DWC Slow to Act More Than an Month After Angelotti Dismissal

On June 29, 2015, the United States 9th Circuit District Court of Appeals dismissed the case of Angelotti Chiropractic v. Baker.  The dismissal vacated the preliminary injunction that had stayed the collection of the $100 activation fee since November 19, 2013.   After the dismissal, uncertainty ensued at California W.C.A.B. district offices as to what came next.  Will lien holders be provided an extension to pay the activation fee?  If so, how long will the extension last?  What happens to liens that are set for hearing before the DWC reinstitutes a mechanism for payment?  More than a month has passed since Angelotti’s dismissal, but the DWC has been slow to provide guidance for lien holders, defendants and Administrative Law Judges.  The following text is still displayed in red lettering on the EAMS Public Information Search page:

Lien activation fees are no longer being collected by the Division of Workers’ Compensation, in compliance with a ruling issued by the US District Court for the Central District of California in the matter of Angelotti Chiropractic, Inc., et al. v. Baker, et al.

Lien claimants whose liens were subject to the activation fee are not currently required to pay the fee in order to appear at a hearing or file a Declaration of Readiness to Proceed regarding a lien.

Labor Code Section 4903.06(a)(5) states,  “Any lien filed pursuant to subdivision (b) of Section 4903 prior to January 1, 2013, and any cost that was filed as a lien prior to January 1, 2013, for which the filing or lien activation fee has not been paid by January 1, 2014, is dismissed by operation of law.”   Strict construction of the Labor Code means that all liens that have not yet paid the activation fee are summarily dismissed without a hearing on their merits.  At odds with the code, and unforeseen at the time of its writing and adoption, was that the preliminary injunction prevented lien holders from paying the activation fee from November 19, 2013 to January 1, 2014.  Now that the injunction has been vacated, and the statutory time to pay the fee has passed, the U.S. Court of Appeals did not address what happens to the liens whose claimants were prevented from paying the filing or lien activation fee through no fault of their own.  Due process should allow lien claimants an extension to pay the fee.

On July 13, 2015, the Angellotti Plaintiffs filed a Petition for Rehearing with the U.S. 9th District Court of Appeals.  We will keep you abreast of new developments as they unfold.

The following are links to the June 29, 2015 Dismissal and the July 13, 2015 Petition for Rehearing.