Thomas v. Carnival Corp., No. 08-10613.

• Decision Date: 01 July 2009
• Docket Number: No. 08-10613.
• Citation: 573 F.3d 1113
• Parties: Puliyurumpil Mathew THOMAS, Plaintiff-Appellant, v. CARNIVAL CORPORATION, d.b.a. Carnival Cruise Lines, Inc., Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

573 F.3d 1113

Puliyurumpil Mathew THOMAS, Plaintiff-Appellant, v. CARNIVAL CORPORATION, d.b.a. Carnival Cruise Lines, Inc., Defendant-Appellee.

No. 08-10613.

United States Court of Appeals, Eleventh Circuit.

July 1, 2009.

Ralph Oliver Anderson, Ralph O. Anderson, P.A., Davie, FL, David W. Brill, Downs Brill Whitehead, Pembroke Pines, FL, for Plaintiff-Appellant.

Curtis J. Mase, Rachel S. Cohen, Mase & Lara, P.A., Miami, FL, for Defendant-Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before BARKETT and FAY, Circuit Judges, and TRAGER,^* District Judge.

PER CURIAM:

Puliyurumpil Mathew Thomas appeals the district court's Order granting Carnival Corporation's Motion to Compel Arbitration and the Order denying his Motion to Remand this case to state court. Thomas originally brought suit against Carnival, his former employer which operated cruise lines in Florida waters, in Florida state court for damages arising from injuries he sustained in a slip-and-fall onboard a Carnival ship. He sued for negligence under the Jones Act (Count I),¹ unseaworthiness of the ship and failure to provide prompt and adequate maintenance and cure² under general maritime law of the United States (Counts II and III), and failure to pay wages under the Seaman's Wage Act (Count IV).³

Relying on the arbitration clause of its most recent Seafarer's Agreement with Thomas in conjunction with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "Convention"), Carnival filed to remove the suit to federal court and have the district court compel the parties to arbitrate. The district court granted these motions, finding that the Convention applied and that the arbitration provision of the Seafarer's Agreement was enforceable.

Thomas appeals this decision and argues that it should be reversed on several grounds. First, Thomas argues that the Convention does not apply in this case because two of its four jurisdictional prerequisites have not been met. Specifically, he argues that the requirement that any agreement to arbitrate must be in writing was not met because the governing Seafarer's Agreement at the time of his injuries did not contain an arbitration clause. As to the Convention's provision that it only applies to commercial contracts, he argues that seamen employment contracts are not considered commercial contracts.

Alternatively, Thomas notes that even if all of the jurisdictional requirements are met, the Convention provides that courts need not enforce an arbitration clause when to do so "would be contrary to the public policy of that country." Thomas invokes this affirmative defense, arguing that forcing him to arbitrate in a forum that would apply non-U.S. law constitutes a prospective waiver of his U.S. statutory rights and, thus, the Arbitration Clause violates U.S. public policy.

Finally, Thomas argues that his statutory claims (based on the Seaman's Wage Act and Jones Act) are outside the scope of the Convention. He asserts that both statutes are at odds with the Convention and, as more recently passed and amended statutes, they supersede all prior inconsistent treaties including the Convention.

BACKGROUND

Thomas was employed by Carnival as a head waiter on one of its cruise ships, the IMAGINATION, which flew a Panamanian flag of convenience.⁴ On November 8, 2004, Thomas slipped and fell on a wet substance in the dining room, dropping a coffeepot. He injured his spine and right shoulder and burned his leg. The Seafarer's Agreement in effect at that time did not contain any arbitration provision (the "Old Agreement"). Thomas received what he alleged was substandard medical care from the onboard physician, who only addressed the leg burn. Due to the injuries, he was signed off the vessel soon after, but on regular vacation time rather than medical leave. During this period, he was not given any maintenance or cure payments, nor was he treated for his neck and shoulder injuries. In January of 2005, Thomas again signed on to the IMAGINATION. Over the course of the next several months, Thomas repeatedly visited the shipboard physician where he claims that he (1) initially was told that he did not have injuries; (2) later was treated only with analgesic balm and pain killers; and (3) eventually was signed off the vessel, again due to injuries and again on regular vacation leave. Before being signed off from the ship, there were many days Thomas could not properly execute his duties because of his shoulder and neck pain, and he consequently lost pay.

On October 10, 2005, Thomas again returned to the IMAGINATION and executed a new Seafarer's Agreement with Carnival that did contain an arbitration clause (the "New Agreement"), which specified that any disputes would be arbitrated in the Philippines and resolved under Panamanian law. Just over two months later, in December of 2005, the shipboard physician determined that Thomas's previous injuries from 2004 rendered him unfit for continuing with his duties, and he was officially discharged for good. Thomas was given a medical sign-off with a $700 payment and commenced receiving medical treatment. After his medical sign-off, he received maintenance and cure payments for approximately three months, but those ceased in April of 2006.

DISCUSSION

I. Convention on the Recognition and Enforcement of Foreign Arbitral Awards

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, is a multi-lateral treaty that requires courts of a nation state to give effect to private agreements to arbitrate and to enforce arbitration awards made in other contracting states.⁵ The United States, as a signatory to the Convention, enforces this treaty through Chapter 2 of the U.S. Federal Arbitration Act (FAA), which incorporates the terms of the Convention (the "Convention Act").⁶

We review de novo a district court's order to compel arbitration pursuant to the Convention Act. Bautista v. Star Cruises, 396 F.3d 1289, 1294 (11th Cir.2005). Unless there is an affirmative defense that prevents the application of the Convention Act, the Court should compel the parties to arbitrate, providing the following jurisdictional prerequisites 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 of the Convention;

(3) the agreement arises out of a legal relationship, whether contractual or not, that is considered commercial; and

(4) one party to the agreement is not a United States citizen, or the commercial relationship at issue has some reasonable relation with a foreign state.

Id. at 1294-95.

There is no dispute that the second and fourth jurisdictional prerequisites of the Convention have been met. Accordingly, we first consider Thomas's argument that the first and third jurisdictional prerequisites have not been met and then consider his affirmative defenses.

II. Jurisdictional Prerequisites of the Convention

A. The agreement must arise out of a commercial legal relationship.

Thomas argues that seaman employment contracts are not commercial contracts and therefore are expressly exempt from arbitration under the Convention. However, as Thomas has acknowledged, we have previously held that seaman employment contracts are commercial. Bautista, 396 F.3d at 1295-96. While Thomas submits that this decision was wrong and should be reconsidered, we are bound by our prior precedent. Accordingly, we find that this jurisdictional requirement is met.

B. There must be an agreement in writing to arbitrate the dispute.

Thomas also argues that there is no agreement to arbitrate this dispute, in writing or otherwise, because the injuries that gave rise to all of his claims occurred before the New Agreement containing the Arbitration Clause was executed. In the alternative he argues that, even if some of the claims are subject to the Arbitration Clause, the court erred in ordering arbitration of all his claims, which included those clearly arising out of his first term of employment while his Old Agreement was in effect. Carnival responds that the Arbitration Clause governs because the suit was brought after the New Agreement was signed. Carnival also suggests that the Arbitration Clause is retroactive.

The Arbitration Clause at issue provides that:

"Any and all disputes arising out of or in connection with this Agreement, including ... Seafarer's service on this vessel shall be referred to, and finally resolved by arbitration...."

(emphasis added). The effective date of this provision stated that:

"[T]he employment relations between [the parties] shall be governed by the terms of this Agreement commencing on the date the Seafarer first signs on board the assigned vessel after signing this Agreement [October 10, 2005] and continuing for a period of time which shall not exceed a maximum service period of 10 months."

Thomas brought four claims: (1) Carnival was negligent both in causing the accident resulting in his injuries and its immediate medical response; (2) the vessel was unseaworthy at the time of the accident; (3) he did not receive the amount of maintenance and cure due to him from his injury; (4) he has not received all the wage payments due to him from his employment.

The district court ordered arbitration, noting that "Plaintiff's claims all arise out of his employment on the IMAGINATION" and interpreting the New Agreement to require arbitration of "all disputes arising out of Plaintiff's services on the vessel." We believe the district court erred in this analysis. There is no doubt that Thomas's claims arose out of his employment on the IMAGINATION, but the relevant question is whether they arose "out of or in connection with this [New] Agreement," as set forth in the Arbitration Clause. It is not enough that the dispute simply arose from his work on the...