Norwegian suits to Philippines? Cruise line likely to seek transfer

Lipcon, Marguiles, Alsina & Winkleman, P.A

By Jay Weaver and Luisa Yanez
The Miami-Herald
June 17, 2003

Norwegian Cruise Line is likely to try to transfer lawsuits filed on behalf of Filipino seamen killed or burned in a boiler blast to their homeland, a move meant to help the firm avoid paying potentially tens of millions of dollars in damages, maritime lawyers say.

If recent federal court rulings are any guide, Norwegian might succeed in removing the injury claims arising from the deadliest U.S.-based cruise ship accident in a decade.

A Miami federal judge would be asked to send complaints brought by attorneys representing killed and injured Filipinos on the SS Norway to the Philippines, where damage awards for seafarers are in the tens of thousands of dollars.

In a unique relationship, the Philippine government negotiates the seamen’s employment contracts with Norwegian and other Miami-based cruise lines — including a clause requiring that the Filipinos’ injury claims be decided by arbitrators in their native country.

During the past decade, the cruise lines, including Norwegian, have relied on their employment agreements with Filipino seafarers as a means to remove their injury claims from courts in this country. Last year, a Miami federal judge granted Norwegian’s request to send a busboy’s injury case to the Philippines, but after an appeal, it was settled out of court here.

SUITS FILED

In the May 25 explosion at the Port of Miami-Dade, six of the seven killed and 15 of the 17 injured were Filipinos. So far, 14 Norway crew members and their families have sued Norwegian in Miami-Dade Circuit Court. More suits are expected.

For Norwegian, owned by the Malaysian firm Star Cruises, the jurisdictional fight comes down to money, maritime attorneys say.

“The way I see it, keeping the cases in [Miami] will be the real battle in this whole thing,” said longtime admiralty attorney Charles Lipcon, who is representing a Norway victim who is Nicaraguan. “What would be a [single] judgment in a U.S. court for, say, $1 million will be $10,000 in the Philippines.”

A Jamaican crew member also was killed, and his family has filed suit against Norwegian. But only the Philippines has an agreement with the cruise lines involving legal claims.

Norwegian spokeswoman Susan Robison declined to comment on the company’s legal strategy, saying its insurer would decide the defensive course of action. Norwegian’s attorney, Curtis Mase, also refused to discuss it.

The Norway cases could be affected by recent federal court and appellate decisions in Miami and New Orleans that ordered sending past Filipino seamen’s complaints back to their country because of their employment contracts.

“The court will have to look at whether they want to deprive Philippine families their access to U.S. law for an accident that happened in Miami, Florida, on a cruise line in Miami, Florida,” said attorney Brett Rivkind, president of the Florida Admiralty Trial Lawyers Association.

For the injured Filipino workers and relatives of the killed Filipino crew members, removal of their suits could be devastating. The Filipino victims on the Norway were their family’s breadwinners, sending home their monthly wages, from $300 to $1,000, according to one widow.

Cristina Valenzuela, whose husband, Candido, died in the blast, said she is all but penniless. The mother of four has hired a Miami lawyer, who filed a negligence suit seeking $5 million for lost wages, pain and suffering and other damages. Candido, 49, had worked 16 years for Norwegian, most recently as a boiler worker.

The widow said in a phone interview that she doesn’t want her case transferred to the Philippines. “It would be bad if that would happen, but I haven’t heard anything,” said Valenzuela, who said three Norwegian officials attended her husband’s June 10 funeral, offering condolences. “They did not talk to me about money,” she said.

MILLIONS AT STAKE

The legal confrontation over the Norway’s engine explosion — still under federal investigation — is likely to heat up because Norwegian and its parent company, Star Cruises, stand to lose millions of dollars at trial or in settlements if the Filipinos’ suits are allowed to stay in Miami.

Veteran Miami attorney William Huggett, who is representing five killed and five injured Filipino seamen, including Valenzuela, predicted that the Miami federal court would keep his suits here.

“[Norwegian] will try every trick in the book, and they’re going to lose,” Huggett said. The seamen signed their labor agreements with Norwegian through the Philippine Overseas Employment Administration. The government agency, a branch of the Philippine Department of Labor, is responsible for managing and regulating the country’s more than 150,000 workers in the seafaring trades. Because of poverty at home, Filipino seamen covet cruise line jobs.

“The [agency’s] overriding mission is to protect our overseas workers,” said Henry Bensuro, first secretary and consul at the Philippines Embassy in Washington.

That contention, however, has been disputed in U.S. courts for more than a decade.

Attorneys for seamen argue the Filipino workers often don’t understand the employment agreement or realize that the cruise lines pay their dues to a seafarers’ union. The lawyers also claim the crew workers are still protected by federal maritime law because the cruise lines operate in major U.S. ports, allowing the seamen to have their day in court in this country.

1999 CASE

In a 1999 Filipino seaman’s injury case against Royal Caribbean Cruise lines, Philippines Solicitor General Ricardo P. Galvez supported this argument in an affidavit. “[The Philippines] expressly recognizes the right of the Filipino seafarer to institute suit against his employer or shipowner before the court of foreign countries.”

But the cruise lines, including Norwegian, counter that if a crew member is injured or killed, the matter must be decided by labor arbitrators in the Philippines.

In that same Royal Caribbean case, an arbitrator for the Philippine National Labor Relations Commission backed the cruise lines. In an affidavit, Salimathar v. Nambi said his government “has determined that all claims by Filipino seaman working abroad must be filed in the Philippines.”

Federal appellate courts in California, New York and Louisiana have allowed seamen’s cases to be shipped to the Philippines, saying their job contracts fall under Filipino law.

South Florida federal courts have rejected that argument, primarily because the cruise lines garner much of their profits from Miami-based operations and are therefore subject to federal laws.

But in March, a Miami federal judge, citing a 2002 appellate decision in New Orleans, ordered that a Filipino seaman’s injury claim against Carnival Cruise Lines be sent to the Philippines.

U.S. District Judge Paul Huck said the Filipino was bound by the arbitration provision in his employment contract between Carnival and the Philippines Overseas Employment Administration. The seaman is contesting Huck’s decision to the 11th Circuit Court of Appeals in Atlanta.

“If they have the possibility of convincing the court that these cases belong in the Philippines instead of here,” said Miami attorney Luis A. Perez, “the savings for Norwegian Cruise Lines would be significant at the expense of the seamen and their families.”