convention, we find no justification for removing from the Convention Act's a subset of commercial employment agreements. The crewmembers' arbitration provisions constitute commercial legal relationships within the meaning of the Convention Act." Id. at 1300.

It is the advent of the Convention and the Convention Act, together with its broad policies, which distinguishes this case from Arguelles. In Arguelles, the Court's recognition of the parochial desire to protect seamen lead it to trump the underlying policy of the LMRA. Given the Supreme Court's later position in Scherk, this case is not governed by Arguelles because the underlying policies at issue between the LMRA and the Convention and Convention Act are diametrically different. As noted in Bautista, the Eleventh Circuit, relying on Scherk, already has recognized that the same policies do not apply with regard to foreign seamen governed under the Convention and Convention Act, because: "Mil pursuing effective, unified arbitration standards, the Convention's framers understood that the benefits of the treaty would be undermined if domestic courts were to inject their `parochial' values into the regime." Id. at 1300. Accordingly, Plaintiffs claim cannot be carved out from the Convention. In that regard, I concur with the Magistrate Judge, that a contrary holding "would go against the reading proscribed in Bautista, because it would be reading into the Convention Act an insular (parochial) attitude of the courts to protect seamen." Report and Recommendation, page 10. Given that the Plaintiff gets to arbitrate in Miami, Florida, namely within the same jurisdiction of the Southern District of Florida, such a result is neither unfair nor onerous. This is not a situation where the contract at issue required arbitration in an untenable forum.¹

These conclusions are supported by the Fifth Circuit's decision in Lim v. Offshore Specialty Fabricators, Inc., 404 F.3d 898 (5th Cir.2005). Although the Lim case dealt with a different federal statute, the Federal Labor Standards Act, the case is nonetheless persuasive in the context of federal wage statutes.

In the Lim case, a Filipino seaman sued his employer, a Louisiana corporation that owned the foreign-flagged vessel on which he worked, alleging overtime violations under the Fair Labor Standards Act (FLSA). The employer moved to dismiss, claiming that the standard terms of the seaman's employment contract required arbitration of the claim in the Philippines, and that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards required enforcement of the arbitration clause. The district court denied the dismissal, holding that the arbitration clause violated Louisiana law, which signaled a strong public policy against a forum selection clause in an employment contract and...