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Fate of Pre-1/1/13 Liens Still Uncertain

Happy Wednesday, dear readers!

Since the 9th Circuit decided to put the Kaibosh on the Angelotti injunction, there has been a big question mark floating around on how to deal with the liens.  As my readers will recall, the WCAB stopped processing line activation fees in accordance with the injunction issued by the Federal District Court issued on November 19, 2013.

Well, with the 9th Circuits remand, that injunction is supposed to go out the window soon enough.  But what about the liens?

As part of the SB-863 reform (now Labor Code section 4903.06), any lien filed prior to January 1, 2013, was made subject to a lien activation fee of $100.  The failure to pay this $100 activation fee by January 1, 2014, was supposed to result in a dismissal of the lien by operation of law (LC 4903.06(a)(5).)

In November of 2013, the federal district court ordered an injunction against collecting the activation fees, and the DIR complied.  So… now that the injunction is to be lifted, what’s to be done?  Should the DIR grant an additional 58 days for lien claimants to pay?  Should there now be an additional 60 days or so to pay the activation fees?

Your humble blogger is informed that there is a wide range of different approaches by the various WCJs across our fair state, but a memo from Chief Judge Richard Newman reflects that restraint should be the order of the day.   As the 9th circuit has ordered the district court to vacate its decision granting the injunction, the effect has not happened just yet, and is expected on or about July 20, 2015.

In other words, no one knows what’s going to happen as yet.  Your humble blogger opines that, since the DWC made it impossible to pay a lien activation fee prior to January 1, 2014, in compliance with Judge Wu’s injunction, it seems unlikely that LC 4903.06(b)(5) will be given effect.  In all likelihood, the DWC will start collecting lien activation fees again and provide a grace period for fees to be paid.

But, while uncertainty is in the air, it also seems like a wonderful opportunity to settle liens and close files.  The likely best-case scenario for lien claimants from pre-1/1/13 liens is that they will have to pay lien activation fees at some point in the near future.  The worst-case scenario is that the DWC will take the position that the ship has sailed, the train has left the station, and all those liens are dismissed by operation of law.

So, stand by, dear readers, we’re going to get to see what happens.

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