California: WCAB Provides Further Guidance on Lien Activation Fees

California: WCAB Provides Further Guidance on Lien Activation Fees

  By David Bryan Leonard, Esq.
Three new panel decisions illustrate how the WCAB is interpreting the new lien activation fees. These decisions should be of great interest to the workers’ comp community and are summarized below.
Note: The three panel decisions can be accessed for free for a limited time.
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Villanueva v. Tech Data Product Management Inc., 2013 Cal. Wrk. Comp. P.D. LEXIS –. With the exception of a lien claimant that was dismissed in error for non-activation when it had previously settled its lien, the WCAB upheld the remainder of the WCJ’s order dismissing medical liens in connection with applicant/picker’s industrial injuries, for failure to pay lien activation fees pursuant to Labor Code § 4903.06(a)(4) [4903.06], effective 1/1/2013, which requires mandatory dismissal of liens with prejudice if the fee is not paid by the time of the lien conference. Here, the lien claimants did not pay the lien activation fee prior to or at the time of the 1/9/2013 lien conference. The WCAB found that the dismissal of the liens was not discretionary, but rather required under the statute.
The WCAB found no merit to the lien claimants’ assertion that due to the timing of the dismissal orders it was prevented from exercising its right to seek reimbursement of the lien activation fee under Labor Code § 4903.07(a) [4903.07], when SB 863 was signed into law on 9/12/2012, giving the lien claimants sufficient opportunity to substantially comply with the new lien requirements but the lien claimants made no effort to do so, there is no suggestion in the legislative history or the Labor Code that the Legislature intended to delay the effective date of the lien activation fee requirement to allow lien claimants additional time for reimbursement nor anything to indicate that Labor Code § 4903.07 [4903.07] was enacted for the sole benefit of lien claimants, and the lien claimants never paid the lien activation fee so were not aggrieved.
The WCAB also noted that it does not have authority to declare lien activation fee statutes unconstitutional pursuant to Greener v. W.C.A.B. (1993) 6 Cal. 4th 1028, 25 Cal. Rptr. 2d 529, 863 P.2d 784, 58 Cal. Comp. Cases 793 [6 Cal. 4th 1028].
Takeaways:
1. The WCAB does not have legal jurisdiction to declare a statute unconstitutional.
2. The WCJ erred by dismissing one of the lien claimants for non-activation when it had previously settled its lien.
3. At the lien conference held 1/9/2013, the WCJ properly dismissed multiple lien claimants that had not paid their activation fee.
Lopez v. Stoneledge Furniture, 2013 Cal. Wrk. Comp. P.D. LEXIS –. The WCAB upheld the WCJ’s order dismissing medical liens in connection with applicant/delivery driver’s industrial injuries, for failure to pay the lien activation fees pursuant to Labor Code § 4903.06(a)(4) [4903.06], effective 1/1/2013, which requires mandatory dismissal of liens with prejudice if the fee is not paid by the time of the lien conference, when the lien claimants did not pay the lien activation fee prior to or at the time of the 1/9/2013 lien conference and the WCAB found that the dismissal of liens was not discretionary, but was required under the statute.
The WCAB found no merit to lien claimants’ assertion that due to the timing of the dismissal orders it was prevented from exercising its right to seek reimbursement of the lien activation fee under Labor Code § 4903.07(a) [4903.07], when SB 863 was signed into law on 9/12/2012, giving the lien claimants sufficient opportunity to substantially comply with the new lien requirements but the lien claimants made no effort to do so, there is no suggestion in the legislative history or the Labor Code that the Legislature intended to delay the effective date of the lien activation fee requirement to allow the lien claimants additional time for reimbursement nor anything to indicate that Labor Code § 4903.07 [4903.07] was enacted for the sole benefit of lien claimants, and the lien claimants never paid the lien activation fee so were not aggrieved.
The WCAB also noted that it does not have authority to declare the lien activation fee statutes unconstitutional pursuant to Greener v. W.C.A.B. (1993) 6 Cal. 4th 1028, 25 Cal. Rptr. 2d 529, 863 P.2d 784, 58 Cal. Comp. Cases 793 [6 Cal. 4th 1028].
Takeaways:
1. The WCAB is without power to declare a statute unconstitutional.
2. When the lien claimants did not pay the lien activation fees prior to or at the time of the lien conference held on 1/9/2013, their liens were subject to dismissal mandated by Labor Code 4903.6 even if the dismissals occurred prior to the expiration of the required cost recovery timelines precedents set forth in Labor Code 4903.07.
Morales v. R&D Farms, 2013 Cal. Wrk. Comp. P.D. LEXIS –. The WCAB rescinded the WCJ’s order dismissing the lien claimant’s lien for medical treatment provided to applicant/farm laborer for failure to pay the lien activation fee pursuant to Labor Code § 4903.06(a)(4) [4903.06], when the WCAB found that the lien claimant’s failure to pay the lien activation fee did not warrant dismissal of the lien because the lien claimant had no notice that it was subject to a lien conference that would have required payment of the fee because the Division of Workers’ Compensation erroneously sent a notice of Mandatory Settlement Conference.
Takeaway:
Labor Code Section 4903.6(a) requires lien activation fees for any 4903(b) lien or cost filed as a lien prior to January 1, 2013. However, this cost shall only be required to be paid when a lien claimant files a declaration of readiness to proceed and/or remains a lien claimant of record at the time of a lien conference. Therefore, payment of lien activation fee is not required when the case is set for an MSC.
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