December 16, 2010

Lobo v. Celebrity Cruises and Federazione Italianan Transportion

Reply Brief

After submitting their Initial Appellate Brief the Plaintiffs received the Defendant’s Response with opposing arguments. Plaintiff’s then countered with this Reply Brief to the Eleventh Circuit Court of Appeals before a decision was rendered.

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
CASE NO.: 10-13623-GG
INACIO LOBO, et. al.
Petitioners/Appellants

vs.

CELEBRITY CRUISES, INC., and
FEDERAZIONE ITALIANAN TRANSPORTI
Respondents / Appellees

Appeal from the United Status District Court for the Sourthern District of Florida, Docket # 1:08-cv-23386-ASG

APPELLANT’S REPLY BRIEF

CARLOS FELIPE LLINÁS NEGRET
MICHAEL A. WINKLEMAN
LIPCON, MARGULIES, ALSINA & WINKLEMAN, P.A.
Attorneys for Appellants/Plaintiffs
2 South Biscayne Tower, Suite 1776
Miami, Florida 33131
Telephone: (305) 373 – 3016
Facsimile: (305) 373 – 6204

TABLE OF CONTENTS

TABLE OF CONTENTS ……………………………………………………………………2
TABLE OF AUTHORITIES ……………………………………………………………….3
ARGUMENT …………………………………………………………………………………….3

I. NOTHING IN DEFENDANTS’ RESPONSE CHANGES THE FACT THAT THIS MATTER PRESENTS AN ISSUE OF FIRST IMPRESSION IN THE ELEVENTH CIRCUIT AND ELSEWHERE…………………………………………………………………………..3

II. NOTHING IN DEFENDANTS’ RESPONSE CHANGES THE FACT THAT THIS IS AN ACTION WHICH COMBINES THE REMEDIES OF THE SEAMAN’S WAGE ACT AND SECTION 301 OF THE LABOR MANAGEMENT RELATIONS ACT (LMRA). PURSUANT TO U.S. BULK V. ARGUELLES, THE UNITED STATES SUPREME COURT UNEQUIVOCALLY HELD THAT THE SEAMAN’S WAGE ACT AND SECTION 301 OF THE LRMA PROVIDE COMPLEMENTARY REMEDIES. SINCE THE SEAMAN’S WAGE ACT IS EXPRESSLY AVAILABLE TO FOREIGN SEAMEN ON FOREIGN VESSELS, SECTION 301 (A COMPLEMENTARY REMEDY) MUST ALSO BE AVAILABLE TO FOREIGN SEAMEN ……………………………………………………………5
a. Defendants do not dispute that the remedies of Seamen’s Wage Act are expressly available to foreign seafarers working in foreign vessels…………………………………………………………………………………….5
b. Pursuant to U.S. Bulk Carriers Inc. v. Arguelles: section 301 of the LMRA (the source of a hybrid cause of action) and the Seaman’s Wage Act – provide complementary remedies. Because the courts of the United States are expressly open to foreign seafarers bringing causes of action under the Seaman’s Wage Act; the complementary remedies under section 301 (i.e. hybrid causes of action) should also be available to foreign seamen. To hold otherwise is a contrary to the precedent in Arguelles./em> ……………………………………………………………….7
c. There is no basis for distinguishing Arguelles. The holding in Arguelles did not take into consideration – and therefore was not limited by – the nationality of the seafarer or the origin of the ship-owner. This interpretation is consistent with the Supreme Court’s extension of the act (years after Benz) in Sure Tan to foreign workers (non-U.S. citizens and illegal aliens) and the fact that Congress has not expressly exempted foreign seafarers from the scope of the LMRA…………………………………..9
d. Benz (decided in 1957) and McCulloch (decided in 1963), preceded the creation of the hybrid cause of action promulgated in Dellcostello in 1983. Therefore, the holdings in Benz and McCulloch are inapposite as none of them concerned hybrid causes of action under Section 301 of the LMRA………………………………………………………….13

III. CONTRARY TO CELEBRITY’S ASSERTIONS, THERE DOES NOT NEED TO BE A DECISION ON THE MERITS OF PLAINTIFF’S INDIVIDUAL WAGE CLAIM IN ORDER TO PURSUE THIS HYBRID ACTION……………………………………………15

IV. CONTRARY TO DEFENDANTS’ ASSERTIONS, THE CHOICE OF LAW ANALYSIS PROMULGATED IN RHODITIS CALLS FOR THE APPLICATION OF U.S. LAW…………………………………..16
a.The Rhoditis Choice of Law Test – developed after the holdings in Benz and McCulloch– calls for the application of U.S. law…………………………16

V. CONCLUSION………………………………………………………………………..19

CERTIFICATE OF COMPLIANCE …………………………………………………..20
CERTIFICATE OF SERVICE …………………………………………………………..20
TABLE OF AUTHORITIES
29 U. S. C. § 152(3) ………………………………………………………………………….11
46 U.S.C. §10313 ………………………………………………………………………5,6,7,8
Benz v. Compania Naviera Hidalgo 353 U.S. 138 (1957)…..4,9,10,13,14,16
Dominguez v. Tom James Company, 113 F. 3D 1188, 1190 (11th Cir. 1997) ………………………………………………………………………….5
Jose v. M/V FIR Grove, 801 F. Supp. 358 (D. Or. 1992) ………………………….6
Lakos v. Saliaris116 F. 2d 440 (4th Cir. 1940)………………………………………6
Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970)……………………………..17
Strathearn S.S. Co. v. Dillon, 252 U.S. 348 (1920) …………………………………6
Sure Tan Inc. V. NLRB, 467 U.S. 883 (1984) …………………………..9,10,11,12
U.S. Bulk Carries Inc. v. Arguelles, 400 U.S. 351 (1971) ……………..7,8,9,10

Rory Bahadur, Constitutional History, Federal Arbitration and Seaman’s Rights Sinking in a Sea of Sweatshop Labor, Journal of Maritime Law and Commerce, 39 JMARLC 157 (2008) …………………………………………………..13

ARGUMENT

I. NOTHING IN DEFENDANTS’ RESPONSE CHANGES THE FACT THAT THIS MATTER PRESENTS AN ISSUE OF FIRST IMPRESSION IN THE ELEVENTH CIRCUIT AND ELSEWHERE.

Defendants make it seem as if the issues raised in this appeal were settled in the Benz line of cases. In fact, as indicated below, the Benz line of cases did not consider or even mention whether foreign seafarers could bring hybrid claims bundled with Seamen’s Wage Act claims. Therefore, as the district court below made clear, this case raises an issue of first impression in this and other circuits. [See R.E. Tab 4, pg. 6] (“The parties agree that this is an issue of first impression in the Eleventh Circuit … The parties further agree that there is no direct guidance from another circuit court or another district court”).

An issue of first impression is reviewed de novo. See Dominguez v. Tom James Company, 113 F. 3D 1188, 1190 (11th Cir. 1997)(“that holding presents us with an issue of first impression which we review de novo, as we do questions of law”).

a.Defendants do not dispute that the remedies under Seaman’s Wage Act are expressly available to foreign seafarers working on foreign vessels.

The following is undisputed by Defendants Celebrity and the Union.

First, Count II of Plaintiffs’ Amended Complaint in this matter clearly alleged a cause of action against Celebrity pursuant to the Seaman’s Wage Act, 46 U.S.C. §10313 (the “Wage Act”).[1]

Second, also undisputed, is that section 10313(i) of the statute expressly 1) applies the remedies of the Wage Act to foreign seafarers working on foreign vessels, and 2) mandates that Courts of the United States be open and available to foreign seamen for the enforcement of the statute. See 46 U.S.C. §10313(i): “This section applies to a seaman on a foreign vessel when in a harbor of the United States. The courts are available to the seaman for the enforcement of this section.”

Therefore, it is well settled – and Defendants Union and Celebrity do not dispute – that he protection of this statute extends to foreign seamen on a foreign vessel. See Lakos v. Saliaris, 116 F. 2d 440 (4th Cir. 1940). See also Jose v. M/V FIR Grove, 801 F. Supp. 358 (D. Or. 1992), citing the United States Supreme Court in Strathearn S.S. Co. v. Dillon, 252 U.S. 348 (1920):

“In 1915, the statute was amended .. to extend the coverage of the act to include foreign seamen …The [Supreme] Court found that the Congressional extension to foreign vessels logically applied once the vessels entered into U.S. ports: “every foreign vessel owes temporary and local allegiance to the country whose port she enters and becomes amenable to the jurisdiction and the laws of the country.” Id., at 1185… Finally, the Court found that Congress expressly intended that the Act should apply to “all” seamen, Amer

ican and foreign, in order to “give the seamen the right to leave the ship when in a safe harbor.” Id., at 1191.”

Id. (Emphasis Added).

b. Pursuant to U.S. Bulk Carriers Inc. v. Arguelles section 301 of the LMRA (the source of a hybrid cause of action) and the Seaman’s Wage Act – provide complementary remedies. Because the courts of the United States are expressly open to foreign seafarers that bring causes of action under the Seaman’s Wage Act; the complementary remedies under section 301 (i.e. hybrid causes of action) should also be available to foreign seamen. To hold otherwise is a contrary to the precedent in Arguelles. <

In Count II of the Complaint, in addition to alleging violations of the Seaman’s Wage Act (46 U.S.C. §10313) against Celebrity; Plaintiffs also alleged a hybrid cause of action under Section 301 of the LRMA for breach of the Collective Bargaining Agreement.[2] This is significant because pursuant to binding Supreme Court precedent, the remedies under both are complementary.

In U.S. Bulk Carries Inc. v. Arguelles, 400 U.S. 351 (1971), the Supreme Court was called on to determine the compatibility of Section 301 of the LMRA (29 U.S.C. §185) and the Seaman’s Wage Act (46 U.S.C. §10313). The Court, looking at both statutes, ultimately held that the enactment of 301 of the LMRA, did not abrogate, but merely added an optional remedy to the remedies under the Seamen’s Wage Act, which permitted foreign Seamen to sue for wages in Federal Court. In the words of Justice Douglas:

The chronology of the two statutes [The Seamen Wage Act and 301 of the LMRA] makes clear that the judicial remedy was made explicit in [the Seamen Wage Act] and was not taken away by section 301. What Congress has plainly granted we hesitate to deny. Since the history of section 301 is silent on the abrogation of existing statutory remedies of seamen in the maritime field, we construe it to provide only an optional remedy to them. (“Emphasis added”).

Thus, the Supreme Court validated what Plaintiffs sought in this action; relief under both the Seamen Wage Act and Section 301 of the LMRA. In other words, Arguelles recognized that seamen, who are entitled to remedies under the Seaman’s Wage Act, are also entitled to the remedies under Section 301 of the LMRA (the source for a hybrid cause of action).

As illustrated earlier, section 10313(i) of the Seaman’s Wage Act expressly 1) applies the remedies of the Wage Act to foreign seafarers working on foreign flagged vessels, and 2) mandates that Courts of the United States be open and available to foreign seaman for their wage claims.

Therefore, because in the aftermath of Arguelles the Supreme Court held that these two statutes offered complementary remedies; if the Seaman’s Wage Act applies to foreign seamen, it follows that a cause of action under the Wage Act bundled with complementary remedies under section 301, also apply to foreign seamen on foreign vessels. To hold otherwise – as the district court did below – is to hold that the remedies of statutes are not complementary; a holding in contravention to the clear precedent set forth in Arguelles.

c. There is no basis for distinguishing Arguelles. The holding in Arguelles did not take into consideration – and therefore was not limited by – the nationality of the seafarer or the origin of the ship-owner. This interpretation is consistent with the Supreme Court’s extension of the LMRA (years after Benz) in Sure Tan to foreign workers (non-U.S. citizens and illegal aliens) and the fact that Congress has not expressly exempted foreign seafarers from the scope of the LMRA.

The district court distinguished Arguelles because the Plaintiff in that was a legal U.S. resident. However, this is of no consequence.

First, the Supreme Court opinion clearly and unequivocally established that the remedies of the Seaman’s Wage Act and section 301 of the LMRA are complementary. The Arguelles Court does not in any way qualify or limit its holding to seafarers who are U.S. residents or U.S. citizens. In fact, nothing in Justice Douglas’ opinion gives weight to the origin of the seafarer or the origin of the vessel owner. All in all, in reaching that decision, the Court did not make a determination of the nationality of seafarer or the flag of the vessel a pre-requisite or qualification of the holding to the notion that “the remedies of the Seaman’s Wage Act are complementary of the remedies of section 301 of the LMRA.”

Therefore, in the absence of that limitation there is no basis to distinguish Arguelles.

Second, the district Court’s distinction of Arguelles relies is the old notion articulated in Benz v. Compania Naviera Hidalgo, 353 U.S. 138 (1957) that “the NLRA had been formulated as a bill of rights for both American workingmen and their employers.” The reliance on this quote is misplaced, however, as in subsequent cases the United States Supreme Court extended coverage of the act to foreign aliens (i.e. even illegal aliens). The reasoning is that aliens (legal or illegal) – unlike other workers groups – are expressly exempted by Congress under the LMRA. See Sure Tan Inc. v.NLRB, 467 U.S. 883 (1984).

In Sure Tan Inc., the Court held that extending coverage of the Labor Management Relations Act to undocumented alien workers was “consistent with the Act’s avowed purpose of encouraging and protecting the collective-bargaining process because acceptance by illegal aliens of jobs on substandard terms as to wages and working conditions can seriously depress wage scales and working conditions of citizens and legally admitted aliens.” Id. The Supreme Court justified the extension of the Labor Management Relations Act to illegal aliens by holding that aliens – unlike other workers groups – are not expressly exempted by Congress under the LMRA. See Sure Tan Inc. at 891, holding in part:

The breadth of § 2(3)’s definition is striking: the Act squarely applies to “any employee.” The only limitations are specific exemptions for agricultural laborers, domestic workers, individuals employed by their spouses or parents, individuals employed as independent contractors or supervisors, and individuals employed by a person who is not an employer under the NLRA. See 29 U. S. C. § 152(3). Since undocumented aliens are not among the few groups of workers expressly exempted by Congress, they plainly come within the broad statutory definition of “employee.” Id. at 891-892.(Emphasis Added).

Herein, like undocumented aliens, foreign seafarers are not among the few groups of workers expressly exempted by Congress under the LMRA. As a result, foreign seafarers, like undocumented aliens come within the broad statutory definition of “employee;” allowing Plaintiffs’ to bring their hybrid claims under section 301 of the Labor Management Relations Act.

In their response, Defendants’ attempt to distinguish Sure Tan by arguing that in that case the illegal aliens “worked on land in the United States or its territories.” [Appellee Celebrity’s Response, pg. 22]. Celebrity’s distinction however, is at best, disingenuous.

On one hand, the holding in Sure Tan did not depend on the fact that these illegal aliens worked on land in the United States or its territories. Further, the “striking breath of the LMRA” does not “expressly exempt” the applicability of the act to “non-land workers” from the scope of the Act. Certainly, Celebrity shows no authority in support of that. More importantly however, appellant seafarers – like the workers in Sure Tan – worked for a U.S. based employer, spending considerable amounts of time working in ports inside the United States and its territories.

As illustrated to the District Court below, Celebrity Cruises is based and headquartered out of 1050 Caribbean Way, Miami, Florida, 33132. The departments dealing with payroll, human resources and recruiting are also based out of Miami, Florida. Further, while appellant seafarers worked for Celebrity, its vessels made weekly – if not daily – stops in ports in Florida, the United States and its territories.[3]

Therefore, like the workers in Sure Tan, appellant Seafarers herein also worked in the United States and its territories. At all times material, appellant seafarers 1) worked for a Miami, Florida based company, 2) in vessels navigating to U.S. ports and U.S. territorial waters, 3) were hired out of Miami, Florida, 4) received payments processed in Miami, Florida, and 5) received gratuities from North American cruise passengers.

All in all, the policy in favor of extending the LMRA to foreign seafarers working for U.S. based cruise lines (earning wages as a modest as $50.00 dollars per month [R.E. Tab 1, pg. 6]) is the same that the Supreme Court recognized in extending the LMRA to illegal aliens working for U.S. employers:

It is “consistent with the Act’s avowed purpose of encouraging and protecting the collective-bargaining process because acceptance by .. aliens of jobs on substandard terms as to wages and working conditions can seriously depress wage scales and working conditions of citizens and legally admitted aliens.” Id.[4]

d.Benz (decided in 1957) and McCulloch (decided in 1963), preceded the creation of the hybrid cause of action promulgated in Dellcostello in 1983. Therefore, the holdings in Benz and McCulloch are inapposite, as none of them concerned hybrid causes of action under Section 301 of the LMRA.

The District Court below held that Plaintiffs’ could not raise hybrid claims under Section 301 of the Labor Management Relations Act (LMRA), under Benz and McCulloch, because of their status as “foreign seafarers working on foreign ships.” The district court erred, however, because the holding in Benz and McCulloch did not considered the applicability of a hybrid cause of action under section 301 of the LRMA. In fact, nothing in those opinions establishes that a foreign seafarer on a foreign vessel cannot bring a hybrid cause of action, under Section 301 of the LMRA.

The reason why the Supreme Court did not – and in fact could not -consider whether 301 hybrid remedies applied to foreign seafarers is simple. At the time that Benz and McCulloch were decided – 1957 and 1963 respectively – the Supreme Court had not yet developed the hybrid cause of action pursuant to Section 301 of LMRA.

As explained in footnote 2 above and as recognized by the District Court in its opinion [R.E. Tab 4, pg. 6], the hybrid remedies under Section 301 were developed by the Supreme Court much later in Dellcostello v. International Brotherhood of Teamsters, 462 U.S. 151, 163-4 (1983). Therefore, because the Supreme Court’s holding in the Benz line of cases did not – and in fact could not – concern foreign seafarers attempting to bring a hybrid cause of action under section 301 of the LMRA; their holdings do not preclude Plaintiffs causes of action below.

III. CONTRARY TO CELEBRITY’S ASSERTIONS, THERE DOES NOT NEED TO BE A DECISION ON THE MERITS OF PLAINTIFF’S INDIVIDUAL WAGE CLAIM IN ORDER TO PURSUE THIS HYBRID ACTION.

Celebrity also argues that even if §301 applies, the hybrid claim fails because there has been no decision on the merits. D.E. 41, p. 6. This argument is contrary to the relevant authority. The Tenth Circuit Court of Appeals, Webb v. ABF Freight System, Inc., and Teamsters Local Union No. 17, 155 F. 3d 1230 (10th Cir. 1998) citing DelCostello, 462 U.S. 151 (1983), succinctly disposed of Celebrity’s argument:

Federal labor policy generally extends great deference and finality to the decision by a labor arbitrator that a company has not violated its collective bargaining agreement in firing an employee. [Internal Citations Omitted]. However, this deference can result in “an unacceptable injustice” when the employee’s assertion of his rights under the collective bargaining agreement has been tainted by conduct from his union that breaches its duty of fair representation toward him. [Internal Citations Omitted]. As a result, the Court has explained that, [w]hen the union representing the employee in the grievance/arbitration procedure acts in such a discriminatory, dishonest, arbitrary, or perfunctory fashion as to breach its duty of fair representation. . . , an employee may bring suit against both the employer and the union, notwithstanding the outcome or finality of the grievance or arbitration proceeding. DelCostello, 462 U.S. at 164 (citations omitted)(emphasis added).

Herein, when the Union breached its duty of fair representation in the numerous ways set forth in the Amended Complaint [R.E. Tab 4, 55], the Seafarers were entitled to bring this hybrid suit irrespective of whether there was a final decision on the merits. Therefore, Celebrity’s argument is without merit.

IV. CONTRARY TO DEFENDANTS’ ASSERTIONS, THE CHOICE OF LAW ANALYSIS PROMULGATED IN RHODITIS CALLS FOR THE APPLICATION OF U.S. LAW.

a. The Rhoditis Choice of Law Test – developed after the holdings in Benz and McCulloch– calls for the application of U.S. law.

The district court’s assertion that U.S. law does not apply to the Seafarers claims, relies primarily on two facts: a) that Celebrity is a Liberian Corporation with vessels’ flagged in the Republic of Malta, and b) that Plaintiffs’ are foreign nationals. However, the analysis of the issue is far broader than this because maritime jurisprudence has diminished the significance of legal fictions such as “flags of convenience” and the allegiance of the ship-owner. Instead, Courts have made a ship-owners’ economic and operational contacts with the United States, the single most important factor in determining whether to apply U.S. law in maritime actions. See Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970).[5]

The issue before this Honorable Court is analogous to the well-established “Choice of Law” analysis set forth in Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970). Under this analysis, the Court considers whether to apply U.S. law (i.e. Seaman’s Wage Act and Section 301 of the LMRA) to an allegedly foreign ship owner with a substantial base of operations in the U.S. If the test provides that the foreign ship-owner has substantial and continuing contacts with the United States, then U.S. law applies and the case must be heard in a Court of the United States.[6]

Herein, a cold, objective look at the real nature of Celebrity’s operation shows that Celebrity should be subject to U.S. law; including the Seaman’s Wage Act and Section §301 of the Labor Management Relations Act. Celebrity is owned by Royal Caribbean International (“RCI”) which is listed on the U.S. Stock exchange. See Plaintiffs Response to Defendant’s Motion to Dismiss (R.E. Tab 4), excerpt from RCI’s 2008 Annual Report.

Further, RCI (and Celebrity) has its base of operations at 1050 Caribbean Way, Miami, Florida, 33132, in Miami, Florida. RCI carried 10,815,000 North American cruise passengers in 2008, and has carried over 50,000,000 North American cruise passengers since 2004. Id. RCI employs over 5,000 people worldwide in its shoreside operations, the majority of which are likely located in the United States. Id. And RCI leases numerous U.S. properties including: a 359,000 square foot property at the Port of Miami; a 163,000 square foot property in Springfield, Oregon; a 95,000 square foot property in Wichita, Kansas; a 178,000 square foot property in Miramar, Florida; a 154,000 square foot property in Pembroke Park, Florida; and a 267,000 square foot property in Weston, Florida. Id. at p. 5. Thus, RCI leases 1,216,000 square feet of property in the U.S.

Accordingly, while Celebrity’s operational façade consists of a ship-owner incorporated in Liberia, with vessels flagged in Malta, Bahamas and Ecuador, this does not disguise the real nature of Celebrity’s operations, which for over 20 years, has established overwhelming economic and commercial contacts with the U.S.

In short, Celebrity’s extensive business and operational contacts with the United States demand application of U.S. law. This is the equitable result in light of the substantial economic benefits Celebrity enjoys through its commercial and economic activities here. It is only fair that when Celebrity obtains the benefits and protections of U.S. laws and institutions (e.g. Celebrity has the ability to enforce its contractual agreements, including, but not limited to, the CBA at issue, using Florida Courts and Florida law), that Celebrity should also bear the burdens, liabilities and duties required under U.S. labor law.

V. CONCLUSION

For the reasons stated in Appellant’s Initial Brief and herein, the lower Court’s ruling should be reversed and remanded with instructions that a hybrid cause of action under section 301 of the Labor Management Relations Act, applies to foreign seafarers bringing claims under the Seaman’s Wage Act and working for companies with a base of operations in the United States.

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