Plaintiff v. Celebrity Cruises – Continued

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

August 09, 2012

Plaintiff v. Celebrity Cruises – Continued

Response in Opposition to Motion to Dismiss

Many of our clients are crewmembers who work aboard cruise ships. Unfortunately, many of these crewmembers are taken advantage of by cruise lines who exploit loopholes in the law to increase profits, often at a crewmembers expense. One of the main vehicles for doing this in the past decade has been by placing arbitration clauses in crewmember contracts. Often times these crewmembers have no idea they are subject to arbitration and barred from bringing claims in U.S. Courts. In this case, a seafarer had been denied his full wages and sought remediation in U.S. Court, only to have his claim sent to arbitration pursuant to his contract. In this motion, our experienced maritime attorneys fight to get this client his day in Court and demonstrate that the arbitration he was subjected to was a scam aimed at depriving him of his rights.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO.: 12-22287-CIV-Lenard

AGNELO GONSALVEZ, et. al.
Plaintifffs

v.

CELEBRITY CRUISES, INC.
Defendant
_____________________________/

PLAINTIFF’S RESPONSE IN OPPOSITION TO CELEBRITY’S MOTION TO DISMISS

COME NOW, AGNELO GONSALVEZ, et. al. (hereinafter “the seafarers”) by and through undersigned counsel and hereby file their Response in Opposition to Celebrity’s Motion to Dismiss. In support thereof, the Plaintiffs allege as follows:

FOR CENTURIES IT HAS BEEN THE PUBLIC POLICY OF THE UNITED STATES TO PROTECT SEAFARERS, SUCH AS THE PLAINTIFFS, FROM THE UNSCRUPULOUS CONDUCT OF SHIPOWNERS SUCH AS THE DEFENDANT. HEREIN, THE ARBITRATION DECISION RENDERED BY THE ARBITRATOR (THAT THE SHIPOWNER UNILATERALLY SELECTED AND PAID), SHORTENED THE STATUTE OF LIMITATIONS FOR THE SEAFARERS’ WAGE CLAIMS FROM THREE YEARS DOWN TO THIRTY DAYS, BASED ON A PROVISION IN A DOCUMENT THAT THE SEAFARERS’ TESTIFIED THEY NEVER EVEN KNEW EXISTED. FOR TEN YEARS THESE SEAFARER-PLAINTIFFS HAVE FOUGHT TO HAVE THEIR DAY IN COURT, BUT BECAUSE OF THE ENFORCEMENT OF ARBITRATION PROVISIONS, THESE SEAFARERS HAVE BEEN LEFT AT SEA TO FEND FOR THEMSELVES, IN DIRECT CONTRAVENTION OF PUBLIC POLICY THAT IS AS OLD AS THE REPUBLIC ITSELF.

I. Introduction

From the earliest days of the Republic, there has been a “great public policy of preserving [seamen as an] important class of citizens for the commercial service and maritime defense of the nation.” Harden v. Gordon, 11 F.Cas. 480, 483 (No. 6,047) (C.C.D.Me.1823) (No. 6,047) (Story, J.). Indeed, “[s]eamen have always been regarded as wards of the admiralty, and their rights, wrongs, and injuries a special subject of the admiralty jurisdiction. The policy of Congress, as evidenced by its legislation, has been to deal with them as a favored class.” Bainbridge v. Merchants’ & Miners’ Transp. Co., 287 U.S. 278, 282, 53 S.Ct. 159, 77 L.Ed. 302 (1932) (citation omitted). Consequently, seamen have traditionally been afforded special legal remedies. See McDermott Int’l, Inc. v. Wilander, 498 U.S. 337, 354, 111 S.Ct. 807, 112 L.Ed.2d 866 (1991).

Despite this rich tradition protecting seafarers, beginning roughly a decade ago, unscrupulous ship-owners intentionally devised a scheme to deprive seafarers of their powerful rights under U.S. Law: namely, to utilize sham unions to create an appearance of fairness in contractual matters, while in fact stripping them of their rights via arbitration clauses. Unfortunately, for seafarers working for U.S. based companies (such as Celebrity), it worked.

Herein, as explained in detail below, after being deprived of roughly half of their wages by the unscrupulous conduct of the Defendant ship-owner, the seafarers were forced to arbitrate with the understanding that the merits of their claims would be adjudicate at arbitration. Once in arbitration, however, the seafarers claims were dismissed based on the language contained in a document or so called “grievance procedure” (which they never knew existed and which was negotiated by a Union they did not know they were members of) that shortened their statute of limitations from 3 years to 30 days. In short, the arbitration was a complete and total sham, which was only successful on one front: systematically depriving these seafarers of all of their rights and remedies under U.S. law.

In Lindo v. NCL (Bahamas), Ltd., 652 F. 3d 1257 (11th Cir. 2011), the Eleventh Circuit unequivocally declared that seafarers, like the Plaintiffs herein, can challenge an arbitration award after the arbitration has taken place on the grounds that the award (or absence thereof) is contrary to the public policy on the United States. That is precisely where the instant matter sits.

The analysis for this Honorable Court, as Celebrity frames the issue is that “the Convention’s public policy defense should be construed narrowly” and applies where the award “violate[s] the forum state’s most basic notions of morality and justice.” That is precisely the situation before this Court. There is nothing moral about the shipowner’s unscrupulous conduct herein. And there is no justice in what has been done to these seafarers for the past decade, and to all seafarers who have been and will continue to be subject to arbitration provisions unilaterally placed in their contracts of employment.

II. Standard of Review: As a preliminary matter, Plaintiffs are seafarers, wards of the admiralty courts and historically a protected class by Congress.

Plaintiffs are citizens of India who worked aboard cruise ships owned and operated by Defendant, Celebrity Cruises Inc. (“Celebrity”), a company based in Miami, Florida. Because they worked full time aboard ships operated by an American based cruise line, Plaintiffs are considered seamen; a legal classification that entitles them to special rights and privileges under U.S. law.

Since the foundation of the American Republic, “[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).[1] Further, as the Fifth Circuit explained in Castillo v. Spiliada Maritime Corp., 937 F. 2d 240, 243 (5th Cir. 1991), “[h]istorically, seamen have enjoyed a special status in our judicial system. They 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 great inequality in bargaining position between large ship-owners and unsophisticated seamen.” Id. at 243.

Thus, “[t]o shield seamen against unfair conduct by ship-owners, Congress enacted special wage protection statutes. Congress did not limit this statutory coverage to American seamen; rather, Congress extended protection to seamen who serve on a foreign vessel when located in a United States harbor. 46 U.S.C. §10313.” Castillo, 937 F. 2d at 243; see also Su v. MV Southern Aster, 978 F. 2d 462 (9th Cir. 1992) (“The Wage Act’s jurisdictional provision makes clear that foreign seafarers discharged in an American port may invoke the Act’s protections.”). As such, because appellants – foreign seafarers – were discharged in American ports, the may invoke the Act’s protections.

Like Congress, from the beginning, federal courts have remained guardians of seamen. See U.S. Bulk Carriers, Inc. v. Arguelles, 400 U.S. 351, 355 (1971) (“Seamen from the Start were wards of admiralty. The federal courts remained as the guardians of seamen, the agencies chosen by Congress, to enforce their rights-a-guardian concept which, so far as wage claims are concerned, is not so much different than what it was in the 18th century”); see also Castillo, 937 F. 2d at 243:

We are convinced that federal courts must remain vigilant in protecting the rights of seamen, whether foreign or domestic, in their relations with their employer. This protection comports with our nation’s long history of concern and solicitude for seamen with employment disputes.

Thus, in making its determination regarding Defendant’s Motion to Dismiss, this Honorable Court should be mindful that the public policy of the United States for over two hundred years has been to give seamen protected class status in our judicial system. To deny them that status is in contravention to this long standing policy. This point is significant in light of this Honorable Court’s discretion to vacate an arbitrator’s decision contrary to public policy. See PMA Capital Ins. Co. v. Platinum Underwriters Bermuda, Ltd., 659 F. Supp. 2d 631 (E.D. Pa. 2009):
Although my review of the [arbitrator] Panel’s award must be highly deferential, I am “neither entitled nor encouraged simply to ‘rubber stamp’ the interpretations and decisions of arbitrators.” Matteson v. Ryder Sys., 99 F.3d 108, 113 (3d Cir. 1996).

III. Factual Background.

1. Nearly a decade ago, during a three-year period, Celebrity, the ship-owner, exploited these seafarers, depriving them of their wages and livelihood.

During their employment with Celebrity the seafarers were compensated from two sources: base pay and gratuities/tips. Since base pay consisted of only $50 dollars per month,[2] the majority of the seafarers’ wages consisted of tips from passengers. Under the tip payment scheme set forth in pay scales incorporated in the seafarers’ contracts, the seafarers were entitled to receive tips[3] amounting to $3.50 per passenger per day. [D.E. 1, ¶14, ft. 2]. [4]

Despite these provisions, Celebrity breached the terms of the seafarers’ employment contract by suddenly requiring the seafarers to share their earned gratuities with assistant cabin stewards (a newly created position on the ships) and the chief housekeeper (the seafarers’ supervisor) at the rates of $1.20 and $0.50 per day, respectively. [D.E. 1, ¶16]. The scheme, consisting of unlawful deductions under the Seaman’s Wage Act, 46 U.S.C. §10313, deprived the seafarers of roughly 48% of their earned wages for a three-year period.

2. Lobo v. Celebrity Cruises, Case No. 04-22132-GOLD (S.D. Fla. 2005).

In light of Celebrity’s breach of the CBA, on July 29, 2004 seafarer Inacio Lobo brought a lawsuit in Florida State Court against Celebrity for its violations under the Seamen’s Wage Act, 46 U.S.C. § 10313. At that time, seafarer Inacio Lobo (not a Plaintiff in this action) filed a complaint as a proposed class action, on his own behalf as well as on behalf of all other similarly situated Celebrity cabin stewards, including the above named Plaintiffs. In effect, Mr. Lobo was acting as Plaintiffs’ representative. See Crown, Cork & Seal v. Parker, 462 U.S. 345 (1983):

We conclude, as did the Court in American Pipe, that “the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action.” 414 U.S., at 554. Once the statute of limitations has been tolled, it remains tolled for all members of the putative class until class certification is denied. At that point, class members may choose to file their own suits or to intervene as plaintiffs in the pending action.

Id., at 354. Thus, the Plaintiffs claims relate back to Lobo’s lawsuit initiated on July 29, 2004.

On April 11, 2005 the lawsuit was removed to Federal Court. At that time, Celebrity did not seek to compel any grievance procedure. Further, Celebrity did not raise or assert any defenses that the claims were barred because of “untimely filing of grievances.” Celebrity did not even represent to the Federal Court that the Seafarer’s claims under the CBA were “non-arbitrable.” Instead, Celebrity simply asked the Federal Court to compel the case to arbitration – arguing that the claims were arbitrable.

Article 26 of the CBA provides, in part, the following arbitration provision:

Grievances and disputes arising on the vessels or in connection with this Agreement which cannot be resolved on board or between the parties shall be referred to the arbitration& If a matter is not resolved within forty-eight (48) hours after the conference, either party may refer it to an arbitrator for final resolution. Arbitrator to be jointly appointed by the Union and the Company. The place of arbitration shall be either the country of the seafarer’s citizenship or Miami, Florida.

The Court, citing the CBA’s arbitral provision compelled Mr. Lobo (and effectively all of the members of Lobo’s proposed class) to litigate the merits of those claims at arbitration. Judge Gold’s order compelled only arbitration – not any grievance process. Subsequently, the Eleventh Circuit affirmed the lower Courts order compelling arbitration. See Lobo v. Celebrity Cruises Inc., 488 F. 3d 891, 894-95 (11th Cir. 2007).

Based on the District Court and Circuit Court’s rulings (compelling the arbitration of claims under the aforementioned CBA) the above named Plaintiffs – who have identical substantive wage claims as Mr. Lobo and arising under the same CBA – made their formal demands for arbitration.

Once at arbitration, Celebrity, for the first time ever – and contrary to its representations to the Southern District and Eleventh Circuit in Lobo v. Celebrity Cruises– argued at the arbitration that the claims “were not arbitrable” because the seafarers had failed to file their claims within 30 days in accordance with a grievance procedure.

4. The one-day “arbitration.”

On September 22, 2009 Plaintiffs’ submitted their formal demands for arbitration to Defendant Celebrity and Federazione Italian Transporti (hereinafter “Union”).

Celebrity and the Union appointed Robert B. Hoffman as arbitrator of the proceedings.[5] At all times material, Celebrity and the Union exchanged names of proposed arbitrators without the Seafarers knowledge or input. Further, Celebrity and the Union unilaterally appointed an arbitrator with minimal experience or knowledge in maritime matters, and in particular seamen wage law.[6] [7][8]

The Plaintiffs objected to the selection of Robert B. Hoffman and filed a Motion for Recusal. The arbitrator denied the Plaintiffs’ Motion for Recusal. See Motion for Recusal and Order Denying Motion to Recuse, D.E. 1, Exhibit “2.”

On October 8, 2010, Celebrity filed a motion to dismiss the demands for arbitration, arguing that the seafarers’ claims were “not arbitrable.” Again, this was contrary to the representations Celebrity made to the Federal District Court when it sought to compel arbitration in the Lobo matter (i.e. that the claims were arbitrable).

In support of its argument, Celebrity relied on a grievance procedure, entered into between Celebrity and a labor union that the seafarers had never heard of. According to Celebrity, the grievance procedure required the seafarers to submit all of their claims within 30 days to the company (allegedly a pre-condition to arbitration). The grievance procedure relied by Celebrity at arbitration provided as follows:

Unless Extenuating Circumstances exist justifying delay, no grievance shall be recognized if raised more than thirty (30) days after the Seafarer has left the vessel&.

Id. (emphasis added).

On January 7, 2011, a one (1) day arbitration hearing was held in Miami, Florida at the offices of counsel for Celebrity. On January 22, 2011, the arbitrator granted Celebrity’s Motion to Dismiss, holding that the seafarers claims were non arbitrable for failing to file their grievance within 30 days.

The Arbitrator’s ruling was premised on the fact that the seafarers had knowledge of Celebrity’s hyper-technical procedure requiring them to submit a grievance within 30 days as a pre-condition to arbitration. In fact, the opposite is true. At the arbitration, the Plaintiffs submitted sworn declarations setting forth that they: 1) never received copies of any collective bargaining agreements – and therefore never received copies of any grievance procedure; 2) were never informed and therefore never knew that they were members of a labor union; 3) never paid any union fees (this is so because during the relevant period Celebrity – not the employees – paid for union dues); 4) never met, talked, or corresponded with any representative of any union; 5) never attended any union meetings, or any other meetings where rights to submit grievances under Collective Bargaining Agreements were discussed; and, 6) were never informed by either Celebrity or any union that, in the event of a dispute concerning their wages, they were required to submit their claims to a union in Italy and to Celebrity in Miami within 30 days. D.E. 1, Exhibit “3.”

All in all, at the arbitration, the seafarers showed that Celebrity not only prevented them from participating in the collective bargaining process, but also failed to communicate to them the contents of a CBA negotiated behind closed doors (without their knowledge or input).

Therefore, in light of their lack of knowledge, Celebrity could not expect to have employees follow hyper-technical grievance procedures, when its own business practice was to conceal the information of such grievance procedure from the employees themselves.

Moreover, the seafarers had a factual basis (via sworn declarations) to support their defense: the Plaintiffs’ affidavits created a material dispute such that there were questions of fact regarding whether the seafarers in fact knew that they had to file grievances within 30 days. D.E. 1, Exhibit “3.”

This is what actually happens at arbitration. The cruise lines fight tooth and nail to have arbitration compelled, only to then argue in arbitration the claims are untimely based on provisions in a CBA that the seafarers never even knew existed. This is the epitome of the unscrupulous conduct the Supreme Court warned of in Griffin. And it is the direct bi-product of enforcement of these arbitration provisions.

III. Pursuant to binding Eleventh Circuit precedent the Seafarers motion to challenge the arbitrator’s decision on public policy grounds is valid. Thus, it is simply irrelevant that Celebrity did not seek to confirm the award first.

On June 19, 2012, the Seafarers filed a Complaint seeking an order from this Court to vacate the arbitrator’s decision, pursuant to Article V of the Convention on the Recognition and Enforcement of Arbitral Awards, 21 U.S.T. 2517 (the “Convention Act”). See TEuropcar Italia S.p.A. v. Maiellano Tours, Inc., 156 F.3d 310, 315 (2d Cir. 1998) (The public policy exception in Article V(2)(b) of the Convention applies where enforcement of the award would violate “the most basic notions of morality and justice” of the forum where enforcement is sought).

In its Motion, Celebrity seems to be making the argument that the Plaintiffs can only seek to vacate an arbitral decision under the Convention Act only if the prevailing party (i.e. Celebrity) seeks confirmation of the decision first. Celebrity’s argument fails and is contrary to binding precedent: Enforcement is not a precondition of vacatur. Indeed, a seafarer can move to vacate an arbitrator’s decision, irrespective of whether the prevailing party (i.e. Celebrity) moved to confirm the award.

For instance, in Lindo v. NCL (Bahamas), Ltd., 652 F. 3d 1257 (11th Cir. 2011), the Eleventh Circuit expressly held that a seafarer can challenge an arbitrator’s decision in federal court, on the basis that the arbitrator’s award is contrary to public policy. Nothing in Lindo requires the seafarer to wait until the employer seeks confirmation of the award. See Lindo:

One of Article V’s seven defenses is the “public policy” defense, which states: Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that: …(b) The recognition or enforcement of the award would be contrary to the public policy of that country.

& Afterarbitration, a court may refuse to enforce an arbitral award if the award is contrary to the public policy of the country. Id. The party defending against the enforcement of an arbitral award bears the burden of proof. Imperial Ethiopian Gov’t v. Baruch-Foster Corp., 535 F. 2d 334, 336 (5th Cir. 1976).

In Mitsubishi the Supreme Court stated: “Having permitted the arbitration to go forward, the national courts of the United States will have the opportunity at the award-enforcement stage to ensure that the legitimate interest in the enforcement of the antitrust laws has been addressed.” 473 U.S. at 638, 105 S. Ct. at 3359 (emphasis added). On this point, the Mitsubishi Court continued: “The Convention reserves to each signatory country the right to refuse enforcement of an award>where the ‘recognition or enforcement of the award would be contrary to the public policy of that country.’ ” Id. at 638, 105 S. Ct. at 3359-60(quoting New York Convention, art. V(2)(b), and citing Scherk, 417 U.S. at 519 n. 14, 94 S. Ct. at 2457 n. 14) (emphasis added).

Id (emphasis added); See also Ved P. Nanda, David K. Pansius , 2 Litigation of International Disputes in U.S. Courts § 19:27 (“The Convention indirectly grants the U.S. court the authority to vacate an award rendered in the United States”); PMA Capital Ins. Co. v. Platinum Underwriters Bermuda, Ltd., 659 F. Supp. 2d 631 (E.D. Pa. 2009):

On June 3, 2009, PMA filed the instant Petition to Vacate & Because the Arbitrators adjudicated rights and obligations conferred by a commercial contract between a United States citizen and a foreign citizen, the Award is subject to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958. See 9 U.S.C. § 202; 9 U.S.C. § 2. Accordingly, this Court has subject matter jurisdiction pursuant to Section 203 of the Federal Arbitration Act. See 9 U.S.C. § 203 (“An action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States. The district courts of the United States … shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.”).

Therefore, the seafarers Motion to Vacate the Arbitrator’s decision on public policy grounds is valid. Contrary to Celebrity’s assertions, it is simply irrelevant that Celebrity did not seek to confirm the arbitrator’s decision first.[9]

IV. The seafarers’ motion to vacate the arbitrator’s decision is timely because it was filed within the applicable three year limitations period. Because the arbitration involved citizens of a foreign country (i.e. India), Chapter 2 and the Convention Act exclusively govern the arbitration. Under the Convention, the period to confirm and vacate arbitral awards is three years.

Celebrity argues that the Complaint should be dismissed because it is untimely. In support of its argument, Celebrity alleges that under Chapter 1 of the Federal Arbitration Act, 9 U.S.C. §§1-16 (“FAA”), an action seeking to vacate an award must be initiated within three months. Celebrity’s argument is incorrect and contrary to law. Because the arbitration here is not governed by Chapter 1 of the FAA, the three month limitations period under Chapter 1 is strictly inapplicable.[10]
On the contrary, the arbitration in this case (including vacatur), is exclusively governed by Chapter 2, 9 U.S.C. §§201-208, which contains the Convention on the Recognition and Enforcement of Arbitral Awards (“Convention Act”). Under the Convention Act, the period to refuse enforcement of an arbitral decision is three years. See 9 U.S.C. § 207:

Within three years after an arbitral award falling under the Convention is made, any party to the arbitration may apply to any court having jurisdiction under this chapter for an order confirming the award as against any other party to the arbitration. The court shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.

Id. (emphasis added). Here, the arbitrator’s decision was rendered on January 22, 2011. The Plaintiffs filed their Complaint to Vacate the Arbitrator’s Award on June 19, 2012; well within the three year limitations period set forth under the Convention Act, 9 U.S.C. § 207.

a. The Convention and Chapter 2 of the FAA exclusively governs the arbitration here Therefore, Chapter 1 of the FAA (including its three month limitations period is inapplicable).

It is beyond dispute that the Convention Act applies here. Specifically, the Convention applies to decisions that are “not considered as domestic awards’ in the country where enforcement of the award is sought.” See Industrial Risk Insurers v. M.A.N. Gutehoffnungshutte

GmbH, 141 F.3d 1434, 1446 (11th Cir. 1998) (quoting article 1 of the Convention). Included in the definition of “awards ‘not considered domestic’ in the United States” are awards where at least one of the parties is a domiciliary and citizen of a nation other than the United States. See id. at 1440-41 (collecting decisions). The fact that an award is issued in the United States or applies the laws of the United States does not convert the award into a domestic award provided that one party is a domiciliary or citizen of a nation other than the United States. See id.

It is beyond dispute that Plaintiffs’ are citizens of India, thus the Convention and Chapter 2 of the FAA exclusively govern the arbitration here; including the Convention’s three year limitations period. Thus, because this is not a domestic arbitration, Chapter 1 of the FAA (including its three month limitation period) is strictly inapplicable. See Costa v. Celebrity Cruises, Inc., 768 F. Supp. 3d 1237 (S.D. Fla. 2011):

The Court discusses Celebrity’s Motion beginning with the arguments against the applicability of the FAA and the Florida Act. The Convention and Chapter 2 of the FAA exclusively governs arbitration between a citizen of the United States and citizens of a foreign country. See 9 U.S.C. § 207; Indus. Risk Ins. v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434, 1439-41 (11th Cir. 1998). Here, Plaintiffs are citizens of India and, thus, the Convention and Chapter 2 of the FAA apply. Chapter 2 of the FAA, therefore, also provides for subject matter jurisdiction in this case. 9 U.S.C. § 203. Chapter 1 of the FAA or the FIAA are strictly inapplicable.

Id. (emphasis added). Notably, in Costa, the Eleventh Circuit affirmed the district Court’s decision holding that the Convention exclusively governed an arbitration involving Indian seafarers and that the provisions of Chapter 1 of the FAA were strictly inapplicable. See Costa, 470 Fed. Appx. 726 (11th Cir. 2012) (affirmed based on Industrial Risk Insurers v. M.A.N. Gutehoffnungshutte 141 F.3d 1434, 1446 (11th Cir. 1998)). [11]

Therefore, as set forth above, Celebrity cannot rely on the three month limitations period under Chapter 1 of the FAA – as it is strictly inapplicable. Instead, because the Convention Act exclusively governs the arbitration here, the three year limitations period applies.

b. Contrary to Celebrity’s assertions the Convention Act is not silent on the time to vacate an arbitral decision.

In its Motion to Dismiss Celebrity argues that “[t]he Convention Act requires that an action seeking to confirm an arbitration award be initiated within three years of the date on which the award was made, but its silent regarding the time within which an action seeking to vacate the award must be initiated.” Celebrity relies on this supposed “silence” to argue that the three years only apply to motions seeking to confirm awards, not motions to vacate them.

First, as set forth above, the Convention Act is not silent regarding the time within which a Court can vacate an arbitral decision. Instead, the three year provision expressly contemplates actions for vacatur and refusal of enforcement of arbitral decisions. See 9 U.S.C. § 207:

Within three years after an arbitral award falling under the Convention is made, any party to the arbitration may apply to any court having jurisdiction under this chapter for an order confirming the award as against any other party to the arbitration. The court shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.

Id. (emphasis added). Thus, contrary to Celebrity’s assertions, the language providing “& unless it finds one of the grounds for refusal or deferral of recognition of enforcement of the award specified in the said Convention” shows that the three year statute expressly contemplates actions for vacatur.

Second, Celebrity’s attempt to distinguish vacatur from confirmation is unwarranted. Notably, in support of its argument, Celebrity does not cite a single case or any other legal authority. The reason for Celebrity’s lack of precedent is simple: Courts do not distinguish between confirmation and vacatur actions. Rather, they are treated as one and the same. See Sanluis Developments, L.L.C. v. CCP Sanluis, L.L.C., 556 F. Supp. 2d 329 (S.D. NY 2008):

When a party moves to dismiss a motion to vacate an arbitration award, the court may, sua sponte, treat the motion to dismiss as a motion to confirm the award. Thyssen, Inc. v. M/V Markos N, 97 Civ. 6181(MBM), 2001 WL 902564, at *1, 2001 U.S. Dist. LEXIS 11560, at *2 (S.D.N.Y. 2001) (“Although defendants frame their motion as one to dismiss, I will treat it as a motion to confirm the arbitration award.”); Maidman v. O’Brien, 473 F.Supp. 25, 27 (S.D.N.Y. 1979) (“[A]lthough Evans has not sought to have the arbitration decision confirmed pursuant to 9 U.S.C. § 9, there is authority for treating such motions to dismiss as implicitly seeking that confirmation….”); GE v. Anson Stamping Co., 426 F.Supp.2d 579, 591 (W.D.Ky.2006) (“Anson’s motion to dismiss GE’s motion to vacate is in all respects the practical equivalent of a motion to confirm….”). See also Brown v. Bridgeport Rolling Mills Co., 245 F.Supp. 41, 45 (D. Conn. 1965) ( “[T]his Court’s judgment in the prior proceeding denying the Company’s motion to vacate the award and granting the motion by Brown and the Union for judgment on the record and pleadings was in effect a judgment confirming the award….”).

Here, Celebrity’s Motion to Dismiss [D.E. 9] is treated as a Motion to Confirm the Award. There is no question that Celebrity’s Motion was filed within the three year limitation period of the Convention Act, 9 U.S.C. § 207. Therefore, because Celebrity’s Motion is timely, Plaintiff’s petition seeking the Court to refuse the arbitrator’s decision is also timely under 9 U.S.C. § 207.

Third, Celebrity’s identical argument has been rejected by other Courts that have examined the issue. See, i.e. Jamaica Commodity Trading Co. Ltd. v. Cornell Rice & Sugar Co., Inc., 1991 WL 123962 (S.D. NY 1991) (emphasis original):

CTC argues that since the Convention is silent, the three-month limitation period should apply to awards also encompassed within the Convention, thereby precluding Connell Rice’s motion to vacate the award. JCTC’s argument, however, ignores the plain language of section 207 of the implementing statute, which establishes that there are significant differences between the Convention and the Arbitration Act. Section 207 provides as follows: Within three years after an arbitral award falling under the Convention is made, any party to the arbitration may apply to any court having jurisdiction under this chapter for an order confirming the award as against any other party to the arbitration. The court shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.

The first notable difference between the two statutes is that under the Convention a party has three years to move to confirm the award & Second, and most importantly, under the Convention a party may raise one of the grounds for vacating an award at any time during the three-year period in opposition to a motion to confirm. Since Connell Rice’s motion to vacate is made within three years of the award in opposition to JCTC’s motion to confirm, it is permissible under the Convention. The untimeliness of Connell Rice’s opposition under the Arbitration Act does not preclude it from proceeding under the Convention. Where the two statutes overlap, a party “has more than one remedy available and may choose the most advantageous.” Bergesen, 710 F.2d at 934.

Celebrity’s timeliness argument should therefore be rejected. Plaintiffs’ Motion to Vacate was timely.

V. The arbitrator’s decision is contrary to the public policy of the United States. For over two hundred years the Federal Courts and the United States Congress have created special protections and guarantees for seafarers so that they can seek redress against abuses by their employer-shipowners in Federal Court. Because these seafarers can no longer bring their claims in Federal Court (as they were compelled to arbitration), their last avenue to bring their claims was through a fair and impartial arbitration. Now that Celebrity’s hand-picked arbitrator has held that their claims are “not arbitrable;” enforcement of the decision will completely disenfranchise these seafarers as they will no longer have a mechanism to assert their claims. This result is contrary to the public policy of the United States.

Article V, 2(b) of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (9 U.S.C.A. § 201) permits the courts of a signatory country in which enforcement of a foreign arbitration award is sought to deny enforcement of the award if enforcement would violate the public policy of the country. See Rintin Corp. S.A. v. Domar, LTD., 476 F. 3d 1254 (11th Cir. 2007); Lindo v. NCL (Bahamas), Ltd., 652 F. 3d 1257 (11th Cir. 2011) (“Having permitted the arbitration to go forward, the national courts of the United States will have the opportunity at the award-enforcement stage to ensure that the legitimate interest in the enforcement of [&] laws has been addressed & The Convention reserves to each signatory country the right to refuse enforcement of an award where the ‘recognition or enforcement of the award would be contrary to the public policy of that country.”).

The public policy of the United States is to treat seafarers as a favored class and to give them a special status in our system of justice. As set forth above, since the foundation of the American Republic, “[t]he policy of Congress, as evidenced by its legislation