16-465
Pagaduan v. Carnival Corp. et al
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Thurgood Marshall United
3 States Courthouse, 40 Foley Square, in the City of New York,
4 on the 18th day of September, two thousand seventeen.
5
6 PRESENT: DENNIS JACOBS,
7 JOSÉ A. CABRANES,
8 RICHARD C. WESLEY,
9 Circuit Judges.
10
11 - - - - - - - - - - - - - - - - - - - -X
12 Rodrigo R. Pagaduan,
13 Plaintiff-Appellant,
14
15 -v.- No. 16-465
16
17 Carnival Corporation, dba Carnival
18 Cruise Lines, Carnival PLC, Melvin
19 Babi, Doctor Doe (Ship’s Doctor),
20 Nurse Doe (Ship’s Nurse),
21 Defendants-Appellees.
22 - - - - - - - - - - - - - - - - - - - -X
23
24 FOR APPELLANT: Felix Q. Vinluan, Law Office of
25 Felix Q. Vinluan, New York, New
26 York.
27
1
1 FOR APPELLEES: Edgar R. Nield (Jeffrey B.
2 Maltzman, Gabrielle De Santis
3 Nield, on the brief), Maltzman &
4 Partners, PA, Encinitas,
5 California.
6
7 Appeal from a judgment of the United States District
8 Court for the Eastern District of New York (Gleeson, J.).
9
10 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
11 AND DECREED that the judgment of the district court be
12 AFFIRMED.
13
14 Rodrigo Pagaduan appeals from the judgment of the
15 United States District Court for the Eastern District of New
16 York (Gleeson, J.), granting defendants-appellees’ motion to
17 compel arbitration. We review de novo a district court’s
18 order to compel arbitration. Genesco, Inc. v. T. Kakiuchi &
19 Co., 815 F.2d 840, 846 (2d Cir. 1987). On appeal from an
20 order compelling arbitration, this Court “applies a standard
21 similar to that applicable for a motion for summary
22 judgment.” Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d
23 Cir. 2003). We assume the parties’ familiarity with the
24 underlying facts, the procedural history, and the issues
25 presented for review.
26 Rodrigo Pagaduan (“Pagaduan”) is a Filipino national
27 who served as a motorman on the Queen Mary 2, a liner owned
28 by defendants-appellees (“Carnival”). Pagaduan sued
29 Carnival in the Eastern District of New York for negligence
30 and related claims in connection with injuries sustained in
2
1 the course of his employment. Carnival moved to compel
2 Pagaduan’s claims to arbitration in the Phillippines on the
3 basis of Pagaduan’s Contract of Employment.
4 The terms of his employment are largely dictated by a
5 body of the Philippines government, the Philippine Overseas
6 Employment Administration (“POEA”). The second paragraph of
7 the Contract states that the “herein terms and conditions in
8 accordance with POEA Governing Board Resolution No. 09 and
9 Memorandum Circular No. 10 ... shall be strictly and
10 faithfully observed.” J. App’x at 94. The Memorandum
11 Circular No. 10 implements Standard Terms and Conditions
12 that serve as “the minimum requirements acceptable to the
13 POEA for the employment of Filipino seafarers on board
14 ocean-going ships.” Id. at 204. Section 29 of those
15 Standard Terms and Conditions reads as follows:
16 In cases of claims and disputes arising from this
17 employment, the parties covered by a collective
18 bargaining agreement shall submit the claim or
19 dispute to the original and exclusive jurisdiction
20 of the voluntary arbitrator or panel of voluntary
21 arbitrators. If the parties are not covered by a
22 collective bargaining agreement, the parties may
23 at their option submit the claim or dispute to
24 either the original and exclusive jurisdiction of
25 the National Labor Relations Commission...or to
26 the original and exclusive jurisdiction of the
27 voluntary arbitrator or panel of arbitrators.
28
29 Id. at 221. Judge Gleeson granted the motion.
3
1 On appeal, Pagaduan argues that material factual issues
2 remain in dispute on the threshold question of arbitrability
3 under the Convention on the Recognition and Enforcement of
4 Foreign Arbitral Awards (“Convention”), 9 U.S.C. §§ 201-208,
5 and that the district court erred in denying him a trial.
6 See Scherk v. Alberto-Culver Co., 417 U.S. 506, 519-20
7 (1974); see also Howsam v. Dean Witter Reynolds, Inc., 537
8 U.S. 79, 83 (2002) (existence of an agreement to arbitrate
9 is a question for judicial determination). The Convention,
10 which the parties agree applies here, prescribes four
11 requirements for the enforcement of arbitration agreements:
12 (1) there must be a written agreement; (2) that provides for
13 arbitration in the territory of a signatory of the
14 convention; (3) the subject matter must be commercial; and
15 (4) it cannot be entirely domestic in scope. Smith/Enron
16 Cogeneration Ltd. P’ship, Inc. v. Smith Cogeneration Int’l.,
17 Inc., 198 F.3d 88, 92 (2d Cir. 1999). The only requirement
18 disputed on appeal is the existence of the written
19 agreement.
20 Pagaduan admits to having entered into a contract of
21 employment with the entities Career Philippines
22 Shipmanagement Ltd. and Columbia Shipmanagement, Inc. to
23 work aboard the Queen Mary 2. He contends, however, that
24 the signed Contract of Employment contains no arbitration
4
1 provision, that it does not incorporate the POEA Standard
2 Terms and Conditions and that, in any event, Carnival as a
3 non-party cannot enforce it.
4 Arbitration agreements are creatures of contract.
5 Questions concerning the language or construction of an
6 arbitration agreement “‘must be addressed with a healthy
7 regard for the federal policy favoring arbitration.’”
8 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
9 473 U.S. 614, 626 (1985) (quoting Moses H. Cone Memorial
10 Hospital, 460 U.S. 1, 24-25 (1983)).
11 A contract may incorporate another document by
12 reference by describing it in such clear and unambiguous
13 terms that its identity can be ascertained beyond reasonable
14 doubt. See Progressive Cas. Ins. Co. v. C.A. Reaseguradora
15 Nacional de Venezuela, 991 F.2d 42, 47 (2d Cir. 1993);
16 Glencore Ltd. v. Degussa Engineered Carbons L.P., 848 F.
17 Supp. 2d 410, 428 n. 14 (S.D.N.Y. 2012); Republic of Ecuador
18 v. Chevron Corp., 638 F.3d 384, 395 (2d Cir. 2011).
19 Maritime contracts frequently incorporate by reference other
20 documents and industry terms and conditions. See, e.g., Son
21 Shipping Co. v. De Fosse & Tanghe, 199 F.2d 687, 688 (2d
22 Cir. 1952). Incorporation by reference is a matter of law
23 that can be resolved on summary judgment and does not
24 require a trial to discard a contrary interpretation urged
5
1 by one party. Progressive Cas. Ins. Co., 991 F.2d at 47 &
2 n.8 (“We also disagree with the district court’s ruling that
3 a trial is necessary to determine whether the Policy
4 identified the FRA with sufficient specificity to
5 incorporate it by reference into the Policy. The Policy
6 specifically and directly identifies the FRA by name.”);
7 Roling v. E*Trade Sec. LLC, 860 F. Supp. 2d 1035, 1041 (N.D.
8 Cal. 2012) (under New York law, provision “properly
9 incorporated by reference” “as a matter of law”).
10 Pagaduan’s single-page Contract of Employment does not
11 contain an arbitration provision on its face. It does,
12 however, reference secondary documents that govern seafaring
13 employment contracts and that do call for arbitration, e.g.,
14 the Memorandum Circular No. 10. The Contract clearly and
15 unambiguously describes the documents whose terms would
16 apply to Pagaduan’s employment. See, e.g., JGA Constr.
17 Corp. v. Burns Elec. Co., 145 A.D.2d 945, 946 (4th Dep’t
18 1988); Bautista v. Star Cruises, 396 F.3d 1289, 1293 (11th
19 Cir. 2005). The Contract of Employment incorporates the
20 Standard Terms and Conditions and its arbitration provision
21 by reference as a matter of law, foreclosing any material
22 factual dispute.
23 Pagaduan quibbles with the language of the second
24 paragraph of the Contract of Employment, arguing that it
6
1 simply states that the terms “herein” are in accordance with
2 the POEA documents. The Eleventh Circuit, however, analyzed
3 nearly identical language in a similar case and found the
4 second paragraph incorporated by reference the POEA Standard
5 Terms and Conditions. Bautista, 396 F.3d at 1293. We agree
6 with the Eleventh Circuit’s analysis, particularly in the
7 context of the purpose of the POEA to supervise, regulate,
8 and monitor overseas employment. See id.; Navarette v.
9 Silversea Cruises Ltd., 620 F. App’x 793, 794-95 (11th Cir.
10 Aug. 5, 2015) (per curiam).
11 Pagaduan contends that this Court would be compelled to
12 make significant leaps in rational deduction to “connect the
13 dots” between the Contract of Employment and Section 29 of
14 the POEA Standard Terms and Conditions. But the connection
15 is achieved by ordinary contract law principles. See
16 Massena Towne Ctr. Assoc. v. Sear-Brown Grp., Inc., 255
17 A.D.2d 893, 895 (4th Dep’t 1998) (incorporating by reference
18 multiple layers of documents).
19 Pagaduan protests that he was unaware of the
20 arbitration clause; that he was never told about it; and
21 that he never consented to incorporation by reference of any
22 additional terms. None of this rebuts the powerful
23 presumption in favor of enforcing freely negotiated
24 contracts, especially in the arbitration context.
7
1 Progressive Cas. Ins. Co., 991 F.2d at 46 (“Under New York
2 law, in the absence of fraud or other wrongful conduct, a
3 party who signs a written contract, is conclusively presumed
4 to know its contents and to assent to them, and he is
5 therefore bound by its terms and conditions.”); Metzger v.
6 Aetna Ins. Co., 227 N.Y. 411, 416 (1920)(“Ignorance through
7 negligence or inexcusable trustfulness will not relieve a
8 party from his contract obligations. He who signs or
9 accepts a written contract in the absence of fraud or other
10 wrongful act on the part of another contracting party is
11 conclusively presumed to know its contents and to assent to
12 them.”). The same rules apply to terms incorporated by
13 reference. See, e.g., Level Export Corp. v. Wolz, Aiken &
14 Co., 305 N.Y. 82, 86 (1953); 4Connections LLC v. Optical
15 Commc’ns Grp., Inc., 618 F. Supp. 2d 178, 183-84 (E.D.N.Y.
16 2009).
17 The parties debate a number of secondary issues,
18 including whether Pagaduan separately signed the Amended
19 Standard Terms and Conditions, the authenticity of that
20 signature, and the timeliness of the document. However,
21 Carnival does not need to prove that Pagaduan signed both
22 the Contract of Employment and the documents incorporated by
23 reference into that contract at the same time. Pagaduan
24 signed a Contract of Employment that specifically referenced
8
1 a set of industry-wide standard terms and conditions, the
2 minimum requirements for all seafaring employees. No fraud
3 or overreaching is alleged. Section 29 of those terms
4 mandates that Pagaduan pursue his claims via arbitration.1
5 The District Court properly held that Pagaduan is bound by
6 the terms of this contract, including the arbitration
7 clause.
8 Since the word “Carnival” does not appear on his
9 Contract of Employment, Pagaduan argues that Carnival cannot
10 enforce the arbitration clause in the POEA Standard Terms
11 and Conditions. This argument fails on numerous theories
12 discussed below.
13 Pagaduan’s complaint states that Carnival was his
14 employer. See J. App’x at 30 (pleading he was “employed by
15 the Defendants Carnival”). This alone permits Carnival to
16 move to compel by estoppel under the contract. It would
17 perpetrate an inequitable result to permit Padaguan to sue
18 Carnival on claims arising out of its Contract of
19 Employment, but resist arbitration with Carnival on terms
1
If Pagaduan is not party to a collective bargaining
agreement, he has the option of selecting the National Labor
Relations Commission dispute resolution process in lieu of
arbitration. The Court notes that whether Pagaduan is party
to a collective bargaining agreement or not has no bearing
on the outcome of this appeal since he is compelled to
arbitration regardless.
9
1 found in the same document. See, e.g., Barton Enterprises,
2 Inc. v. Cardinal Health, Inc., No. 4:10 CV 324 DDN, 2010 WL
3 2132744, *4 (E.D. Mo. May 27, 2010) (“Because its claims
4 against Cardinal Health depend on the interpretation of fee
5 terms found in the license agreement, it would be unfair to
6 allow Barton Enterprises to rely on these terms for its
7 complaint, yet disavow the arbitration terms found in the
8 very same license agreement.”).
9 On appeal, Pagaduan seeks to distance himself from the
10 Carnival entities, stating they are not his employer and are
11 not parties to the contract. However, agency principles
12 dictate that Carnival is a party capable of enforcing an
13 arbitration agreement made by its agents. Comer v. Micor,
14 Inc., 436 F.3d 1098, 1101 (9th Cir. 2006); Arnold v. Arnold
15 Corp.-Printed Commc’ns for Business, 920 F.2d 1269, 1282
16 (6th Cir. 1990). Carnival submitted two declarations that
17 establish through business records that Columbia
18 Shipmanagement Ltd. and Career Shipmanagement, Inc. act as
19 manning agents on behalf of Carnival. See Major League
20 Baseball Prop., Inc. v. Salvino, Inc., 542 F.3d 290, 312-13
21 (2d Cir. 2008) (accepting sworn declarations at the summary
22 judgment stage to establish admissibility as business
23 records). Moreover, Pagaduan’s Contract of Employment does
24 specify his charge as the Queen Mary 2, which suggests a
10
1 contractual relationship with the vessel and its owner,
2 Carnival. See Putnam v. Lower, 236 F.2d 561, 563 (9th Cir.
3 1956); Piedmont & Georges Creek Coal Co. v. Seaboard
4 Fisheries Co., 254 U.S. 1, 9 (1920). Carnival is therefore
5 a party capable of exercising rights under Pagaduan’s
6 Contract of Employment to work aboard its vessel.
7 For the foregoing reasons, and finding no merit in
8 Pagaduan’s other arguments, we hereby AFFIRM the judgment of
9 the District Court.
10
11 FOR THE COURT:
12 CATHERINE O’HAGAN WOLFE, CLERK
13
11