Greenway Paulraj v. Crystal Cruises, Inc.

Lipcon, Margulies, Alsina & Winkleman, P.A - Maritime Lawyer

December 06, 2011

Greenway Paulraj v. Crystal Cruises, Inc.

Initial Appellate Brief

This brief argues the merits of allowing a seaman to pursue his injury claims in United States Federal Court. The Defendant moved to dismiss the seaman’s claim based on an arbitration clause in his contract. Attorney Carlos Felipe Llinas Negret, demonstrates in this brief that arbitration is an illusory remedy at best, and that compelling arbitration would deny the Plaintiff of his remedies under U.S. law. By demonstrating to the Eleventh Circuit Court of Appeals that it is boud by its former decision and Supreme Court precedent, the Plaintiff argues for the reversal of the lower court decision.

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
CASE NO.: 11-15009-DD
GREENWAY PAULRAJ
Petitioner/Appellant

vs.

CRYSTAL CRUISES, INC.
Respondent/Appellee

Appeal from the United Status District Court for the Southern District of Florida, Docket # 1:11-cv-22440-PAS

APPELLANT’S INITIAL BRIEF
CARLOS FELIPE LLINÁS NEGRET
LIPCON, MARGULIES,
ALSINA & WINKLEMAN, P.A.
Attorneys for Appellant/Plaintiff
2 South Biscayne Tower, Suite 1776
Miami, Florida 33131
Telephone: (305) 373 – 3016
Facsimile: (305) 373 – 620

STATEMENT REGARDING ORAL ARGUMENT

Appellant respectfully requests oral argument. The outcome of this case will resolve conflicts between three Eleventh Circuit panel opinions: Paladino v. Avnet Computer Technologies, Inc., 134 F. 3d 1054 (11th Cir. 1998); Thomas v. Carnival Corp., 573 F. 3d 1113, 1117 (11th Cir. 2009); and Lindo v. NCL (Bahamas), Ltd., 2011 WL 3795234 (11th Cir. 2011). As such, Appellant believes oral argument will be of assistance in presenting this case to the Court.

TABLE OF CONTENTS

Page(s)
STATEMENT REGARDING ORAL ARGUMENT ………………………………. i
TABLE OF CONTENTS ………………………………………………………….. ii
TABLE OF AUTHORITIES ……………………………………………………… .v
STATEMENT OF JURISDICTION ………………………………………………. 1
STATEMENT OF THE ISSUES ………………………………………………….. 1
STATEMENT OF THE CASE ……………………………………………………. 2
SUMMARY OF ARGUMENT …………………………………………………… 4
STANDARD OF REVIEW ……………………………………………………….. 5
ARGUMENT ……………………………………………………………………… 5
I. CRYSTAL’S MOTION TO COMPEL ARBITRATION SHOULD HAVE BEEN DENIED AND THE MATTER REMANDED…………… 5

A.Pursuant to binding Supreme Court precedent under Granite Rock Co., v. International Broth. of Teamsters, 130 S. Ct. 2847 (2010), there is no “federal policy in favor of arbitration” if the formation of the parties arbitration agreement, its enforceability or application is at issue……… 5

B.The arbitral provision’s choice of law clause, requiring Norwegian law as the substantive law of the arbitration, deprives Plaintiff of any meaningful relief and is therefore unenforceable pursuant to Paladino v. Avnet Computer Technologies, Inc., 134 F. 3d 1054 (11th Cir. 1998)…… 6

i. Norwegian Law does not recognize seafarers U.S. statutory rights pursuant to the Jones Act…………………………………………….. 8

ii. Norwegian law does not provide Plaintiff, a non-Norwegian cruise ship employee, the right to sue the ship-owner for the vessel’s “unseaworthiness.”……………………………………………………. 14

iii. Norwegian law does not provide Plaintiff, a non-Norwegian cruise ship employee, a cause of action against Defendant-employer to pay maintenance and cure (including a claim for punitive damages)….. .17

C.Pursuant to binding United States Supreme Court precedent, in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), Crystal’s arbitration provision is void as against public policy. The foreign choice of law provision and foreign venue selection provision operate in tandem as a prospective waiver of Plaintiff’s statutory rights……………………………………………………………. 23

i. This Honorable Court recognized the Supreme Court’s “prospective waiver” doctrine of Mitsubishi, in Thomas v. Carnival, 573 F. 3d 113 (11th Cir. 2009), and declared an identical provision void as against public policy……………………………………………………………. 24

D.The Eleventh Circuit’s decision in Bautista v. Star Cruises, 396 F. 3d 1289, 1294 (11th Cir. 2005) does not control the outcome of this case. Contrary to the Honorable Court’s ruling below, Thomas does not conflict with Bautista. Bautista predates Thomas and did not address the issue of whether a contract that calls for application of only foreign law in arbitration is void as against public policy…………………………… 26

E.Subsequent to Thomas, this Honorable Court decided Lindo v. NCL, 2011 WL 3795234 (11th Cir. 2011). Lindo, however, is an advisory opinion not binding on this Court. Before the Eleventh Circuit issued its mandate in Lindo, the parties in Lindo settled and moved to voluntarily dismiss the appeal. Controlling precedent holds that when a case settles before the end of the appellate process, any opinion that has been produced should be vacated. Lindo v. NCL should therefore be vacated…………………………………………………………………….. 29

i.Lindo was a panel opinion and therefore cannot purport to overturn Thomas. Pursuant to the prior panel precedent rule, Thomas v. Carnival is still the law of this Circuit: neither the Eleventh Circuit en banc nor the United States Supreme Court has overruled Thomas…………………………………………………………………. 31

iiLindo conflicts with Paladino v. Avnet Computer Technologies, Inc., 134 F. 3d 1054 (11th Cir. 1998). Lindo also ignores controlling Supreme Court precedent in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) and Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970)……………………………………….. 32

F. If appellant is required to arbitrate his claims, he will have no opportunity for subsequent review. There is no provision under the Convention for a vacatur action………………………………………….. 34

CONCLUSION…………………………………………………………………… 36
CERTIFICATE OF COMPLIANCE …………………………………………….. 36
CERTIFICATE OF SERVICE …………………………………………………… 36

TABLE OF AUTHORITIES

Page(s)
Federal Cases
14 Penn Plaza LLC v. Pyett, 129 S.Ct. 1456 (2009)……………………………… 23
Alcalde v. Carnival Cruise Lines, 1:10-cv-24457-Moore/Torres (S.D. Fla. 2010).. 27
Anders v. Hometown Mortgage Services, Inc., 346 F.3d 1024 (11th Cir. 2003)…… 7
Atlantic Sounding v. Townsend, 129 S.Ct. 2561 (2009)………………………. 18, 21
Bass v. Phoenix Seadrill 78, Ltd., 749 F.2d 1154 (5th Cir. 1985)………………… 21
Bainbridge v. Merchants’ & Miners’ Transp. Co., 287 U.S. 278 (1932)………… 13
Bautista v. Star Cruises, 396 F.3d 1289 (11th Cir. 2005)………………….. 5, 26-29
Bertrand v. International Mooring and Marine, 710 F.2d 837 (5th Cir. 1983)…… 10
Bonner v. City of Prichard, Ala., 661 F.2d 1206 (11th Cir. 1981)………………… 10
CSX Transportation, Inc. v. McBride, 131 S.Ct. 2630 (2011)……………………. 10
Davis v. Hill Engineering, Inc., 549 F.2d 314 (5th Cir. 1977)…………………….. 9
Ferrostaal, Inc. v. M/V Sea Phoenix, 447 F.3d 212 (3d Cir. 2006)………………… 8
Flagship Marine Services, Inc. v. Belcher Towing Co., 23 F.3d 341 (11th Cir. 1994)……………………………………………………………………….. 30
Flores v. Carnival Cruise Lines, 47 F.3d 1120 (11th Cir. 1995)…………………. 18
Granite Rock Co., v. International Broth. of Teamsters, 130 S.Ct. 2847 (2010)… 5-6
Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970)…………………………. 32-33
Ingaseosas Intern. Co. v. Alconcagua Investing Ltd., 09–23078–CIV, 2011 WL 500042 (S.D. Fla. Feb. 10, 2011)………………………………………….. 35
Isbrandtsen Marine Servs. v. M/V Inagua Tania, 93 F.3d 728 (11th Cir. 1996)…. 21
Jacob v. New York, 315 U.S. 752 (1942)…………………………………………… 9
Key Enterprises, Inc. v. Venice Hospital, 9 F.3d 893 (11th Cir. 1993)…………… 30
Lagarde v. Carnival Corporation, 11-20822-UNGARO (S.D. Fla. 2011)………. 27
Lindo v. NCLspan style=”font-size: 14.0pt; line-height: 200%;”>, 652 F.3d 1257 (11th Cir. 2011)………………………………… 29-34
Martin v. Walk, Haydel and Associates, Inc., 742 F.2d 246 (5th Cir. 1984)……… 15
Melea, Ltd. v. Jawer SA, 511 F.3d 1060 (10th Cir. 2007)…………………………. 8
Meneses v. Carnival Corp., 731 F.Supp.2d 1332 (S.D. Fla. 2010)………………. 27
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985)……………………………………………… 1, 5, 23-24, 29, 32-33, 35
Odom v. Celebrity Cruises, Inc., 10-23086-AJ (S.D. Fla. 2011)…………………. 23
Paladino v. Avnet Computer Technologies, Inc., 134 F.3d 1054 (11th Cir. 1998)………………………………………….. 1, 4, 6-8, 13-14, 17, 22, 32-35
Pavon v. Carnival Corporation, 11-cv-23148-JAL (S.D. Fla. 2011)…………….. 31
Perez v. Globe Airport Security, Service, Inc., 294 F.3d 1275 (11th Cir. 2002)…. 30
Prewitt Enterprises, Inc. v. Organization of Petroleum Exporting Countries, 353 F.3d 916 (11th Cir. 2003)…………………………………………………… 8
The Osceola, 189 U.S. 158 (1903)………………………………………………… 15
Thomas v. Carnival, 573 F.3d 1113 (11th Cir. 2009)………………………………………. 2, 5, 14, 17, 20, 23-29, 31-32, 35
United States v. Archer, 531 F.3d 1347 (11th Cir. 2008)………………………… 31
Wilburn v. Maritrans GP Inc., 139 F.3d 350 (3d Cir. 1998)………………………. 9
Williams v. Carnival Cruise Lines, 907 F. Supp. 403 (S.D. Fla. 1995)…………… 10
Federal Statute
9 U.S.C. § 1……………………………………………………………………….. 28
9 U.S.C. § 205……………………………………………………………………… 1
9 U.S.C. § 206…………………………………………………………………….. 35
9 U.S.C. § 207…………………………………………………………………….. 35
45 U.S.C. § 51……………………………………………………………………… 9
46 U.S.C. § 30104………………………………………………………………… 8-9

STATEMENT OF JURISDICTION

The district court had federal question jurisdiction over Appellant’s complaint based on 9 U.S.C. § 205, as an action or proceeding relating to an arbitration agreement falling under the Convention on Recognition and Enforcement of Arbitral Awards (“Convention”).

This Court has jurisdiction to review the district court’s order that compelled arbitration and denied Paulraj’s Motion for Remand. See City of Waco v. United States Fidelity & Guar. Co., 283 U.S. 140 (1934); Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336 (1976); see also Snapper, Inc. v. Redan, 171 F. 3d 1249, 1252-53 (11th Cir. 1999); see generally Beiser v. Weyler, 284 F. 3d 665, 672-75 (5th Cir. 2002).

STATEMENT OF THE ISSUES

1. Whether the district court erred in granting Crystal’s Motion to Compel Arbitration and denying Plaintiff’s Motion for Remand?

2. Whether Crystal’s arbitration clause, requiring the application of Norwegian law at arbitration, deprives Appellant of his congressional U.S. statutory rights under the Jones Act, and his legal rights pursuant to the doctrines of “unseaworthiness,” and “maintenance and cure” ?

3. Whether Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), Paladino v. Avnet Computer Technologies, Inc., 134 F. 3d 1054 (11th Cir. 1998) and Thomas v. Carnival Corp., 573 F. 3d 1113, 1117 (11th Cir. 2009); required the district court to declare Crystal’s arbitral provision unenforceable, null and void as against public policy?

4. Whether Appellant will have a subsequent opportunity to review the arbitrator’s decision in a U.S. district court, particularly because there is not provision under the Convention for a vacatur action?

STATEMENT OF THE CASE

This matter involves a labor dispute between Appellant, Greenway Paulraj (hereinafter “Paulraj”/ “Plaintiff”/ “Appellant”) and Crystal Cruises Inc. (hereinafter “Crystal”), the owner operator of the vessel M/S Crystal Cruises. [R.E. Tab 2, [5]. On or about May 23, 2010, Paulraj was employed by Crystal as a seaman and a member of the vessel’s crew. [Id., [ 8]. On or about the above referenced date, Paulraj, while doing his job as a waiter aboard the vessel, lifted an unreasonably heavy table, causing him to develop severe shoulder pain. Subsequent MRI results showed Plaintiff had suffered multiple disc bulges at C3-C4, C4-C5 and C6-C7, an annual tear at C5-C6, and an extruded disc at C7-D1. [Id., [ 10].[1]

As a result of his injuries, and exercising his Congressional statutory rights, Paulraj filed suit in Florida State Court against Crystal. In the suit, Paulraj alleged claims against Crystal for “Jones Act negligence,” “unseaworthiness,” “failure to provide maintenance and cure”, and “failure to treat.” [R.E. Tab. 2]. On July 7, 2011 Crystal removed the matter pursuant to 28 U.S.C. §§1441, et seq. [R.E. Tab 3(a)]. Subsequently, on August 8, 2011, Defendant filed a Motion to Compel Arbitration. [R.E. Tab 3(b)].

The subject arbitration provision contains a choice of law clause which provides, in part, that the “agreement or any part and conditions thereof shall be governed by the laws of Norway, without regard to its conflict of law provisions and shall be resolved only through the arbitration procedure established by the agreement.” [Tab 5, pg. 6]. Additionally, the subject arbitration provision contains a foreign venue clause which provides, that arbitration must take place in Oslo, Norway. [Tab 5, pg. 6, [ D(c)].

Pursuant to the terms of Crystal’s arbitral provision, therefore, if Paulraj were compelled to arbitrate this matter, Paulraj would be forced to arbitrate his claims exclusively under Norwegian law – in Oslo, Norway. Because all of Plaintiff’s causes of action are U.S. based law remedies (which Norwegian law does not recognize), compelling the case to arbitration would completely deprive Plaintiff of his causes of action under U.S. law.

On September 30, 2011, the district court below, granted Crystal’s Motion to Compel Arbitration and Denied Paulraj’s Motion for Remand. [R.E. Tab 4]. As shown below, the district’s court’s Order compelling arbitration and denying remand should be reversed.

SUMMARY OF ARGUMENT

The district court erred in granting Crystal’s Motion to Compel Arbitration and denying Paulraj’s Motion for Remand. Crystal’s arbitral provision’s choice of law clause, requiring Norwegian law as the substantive law of the arbitration, deprives Plaintiff of any meaningful relief.

As set forth below, Norwegian law exempts foreign cruise line workers, such like Mr. Paulraj from any statutes protecting seafarers. Norway’s seamen’s laws only apply to Norwegian residents and citizens; Mr. Paulraj is neither. Further, Norwegian law does not recognize the causes of action and remedies under the Jones Act, the doctrines of Unseaworthiness, and Maintenance & Cure.

As such, Crystal’s arbitration provision deprives Plaintiff of any meaningful relief, and is therefore unenforceable pursuant to Paladino v. Avnet Computer Technologies, Inc., 134 F. 3d 1054 (11th Cir. 1998). Moreover, because Crystal’s choice-of-law provision operates in tandem to deprive Paulraj from his U.S. statutory rights; the arbitration clause is void as against public policy pursuant to Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) and Thomas v. Carnival, 573 F. 3d 113 (11th Cir. 2009).

STANDARD OF REVIEW

The Eleventh Circuit Court of Appeals reviews de novo a district court’s order to compel arbitration. Thomas v. Carnival, 573 F. 3d 1113 (11th Cir. 2009), citing Bautista v. Star Cruises, 396 F. 3d 1289, 1294 (11th Cir. 2005).

ARGUMENT

I. CRYSTAL’S MOTION TO COMPEL ARBITRATION SHOULD HAVE BEEN DENIED AND THE MATTER REMANDED.

A.Pursuant to binding Supreme Court precedent under Granite Rock Co., v. International Broth. of Teamsters, 130 S. Ct. 2847 (2010), there is no “federal policy in favor of arbitration” if the formation of the parties arbitration agreement, its enforceability or application, is at issue.

As a preliminary matter 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 or application is at issue. See Granite Rock Co., 130 S. Ct. at 2857 (Thomas, J.):

… a court may order arbitration of a particular dispute only where the court is satisfied that the parties agreed to arbitrate that dispute … Local, like the Court of Appeals, overreads our precedents. The language and holdings on which Local and the Court of Appeals rely [referring to the federal policy in favor of arbitration] cannot be divorced from the first principle that underscores all of our arbitration decisions: Arbitration is strictly a “matter of consent”, [citations omitted], and thus “is a way to resolve those disputes but only those disputes- that the parties have agreed to submit to arbitration. Applying this principle, our precedents hold that courts should order arbitration of a dispute only where the Court is satisfied that neither the formation of the parties’ arbitration agreement nor its enforceability or applicability to the dispute is in issue … We have applied the presumption [in favor of arbitration] in labor cases, only