Florida Federal Judge Lifts Stay Of Seamans’ Claims Against Cruise Line

by Tara Arick on May 29, 2013 · 0 comments

in Corporate Counsel

- From LexisNexis® Mealey’s™ Daily Legal News.

A Florida federal judge on May 24 lifted a previously imposed stay of case that was filed by cruise line workers who seek damages for allegedly withheld wages, dismissing the case so that the workers can appeal an order compelling arbitration of their claims (Kenneth Downer, et al. v. Royal Caribbean Cruises Ltd., No. 11-21948, S.D. Fla.; 2013 U.S. Dist. LEXIS 74135).

Class Action

Kenneth Downer and seven others (collectively, the attendants) worked for Royal Caribbean Cruises Ltd.

as stateroom attendants. The attendants filed a putative class action in the U.S. District Court for the Southern District of Florida, alleging that Royal Caribbean unlawfully withheld or failed to pay their wages.

The attendants each signed employment agreements, which contained a mandatory arbitration provision. The employment agreements incorporated a collective bargaining agreement (CBA), which also contained an arbitration provision. Royal Caribbean moved to compel arbitration of the case.

Arbitration

Judge Marcia G. Cooke said the attendants opposed the motion on various grounds, including that the arbitral clause’s choice of law provision requiring the application of Norwegian law deprived them of remedies under the Seaman’s Wage Act. The attendants relied on the decision in Thomas v. Carnival Corp. (573 F.3d 1113, 1124 [11th Cir. 2009]), in which the 11th Circuit U.S. Court of Appeals found that an arbitration agreement that required the application of foreign law was a waiver of the seaman’s right to assert claims under the Seaman’s Wage Act and was not enforceable under the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards.

Judge Cooke said the 11th Circuit subsequently issued a ruling in Lindo v. NCL (Bahamas), Ltd. (652 F.3d 1257, 1275 [11th Cir. 2011]), which overturned Thomas. The parties then filed notices of supplemental authority. In May 2012, Judge Cooke granted the motion to compel arbitration and stayed the case. The attendants appealed to the 11th Circuit. Caribbean moved to dismiss the appeal for lack of jurisdiction, arguing that since the case was not dismissed the order was interlocutory and that appellate review was not permitted. The appeals court dismissed the appeal for lack of jurisdiction.

Stay

The attendants moved to lift the stay, arguing that they were deprived the right to appeal. Caribbean argued that the motion was an attempt to delay arbitration. The appeals court found that Judge Cooke’s May 31, 2012, order granting the motion to compel and to stay the case was not final or appealable.

Judge Cooke said she would exercise her discretion and lift the stay and dismiss the case. Judge Cooke said that the attendants argued that lifting the stay would promote the public interest, because the law on the issue of the public policy defense under article 2 of the Federal Arbitration Act was still unsettled. The attendants also argued that lifting the stay would preserve judicial resources. Judge Cooke agreed with the attendants’ arguments and granted the motion to lift the stay.

Counsel

The attendants are represented by Jason Robert Margulies, Michael A. Winkleman and Carlos Felipe Llinas Negret Margulies of Lipcon Margulies, Alsina & Winkleman in Miami.

Royal Caribbean is represented by Sanford Lewis Bohrer and Scott Daniel Ponce of Holland & Knight in Miami.

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