Michae; Sherwood v. Marquette Transportation Company, LLC, and Bluegrass Marine LLC

[B]Case Name: [/B]Michael Sherwood v. Marquette Transportation Company, LLC, and Bluegrass Marine LLC.
[B]Date Decided: [/B]November 23, 2009
[B]Court: [/B]United States Court of Appeals Seventh Circuit
[B]Judge: [/B]Chief Judge Easterbrook
[B]Citation: [/B]2009 WL 4016607 [B]Background:
[/B]Deckhand, Micael Sherwood (“Sherwood”) brought this action against his employers seeking recovery under the Jones Act and general maritime law for injuries he allegedly sustained during his employment.

Sherwood alleged he suffered an injury while working as a deckhand who’s vessels travel on the Mississippi River. Sherwood has asked for arbitration.

The district court denied the motion to stay concluding that the Federal Arbitration Act preempts any state law concerning arbitration, and does not allow for arbitration to apply to contracts of employment of seamen. Basically, the district court stated that if the federal Act applied, arbitration must proceed under its terms; but if the federal Act does not apply, then arbitration is forbidden.

[/B]Did this Court find that the Federal Arbitration Act applied to this action?

The Court recognized that if the federal Act did not apply, then state law governed. That is if the Act applied, then states are forbidden to interfere with the parties’ agreement, but that when a contract is not covered by the federal Act, states are free to favor, disfavor, or even ban arbitration.

In fact, this Court has held that the limited scope of federal enactment does [I]not preempt [/I]legislation on subjects that Congress has chosen not to regulate.

Defendant, Bluegrass, appealed arguing that interlocutory review is auhorized of any order “refusing a stay of any action under section 3 of this (FAA) title”. However, this Court found that this does not apply to any employment contract involving a seaman and Bluegrass’s motion relied upon [I]Illinois Law[/I], neither which applies to a motion to stay litigation when the state, not the federal, law is the source of the obligation to arbitrate.

Ultimately, because defendants seek apply State law to their appeal, this Court ruled that they had no jurisdiction and denied defendants’ appeal.

The Federal Arbitration Act is a statute that provides for judicial facilitation of private dispute resolution through arbitration. The FAA requires that where parties have agreed to arbitrate they must do so in lieu of going to court, provided that the proceeding is fundamentally fair. [/B]

[B]Applicable to this case, the Act states that “nothing shall apply to contracts of employment of seamen” (9 U.S.C. §1). Generally, state law that disfavors the enforcement of arbitration agreements will be [U]preempted [/U]by the FAA. [/B]

[B]However, here, the contract involved a seaman, and therefore, was not within the FAA’s reach and did not preempt it. This leaves the determination to state law and as such, is not within the federal appeals courts’ jurisdiction. [/B]

[B]Steve Gordon [/B]