July 13 was a big day for California workers’ compensation law being tested in a downtown Los Angeles federal courtroom where Judge George H. Wu was schedule to hear arguments for and against imposing a preliminary injunction halting the implementation of newly adopted SB 1160. This new law provides for a stay on lien claims filed by indicted medical providers until after their case has been resolved.

Dr. Eduardo Anguizola is facing multiple counts of insurance fraud filed by Orange County prosecutors. His federal lawsuit claims that SB 1160 and Labor Code 4615, the anti-fraud law that took effect January 1, violates his rights to due process of law and to make a contract and to hire and pay his criminal defense attorneys. His request for a preliminary injunction was scheduled for hearing on July 13

Dr. Anguizola is alleging that Senate Bill 1160 and Labor Code 4615 violate the 5th, 6th, and 14th amendments of the United States Constitution. He also claims the legislation violates the Supremacy clause, and California contracts clause.

The July 13 oral arguments on the preliminary injunction request took about 16 minutes of the crowded court calendar. Judge Wu focused the case on issues surrounding the distinction between “procedural” as opposed to “substantive” due process requirements of constitutional law.

Plaintiff attorney, M. Chris Arminta, had argued that there were problems with procedural due process while Judge Wu seemed more interested in the law on substantive due process.

Procedural Due Process aims to protect individuals from the coercive power of government by ensuring that adjudication processes under valid laws are fair and impartial (e.g., the right to sufficient notice, the right to an impartial arbiter, the right to give testimony and admit relevant evidence at hearings, etc.).

In contrast, Substantive Due Process aims to protect individuals against majoritarian policy enactments which exceed the limits of governmental authority – that is, courts find the majority’s enactment is not law, and cannot be enforced as such, regardless of how fair the process of enforcement actually is.

In other words, procedural due process consists of the restrictions that the law places on the legal process; substantive due process is the determination of whether or not the law itself exceeds government authority.

Judge Wu was concerned that attorney Arminta had not adequately briefed the issue of substantive due process. Thus the court gave the plaintiff attorney 3 days to prepare and file an amended brief addressing the issue of substantive due process,

The California Attorney General who appeared for the defense would then have until August 8th to respond, and then the plaintiff would have until August 15th to respond to the AG response.

There was no preliminary injunction ordered at this time. Another hearing was set for August 24th.