Opinion ID: 796847
Heading Depth: 2
Heading Rank: 2

Heading: Terrebonne's Arguments and Applicable Law

Text: 18
19 Terrebonne focuses his appeal almost entirely on the district court's September 2002 order to arbitrate and the validity or enforceability of the March 2001 arbitration agreement. Specifically, he makes two challenges against the agreement: First, he asserts that the arbitration agreement is subsumed into his employment contract and therefore unenforceable per section one of the FAA, 9 U.S.C. § 1, which excludes contracts of employment of seamen from the FAA's purview. Second, Terrebonne contends that the agreement is void under section five of the FELA, which is applicable here by virtue of the Jones Act, 46 U.S.C.App. § 688. 10 Section Five of the FELA provides in relevant part that [a]ny contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this chapter, shall to that extent be void. 45 U.S.C. § 55. We consider each argument in turn below.
20 The FAA compels judicial enforcement of a wide range of written arbitration agreements. Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S.Ct. 1302, 1307, 149 L.Ed.2d 234 (2001). Accordingly, the FAA generally declares valid and enforceable written provisions for arbitration in any maritime transaction . . . . Freudensprung, 379 F.3d at 339. This is consistent with the FAA's purpose, which was to reverse the longstanding judicial hostility to arbitration agreements. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647, 1651, 114 L.Ed.2d 26 (1991). 21 Section one of the FAA, however, provides that nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce. 9 U.S.C. § 1. Terrebonne argues that this exclusion applies in the instant case because the March 2001 agreement is subsumed into his employment contract. We find this argument unpersuasive. 22 First, we note that the agreement here only partially settles claims for benefits and damages related to Terrebonne's November 2000 injury. It does not purport either to employ Terrebonne or to modify Terrebonne's contract of employment in any way. Thus, on its face, the agreement does not appear to fall within section one's exception for contracts of employment of seamen. 23 Terrebonne, however, argues that the March 2001 agreement is subsumed into his employment contract because the agreement covers his maintenance and cure claims. Because maintenance and cure are inseparable from a seaman's employment, he contends, the agreement necessarily constitutes part of his employment contract, such that the agreement falls within section one's exception. 11 24 The March 2001 agreement indeed covered Terrebonne's maintenance and cure claims up to the time that the agreement was entered into. We reject, however, Terrebonne's assertion that these maintenance and cure claims necessarily implicate his employment contract. Certainly, there is case law using generalized language connecting maintenance and cure to the seaman's employment contract. See, e.g., Aguilar v. Standard Oil Co. of N.J., 318 U.S. 724, 63 S.Ct. 930, 933-34, 87 L.Ed. 1107 (1943) (In the United States [maintenance and cure] has been recognized consistently as an implied provision in contracts of marine employment.); Tate v. Am. Tugs, Inc., 634 F.2d 869, 870 (5th Cir.1981) (The right of an injured seaman to maintenance is a form of compensation that arises out of the contract of employment.). Yet, we have clarified that maintenance and cure is an intrinsic part of the employment relationship, separate from the actual employment contract: 25 [M]aintenance and cure differs from contractual rights. The Court, in Cortes v. Baltimore Insular Line, 287 U.S. 367, 371, 53 S.Ct. 173, 77 L.Ed. 368 (1932), held that maintenance and cure `is imposed by the law itself as one annex to the employment . . . . Contractual it is [in the] sense that it has its source in a relation which is contractual in origin, but given the relation, no agreement is competent to abrogate the incident.' Wood v. Diamond M Drilling Co., 691 F.2d 1165, 1170 (5th Cir.1982) (concluding that recovery of maintenance and cure is not subject to the same mitigation limitations that govern recovery based on ordinary contractual rights). 12 26 In other words, maintenance and cure is an essential part of the seaman's employment relationship that cannot be contracted away: The duty to provide maintenance attaches once the seaman enters the service of the ship and it is `a duty that no private agreement is competent to abrogate.' Baldassaro v. United States, 64 F.3d 206, 212 (5th Cir.1995) (quoting De Zon v. Am. President Lines, 318 U.S. 660, 63 S.Ct. 814, 818, 87 L.Ed. 1065 (1943)). 27 It is true that collective bargaining agreements may validly set the rate of maintenance and cure. See id. at 212 (The right to maintenance cannot be abrogated, but it can be modified and defined by contract.). But we do not accept that this in turn means that maintenance and cure is part of the employment contract. Further, while the March 2001 agreement states that K-Sea is obligated to pay maintenance and cure, it does not purport to change anything regarding that obligation or regarding Terrebonne's employment with K-Sea. Thus, we conclude the agreement is not subsumed into Terrebonne's employment contract, and does not fall under section one's exception to the FAA's coverage. 13
28 We also reject Terrebonne's assertion that because this is a Jones Act case, the arbitration agreement is invalid for the reason that it violates section five of the FELA. In passing the Jones Act, Congress did not specifically enumerate the rights of seamen, but extended to them the same rights granted to railway employees by FELA. Withhart v. Otto Candies, L.L.C., 431 F.3d 840, 843 (5th Cir. 2005). Section five of the FELA invalidates [a]ny contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this chapter . . . . 45 U.S.C. § 55 (2000). 29 For his FELA-based argument, Terrebonne relies heavily on Boyd v. Grand Trunk Western R.Co., 338 U.S. 263, 70 S.Ct. 26, 94 L.Ed. 55 (1949) (per curiam). In Boyd the railroad employee, having been injured on the job, agreed, in exchange for his employer's cash advances against whatever settlement or recovery was later achieved, that any suit to be filed on account of the injury would be filed only in a district (or county) that was either his residence when injured or in which the injury occurred. Both such locations were in Michigan, but the employee filed suit in the Supreme Court of Cook County, Illinois. The railroad sued the employee in Michigan state court to enjoin his prosecution of the Illinois suit, and the Michigan Supreme Court ruled for the railroad. The United States Supreme Court reversed, holding that the Illinois suit was in a venue specifically authorized under section 6 of the FELA 14 and that hence FELA section 5 voided the agreement excluding that venue provided for in section 6. 30 For several reasons, we are not persuaded that Boyd controls here. 31 To begin with, the venue provisions of section 6 of the FELA — which Boyd held protected by FELA section 5 — do not apply to the Jones Act, which has its own venue provision contained in the last sentence of section 688(a) (see note 10, supra ), and provides for venue in a district where the defendant employer resides or his principal office is located. 15 Venue of a Jones Act case is hence not provided for in section 6, or in any other provision, of the FELA. We directly so held in Pure Oil Co. v. Suarez, 346 F.2d 890, 892 (5th Cir. 1965), affirmed on other grounds, 384 U.S. 202, 86 S.Ct. 1394, 16 L.Ed.2d 474 (1966). There, the plaintiff seaman brought a Jones Act and general maritime law suit against his employer, Pure Oil Company, in the Southern District of Florida. The defendant moved to transfer the case to the Northern District of Illinois, it being undisputed that it was incorporated in Ohio and had its principal office in Illinois, although it did do substantial business in the Southern District of Florida when the suit was commenced. The district court denied the motion to transfer, but certified its ruling to this court under 28 U.S.C. § 1292(b). We noted that [t]he relevant language of the Jones Act, 46 U.S.C.App. § 688 provides for venue in the district in which the defendant employer resides or has its principal office, and that in the absence of a statutory directive to the contrary, the `residence' of a corporation for venue purposes is limited to the state of its incorporation. Id. at 891-92. We stated that appellee [seaman] makes two arguments in support of the district court's denial of the motion to transfer, describing the first of these as follows: . . . appellee argues that the special venue provisions of the Federal Employers Liability Act, under which venue against Pure Oil would undoubtedly be proper in the instant case, are applicable to a civil action under the Jones Act. Id. at 892 (footnote omitted). 16 Characterizing this argument as one which can be disposed of in short order, we emphatically rejected it, stating: 32 However, this argument does not adequately accommodate the well-recognized and eminently logical canon of statutory construction that the specific provisions of a statute control exclusively over the broader and more general provisions of another statute which may relate to the same subject matter in the absence of a clear manifestation to the contrary by the legislature . . . . [citations omitted]. As one court has stated, `The short answer to [appellee's] argument is that Congress has seen fit to impose different venue requirements in Jones Act cases. To now hold that the venue requirements under the Federal Employers' Liability Act are controlling would negate the plain language of 46 U.S.C.App. § 688.' Rodriguez v. United Fruit Co., 236 F.Supp. 680, 682 (E.D. Va. 1964). Id. 33 Having rejected the seaman-appellee's first argument, we proceeded to consider his second, characterized as a far more appealing argument, which was that the definition of the term `residence' which was added to the general venue statute in 1948, 28 U.S.C.A. § 1391(c), should be read into the Jones Act. Id. at 893. 17 Under the terms of section 1391(c), as added in 1948, any judicial district in which a corporation is incorporated or licensed to do business or is doing business . . . shall be regarded as the residence of such corporation for venue purposes. Agreeing with appellee's second argument, we held that this definition of a corporate defendant's residence in section 1391(c) applied to determine the district in which the corporate defendant employer resides as provided in section 688, and on that basis affirmed the district court's denial of the motion to transfer. Id. at 893-97. In this latter connection we considered and rejected the contention that the Supreme Court's decision in Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 77 S.Ct. 787, 1 L.Ed.2d 786 (1957) (holding section 1391(c) did not define a corporate defendant's residence under 28 U.S.C. § 1400(b) applicable to patent infringement suits) dictated a contrary result. Id. at 894 et seq. 34 The Supreme Court granted certiorari to resolve the issue concerning section 1391(c), section 688, and the Fourco case, and ultimately affirmed this court, holding that the section 1391(c) definition of corporate residence applied to determine the district in which the corporate defendant employer resides as provided in § 688. Pure Oil Co. v. Suarez, 86 S.Ct. 1394 (1966). The Supreme Court did not mention our holding that the venue provisions of section 6 of the FELA did not apply to the Jones Act. 18 We note, however, that the section 1391(c) question would not have any practical importance if Jones Act venue included whatever venue would be proper under section 6 of the FELA because section 1391(c) embraced no venue not authorized by section 6. 35 Because, under our decision in Pure Oil Co., the venue provisions of section 6 of the FELA are inapplicable to Jones Act cases, it necessarily follows that nothing in section 5 of the FELA is applicable to Jones Act venue. Hence, neither Boyd nor section 5 dictate the result here. 19 36 Boyd is also to be distinguished because it did not in any way involve the FAA (or, indeed, an agreement to arbitrate). There was no federal statute authorizing or providing for the enforcement of the type of agreement involved in Boyd. In Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991), the Court upheld an agreement to arbitrate governed by the FAA, specifically distinguishing prior cases on the ground, inter alia, that those cases were not decided under the FAA, which, as discussed above, reflects a `liberal federal policy favoring arbitration agreements.' Id. at 1657 (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth Inc., 473 U.S. 614, 105 S.Ct. 3346, 3353, 87 L.Ed.2d 444 (1985)). See also, e.g., Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 107 S.Ct. 2332, 2337, 96 L.Ed.2d 185 (1987) (The Arbitration Act thus establishes a federal policy favoring arbitration) (inside quotation marks and citation omitted). Here, in contrast to Boyd, the FAA is involved and thus the issues  must be addressed with a healthy regard for the federal policy favoring arbitration. Gilmer, 111 S.Ct. at 1652 (emphasis added; inside quotation marks and citation omitted). 20 37 Terrebonne answers this argument solely by relying on Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953). Wilko was a suit by a customer against a brokerage firm alleging the firm sold him certain securities by misrepresentations. The suit was pursuant to sections 12(2) and 22(a) of the Securities Act of 1933, 15 U.S.C. § 77l(2), 77v(a), which respectively provide that under certain circumstances the seller making such misrepresentation shall be liable to the person purchasing such security from him, who may sue . . . in any court of competent jurisdiction, to recover the consideration paid . . ., and that the United States District Courts have jurisdiction over such suits, with venue in a district where, inter alia, the defendant is found or transacts business or where the sale took place but precluding removal of state court suits. The defendant moved under section 3 of the FAA to stay trial of the suit pending completion of arbitration, relying on the arbitration provisions of the plaintiff's margin agreement with the brokerage firm (executed prior to the challenged sale). The Supreme Court noted that section 14 of the Securities Act, 15 U.S.C. § 77(a), provided that [a]ny condition, stipulation, or provision binding any person acquiring any security to waive compliance with any provision of this subchapter . . . shall be void. Id. at 184 n. 6. It went on to hold that the arbitration agreement was invalid because 38 The words of § 14, . . . void any `stipulation' waiving compliance with any `provision' of the Securities Act. This arrangement to arbitrate is a `stipulation,' and we think the right to select the judicial forum is the kind of `provision' that cannot be waived under § 14 of the Securities Act. 39 Id. at 186, and that Congress must have intended § 14 . . . to apply to waiver of judicial trial and review. Id. at 188. The Wilko Court then continued by stating: 40 This accords with Boyd v. Grand Trunk Western R. Co., . . . . We there held invalid a stipulation restricting an employee's choice of venue in an action under the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq. Section 6 of that Act permitted suit in any one of several localities and § 5 forbade a common carrier's exempting itself from any liability under the Act. Section 5 had been adopted to avoid contracts waiving employers' liability . . . . We said the right to select the `forum' . . . is a `substantial right' and that the agreement, restricting that choice, would thwart the express purpose of the statute. Id. (footnotes omitted). 41 However, over a decade ago the Supreme Court, in Rodriguez De Quijas v. Shearson/American Express Inc., 490 U.S. 477, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989), expressly overruled Wilko, and held that a predispute agreement to arbitrate was validly applicable to a claim under section 12(2) of the Securities Act and was not invalided by section 14 thereof. 21 Rodriguez observed that Wilko's characterization of the arbitration process was pervaded by . . . `the old judicial hostility to arbitration' which had become outmoded and had fallen far out of step with our current strong endorsement of the federal statutes favoring this method of resolving disputes. Id. at 1920. It rejected the Wilko 's holding that § 14 did not permit waiver of `the right to select the judicial forum', id. at 1919, on the ground that [b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum.' Id. at 1920 (internal quotation marks and citation omitted). It likewise held, with reference to the procedural litigation provisions contained in the Securities Act, such as the statute's broad venue provisions, nationwide service of process and concurrent jurisdiction in the state and federal courts without possibility of removal, that: There is no sound basis for construing the prohibition in § 14 on waiving `compliance with any provision' of the Securities Act to apply to these procedural provisions. Id. These holdings are similarly applicable here. Under the arbitration agreement, Terrebonne does not forgo the substantive rights afforded by the Jones Act (and the general maritime law), he only submits to their resolution in an arbitral, rather than a judicial, forum. 42 Terrebonne argues in his post-submission brief (see note 21 supra ) that Rodriguez is restricted to business transactions. That argument, however, is clearly refuted by Gilmer, which relied on, inter alia, Rodriguez, to enforce under the FAA a pre-dispute arbitration agreement as applied to an individual employee's claim under the Age Discrimination in Employment Act. See Gilmer, 111 S.Ct. at 1652, 1654, 1655. 22 43 In this connection, Terrebonne further passingly contends, in a most conclusory fashion, that requiring arbitration of a seaman's Jones Act claim is contrary to public policy. But, as noted above, the FAA establishes a federal policy favoring arbitration. McMahon, 107 S.Ct. at 2337. The burden is on Terrebonne to show a contrary and compelling public interest. Gilmer, 111 S.Ct. at 1652. Terrebonne has made no such showing. Having made the bargain to arbitrate, the party should be held to it unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue. Gilmer at 1652 (citation and inside quotation marks omitted). 23 The only such indication on the part of Congress is the concluding clause of section 1 of the FAA which expressly exempts from the FAA, and from the binding effect it gives to pre-dispute contracts to arbitrate, contracts of employment of seamen, railroad employees, or other such in-commerce transportation workers. Beyond that express exemption, there is certainly no more public policy reason to exempt seamen from the binding effect of pre-dispute contracts — other than contracts of employment — to arbitrate Jones Act or general maritime law claims against their employer than there is to exempt employees protected by the various civil rights or employee protection statutes from the binding effect of pre-dispute contracts to arbitrate claims under such statutes against their employer. See Gilmer and note 22 supra. 44 This comports with our decision in Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327 (5th Cir.2004), where we affirmed the district court's orders staying litigation of the plaintiff's Jones Act claim pending arbitration. Id. at 332. We noted that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. §§ 201-208, governs concurrently with the FAA in this case. Id. at 338. We held that even assuming arguendo that the Consultant's Agreement [by which the defendant retained the plaintiff] is a seaman's employment contract, the arbitration agreement contained therein is nonetheless enforceable pursuant to the Convention . . . . Id. We rejected the plaintiff's argument 45 . . . that a `pre-injury' agreement to arbitrate rather than litigate his personal injury claims is `inherently unfair' because he could not have made an informed decision concerning his post-injury remedies before his injury had occurred and before any medical advice was available to him. The difficulty with this argument is that the same could be said of any advance agreement to arbitrate personal injury claims, and it is by now beyond cavil that such agreements are presumptively enforceable. As noted above, Freudensprung and OTSI agreed to arbitrate `any dispute' arising out of the Consultant's Agreement. It is `[o]nly by rigorously enforcing arbitration agreements according to their terms, do we give effect to the contractual rights and expectations of the parties, without doing violence to the policies behind the FAA.' Ford v. NYLCare Health Plans of Gulf Coast, Inc., 141 F.3d 243, 248-49 (5th Cir.1998) (quoting Volt Information Sci., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989)). Id. at 342. 46 The plain implication is that if the agreement was not contained in a seaman's contract of employment it would be enforceable under the FAA. 47 We observe that, beyond vague references to the unfairness of pre-injury arbitration agreements (of seamen and of others) generally and generically, Terrebonne has never asserted in this case (or urged on this appeal) that the March 12, 2001 agreement here was invalid because it was not (or was not shown to be) sufficiently voluntary, informed and understood on his part, or because the amount paid for damages incurred up until March 12, 2001 was not (or was not shown to be) fair and adequate, or because the agreement was not otherwise sufficiently fair or shown to be so. Terrebonne's public policy arguments lack merit.
48 In addition to challenging the arbitration agreement's enforceability, Terrebonne asserts that if the agreement is enforceable, his re-injury is separate from his prior hernia and thus outside the agreement's coverage. We hold that the district court did not err in compelling arbitration or confirming the arbitration award on this basis; the agreement was sufficiently broad for the district court to compel arbitration and allow the arbitration panel to determine its scope. 49 The agreement clearly states that it encompasses any claims related to Terrebonne's November 2000 injury. Terrebonne's complaint in this action is for damages for both his 2000 accident and his April 2001 re-injury. Terrebonne has nowhere asserted that he is only or even mainly asking for damages for his reinjury. Further, Terrebonne has not explained anywhere how these two are different. Thus, in light of Terrebonne's complaint — which lumps together the November 2000 and April 2001 injuries — the arbitration agreement was broad enough to be submitted to the arbitrators for determination of whether Terrebonne's reinjury fell within the agreement's scope. See in re Complaint of Hornbeck Offshore (1984) Corp., 981 F.2d 752, 754-55 (5th Cir.1993) (stating that this court distinguishes between broad and narrow arbitration clauses, and explaining, If the clause is broad, the action should be stayed and the arbitrators permitted to decide whether the dispute falls within the clause). We conclude that the arbitration clause is broad. See, e.g., Hornbeck Offshore at 755 (any dispute is broad) and Beiser v. Weyler, 284 F.3d 665, 669-70 (5th Cir.2002) (relates to has a plainly broad meaning). Terrebonne has not attacked the award rendered by the arbitration panel; nor has he attacked the arbitrators' decision that the reinjury fell within the agreement's scope.