Plaintiff v. Royal Caribbean Cruises, Ltd.

Lipcon, Margulies & Winkleman, P.A

August 08, 2012

Plaintiff v. Royal Caribbean Cruises, Ltd.

Memorandum in Support of Jurisdiction

One of the most common challenges faced by passengers and crewmembers is jurisdiction. Cruise lines and shipping companies argue that because your accident happened overseas, you are not a U.S. citizen, the defendant is not a U.S. citizen, or that a contract calls for a different venue, that the Court does not have power over the subject matter of the case or the Defendant itself. Jurisdictional challenges can bring an end to your case before it has had the chance to even get underway. That is why it is important to hire an experienced nautical legal attorney, like the attorneys of Lipcon, Margulies & Winkleman, P.A. Our lawyers regularly face and defeat jurisdictional challenges brought by defendants like shore excursion operators, cruise ship doctors, and foreign shipping companies. In this memorandum to the 11th Circuit Court of Appeals, our maritime attorneys fight for a crewmember’s right to have his day in court.

APPEAL NO. 12-13001




COMES NOW, Appellants, PLAINTIFF et al., by and through undersigned counsel, and hereby file their Brief in Support of Jurisdiction. As grounds thereof, Appellants alleges as follows:


1. Appellants’ are seafarers, wards of the admiralty courts and historically a protected class by Congress.

Plaintiffs are citizens of Jamaica who worked aboard cruise ships owned and operated by Defendant, Celebrity Cruises Inc. (“NCL”), 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 protected class.

Since the foundation of the 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.” 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, they 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 as to whether or not it should retain jurisdiction over this appeal, this Honorable Court should be mindful of the special status of seamen in our judicial system.

2. The lower court’s order compelling arbitration is final and appealable. The Eleventh Circuit Court of Appeals has jurisdiction over this appeal by virtue of the Federal Arbitration Act (FAA). See Jackson v. Cintas Corp., 425 F. 3d 1313 (11th Cir. 2005):

The Federal Arbitration Act (FAA) allows an immediate appeal from any “final decision with respect to arbitration.” 9 U.S.C. § 16 (a)(3). A decision is final within the meaning of Section 16(a)(3) where the court “dispose[s] of the entire case on the merits and leaves no part of it pending before the court. Green Tree Financial Corp. – Ala. v. Randolph, 531 U.S. 79 (2000) (internal quotations omitted). When it compelled arbitration, dismissed the complaint and entered a judgment, the district court resolved “the entire case on the merits” and left no part of it pending before the Court. Id. Citing the United States Supreme Court in Green Tree.

(emphasis added); see also Green Tree Financial Corp. – Ala. v. Randolph, 531 U.S. 79 (2000):

The question before us, then, is whether that order can be appealed as “a final decision with respect to an arbitration” within the meaning of § 16(a)(3) & Section 16(a)(3) ..preserves immediate appeal of any “final decision with respect to an arbitration,” regardless of whether the decision is favorable or hostile to arbitration. And as petitioners and respondent agree, the term “final decision” has a well-developed and longstanding meaning. It is a decision that “ ‘ends the litigation on the merits and leaves nothing more for the court to do but execute the judgment. &The District Court’s order directed that the dispute be resolved by arbitration and dismissed respondent’s claims with prejudice, leaving the court nothing to do butexecute the judgment.That order plainly disposed of the entire case on the merits and left no part of it pending before the court. The District Court’s order was therefore “a final decision with respect to an arbitration” within the meaning of § 16(a)(3), and an appeal may be taken.

Id., at 84 – 87. (emphasis added).

Herein, the district court granted Defendant’s Motion to Compel arbitration and “closed the case.”

Like the Supreme Court case in Green Tree, the district court’s order here directed that the dispute be resolved by arbitration, dismissed the case with prejudice, leaving the court with noting to do but to execute the judgment. Therefore, as set forth in Green Tree and Jackson; here “the District Court’s order was ‘a final decision with respect to an arbitration’ within the meaning of § 16(a)(3), and an appeal may be taken.”

2. This case is too important to be denied review. If the Court declines to hear the appeal, the Plaintiffs will be forever deprived of a remedy and their employer will be free to continue its unlawful practices (forced labor, wage deductions, and peonage).

During a period of approximately two years the Plaintiffs in this case were victims of forced labor, peonage and other slave-like working conditions in United States ports, aboard Royal Caribbean’s cruise ships.

As a result of Royal Caribbean’s policies, on May 27, 2011, Plaintiffs filed a lawsuit, alleging claims under the Seaman’s Wage Act, 46 U.S.C. §10313, 46 U.S.C. §10504 (Counts II and III),[2] the General Maritime Laws of the United States (Counts IV and V), and 18 U.S.C. §1595 (Count VI)[3].

The District Court below, did not examine or made any rulings with respect to the merits of the seafarers claims. Rather, it compelled the claims to arbitration.

No rights in arbitration under Norwegian law. The subject arbitration provision contains a choice of law clause which provides, in part, at paragraph 3 of the employment contract that “[t]he procedural and substantive law of the arbitration shall be the law of Norway without regard to conflict of law principles” [D.E. 11-3, pg. 3]. Further, at paragraph E, titled “governing law” the contract provides, that “[a]ny grievance or dispute shall be governed in accordance with the laws of Norway, without regard to any conflicts of law principles.” Pursuant to the terms of Royal Caribbean’s arbitral provision, therefore, if Plaintiffs were compelled to arbitrate this matter, Plaintiffs would be forced to arbitrate their claims exclusively under Norwegian law.

Norway’s laws, however, expressly exempt foreign (non-Norwegian) cruise line workers from the protection of their laws. The Norwegian Seaman’s Act of 30 May 1975 No. 18, specifically provides that the wage provisions of the Norwegian Seaman’s Act, do not apply to cruise ship workers who are not nationals or residents of Norway. Since Plaintiffs here are all cruise ship workers, who neither reside or hold Norwegian citizenship, the wage provisions of the Norwegian Seaman’s Act – do not apply to them. See §1 “Scope of Act,” Norway Seamen’s Act of 30 May 1975 No. 18:”

§1 The scope of the Act

This Act applies to any person who is employed on board a Norwegian ship, and who does not only work on board while the ship is in port.

Persons who are neither residents in Norway nor Norwegian nationals and who are hired by a foreign employer to serve passengers on board a cruise ship, are only subject to provisions in §4, §18, subsection 1, first and second paragraph, however, with the exception of the right to be transferred under the second paragraph, §18 subsection 3 as well as §27, Chapter II A and Chapter II A and Chapter II B, §§39, 43, 45 and 49. Nationals of countries to which the EEA Agreement applies shall be considered equal to Norwegian Nationals.

Here, Plaintiffs are citizens and residents of Jamaica, Costa Rica, and St. Vincent and the Grenadines. Plaintiffs are neither citizens or residents of Norway. Plaintiffs also work aboard cruise ships for a non-Norwegian (U.S. based) employer,[4] on Bahamian flagged vessels. The Norway Seaman’s Act Wage sections are §§21, 22, 23, 24, and 25 (neither of which are listed as exceptions in §1 above). Finally, Plaintiffs’ are not nationals of countries to which the EEA Agreement applies.[5]

Therefore, as set forth in of §1 the Norway Seaman’s Act, Plaintiffs do not have remedies for unpaid wages under Norwegian law.

No rights to bring claims for penalty wages under U.S. law in arbitration. Further, Norwegian law does not recognize causes of action under the United States Seaman’s Wage Act. For instance, Norwegian statutes do not allow seafarers to sue their employer for penalty wages, an unmistakable and unique statutory right under the U.S. Seaman’s Wage Act, (46 U.S.C. §10313, 46 U.S.C. §10504). See Thomas v. Carnival, 573 F, 3d 1113 (11th Cir. 2009):

Thus under the terms of the Arbitration clause, Thomas must arbitrate in the Philippines (choice-of-forum) under the law of Panama (choice-of-law). As the arbitrator is bound to effectuate the intent of the parties irrespective of public policy considerations, these arbitration requirements have “operated in tandem” to completely bar Thomas from relying on any U.S. statutorily created causes of action. This inability to bring a Seaman’s Wage Act claim certainly qualifies as a “prospective waiver” or rights, including one of a private litigant’s “chief tools” of statutory enforcement of the Act’s treble-damages wage penalty provision for late payments. see, e.g. Mitsubishi, 473 U.S. at 635 (“The treble- damages provision wielded by the private litigant is a chief tool in the anti-trust enforcement scheme, posing a crucial deterrent to potential violators).

Id., at 1123. (Emphasis added).
All in all, there is no question that if the Plaintiffs are forced to arbitrate under Norwegian law, they will not be able to pursue any claims under either U.S. law or even Norwegian law. In effect, requiring them to arbitrate, tantamounts to these seafarers being deprived of every opportunity and right to bring claims against their employer. As a consequence, Royal Caribbean will be given free rein to maintain its policies of forced labor and peonage.

3. If appellants are required to arbitrate their claims, they will have no opportunity for subsequent review.

As set forth above, if Plaintiffs are required to arbitrate their claims, because Norwegian law will apply, Plaintiffs will no receive no award in the arbitral forum -given the U.S. based nature of their claims. Therefore, Plaintiffs will have nothing to enforce in U.S. Courts, depriving them of any later opportunity to review. See Thomas v. Carnival, 573 F, 3d 1113 (11th Cir. 2009), citing Vimar Seguros Y Reaseguros v. M/V Sky Reefer, 515 U.S. 528 (1995):

Moreover, there is no assurance of “opportunity for review&in this case Thomas would only be arbitrating a single issue claim, one derived solely from a U.S. statutory scheme. If applying Panamanian law, Thomas receives no award in the arbitral forum – a distinct possibility given the U.S. based nature of his claim – he will have nothing to enforce in U.S. Courts, which will deprive him of any later opportunity to review.

Moreover, as the record in this case makes clear, the application of Norwegian law makes Plaintiffs’ claims not arbitrable in the first place. Therefore, there is no point – and no justice- in requiring Plaintiffs to go to arbitration, and then, upon a showing that they were deprived of all of their causes of action at arbitration, require him to come back to United States District Court to vacate the award.

As Judge Barkett has pointed out, interpreting the Convention on the Enforcement and Recognition of Foreign Arbitral Awards in this way, “would require a court to compel arbitration in a dispute involving a sale of slaves, despite knowing full well that any resulting arbitral award would be unenforceable as a matter of public policy.” Lindo, at 1288, citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth Inc., 723 F. 2d 155, 164 n. 9 (1st Cir.1983). “ While this example may be extreme, it illustrates the absurdity and inefficiency of requiring a court to refer a matter to arbitration where it is apparent from the face of the agreement that any subsequent award would be unenforceable as a matter of public policy.” Id.

The Convention also does not contemplate actions for vacatur. There is no provision under the Convention for a vacatur action. This problem was directly addressed in a recent decision from the U.S. District Court for the Southern District of Florida, Ingaseosas Intern. Co. v. Alconcagua Investing Ltd., 2011 WL 500042 *2-3 (S.D. Fla. 2011).

As has been pointed out in Ingaseosas, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards explicitly regulates only two types of proceedings – (1) for order confirming an arbitration award (9 U.S.C. §207), and (2) for an order compelling arbitration pursuant to an arbitration agreement (9 U.S.C. §206), but makes no provision at all for vacatur proceedings. Thus, arguably unless the ship owner-employer initiates a proceeding for an order confirming an arbitration award (and the ship owners will never have any need for such a proceeding – or any desire to open the door to a seafarer’s affirmative defenses under the Convention – including voidness under public policy), the aggrieved seaman has no opportunity for review.

4. Alternatively, this Court has jurisdiction under the Collateral Order Doctrine.

The collateral order doctrine requires that an order (1) conclusively determine the disputed question; (2) resolve an important issue completely separate from the merits of the action; and (3) be effectively unreviewable on appeal from final judgment. Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949).

Herein, the lower Court’s decision to compel Plaintiffs’ case to arbitration conclusively determined the disputed question of whether Plaintiffs could stay in Federal Court or assert their claims in arbitration. Further, this decision is completely separable from the merits of the action, and collateral to, rights asserted in the action. The merits of Plaintiffs’ case center around Forced Labor, Peonage, and Slavery, pursuant to 18 U.S.C. §1595 and Failure to Pay Wages, pursuant to 46 U.S.C. §10303 [D.E. 1]. See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949):

[The] decision appears to fall in a small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.

It follows that an order granting a motion to compel arbitration is also one of that small category of orders which finally determine claims of right separable from, and collateral to, rights asserted in the action. An order granting a motion to compel arbitration is also “too important to be denied review and too independent of the cause itself that appellate consideration be deferred until the whole case is adjudicated” – particularly a case centered on slavery and violations of forced labor statutes.

WHEREFORE, the district Court’s May 31, 2012 order granting Defendants’ Motion to Compel Arbitration is final and appealable.


[1] Congress first enacted laws to protect the wages of seafaring employees in 1790. See Griffin v. Oceanic Contractors, Inc., 458 U.S. 64, 572-73 (1982). The statute, referred to as the “Seaman’s Wage Act, ” was recodified in 1983 at 46 U.S.C. §10313.

[2] The Seaman’s Wage Act, 46 U.S.C. §10313 , focuses on ensuring wage payment to seamen via a treble-damages wage-penalty provision assessed on employers for late wages. The “primary purpose of the Act” is to ensure that a seaman will be paid his wages promptly upon discharge in a U.S. port, and will not be turned ashore with nothing in his pockets” after his right to food and shelter is terminated. Chung Yung II v. Overseas Navigation Co., 774 F. 2d 1043 (11th Cir. 1985). The purpose of the penalty wage statutes is to secure prompt payment of seaman’s wages and thus protect them from the harsh consequences of arbitrary and unscrupulous action by their employers. Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 572 (1982).

[3] Pursuant to 18 U.S.C. §1595 (a) an individual who is a victim of forced labor and/or “peonage” may bring a civil action against the perpetrator (or whoever knowingly benefits, financially or by receiving anything of value from participating in a venture which that person knew or should have known has engaged in an act of forced labor and/or peonage) in an appropriate district court of the United States and may recover damages and reasonable attorneys fees.

[4] Royal Caribbean is an American business entity, with its principal place of business in Miami, Florida. Presumably for tax purposes, Royal Caribbean is incorporated in Liberia.

[5] The EEA agreement applies to citizens of European Union nations, citizens of Sweden, Norway, Iceland and Liechtestien. Plaintiffs are not European Union nationals, and are not citizens of Sweden, Norway Iceland or Liechtestien.