U.S. Maritime Law Preempts Law of Seaman's Own Country

Seamen have always been treated with special solicitude by U.S. courts and are given more protection than shoreside employees, even those employed in maritime trade, such as longshoremen. Injured seamen have more rights than the passengers they serve on cruise ships. Maritime law has historically afforded seamen fervent protection based on the ancient doctrine that seamen are "Wards of the Court," the same as orphans in need of a guardian.

As Justice Story of the Supreme Court put it in an 1823 case:

Every court should watch with jealousy any encroachment upon the rights of seamen, because they are unprotected and need counsel, because they are thoughtless and require indulgence, because they are credulous and complying, and are easily overreached. They are emphatically the wards of the admiralty; and though not technically incapable of entering into a valid contract, they are treated in the same manner, as courts of equity are accustomed to treat young heirs, dealing with their expectancies, wards with their guardians...

Maritime courts today still quote Justice Story, although he was referring to the situation of seamen two hundred years ago. Others wonder whether the ancient doctrine should apply equally today to modern seamen with their strong unions.

Nevertheless, the "Wards of the Court" theory continues today to protect even a foreign seaman who is injured while employed on a foreign vessel while it is docked in a U.S. port.

A recent case of the federal court in the Eastern District of Louisiana, illustrates how far a U.S. court will go to protect a seaman. A Filipino sailor was seriously injured when scalding water overflowed from a cascade tank in the engine room and splashed on him. He suffered severe burns more than 35 percent of his body. He was treated in U.S. hospitals, and later in a hospital in the Philippines after he was repatriated.

The vessel owner was German. The law of the flag was Marshall Islands, and the employment contract had been signed in the Philippines. The contract incorporated the government's standard terms and conditions governing employment of Filipino seafarers, which terms required exclusive arbitration of any claims in the Philippines and also application of Philippine law.

Nevertheless, the seaman filed suit in a state court in Louisiana seeking recovery under the Jones Act and U.S. general maritime law. The state court stayed the suit and ordered arbitration to take place in the Philippines in accordance with the employment contract.

The Philippine Arbitration Panel found that U.S. law was not applicable and awarded the seaman only $1,870.00, based upon scheduled benefits provided under the Philippine law.

The Plaintiff returned to the state court in the U.S. asking that the stay be lifted, and that the decision of the Philippine arbitrators be set aside as contrary to "U.S. public policy." The Defendant shipowner removed the action to the federal court and asked to recognize and enforce the arbitration award of the seaman's own country.

The U.S. court came to the rescue of the "ward of the court." It noted that the U.S. and the Philippines are both signatory states of the New York Convention on the Recognition of Foreign Arbitral Awards. The Convention provides that when a decision is rendered in a signatory country, courts in that country have primary jurisdiction. Courts in other signatory countries have secondary jurisdiction which limits them to consider only whether to enforce in their country.

Article V of the New York Convention enumerates seven exclusive grounds in which a court with secondary jurisdiction may refuse to enforce a foreign award, and one of those seven is an award "contrary to the public policy of that country". Plaintiff argued refusal of Philippine arbitrators to apply U.S. law violated public policy under the Supreme Court's Mitsubishi case of 1985 and Vimar case of 1995. In these cases, the Supreme Court contemplated condemning arbitration awards as being in violation of U.S. public policy "when the choice-of-forum and choice-of-law clauses operate in tandem as a prospective waiver of a party's right to pursue certain remedies they are entitled to under law." Plaintiff argued that contract's provisions of Philippine arbitration and Philippine law did just that and denied him of his rights to review under U.S. law. The federal court agreed.

"(T)he parties' contract attempted to apply Philippine law to a Marshall Islands ship," so the court proceeded to conduct its own choice-of-law inquiry in a maritime personal injury case under U.S. general maritime law. The test set up in Lauretzen - Rhoditis case, 1953, considers eight factors:  (1) location of the injury; (2) law of the flag; (3) domicile of injured party; (4) allegiance of shipowner; (5) place of the contract; (6) inaccessibility of foreign forum; (7) the law of the forum; and (8) base of operations of the shipowner. The court found that applicable factors in this case were (1) injury occurred while vessel was in the U.S.; (2) the vessel flew Marshall Island flag; (3) plaintiff was citizen of the Philippines; (4) the vessel was owned by a German corporation; (5) the contract was executed in the Philippines; (7) the law of the forum was U.S. maritime law; and (8) Defendant's base of operation was Germany.

The court considered the significance of each factor and found two to be the most significant. "The law of the flag is given great weight in determining the law to be applied in maritime cases." The law of the Marshall Islands adopted the "non-statutory maritime law of the United States," as long as it did not conflict with the law of the Marshall Islands. The arbitral panel in the Philippines did not apply U.S. maritime law to plaintiff's claim. The court found that under U.S. maritime law that "constitutes a violation of this country's public policy" because the seaman was denied the "opportunity to pursue remedies to which he was entitled as a seaman that resulted from the Panel's application of Philippine law." The U.S. court held the Philippine seaman was entitled to rights under U.S. law "(albeit the Marshall Islands)." On the grounds that enforcement of the Philippine award "would violate this country's [U.S.] most basic notions of morality and justice," the court refused to enforce the award on "public policy grounds." Thus, the "Wards of the Court" status won the U.S. case for the foreign seaman. Asignacion v. Rickmers Genoa (E.D. La. Feb. 2014).