May 07, 2014
John Doe v. Silversea Cruises, Ltd., et al
Response to Motion to Dismiss
In this response to a motion to dismiss and motion to compel arbitration, our maritime travel injury advocate will fight on behalf of a Filipino crewmember who lost his leg in an accident aboard ship.
IN THE UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
IN ADMIRALTY
CASE NO. 14-CV-20593-HUCK/O’SULLIVAN
JOHN DOE,
Plaintiff,
v.
SILVERSEA CRUISES LTD.,
SILVER SPIRIT SHIPPING CO. LTD.,
V. SHIPS LEISURE Inc., V. SHIPS Leisure USA Inc.,
V. SHIPS LEISURE SAM, and V. SHIPS USA LLC.
Defendants.
______________________________________/
PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT SILVERSEA CRUISES LTD.’S MOTION TO COMPEL ARBITRATION AND DISMISS PLAINTIFF’S AMENDED COMPLAINT FOR IMPROPER VENUE; DE 28
COMES NOW, Plaintiff, JOHN DOE, and hereby files his Response in Opposition to Defendant, SILVERSEA CRUISES LTD., Motion to Compel Arbitration and Dismiss Plaintiff’s Amended Complaint for Improper Venue [D.E. 28], and for good cause states as follows.
DEFENDANT’S MOTION TO COMPEL ARBITRATION SHOULD BE DENIED IN ITS ENTIRETY BECAUSE THERE IS SIMPLY NO VALID, BINDING AGREEMENT TO ARBITRATE, AND THERE IS UNDENIABLY NO CHOICE OF FORUM CLAUSE AT ISSUE.
OVERVIEW
This case arises out of grievous personal injuries suffered by Plaintiff JOHN DOE, a 33 year old Filipino Seafarer, while working aboard the vessel, Silver Spirit. On or about January 11, 2014, a secured line of the vessel parted and snapped back violently into Emmanuel’s leg. Thereafter, Defendants allegedly failed to immediately provide proper and necessary medical care and treatment. Emmanuel was eventually flown to Jackson Memorial Hospital in Miami. Despite the team of doctors’ best efforts at Jackson Memorial, Emmanuel’s leg was ultimately amputated, first below the knee, and later above the knee.
This matter was initially filed as a ‘Maintenance and Cure’ action and included an emergency motion for the entry of an injunction to maintain the status quo and prevent Defendant from repatriating Emmanuel back to the Philippines against the recommendations of his treating doctors.
On February 18, 2014, this Honorable Court held an emergency hearing during which both parties agreed, and the Court entered an order holding that Mr. Navarette would not be repatriated back to the Philippines unless the parties agreed in writing to allow repatriation or this Court ordered otherwise. DE 8.[1]
Thereafter, Emmanuel filed an Amended Complaint against Defendants Silversea Cruises Ltd., Silver Spirit Shipping Co. Ltd., V. Ships Leisure Inc., V. Ships Leisure USA Inc., V. Ships Leisure SAM, and V. Ships USA LLC. [D.E. 13] alleging Jones Act Negligence, Unseaworthiness, Failure to Pay Maintenance and Cure, Failure to Treat, and General Negligence. To date, the moving party, Defendant Silversea Cruises Ltd. is the only defendant that has filed a response to Plaintiff’s Amended Complaint. The deadline to file a response to Plaintiff’s Amended Complaint for the remaining defendants is May 12, 2014.
Defendant Silversea Cruises Ltd. filed a Motion to Compel Arbitration and Dismiss Plaintiff’s Amended Complaint for Improper Venue arguing that the matter should be compelled to arbitration in the Philippines despite the fact that there is no employment contract which contains a valid arbitration clause, and it is indisputable that there is no choice of forum clause selecting the Philippines. As fully explained herein, Silversea’s Motion to Compel Arbitration has no basis in fact and law.
First, Silversea failed to satisfy the agreement-in-writing prerequisite under the Convention on recognition of foreign arbitral awards. There is simply no record evidence that Navarette signed or agreed to submit his Jones Act and related claims to arbitration. To this very point, in the absence of a written agreement to arbitrate, controlling precedent holds that this Honorable Court does not have jurisdiction to compel the case to arbitration. See Czarina, L.L.C. v. W.F. Poe Syndicate, 358 F. 3d 1286 (11th Cir. 2004).
Second, even if, for the sake of argument, there was an arbitration provision requiring the application of Philippine law in the Philippines (there is none in the record): such a provision would nevertheless be void as against public policy, pursuant to binding United States Supreme Court precedent cases which hold that arbitration agreements that include foreign choice-of-law clauses are void as against public policy because they prospectively waive a litigant’s right to pursue U.S. statutory remedies, such as Navarette’s Jones Act and related claims. Accordingly, Defendant’s Motion to Compel Arbitration should be denied.
DEFENDANT HIGHLIGHTS THAT ‘FEDERAL LAW FAVORS ARBITRATION,’ BUT FAILS TO NOTE THAT SEAFARERS ARE EMPHATICALLY THE WARDS OF THE ADMIRALTY COURTS AND TREATED AS A FAVORED CLASS BY CONGRESS.
“Seafarer from the start were wards of admiralty.” U.S. Bulk Carriers, Inc. v. Arguelles, 400 U.S. 351, 355 (1971) citing Robertson v. Baldwin, 165 U.S. 275, 287 (1897). In 1823, Justice Story declared:
Every Court should watch with jealousy an encroachment upon the rights of a seaman, because they are unprotected and need counsel; because they are thoughtless and require indulgence; because they are credulous and complying; and are easily overreached. But Courts of maritime law have been in the constant habit of extending towards them a peculiar, protecting favor and guardianship. They are emphatically the wards of the admiralty
… Harden v. Gordon, 11 Fed. Cas. 480 (No. 6047) (C.C. Me 1823).
As this Court later stated “[f]rom the earliest times maritime nations have recognized that unique hazards, emphasized by unusual tenure and control, attend the work of seafarer.” See Aguilar v. Standard Oil Co. of New Jersey, 318 U.S. 724 (U.S. 1943). The Aguilar Court further held: “the restrictions which accompany living aboard ship for long periods at a time combine with the constant shuttling between unfamiliar ports to deprive the seaman of the comforts and opportunities for leisure, essential for living and working that accompany most land occupations.” Id., at 728.
In Chandris, Inc. v. Latsis, 515 U.S. 347, 355 (1995) (Internal Citations omitted), this Court reaffirmed this longstanding principle that seafarer are wards of the Admiralty Courts as a “feature of the maritime law compensating or offsetting the special hazards and disadvantages to which they who go down to sea in ships are subjected.” The Fifth Circuit Court of Appeals explained the rationale for affording seafarers special protections in Castillo v. Spiliada Maritime Corp.,937 F.2d 240, 243 (5th Cir. 1991):
[Seafarer] enjoy this status because they occupy a unique position. A seaman isolated on a ship on the high seas is often vulnerable to the exploitation of his employer. Moreover, there exists a great inequality in bargaining position between large ship-owners and unsophisticated seafarer. Ship-owners generally control the availability and terms of employment.
Accordingly, the Admiralty Courts have a rich tradition of protection of seafarers, which flowed from the uniquely abhorrent conditions workers face at sea.
It is not just the Courts which recognize the need to protect seafarers, as “[t]he policy of Congress, as evidenced by its’ legislation, has been to deal with [seafarers] as a favored class.” Bainbridge v. Merchants’ & Miners’ Transp. Co., 287 U.S. 278 (1932). A recent example of Congress’s intent to protect seafarers is shown through the 2008 amendment of the Jones Act venue provision.[2] Congress made its reasons for deleting the Jones Act venue provision clear: “[t]his subsection is being repealed to make clearer that the prior law regarding venue, including the holding in Pure Oil Co. v. Suarez, 384 U.S. 202 (1966) and cases following it, remains in effect, so that the action may be brought wherever the seaman’s employer is doing business.”[3] This amendment evidences Congress’s intent to open the doors of the Admiralty Courts to seafarers, and in fact expand seafarers’ access to Courts.
The Courts, like Congress, should continue to preserve seafarers’ rights by ensuring their ability to access U.S. Courts and obtain proper redress, particularly under the Jones Act. Unfortunately, foreign arbitrations have become a potent weapon of the cruise lines to systemically deprive seafarers of their ancient rights and statutory remedies in the rush to save money and increase profits.
Further to this point, Silversea argues that this Court, if in doubt, must lean in favor of compelling arbitration because “[f]ederal law strongly favors agreements to arbitrate, particularly in international commercial transactions.” [D.E. 28, pg. 3]. Defendant is incorrect. The federal policy favoring arbitration is applicable only when a written agreement to arbitrate exists (which is not the case herein).
Indeed, it is critical to briefly point to recent Supreme Court precedent dispelling the notion that there is always a federal policy in favor of arbitration. In Granite Rock Co., v. International Broth. of Teamsters, 130 S. Ct. 2847 (2010), a unanimous United States Supreme Court held that the federal policy favoring arbitration is not applicable if the formation of the parties’ arbitration agreement, its enforceability orapplication is at issue. The rationale for the holding in Granite Rock, is “the first principle that underscores all of [the Supreme Court’s] arbitration decisions: Arbitration is a ‘matter of consent,’ and thus is a way to resolve those disputes – but only those disputes – that the parties have agreed to submit to arbitration.” Granite Rock, at 2857; see also AT&T Technologies, Inc. v. Communications Workers of American, 475 U.S. 643, 648 (1986) (“[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.”).See also, American Heritage Life Ins. Co. v. Lang, 321 F. 3d 533, 537 (5th Cir. 2003)(“federal policy favoring arbitration does not apply to the determination of whether there is a valid agreement to arbitrate between the parties’ or to ‘the determination of who is bound’ by the arbitration agreement.”).
Accordingly, the federal policy of protecting seafarers as wards of the Admiralty Courts should govern this Honorable Court’s consideration of the instant motion, not the presumption in favor of arbitration.
THE CONTRACTS OF EMPLOYMENT
It is undisputed that there are two contracts of employment at issue before this Honorable Court; one signed May 20, 2013, by Navarette (copy attached as Exhibit 1); and a second contract signed by Navarette on July 1, 2013 (copy attached as Exhibit 2).
As Paragraph 11 of the Amended Complaint states:
At all material times hereto, Plaintiff was employed as a seaman aboard the M/V Silver Spirit. A contract of employment was executed on July 1, 2013 (the day before Plaintiff boarded the ship for the subject voyage wherein the subject incident occurred); copy attached as Exhibit 1. The attached, operative employment contract contains no arbitration provision and incorporates a Collective Bargaining Agreement (FIT-CISL) which similarly contains no arbitration provision. Accordingly, there is no arbitration agreement or clause at issue herein. Plaintiff does not have to arbitrate, but instead can have his claims heard by this Court.
This succinct paragraph, which is to be taken as true, accurately states (and simplifies) the issue for this Honorable Court.
Nonetheless, it is imperative for this Honorable Court to closely scrutinize the plain language of the contracts of employment at issue.
The May 20, 2013, Contract (hereinafter referred to as Contract 1)
The May 20, 2013, contract lists out a Collective Bargaining Agreement (hereinafter called a “CBA”) called the ITF/TCC AMOSUP. Exhibit 1, paragraph 1. Remarkably, the ITF/TCC AMOSUP CBA is not attached to the Defendant’s Response. This will be addressed further momentarily.
Paragraph 2 of Contract 1 expressly states: “The herein items and conditions is in accordance with Governing Board Resolution No. 09 and Memorandum Circular No. 10 both Series of 2010, shall be strictly and faithfully observed.” Id.
It is dispositive to note that nothing in Contract 1 contains any arbitration clause, much less even the word arbitration.
The July 1, 2013 Contract (hereinafter referred to as Contract 1)
The July 1, 2013, contract is based on a different CBA (or “Conditions of Service”) from the prior contract. See Exhibit 2. This time it is Part I and Part II on the Cruise TCC FIT/CISL. Id. Remarkably, Part I and Part II of the TCC FIT/CISL are attached to the Defendant’s Motion to Compel Arbitration as being the applicable CBA, rather than the ITF/TCC AMOSUP CBA that is actually listed in the Contract 1. [D.E. 28-1]. In other words, Defendant has not even attached the CBA that is listed as governing Contract 1, which Defendant asserts is the controlling contract.
Defendant is either negligently misrepresenting the facts to this Honorable Court or worse, fraudulently misleading the Court. In either case, there is simply no binding arbitration clause before this Court.
To be clear, Defendant argues that Contract 2 does not govern or change the terms or conditions of the employment, while at the same time attaching the very CBA which governs contract 2, but does not govern Contract 1. [D.E. 28]. This will be the first of several examples of the Defendant seeking to ‘pick and choose’ what it likes from the contracts, and disregarding what it does not like.
THERE IS SIMPLY NO WRITTEN AGREEMENT TO ARBITRATE, AND CONTROLLING PRECEDENT HOLDS THAT THIS IS DISPOSITIVE OF DEFENDANT’S MOTION.
Navarette has several good faith, arguments as to why this Honorable Court should deny Defendant’s Motion to Compel Arbitration.
First and foremost, there is simply no agreement to arbitrate. It is Plaintiff’s position that Contract 2, the July 1, 2013, contract governs. See Exhibit 2. In response, Defendant argues Contract 1 governs and Contract 2 does not constitute a valid novation. [D.E. 28]. Notably, the recent case cited by Defendant Aggarao v. MOL Ship Management Co., Ltd., 675 F.3d 355 (4th Cir. 2012) supports Plaintiff’s argument, where it states:
A contractual novation has four elements: “(1) [a] previous valid obligation; (2) the agreement of all parties to [a] new contract; (3) the validity of such new contract; and (4) the extinguishment of the old contract by the substitution of the new contract.”
…
As we have explained, however, “[w]hen a party seeking to avoid arbitration contends that the clause providing for arbitration has been superseded by some other agreement, the presumptions favoring arbitrability must be negated expressly or by clear implication.” Zandford v. Prudential–Bache Sec., Inc., 112 F.3d 723, 727 (4th Cir.1997) (internal quotation marks omitted).
…
It is elementary that a contract term must “be construed in connection with the [contract’s] other provisions, so that if possible, or so far as is possible, they may all harmonize.” Chi. Ry. Equip. Co. v. Merch. Bank, 136 U.S. 268, 281, 10 S.Ct. 999, 34 L.Ed. 349 (1890); see Levin v. Alms & Assocs., Inc., 634 F.3d 260, 267 (4th Cir.2011) (observing that “whether one of two provisions in a contract controls is irrelevant where … the two provisions can be comfortably read together” (internal quotation marks omitted)). …
Herein, the two contracts simply cannot be read in concert with one another and thus Contact 2 must be considered a novation of Contract 1. This is because, for the sake of argument, assuming there was a valid arbitration clause in contract 1 (which Plaintiff steadfastly contests), it is completely at odds with the language in Contract 2 that says “Jurisdiction: The Union and the Owner agree that any dispute arising out of this Agreement can and should be resolved through friendly negotiations. If every effort has been exerted to resolve such conflicts and, if no solution is found, the same may be brought for judicial resolution at London, applying English Law.”[4][D.E. 28-1, Page 2 of 23, Cruise TCC Agreement, Part I].
In other words, stated simply, assuming Contract 1 calls for Philippines arbitration, Contract 2 calls for judicial resolution in London, pursuant to English Law. Arbitration and Judicial resolution are mutually exclusive. Thereby, Contract 2 governs and there is simply no arbitration provision at issue. To be clear, it is indisputable that Contract 2 contains nothing even remotely suggesting arbitration is the vehicle the parties intended.
Of critical importance, despite attaching the London judicial resolution clause as part of its Motion to Compel Arbitration, Defendant does not seek to dismiss the case based on this choice of forum and choice of law clause and has thereby waived any right to enforce said clause. See Fed. R. Civ. P. 12(h).[5]Remarkably, once again, Defendant does not even mention the London clause in the contract. This is another example of Defendant picking and choosing the provisions of the contracts it likes and ignoring the ones it does not like.
Nonetheless, the point regarding novation is solidified by other provisions contained in the CBA (which Defendant concedes governs). First, section 25.6 of the CBA expressly states that “[a]ny payment effected under this article shall be without prejudice to any claim for compensation made in law provided that it shall be deducted from any award of damages.” This is important because part of the CBA (and the POEA generally) is a schedule of payments for death and/or injuries incurred by Philippines seafarers (as an example Emmanuel gets roughly $40,000 for the amputation of his leg above the knee). Thus, the governing CBA makes clear that said payments are without prejudice to any claim for compensation made in the law. This is entirely consistent with the London litigation clause.
Second, the governing CBA, clause 33.1, makes it clear that the prior agreement is null and void. Clause 33.1 expressly states:
33.1 The owner undertakes not to demand or request the seafarer to enter into any document whereby, by way of waiver or assignment or otherwise, the seafarer agrees or promises to accept variations to the terms of this Agreement or, except as provided in this Agreement, return to the owner, its servants or agents any wages (including back wages) or other emoluments due or becoming due to the seafarer under this Agreement and the owner agrees that any such document already in existence shall be null and void and of no legal effect.
[D.E. 28-1, Page 17 of 23, Clause 33.1 – “Waivers and Assignments”]. Accordingly, Contract 1, a “document already in existence” at the time of the execution of Contract 2, which undeniably varied the terms of the Agreement, is null and void and of no legal effect.
Consequently, the plain language of the governing CBA wholly comports with novation. That is, the second contract governs. And it is indisputable that the second contract makes no mention of arbitration and does not reference any CBA or ‘Standard Terms and Conditions’ that may include an arbitration provision.
To this point, controlling precedent holds that “Article II of the Convention is very clear. It imposes a jurisdictional prerequisite on a party asking the Court to compel arbitration: it requires that the party bring the court the written agreement.” Czarina L.L.C v. W.F. Poe Syndicate, 358 F. 3d 1286, 1291 (11th Cir. 2004) (emphasis added). Notably, there are no exceptions to this requirement. Thus, without a signed written arbitration agreement, this Honorable Court does not have subject matter jurisdiction under the Convention to compel the case to arbitration.[6]
ALTERNATIVELY, DEFENDANT’S ATTEMPTS TO ‘CONNECT THE DOTS’ THROUGH SEVERAL DIFFERENT UNSIGNED DOCUMENTS FAILS BOTH LOGICALLY AND LEGALLY.
Next, in the alternative, Plaintiff argues that if this Honorable Court finds there is no novation and that Contract 1 still governs, then Defendant’s Motion to Compel should still be denied for the following reasons.
First, to reiterate, no clause in Contract 1 requires Mr. Navarette to arbitrate his claims in the Philippines under Philippine law. In fact, the employment contract does not even include the word arbitration. Furthermore, nothing contained in the attached and governing CBA requires arbitration, much less even mentions arbitration.
Nonetheless, Defendant attempts to circumvent the jurisdictional prerequisite under the Convention by arguing that a separate, third document referred to as “Memorandum Circular No. 10” requires Navarrete to arbitrate his claims under Philippine law in the Philippines. Silversea’s assertion is completely false because “Memorandum Circular No. 10” does not include an arbitration provision, nor does it include a choice of forum provision.
As noted earlier, Contract 1 states: “The herein items and conditions are in accordance with Governing Board Resolution No. 09 and Memorandum Circular No. 10 both Series of 2010, shall be strictly and faithfully observed.” At best, this is an ambiguous contractual provision which should be construed against the drafter. Notwithstanding, Defendant argues that because the employment contract incorporates “Memorandum Circular 10,” Navarette’s claims should be compelled to arbitration. On closer inspection, this argument is just as untenable as the balance of Defendant’s arguments.
The fallacy of this argument is that a review of “Memorandum Circular 10” shows that it also does not contain an arbitration clause. See 28-3. No clause in “Memorandum Circular 10” says that Mr. Navarrete must arbitrate his claims against Silverseas in the Philippines under Philippine law. Moreover, Mr. Navarrete did not sign “Memorandum Circular 10.” Instead, the Memorandum Circular 10 merely mentions, but does not expressly incorporate, the ‘Standard Terms and Conditions’ governing Filipino seafarers.
Nonetheless, Defendant argues that a fourth[7], separate, unsigned document, the Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers [D.E. 28-3] requires that Navarrete arbitrate his claims in the Philippines, under Filipino law.
The fatal flaw with Silversea’s argument is that neither Contract 1 (nor Contract 2), nor the governing CBA expressly incorporate, much less even mention, these standard terms and conditions.
To be clear, it is Defendant’s argument that because Plaintiff signed Contract 1 (employment agreement), and Contract 1 mentions document 2 (Memorandum Circular 10), and document 2 mentions document 3 (the Standard Terms and Conditions); then Navarette’s claims should be arbitrated in the Philippines. This ridiculous argument of arbitration ‘connect the dots’ cannot circumvent the Eleventh Circuit’s controlling precedent in Czarina L.L.C v. W.F. Poe Syndicate, 358 F. 3d 1286, 1291 (11th Cir. 2004), which holds that “Article II of the Convention is very clear. It imposes a jurisdictional prerequisite on a party asking the Court to compel arbitration: it requires that the party bring the court the written agreement.” Herein, there are simply no binding, legal written agreements to arbitrate.
Second, again assuming for the sake of argument that Contract 1 governs and each of the four (4) separate documents are in play, then there are still several valid arguments against arbitration.
i. The ‘dispute resolution procedures’ contained in the Standard Terms and Conditions do not apply to Navarette’s grievous bodily injury claims.
Assuming this Honorable Court made the mistake of accepting Defendant’s tenuous arguments and found that the Standard Terms and Conditions were even relevant to the analysis, then it is clear from even the most cursory inspection that the ‘dispute settlement procedure’ contained in the Standard Terms has nothing to do with a bodily injury claim such as the instant claim herein, but instead deals solely with contractual and/or disciplinary disputes stemming from the terms of the CBA. (See Article 261 of the Labor Code attached as Exhibit 3; See also a copy of Frequently Asked Questions from the NCMB website page attached as Exhibit 4).
For instance, Article 261 of the Labor Code provides the exclusive and original jurisdiction of voluntary arbitrators over the following: 1) All unresolved grievances arising from the interpretation or implementation of the collective bargaining agreement; 2) Those arising from the interpretation or enforcement of company personnel policies, as referred to in Article 260 of the Labor Code (i.e., situations where workers are not satisfied with the decision of management in the implementation of its policies, in which case workers have recourse to file a grievance.); and 3) Violations of the collective bargaining agreement which are not gross in character. (See Articles 260-262 of the Labor Code, Exhibit 3).
Furthermore, Article 262 of the Labor Code provides that all other labor disputes, including unfair labor practices and bargaining deadlocks may also be submitted to voluntary arbitration upon agreement of the parties. (See Article 262 of the Labor Code, Exhibit 3).
Even further to that point, the National Conciliation and Mediation Board (“NCMB”) from the Department of Labor and Employment in the Philippines defines “Voluntary Arbitration” as follows: “the mode of settling labor-management disputes by which the parties select a competent, trained, and impartial person who shall decide on the merits of the case and whose decision is final, executory and binding. See Exhibit 4.
Importantly, the definitions section of the POEA standard terms and conditions expressly defines an injury claim as follows: “injury arising out of and in the course of employment.” [D.E. 28-3, Page 4 of 40].
Conversely, the section that Defendant relies upon says:
In cases of claims and disputes arising from this employment, the parties covered by a collective bargaining agreement shall submit the claim or dispute to the original and exclusive jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators. If the parties are not covered by a collective bargaining agreement, the parties may at their option submit the claim or dispute to either the original and exclusive jurisdiction of the National Labor Relations Commission (NLRC), pursuant to Republic Act (RA) 8042 otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, as amended or to the original jurisdiction of the voluntary arbitrator or panel of arbitrators. If there is no provision as to the voluntary arbitrator to be appointed by the parties, the same shall be appointed from the accredited voluntary arbitrators of the National Conciliation and Mediation Board of the Department of Labor and Employment.
The Philippine Overseas Employment Administration (POEA) shall exercise original and exclusive jurisdiction to hear and decide disciplinary action on cases, which are administrative in character, involving or arising out of violations of recruitment laws, rules and regulations involving employers, principals, contracting partners and Filipino seafarers.
[D.E. 28-3, Page 18 of 40, Section 29]. Clearly, there is a stark difference between an injury claim versus a contractual dispute related to disciplinary actions. At best, the Standard Terms are ambiguous and should be construed against the drafter (Defendant).
In short, the type of personal injury claim that Navarette asserts herein is not contemplated in the Standard Terms governing the POEA.
ii. Even accepting Defendant’s arguments, the ‘Standard Terms and Conditions’ contemplate improvements and/or betterment of the contract, which is precisely what occurred herein.
For instance, paragraph two of Memorandum Circular No. 10 states:
1.The parties to the contract may improve on the minimum terms and conditions, provided such improvements shall be made in writing and appended to the contract of employment.
Id. [emphasis added]. That is precisely what occurred herein because Navarette and Defendant Silversea Cruises Ltd. did just that by expressly incorporating the terms and conditions of the governing CBA, which unequivocally (as set forth above) agree to resolve Plaintiff’s injury claims by judicial resolution; not by arbitration.
iii. There is nothing anywhere in the record indicating or selecting the Philippines as the forum for an arbitration.
Lastly, and briefly, to the extent that Defendant frivolously (if not sanctionably) argues that the matter should be sent to the Philippines, there is literally nothing in the record selecting the Philippines as the forum for arbitration. At worst, assuming the London litigation clause were not waived (which it was), then the matter would be litigated here, before this Honorable Court, under English Law.
The material facts in this case are easily distinguishable to the cases relied upon by Defendant in its Motion.
In support of its Motion, Defendant stresses that the Eleventh Circuit Court has affirmed four District Court orders compelling arbitration with regards to POEA contracts. [D.E. 28, pg. 8]. Defendant, however, fails to mention two critical facts: First, in those cases, the plaintiffs did not dispute that a written agreement to arbitrate existed between the contracting parties. See Amon v. Norwegian Cruise Lines, Ltd., (the plaintiff argued that “his entire Employment Agreement is an invalid contract of adhesion.”); Aggaro v. Mitsui O.S.K. Lines, Ltd. 741 F. Supp. 2d 733, 738 (D.Md. 2010) (“[plaintiff] does not dispute that the POEA Contract he signed on June 2, 2008 contains a mandatory arbitration clause.”); Ramirez v. NCL (Bahamas), Ltd., Not Reported, 2013 WL 6981941 (S.D. Fla. 2013) (“The sole issue before the Court is whether the Plaintiff is bound to submit her claims to arbitration, as required by the Employment Agreement.”); Bautista v. Star Cruises, 396 F. 3d 1289 (11th Cir. 2005) (In affirming the district court’s order compelling arbitration, the Eleventh Circuit heavily relied upon the fact that each of the plaintiffs had signed a copy of the “POEA Standard Terms and Conditions.”); Vacaru v. Royal Caribbean Cruises, Ltd., Not Reported in F.Supp.2d, 2008 WL 649178 (S.D. Fla. 2008) (“Significantly, the SOEA executed by the parties expressly incorporates by reference the terms of the CBA and contains Plaintiff’s acknowledgment that at the time of entering the employment agreement, he received a copy of the CBA effective on the date the parties entered into the SOEA.”).
More specifically, the contracts of employment at issue in those cases either expressly contained an arbitration clause in the contract itself or the contract specifically identified and incorporated the terms and conditions of an outside agreement, such as a collective bargaining agreement, which contained an arbitration clause. For instance, in Lindo, the contracts of employment at issue included an arbitration provision specifically incorporating the arbitration provision under the Standard POEA Contract for Filipino Seafarers. See a copy of Lindo’s employment contract, paragraph 12, attached as Exhibit 5, which states in relevant part:
12. ARBITRATION. Seaman agrees, on his own behalf and on behalf of his heirs, executors, and assigns, that any and all claims, grievances, and disputes of any kind whatsoever relating to or in any way connected with the Seaman’s shipboard employment with Company including, but not limited to, claims such as personal injuries, Jones Act claims, actions for maintenance and cure, unseaworthiness, wages, or otherwise, no matter how described, pleaded or styled, and whether asserted against Company, Master, Employer, Ship Owner, Vessel or Vessel Operator, shall be referred to and resolved exclusively by binding arbitration pursuant to the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards (New York 1958)(“The Convention”), except as otherwise provided in any government mandated contract, such as the Standard POEA Contract for Seafarers from the Philippines.
This is a clear, unequivocal mandatory arbitration provision which is starkly contrasted to what the defendant argues herein constitutes the equivalent.
Also in Vacaru v. Royal Caribbean Cruises Ltd., Not Reported in F. Supp. 2d, 2008 WL 649178 (S.D. Fla. 2008) (Ungaro, U. Hon. J.)the plaintiff Vacaru, a Filipino seafarer, signed an employment contract which specifically incorporated a collective bargaining agreement. Under Article 26-Grievance and Dispute Resolution Procedure of the collective bargaining agreement, subpart (d) states in relevant part:
(d) ….shall be referred to and resolved exclusively by binding arbitration pursuant to the United Nations Conventions on Recognition and Enforcement of Foreign Arbitral Awards (New York 1958), 21 U.S.T. 2517, 330 U.N.T.S. (“The Convention”), except as otherwise provided in any government mandated contract, such as the Standard POEA Contract for Philippine Seafarers.
As Lindo and Vacaru’s employment contracts (including the incorporated CBA) specifically referred to and/or expressly incorporated the arbitration provision in the “POEA Standard Terms and Conditions.” Contrary to the facts in the cases cited by Defendant, the facts in this case show that Mr. Navarette’s employment contract (including the CBA expressly incorporated) does not contain any provisions or language of an agreement to arbitrate. Nor does it contain any language of an agreement to incorporate, expressly or by implication, an outside agreement or writing which contains an arbitration clause. Accordingly, there is simply no valid, binding arbitration clause and defendant’s Motion should be denied.
I. ALTERNATIVELY, UNDER THE “EFFECTIVE VINDICATION EXCEPTION” ESTABLISHED BY THE SUPREME COURT IN ITALIAN COLORS, SECTIONS 28 AND 31 OF THE POEA STANDARD TERMS AND CONDITIONS ARE VOID AS AGAINST PUBLIC POLICY BECAUSE IT PROSPECTIVELY WAIVES A SEAFARERS’ RIGHTS TO PURSUE U.S. STATUTORY REMEDIES.
To be clear, it is plaintiff’s position that no arbitration agreement exists. Nonetheless, should the Court find that ones does, then Plaintiff herein preserves its public policy arguments under Lindo. In other words, should this Court compel arbitration, then Plaintiff intends to come back at the enforcement to argue any award is void as against public policy.
To this point, herein, Plaintiff invoked his U.S. federal statutory rights as a seaman under the Jones Act by filing his claims in federal court under its admiralty jurisdiction. Defendant, however, seeks to deprive Mr. Navarette of rights under the Jones Act by seeking to compel his claims to arbitration in the Philippines to be resolved under the laws of the Philippines. Since Mr. Navarette would not be able to enforce his U.S. statutory rights under the laws of the Philippines, then the arbitration agreement should be deemed void as against public policy.
In American Express Co. v. Italian Colors Restaurant, __ U.S. ____ (2013), 133 S. Ct. 2304 (2013), the Supreme Court held that arbitration agreements that include foreign choice-of-law clauses are void as against public policy when they prospectively waive a litigant’s right to pursue U.S. statutory remedies. This doctrine is referred by the Supreme Court as the “effective vindication exception.” See Italian Colors, supra. at 2310.:
The “effective vindication” exception to which respondents allude originated as dictum in Mitsubishi Motors, where we expressed a willingness to invalidate, on “public policy” grounds, arbitration agreements that “operat[e] … as a prospective waiver of a party’s right to pursue statutory remedies.” 473 U.S., at 637, n. 19, 105 S. Ct. 3346 (emphasis added). Dismissing concerns that the arbitral forum was inadequate, we said that “so long as the prospective litigant effectively may vindicate its statutory cause of action in the arbitral forum, the statute will continue to serve both its remedial and deterrent function.” Id., at 637, 105 S. Ct. 3346. Subsequent cases have similarly asserted the existence of an “effective vindication” exception, [Internal Citations omitted], but have similarly declined to apply it to invalidate the arbitration agreement at issue.
And we do so again here. As we described, the exception finds its origin in the desire to prevent “prospective waiver of a party’s right to pursue statutory remedies,” Mitsubishi Motors, supra at 637, n. 19, 105 S. Ct. 3346 (emphasis added). That would certainly cover a provision in an arbitration agreement forbidding the assertion of certain statutory rights. And would perhaps cover filing and administrative fees attached to arbitration that are so high as to make access to the forum impracticable. See Green Tree Financial Corp. – Ala. v. Randolph, 531 U.S. 79, 90, 121 S. Ct. 513, 148 L. Ed. 2d 373 (2000).
Am. Exp. Co. v. Italian Colors Rest., 133 S. Ct. 2304, 2310-11 (2013) (footnotes omitted: “right to pursue” emphasis in original; other emphasis added). Here, Mr. Navarette invoked his U.S. federal statutory rights as a seaman. However, if his claims are compelled to arbitration in the Philippines pursuant to the POEA, then he would not have an opportunity to effectively vindicate his U.S. statutory rights.
These two sentences from the Supreme Court’s opinion bear repeating: “the [effective vindication] exception finds its origin in the desire to prevent ‘prospective waiver of a party’s right to pursue statutory remedies.’” That would certainly cover a provision in an arbitration agreement forbidding the assertion of certain statutory rights.” Id. (emphasis added).
In Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), cited in Italian Colors, the Supreme Court ruled that U.S. district courts should enforce agreements resolving antitrust claims through arbitration when those agreements arise from international, commercial transactions. The Supreme Court, however, also noted that “in the event the choice-of-law clauses operated in tandem as a prospective waiver of a party’s right to pursue statutory remedies for antitrust violations, [it] would have little hesitation in condemning the agreement as against public policy.” Id. at 637 n. 19.
The Mitsubishi Motors ‘effective vindication doctrine’ has been reaffirmed in four subsequent Supreme Court decisions. See American Express Co. v. Italian Colors Restaurant, __ U.S. ___ (2013), 133 S.Ct. 2304 (2013) (“Subsequent cases have similarly asserted the existence of an “effective vindication” exception, see,
