The Implications of Hanjin’s Bankruptcy

Hanjin Shipping Company originates in South Korea but is internationally recognized in the maritime industry. Responsible for a substantial portion of the industry’s shipping needs, Hanjin is the world’s seventh-largest container shipper. The company is now facing a detrimental dilemma: too many ships and not enough cargo. In order to protect its remaining assets, the company filed for bankruptcy in the United States. So far, eight of Hanjin’s ships have been seized. Approximately 80 more are awaiting their fate and are, in the meantime, preventing approximately $14 billion worth of cargo orders from being delivered. On September 9, 2016, a U.S. judge granted an order allowing Hanjin provisional protection from U.S. creditors, thus enabling some of its vessels to dock and unload.

Despite the court ordered protection, the company’s collapse has already made waves across the board. Retailers are predicting delayed shipments in advance of the holiday season, the impact of which will be felt by the consumer. U.S. exporters are estimating a 50% increase in shipping fees as a direct result of Hanjin’s bankruptcy. Additionally, commentators are noting that the bankruptcy is reflective of an industry-wide problem, citing Maersk Line’s $114 million loss in the first six months of 2016. Though the fate of the company and its vessels is uncertain, we can be sure that all members of the industry will feel the impact, either directly or indirectly.

Ninth Circuit Denies Concurrent Compensation to DBA Claimant

In this claim for benefits brought under the Defense Base Act as an extension of the Longshore & Harbor Workers’ Compensation Act, Claimant alleged that he sustained both a hearing loss injury and a lower back injury caused by a suicide bomber attack while deployed in Iraq. Claimant’s back injury left him permanently and totally disabled. Claimant was adjudicated permanently and totally disabled following a first formal hearing, then a modification hearing brought under Section 22 of the LHWCA.

 

During the Section 22, modification hearing, Claimant also presented an audiogram that demonstrated binaural hearing loss of 9.7%. However, the presiding administrative law judge held that concurrent payments for hearing loss were unavailable because Claimant was already receiving PTD benefits. The Benefits Review Board affirmed this finding.

 

Claimant appealed to the U.S. Ninth Circuit Court of Appeals, arguing that he should be awarded concurrent benefits pursuant to Stevedoring Servs. of Am. v. Price, 382 F.3d 878 (9th Cir. 2004). In Price, the Ninth Circuit awarded concurrent benefits to a Claimant who sustained a loss of earning capacity from one accident, and then suffered total disability from a second accident. The Ninth Circuit held in Price that, under those circumstances—where later total disability was based on a wage that had already been decreased because of a prior partial disability—concurrent benefits were merited. Here, Claimant’s two injuries occurred from one accident. The court held that Price was distinguishable, and affirmed its long-standing principle that concurrent benefits were not merited where Claimant sustained both a “scheduled injury” and a permanent and total disability.

 

Fenske v. Service Employees Int’l

New LHWCA Compensation Rates Announced

The Bureau of Labor Statistics has determined the national average weekly wage to be $718.24, a 2.17% increase over the current NAWW of $703.00. Therefore, effective October 1, 2016, the new minimum compensation rate under the LHWCA will be $359.12, up from the current $351.50, and the maximum compensation rate will be $1,436.48, up from the current $1,406.00.

Veteran District Director Announces Retirement

Richard V. Robilotti, District Director for the Second Compensation District, announced his retirement from the United States Department of Labor effective October 31, 2016. Mr. Robilotti, who began his career with the Department of Labor on January 15, 1973, has been a unquestioned force in the administration of the LHWCA and the DBA for the past 43 years. It is a well-earned retirement, but both his knowledge and probing voice will be missed by many who work with the Department. We wish him the very best in his retirement.