Harrington v. Atlantic Sounding Co., Inc., No. 07-4272 (2d Cir. 2010)

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07-4272-cv Harrington v. Atlantic Sounding Co., Inc. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term 2008 (Argued: November 24, 2008 Decided: April 16, 2010) Docket No. 07-4272-cv ----------------------------------------------------x FREDERICK J. HARRINGTON, JR., Plaintiff-Appellee, - v. ATLANTIC SOUNDING CO., INC., WEEKS MARINE, INC., and MV CANDACE, her engines, equipment and tackle, in rem,* Defendants-Appellants. -----------------------------------------------------x B e f o r e : WINTER, WALKER, and CALABRESI, Circuit Judges. Appeal by Defendants from a judgment entered in the United 26 27 States District Court for the Eastern District of New York (Nina 28 Gershon, Judge), denying their motion to dismiss or, in the 29 alternative, to stay the district court action and compel 30 arbitration. 31 judgment, concluding that the arbitration agreement in this case 32 was neither unconscionable nor unenforceable as a matter of law. 1 2 3 On appeal, we VACATE the district court s * The Clerk of the Court is respectfully directed to amend the official caption to read MV CANDACE, her engines, equipment and tackle, in rem. -1- 1 The case is REMANDED for the district court to consider 2 Plaintiff s remaining contractual defenses. 3 VACATED AND REMANDED. 4 Judge Calabresi dissents in a separate opinion. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 TODD P. KENYON (Ronald Betancourt, of counsel), Betancourt, Van Hemmen, Greco & Kenyon, New York, NY, for Defendants-Appellants. JACOB SHISHA, Tabak, Mellusi & Shisha, New York, NY, for Plaintiff-Appellee. John P. James, Friedman & James LLP, New York, NY (James P. Jacobsen, Vice-Chair, AAJ Admiralty Law Section, Seattle, WA, Ross Diamond, Chair, Admiralty Law Section, American Association for Justice, Mobile, AL, on the brief, Kathleen Flynn Peterson, President, American Association for Justice, Minneapolis, MN, of counsel), for Amicus Curiae American Association for Justice. JOHN M. WALKER, JR., Circuit Judge: Plaintiff-Appellee Frederick J. Harrington, Jr., 31 ( Harrington ) filed this action in the United States District 32 Court for the Eastern District of New York (Nina Gershon, 33 Judge), against Defendants-Appellants Atlantic Sounding Co., 34 Inc., Weeks Marine, Inc. (Atlantic Sounding s corporate parent), 35 and the vessel MV CANDACE (collectively, Defendants ) pursuant -2- 1 to the Jones Act, 46 U.S.C. § 688, seeking recovery for injuries 2 sustained while he was employed as a seaman on the CANDACE. 3 Defendants sought to dismiss the complaint or, in the 4 alternative, to compel arbitration and to stay the district 5 court action, pursuant to a post-injury arbitration agreement 6 between the parties. 7 arguing that the arbitration agreement, which he signed in 8 return for cash advances against his claim, was unenforceable as 9 the result of intoxication and lack of mental capacity, and 10 Harrington opposed Defendants motion, because the agreement was unconscionable. After an evidentiary hearing, the district court determined 11 12 that the arbitration agreement was unenforceable under New 13 Jersey law due to substantive and procedural unconscionability, 14 and did not address the claims of intoxication and lack of 15 mental capacity. 16 the basis that the arbitration agreement is unenforceable as a 17 matter of law under § 6 of the Federal Employer s Liability Act 18 ( FELA ), 45 U.S.C. § 56, and alternatively, that the 19 unconscionability finding below was correct under New Jersey 20 law. 21 22 On appeal, Harrington resists arbitration on We find that FELA § 6 does not apply to seamen s arbitration agreements, and thus the arbitration agreement is -3- 1 not unenforceable as a matter of law, and that the district 2 court s finding that the arbitration agreement was unenforceable 3 due to unconscionability was erroneous. 4 the district court s decision and remand to the district court 5 for consideration of Harrington s remaining contractual 6 defenses. Therefore, we vacate 7 BACKGROUND 8 After more than two years with Weeks Marine as an Able 9 Bodied Seaman, Harrington suffered a back injury in April 2005 10 while working aboard the CANDACE, a vessel owned and operated by 11 Weeks Marine. 12 to live with his father in Massachusetts and began receiving 13 maintenance payments of twenty dollars per day from Weeks 14 Marine. 15 from Harrington s back injury. Shortly thereafter, Harrington left the CANDACE Weeks Marine also paid all medical expenses resulting 16 In Massachusetts, Harrington s doctor prescribed 17 painkillers and cortisone shots to help him cope with his 18 injury. 19 Harrington testified that the medications interfered with his 20 concentration and made him drowsy. 21 during this time he was drinking upwards of a half-gallon of 22 vodka every two or three days. At the evidentiary hearing held on the instant motion, He also testified that He added that he has a history -4- 1 of alcohol abuse for which he has undergone substance abuse 2 treatment on several occasions, most recently in March 2006. 3 Thereafter, Harrington was diagnosed with herniated discs 4 and was told by his doctor that he required lumbar surgery. In 5 early July 2005, he called Weeks Marine to request additional 6 financial support for his injury and upcoming surgery. 7 response, on July 11, 2005, Harrington received a Claim 8 Arbitration Agreement (the Agreement ) from Defendants in the 9 mail. In Defendants prepared and signed the Agreement in New 10 Jersey, the location of their principal place of business, and 11 sent it to Harrington for his signature at his father s house in 12 Massachusetts. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 The Agreement included the following language (with You referring to Defendants and I referring to Harrington): Although You are obligated to pay maintenance and cure, You are not currently responsible or liable for any other damages under general maritime law, the Jones Act or any other applicable law. Nonetheless, You are prepared to make voluntary advances against settlement of any claim that could arise out of the personal injury/illness claim I have made . . . , provided I agree to arbitrate any such claim under the American Arbitration Association (AAA) Rules . . . . The decision of the arbitrators shall be final and binding on the parties and any United States District Court shall have the jurisdiction to enforce this agreement, to enter judgment on the award and to grant any remedy provided by law in respect of the arbitration proceedings. -5- 1 2 (emphasis omitted.) 3 Under the Agreement, in exchange for Harrington s 4 undertaking to arbitrate his claims, Defendants agree[d] to 5 advance sixty percent (60%) of the gross wages [Harrington] 6 would have otherwise earned based upon [his] earnings history . 7 . . as an advance against settlement until [Harrington was] 8 declared fit for duty, and/or at maximum medical improvement, 9 and/or October 10, 2005, whichever occurs first. The Agreement 10 further credited [the advance] against any settlement 11 [Harrington] might eventually reach with [Defendants] or against 12 any future arbitration award [he] might receive. 13 the Agreement, Defendants also agreed to advance up to $750.00 14 and any deposit for compensation of the arbitrators . . . , 15 subject to subsequent allocation. Pursuant to 16 A cover letter accompanying the Agreement explained: 17 18 19 20 21 22 23 24 25 26 Our company recognizes the value in its long term employees and the hardship that can be associated with a dramatic income decrease during a period of incapacity. Although we are under no legal obligation to advance funds in this type of situation, our towing division has approved such voluntary payment in your case, so long as you are willing to agree to arbitrate any disputes that might arise from this claim. 27 Defendants that they wanted to help [him] out because of [his] According to Harrington s affidavit, he was told by -6- 1 situation, and that the payments made under the Agreement would 2 constitute an advance against any claim [he] may bring. 3 Decl. ¶ 9. 4 tell [him] that [he] was giving up any rights by signing the 5 Agreement. 6 Pl. Harrington also alleges that Defendants did not Pl. Decl. ¶ 9. On July 18, 2005, Harrington underwent lumbar surgery, and 7 was released from the hospital the next day. On July 23, 2005, 8 Harrington went to a local bank with his father to sign the 9 Agreement and have it notarized. Harrington was still taking 10 painkillers and drinking heavily during his recovery from 11 surgery, and he testified to being in tough shape on July 23 12 because he was taking medication and . . . had a couple of 13 drinks that day. 14 The notary read aloud the Agreement s acknowledgment 15 section, which stated, [o]ther than the promises contained in 16 this agreement, I have been given no other promises to induce me 17 to sign this Claim Arbitration Agreement. 18 coerced in any way into signing this agreement. 19 this agreement knowingly and willingly. 20 Harrington if he understood what he was signing before she 21 notarized the Agreement. 22 signed the Agreement. I have not been I have signed The notary asked Harrington answered that he did and The notary testified that Harrington did -7- 1 not appear to be drunk when he signed the Agreement, and that 2 she would not have notarized the Agreement if he appeared 3 intoxicated or in any way impaired. 4 however, that Harrington appeared to be in pain and had to be 5 assisted by his father when sitting down and standing up and 6 that Harrington appeared disheveled and unke[m]pt, Harrington 7 v. Atl. Sounding Co., No. 06-cv-2900(ng) (vvp), 2007 WL 2693529, 8 at *2 (E.D.N.Y. Sept. 11, 2007), whenever the notary saw him at 9 the bank and was incoherent whenever he spoke, which was not 10 The notary testified, often. 11 Pursuant to the Agreement, Defendants sent support checks 12 to Harrington, which Harrington s father cashed for him, ending 13 with the last payment on October 10, 2005. 14 unable to work, Harrington contacted Weeks Marine to request 15 continued payment of sixty percent of his wages until he was fit 16 to return to work. 17 Marine sent him the Addendum Claim Arbitration Agreement (the 18 Addendum ). 19 the partial payment of Harrington s wages until January 10, 2006 20 and specified that, apart from this amendment, the prior Claim 21 Arbitration Agreement, executed on July 23, 2005, remain[ed] in 22 full force and effect. Because he was still In response, on December 2, 2005, Weeks The Addendum amended the Agreement by extending The Addendum, like the Agreement, also -8- 1 stated: 2 sign this Addendum thereto. 3 into signing this Addendum agreement. 4 Addendum agreement knowingly and willingly. 5 I have been given no other promises to induce me to I have not been coerced in any way I have signed this On December 8, 2005, Harrington, who testified that he was 6 drinking two quarts of vodka and six beers every day at the time 7 he received the Addendum, brought the Addendum to the same 8 notary he had used to execute the Claims Arbitration Agreement. 9 The notary again read the acknowledgment aloud and asked 10 Harrington if he understood what he was signing. Harrington 11 again answered that he did and signed the Addendum. 12 testified that Harrington appeared to be in the same condition 13 on December 8 as on July 23, and that she did not believe him to 14 be intoxicated or impaired, while conceding that she is not 15 around those type of people, so she couldn t judge whether 16 Harrington was intoxicated or impaired. 17 29, 2007. 18 appeared to be in pain every time she saw him. The notary Dep. Tr. 27:9-10, Jan. The notary testified, however, that Harrington Dep. Tr. 28:4. 19 20 Defendants terminated Harrington s employment effective 21 January 27, 2006. 22 action. In June 2006, Harrington filed the instant Defendants moved to dismiss the complaint, or in the -9- 1 alternative, stay the action and compel arbitration pursuant to 2 the Agreement (as amended by the Addendum). 3 In July 2007, the district court held an evidentiary 4 hearing to determine the validity of the Agreement, and two 5 months later, finding the Agreement invalid, denied Defendants 6 motion in its entirety. 7 The district court assumed that, under § 2 of the Federal 8 Arbitration Act ( FAA ), 9 U.S.C. § 2, Harrington bore the 9 burden of establishing a basis for not enforcing the Agreement. 10 After observing that, under the FAA, questions of contractual 11 validity . . . of the underlying arbitration agreement must be 12 resolved first, as a matter of state law, before compelling 13 arbitration pursuant to the FAA, Harrington, 2007 WL 2693529, 14 at *3 (quoting Cap Gemini Ernst & Young, U.S., L.L.C. v. Nackel, 15 346 F.3d 360, 365 (2d Cir. 2003) (per curiam)) (internal 16 quotation marks omitted) (alteration in original), the district 17 court chose to apply New Jersey law (where Weeks had its 18 principal place of business) instead of Massachusetts law (where 19 Harrington resided) because New Jersey had the most significant 20 relationship to the arbitration agreements and the employment 21 relationship between the parties, while at the same time noting 22 that the principles of contract law are fundamentally the same 23 in both states and . . . the application of either state s law Harrington, 2007 WL 2693529, at *6. -10- 1 2 would yield the same result. Id. The district court then found the Agreement both 3 procedurally and substantively unconscionable and therefore 4 unenforceable under New Jersey law, citing, inter alia, Sitogum 5 Holdings, Inc. v. Ropes, 800 A.2d 915, 921 (N.J. Super. Ct. Ch. 6 Div. 2002) (noting that [m]ost [New Jersey] courts have looked 7 for a sufficient showing of both [procedural and substantive 8 unconscionability] in finding a contract unconscionable ). 9 Harrington, 2007 WL 2693529, at *4. The district court found 10 that the facts of this case satisfied New Jersey s sliding 11 scale approach to unconscionability, under which a claim of 12 unconscionability can succeed when one form of it, either 13 procedural or substantive, is greatly exceeded, while the other 14 form is only marginally exceeded. 15 Id. In finding procedural unconscionability, the district court 16 placed particular significance on the timing of the original 17 Agreement. 18 Harrington the Agreement three months after his injury, and 19 shortly before he was scheduled to undergo major surgery with a 20 lengthy recovery. 21 Harrington had an impaired . . . ability to understand the 22 nature and consequences of the document he was signing, that 23 the notary had doubts about [Harrington s] condition, and that Id. The district court noted that Defendants sent Id. The district court found that -11- 1 [D]efendants were aware of his heavily medicated state and his 2 financial vulnerability. 3 Harrington did not have an attorney, nor was he advised to seek 4 representation when he signed the Agreement, and that the 5 Agreement fails to set forth the terms in such a way that an 6 average person would understand its substance. 7 district court concluded that all of the facts demonstrate that 8 [Harrington] was in a substantially weaker bargaining position 9 than [Defendants], and that the Agreement was therefore 10 11 Id. procedurally unconscionable. The district court noted that Id. at *5. The Id. With respect to substantive unconscionability, the district 12 court found startling the provision in the Claims Arbitration 13 Agreement (incorporated by reference into the Addendum) that 14 provided that Defendants are not currently responsible or 15 liable for any other damages under general maritime law, the 16 Jones Act or any other applicable law. 17 concluded that 18 19 20 21 22 23 24 25 26 Id. The district court [s]uch misleading contractual language, especially when reviewed by a layperson without the benefit of legal counsel, creates the false impression that defendants are not subject to liability for any damages; if that is the case, then plaintiff, by signing the Agreement, is giving up nothing but obtains the wages he so badly needs. Put another way, defendants asked plaintiff to sign an agreement which purports to eliminate any prospect of liability. -12- 1 2 Id. 3 The district court rejected Defendants argument that 4 Harrington had ratified the Agreement by accepting the support 5 payments, concluding that, because Harrington was unaware of 6 his legal rights and the unconscionable nature of the Agreement 7 when he accepted the payments, there was no ratification. Defendants appealed to this court.1 8 DISCUSSION 9 10 Id. I. Legal Standards We review de novo a district court s denial of a motion to 11 12 compel arbitration. 13 Inc., 58 F.3d 16, 19 (2d Cir. 1995). 14 whether parties have contractually bound themselves to arbitrate 15 a dispute [is] a determination involving interpretation of state 16 law [and, hence] a legal conclusion also subject to de novo 17 review. 18 Cir. 2002); accord Shann v. Dunk, 84 F.3d 73, 77 (2d Cir. 1996). 19 However, [t]he findings upon which that conclusion is based . . 20 . are factual and thus may not be overturned unless clearly 1 2 3 Collins & Aikman Prods. Co. v. Bldg. Sys., The determination of Specht v. Netscape Commc ns Corp., 306 F.3d 17, 26 (2d 1 The defendants have withdrawn that part of their appeal that challenges the district court s rejection of their motion to dismiss Harrington s in rem claim against the CANDACE. -13- 1 erroneous. 2 II. Specht, 306 F.3d at 26. Is The Agreement Invalid As A Matter Of Law Under The FELA? Harrington, assisted by amicus curiae American Association 3 4 for Justice (the AAJ ), argues that the Agreement is invalid as 5 a matter of law because it violates the FELA as incorporated by 6 the Jones Act. 7 that the Agreement eliminated the seaman s choice to try his 8 case to a federal judge or jury, or a state court judge or 9 jury, and grants the defendant immunity from suit in all of Specifically, Harrington and the AAJ contend 10 these forums, in violation of the FELA. 11 16. 12 13 Amicus Curiae Br. at We disagree. The Jones Act, which provides the basis for Harrington s personal injury suit, states in relevant part: A seaman injured in the course of employment . . . may elect to bring a civil action at law, with the right of trial by jury, against the employer. Laws of the United States regulating recovery for personal injury to, or death of, a railway employee apply to an action under this section. 14 15 16 17 18 19 20 21 46 U.S.C. § 30104. 22 Court held that the Jones Act adopts the entire judicially 23 developed doctrine of liability under the [FELA]. 24 Dredging Co. v. Miller, 510 U.S. 443, 456 (1994) (quoting Kernan 25 v. Am. Dredging Co., 355 U.S. 426, 439 (1958)). Interpreting this language, the Supreme -14- Am. 1 Harrington and the AAJ argue that FELA §§ 5 and 6 render 2 the Agreement unenforceable as a matter of law. 3 provides that [a]ny contract, rule, regulation, or device 4 whatsoever, the purpose or intent of which shall be to enable 5 any common carrier to exempt itself from any liability created 6 by this chapter, shall to that extent be void. 7 see Duncan v. Thompson, 315 U.S. 1, 7 (1942) (holding that FELA 8 § 5 applies to post-injury agreements). 9 FELA § 5 45 U.S.C. § 55; FELA § 6 provides, in relevant part: Under this chapter an action may be brought in a district court of the United States, in the district of the residence of the defendant, or in which the cause of action arose, or in which the defendant shall be doing business at the time of commencing such action. The jurisdiction of the courts of the United States under this chapter shall be concurrent with that of the courts of the several States. 10 11 12 13 14 15 16 17 18 19 45 U.S.C. § 56. 20 bring a[] FELA action in state court. 21 R.R. Co., 380 U.S. 424, 434 (1965); see Engel v. Davenport, 271 22 U.S. 33, 37-38 (1926). 23 been amended out of 45 U.S.C. § 56 since its enactment, similar 24 language in 28 U.S.C. § 1445(a) applies to the FELA and renders 25 Jones Act cases non-removable. FELA § 6 embodies the plaintiff s right to Burnett v. N.Y. Cent. Although the non-removal language has See Cal. Pub. Employees Ret. -15- 1 Sys. v. Worldcom, Inc., 368 F.3d 86, 99 (2d Cir. 2004).2 2 In Boyd v. Grand Trunk Western Railroad Co., the Supreme 3 Court invoked FELA § 5 to invalidate an agreement limiting an 4 injured party s right to bring the suit in any eligible forum, 5 a right which the Court found to be guaranteed by FELA § 6. 6 U.S. 263, 265 (1949) (per curiam). 7 railroad advanced Boyd money after Boyd was injured while 8 working for the railroad. 9 an agreement stating that if he brought suit, such suit shall 10 be commenced within the county or district where I resided at 11 the time my injuries were sustained and not elsewhere. 12 263-64. 13 County, Illinois, which was not one of the stipulated venues. 14 Id. at 264. 15 agreement, the Supreme Court agree[d] with those courts which 16 have held that contracts limiting the choice of venue are void 1 2 3 4 5 6 7 8 9 10 We assumed without discussion in Worldcom that FELA § 6 applies to Jones Act cases, see 368 F.3d at 99, even though, when Worldcom was decided in 2004, the Jones Act included its own venue clause, see Terrebonne v. K-Sea Transp. Corp., 477 F.3d 271, 281 (5th Cir. 2007) (citing 46 U.S.C. App. § 688(a)). However, in 2008, Congress amended the Jones Act by deleting its venue clause, see National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, 122 Stat. 3 (2008) (codified as amended at 46 U.S.C. § 30104), thereby confirming our assumption in Worldcom that § 6 applies to Jones Act cases. 338 In Boyd, the defendant Id. at 263. In return, Boyd signed Id. at Boyd subsequently filed suit in Superior Court, Cook When the railroad sought to enforce the venue 2 -16- 1 as conflicting with the [FELA]. 2 concluded that the agreement at issue was unenforceable as a 3 matter of law because 4 5 6 7 8 9 10 11 12 13 Id. at 264-65. The Court petitioner s right to bring the suit in any eligible forum is a right of sufficient substantiality to be included within the Congressional mandate of [FELA § 5]. . . . The right to select the forum granted in [FELA § 6] is a substantial right. It would thwart the express purpose of the [FELA] to sanction defeat of that right by the device at bar. Id. at 265-66. Building upon Boyd, the AAJ and Harrington argue that 14 arbitration agreements like the one at issue in this case 15 deprive workers of their statutorily protected forum-selection 16 rights and are invalid as a matter of law. 17 [t]he agreement in the instant case is more egregious than that 18 in Boyd because at least in Boyd the worker could still pick 19 some federal or state courts in which to file his case. 20 Curiae Br. at 13. 21 They contend that Amicus Harrington and the AAJ read FELA § 6 far too broadly, and 22 fail to properly distinguish Boyd from this case. 23 not decided under the FAA, which . . . reflects a liberal 24 federal policy favoring arbitration agreements. 25 Interstate/Johnson Lane Corp., 500 U.S. 20, 35 (1991) (internal 26 quotation marks omitted); see also Shearson/Am. Express Inc. v. -17- Boyd [was] Gilmer v. 1 McMahon, 482 U.S. 220, 226 (1987) ( The [FAA] . . . establishes 2 a federal policy favoring arbitration. ) (internal quotation 3 marks omitted). 4 v. K-Sea Transportation Corp., 477 F.3d 271, 283 (5th Cir. 5 2007), when Boyd was decided six decades earlier, [t]here was 6 no federal statute authorizing or providing for the enforcement 7 of the type of agreement involved in Boyd. 8 As the Fifth Circuit recognized in Terrebonne The FAA broadly applies to maritime transaction[s] and 9 commerce, and provides that an agreement in writing to submit 10 to arbitration an existing controversy arising out of maritime 11 transactions or commerce shall be valid, irrevocable, and 12 enforceable, save upon such grounds as exist at law or equity 13 for the revocation of any contract. 14 the FAA exempts from its coverage contracts of employment of 15 seamen, id. § 1, the Supreme Court has strongly suggested that 16 arbitration agreements such as the one at issue in this case do 17 not constitute contracts of employment where the arbitration 18 agreement is not contained in a broader employment agreement 19 between the parties, Gilmer, 500 U.S. at 25 n.2; see also 20 Terrebonne, 477 F.3d at 279 (holding that the maintenance and 21 cure provisions of an arbitration agreement, though an 22 intrinsic part of the employment relationship, [are] separate -18- 9 U.S.C. § 2. Although 1 from the actual employment contract ) (emphasis in original); 2 cf. Nunez v. Weeks Marine, Inc., No. 06-3777, 2007 WL 496855, at 3 *3 n.4 (E.D. La. Feb. 13, 2007) (noting that, in Gilmer, the 4 Supreme Court d[id] not broadly define employment contract as 5 any contract that has some connection or relation to a party s 6 employment ). 7 if the term contracts of employment was read so broadly as to 8 include independent arbitration agreements, then every seamen 9 contract would be exempt from the FAA, thereby rendering the Moreover, the Supreme Court has recognized that 10 separate exemption for contracts of employment of seamen . . . 11 pointless. 12 (2001) (quoting 9 U.S.C. § 1). 13 Boyd, the FAA is involved and thus the issues must be addressed 14 with a healthy regard for the federal policy favoring 15 arbitration. 16 U.S. at 26) (emphasis in original). 17 Circuit City Stores v. Adams, 532 U.S. 105, 113 Thus, [h]ere, in contrast to Terrebonne, 477 F.3d at 283 (quoting Gilmer, 500 In addition, § 6, by its terms and purpose, is inapplicable 18 to arbitration agreements. Section 6 says nothing about 19 arbitration agreements. 20 are [currently] prevalent in a broad collection of contracts, 21 George Watts & Son, Inc. v. Tiffany & Co., 248 F.3d 577, 583 22 (7th Cir. 2001), at the time § 6 was enacted, arbitration was Although mandatory arbitration clauses -19- 1 not a commonly used mechanism to adjudicate [employee] rights, 2 id.; indeed, § 6 was enacted in 1910, see Baltimore & O.R. Co. 3 v. Kepner, 314 U.S. 44, 49 (1941), fifteen years before the FAA 4 was enacted, see Circuit City Stores, 532 U.S. at 111. 5 therefore cannot reasonably be read to include a blanket 6 prohibition on seamen arbitration agreements when, at the time 7 of enactment, that provision did not contemplate, either in 8 letter or spirit, the existence of an arbitral forum. 9 FELA § 6 In fact, as the AAJ notes, § 6 was enacted by Congress, not 10 in order to invalidate employee arbitration agreements, but so 11 that [FELA] suit[s] may be tried in a forum that was convenient 12 for the worker. 13 of § 6, FELA (and hence, Jones Act) trials Amicus Curiae Br. at 7. Without the inclusion [m]ay be at a place in a distant State from the home of the plaintiff, and may be a thousand miles or more from the place where the injury was occasioned. The extreme difficulty, if not impossibility, of a poor man who is injured while in railroad [or seaman] employ securing the attendance of the necessary witnesses at such a distant point makes the remedy given by the law of little avail under such circumstances. 14 15 16 17 18 19 20 21 22 23 24 Amicus Curiae Br. at 7-8 (quoting H.R. Rep. 513, 61st Cong. 2d 25 Sess. 6 (1910)); see also Kepner, 314 U.S. at 49-50; cf. Lewis 26 v. Texaco Inc., 527 F.2d 921, 924 (2d Cir. 1975) (describing the 27 solicitude that should be afforded seamen in order to -20- 1 safeguard seamen s rights ) (internal quotation marks omitted).3 2 Therefore, the purpose of § 6 is to ensure the existence of a 3 practical and convenient forum to adjudicate the employee s 4 rights, not to ensure the existence of a particular type of 5 forum.4 6 was not the worker s right to bring litigation in a judicial 7 forum, but his right to have his claims adjudicated in an 1 2 3 4 5 6 7 8 9 10 11 12 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Similarly, the substantial right referred to in Boyd 4 At best, it is unclear to what extent the solicitude afforded to seamen, which resulted in the extension of the FELA to seamen and the carve-out exception for seamen employment contracts from the FAA, still holds true today. See Ammar v. United States, 342 F.3d 133, 146 (2d Cir. 2003) ( The modern reality is that most seamen are no longer friendless ; rather, they have gained strength through collectivity, and they are a well-organized work force with sophisticated leaders who constantly press for better working conditions, pay, and benefits, as well as increased job security. Thus, the need for judicial intervention to protect seamen has been substantially lessened. ). Contrary to the suggestion made in Judge Calabresi s dissent, this understanding of the purpose of § 6 is not hard to understand in light of the Supreme Court s bar on state courts enjoining that state s citizens from suing railroad companies in the state courts of another state or in federal district court of another state. Dissent of J. Calabresi at [14] (emphasis in original). The dissent s puzzlement derives from the assumption that a plaintiff s home state is always the most convenient state for litigation. The Jones Act and FELA, however, recognize that this may not always be the case, and therefore explicitly allow a plaintiff to choose one of several states in which to initiate his suit. That choice is preserved by the arbitration clause in this case, leaving us with only a contractual preference for an arbitral forum a preference with no implications for the plaintiff s substantive rights. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985). -21- 1 eligible forum. 2 only an eligible forum where Harrington can adjudicate his 3 rights; under the FAA, it is also a favored one. 4 does not deprive Harrington of his right to adjudicate his 5 claims, it only shifts his right to adjudication to an arbitral 6 forum, without geographical constraints.5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 338 U.S. at 265. 5 An arbitral forum is not The Agreement Although purporting to discuss the relationship between the Jones Act and the later-enacted FAA, Judge Calabresi s dissent provides no indication of a Congressional intent to exclude the venue provisions of the Jones Act and FELA from the plain language of the FAA. Nor does the dissent demonstrate any inherent conflict between arbitration and the [Jones Act's] underlying purpose. Shearson/American Exp., Inc. v. McMahon, 482 U.S. 220, 227 (1987). Although the dissent notes the benefits to Jones Act plaintiffs of choosing their forum, it provides no basis for concluding that the authors of either the Jones Act (as opposed to the authors of certain state workers compensation provisions) or the FAA would have believed arbitration of disputes to be inherently in conflict with the goals of the Jones Act. This comes as no surprise in light of the Supreme Court s ruling 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. Mitsubishi Motors Corp., 473 U.S. at 628. Ultimately, Judge Calabresi tells us that we should be reluctant to interpret the Jones Act and FELA to cede to the policy of the FAA, because the underlying rights for workers protected by [those Acts] have been judged non-amenable to private resolution by legislative bodies [i.e., the state legislatures of Montana, South Carolina, Georgia, Iowa, and Wisconsin] conferring analogous rights in the workers compensation context. Dissent of J. Calabresi at [20]. The FAA's policy of promoting arbitration, however, has been consistently applied to claims under statutes embodying similarly compelling rights and interests. See Shearson/American Exp., 482 U.S. at 242 (applying the FAA's provisions to a civil RICO claim); see also, Mitsubishi, 473 U.S. at 635 ("The importance of the private damages remedy [under the Clayton Act, 15 U.S.C. § 15], however, does not compel the conclusion that it may not be -22- 1 Thus, the AAJ s reliance on cases such as Duncan, 315 U.S. 2 1, Aaacon Auto Transport v. State Farm Mutual Automobile 3 Insurance Co., 537 F.2d 648 (2d Cir. 1976), Krenger v. 4 Pennsylvania Railroad Co., 174 F.2d 556 (2d Cir. 1949), and 5 Nunez v. American Seafoods, 52 P.3d 720 (Alaska 2002), is 6 unpersuasive. 7 an arbitral forum without geographic restriction, but agreements 8 to adjudicate the worker s claims in a specific court or 9 geographic location, see Aaacon, 537 F.2d at 651 (arbitration Those cases involved, not agreements to submit to 10 must occur in New York City); Krenger, 174 F.2d at 557 (employee 11 agreed to bring suit only in a court sitting within either the 12 state where the injuries were sustained or the state where the 13 plaintiff was then living ); Nunez, 52 P.3d at 720 (employee 14 agreed to bring suit only in federal court in Seattle), or in 15 the case of Duncan, not to bring suit at all without satisfying 16 certain prerequisites, see 315 U.S. at 3 (employee agreed not 17 to resort[] to litigation without refunding monies previously 18 advanced to employee). 19 Additionally, the AAJ suggests that the proviso in FELA § 5 20 bars seaman arbitration agreements. 1 2 sought outside an American court."). -23- The proviso states: Provided, That in any action brought against any such common carrier under or by virtue of any of the provisions of this chapter, such common carrier may set off therein any sum it has contributed or paid to any insurance, relief benefit, or indemnity that may have been paid to the injured employee or the person entitled thereto on account of the injury or death for which said action was brought. 1 2 3 4 5 6 7 8 9 10 45 U.S.C. § 55. 11 defendant s sole statutory remedy when it has made advances to 12 an injured seaman and does not allow [it] to impose 13 arbitration in exchange for the payments. 14 18-19. 15 Defendants are common carriers (an issue the AAJ does not 16 address), this proviso does not provide that setting off 17 benefits (or even advancing those benefits, before setting them 18 off) renders any specific action, remedy, or forum exclusive. 19 Rather, the proviso s plain language simply ensures that common 20 carriers can set off benefits under certain circumstances. 21 The AAJ argues that this language provides the This argument is also unpersuasive. Amicus Curiae Br. at Even assuming that In concluding that FELA §§ 5-6 and Boyd are inapplicable to 22 seaman arbitration agreements, we align ourselves with all of 23 the courts that have considered the issue. 24 Terrebonne, 477 F.3d at 280-86; Nunez, 2007 WL 496855, at *6 25 (concluding that Boyd was inapplicable because this case 26 concerns an agreement to arbitrate and not a forum selection or -24- See, e.g., 1 venue clause ); Schreiber v. K-Sea Transp. Corp., 9 N.Y.3d 331, 2 338 (2007) ( We reject the analogy because there is a factor 3 here not present in Boyd: the federal policy favoring 4 arbitration. ); In re Weeks Marine, Inc., 242 S.W.3d 849, 858 5 (Tex. App. 2007) (questioning the applicability of [Boyd] to 6 this case, in which the issues must be considered with a healthy 7 regard for the federal policy favoring arbitration ). 8 Agreement is not unenforceable as a matter of law. 9 III. Is The Agreement Unconscionable? 10 Thus, the Next, Defendants argue that the district court erred in 11 concluding that the Agreement is unconscionable. 12 For the following reasons, we agree. 13 A. Burden Of Proof 14 The district court assumed without deciding that Harrington 15 bore the burden of proving that the Agreement was invalid. A 16 party to an arbitration agreement seeking to avoid arbitration 17 generally bears the burden of showing the agreement to be 18 inapplicable or invalid. 19 Randolph, 531 U.S. 79, 91-92 (2000). 20 has also stated that the burden is upon one who sets up a 21 seaman s release to show that it was executed freely, without 22 deception or coercion, and that it was made by the seaman with See Green Tree Fin. Corp.-Ala. v. -25- However, the Supreme Court 1 full understanding of his rights. Garrett v. Moore-McCormack 2 Co., 317 U.S. 239, 248 (1942). 3 have noted that [t]he sweep of the language in Garrett is so 4 broad and the solicitude for seamen so plain that an argument 5 for limiting traditional rule in admiralty regarding seamen s 6 releases cannot be sustained. 7 Harrington argues that Garrett s burden-shifting rule should 8 apply to this case because the Agreement constitutes a release 9 of his right to a jury trial. 10 Harrington is incorrect. In discussing this principle, we Lewis, 527 F.2d at 924. Garrett s burden-shifting rule 11 does not apply here because, as Defendants correctly note, the 12 Agreement is clearly not a release of rights, but an agreement 13 to arbitrate those very rights. 14 Harrington s substantive rights arise under the Jones Act. 15 agreeing to arbitrate a statutory claim, a party does not forgo 16 the substantive rights afforded by the statute; it only submits 17 to their resolution in an arbitral, rather than a judicial, 18 forum. 19 Inc., 473 U.S. 614, 628 (1985). 20 case law to support his argument that Defendants must 21 affirmatively prove the Agreement s validity. 22 Harrington cites, see Appellee Br. at 16-19, universally place Appellants Reply Br. at 9. By Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Harrington fails to cite any -26- Those cases 1 the burden of proof on the party seeking to avoid arbitration, 2 see, e.g., Nunez, 2007 WL 496855, at *8 n.15 ( [T]he burden in 3 Garrett concerned a burden of sustaining release of claims. . . 4 . 5 N.Y.3d at 340 ( [The] burden [for challenging the enforceability 6 of an arbitration agreement] is not shifted simply because the 7 objecting party is a seaman. ). 8 burden of proving that the Agreement was invalid under New 9 Jersey law. 10 B. 11 New Jersey [c]ourts generally have applied a sliding-scale 12 approach to determine overall unconscionability, considering the 13 relative levels of both procedural and substantive 14 unconscionability. 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 6 [R]elease of claims is not an issue here. ); Schreiber, 9 Thus, Harrington bears the Unconscionability Delta Funding Corp. v. Harris, 912 A.2d The parties do not challenge the district court s application of New Jersey law to determine the validity of the Agreement. Nevertheless, Harrington argues that, on the basis of Garrett, a New Jersey state court would not apply New Jersey common law in this case, but instead would apply federal maritime law to determine the validity of the Agreement. See Appellee Br. at 19-20. Harrington s argument appears to be an oblique reference to the reverse-Erie doctrine, which requires that the substantive remedies afforded by state courts in maritime cases conform to governing federal maritime standards. Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 223 (1986). We reject this cursory argument, both because Harrington cites no case law to support it, and because, as previously established, Garrett is inapposite to this case. Moreover, given maritime law s silence on this particular issue, the district court correctly applied New Jersey common law principles to determine -27- 1 104, 111 (N.J. 2006) (citing Sitogum Holdings, 800 A.2d at 921- 2 22). 3 like age, literacy, and lack of sophistication, while 4 [s]ubstantive unconscionability describes an exchange of 5 promises that is so one-sided as to shock the conscience of the 6 court. 7 357 F. Supp. 2d 788, 801-02 (D.N.J. 2005). 8 unconscionability typically does not, by itself, render [an] 9 arbitration agreement unenforceable. Procedural unconscionability includes various inadequacies Travelodge Hotels, Inc. v. Honey Suckle Enters., Inc., Procedural Delta Funding, 912 A.2d at 10 111; see also Sitogum Holdings, 800 A.2d at 921 n.13 ( There do 11 not appear to be any decisions where procedural unconscionability 12 was present but not substantive unconscionability. ). 13 result, for an agreement to be unconscionable under New Jersey 14 law, it must include an exchange of obligations so one-sided as 15 to shock the court s conscience. 16 921; see also Travelodge Hotels, 357 F. Supp. 2d at 802 (granting 17 summary judgment where plaintiff failed to establish that the 18 material terms or promises in the [agreement] were substantively 19 unconscionable ). 20 As a Sitogum Holdings, 800 A.2d at In finding the Agreement unconscionable, the district court 21 focused primarily on the Agreement s alleged procedural 22 unconscionability, while finding substantive unconscionability 1 2 3 the validity of the Agreement. See, e.g., Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434, 445 n.6 (2d Cir. 2006). -28- 1 solely based on the provision of the Agreement that stated that 2 Defendants are not currently responsible or liable for any other 3 damages under general maritime law, the Jones Act or any other 4 applicable law. 5 According to the district court, this language was substantively 6 unconscionable because of its potential to mislead[] . . . a 7 layperson [who is] without the benefit of legal counsel. 8 *5. 9 Harrington, 2007 WL 2693529, at *4-5. We disagree with the district court s analysis. Id. at First, 10 misleading language in an agreement is relevant to procedural, 11 and not substantive, unconscionability, see Sitogum Holdings, 800 12 A.2d at 921 (explaining that procedural unconscionability 13 includes, inter alia, an agreement s hidden or unduly complex 14 contract terms ); thus, the instant provision could only be 15 substantively unconscionable if, as a result of its operation, 16 the Agreement shock[ed] the court s conscience, id. 17 instant provision had no such effect it impose[d] no 18 substantive obligation on Harrington, Appellants Br. at 13, nor 19 did it deprive Harrington of any rights. 20 only noted that, at the time the Agreement was executed, 21 Defendants were not currently liable for any damages, which was 22 true because there had been no finding, or admission, of 23 liability. 24 that there was no basis for liability, but the fact that a The Instead, the provision To be sure, the provision could be read as indicating -29- 1 provision is susceptible to different interpretations does not, 2 without more, make it substantively unconscionable. 3 remaining provisions of the Agreement were substantively 4 reasonable: 5 Harrington agreed to arbitrate his claims against Defendants. 6 find this bargain so one-sided as to shock the court s 7 conscience, Sitogum Holdings, 800 A.2d at 921, would contravene 8 the liberal federal policy favoring arbitration agreements, 9 Moses H. Cone Mem l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 10 11 The Defendants agreed to advance funds to Harrington and To 24 (1983). Harrington sets forth two additional, unpersuasive reasons 12 for affirming the district court s judgment. 13 contention that the Agreement is substantively unconscionable 14 because the financial cost of arbitration essentially 15 extinguish[ed] [his] ability to pursue his claims, see Appellee 16 Br. at 23, fails because the Rules of Employment for the American 17 Association of Arbitration ( AAA ) expressly provide that [t]he 18 AAA may, in the event of extreme hardship on any party, defer or 19 reduce the administrative fees, and Harrington has not explained 20 why the fees would not be deferred or reduced in his case. 21 Moreover, Defendants have agreed to advance all arbitration fees, 22 subject to later allocation by the arbitrator, and Harrington s 23 retainer agreement with his counsel provides for the advancement 24 of all expenses by counsel, presumably including the cost of -30- First, Harrington s 1 arbitration. 2 arbitration would preclude him from arbitrating his claims. 3 Harrington has not established that the cost of Harrington s argument that the Agreement was substantively 4 unconscionable because it takes away his right to a trial by jury 5 fails because courts may not rely on the uniqueness of an 6 agreement to arbitrate, which necessarily waives jury trial, as 7 a basis for a state-law holding that enforcement would be 8 unconscionable. 9 It is well-settled that waivers of jury trial are fully Perry v. Thomas, 482 U.S. 483, 492 n.9 (1987). 10 enforceable under the FAA. 11 Shearson/American Exp., Inc., 490 U.S. 477, 480-81 (1989); 12 Mitsubishi Motors, 473 U.S. at 628. 13 See Gilmer, 500 U.S. at 26; Quijan v. Putting aside the question of whether the Agreement was 14 procedurally unconscionable, the district court erred in 15 concluding that the Agreement was substantively unconscionable. 16 Because, under New Jersey law, an agreement must be substantively 17 unconscionable in order to be voided for unconscionability, see 18 Sitogum Holdings, 800 A.2d at 921 n.13, the arbitration agreement 19 entered into by Harrington cannot be voided on that basis.7 1 2 3 4 5 6 7 8 9 7 We note that Judge Calabresi s dissent agrees with our understanding that New Jersey requires some degree of substantive unconscionability in order to void a contract provision. Dissent of J. Calabresi at [5]. Judge Calabresi would, however, permit a finding of substantive unconscionability under New Jersey law without a determination that the provision at issue shocks the conscience. Id. at [6] ( I do not believe that conscienceshocking terms are in practice required to find unconscionability in New Jersey in circumstances like those before us. ). -31- 1 2 IV. Harrington s Remaining Contractual Defenses Harrington also argued to the district court that the 3 Agreement should be voided due to lack of mental capacity and 4 intoxication. 5 Super. Ct. App. Div. 2005) ( [T]he longstanding rule is that 6 where there is not the mental capacity to comprehend and 7 understand, there is not the capacity to make a valid contract. ) 8 (internal quotation marks omitted); Feighner v. Sauter, 614 A.2d 9 1071, 1075 (N.J. Super. Ct. App. Div. 1992) (noting that See Jennings v. Reed, 885 A.2d 482, 488 (N.J. 10 intoxication is one of the usual grounds for rescission of a 11 contract). 12 rejected sub silentio Plaintiff s defenses of lack of mental 13 capacity and intoxication, Appellants Br. at 10 n.2, and that 14 therefore we should also reject those defenses on appeal. 15 discern no evidence of this. 16 or legal findings with respect to Harrington s lack of mental 17 capacity and intoxication defenses, nor have those issues been 18 briefed on appeal. 19 for a determination of the merits of Harrington s remaining 20 contractual defenses. 1 2 3 4 5 6 Defendants contend that [t]he [d]istrict [c]ourt We The district court made no factual Accordingly, we remand to the district court Following the standards set forth by the Supreme Court of New Jersey, we require the identification of some exchange of obligations so one-sided as to shock the court s conscience before voiding a contract provision. Sitogum Holdings, 800 A.2d at 921. Finding no such one-sided obligation, the arbitration provision cannot be voided under New Jersey law. -32- 1 In addition, if the district court finds one or both of 2 Harrington s defenses to have merit, it will also be required to 3 reconsider whether Harrington nonetheless ratified the Agreement. 4 Ratification is the affirmance by a person of a prior act which 5 did not bind him but which was done, or professedly done on his 6 account, whereby the act, as to some or all persons, is given 7 effect as if originally authorized by him. 8 v. First Fidelity Bank, N.A., 652 A.2d 199, 205 (N.J. Super. Ct. 9 App. Div. 1995) (internal quotation marks omitted). Martin Glennon, Inc. 10 Ratification requires intent to ratify plus full knowledge of 11 all the material facts. 12 and intent may be inferred . . . from conduct on the part of the 13 principal which is inconsistent with any other position than 14 intent to adopt the act. 15 N.J., 354 A.2d 291, 296 (N.J. 1976) (internal citations omitted). 16 Therefore, if the district court finds the Agreement voidable due 17 to lack of mental capacity and/or intoxication, the court must 18 then determine whether Harrington cashed Defendants checks, not 19 only with the intent to ratify the Agreement, but with the 20 full knowledge of the potential invalidity of the Agreement. 21 Id. Thermo Contracting Corp. v. Bank of CONCLUSION 22 23 Ratification may be express or implied, For the foregoing reasons, the district court s judgment is 24 VACATED and the case REMANDED for proceedings consistent with 25 this opinion. -33- 1 2 3 CALABRESI, Circuit Judge, dissenting: 4 arbitration is in this case unconscionable under New Jersey law. More importantly, I would 5 answer a threshold question differently from the majority and conclude that the arbitration 6 agreement is invalid as a matter of law under the Jones Act, 46 U.S.C. § 30104, and sections 5 7 and 6 of the Federal Employers Liability Act ( FELA ), 45 U.S.C. § 51 et seq. Because I 8 believe that the majority s decision to reverse does not take adequate account of the historic 9 importance and purpose of both the Jones Act and FELA, and of their unique protections for 10 I would affirm the District Court s judgment that the post-injury agreement compelling specific categories of workers, such as seamen, I respectfully dissent. I. 11 Plaintiff-Appellee Frederick Harrington ( Harrington ) is a former seaman who sustained 12 13 a serious back injury during the course of his employment with Weeks Marine, Inc ( Weeks 14 Marine or Appellant ). After being diagnosed with herniated disks and being told by his 15 doctor that he required surgery, he contacted Weeks Marine to request further financial support 16 that would enable him to finance his surgery. Three months later, and just days before 17 Harrington was scheduled to undergo major surgery a fact of which the District Court found 18 Weeks Marine was aware Weeks Marine responded by mailing Harrington a Claim Arbitration 19 Agreement ( Agreement ). In the Agreement, Weeks Marine offered to pay Harrington 60 20 percent of his gross wages up to a certain time as an advance on a potential settlement, provided 21 that Harrington agree to arbitrate all of his claims. 1 Five days after his surgery, and while under 1 Harrington received this initial Agreement from Weeks Marine on July 11, 2005 and signed it on July 23, 2005. Weeks Marine agreed to make advance payments to Harrington until Harrington was declared fit for duty, reached maximum medical improvement, or October 10, 2005, whichever came first. Therefore, in exchange for Harrington s agreement to arbitrate, Weeks Marine agreed to advance his salary for an amount of time that would at most be less than 1 1 the influence of large doses of both prescription pain medication and alcohol, Harrington signed 2 the Agreement. The District Court found that Weeks Marine was aware of Harrington s heavily 3 medicated state when he signed the Agreement and was also aware that Harrington was 4 financially vulnerable : he was an injured seaman attempting to survive on a mere $20.00 per 5 day who was living with and being supported by his elderly father. Harrington v. Atlantic 6 Sounding Co., Inc., No. 06-CV-2900, 2007 WL 2693529, at *4 (E.D.N.Y. Sept. 11, 2007). 7 In addition, Harrington manifestly lacked legal sophistication. When he testified before 8 the District Court, it was clear that he had difficulty understanding the questions and 9 articulating his responses. Id. at *5. The District Court was able to glean from Harrington s 10 testimony that he did not know the meaning of the word arbitration and was unfamiliar with 11 his legal remedies under the Jones Act. Rather than helping an employee like Harrington 12 understand the contract he was to sign, the agreement Weeks Marine sent obfuscated as much as 13 it clarified. The Agreement did not use plain English and failed to make clear that, by signing, 14 Harrington waived his right to a jury trial. In fact, the Agreement was framed in a way that 15 could reasonably lead a signatory to believe he was not relinquishing any rights at all: it provided 16 that [a]lthough [the company was] obligated to pay maintenance and cure it was not currently 17 responsible or liable for any other damages under general maritime law, the Jones Act or any 18 other applicable law. J.A. 245. Harrington was never told that he was signing a legal document 19 affecting his rights or told that he might wish to seek the advice of an attorney. In light of this, it 20 is not surprising that Harrington believed that because he was a good employee, Weeks Marine 21 was simply planning to pay him 60% of his wages until he could return to work, and he did not three months. When Harrington failed to recover, Weeks Marine did ultimately agree to extend the payments advanced for an additional three months pursuant to an Addendum Agreement that in other respects set forth the same terms and conditions as the original Agreement. 2 1 realize he was being asked to relinquish anything in return. See Pl. Decl. ¶ 9. Based on these 2 findings of fact, which we must accept unless they are clearly erroneous, see Chelsea Square 3 Textiles, Inc. v. Bombay Dyeing and Mfg. Co., 189 F.3d 289, 295 (2d Cir. 1999), the District 4 Court concluded that the Agreement requiring Harrington to arbitrate his Jones Act claims was 5 unconscionable under New Jersey law, and accordingly denied Weeks Marine s motion to 6 dismiss or compel arbitration. 7 I would not reach the issue of unconscionability because I would hold that an Agreement 8 requiring a seaman to arbitrate his Jones Act claim is invalid as a matter of law. See infra Part II. 9 But because the majority holds otherwise, the majority addresses the District Court s 10 unconscionability determination and reverses it, concluding that the Agreement was not 11 substantively unconscionable because it does not shock[] the court s conscience. See Maj. Op. 12 at [27]. I find New Jersey law far less clear on this question than does the majority. But were I 13 to decide the issue, I would agree with the District Court that the Agreement was 14 unconscionable, even assuming, as the District Court did, that the burden of demonstrating 15 unconscionability is on Harrington. 2 16 Central to the majority s holding is its conclusion that New Jersey contract law always 17 requires a showing of significant substantive unconscionability in addition to procedural 18 unconscionability. While the majority acknowledges that New Jersey courts generally . . . 19 appl[y] a sliding-scale approach to determine overall unconscionability, the majority ultimately 20 explains that for a contract to be unconscionable under New Jersey law it must include an 21 exchange of obligations so one-sided as to shock the court s conscience. See Maj. Op. at [242 It is possible to argue to the contrary. See Garrett v. Moore-McCormack Co., 317 U.S. 239, 248 (1942) (holding, in the context of a complete relinquishment of rights, that the burden of showing a release was knowing and voluntary lies on the seaman s counterparty). 3 1 26] (internal quotation marks omitted). I do not understand New Jersey law to establish so 2 formal a test, and instead believe that New Jersey courts actual application of unconscionability 3 is much more nuanced and case-specific. See Delta Funding Corp. v. Harris, 912 A.2d 104, 111 4 (N.J. 2006) ( The defense of unconscionability . . . calls for a fact-sensitive analysis in each 5 case[.] ); Lucier v. Williams, 841 A.2d 907, 911 (N.J. Super. A.D. 2004) ( There is no hard and 6 fast definition of unconscionability); see also Sitogum Holdings, Inc. v. Ropes, 800 A.2d 915, 7 920 n.12 (N.J. Super Ch. Div. 2002) ( It is not possible to define unconscionability. It is not a 8 concept, but a determination to be made in light of a variety of factors not unifiable into a 9 formula. ) (quoting James J. White & Robert S. Summers, Uniform Commercial Code 151 (4th 10 ed. 1996)). Therefore, rather than approaching unconscionability as though it contained discrete 11 elements, New Jersey courts have frequently emphasized, when evaluating contracts of adhesion, 12 that various factors must be considered, and these factors have procedural and substantive 13 aspects. See Delta Funding Corp., 912 A.2d at 111; Rudbart v. North Jersey Dist. Water 14 Supply Comm n, 605 A.2d 681, 687 (N.J. 1992) ( [I]n determining whether to enforce the terms 15 of a contract of adhesion courts have looked . . . to . . . the subject matter of the contract, the 16 parties relative bargaining positions, the degree of economic compulsion motivating the 17 adhering party, and the public interests affected by the contract. ). 18 Underlying New Jersey courts consideration of these various factors appears to be a 19 general concern about asymmetry between contracting parties, which, when this asymmetry rises 20 to a certain level, makes judicial enforcement of a contract unfair. New Jersey s sliding-scale 21 approach to unconscionability reflects a view, first, that this unfairness can manifest itself in a 22 contract s formation and also in its terms, and second, that these two manifestations are 23 interrelated. This seems perfectly sensible. If two parties of relatively equivalent bargaining 4 1 power negotiate contractual terms, courts will rightly be skeptical when one party later claims 2 that the agreement was so one-sided as to preclude its enforcement. By contrast, when there is 3 overwhelming procedural unconscionability in the formation of a contract, a court may well 4 believe that the contract is unconscionable based on a lower degree of unfairness in the ultimate 5 terms. See Muhammad v. County Bank of Rehoboth Beach, 912 A.2d 88, 97 n.3 (N.J. 2006) 6 (indicating that a sliding scale analysis may be appropriate in the context of adhesion contracts 7 and that when a contract involves overwhelming procedural unconscionability this should be 8 factored into the unconscionability analysis); Sitogum Holdings, 800 A.2d at 923 (endorsing a 9 sliding scale approach to unconscionability, and holding that a claim for unconscionability 10 should not be barred when one factor [i.e. procedural or substantive] is greatly exceeded, while 11 the other only marginally so ). 12 I take as valid the District Court s findings of fact, and based on these findings, I think it 13 is manifest that there was dramatic procedural unconscionability in this case. While this would 14 not in itself render the agreement to arbitrate unenforceable, see Delta Funding Corp. v. Harris, 15 912 A.2d at 111, it does mean that, under New Jersey law, a lesser degree of substantive 16 unfairness than the majority seems to demand suffices to make the Agreement unenforceable. 17 Here, in exchange for an advance against a potential settlement that (under the District Court s 18 findings) was offered in a procedurally outrageous manner, Harrington gave up substantial rights 19 uniquely afforded to Jones Act plaintiffs. Agreeing to arbitration did more than deprive 20 Harrington of a jury trial, which is of course a necessary consequence of all arbitration 21 agreements and so not ordinarily enough to constitute substantive unconscionability. See Perry 22 v. Thomas, 482 U.S. 483, 492 n.9 (1987). Rather, the Agreement deprived Harrington of a whole 23 panoply of important choices, the existence of which reflects the specific decision by Congress 5 1 to confer significant procedural advantages on seamen under the Jones Act. I will discuss these 2 choices in detail in the section below; for now it is enough to note that they include the ability to 3 elect unilaterally between a jury or non-jury trial and to choose to a degree virtually never seen 4 elsewhere the forum that he believes to be most favorable in which to bring his claim. See 5 infra Part II. I do not need to decide whether the overall Agreement or any of its individual provisions 6 7 shock my conscience as a judge. For I do not believe that conscience-shocking terms are in 8 practice required to find unconscionability in New Jersey in circumstances like those before us. 9 The question is a close one. And, more than anything, I believe this case demonstrates the 10 general undesirability of giving federal courts the last word on the interpretation of state law in a 11 given case. See Guido Calabresi, Federal and State Courts: Restoring a Workable Balance, 78 12 N.Y.U. L. Rev. 1293, 1300 (2003) ( [F]ederal courts often get state law wrong because federal 13 judges don t know state law and are not the ultimate decisionmakers on it. ). In its effort to 14 interpret New Jersey law, the majority articulates a rule for contractual unconscionability that the 15 Agreement at issue cannot meet because the Agreement s terms are not shocking. The 16 majority s interpretation of New Jersey law to require this, even in the face of important 17 procedural unconscionability, is not untenable. But I do not believe it is one that the New Jersey 18 Supreme Court would adopt if we could certify the question to them. Unfortunately, the New 19 Jersey Supreme Court does not accept certification from us. 3 As a result, the majority and I must 20 guess as to state law, and we come out in opposite ways. 3 See N.J. Court Rule 2:12A-1 ( The Supreme Court may answer a question of law certified to it by the United States Court of Appeals for the Third Circuit, if the answer may be determinative of an issue in litigation pending in the Third Circuit and there is no controlling appellate decision, constitutional provision, or statute in this State. ); Stichting Ter Behartiging Van de Belangen Van Oudaandeelhouders In Het Kapitaal Van Saybolt Int'l B.V. v. Schreiber, 407 F.3d 6 1 In short, while I agree that a contract to arbitrate one s claims would not by itself be 2 deemed substantively unconscionable by New Jersey in the typical case, see Maj. Op. at [28], I 3 believe that New Jersey would find Harrington s case not to be typical. II. 4 5 This case can, however, also be properly resolved without recourse to any questions of 6 state contract law. Harrington, supported by amicus curiae American Association for Justice 7 ( AAJ ), argues that the Agreement is void as a matter of law. I agree, and consider this an 8 appropriate alternate ground for affirming the District Court s judgment. See Prisco v. A & D 9 Carting Corp., 168 F.3d 593, 610 (2d Cir. 1999) (explaining that we may affirm the judgment 10 of the district court on any basis for which there is a record sufficient to permit conclusions of 11 law (quotation marks omitted)). 12 13 A. The Jones Act, officially entitled The Merchant Marine Act of 1920, was enacted to 14 provide a cause of action in negligence for any seaman injured in the course of employment. 15 46 U.S.C. § 30104. The Act followed a long tradition of solicitude for the rights and interests of 16 seamen by both legislatures and courts that dates back to the First Congress. See Garrett v. 17 Moore-McCormack Co., 317 U.S. 239, 246 (1942) (recognizing [o]ur historic national policy, 18 both legislative and judicial directed to the safeguarding of seamen s rights). In an oft-quoted 19 case, Justice Story, sitting on Circuit in 1823, discussed the judicial solicitude accorded to 34, 47 n.6 (2d Cir. 2005) ( [W]ere certification available to us, we might . . . seek guidance from the New Jersey Supreme Court on the matter. But certification of the question to the New Jersey Supreme Court is not an option, because, under Rule 2:12A-1 of that court, certification is accepted by that court only from the Third Circuit. ). 7 1 seamen in admiralty, and explained how this solicitude should inform a court s interpretation of 2 the contracts into which seamen enter: Every court should watch with jealousy an encroachment upon the rights of seamen, because they are unprotected and need counsel . . . . [C]ourts of maritime law have been in the constant habit of extending towards them a peculiar, protecting favor and guardianship. They are emphatically the wards of the admiralty[.] . . . If there is any undue inequality in the terms, any disproportion in the bargain, any sacrifice of rights on one side, which are not compensated by extraordinary benefits on the other, the judicial interpretation of the transaction, is that the bargain is unjust and unreasonable, that advantage has been taken of the situation of the weaker party, and that protanto the bargain ought to be set aside as inequitable. . . . And on every occasion the court expects to be satisfied, that the compensation for every material alteration is entirely adequate to the diminution of right or privilege on the part of the seamen. 3 4 5 6 7 8 9 10 11 12 13 14 15 Harden v. Gordon, 11 F. Cas. 480, 485 (Cir. Ct. Me. 1823) (Story, J.). 16 Growing out of this tradition, the Jones Act sought to fill a remedial gap that existed for 17 the personal injury claims of this group of especially vulnerable workers. General maritime law 18 prevailing prior to the enactment of the Jones Act allowed a seaman to receive maintenance and 19 cure from his employer and damages attributable to a ship s unseaworthiness, but did not permit 20 a suit in negligence against either the ship s master or any member of the crew. See Chandris, 21 Inc. v. Latsis, 515 U.S. 347, 354 (1995) (citing The Osceoloa, 189 U.S. 158, 175 (1903)). State 22 workers compensation schemes which were first adopted in the decade preceding the Jones 23 Act and quickly proliferated despite challenges to their validity, see Dan B. Dobbs & Paul R. 24 Hayden, Torts and Compensation 916 (5th ed. 2005) might have conceivably filled this gap, 25 albeit non-uniformly. But this possibility was apparently precluded by a series of much- 26 criticized 4 Supreme Court decisions authored by Justice McReynolds prohibiting the application 27 of state compensation laws to maritime workers. 5 4 See, e.g., Am. Dredging Co. v. Miller, 510 U.S. 443, 458-62 (1994) (Stevens, J., concurring in part and concurring the judgment) (referring to the Jensen doctrine as ill-advised and calling the case just as untrustworthy a guide in an admiralty case today as Lochner v. New York . . . 8 1 The Jones Act was, therefore, enacted by a Congress a) that recognized seamen as a 2 group meriting solicitude and protection, and b) that also realized that then-current law provided 3 them with inadequate recourse when they suffered injuries resulting from the hazards of their 4 employment. Hence, the Act removed the bar for a suit based on negligence, defined negligence 5 extremely broadly, and provided seamen with heightened legal protection as workers merited by 6 their exposure to the perils of the sea. Chandris, 515 U.S at 354 (internal quotation marks 7 omitted). 6 These protections extended beyond the change in substantive law; the Act provides would be in a case under the Due Process Clause ); Matthew H. Frederick, Note, Adrift in the Harbor: Ambiguous-Amphibious Controversies and Seamen s Access to Workers Compensation Benefits, 81 Tex. L. Rev. 1671, 1706 (2003) ( It has become common sport to catalogue the abuse heaped upon Jensen over the years . . . . ). 5 See S. Pac. Co. v. Jensen, 244 U.S. 205, 217-18 (1917) (holding that state worker s compensation award to family of a longshoreman killed on an ocean-going ship was unconstitutional because it addressed a subject matter reserved exclusively to Congress and the federal courts); see also Knickerbocker Ice Co. v. Stewart, 253 U.S. 149, 163-64 (1920) (invalidating as an impermissible transfer of legislative power a law passed by Congress in response to Jensen intended to permit the application of workers compensation laws of the several states to injuries within the admiralty and maritime jurisdiction); State of Washington v. W.C. Dawson & Co., 264 U.S. 219, 222-23 (1924) (invalidating on the same ground a similar but more limited federal statute that excluded some maritime workers from its scope). A contemporaneous opinion by Justice Van Devanter also held that state workers compensation laws could not be applied to railway employees who were engaging in interstate commerce. New York Cent. R. Co. v. Winfield, 244 U.S. 147 (1917). Relying on a theory of field preemption, the Court concluded that the remedy established by Congress in passing FELA was meant to be exclusive. See id. at 151-53. In 1927, Congress ultimately did adopt its own workers compensation law, but only for non-seamen maritime workers. See Longshoremen s and Harbor Workers Compensation Act ( LHWCA ), 33 U.S.C. § 901 et seq.; id. § 902(3)(G) (excluding a master or member of a crew of any vessel from the coverage of LHWCA); see also Southwest Marine, Inc. v. Gizoni, 502 U.S. 81, 87 (1991) (describing this provision as a refinement of the term seamen in the Jones Act). 6 The majority, relying on dicta from one of our cases, expresses doubt about whether the solicitude traditionally afforded to seaman is still applicable because [t]he modern reality is that most seamen are no longer friendless. Maj. Op. at [19 n.3] (quoting Ammar v. United States, 342 F.3d 133, 146 (2d Cir. 2003). Leaving aside the irony of invoking this (ultimately empirical) notion in a case involving a litigant as helpless as Harrington, it is notable that in the passage the majority quotes, the court was addressing a seaman s maintenance claim in the shadow of a 9 1 seamen plaintiffs with powerful procedural rights, such as the unilateral right to elect between 2 jury and non-jury trial. 7 3 Many of the Jones Act s rights and protections are conferred by reference to the rights 4 and protections afforded by law to railway employees another group of workers engaged in an 5 industry that was extremely dangerous, of national importance, and under the aforementioned 6 Supreme Court decision, see supra [9 n.5], not readily covered by state workers compensation 7 laws. See 46 U.S.C. § 30104 ( Laws of the United States regulating recovery for personal injury 8 to, or death of, a railway employee apply to an action under this section. ). As the Supreme 9 Court has explained, this provision of the Jones Act adopt[ed] the entire judicially developed 10 doctrine of liability under [FELA]. Am. Dredging Co. v. Miller, 510 U.S. 443, 456 (1994) 11 (quotation marks omitted). FELA includes several provisions that both provide plaintiffs with 12 significant procedural rights and protect those rights from subversion by counterparties with 13 superior bargaining power. FELA section 6 provides an expansive federal venue provision, 45 collective bargaining agreement. See Ammar 342 F.3d at 146. Maintenance is a judicially fashioned duty based on general maritime law, see Wills v. Amerada Hess Corp., 379 F.3d 32, 52 (2d Cir. 2004), and federal courts have also been vested with the power to adopt federal common law governing the enforcement of collective bargaining agreements, see Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 451(1957). By contrast, this case involves statutory interpretation, in which case it is the intent of the Congress that enacted the Jones Act that matters. See Consumer Prod. Safety Comm n v. GTE Sylvania, Inc., 447 U.S. 102, 117 (1980). The majority might view as anachronistic the solicitude that Congress in 1920 exhibited toward seamen, but we as federal courts have not been given the power to update supposedly out-of-date statutes, whatever the academic merits of such proposals. See Hayden v. Pataki, 449 F.3d 305, 367 (2d Cir. 2006) (in banc) (Calabresi, J., dissenting). 7 See 46 U.S.C. § 30104 ( A seaman injured in the course of employment . . . may elect to bring a civil action at law, with the right of trial by jury, against the employer. ); Panama R. Co. v. Johnson, 264 U.S. 375, 392 (1924) (rejecting Fifth Amendment Due Process challenge to Jones Act premised on argument that the Act permits injured seamen to elect between varying measures of redress and between different forms of action without according a corresponding right to their employers ); Craig v. Atlantic Richfield Co., 19 F.3d 472, 476 (9th Cir. 1994) ( The plain language of the Jones Act gives a plaintiff the option of maintaining an action at law with the accompanying right to a jury trial. The Act makes no mention of a defendant. ). 10 1 U.S.C. § 56, 8 expressly recognizes concurrent jurisdiction in the state courts, 28 U.S.C. § 2 1445(a), 9 and bars a defendant from removing FELA claims (and by extension Jones Act 3 claims) to federal court, 45 U.S.C § 56. The combination of these provisions gives the plaintiff 4 in either a FELA or Jones Act case almost limitless forum choices that the defendant cannot 5 disturb. Moreover, FELA section 5 protects the rights established under the Act by declaring 6 void [a]ny contract, rule, regulation, or device whatsoever, the purpose or intent of which shall 7 be to enable any common carrier to exempt itself from any liability created by this chapter. 45 8 U.S.C. § 55. In adopting this section, Congress sought to be comprehensive by using a 9 generic, rather than a specific, description. Philadelphia B. & W. R. Co. v. Schubert, 224 U.S. 10 603, 611 (1912); see also Duncan v. Thompson, 315 U.S. 1, 6 (1942) (surveying legislative 11 history of FELA and concluding that Congress wanted Section 5 to have the full effect that its 12 comprehensive phraseology implies ). 13 In Boyd v. Grand Trunk Western Railroad, 338 U.S. 263 (1949), the Supreme Court 14 applied FELA section 5 to invalidate a post-injury agreement that, in consideration for a 15 monetary advance, restricted a railroad employee s choice of venue for his FELA action. After 16 explaining that, under FELA section 6, the defendant was liable to suit in the state court in which 17 the plaintiff filed his claim, the Court held that the right to bring the suit in any eligible forum is 18 a right of sufficient substantiality to be included within the Congressional mandate of s. 5 of 19 [FELA]. Id. at 265. Accordingly, the contract limiting plaintiff s choice of venue was declared 8 Specifically, section 6 provides that an action under FELA may be brought in a federal district that is in the district of the residence of the defendant, or in which the cause of action arose, or in which the defendant shall be doing business at the time of commencing such action. 45 U.S.C. § 56. The last of these options makes this venue provision especially broad. 9 As the majority explains, this non-removal language was originally part of FELA section 6, but has subsequently been amended out and has been replaced with language to the same effect in 28 U.S.C. § 1445(a). 11 1 void under FELA section 5. To hold otherwise, the Court asserted, would thwart the express 2 purpose of FELA by allowing the use of a device to defeat plaintiff s substantial right 3 granted in FELA section 6 to select the forum. Id. at 266. I believe that Boyd is controlling in this case, and that faithful adherence to that long- 4 5 established precedent requires that we find the arbitration agreement at issue in this case void as 6 a matter of law. The Agreement that Weeks Marine entered into with Harrington is a contract or 7 device whose purpose is to deprive Harrington of the substantial right to choose the forum in 8 which to bring his claim. The majority tries to distinguish Boyd, but its attempt is ultimately 9 unconvincing. First, Boyd s prohibition on venue selection agreements fully applies to Jones Act cases. 10 11 This is the plain implication of 46 U.S.C. § 30104, which, as previously noted, has been 12 interpreted to adopt under the Jones Act the entire judicially developed doctrine of liability 13 under FELA. Am. Dredging Co., 510 U.S. at 456 (quotation marks omitted). Following this 14 clear and comprehensive instruction, we have not hesitated to recognize that rules governing 15 jurisdiction and venue under FELA apply with full force to Jones Act claims. See Cal. Pub. 16 Employees Ret. Sys. v. WorldCom., Inc., 368 F.3d 86, 99 (2d Cir. 2004) (acknowledging that 17 Jones Act cases are made non-removable by 28 U.S.C. § 1445(a), which precludes removal to 18 federal court in civil actions against a railroad or its receivers or trustees ); see also Nunez v. 19 Am. Seafoods, 52 P.3d 720 (Ala. 2002) (holding that Boyd applies to Jones Act claims and 20 invalidating a forum selection clause that restricted the plaintiffs ability to bring his Jones Act 21 suit in any eligible forum). 10 10 But see Terrebonne v. K-Sea Transp. Corp., 477 F.3d 271, 281 (5th Cir. 2007). Terrebonne is more than unpersuasive, however. The Terrebonne court held that the venue provisions of FELA section 6 did not apply to the Jones Act because the Jones Act had its own venue 12 1 Second, contracts mandating arbitration of a Jones Act claim, such as the Agreement at 2 issue here, directly implicate FELA section 5 and Boyd. Harrington brought suit in the District 3 Court for the Eastern District of New York. It is not disputed that [Appellant] is liable to suit, 4 Boyd, 338 U.S. at 265, in that forum under the Jones Act. The Agreement compelling 5 arbitration, however, if enforced, would prevent Harrington from being able to pursue his claims 6 in that forum. Accordingly, the Agreement deprives Harrington of the substantial right to 7 bring suit in any eligible forum, and effectively allows Weeks Marine to contract out of 8 liability to be sued in the jurisdiction Harrington selected. See id. at 265-66; Krenger v. Penn. 9 R.R. Co., 174 F.2d 556, 559 (2d Cir. 1949) (Op. of Clark, J.). It follows that the Agreement 10 contravenes FELA section 5 and is void. 11 The majority fails to recognize this point when it argues that Boyd protected only the 12 right to bring claims in an eligible forum, and that the arbitral forum to which the Agreement 13 shifts Harrington s right to adjudication is both eligible and favored. See Maj. Op. at [19-20]. 14 Boyd did not merely protect a plaintiff s ability to adjudicate his claim in some eligible forum. 15 The contract at issue in Boyd did not, after all, prevent that, because it recognized as eligible fora 16 both the state county court and the federal district court where the plaintiff resided at the time of 17 his injuries (or alternatively the state and federal fora in which the injuries were sustained). See 18 Boyd, 338 U.S. at 263-64. Instead, Boyd interpreted FELA section 5 to protect the plaintiff s provision. As a result, the court reasoned, FELA section 5, as interpreted by Boyd, did not apply to protect the plaintiff s choice of venue in a Jones Act case. Whatever the merit of the Terrebonne s holding on this point and I believe it was in error the predicate for the court s reasoning has been totally undercut by subsequent legislation that deleted the Jones Act s separate federal venue provision. See National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, Title XXXV.C, § 3521, 122 Stat. 3, 596. The amendment was made retroactive to the last codification of the Jones Act in Public Law 109-304, which occurred on October 6, 2006. In a reply brief, Appellant all but concedes that this amendment to the Jones Act completely undermines this aspect of Terrebonne. See App. 2d Rep. Br. at 4 n.2. 13 1 right to bring his claim in any forum that was made eligible to him by statute, because the Court 2 recognized that [t]he right to select the forum that was granted by FELA section 6 was a 3 substantial right. Id. at 266 (emphasis added). It is this fundamental FELA/Jones Act right to 4 select that the Agreement before us takes away from Harrington. Cf. Scherk v. Alberto-Culver 5 Co., 417 U.S. 506, 519 (1974) ( An agreement to arbitrate before a specified tribunal is, in 6 effect, a special kind of forum-selection clause . . . . ). 7 B. 8 I recognize that other courts have held that FELA sections 5 and 6 and Boyd do not 9 preclude the enforcement of a seaman s agreement to submit Jones Act claims to arbitration. See 10 Maj. Op. at [22] (collecting cases). But those courts, like the majority here, reach this result by 11 unjustifiably limiting the scope of the Supreme Court s holding in Boyd. 12 The majority argues that the purpose of FELA section 6 is to ensure the existence of a 13 practical and convenient forum to adjudicate the employee s rights, and that an agreement to 14 submit to an arbitral forum without geographic constraints, does not frustrate this purpose. See 15 Maj. Op. at [19-20]. By contrast, the majority argues, the agreement at issue in Boyd did impose 16 a geographic restriction in the plaintiff s choice of venue. Certainly, convenience to the worker- 17 litigant was one of the purposes behind § 6. See Baltimore & O. R Co. v. Kepner, 314 U.S. 44, 18 49-50 (1941). But this was not the provision s only object. If it were, it would be hard to 19 understand the Supreme Court s decisions interpreting FELA section 6 to bar a state court from 20 enjoining its citizens from suing railroad companies in the state courts of another state or in the 21 federal district court of another state. See Miles v. Illinois Cent. R. Co., 315 U.S. 698 (1942) 22 (invalidating an injunction entered by a Tennessee state court against a Tennessee resident from 23 further prosecuting her FELA claim arising from the death of her husband in a Missouri state 14 1 court); Kepner, 314 U.S. at 51 (holding that FELA section 6 does not permit a state court to enter 2 an injunction against the prosecution of a FELA claim in a remote federal district court in the 3 face of the defendant railroad s contention that the plaintiff was acting in a vexatious and 4 inequitable manner in maintaining the federal court suit in a distant jurisdiction when a 5 convenient and suitable forum is at respondent s doorstep ). 6 Congress had, in fact, more in mind than convenience. By allowing the injured workman 7 to choose from the entire territory served by the railroad any place in which to sue and to 8 choose between bringing his claim in either state or federal court, Congress also intended to 9 give the disadvantaged workman some leverage. Miles, 315 U.S. at 707-08 (Jackson, J., 10 concurring); see also Krenger, 174 F.2d at 561 (opinion of Hand, C.J.) ( [FELA] bears evidence 11 that in the eyes of Congress employees do not bargain in all respects as equals with the roads. ). 12 And Congress manifestly had the same intent to give seamen an edge, and to provide 13 heightened legal protections when it passed the Jones Act. See Chandris, Inc., 515 U.S. at 14 354. It did so, inter alia, by giving them these distinct procedural advantages: the unilateral right 15 to seek a jury trial or a bench trial, and the ability to bring suit in any eligible forum. Boyd, I 16 believe, recognized this, and it is wrong now to reduce its holding to a mere prohibition on 17 contractual agreements that impede the plaintiff s ability to bring suit in a forum that is 18 geographically convenient. 19 20 C. This all leads to what is perhaps the most important issue in this case: the relationship 21 between the Jones Act/FELA and the Federal Arbitration Act ( FAA ), 9 U.S.C. § 1 et seq. The 22 question of whether the FAA requires enforcement of agreements to arbitrate claims brought 23 under certain federal statutes is by now a familiar, if still often-difficult, issue. See, e.g., Gilmer 15 1 v. Interstate/Johnson Lane Corp, 500 U.S. 20, 26-27 (1991) (holding that a claim brought under 2 the Age Discrimination in Employment Act was subject to the parties compulsory arbitration 3 agreement); Desiderio v. Nat l Ass n of Sec. Dealers, Inc., 191 F.3d 198, 205 (2d Cir. 1999) 4 (finding no inherent conflict between the underlying purposes of Title VII and the 1991 Civil 5 Rights Act and the imposition of compulsory arbitration). But the Jones Act and FELA are 6 unique federal statutes in part because of their particular historical relationship to workers 7 compensation laws. See supra at [8]. I believe that this connection to workers compensation 8 laws provides a strong reason to resist the reflexive assumption that some other courts have made 9 that the liberal federal policy favoring arbitration agreements, Gilmer, 500 U.S. at 25, 10 11 necessarily trumps the particular worker-protection values that underlie these laws. FELA and the Jones Act were passed at a time when legislative bodies throughout the 12 nation were rethinking common-law rules that frequently operated to the great disadvantage of 13 injured workers. See New York Cent. R. Co., 244 U.S. at 159-60 (Brandeis, J., dissenting) 14 (describing the origin of FELA and explaining how common-law doctrines of fellow servant s 15 negligence, assumption of risk, and contributory negligence practically abolished the liability of 16 employers to employees when they were applied to huge organizations and hazardous 17 occupations, as in railroading resulting in great hardship and apparent injustice ). While states 18 began to remove some of these common-law barriers to recovery, in general and most states 19 took the more dramatic step of establishing liability without fault in the employment context 20 through workers compensation laws Congress acted analogously in protecting the at-risk 21 workers who fell within the scope of its (then quite limited) Commerce Clause power. See 22 Rogers v. Missouri Pac. R. Co., 352 U.S. 500, 507-08 (1957) (describing FELA s elimination of 23 the common-law defenses of contributory negligence, the fellow servant rule, and assumption of 16 1 the risk). 11 As Justice Douglas wrote with respect to FELA, the Act was designed to put on the 2 railroad industry some of the cost for the legs, eyes, arms, and lives which it consumed in its 3 operations by changing the strict rules of liability placed upon employees by the common law 4 and providing employers with incentives to avoid or lessen hazards and risks. See Wilkerson v. 5 McCarthy, 336 U.S. 53, 68 (1949) (Douglas, J., concurring). 6 FELA and the Jones Act did not go as far as state workers compensation laws sought to 7 do in both forcing employers to internalize the accident costs of their operations and providing 8 true insurance to employees because the two acts did not eliminate fault as the basis for 9 recovery. 12 Even so, as the Supreme Court made clear, Congress intended these statutes to 10 provide liberal recovery for injured workers for the industries covered in a manner very much 11 aligned with the spirit behind workers compensation laws adopted at the state level for other 12 industries. See Kerman v. Am. Dredging Co., 355 U.S. 426, 431-32 (1958) (describing change in 13 public policy favoring compensation of employees and their dependents for the losses 11 Congress passed amendments to FELA in 1939 to proscribe, in no uncertain terms, judicial invocation of the assumption of risk defense and to eliminate other fetters to recovery imposed by federal courts implementing the initial 1908 legislation. See Rogers, 352 U.S. at 508-09. 12 This limitation was often lamented. See, e.g., Ferguson v. Moore-McCormack Lines, 352 U.S. 521, 539 (1957) (Frankfurter, J., dissenting) (describing application of common-law doctrine of negligence to injuries suffered by railroad employees as opposed to provision of true workers compensation as archaic and cruel ); Miles, 315 U.S. at 707-08 (Jackson, J., concurring) (characterizing FELA as maintaining a medieval system of compensation that gives injured workers and their survivors only a lawsuit rather than a remedy ); see also Clarence A. Miller, The Quest for a Federal Workmen s Compensation Law for Railroad Employees, 18 Law & Contemp. Probs. 188 (1953) (documenting (ultimately failed) efforts subsequent to FELA s enactment in 1908 to establish federal workers compensation laws). Unlike railway workers, seamen do also have the ability to obtain limited no-fault recovery for maintenance and cure, a remedy recognized as implied in contracts of marine employment. See Aguilar v. Standard Oil Co. of N.J., 318 U.S. 724, 730 (1943). Maintenance includes sustenance and a berth while aboard ship and payment for the cost of board and lodging while ashore. Cure refers to proper care of the injured seaman. Mooney v. City of New York, 219 F.3d 123, 127 n.1 (2d Cir. 2000). 17 1 occasioned by the inevitable deaths and injuries of industrial employment, and explaining that 2 while [f]or most industries this change ha[d] been embodied in Workmen s Compensation 3 Acts, FELA and the Jones Act provided the framework in the railroad and shipping industries, 4 and gave to the courts the duty to fashion remedies for injured workers in a manner consistent 5 with a policy of liberal recovery); see also Louis L. Jaffe, Res Ipsa Loquitur Vindicated, 1 Buff. 6 L. Rev. 1, 15 (1951) ( The FELA serves as a glorified workmen s compensation [statute.] ). 7 This Circuit continues to recognize the distinctive nature of FELA and the Jones Act by applying 8 relaxed standards of negligence and causation to claims brought under those statutes. See 9 Williams v. Long Island R.R. Co., 196 F.3d 402, 406 (2d Cir. 1999). 10 Thus, in a way, the Jones Act and FELA are akin to a federal attempt to provide workers 11 compensation for injured employees. Accordingly, in trying to determine how the worker- 12 protection policies embodied in those statutes interact with the FAA s strong federal policy 13 favoring arbitration as an alternative means of dispute resolution, Ragone v. Atlantic Video at 14 Manhattan Center, 595 F.3d 115, 121 (2d Cir. 2010) (internal quotations omitted), it is useful to 15 look to the states treatment of arbitration in relation to workers compensation laws. In this 16 regard, I find it instructive that a considerable number of states either bar or limit the scope of 17 mandatory arbitration agreements in the context of workers compensation statutes. 13 It is also 13 E.g., MONT. CODE § 27-5-114(2) (stating that pre-dispute arbitration clauses are valid and enforceable except [for] . . . (d) claims for workers compensation ); Neb. Rev. Stat. § 252602.01(e) (indicating that provisions establishing validity of written arbitration agreement do not apply to a claim for workers compensation ); S.C. CODE § 15-48-10(b)(2) ( [N]otwithstanding any other provision of law, employers and employees or their respective representatives may not agree that workmen s compensation claims . . . shall be subject to the provisions of this chapter and any such provision so agreed upon shall be null and void. ). Other states do not specifically exempt workers compensation claims from the scope of arbitration statutes, but instead attempt to exclude a larger class of claims that likely includes workers compensation claims. E.g., GA. CODE § 9-9-2 (excepting a variety of contracts from state s arbitration provision including agreements to arbitrate future claims arising out of personal 18 1 significant that, as a practical matter, relatively few agreements to arbitrate workers 2 compensation disputes appear to exist. From this, one can derive the notion that the fundamental 3 rights given to workers in workers compensation are not as readily viewed as being subject to, 4 or appropriate for, private resolution through arbitration. 5 This evaluation would not, of course, end the matter if the question we were addressing 6 was the effect of the FAA on state workers compensation laws. For even in states that attempt 7 to insulate workers compensation claims from mandatory arbitration, the FAA, being a federal 8 law, is potentially preemptive. See Southland Corp. v. Keating, 465 U.S. 1, 10 (1984). But 9 regardless of that state/federal question, 14 what is one to say about the federal/federal 10 relationship between the Jones Act/FELA and the FAA? This is an entirely different question 11 because it does not involve preemption. Whatever limits the FAA may be read to impose on 12 state legislatures, Congress has the unlimited ability to privilege in federal statutes values that in 13 some contexts it deems sufficiently important, without displacing the federal policy favoring 14 arbitration agreements in most other circumstances. As the Supreme Court has repeatedly 15 recognized, all statutory claims may not be appropriate for arbitration, and while parties 16 generally will be held to their bargain to arbitrate, courts should not enforce an agreement to bodily injury or wrongful death based on tort ); IOWA CODE § 679A.1 (declaring enforceability of written arbitration agreements except as applied to, inter alia, [a] contract between employers and employees ); WIS. STAT. § 788.01 (same). To be clear, I do not intend to say anything about the ultimate validity of these statutes. My point is only that they exist, and that this suggests something about whether legislatures that establish workers compensation systems believe those claims should be subject to mandatory arbitration. 14 Some courts have found, without much discussion, that the FAA does preempt state laws that do not permit agreements to arbitrate workers compensation claims. See, e.g., Miller v. Public Storage Mgmt., Inc., 121 F.3d 215, 218 (5th Cir. 1997). The issue rarely arises in federal courts, however, and does not appear to have been considered by this Circuit. 19 1 arbitrate specific statutory claims if Congress . . . has evinced an intention to preclude a waiver 2 of judicial remedies for the statutory right at issue. Gilmer, 500 U.S. at 26. 3 Because the underlying right for workers protected by the Jones Act and FELA have been 4 judged non-amenable to private resolution by legislative bodies conferring analogous rights in 5 the workers compensation context, we should be reluctant to interpret the Jones Act and FELA 6 to cede to the policy of the FAA. This is especially so as there are strong indications that 7 Congress sought to insulate FELA and the Jones Act from agreements that would undercut the 8 procedural structures of these laws, as arbitration inevitably would, just as many state 9 legislatures have sought to do mutatis mutandis for state workers compensation laws. See 10 Boyd, 338 U.S. at 266. FELA section 5 does not expressly reference agreements to arbitrate in 11 the scope of its prohibition in the same manner as some states laws do with respect to workers 12 compensation claims. This is not surprising given the modest use of arbitration at the time 13 FELA and the Jones Act were enacted. Yet FELA section 5, much like those state laws, reflects 14 an understanding that the procedural protections provided by laws for the compensation of 15 injured workers are part and parcel of the substantive remedy provided. And that provision 16 also demonstrates a judgment that agreements that we ordinarily allow and even favor whether 17 venue agreements or arbitration agreements can be abused when applied to injured workers at a 18 time of vulnerability. One need look no further than to the procedural background of the 19 agreement in this case to understand the basis for such a judgment! *** 20 21 For all of the reasons stated above, I would affirm the judgment of the District Court and 22 allow discovery in this case to commence in a judicial forum. I therefore respectfully, but 23 emphatically, dissent. 20

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