August 2010 E Alerts

Menseses v. Carnival Corp., 2010 WL 3221953 (S.D. Fla., Aug. 4, 2010)

Defendant brought a motion to dismiss and compel arbitration.  Plaintiff, a Philippine national, sustained injuries in the course of his employment on defendant’s cruise ships and alleged, inter alia, Jones Act negligence.  The parties had entered into a Seafarer Agreement, which pursuant to the New York Convention requires arbitration in a location close to the seafarer’s home country. The agreement in dispute contained a severability provision and a choice of law clause providing for the settlement of disputes “in accordance with the laws of the flag of the vessel on which Seafarer is assigned at the time the cause of action accrues.”  The court reviewed two conflicting 11th Circuit cases, Bautista v. Star Cruises, 396 F.3d 1289 (11th Cir. 2005) and Thomas v. Carnival Corp., 573 F.3d 1113 (11th Cir. 2009).  The Thomas court rendered an arbitration provision invalid because it would have deprived the plaintiff from its U.S. statutory rights under the Wage Act.  In the case at hand, the court first held a “fair reading” of Thomas indicates it applies to statutes such as the Jones Act.  Furthermore, there existed a “distinct possibility” that, were the choice of law provision to be upheld, U.S. law would not be applied and the plaintiff would receive no reward.  In light of the severability clause, the court struck the choice of law provision from the Seafarer’s Agreement, sending the plaintiff’s claims to arbitration applying U.S. law.

TracFone Wireless, Inc. v. Distelec Distribuciones Electronicas, S.A. de C.V., 2010 WL 3359529 (S.D. Fla., Aug. 23, 2010)

Plaintiff brought complaint against defendant, a Honduran corporation, for trademark infringement, copyright infringement, unfair competition, breach of contract, tortious interference, conspiracy, and unjust enrichment, through its alleged business transactions in the United States and with individuals and entities based in Florida.  Plaintiff served defendant’s agent, Lic. Zuleyma Avelar, with the initial service of process, filed a proof of this service, moved for a Clerk’s default against defendant.  Default against defendant was granted.   Plaintiff subsequently moved for final default judgment against defendant.  Defendant moved to dismiss due to insufficient service of process and lack of personal jurisdiction.  The court relied on Rule 4(f)(2) of the Federal Rule of Civil Procedure to determine that plaintiff did not properly serve defendant, since it did not first attempt to serve the President of the corporation as is required by Honduran law.  The court vacated the default judgment against the defendant and denied the plaintiff’s motion for Final Default Judgment.   The court also denied the defendant’s motion to dismiss.  Plaintiffs moved for Court-Directed Alternative Service of Process via Fed-Ex and by hand-delivery to the defendant’s attorneys in the U.S.  The court granted the plaintiff’s Motion for Court-Directed Alternative Service of Process since under Rule(f)(3) the plaintiffs proposed alternative methods were not expressly prohibited by Honduran Law.  In a second, related, issue plaintiff moved for enlargement of time to complete service on defendant.  That motion was granted.  Defendant’s motion to quash plaintiff’s attempt of substituted service was denied without prejudice as service on defendant has not yet been fully completed.

Estate of Amergi ex rel. Amergi v. Palestinian Auth., 611 F.3d 1350 (11th Cir. 2010)

Estate of Israeli citizen, who was shot and killed as she drove her car in the Gaza Strip, brought action against the Palestinian Authority (PA) and the Palestine Liberation Organization (PLO) under the Alien Tort Statute (ATS) and the Federal Terrorism Act (FTA). The United States District Court for the Southern District of Florida entered judgment in favor of defendants.  The Eleventh Circuit, affirming, explained that since the plaintiff did not advance the terrorism theory on appeal and did not allege state action, genocide, ethnic cleansing, multiple war crimes, mass killings, rapes, or summary execution, the holding was limited to “onlythat a single murder committed by private actors in the course of an ongoing armed conflict cannot confer subject matter jurisdiction on federal courts under the ATS.”  In reaching the decision, the court explained that it was bound by the direction of the Supreme Court “to compare any proposed cause of action under the ATS to the three torts contemplated at the time of its passage-offenses against ambassadors, violations of safe conduct, and piracy.”  Sosa v. Alvarez-Machain, 542 U.S. 692 (2004).  The court explained that a murder by private actors falls outside of the narrow set of situations that have serious consequences in international affairs, which allow Federal courts to assume jurisdiction under the ATS.

World Holdings, LLC v. The Federal Republic of Germany, 2010 WL 3081442 (11th Cir. 2010)

World Holdings was a holder of German bonds that were issued prior to World War II through the New York Stock Exchange.  Before the War, Germany had ceased to pay outstanding principal and accrued interest payments on these bonds.  In 1953, the United States and Germany signed a Treaty to settle the claims on these bonds.  The Treaty stated that in order for a claimant to enforce Germany to pay the debt, the bond must be validated.  Validation consisted of review by special committees.  These committees no longer existed when World Holdings sought validation.  World Holdings sued under the Foreign Sovereign Immunities Act’s commercial activity exception.  This exception states that a foreign sovereign could avail itself of US jurisdiction if its commercial activities were performed within the United States.  The 11thCircuit questioned whether the 1953 Treaty expressly conflicts with the immunity provisions of the Foreign Sovereign Immunities Act, specifically, the commercial-activity exception which serves to abrogate Germany’s immunity.  The court held that the disputed clause in the Treaty to mean that it did not preclude a plaintiff from bringing a legal action in the United States.  The court found that the Treaty did not explicitly express any intent to deny claimants of the bonds access to US courts to determine whether their bonds were enforceable.  Also, the court found that it had jurisdiction under the commercial-activity exception because the German bonds were issued in the US.

Submitted by:  Feleke Kassegn, Kristin Drecktrah, Erin Miller, John Faulconer, and Agesilaos Pappas (All students at Florida International University College of Law and members of the FIU International Arbitration Society)