Morales Rivera v. Sea Land of Puerto Rico, Inc.

• Decision Date: 04 December 1969
• Docket Number: No. 7359.,7359.
• Citation: 418 F.2d 725
• Parties: Santiago MORALES RIVERA et al., Plaintiffs, Appellants, v. SEA LAND OF PUERTO RICO, INC., et al., Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

418 F.2d 725 (1969)

Santiago MORALES RIVERA et al., Plaintiffs, Appellants, v. SEA LAND OF PUERTO RICO, INC., et al., Defendant, Appellee.

No. 7359.

United States Court of Appeals First Circuit.

December 4, 1969.

Nicolas Nogueras, Jr., Santurce, P. R., on brief for appellants.

Sutton Keany, and McConnell, Valdes, Kelley & Sifre, San Juan, P. R., on brief for appellee.

Before ALDRICH, Chief Judge, McENTEE and COFFIN, Circuit Judges.

ALDRICH, Chief Judge.

Plaintiffs-appellants, employees or former employees of defendants-appellees, brought suit in the Superior Court of Puerto Rico for back wages claimed to be due because of defendants' failure to comply with Puerto Rico wage and hours legislation. Defendants removed to the District Court on the ground of diversity, where the action was eventually dismissed with prejudice for failure to prosecute. No appeal was taken. Nine months later plaintiffs filed a motion under F.R.Civ.P. 60(b) asking that the dismissal with prejudice be vacated and that the case be dismissed for lack of jurisdiction. The basis of the motion is that the court lacked subject matter jurisdiction because a collective bargaining agreement — now mentioned for the first time — called for arbitration of grievances. The court held, inter alia, that there had been waiver of arbitration, and denied the motion.

Plaintiffs are, of course, correct in maintaining that basic jurisdiction of the court cannot be waived. Thus, if there were in fact no diversity of citizenship between the parties, this would prove fatal no matter when it was discovered. American Fire & Cas. Co. v. Finn, 1951, 341 U.S. 6, 17-18, 71 S.Ct. 534, 95 L.Ed. 702; Compagnie Nationale Air France v. Castano, 1 Cir., 1966, 358 F.2d 203, 206. An agreement to arbitrate is altogether different. Indeed, at one time such agreements were held to be unenforceable, as an illegal private attempt to oust the courts of jurisdiction. Kulukundis Shipping Co. v. Amtorg Trading Corp., 2 Cir., 1942, 126 F.2d 978, 985; United States Asphalt Refining Co. v. Trinidad Lake Petroleum Co., S.D.N.Y., 1915, 222 F. 1006. The agreements are recognized today, but they still are not destructive of jurisdiction. They are, precisely, agreements, and as such may be pleaded as a personal defense. However, like any such right, they may be waived. Cornell & Co. v. Barber & Ross Co., 1966, 123 U.S.App. D.C. 378, 360 F.2d 512, 513; Galion Iron Works & Mfg. Co. v. J. D. Adams Mfg. Co., 7 Cir., 1942, 128 F.2d 411, 413; cf. Ferber Co. v. Ondrick, 1 Cir., 1962, 310 F.2d 462, 464-465, cert. denied 373 U.S. 911, 83 S.Ct. 1300, 10 L.Ed.2d 412. Plaintiffs' cases, to the effect that the court has no "jurisdiction" until agreed-on...