Monday, April 29, 2013
Ninth Circuit Panel Revives Attack on Forum Selection Clause
Per Curiam Opinion Says Court Must Reconsider Claims by Worker Who Says He Was ‘Virtual Prisoner’ in Saudi Arabia
By KENNETH OFGANG, Staff Writer
A former Boeing Co. engineer is entitled to an evidentiary hearing on his challenge to a forum selection clause that would require him to return to Saudi Arabia to litigate his claim that he was a “virtual prisoner” of the company while he worked there and suffers from serious medical problems as a result.
The panel said Chief U.S. District Judge Roslyn O. Silver of the District of Arizona erred in dismissing Robin P. Petersen’s suit without hearing evidence on his allegations the aerospace giant and its Saudi subsidiary used “fraud and overreaching” to get his signature on the contract containing the clause, and that he could not get a fair trial in the kingdom.
The court sent the case back to the lower court to reconsider its dismissal under the standards of M/S Bremen v. Zapata Off-Shores Co., 407 U.S. 1 (1972). The high court held in that case that a forum selection clause may be held unenforceable if unfair tactics were used to obtain a party’s signature, if enforcement would deprive a party “of his day in court,” or if the clause violates a strong public policy.
Petersen is a former Navy pilot who represented himself in the lawsuit. He worked for Boeing International Support Services as a flight instructor.
He alleged in his complaint that before leaving for the Middle East, he signed an employment contract that had no forum selection clause. But when he got to Saudi Arabia, he claims, he was given a second contract, and told that if he did not sign it immediately—he says he never got a chance to read it—he would have to return to the United States at his own expense.
Once he signed the agreement, which provided among other things that any dispute between himself and BISS would be litigated in the Labor Courts of Saudi Arabia, he claims, he was forced to turn over his passport, had to work in miserable conditions, contracted an upper respiratory infection, and received inadequate surgical treatment for an Achilles tendon tear, leading to permanent injury.
His continuing medical problems, he alleges, are a result of his being unable to return to the United States for care because his employer kept his passport for months. He was ultimately able to leave, he says, only with the intervention of the U.S. consulate in Jeddah.
In a sworn affidavit accompanying his complaint, Petersen alleged that he cannot afford to travel to Saudi Arabia to litigate and that even if he could, he could not get a fair trial there. He cited a State Department report questioning the independence of the Labor Courts, suggesting that they are subject to outside influence in favor of employers, and questioning whether foreigners and non-Muslims could expect fair treatment there.
Silver dismissed for failure to state a cause of action, citing Spradlin v. Lear Sigler Mgmt. Servs.Co., 926 F.2d 865 (9th Cir. 1991). But the panel—comprised of Judges Harry Pregerson, Stephen Reinhardt, and William A. Fletcher—held in a per curiam opinion that Petersen’s claims did not suffer from the same deficiencies as those of the plaintiff in Spradlin.
Whereas the complaint in that case contained only “the most general and conclusory allegations of fraud and inconvenience,” the judges explained, “Petersen did precisely what we held that the employee in Spradlin needed to have done…he provided specific evidence sufficient to demonstrate that he would be wholly foreclosed from litigating his claims against Boeing and BISS in a Saudi forum.”
The court noted that Silver denied the plaintiff’s motion to amend his complaint prior to dismissal, a ruling the appellate panel said was an abuse of discretion because the amendment supplied additional facts supporting his claim. The proposed amendment cited a State Department travel advisory noting that non-Muslim Americans can only obtain Saudi visas for limited purposes, such as work, and that foreigners with legal cases in the country are not allowed to leave until the cases are resolved, which can take months.
The case is Petersen v. Boeing Co., 11-18075.
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