Hibernia National Bank in New Orleans v. Chung, Yong Il

Background

A seaman sued his employer, a shipowner, after wages he earned aboard a docked vessel were not paid on time. The federal appeals court for the Eleventh Circuit ruled that the maritime penalty-wage law (46 U.S.C. §596) applies even when a ship is docked and no voyage is scheduled. The court also held that penalty wages continued to accrue even after the shipowner filed a $400,000 letter of undertaking as security, and continued until the wages were actually paid shortly before oral argument.

Reasoning

The key questions were whether the penalty-wage rule covers pay earned on a docked vessel with no planned voyage and whether posting security stops penalties from growing. The Eleventh Circuit said the statute applies and that penalties kept running despite the security filing. That decision conflicts with earlier rulings from other federal appeals courts that reached different results. The opinion also touches on older Supreme Court language suggesting that penalties should not run past certain court actions when an appeal is reasonably taken, a point the dissenter highlighted.

Real world impact

The ruling affects seamen seeking extra penalty pay when wages are late and shipowners who try to limit exposure by posting security. Because the Supreme Court denied review, the Eleventh Circuit’s approach stands in that region, while other circuits remain split. The legal disagreement between courts continues and could affect payroll practices and litigation strategies in the maritime industry.

Dissents or concurrances

Justice White dissented from the denial of review and argued the Court should take the case to resolve the conflicting interpretations of the penalty-wage statute.