Lindo v. NCL (Bahamas), Ltd.

Plaintiff-Appellant Harold Leonel Pineda Lindo (“Lindo”) appeals the district court’s enforcement of the arbitration agreement in his employment contract with Defendant-Appellee NCL (Bahamas) Ltd. (“NCL”). Lindo sues NCL on a single count of Jones Act negligence, pursuant to 46 U.S.C. § 30104. He claims that NCL breached its duty to supply him with a safe place to work. The district court granted NCL’s motion to compel arbitration and dismissed Lindo’s complaint.

Given the New York Convention and governing Supreme Court and Circuit precedent, we must enforce the arbitration clause in Plaintiff Lindo’s employment contract, at least at this initial arbitration-enforcement stage. After review and oral argument, we affirm the district court’s order compelling arbitration of Lindo’s Jones Act negligence claim.

I. FACTUAL BACKGROUND

Plaintiff Lindo is a citizen and resident of Nicaragua. Defendant NCL is a Bermuda corporation that operates cruise ships, with its principal place of business in Miami, Florida. See Spector v. Norwegian Cruise Line Ltd., 545 U.S. 119, 126, 125 S.Ct. 2169, 2175, 162 L.Ed.2d 97 (2005) (referring to NCL as “a Bermuda corporation with a principal place of business in Miami, Florida”).

NCL employed Lindo to serve as a crewmember on the M/S Norwegian Dawn, which flies a Bahamian flag of convenience.1 The ship typically departs from ports in the United States and travels to international locales, such as Bermuda, Canada, and venues throughout the Caribbean.

Lindo alleges that in December 2008, while acting in the scope of his employment on NCL’s private island in the Bahamas,2 he injured his back after he was ordered to transport heavy trash bags to the ship. He later underwent surgery to correct the injury.

A. Lindo’s Employment Contract

Lindo’s employment with NCL was governed by (1) a collective bargaining agreement (“CBA”) negotiated by NCL and the Norwegian Seafarers’ Union, and (2) an employment contract (the “Contract”), which Lindo executed in January 2008.

Lindo’s Contract provides that the “[ejmployee and the employment relationship established hereunder shall at all times be subject to and governed by the CBA.” Lindo’s Contract also provides that, notwithstanding whether he is a union member, he “understands and agrees that with respect to the Employer’s obligations under general maritime law in the event of injury or illness, the terms of the CBA control and the Employee will be provided with benefits, including unearned wages, maintenance, cure and medical care and will be compensated in accordance with said CBA.” Lindo’s Contract “acknowledges that he[ ] has had an opportunity to review said CBA.”

Paragraph 12 of Lindo’s Contract specifies that all Jones Act claims will be re*1261solved by binding arbitration pursuant to the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards (“the New York Convention” or “the Convention”):

Seaman agrees ... that any and all claims ... relating to or in any way connected with the Seaman’s shipboard employment with Company including ... claims such as personal injuries [and] Jones Act claims ... shall be referred to and resolved exclusively by binding arbitration pursuant to the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards....

The Convention requires courts in signatory nations to give effect to private international arbitration agreements and to recognize and enforce arbitral awards entered in other contracting states. See The United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 3. The CBA likewise provides that Jones Act claims will be resolved by binding arbitration pursuant to the Convention.

As to the place of arbitration, Lindo’s Contract states that “[t]he place of the arbitration shall be the Seaman’s country of citizenship, unless arbitration is unavailable under The Convention in that country, in which case, and only in that case, said arbitration shall take place in Nassau, Bahamas.” As to the choice of law, Lin-do’s Contract provides, “The substantive law to be applied to the arbitration shall be the law of the flag state of the vessel.” This entailed that any claim, including Lin-do’s Jones Act claim, would be arbitrated in Nicaragua (Lindo’s country of citizenship) under Bahamian law (the law of the flag state of the vessel).3

Lindo does not challenge the place of arbitration. Rather, Lindo challenges having arbitration at all because Bahamian negligence law, not U.S. statutory negligence law under the Jones Act,4 would apply.

B. Procedural History

In 2009, Lindo filed suit in Florida state court. He asserted various claims: (1) Jones Act negligence, pursuant to 46 U.S.C. § 30104 (Count I); (2) failure to provide entire maintenance and cure (Count II); (3) failure to treat and provide adequate medical cure (Count III); (4) unseaworthiness (Count IV); and (5) an unnumbered count for disability benefits under the CBA. NCL filed a motion to dismiss and compel arbitration.

Pursuant to 9 U.S.C. § 205, NCL also removed the action to the U.S. District Court for the Southern District of Florida and sought to compel arbitration. Lindo filed a second amended complaint alleging a single count of Jones Act negligence. Lindo’s related motion stated that “NCL has to date met its maintenance and cure obligations.”

*1262Subsequently, Lindo opposed NCL’s motion to dismiss and sought a remand to state court. Lindo argued that the arbitration provision in his Contract was void as against public policy because it operated as a prospective waiver of his Jones Act claim. Alternatively, Lindo contended that the arbitration provision should not be enforced due to the economic hardship Lindo would incur because his Contract was unclear regarding the extent to which he must pay arbitration costs.

The district court denied Lindo’s motion to remand, granted NCL’s motion to compel arbitration, and dismissed Lindo’s second amended complaint. See Lindo v. NCL (Bahamas) Ltd., No. 09-22926-CIV, 2009 WL 7264038, at *4, 2009 U.S. Dist. LEXIS 129452, at *10 (S.D.Fla. Dec. 23, 2009); see also 9 U.S.C. § 206 (“A court having jurisdiction under this chapter may direct that arbitration be held in accordance with the agreement at any place therein provided for, whether that place is within or without the United States.”). Lindo timely appealed.

II. THE NEW YORK CONVENTION

A. Enforcement of Arbitration Agreements

We start with the New York Convention referenced in Lindo’s Contract. In 1958, the United Nations Economic and Social Council adopted the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, more commonly known as the New York Convention. In 1970, the United States acceded to the treaty, which was subsequently implemented by Chapter 2 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 201 et seq.

The Convention requires contracting states, such as the United States, to recognize written arbitration agreements concerning subject matter capable of settlement by arbitration:

Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

New York Convention, art. 11(1) (emphasis added). Both Nicaragua (where Lindo is a citizen) and the Bahamas (whose law Lin-do agreed to in his Contract) are also signatories to the Convention.

Section 201 of the FAA provides that the Convention shall be enforced in U.S. courts: “The Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958, shall be enforced in United States courts in accordance with this chapter.” 9 U.S.C. § 201 (emphasis added); see also Indus. Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434, 1440 (11th Cir.1998) (“As an exercise of the Congress’ treaty power and as federal law, the Convention must be enforced according to its terms over all prior inconsistent rules of law.” (quotation marks omitted)). The Supreme Court has stated that “[t]he goal of the Convention, and the principal purpose underlying American adoption and implementation of it, was to encourage the recognition and enforcement of commercial arbitration agreements in international contracts and to unify the standards by which agreements to arbitrate are observed and arbitral awards are enforced in the signatory countries.” Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n. 15, 94 S.Ct. 2449, 2457 n. 15, 41 L.Ed.2d 270 (1974).

B. Two Stages of Enforcement

To implement the Convention, Chapter 2 of the FAA provides two causes of action in federal court for a party seeking to *1263enforce arbitration agreements covered by the Convention: (1) an action to compel arbitration in accord with the terms of the agreement, 9 U.S.C. § 206, and (2) at a later stage, an action to confirm an arbitral aivard made pursuant to an arbitration agreement, 9 U.S.C. § 207. See Czarina, L.L.C. v. W.F. Poe Syndicate, 358 F.3d 1286, 1290-91 (11th Cir.2004).

The Convention contains defenses that correspond to the two separate stages of enforcement mentioned above. Article II contains the “null and void” defense, which — like 9 U.S.C. § 206 — is directed at courts considering an action or motion to “refer the parties to arbitration”:

The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

New York Convention, art. 11(3) (emphasis added). Article II applies at the initial arbitration-enforcement stage. See Bautista v. Star Cruises, 396 F.3d 1289, 1301 (11th Cir.2005) (stating that “[t]he -Convention requires that courts enforce an agreement to arbitrate unless the agreement is ‘null and void, inoperative or incapable of being performed’ ” (quoting New York Convention, art. 11(3))).

Article V of the Convention, on the other hand, enumerates seven defenses that — like 9 U.S.C. § 207 — are directed at courts considering whether to recognize and enforce an arbitral award. Article V applies at the award-enforcement stage. See New York Convention, art. V (listing seven instances where “[Recognition and enforcement of the award may be refused” by “the competent authority where the recognition and enforcement is sought”); see also 9 U.S.C. § 207 (providing “[t]he court shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention”). One of Article V’s seven defenses is the “public policy” defense, which states:

Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:

(b) The recognition or enforcement of the award would be contrary to the public policy of that country.

New York Convention, art. V(2). After arbitration, a court may refuse to enforce an arbitral award if the award is contrary to the public policy of the country. Id. The party defending against the enforcement of an arbitral award bears the burden of proof. Imperial Ethiopian Gov’t v. Baruch-Foster Corp., 535 F.2d 334, 336 (5th Cir.1976).5

Importantly, Article II contains no explicit or implicit public policy defense at the initial arbitration-enforcement stage. See New York Convention, art. II. Meanwhile, Article V’s public policy defense, by its terms, applies only at the award-enforcement stage. See id. art. V(2) (stating when “[Recognition and enforcement of an arbitral award may also be refused”).

Both parties agree that the Convention applies to Lindo’s Contract. Applying the Convention, the district court recognized and enforced Lindo’s agreement to arbitrate his dispute under Bahamian law in the country of his citizenship. On appeal, *1264Lindo argues that his arbitration agreement, by selecting Bahamian law, effectively eliminates his U.S. statutory claim under the Jones Act and is unenforceable under the Convention. Lindo asserts that, despite his agreement binding him to do so, he cannot be required to arbitrate elsewhere under the Convention unless he can pursue a U.S. statutory claim under the Jones Act.

III. REVIEW OF CASE LAW

The Supreme Court and this Circuit have decided multiple cases enforcing forum-selection and choice-of-law clauses in contracts that require (1) suit or arbitration in a non-American forum, (2) application of non-American law, or (3) a combination thereof. Those cases, discussed below, provide the applicable guidelines for reviewing the choice clauses in Lindo’s arbitration agreement.

A. MIS Bremen v. Zapata Off-Shore Co. (U.S. 1972)

Although not strictly an arbitration case, the Supreme Court’s M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972) (“The Bremen”), held that forum-selection clauses are “prima facie valid.” Id. at 10, 92 S.Ct. at 1913. The Supreme Court disclaimed the “parochial concept that all disputes must be resolved under our laws and in our courts” and cautioned that the United States “cannot have trade and commerce in world markets and international waters exclusively on our terms, governed by our laws, and resolved in our courts.” Id. at 9, 92 S.Ct. at 1912-13.

The contract in The Bremen provided that “ ‘[a]ny dispute arising [between the parties] must be treated before the London Court of Justice.’ ” Id. at 2, 92 S.Ct. at 1909. The Supreme Court recognized that English law likely would be applied to adjudicate the claim. See id. at 13 n. 15, 92 S.Ct. at 1915 n. 15 (stating “while the contract here did not specifically provide that the substantive law of England should be applied, it is the general rule in English courts that the parties are assumed, absent contrary indication, to have designated the forum with the view that it should apply its own law”). The Court remarked that “the forum clause was also an effort to obtain certainty as to the applicable substantive law.” Id. Accordingly, the forum-selection clause in The Bremen contained choice-of-law implications as well— English, not American law, would apply. The Supreme Court announced a strong presumption in favor of enforcing such forum-selection clauses, despite the possibility that a markedly different result would be obtained if the case proceeded in English courts as opposed to American courts.6

B. Scherk v. AlbeHo-Culver Co. (U.S. 1971)

Only a few years later, the Supreme Court in Scherk extended these principles to arbitration, reasoning that “[a]n agreement to arbitrate before a specified tribunal is, in effect, a specialized kind of forum-selection clause that posits not only the situs of suit but also the procedure to be used in resolving the dispute.” 417 U.S. at 519, 94 S.Ct. at 2457. Scherk also recognized that U.S. statutory claims are *1265amenable to arbitral resolution — even U.S. statutory claims containing anti-waiver provisions, such as the U.S. securities law barring any provision that requires a security buyer to waive compliance with the Securities Exchange Act of 1934. Id. at 513, 94 S.Ct. at 2454.

Both the district and circuit courts in Scherk had refused to compel arbitration. Id. at 510, 94 S.Ct. at 2452-53. Reversing, the Supreme Court.held that the parties’ agreement, calling for arbitration in Paris applying Illinois law, should be “respected and enforced.” Id. at 519-20, 94 S.Ct. at 2457. The Court stated that “[a] contractual provision specifying in advance the forum in which disputes shall be litigated and the law to be applied is[ ] ... an almost indispensable precondition to achievement of the orderliness and predictability essential to any international business transaction.” Id. at 516, 94 S.Ct. at 2455 (emphasis added). The Scherk majority rejected the dissent’s insistence that “American standards of fairness” must govern the controversy, commenting that such judicial obstinacy “demeans the standards of justice elsewhere in the world, and unnecessarily exalts the primacy of United States law over the laws of other countries.” Id. at 517 n. 11, 94 S.Ct. at 2456 n. 11 (quotation marks omitted).

After declaring that the arbitration clause must be “respected and enforced by the federal courts,” the Supreme Court’s 1974 Scherk decision commented that its holding garnered further support in light of the United States’ 1970 accession to the New York Convention and the treaty’s subsequent implementation by the FAA. Id. at 519-20 & n. 15, 94 S.Ct. at 2457 & n. 15. Although declining to decide whether the New York Convention required of its own force the enforcement of the arbitration clause, the Supreme Court proclaimed that the Convention and the FAA “provide strongly persuasive evidence of congressional policy consistent with the decision we reach today.” Id. at 520 n. 15, 94 S.Ct. at 2457 n. 15.

C. Mitsubishi Motors Corp. , v. Soler Chrysler-Plymouth, Inc. (U.S. 1985)

In Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985), the Supreme Court again enforced an arbitration clause in a sales agreement — this time calling for arbitration in Japan under the rules of the Japan Commercial Arbitration Association — even though a litigant raised U.S. statutory causes of action.

In Mitsubishi, a Japanese car manufacturer (Mitsubishi Motors Corporation) entered into a sales agreement with Soler Chrysler-Plymouth, Inc., a Puerto Rican dealership, for the sale of Mitsubishi-manufactured products. Id. at 616-17, 105 S.Ct. at 3348-49. Mitsubishi sued Soler for payments due and sought to compel arbitration as provided in the sales agreement. Id. at 618-19, 105 S.Ct. at 3349-50. Soler counterclaimed, alleging, inter alia, that Mitsubishi had violated the Sherman Act. Id. at 619-20, 105 S.Ct. at 3350.

In holding that the arbitration agreement was enforceable, the Supreme Court in Mitsubishi stressed the strong presumption favoring the enforcement of arbitration clauses and remarked that “[t]here is no reason to depart from these guidelines where a party bound by an arbitration agreement raises claims founded on statutory rights.” Id. at 626, 105 S.Ct. at 3354. The Supreme Court concluded that a party is bound by its agreement to arbitrate U.S. statutory claims unless Congress has precluded arbitration as to that subject matter:

Just as it is the congressional policy manifested in the Federal Arbitration Act that requires courts liberally to construe the scope of arbitration agree*1266ments covered by that Act, it is the congressional intention expressed in some other statute on which the courts must rely to identify any category of claims as to which agreements to arbitrate will be held unenforceable.... 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. Nothing, in the meantime, prevents a party from excluding statutory claims from the scope of an agreement to arbitrate.

Id. at 627-28, 105 S.Ct. at 3354-55 (emphasis added).

This is consistent with Article 11(1) of the Convention, which states that “[e]ach Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences ... concerning a subject matter capable of settlement by arbitration.” New York Convention, art. 11(1) (emphasis added). The Mitsubishi Court agreed that Article 11(1) “contemplates exceptions to arbitrability grounded in domestic law.” 473 U.S. at 639 n. 21, 105 S.Ct. at 3360 n. 21. In other words, courts may examine, at the arbitration-enforcement stage, whether a type of statutory claim cannot be submitted to arbitration. The Supreme Court stressed, however, that this subject-matter exception is a policy decision to be made by Congress, not courts:

The utility of the Convention in promoting the process of international commercial arbitration depends upon the willingness of national courts to let go of matters they normally would think of as their own. Doubtless, Congress may specify categories of claims it wishes to reserve for decision by our own courts without contravening this Nation’s obligations under the Convention. But we decline to subvert the spirit of the United States’ accession to the Convention by recognizing subject-matter exceptions where Congress has not expressly directed the courts to do so.

Id. (emphasis added).

The Mitsubishi Court rejected the argument that Sherman Act antitrust claims were unsuitable for arbitration. The Supreme Court adverted to its decision in Scherk, concluding that “concerns of international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of disputes require that we enforce the parties’ agreement, even assuming that a contrary result would be forthcoming in a domestic context.” Id. at 629, 105 S.Ct. at 3355 (emphasis added). The Mitsubishi Court observed that “The Bremen and Scherk establish a strong presumption in favor of enforcement of freely negotiated contractual choice-of-forum provisions,” that this presumption is “reinforced by the emphatic federal policy in favor of arbitral dispute resolution,” and that this federal policy “applies with special force in the field of international commerce.” Id. at 631, 105 S.Ct. at 3356.

Because the meaning of dicta in Mitsubishi's footnote 19 is so hotly disputed by the parties, we discuss it in detail. In footnote 19, the Supreme Court commented that the United States, acting as amicus curiae, raised the possibility that the Japanese arbitral panel could read the choice-of-law provision to “wholly ... displace American law,” not just as to the interpretation of the contract terms but also where it would otherwise apply. Id. at 637 n. 19, 105 S.Ct. at 3359 n. 19. Although the arbitration clause provided Swiss law governed the agreement, Mitsubishi conceded in oral argument that American law would apply to the antitrust claims in arbitration. Id. The Supreme *1267Court stated it had “no occasion to speculate on this matter at this stage in the proceedings, when Mitsubishi seeks to enforce the agreement to arbitrate, not to enforce an award.” Id. The Supreme Court added there was no need to “consider now the effect of an arbitral tribunal’s failure to take cognizance of the statutory cause of action on the claimant’s capacity to reinitiate suit in federal court.” Id. (emphasis added).

In continuing dicta in footnote 19, the Supreme Court “merely note[d]” that in the event the “choice-of-forum and choice-of-law clauses operated in tandem as a prospective waiver of a party’s right to pursue statutory remedies for antitrust violations, we would have little hesitation in condemning the agreement as against public policy.” Id. The Supreme Court’s footnote 19 provided no examples of the types of clauses constituting such an impermissible prospective waiver. And to date, the Supreme Court has never invalidated an arbitration agreement under the “prospective waiver” reasoning of footnote 19. Instead, it has compelled arbitration at the initial arbitration-enforcement stage, noting that this “prospective waiver” issue is premature and should instead be resolved at the arbitral award-enforcement stage. See Vimar Seguros y Reaseguros, S.A v. M/V Sky Reefer, 515 U.S. 528, 540-41, 115 S.Ct. 2322, 2329-30, 132 L.Ed.2d 462 (1995) (concluding, at arbitration-enforcement stage, that ruling on “prospective waiver” question would be “premature” given subsequent opportunity for review at award-enforcement stage); see also 14 Penn Plaza LLC v. Pyett, 556 U.S. 247, -, 129 S.Ct. 1456, 1474, 173 L.Ed.2d 398 (2009) (stating, at arbitration-enforcement stage, that resolution of the question of a prospective waiver of “federally protected civil rights .... at this juncture would be particularly inappropriate in light of our hesitation to invalidate arbitration agreements on the basis of speculation” (citations omitted and emphasis added)).

Notably, Mitsubishi is consistent with the fact that an Article V public policy defense applies at the award-enforcement stage, not the initial arbitration-enforcement stage; Immediately following footnote 19, the text of Mitsubishi discussed how the Court’s enforcement of the arbitration clause did not divest federal courts of their authority to review the arbitrators’ ultimate decision. 473 U.S. at 636, 105 S.Ct. at 3359-60. At the award-enforcement stage, federal courts retain the ability to review whether the arbitral proceeding paid sufficient heed to a litigant’s claims and the public policies underlying them: “Having permitted the arbitration to go forward, the national courts of the United States will have the opportunity at the award-enforcement stage to ensure that the legitimate interest in the enforcement of the antitrust laws has been addressed.” Id. at 638, 105 S.Ct. at 3359 (emphasis added).

Additionally, the Mitsubishi Court observed that Article V of the New York Convention “reserves to each signatory country the right to refuse enforcement of an award where the ‘recognition or enforcement of the award would be contrary to the public policy of that country.’ ” Id. (emphasis added) (quoting New York Convention, art. V(2)(b)). Further allaying concerns that such public policy review would occur too late in the process, the Supreme Court stated that although “the efficacy of the arbitral process requires that substantive review at the award-enforcement stage remain minimal, it would not require intrusive inquiry to ascertain that the tribunal took cognizance of the antitrust claims and actually decided them.” Id. at 638, 105 S.Ct. at 3360. In other words, at the arbitral award-enforcement stage, a court can ascertain if the *1268arbitral tribunal recognized the antitrust claims. The Supreme Court gave no indication that an Article V public policy analysis — which by its own terms applies when the “[rjecognition and enforcement of an arbitral award” is sought, New York Convention art. V(2) — should be conducted pri- or to the award-enforcement stage.

D. Vimar Seguros y Reaseguros v. M/V Sky Reefer (U.S. 1995)

Importantly for the issue here, Vimar extended this wait-and-see principle of Mitsubishi even further. In Vimar, a U.S. distributor purchased fruit to be shipped from Morocco in a vessel owned by a Panamanian company and time-chartered to a Japanese company. 515 U.S. at 530, 115 S.Ct. at 2325. Because the fruit cargo was damaged en route, the U.S. distributor and its subrogated marine cargo insurer brought suit in federal district court against the ship in rem and its Panamanian owner in personam, while those defendants sought to compel arbitration. Id. at 531-32, 115 S.Ct. at 2325.

The Supreme Court enforced the arbitration provision providing that disputes “shall be referred to arbitration in Tokyo by the Tokyo Maritime Arbitration Commission” and that the contract “shall be governed by the Japanese law.” Id. at 531, 115 S.Ct. at 2325 (quotation marks omitted). The Supreme Court acknowledged that the substantive law prospectively applied in the Japanese arbitration proceedings could reduce the defendant Panamanian shipping carrier’s liability below the U.S. legal guarantees afforded to the American cargo owner under the Carriage of Goods by Sea Act (“COGSA”).7 Id. at 539-40,