Court: District Court, S.D. Florida; September 27, 2017; Federal District Court
Julia Damaris Toruno Pineda, a cabin stewardess on the cruise ship Nautica, alleges serious injuries from slipping on a defective ladder while in international waters. She initially filed a lawsuit in state court against Nautica Acquisition, LLC and Oceania Cruises, Inc., claiming inadequate medical care, failure to provide maintenance and cure, and unseaworthiness. The defendants removed the case to federal court, citing an arbitration clause under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and sought dismissal and to compel arbitration.
Toruno Pineda contended that her claims were not subject to arbitration and requested the case be remanded to state court. The court determined the arbitration clause was inapplicable to her claims, found a lack of subject-matter jurisdiction, and remanded the case back to state court. Following her fall in August 2013, she received initial medical treatment onboard, underwent surgery ashore, and later experienced complications due to improper medical care in Honduras, leading to ongoing pain. The employment agreement she signed with International Cruise Services, Inc. referenced a collective bargaining agreement that included an arbitration provision for disputes. Toruno Pineda argued she was a borrowed employee under Oceania's control while on the ship.
A "Special Agreement for Cruise Vessels" is attached to the Collective Agreement, indicating that ICS is the owner/agent/operator of the MARSHALL ISLANDS flag ship NAUTICA, and it is responsible for employing each Seafarer per the Collective Agreement. The agreement specifies that the signature for ICS is authorized by the ship owner, Nautica Acquisition, LLC. Nautica and Oceania removed the case filed by Toruno Pineda, claiming it falls under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which mandates the enforcement of private arbitration agreements. The Convention is applied through the Federal Arbitration Act, allowing defendants to remove cases related to arbitration agreements to federal court. Four jurisdictional prerequisites must be met for removal under the Convention: 1) a written agreement to arbitrate; 2) arbitration must take place in a Convention-signatory territory; 3) the agreement arises from a commercial relationship; and 4) a party is a non-American citizen or there is a reasonable connection to foreign states. If these prerequisites are not satisfied, removal is improper. The court determined that Toruno Pineda's claims do not relate to an arbitration agreement under the Convention, leading to a lack of subject matter jurisdiction and rendering the removal improper.
The dispute centers on whether Toruno Pineda's claims against Nautica and Oceania are subject to an arbitration clause in the Collective Agreement, particularly regarding the ability of these nonsignatory defendants to compel arbitration. The defendants assert that equitable estoppel principles, along with the agency relationship between ICS and Nautica and the parent-subsidiary relationship between Nautica and Oceania, justify their ability to invoke the arbitration clause. However, the Court finds these principles inapplicable, concluding that no arbitration agreement exists between Toruno Pineda and either Nautica or Oceania.
Equitable estoppel can allow a nonsignatory to compel arbitration under two conditions: (1) when a signatory must rely on the terms of a written agreement containing an arbitration clause to assert claims against a nonsignatory, or (2) when a signatory alleges misconduct by both a nonsignatory and one or more signatories. The Court determines that neither condition is met in this case. Toruno Pineda's claims do not invoke the terms of the relevant agreements, and the defendants have not demonstrated that her claims against them are intertwined with her Employment Contract with ICS. Although she acknowledges being hired by ICS, she asserts that her employment on board transitioned to Oceania, which was her borrowing employer, and claims against Nautica are based on its ownership of the ship.
Her claims are framed under general maritime law and do not reference or presume the existence of the Collective Agreement. As such, the Court concludes that Toruno Pineda's allegations do not satisfy the criteria for compelling arbitration based on equitable estoppel.
Toruno Pineda's allegations do not demonstrate "substantially interdependent and concerted misconduct" involving both nonsignatories and signatories. Notably, Toruno Pineda does not allege any wrongdoing by ICS, the signatory, and her claims are independent of any relationship with ICS. The Defendants argue that Toruno Pineda should be estopped from avoiding arbitration by suing only nonsignatories, but they fail to support this claim. Previous cases cited by the Defendants involved either signatories or allegations of co-conspiracy, contrasting with Toruno Pineda's situation. Furthermore, the Defendants' equitable estoppel arguments do not establish any agreement for arbitration regarding claims against Oceania or Nautica.
Regarding agency, the Defendants claim Nautica should be treated as a signatory due to ICS acting as its agent. While an agent can bind a principal if granted authority, the Court finds no evidence that ICS had such authority in this case. Toruno Pineda’s Crew Agreement with ICS references the Collective Agreement containing the arbitration clause, which was negotiated between ICS and the Union. Nautica is mentioned in the Special Agreement, but the documentation does not confirm that ICS signed it on Nautica’s behalf. The signature on the Special Agreement indicates ICS's authority to act for Nautica but does not confirm that ICS actually signed it on Nautica's behalf. The obligations outlined in the contracts predominantly reference ICS and the Union, not Nautica.
An agent can bind its principal, but in this case, the Special Agreement does not obligate Nautica to any contract terms. The Defendants' claim that ICS executed the contract as Nautica's agent lacks support. There is an exception allowing nonsignatories to invoke arbitration if the relationship with signatories is close enough to prevent undermining the arbitration agreement. However, the Defendants failed to demonstrate a sufficiently close relationship between ICS and Nautica or Oceania. Oceania's attempt to compel arbitration based on its parent company status is also unsuccessful, as the arbitration clause does not apply to Toruno Pineda's claims against Nautica. Consequently, the Court lacks subject matter jurisdiction under the Convention and grants Toruno Pineda's motion to remand the case to state court. The Court declines to consider the Defendants' motion to dismiss and compel arbitration due to lack of jurisdiction. The case is remanded to the Circuit Court for the 11th Judicial Circuit in Miami-Dade County, with all pending motions denied as moot.
