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California WCAB Panel Concludes That Lien Dismissal for Non-Activation Cannot Be Cured by Subsequent Payment

March 18, 2013 (3 min read)

By David Bryan Leonard, Esq.

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Highlighting the immediate application of the changes brought by Senate Bill 863, a WCAB panel has concluded that failure to pay the activation fee on January 2, 2013 required dismissal of non-activated liens. Of additional interest, the panel concluded that the non-payment could not be cured by subsequent attempts to activate the lien post lien conference.

On March 8, 2013, the WCAB issued a decision in Meyer v. Target Corporation, PSI, 2013 Cal. Wrk. Comp. P.D. LEXIS – (ADJ4146782), one of the first cases to enforce the new legislation, effective 1/1/2013, governing lien activation fees as they apply to liens for medical services and costs.  
In Meyer, applicant/cashier resolved her claim for 9/22/2005 industrial injury to her head, upper extremities, shoulder, nervous system, and other body systems by way of Compromise and Release Agreement approved on 12/6/2012. Subsequently, on 1/2/2013, the WCJ issued an order dismissing the lien claims of Innovative Orthopedic Solutions and five other lien claimants for failure to timely file the appropriate activation fees before the 1/2/2013 lien conference. The WCAB panel upheld the WCJ’s order dismissing the liens.
According to the WCAB panel, under Labor Code § 4903.06(a)(4) [4903.06] and 8 Cal. Code Reg. § 10208(a) [10208], any lien claimant who filed a lien before 1/1/2013 and did not previously pay the requisite $100 lien activation or filing fee, must either pay the fee with its DOR or submit proof of payment at the lien conference. The WCAB explained that if the required fee is not paid, or there is no proof of payment submitted at the lien conference, the lien “shall be dismissed with prejudice” pursuant to Labor Code § 4903.06(a)(4). The WCAB panel concluded that, while it was not apparent from the record who filed the DOR, lien claimant’s failure to pay the lien activation fee until six days after the lien conference, required dismissal of the lien under Labor Code § 4903.06(a)(4).
Author’s comment: This panel decision highlights the strict interpretive approach the WCAB is applying to lien activation issues. Of particular note is the swiftness in which the laws are being applied and the lack of appreciation for subsequent efforts to issue payment. Being heard on the first calendar day of the 2013 year, Meyers was one of the first cases to address lien activation requirements. With past statutory reforms, the WCAB has shown willingness towards compassion by allowing both Applicants and Defendant’s a second chance with a stern warning. (See e.g. See, Willette v. Au Electric Corp. (2004) 69 Cal. Comp. Cases 1298 [69 CCC 1298].) In Willette, an en banc WCAB allowed the parties a second chance to comply with Labor Code Sections 4610 [4610] and 4062 [4062] when a post utilization review dispute was taken to trial rather than resolved through the AME/QME process outlined in Section 4062. In allowing a second chance, the Board reasoned that because the statutory procedures at issue were relatively new and no binding WCAB or Court of Appeal decision had previously interpreted these procedures, a second chance was warranted. As this dismissal occurred on the first day of operation, it would seem that a medical provider that had its lien dismissed, subsequently paid it activation fee, and then sought reconsideration would have had a potential for a second chance. That is clearly not the case. As we are now 10 weeks into the new lien procedures, the likelihood of second chances seems to be a lost phenomenon. However, while this panel decision may seem unique to lien claimants, with a broad perspective, it is anticipated that all parties are going to be held to higher standards and strict timelines.
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