Escobar v. Celebration Cruise Operator, Inc.
2015 U.S. App. LEXIS 20158
| 11th Cir. | 2015Background
- Jorge Escobar, a Honduran seaman, signed an employment contract with Celebration Cruise Operator, Inc. that required arbitration of all employment-related claims in the Bahamas and designated Bahamian law.
- Escobar was injured aboard the M/V Bahamas Celebration and filed Jones Act and related claims in Florida state court.
- Celebration removed the case under the Convention Act (9 U.S.C. § 205) and moved to compel arbitration under the New York Convention/Convention Act; the district court granted the motion and denied remand.
- Escobar argued (1) the FAA seaman exemption bars arbitration, (2) the foreign choice-of-law clause prospectively waived U.S. statutory remedies (effective‑vindication/public‑policy), and (3) the contract’s cost‑splitting provision makes arbitration prohibitively expensive.
- The Eleventh Circuit reviewed de novo and affirmed: it held the Convention Act governs, the FAA seaman exemption does not apply in Convention cases, public‑policy/effective‑vindication defenses are premature at the arbitration‑enforcement stage, and Escobar failed to show prohibitive arbitration costs; removal under §205 was proper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of FAA seamen exemption | §1 exempts seamen’s employment contracts from FAA arbitration | Convention Act governs and displaces the §1 exemption for Convention cases | FAA seamen exemption does not apply where the Convention Act governs; arbitration compelled (Convention Act controls) |
| Foreign choice‑of‑law / effective‑vindication public‑policy defense | Bahamian law choice prospectively waives Jones Act/statutory remedies; public policy forbids enforcement | Public‑policy challenge is an Article V defense and premature at arbitration‑enforcement stage | Public‑policy/effective‑vindication defense is premature; must wait until award‑enforcement stage |
| Cost‑splitting (prohibitive costs) | Requirement to pay half arbitration fees (allegedly ~$20,000) would deny access to forum | Clause requires initial fee paid by employer; plaintiff must prove likely fees and inability to pay | Plaintiff failed to prove likely fees or inability to pay; claim premature and insufficient to void agreement |
| Removal under Convention Act §205 | Jones Act suits are generally not removable | §205 permits removal of cases relating to arbitration agreements falling under the New York Convention | Removal was proper because the dispute related to a Convention arbitration agreement |
Key Cases Cited
- Bautista v. Star Cruises, 396 F.3d 1289 (11th Cir. 2005) (explains Article II/Article V defense split and that Convention Act can displace FAA §1 seamen exemption)
- Lindo v. NCL (Bahamas), Ltd., 652 F.3d 1257 (11th Cir. 2011) (holds Article V public‑policy defenses are unavailable at arbitration‑enforcement stage)
- Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528 (1995) (Supreme Court: premature at interlocutory stage to decide that foreign law choice will deny U.S. statutory protections)
- Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (2000) (party claiming prohibitive arbitration costs bears burden to show likely fees and inability to pay)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (discusses effective‑vindication doctrine in dictum)
- Freudensprung v. Offshore Technical Servs., Inc., 379 F.3d 327 (5th Cir. 2004) (holds FAA applies to Convention cases only to the extent not in conflict with Convention Act)