Cruise Line Has No Right To Demand Arbitration Without Signing Arbitration Agreement

In CAPPELLO v. CARNIVAL CORPORATION, 23 Fla. L. Weekly Fed. D317a (S.D. Fla. Aug. 10, 2012) (J. Altonaga), a crewmember and his wife filed a lawsuit in state court against Carnival Corporation (“Carnival”) alleging breach of warranty of seaworthiness, Jones Act negligence, failure to provide maintenance and cure, failure to provide prompt, proper and adequate maintenance and cure, common law negligence and loss of consortium. Carnival filed a Notice of Removal of the lawsuit attempting to compel the Plaintiff to arbitrate his claims against Carnival. The Plaintiffs in turn filed a Motion to Remand the case back to state court.

The District Court found that it lacked federal question jurisdiction over the seaman's action under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Convention because Convention does not apply. The court found that Carnival had not met the jurisdictional prerequisites of the Convention by presenting a signed arbitration agreement between parties and, instead, produced only an “Officer's Agreement” to which it is not a signatory. The District Court further held that the doctrine of equitable estoppel does not allow Carnival, as non-signatory to the document it relies on, to compel arbitration where it makes no showing of how the Plaintiffs' claims implicate terms of Officer's Agreement . The court reasoned that to extent Carnival contends the seaman was equitably estopped from avoiding arbitration because underlying incident giving rise to his claims arose while he was employed, and the seaman was employed by means of Officer's Agreement, Eleventh Circuit precedent forecloses this line of reasoning.

The court further found that there was no existential basis for federal jurisdiction under admiralty law, and Carnival alleged no other basis for federal jurisdiction. Therefore, the court held that because it lacked subject matter jurisdiction, remand was appropriate and it is therefore inappropriate to rule on substantive merits of claim and granted the Plaintiffs leave to address appropriateness of attorney's fees and costs for improper removal.

If you are interested in receiving a complete copy of this decision, please feel free to contact me at mov@chaloslaw.com.

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