Eleventh Circuit Determines That Some But Not All Claims Must Be Arbitrated

by Cadwalader, Wickersham & Taft LLP
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Jane Doe v. Princess Cruse Lines, Ltd., Jane Doe v. Princess Cruse Lines, Ltd., No. 10-10809 (11th Cir. 2011), addresses the important necessity of careful corporate drafting of international arbitration provisions, a topic we have posted on in the past.

Plaintiff Doe alleged a harrowing story of a woman working for Princess Cruise Lines on one of its ships, who alleged she was drugged by other employees, raped, and physically injured while she was unconscious, and, as the Court of Appeals summarized, “when she reported to officials of the cruise line what had happened to her they treated her with indifference and even hostility, failed to provide her with proper medical treatment on board, and interfered with her attempts to obtain medical treatment and counseling ashore”.  The issue before the Circuit was whether and to what extent her claims were arbitrable under a broad arbitration provision.  In addition to making specific reference to the required arbitrability of claims for personal injury, the arbitration provision specified:

[T]he Company and crew member agree that any and all disputes, claims, or controversies whatsoever (whether in contract, regulatory, tort or otherwise and whether pre-existing, present or future and including constitutional, statutory, common law, admiralty, intentional tort and equitable claims) relating to or in any way arising out of or connected with the Crew Agreement, these terms, or services performed for the Company.

Despite its breadth, the Court of Appeals determined that many of the plaintiff’s claims did not have to be arbitrated.  The Court held that the “relating to”, “arising out of”, and “connected to” language “marks a boundary by indicating some direct relationship” or “direct connection”; hence, claims that were not even indirectly tethered to the work environment or relationship fell outside the arbitration provision.  The Court of Appeals so held notwithstanding the following holding of the Supreme Court in Aguilar v. Standard Oil Co. of N.J., 318 U.S. 724 (1943):

Unlike men employed in service on land, the seaman, when he finishes his day’s work, is neither relieved of obligations to his employer nor wholly free to dispose of his leisure as he sees fit. Of necessity, during the voyage he must eat, drink, lodge and divert himself within the confines of the ship. In short, during the period of his tenure the vessel is not merely his place of employment; it is the frame-work of his existence. For that reason among others his employer’s responsibility for maintenance and cure extends beyond injuries sustained because of, or while engaged in, activities required by his employment. In this respect it is a broader liability than that imposed by modern workmen’s compensation statutes.

The Court also held that Princess had waived its right to claim on appeal that the arbitrator, not the Court, should have decided the issue of arbitrability in the first instance; the Court found that Princess waived any right to appeal since it was Princess that went to the District Court in the first place.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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