Admiralty

• Publication year: 2018

Admiralty

John P. Kavanagh Jr.

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Admiralty

by John P. Kavanagh, Jr.^*

The cases discussed herein represent decisions the United States Court of Appeals for the Eleventh Circuit issued in 2016 and 2017.¹ While not an all-inclusive list of maritime decisions from the court during that timeframe, the Author identified and provided summaries of key rulings of interest to the maritime practitioner.²

I. Admiralty Jurisdiction

Tundidor v. Miami-Dade County,³ addresses subject matter jurisdiction under 28 U.S.C. § 1333;⁴ specifically, the case addresses whether a canal is "navigable" for purposes of admiralty or maritime jurisdiction if it is blocked by artificial obstructions preventing it from being used to conduct interstate commerce.⁵ In a case of apparent first impression, the appellate court agreed with the trial court's decision to dismiss the case for lack of subject matter jurisdiction.⁶

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The plaintiff, a passenger aboard a recreational vessel, suffered serious injuries while the vessel was operating on the Coral Park Canal in Miami, Florida. The canal is traversed by a number of low-lying bridges. After ducking to pass underneath such a structure, the plaintiff raised his head only to strike a water pipe, causing serious injury.⁷ Suit was filed in the United States District Court for the Southern District of Florida, invoking the admiralty jurisdiction of the court.⁸

The test for admiralty tort jurisdiction is twofold: "(1) there must be a significant relationship between the alleged wrong and traditional maritime activity (the nexus requirement) and (2) the tort must have occurred on navigable waters (the location requirement)."⁹ In the instant case, the trial court found that the Coral Park Canal was not navigable, and thus, failed to satisfy the location requirement.¹⁰

The test for navigable waters was set forth in The DANIEL BALL.¹¹ The Supreme Court of the United States held that navigable waters must be "navigable in fact" and capable of being used in interstate commerce.¹²

The Coral Park Canal does connect to the Tamiami Canal, which in turn connects to the Miami River and eventually leads to the Atlantic Ocean. However, the Coral Park Canal is restricted by a, series of artificial obstructions, including a water control structure (S-25B), which prevents navigation from the western side of the structure to the Miami River.¹³ Coral Park Canal is not navigable because this water control structure prevents vessels from traveling outside of the State of Florida.¹⁴ "Because the Coral Park Canal cannot support interstate commerce, it cannot satisfy the location requirement of admiralty jurisdiction."¹⁵

Whether Coral Park Canal might have once been navigable had no bearing on the issue of whether the waterway was presently navigable in fact. Discussing the issue of "historical navigability," the Eleventh Circuit noted that "[e]very circuit court to consider the issue has ruled that when artificial obstructions on a waterway block interstate commercial travel, the waterway cannot support admiralty

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jurisdiction."¹⁶ The appellant concluded his arguments in support of subject matter jurisdiction by citing cases purportedly endorsing historic navigability. The Eleventh Circuit noted that "these decisions do not involve admiralty jurisdiction" and went through some length to differentiate navigability for jurisdictional purposes from other scenarios involving navigable waters or navigability.¹⁷ The twin touchstones of uniformity and promotion of marine commerce underlie the historical scope of navigability for jurisdictional purposes. In the absence of these concerns, the court held that "extending jurisdiction to waters incapable of commercial activity serves no purpose of admiralty jurisdiction."¹⁸

II. Arbitration of Seafarers' Claims

The decision in Suazo v. NCL (Bahamas) Ltd.,¹⁹ is another in a line of Eleventh Circuit decisions enforcing arbitration clauses in seafarers' employment contracts. Willman Suazo, a Nicaraguan citizen, was employed by Norwegian Cruise Lines (NCL) aboard the M/V NORWEGIAN EPIC, a Bahamian-flagged vessel. Suazo was injured while lifting heavy garbage bins as part of his duties aboard the vessel. He eventually returned to his home country to seek medical care and treatment which, at some point, NCL discontinued and declined to reinstate. Suazo retained private counsel and filed suit against NCL in the Miami-Dade County Circuit Court. NCL removed the case to federal court and sought to compel arbitration as required by Suazo's employment contract.²⁰

The NCL employment agreement dictated that all claims arising out of shipboard employment would be resolved pursuant to the New York Convention via arbitration in the seafarer's country of citizenship or, in the alternative, in Nassau, Bahamas. The agreement was silent as to who would bear the costs of arbitration, but reference was made to the collective bargaining agreement (CBA) between NCL and the Norwegian Seafarers' Union (NSU). The CBA provided that the union would bear the costs of arbitration for its member if a NSU legal representative

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represented the seafarer. However, if the seafarer rejected the NSU's legal representative, the employee and NCL (employer) would each bear one-half the costs of arbitration until the arbitrator determined the issue.²¹

Suazo opposed the foreign arbitration because of economic hardship. He provided an affidavit stating that he was from a poor community in Nicaragua where he could not find work and that he did not have money to pay for arbitration.²² The district court rejected this argument, finding that a "public policy" defense of economic hardship was not available at the arbitration-enforcement stage under the New York Convention. Suazo appealed.²³

There are different defenses available under the New York Convention (applicable to foreign arbitrations) versus the Federal Arbitration Act (FAA)²⁴ (applicable to domestic arbitrations). When faced with a motion to compel under the FAA, there is a "broad array of defenses to the enforcement of arbitration agreements."²⁵ Specifically, the party opposing a motion to compel domestic arbitration has all defenses existing "at law or in equity for the revocation of any contract."²⁶ Courts have interpreted the "effective vindication doctrine" as one defense available in the context of domestic arbitration.²⁷ This is a public policy consideration which assesses whether or not forcing a party into arbitration would deprive that party of statutory claims otherwise available in civil litigation.²⁸

In contrast, when a party seeks to enforce arbitration subject to the New York Convention, available defenses to oppose such efforts are very limited. Article II of the New York Convention provides that a court shall enforce the arbitration provision, "unless it finds that the said agreement is null and void, inoperative or incapable of being performed."²⁹

In the instant case, the appellate court faced an issue of first impression: "We have never determined whether a cost-based effective vindication defense can be raised under the 'incapable of being performed' clause of Article II [of the New York Convention] . . . ."³⁰ The

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court went on to state, however, that "we need not resolve that question today because Suazo has fallen far short of establishing that enforcing the arbitration agreement in this case will effectively deny him access to the arbitral forum."³¹

The Eleventh Circuit did provide guidance for the next litigant to use the cost-based effective vindication defense to oppose a motion to compel arbitration subject to the New York Convention. Citing a fairly recent case (which actually seemed to be directly on point), the court noted that a party seeking to invoke an effective vindication doctrine based on the expense of arbitration must present evidence of (1) the amount of fees he or she is likely to incur and (2) an inability to pay those fees.³² In the instant case, the Eleventh Circuit held that Suazo failed to present sufficient evidence of the amount of fees he would likely incur in the putative arbitration.³³ Moreover, the court also cited the fact that Suazo could have received free representation from his union to pursue his rights in the foreign arbitration.³⁴

In Alberts v. Royal Caribbean Cruises, Ltd.,³⁵ the plaintiff, a United States citizen, was employed by Royal Caribbean as a trumpet player aboard the M/V OASIS OF THE SEAS. The vessel sailed once a week from Florida, calling on various foreign ports.³⁶ Alberts signed two employment agreements, both of which contained arbitration clauses requiring that all disputes "be referred to and resolved exclusively by mandatory binding arbitration pursuant to the United Nations Conventions [sic] on the Recognition and Enforcement of Foreign Arbitral Awards."³⁷

After becoming ill while working for Royal Caribbean, and based on his belief that his employer failed to provide proper care, Alberts sued for unseaworthiness, negligence, maintenance and cure, and other relief. The district court granted Royal Caribbean's request to compel arbitration.³⁸

On appeal of the order compelling arbitration, the Eleventh Circuit first observed that a district court is required by law to compel arbitration if four jurisdictional prerequisites are met: (1) an agreement in writing; (2) arbitration is in the territory of a signatory to the New York

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Convention; (3) the agreement must arise out of a commercial relationship; and (4) the party to the agreement is either not an American or the "relationship involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states."³⁹ The issue at hand was whether or not Alberts's performance as a musician aboard vessels in international waters "envisages performance . . . abroad."⁴⁰

Alberts argued that "abroad" required...