Kote v Princess Cruise Lines, LTD. (CORP.)
ORDER GRANTING DEFENDANT PRINCESS CRUISE LINES, LTD.'S MOTION TO COMPEL ARBITRATION 8 AND STAYING THIS CASE. Signed by Judge Joan A. Lenard on 9/23/2011. (dpv)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 10-61146-CIV-LENARD/TURNOFF
ANIL VINAYAK KOTE,
PRINCESS CRUISE LINES, LTD.,
ORDER GRANTING DEFENDANT PRINCESS CRUISE LINES, LTD.’S
MOTION TO COMPEL ARBITRATION (D.E. 8) AND STAYING THIS CASE
THIS CAUSE is before the Court on Defendant Princess Cruise Lines, Ltd.’s
Motion to Compel Arbitration (D.E. 8), filed on September 14, 2010. Plaintiff Anil Vinayak
Kote filed his Response in Opposition to the Motion (D.E. 19) on November 3, 2010, to
which Defendant replied (D.E. 20) on November 15, 2010. Defendant also filed a Notice of
Supplemental Authority (D.E. 34) on August 31, 2011. Having reviewed the Motion, the
Response, Reply, the Notice of Supplemental Authority and the record, the Court finds as
Factual and Procedural Background
This action involves injuries sustained by Plaintiff Anil Vinayak Kote while in
Defendant Princess Cruise Lines, Ltd.'s employ. Kote, a citizen of India, filed suit in this
Court on July 5, 2010, alleging claims for Jones Act Negligence (Count I), Maintenance and
Cure (Counts II-III).1 (See generally, Complaint, D.E. 1)
On or about July 28, 2009, Kote was working for Defendant aboard the Ruby
Princess as a junior waiter. (Id. ¶ 13.) On that date, his supervisor assigned him to assist in
the cleaning of a box of dirty knives. (Id. ¶ 14.) While lifting the box with another
employee, Kote bore the brunt of the box’s great weight. (Id.) Fearing the box would fall and
crush his feet, he maintained his end of the load long enough to get his feet out of the way.
(Id.) Doing so, however, caused injury to Kote’s lower back. (Id.)
Kote reported his injury to his supervisor immediately and requested to be seen by
a doctor. (Id. ¶ 15.) After initially refusing, his supervisor relented when Kote’s pain
intensified. (Id.) The supervisor reported Kote’s ailment as the flu, which required him to
wait another two and one-half hours for treatment. (Id. ¶¶ 16-17.) The ships’ doctor then
diagnosed Kote’s injury as a sprain, gave him the night off and sent him back to work with
pain killers and ointment. (Id. ¶ 18.) Kote continued to work in pain until he signed off the
ship on November 10, 2009. (Id. ¶ 19.)
An MRI was performed on Kote on November 26, 2009, revealing “a posterior
central and right paracentral annular tear with herniation at L4-L5 indenting the thecal sac
and transferring nerve roots and a posterior central disc herniation at L5-S1 indenting both
transversing nerve roots.” (Id. ¶ 21.) Kote saw two doctors who initially prescribed therapy,
but this was unsuccessful. (Id. ¶ 22.) Kote then saw a third doctor who prescribed medicine
The Complaint mistakenly contains two Count IIs.
and rest. (Id.) Kote’s pain did not abate so he returned to the first doctor who recommended
spinal surgery. (Id.) He does not further specify the dates of his treatment nor whether he
elected to have the surgery.
Defendant is a Bermuda corporation and its ship, the Ruby Princess, is flagged in
Bermuda as well. Prior to beginning his employment with Defendant, Kote signed a contract
which contained an arbitration provision and incorporated a separate terms & conditions of
employment pamphlet. (See Ex. A, Mot. to Dismiss, D.E. 8-1.) The terms & conditions also
included arbitration, venue and choice of law provisions. (See Ex. B, Mot. to Dismiss at 1314, D.E. 8-2.) Article 14 of the terms & conditions provides that any disputes arising out of
Kote’s employment would be subject to binding arbitration, held in Bermuda and subject to
Bermuda law. (See id.)
Defendant now moves to compel arbitration, arguing that Kote’s claims, arising
during and out of his employment on the Ruby Princess, are governed by a mandatory
arbitration provision. Defendants argue that the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, 21 U.S.T. 2517, 9 U.S.C. ?? 202-208 (“Convention
Act”) requires that the arbitration provision be enforced once four jurisdictional elements are
met. (Mot. at 6-8, citing Bautista v. Star Cruises, 396 F.3d 1289, 1294, n.7 (11th Cir. 2005).)
Defendant contends that all of the elements have been met in this case and therefore
dismissal of the action in favor of arbitration is required. (Id. at 8.) As an additional
measure, Defendant waives the exclusive application of Bermuda law and stipulates to the
application of United States law to Kote’s Jones Act claims at arbitration. (Id. at 12.)
Plaintiff opposes Defendant’s Motion on several grounds: that the arbitration
clause is “null and void” as unconscionable and the product of unequal bargaining power
between Kote and Defendant; that Defendant’s stipulation to waive application of
Bermuda law is a unilateral contract modification and cannot remedy the employment
contract’s deficiencies; any arbitration award could not be enforced as illegal; an
arbitration clause is a type of forum selection clause that is unenforceable under recent
amendments to the Jones Act; the Jones Act’s availability of punitive damages for
maintenance and cure claims are prohibited by Kote’s employment contract; and
arbitration will be prohibitively expensive for Kote. (See generally, Resp.)
Standard of Review
Federal law strongly favors agreements to arbitrate, especially in international
commercial transactions. See Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n.15
(1974); Del Orbe v. Royal Carribean Cruises, LTD., 549 F. Supp. 2d 1365, 1368 (S.D.
Fla. 2008) (Gold, J.). In deciding a motion to compel under the Convention Act, the
district court conducts a “very limited inquiry.” Bautista, 396 F.3d at 1294. Four
jurisdictional prerequisites must be met prior to compelling arbitration:
(1) there is an agreement in writing within the meaning of the Convention; (2)
the agreement provides for arbitration in the territory of a signatory of the
Convention; (3) the agreement arises out of a legal relationship, whether
contractual or not, which is considered commercial; and (4) a party to the
agreement is not an American citizen, or that the commercial relationship has
some reasonable relation with one or more foreign states.
Id. at 1294, n.7. If the four prerequisites are satisfied, the court must compel arbitration
unless one the Convention Act’s affirmative defenses applies. Bautista, 396 F.3d at 1302.
The parties do not dispute that Bautista’s four jurisdictional pre-requisites are met
and the Court, upon review of the record, finds the same.
None of the Convention’s Affirmative Defenses Are Applicable
Having found that the jurisdictional prerequisites have been met, the Court must
compel arbitration unless one of the Convention’s affirmative defenses applies.
In a recent opinion, Lindo v. NCL (Bahamas) Ltd., the Eleventh Circuit reaffirmed
the strong presumption in favor of arbitration and the notion that U.S. statutory claims,
including Jones Act claims, are arbitrable “absent a contrary intention clearly and
specifically expressed by Congress.” 2011 U.S.App. LEXIS 18001, at **48-49 (11th
Cir., Aug. 29, 2011). Lindo also clarified the applicability of certain affirmative defenses
to the parties’ arbitration provision in the context of Jones Act claims. Id. at **50-54.
Distinguishing between Article II (arbitration-enforcement stage) and Article V (awardenforcement), the Lindo Court emphasized that the former’s defenses are limited
specifically to where the “[arbitration] agreement is null and void, inoperative or
incapable of being performed.” Id. at **50-51 (emphasis in original) (citing New York
Convention, art. II(3).
The “null and void” defense applies only where the agreement is obtained through
“fraud, mistake, duress, and waiver,” or the “standard breach-of-contract defenses.”
Lindo, 2011 U.S.App. LEXIS 18001, at **50-51 (citing Bautista, 396 F.3d at 1302).
Here, Kote does not invoke any of these defenses. Thus, his “null and void” defense fails
under Article II. See id. (Likewise denying plaintiff’s Article II “null and void” defense
in the absence of showing of fraud, mistake, duress or waiver).
Kote’s claim that his employment contract was the product of unequal bargaining
power, i.e. take it or leave it, or unconscionable, similarly fails. Bautista rejected this
argument, “concluding that an unconscionability defense was not available under Article
II of the Convention.” Lindo, 2011 U.S.App. LEXIS 18001, at *51, (citing Bautista, 396
F.3d at 1302 (“It is doubtful that there exists a precise, universal definition of the unequal
bargaining power defense that may be applied effectively across the range of countries
that are parties to the Convention, and absent any indication to the contrary, we decline to
formulate one.”)). Kote offers no persuasive authority or compelling facts on which this
Court might find such a defense applicable here.
Indeed, the Eleventh Circuit makes clear that the range of Article II defenses is
slim and not to be conflated with Article V defenses to the enforcement of an award.
Lindo, 2011 U.S.App.LEXIS 18001, at ** 51, 55. Lindo criticizes the Court's prior
opinion in Thomas v. Carnival Corp., 573 F.3d 1113 (11th Cir. 2009), upon which Kote
relies heavily, in that it applies the Article V public policy defense in an Article II setting.
2011 U.S.App.LEXIS 18001, at ** 55-56. Thomas failed to follow Bautista when it
created “a new public policy defense under Article II – based on the elimination of a U.S.
statutory claim under the Seaman’s Wage Act – [which] by definition [could not] be
applied ‘neutrally on an international scale,’ as each nation operates under different
statutory laws and pursues different policy concerns.” Id. at *56. Kote’s public policy
argument and reliance on Thomas is therefore outweighed by Lindo’s re-framing of the
public policy analysis.
Furthermore, Kote’s Article V public policy defense is premature at this stage.
(See Resp. at 8.) Kote does make any showing regarding the (in)ability of Bermuda law
to settle his Jones Act claims; he also does not explain how an arbitration in Bermuda
applying U.S. law (to which Defendants stipulate) would result in fundamental
unfairness. See, e.g., Lindo, 2011 U.S.App.LEXIS 18001, at **75-76. Even so, an
Article V public policy defense would be timely only at the award enforcement stage at
which time the record “will show what legal principles were applied and what [plaintiff]]
recovered, or did not recover, and why.” Id. at *77; see also Vimar, Vimar Seguros Y
Reaseguros v. M/V Sky Reefer, 515 U.S. 528, 540-41 (1995).
Finally, Kote’s additional reasons why arbitration should not be compelled – the
financial burden of arbitration in Bermuda and the arbitration clause’s prohibition of
punitive damages – do not fall within the accepted Article II defenses. See Lindo, 2011
U.S.App.LEXIS 18001, at **50-51; Bautista, 396 F.2d at 1302; cf. Thomas, 573 F.3d at
___. Even if financial hardship were recognized under the Convention as a defense,
Kote, as the party seeking to invalidate arbitration, bears the burden of showing the
likelihood of incurring these costs. See Green Tree Financial Corp. v. Randolph, 531
U.S. 79, 92 (2000). Unsupported allegations will not carry this burden.
This Case Would Be Compelled To Arbitration Under Thomas.
The Court is careful to note that Lindo, as a panel opinion, does not overrule the
Circuit’s 2009 decision, Thomas v. Carnival Corp., 573 F.3d 1113 (11th Cir. 2009),
although the Court does find Lindo more persuasive.
This case would be compelled to arbitration consistent with this Court’s
application of Thomas, Bautista and their progeny. See, e.g, Shaw v. Carnival Cruise
Lines, 2011 U.S. Dist. LEXIS 58704 (S.D. Fla. May 31, 2011); Hiotakis v. Celebrity
Cruises, Inc., 2011 U.S. Dist. LEXIS 58396 (S.D. Fla. May 31, 2011); Martinez v.
Carnival Corp., 2011 U.S. Dist. LEXIS 22904 (S.D. Fla. Mar. 8, 2011). In Shaw,
Hiotakis and Martinez, the Court stated that simply uttering the name Thomas does not
invoke the public policy defense; plaintiffs must show how the laws of the country where
arbitration would be conducted did not recognize Jones Act claims or comparable
remedies. In Shaw and Hiotakis, this Court found that defendants waived the application
of foreign law to plaintiffs’ Jones Act claims and stipulated for the review of the arbitral
award by this Court. The Court also found that severing the unenforceable choice of law
provisions while leaving intact the arbitration provision was consistent with contract
principles. Arbitration was compelled in each of these cases and the instant case presents
similar circumstances. Thus, in the absence of the Lindo decision, the Court would
nevertheless compel arbitration.
Considering the strong presumption in favor of arbitration clause enforcement, the
lack of specific exclusion by Congress of Jones Act claims from arbitration, Kote’s lack
of applicable Article II defenses to arbitration enforcement, and the Court’s prior
application of Thomas and Bautista to circumstances similar to the case at hand, the Court
must compel this dispute to arbitration pursuant to the Convention Act.
Accordingly, it is ORDERED AND AJDUGDED that:
Defendant Princess Cruise Lines, Ltd.’s Motion to Compel
Arbitration (D.E. 8), filed on September 14, 2010, is GRANTED.
This Case is STAYED pending the outcome of arbitration
and ADMINISTRATIVELY CLOSED.
DONE AND ORDERED in Chambers at Miami, Florida, this 23rd day of
JOAN A. LENARD
UNITED STATES DISTRICT JUDGE
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