Some of my beloved readers know that their humble blogger is a big fan of the good Mr. Tolkein, and his masterpiece, The Lord of the Rings. Naturally, it’s not uncommon for this humble blogger, in an effort to maintain his sanity, to amuse himself by comparing scenes from the workers’ comp world to those of the world of Middle Earth.
Well, behold, dear readers, this news: several lien claimants have filed a federal lawsuit seeking to enjoin the enforcement of the provisions of SB-863 imposing lien activation fees on liens filed prior to January 1, 2013. This same scene was depicted in Lord of the Rings…
Just to clarify – yes, the lien claimants (Saruman) have an evil hold over the workers’ compensation system (Theoden), and Gandalf (SB-863) is desperately tries to break the lien claimants’ hold. In fact, at one point, the lien claimants even promise to take the workers’ comp system with them.
The lawsuit argues that the $100 fee is unconstitutional under the Takings, Due Process, and Equal Protection Clauses of the United States Constitution.
One of the gripes expressed in the lawsuit is the fact that many of the liens are for a few hundred dollars or less, which makes a $100 activation fee particularly harmful. Yeah right! The real gripe is that now the $100 prohibits meritless liens from extorting money from the defendants. After all, SB-863 allows for reimbursement of the lien claim under Labor Code section 4903.07 if the lien claimant makes a demand for settlement that is equal to or less than the award after a trial.
So in other words, if your lien claim has merit, and you offer to settle for the value of your lien or less, you will get the activation fee back, with interest. If your lien claim is frivolous and your only means of recovering is by threatening scorched earth (I have had lien claimants tell me that it would cost the defense more in billables than to just pay the lien), then, really you don’t have a valid lien, and you’re just looking to have a wrongful hold over the noble people of Workers’ Compia.