April 22, 2015

B.K.R. v.  Holland America Line

Response in Opposition

This is a response to a Motion to Dismiss and Compel Arbitration filed by the cruise line in a case Lipcon, Margulies & Winkleman, P.A. filed on behalf of an American ship’s doctor who suffered severe injuries while employed by the cruise line.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO. 15-civ-20254-JLK

B.K.R.,
Plaintiff,

v.

HOLLAND AMERICA LINE – USA INC.,
HOLLAND AMERICA LINE, INC.,
HOLLAND AMERICA LINE N.V.,
HOLLAND AMERICA LINE N.V. LLC,
HAL – ANTILLEN N.V., and
HAL MARITIME LTD.,
Defendants.

                                                                        /

PLAINTIFF’S RESPONSE TO DEFENDANTS’ MOTION TO DISMISS AND COMPEL ARBITRATION AND MEMORANDUM OF LAW

Plaintiff, B.K.R., by and through undersigned counsel, files her Response in Opposition to Defendants (collectively “Holland America”) Motion to Compel Arbitration and Memorandum of Law. [D.E. 14].

  1. BACKGROUND.

            The Plaintiff, B.K.R., is a United States citizen.[1] She is a registered nurse in Florida and California.[2] B.K.R. was employed to work on board the M/S Westerdam as a registered nurse, with the title of ‘Lead Medical Officer.’[3] The ship’s medical facility is operated and managed by Holland America’s medical department, out of its Seattle, Washington headquarters.

At all times material, the Plaintiff was a full time employee of Holland America Line’s medical department, in Seattle Washington. [4] During her tenure working with Holland America, the Plaintiff was required to manually load her luggage onboard the vessel, without assistance. [D.E. 1, ¶18].

On August 4, 2012, the Plaintiff sustained severe injuries after loading her luggage through stairs, while embarking the M/S Westerdam. [D.E. 1, ¶19].   On July 6, 2014, the Plaintiff suffered the same or similar injuries that she suffered following the incident that occurred on August 4, 2012. This was due, in whole or in part, to the delayed, inadequate and/or insufficient medical treatment received for her injuries following the incident that occurred on August 4, 2012. [D.E. 1, ¶20].

On January 22, 2014, the Plaintiff filed her Complaint against six Defendants: Holland America Line – USA INC., Holland America Line, Inc., Holland America Line N.V., Holland America Line N.V. LLC, HAL – Antillen N.V., and HAL Maritime LTD. In her Complaint, the Plaintiff alleged causes of action under the Jones Act, 46 U.S.C. §30104 (Counts I and IV)

On April 6, 2015, the four Holland America entities (collectively “Defendants”), filed a Motion to Dismiss and Compel the case to arbitration. [D.E. 14].

In the Motion, Defendants argue that the 5 of the Defendants should be dismissed because they were not the Plaintiff’s employer. As noted below, however, all 6 entities were properly sued under the ‘borrowed servant doctrine.’ As Judge Altonaga recently noted, “it is possible for a seaman to have more than one Jones Act employer, and under the borrowed servant doctrine a seaman may sue a number of employers, forcing these to argue their culpability to the jury.” Petrovic v. Princess Cruise Lines, Ltd., 12-21588 [D.E. 47] (S.D. Fla. 2012).

In the Motion, Defendants also seek to compel this matter to arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“The Convention”). As noted below, however, the Convention does not apply to American citizens. Because both parties to the arbitration agreement are citizens of the United States, the Convention does not apply, such that this Court does not have subject matter jurisdiction to compel the case to arbitration. Armstrong v. NCL (Bahamas) LTD., 998 F. Supp. 2d 1335, 1338 (S.D. Fla. 2013) (Gold, J.)

Alternatively, five of the Defendants (i.e. Holland America Line – USA INC., Holland America Line, Inc., Holland America Line N.V., Holland America Line N.V. LLC) have no standing to compel the case to arbitration. As noted below, the employment contract and the arbitration agreement is only between two parties: HAL Maritime Ltd. and B.K.R. Accordingly, as a matter of law, only HAL Maritime Ltd. has standing to enforce the terms of terms of the arbitration agreement. Because the other five Defendants are non-parties to the contract, they have no standing to enforce it.

  1. ARGUMENT.
  2. AS A MATTER OF LAW, THE IDENTITY OF A JONES ACT EMPLOYER IS A QUESTION OF FACT FOR THE JURY. ACCORDINGLY, ANY ASSERTIONS THAT SOME DEFENDANTS ARE NOT THE PROPER EMPLOYER(S) ARE PREMATURE AT THE MOTION TO DISMISS STAGE.

While it is clear that the Plaintiff was employed by Holland America’s medical department, located in Seattle, Washington to work as a nurse on board the M/S Westerdam;[5] the identity (and corporate name) of the Plaintiff’s actual employer remains a question of fact. Accordingly, the Plaintiff sued the aforementioned six entities as the potential employers. The Plaintiff also alleged in her Complaint, that each of the aforementioned entities were her employer(s).[6]

This practice is very common in maritime employment cases. While a Jones Act lawsuit may be properly filed only against the employer, resolution of the issue concerning who is the proper Jones Act employer is a question of fact. These questions of fact include ascertaining: 1) who had the power to engage the seaman; 2) who determined the wage to be paid; 3) who had the power of dismissal; and 4) who had the right to control the seaman’s on-the-job conduct. Health v. American Sail Training Association, 644 F. Supp. 1459 (D.R.I. 1986).

In light of this, recently Judge Altonaga held that “it is possible for a seaman to have more than one Jones Act employer, and under the borrowed servant doctrine a seaman may sue a number of employers, forcing these to argue their culpability to the jury.” Petrovic v. Princess Cruise Lines, Ltd., 12-21588 [D.E. 47] (S.D. Fla. 2012), citing Baker v. Raymond Int’l, Inc., 656 F. 2d 173, 178 (5th Cir. 1981) (“The borrowed servant doctrine is the functional rule that places the risk of a worker’s injury on his actual rather than his nominal employer.”).

Therefore, as explained by Judge Altonaga, the ‘borrowed servant’ doctrine requires that courts carefully scrutinize the employment relationship of ship workers to determine who the real employer is. The rationale for the rule is to prevent ‘nominal employers’ (entities which exist only paper) to be used to hide or shield the workers’ actual employer, in a never ending shell game. Otherwise, employers could simply form shell companies with no assets as fronts, leaving the worker without the ability to recover.

  1. THE MOTION TO COMPEL ARBITRATION SHOULD BE DENIED. THE CONVENTION DOES NOT APPLY IN THIS CASE BECAUSE THE PARTIES TO THE ARBITRATION AGREEMENT ARE BOTH UNITED STATES CITIZENS. BECAUSE THE CONVENTION DOES NOT APPLY, THIS COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION TO COMPEL THE CASE TO ARBITRATION..

The Motion should be denied because the two parties involved in the subject arbitration agreement are “citizens of the United States.” On this ground alone, Defendants’ Motion [D.E. 14] should be denied in its entirety. The Plaintiff should be allowed to pursue all of the causes of action in her Complaint (Counts I – V) in this Court.

Defendant, NCL seeks to compel arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the Convention”).[7] Section 202 of the Convention, “Agreement or award falling under the Convention,” explicitly provides:

An arbitration agreement or arbitral award arising out of a legal relationship, whether contractual or not, which is considered as commercial, including a transaction, contract, or agreement described in section 2 of this title, falls under the Convention. An agreement or award arising out of such a relationship which is entirely between citizens of the United States shall be deemed not to fall under the Convention unless that relationship involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states. For the purpose of this section a corporation is a citizen of the United States if it is incorporated or has its principal place of business in the United States.

9 U.S.C. §202 (emphasis added). Accordingly, under the express language of section 202, an arbitration agreement falls outside of the Convention if: 1) it is “entirely between citizens of the United States;” and 2) there is no “reasonable connection between the parties’ commercial relationship and a foreign state that is independent of the arbitral clause itself.” Armstrong v. NCL (Bahamas) LTD., 998 F. Supp. 2d 1335, 1338 (S.D. Fla. 2013) (Gold, J.), citing Ensco Offshore Company v. Titan Marine L.L.C., 370 F. Supp. 2d 594 (S.D. Tex. 2005) and Jones v. Sea Tow Services Freeport NY Inc., 30 F. 3d 360 (2d Cir. 1994).

Notably, the Eleventh Circuit cases that Defendants cite in support of arbitration did not involve American citizens. Indeed, the seminal Eleventh Circuit cases compelling arbitration of cruise line workers, Lindo v. NCL, 652 F. 3d 1270-1271 (11th Cir. 2011) and Bautista v. NCL (Bahamas), Ltd., 396 F. 3d 1289, 1294 n. 7 (11th Cir. 2005), involved foreign nationals. Because Lindo and Bautista involved foreign nationals (i.e. Nicaragua and the Phillipines, respectively); section 202 of the Convention, prohibiting arbitrations between American citizens, was not at issue.

  1. The identical case of Armstrong v. NCL is dispositive of the issues. First, the arbitration agreement is entirely between citizens of the United States. In this case and in Armstrong, the cruise line and the employee are citizens of the United States. Second, there is no reasonable connection between the parties’ commercial relationship and a foreign state. Like Armstrong, the Plaintiff here performed work aboard a Holland America vessel (Westerdam), and never performed any work or services on foreign soil. Moreover, she was paid in U.S. dollars, signed her contract in the United States, was interviewed and hired in the United States, and boarded the vessel and finished her employment in the United States.

In this case, it is undisputed that the Plaintiff, B.K.R., is a citizen of the United States. See Exhibit “1,” Affidavit of B.K.R., ¶2.

It is also undisputed that the Plaintiff’s employer, Holland America Line, is a United States citizen for purposes of the Convention. Holland America Line has its principal place of business in Seattle, Washington at 300 Elliot Avenue West.[8] See 9 U.S.C. §202 (“For the purpose of this section a corporation is a citizen of the United States if it is incorporated or has its principal place of business in the United States”). See Armstrong v. NCL (Bahamas) LTD., 998 F. Supp. 2d 1335, 1338 (S.D. Fla. 2013) (Gold, J.) (“Here, the parties agree that the Employment Agreement meets the first three jurisdictional requirements. The parties also agree both Plaintiff and NCL are United States citizens for purposes of the Convention.”).

Accordingly, because both the Plaintiff and Holland America Line are United States citizens, the Convention does not apply. On this ground alone, the Motion to Compel Arbitration should be denied.

The identical case of Armstrong v. NCL (Bahamas) LTD., 998 F. Supp. 2d 1335, 1338 (S.D. Fla. 2013) (Gold, J.) (Exhibit “3”), is dispositive of this issue. In Armstrong, Judge Gold denied a cruise line’s request to compel the case of an American cruise line worker to arbitration (the same motion that the Holland America Defendants have filed in this case). In Armstrong, in support of the Motion, the cruise line relied on the same type of employment agreement and arbitration clause Holland America is relying on in this case. Judge Gold, citing to section 202 (quoted above), held that the Convention did not apply (and therefore the Court lacked subject matter jurisdiction to compel the case to arbitration) because: 1) the seafarer-employee and the cruise line were American citizens for purposes of the Convention; and 2) there was no reasonable connection between the parties’ commercial relationship and a foreign state.

Notably, the Armstrong Court rejected the cruise line’s argument to get around section 202 and the United States citizenship of the parties. In that case, the cruise line argued that notwithstanding the citizenship of the parties, the employment agreement had a “connection with a foreign state” because the cruise ship sailed outside of the United States. The Armstrong Court rejected that argument, holding at 1338 – 1339 (emphasis added):

Pursuant to 9 U.S.C. §205, federal courts have removal jurisdiction over actions relating to an arbitration agreement falling under the Convention. 9 U.S.C. §205. An arbitration agreement falls under the Convention when four jurisdictional prequisites are met: … and (4) a party to the agreement is not an American citizen, or the relationship between the parties “involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states.” As the party seeking federal jurisdiction it is NCL’s burden to prove jurisdiction under the Convention. … Singh v. Carnival Corp., 2013 WL 5788581 (11th Cir. 2013) (“The party seeking to compel arbitration … bears the burden of proving each of these jurisdictional pre-requisites). … Here, the parties agree that the Employment Agreement meets the first three jurisdictional requirements. The parties also agree both Plaintiff and NCL are United States citizens for purposes of the Convention. The parties disagree, however, as to whether there is a sufficient foreign nexus to meet the fourth jurisdictional requirement.

Carnival argues the agreement falls under the Convention because Plaintiff was to be employed on a vessel “plying the waters off the costs of various European countries and docking at their ports.” [ECF No. 6, at 5]. Carnival also notes that Plaintiff signed the Employment Agreement in Venice, Italy and signed on and off duty in Venice. [ECF No. 27, at 2]. Plaintiff, on the other hand, emphasizes that he performed work only aboard the Gem, and was not requested to perform any work or services on foreign soil. [ECF No. 15, at 6]. Plaintiff also notes he was hired by NCL through an employment agency located in North Miami, Florida, and his salary was paid in United States Dollars. [Id.; ECF No. 15–1].

Upon review of the parties’ relationship and applicable case law, I conclude the relationship between Plaintiff and NCL is not the kind of transnational legal relationship governed by the Convention. Although the parties executed the Employment Agreement in Venice, Italy and Venice served as Plaintiffs sign-on and sign-off ports, the Agreement does not envisage Plaintiff’s performance of work or services abroad because Plaintiff performed work only aboard the Gem and was never requested to perform work or services on foreign soil.

Id. (emphasis added). The Armstrong Court also described the American seafarer’s employment on board NCL ships to be more closely related to the United States than to a foreign country. See Armstrong at 1339:

Further, both Plaintiff and NCL are United States citizens, Plaintiff was hired by NCL through an employment agency located in the United States, and Plaintiff was paid by NCL in United States currency. On these facts, I conclude the parties’ legal relationship does not bear a reasonable relation to a foreign state, the Convention’s fourth jurisdictional prerequisite is not met, and I lack subject matter jurisdiction over this case.

Id. (emphasis added). In this case, like in Armstrong, the Plaintiff’s employment is also more closely related to the United States than to a foreign country. For instance, as the Plaintiff’s affidavit shows (Exhibit “1”), the Plaintiff’s work on the M/S Westerdam was entirely dependent and tied to Holland America’s medical department in Seattle, Washington. In other words, the Plaintiff was not a ship employee. Rather, as the Plaintiff’s declaration shows, she “was a full time employee of Holland America Line’s medical department in Seattle, Washington.” Accordingly, like Amstrong, there was no reasonable connection between the Plaintiff’s employment and a foreign state.

First, she interviewed for the position (and was hired) by a member of Holland America Line’s medical department in Seattle, Washington. She signed her contract to work for Holland America Line in the United States. See Exhibit “1,” ‘Affidavit of B.K.R.:’

  1. I am a citizen of the United States and I am over 18 years of age.
  1. I am a registered nurse in the United States. In particular, I am a registered nurse in the State of Florida and the State of California.
  1. I was employed to work on board the M/S Westerdam as a Lead Medical Officer (registered nurse). The ship’s medical facility is operated and managed by Holland America Line’s medical department, out of its Seattle, Washington headquarters.
  1. I was interviewed for the position of Lead Medical Officer by a member of Holland America Line’s medical department in Seattle, Washington.
  1. I was hired for the position of Lead Medical Officer by a member of Holland America Line’s medical department in Seattle, Washington.
  1. I was a full time employee of Holland America Line’s medical department, located in Seattle, Washington. I received full time benefits such as health insurance through Blue Cross, Blue Shield.
  1. I signed my contract to work for Holland America Line United States and sent it to Holland America Line’s medical department in Seattle, Washington.

Second, the Plaintiff’s employment began in the United States, and while she worked on board the M/S Westerdam, all of the vessel’s itineraries (cruises) began and ended in the United States. The Plaintiff also provided medical care to Holland America passengers on United States ports. Further, she never performed any work or services on foreign soil. See Exhibit “1,” ‘Affidavit:’

  1. I first boarded the vessel M/S Westerdam in Seattle, Washington.
  1. While I worked on board the subject vessel, all of the M/S Westerdam’s itineraries began and ended in the United States.
  1. During my tenure with Holland America I provided medical care to patients in United States ports.
  1. I never performed any work or services as a medical officer on foreign soil.

Third, while she worked on board the M/S Westerdam’s medical facility as a nurse, the Plaintiff reported to her supervisors located at Holland America Line’s medical department in Seattle, Washington. Accordingly, unlike other cruise line workers, the Plaintiff did not report to the ship’s captain or other ship officers in order to perform her job in the medical center (i.e. providing medical care to passengers, as a nurse). Further, the decision to hire, promote and fire nurses such as the Plaintiff, rested entirely on Holland America Line’s medical department in Seattle, Washington. See Exhibit “1,” ‘Affidavit:’

  1. During my tenure with Holland America Line I reported to my supervisors located at Holland America Line’s medical department in Seattle, Washington.
  1. During my tenure with Holland America Line, neither the ship’s captain nor any of the other vessel’s officers supervised my work as a Lead Medical Officer. In order to carry out my job as a nurse and provide medical care, I did not report to the ship’s captain or any other of the vessel’s officers.
  1. The decision to hire, promote and fire nurses such as myself, rested entirely on Holland America Line’s medical department in Seattle, Washington

Fourth, all of the policies and procedures governing the Plaintiff’s employment as a ship’s nurse were exclusively promulgated and enforced by Holland America Line’s medical department in Seattle Washington. Indeed, Holland America implemented protocols and procedures for the M/S Westerdam to mirror protocols of medical care in a standard United States emergency room. For instance, in order to work for the M/S Westerdam, Holland America required the Plaintiff to have a United States nursing license, and current advanced cardiac life support certification (ACLS), provided by the American Heart Association.

The only reason why the Plaintiff was hired in the first place, was because she had a California registered nurse license and had current ACLS American Heart Association certifications. Without her American nursing license or her American ACLS certification, the Plaintiff would not have been able to work as a nurse on the M/S Westerdam. See Exhibit “1,” ‘Affidavit:’

  1. The policies and procedures governing my employment as a Lead Medical Officer, were promulgated and enforced by Holland America Line’s medical department in Seattle, Washington. All of the medical protocols and procedures applicable to the operation of the medical facility on the M/S Westerdam were bound by the standards and protocols of medical care in a standard United States hospital emergency room.
  1. All nurses working on board Holland America Line ships were required to have current Advanced Cardiac Life Support Certification (ACLS), provided by the American Heart Association.
  1. The qualifications, competence and standards of the registered nurse license were verified and enforced by Holland America Line’s medical department in Seattle, Washington. A requirement for employment with Holland America Line’s medical department was to have a United States registered nursing license. In this case, Holland America Line hired me because I am a licensed registered nurse in the State of California.

Sixth, all of the training that the Plaintiff received for the position of ‘Lead Medical Officer, was conducted and coordinated by Holland America Line’s medical department in Seattle, Washington. Further, all of the medical supplies and equipment that the Plaintiff used on the ship’s medical facility to treat passengers, was purchased, requisitioned and provided by the medical department in Seattle. If the Plaintiff needed these materials, she had to request them directly from the medical department in Seattle. See Exhibit “1,” ‘Affidavit:’

  1. All of the training that I received for the position of Lead Medical Officer, was conducted and coordinated by Holland America Line’s medical department in Seattle, Washington.
  1. All of the medical supplies and medical equipment that I used on the ship’s medical facility, was purchased, requisitioned and provided by Holland America Line’s medical department in Seattle, Washington. If I needed medicines, equipment or other materials to practice medicine on the vessel, I had to request these materials directly from Holland America Line’s medical department in Seattle, Washington.

Seventh, in order to treat patients on the M/S Westerdam, “[a]t various times during [her] tenure as a Lead Medical Officer [she] was required to make medical consultations with Holland America’s medical department in Seattle and with other hospitals in the United States, via telephone conference.” See Exhibit “1,” ‘Affidavit,’ ¶21.

Lastly, Holland America paid her in U.S. dollars, prepared and generated a U.S. W2 form to report her income to the Internal Revenue Service, and withheld payroll taxes from each and every one of her pay checks, to pay taxes to U.S. authorities. See Exhibit “1,” ‘Affidavit:’

  1. My salary was paid in United States dollars. My salary was approved and determined by Holland America Line’s medical department in Seattle, Washington.
  1. Holland America Line in Seattle, Washington prepared and generated for me a W2 form in order to report my earnings to the U.S. Internal Revenue Service. Holland American Line in Seattle, Washington deducted payroll taxes from every single one of my paychecks, and paid that payroll tax to the U.S. Internal Revenue Service.

All in all, like Amstrong, the Plaintiff’s employment relationship with Holland America “does not bear a reasonable relation to a foreign state.” Rather, the Plaintiff’s work on the M/S Westerdam was entirely dependent and tied to the United States, and in particular, Holland America’s medical department in Seattle, Washington. See Armstrong at 1339 (emphasis added):

Further, both Plaintiff and NCL are United States citizens, Plaintiff was hired by NCL through an employment agency located in the United States, and Plaintiff was paid by NCL in United States currency. On these facts, I conclude the parties’ legal relationship does not bear a reasonable relation to a foreign state, the Convention’s fourth jurisdictional prerequisite is not met, and I lack subject matter jurisdiction over this case.

This Court should follow Armstrong and similarly hold that because the Convention does not apply, it does not have subject matter jurisdiction to compel the case to arbitration.

Other federal courts that have dealt with identical issues as Armstrong, have reached the same conclusion: Just because the subject employment takes place on a ship on the high seas, it does not necessary mean that the employment automatically is related to a foreign state for purposes of the Convention. See, i.e. Gilroy v. Seabourn Cruise Line, Ltd., 2012 WL 1202343, at *3 (W.D.Wash. April 10, 2012) (“[T]ime on international water does not establish an international relationship.”); Matabang v. Carnival Corp., 630 F.Supp.2d 1361, 1367 (S.D.Fla.2009) (“Even assuming [a vessel] spends 80–85% of the time in the Bahamas, in Bahamian waters and sailing on high seas, … this does not necessarily equate with a reasonable relation with one or more foreign states under § 202.” (internal quotations omitted)); Ensco Offshore Company v. Titan Marine L.L.C., 370 F.Supp.2d 594, 601 (S.D.Tex.2005) (activities in international waters do not meet fourth jurisdictional element of reasonable relation with one or more foreign states).

For the aforementioned reasons, in the absence of the fourth jurisdictional pre-requisite under section 202 of the Convention (prohibiting application of the Convention to disputes between American citizens),[9] this Court does not have subject matter jurisdiction to compel this case to arbitration. On this ground alone, Defendant’s Motion [D.E. 14] should be denied in its entirety. The Plaintiff should be allowed to pursue all of the causes of action in the Complaint (Counts I – V) in this Court.

  1. AN ENTITY CANNOT BENEFIT FROM AN ARBITRATION CLAUSE WITHIN A CONTRACT, IF IT IS NOT A PARTY TO THAT CONTRACT. BECAUSE FIVE OF THE DEFENDANTS ARE NOT PARTIES TO THE EMPLOYMENT CONTRACT, THEY DO NOT HAVE STANDING TO ENFORCE IT.

Alternatively, five of the Defendants (i.e. Holland America Line – USA INC., Holland America Line, Inc., Holland America Line N.V., Holland America Line N.V. LLC, HAL – Antillen N.V.) have no standing to compel the case to arbitration. As noted below, the employment contract and the arbitration agreement is only between two parties: HAL Maritime Ltd. and B.K.R. Accordingly, as a matter of law, only HAL Maritime Ltd. has standing to enforce the terms of terms of the arbitration agreement. Because the other five Defendants are non-parties to the contract, they have no standing to enforce it.

The contract of employment at issue in this case, D.E. 14-2, unequivocally provides at the very beginning: “This Seagoing Employment Agreement (SEA) made by and between the person named below (Employee or you) and HAL MARITIME LTD. (Company/Employer, we or us), a British Virgin Islands International Business Corporation and one of the Holland America Line group of Companies … Employee name: [B.K.R.].” Accordingly, the only two parties to the employment agreement, and therefore the arbitration clause are the Plaintiff and HAL MARITIME LTD. None of the other five Defendants in this action (i.e. Holland America Line – USA INC., Holland America Line, Inc., Holland America Line N.V., Holland America Line N.V. LLC., HAL – Antillen N.V.) are parties to the arbitration agreement. As such, they have no standing to enforce it.

As the Eleventh Circuit held in Lawson v. Life of the South Ins. Co., 648 F. 3d 1166, 1170 (11th Cir. 2011) )(emphasis added), “arbitration is a matter of contract and the FAA’s strong proarbitration policy only applies to disputes that the parties have agreed to arbitrate.” In Lawson, the Court further explained that “[a]n exception to that rule is that a nonparty may force arbitration ‘if the relevant state contract law allows him to enforce the agreement’ to arbitrate. Applying these principles, in Lawson, the Eleventh Circuit held that a non-party to a loan agreement was not entitled to enforce the arbitration clause of the loan agreement.

Under Florida law, non-parties cannot benefit from provisions such as forum selection clauses to which they are not parties to.[10] “The obligation of contracts is limited to the parties making them.” Pozo v. Roadhouse Grill, Inc., 790 So. 2d 1255, 1260-61 (Fla. 5th DCA 2001) citing 11 FLA. JUR. 2D Contracts § 131 (1979). Therefore, under Florida law, an entity cannot benefit from a contract (and seek to enforce a venue selection clause) if it is not a party to that contract. See Drucker v. Duvall, 61 So. 3d 468 (Fla. 5th DCA 2011):

With respect to the breach of contract claim, we recognize that forum selection clauses in contracts are “presumptively fair” and will be enforced unless the result would be unreasonable or unjust. This proposition is limited, however, by the rule in Florida that ordinarily a contract cannot bind one who is not a party thereto or has in some fashion agreed to accept its terms.” CH2M Hill Se. Inc. v. Pinellas Cnty., 598 So. 2d 85, 89 (Fla. 2d DCA 1992); see also Pozo v. Roadhouse Grill, Inc., 790 So. 2d 1255, 1260-61 (Fla. 5th DCA 2001) (refusing to enforce a forum selection clause against a nonparty). The record contains no evidence that appellants were parties to or intended to be bound by the settlement agreement … In sum, the forum selection clause does not bind appellants in this action.

Id. (emphasis added); see also Pozo v. Roadhouse Grill, Inc., 790 So. 2d 1255, 1260-61 (Fla. 5th DCA 2001):

The Venue Selection Clause. Roadhouse alleged … that venue is governed by the “contractual forum selection clause … On the face of these documents, it is apparent that the parties to the agreement were “Roadhouse Grill North Miami, Inc. d/b/a Roadhouse Grill #30” and Florida Agri-Business & Industries Self Insurance Fund.”

Parties to a contract may provide where suit may be brought to enforce it. [citations omitted] … Contrary to Roadhouse’s position, however, the complaint makes clear that Roadhouse and Roadhouse North Miami, Inc., are separate and distinct legal entities. As such, Roadhouse cannot enforce a contract to which Roadhouse North Miami, Inc., was a party.

….Roadhouse is not a party to the agreement and lacks standing to enforce it … In sum, […] Roadhouse an incidental beneficiary cannot enforce a venue selection clause in a contract between Humana and Roadhouse North Miami, Inc. against Pozo, a nonsignatory.

Id., at 1259 – 1260 (emphasis added); see also EverBank v. Atlantic Hospitality of Florida, LLC 134 So. 3d 541, 543 (Fla. 3d DCA 2014) (“As the causes of action do not involve matters relating to the Stipulated Settlement Agreement and as these parties are not signatories to that agreement, the venue provision does not apply”),

            In line with these Florida cases, recently Judge Altonaga refused to allow a non-party to enforce an arbitration provision in a cruise line employment contract. See Capello v. Carnival Corporation, Case No. 12-22181-civ-Altonaga/Simonton [D.E. 15] (S.D. Fla. Aug. 8, 2012), p. 3 – 11 (Exhibit “4”):

Plaintiffs contend section 205 does not apply because the jurisdictional pre-requisites of the Convention have not been met. The jurisdictional requirements of the Convention are that: (1) there is an agreement in writing within the meaning of the convention … Bautista v. Star Cruises, 396 F. 3d 1289, 1295 n. 7 (11th Cir. 2005). According to Plaintiffs, the first element is not met – there is no agreement in writing covered by the Convention. The Convention states, “[a]n arbitration agreement or arbitral award arising out of a legal relationship, whether contractual or not, which is considered commercial, including a transaction, contract, or agreement described in section 2 of this title, falls under the Convention.” 9 U.S.C. §202 …Plaintiffs’ assert Carnival has not presented a signed arbitration agreement between the parties. Carnival has instead produced an “Officer’s Agreement” which was signed and entered into by Capello and Golden Falcon, a non-party to this action. Plaintiffs contend that in order to compel arbitration, Carnival would have to produce an agreement signed by itself and Capello. Carnival does not dispute that it is not a signatory to the Officer’s agreement between Capello and Golden Falcon. … “A rule of contract law is that one who is not a party to an agreement cannot enforce its terms against one who is a party” … Arbitration of Capello’s claims is not appropriate.

Id. (emphasis added). Notably, Judge Altonaga also rejected the non-party’s argument that the arbitration agreement should apply under a theory of equitable estoppel, Id. at 7 (emphasis added):

Carnival may only compel arbitration by means of the equitable doctrine of estoppel, which requires more than merely pointing to a broadly worded arbitration provision. In determining whether the doctrine applies, the Court must examine the scope of the agreement containing the arbitration provision in light of the claims asserted. As defined by Eleventh Circuit precedent, estoppel requires an examination of the actual “terms of the written agreement” in relation to the claims in the Complaint. MS Dealer, 177 F.3d at 947. The court in MS Dealer stated that estoppel is appropriate where “each of a signatory’s claims against a nonsignatory ‘makes reference to’ or ‘presumes the existence of’ the written agreement.”

Apart from the reference to the arbitration clause and a few cursory statements, Carnival makes no showing of how Cappello’s claims implicate the terms of the Officer’s Agreement. Cappello’s claims arise out of an incident on October 20, 2010, when “acid and/or other type [sic] caustic solution erupted/exploded into Plaintiff’s eyes while mixing chemicals for a piece of machinery used to purify water aboard the Vessel,” resulting in Cappello’s blindness. (Compl. ¶ 14). … Counts I, II, and V are premised on such alleged omissions, with some little variation among the three claims. None of these counts mentions the Officer’s Agreement, and Carnival has made no particularized showing of why that agreement is relevant to these claims.

Counts III and IV allege maritime law “failure to provide maintenance and cure” and Jones Act “failure to provide prompt, proper and adequate maintenance and cure,” respectively … It is evident that neither claim presumes the existence of the Officer’s Agreement — neither claim alleges that Cappello is due maintenance and cure under the terms of that agreement.

Similarly, here, the Officer’s Agreement is factually significant in that it was the instrument by which Cappello was employed on Carnival’s ship. It is also factually significant in that Carnival allegedly invoked its terms to avoid fulfilling an independent obligation. Carnival has not, however, shown why the terms of the Officer’s Agreement form the basis of Cappello’s claims. Accordingly, the Court declines to find equitable estoppel appropriate here. The Court finds the Convention does not apply to Plaintiffs’ claims, and Cappello is not required to arbitrate.

All in all, in this case, like in Capello (which involved the same causes of action under the Jones Act, unseaworthiness, maintenance and cure and failure to treat); all of the claims are independent of the employment agreement. That is, none of the Plaintiff’s claims presumes or pleads the existence of the employment agreement. The Plaintiffs claims could exist even in the absence of her employment contract. As a result, like in Capello, the non-parties cannot rely on equitable estoppel to compel this matter to arbitration.

Because Holland America Line – USA INC., Holland America Line, Inc., Holland America Line N.V., Holland America Line N.V. LLC., and HAL – Antillen N.V. are not parties to the arbitration agreement, they have no standing to enforce it.

III.       CONCLUSION.

For the reasons set forth above, the Defendant’s Motion to Compel Arbitration [D.E. 14] should be denied.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY, that on April 22, 2015 electronically filed the foregoing document with the Clerk of the Court using CM/ECF. I also certify that the foregoing document is being served this day on all counsel of record via transmission of Notices of Electronic Filing generated by CM/ECF.

 

LIPCON, MARGULIES,
ALSINA & WINKLEMAN P.A.
Attorneys for Plaintiff
2 South Biscayne Boulevard, Suite 1776
Miami, Florida 33131
Telephone: (305) 373-3016

By: /s/ Carlos Felipe Llinás Negret______
 CARLOS FELIPE LLINAS NEGRET
FL BAR NO. 73545

[1] Exhibit “1,” Affidavit of B.K.R., ¶3.

[2] Id.

[3] Id., ¶4.

[4] Id., ¶ 7.

[5] Exhibit “1,” Affidavit of B.K.R., ¶4.

[6] See Complaint, D.E. 1, ¶¶11 – 15: “On or about August 4, 2012, the Plaintiff was employed by Holland America Line – USA INC.;” “On or about August 4, 2012, the Plaintiff was employed by Holland America Line, Inc.;” On or about August 4, 2012, the Plaintiff was employed by Holland America Line N.V.;” On or about August 4, 2012, the Plaintiff was employed by Holland America Line N.V. LLC.;” On or about August 4, 2012, the Plaintiff was employed by HAL – Antillen N.V.” At the motion to dismiss stage these allegations must be accepted as true.

[7] The subject arbitration agreement [D.E. 14-3, ¶9(a)], also states that it is governed by the Convention.

[8] See Exhibit 2, highlighted portions showing that Holland America’s principal place of business and headquarters are in Seattle, Washington.

[9] As noted above, the fourth jurisdictional pre-requisite to compel a case to arbitration, laid out in section 202 of the Convention, is that a party to the agreement is not an American citizen, or the relationship between the parties “involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states. Armstrong, at 1338 citing Bautista v. NCL (Bahamas), Ltd., 396 F. 3d 1289, 1294 n. 7 (11th Cir. 2005).

[10] In Lindo v. NCL, 652 F. 3d 1270-1271 (11th Cir. 2011), the Eleventh Circuit declared that arbitration provisions were effectively the same as contractual forum selection clauses.