Dr. Eduardo Anguizola, who is facing multiple counts of insurance fraud filed by Orange County prosecutors, is the lead plaintiff who claims Labor Code 4615 – the automatic lien stay law – violates the procedural component of the due process clause because it immediately stays all liens without notice or a hearing.

The federal case was filed this May, and there have been several hearings in federal court on his request for a preliminary injunction halting the implementation of the new lien automatic stay law.

The final brief by the California Attorney General on behalf of DIR Director Christine Baker asserts that the lien claimants have not made their case. The AG says that despite “submitting 10 declarations and 53 exhibits, Plaintiffs have still failed to establish that due process is being denied to the parties in this case or to lien claimants more broadly.”

“Plaintiffs continue to confuse (1) whether existing procedures permit a lien claimant to challenge whether its liens fall within the parameters of Section 4615 and are thus subject to the stay (existing procedures do) with (2) whether a workers’ compensation administrative law judge (“WCALJ”) has the discretion to determine that the stay should not apply to a particular lien notwithstanding the provisions of the statute (no, the stay is automatic for liens within the statute’s parameters).”

The Attorney General further said that “Not one declaration demonstrates that a lien claimant followed proper procedures for requesting adjudication of an issue of law or fact by a workers’ compensation judge, and was wrongly denied that adjudication.1 Further, not one declaration demonstrates that any party claiming that a workers’ compensation judge wrongly refused to hear a Section 4615 lien issue followed proper procedures and filed either a petition for reconsideration or a petition for removal to the workers’ compensation appeals board (“WCAB”) to challenge the judge’s action or lack thereof.”

“Even after this latest of three rounds of briefing, Plaintiffs have failed to demonstrate that they are entitled to the preliminary injunctive relief that they seek. Their motion should be denied.”

“Missing from the declarations are any examples of lien claimants who attempted to raise Section 4615 issues using the proper procedures provided in the regulations and described in Judge Levy’s declaration, and who have had those efforts rejected.”

“These conclusory allegations are insufficient to establish the violation of lien claimants’ due process rights by operation of Section 4615 and cannot support a preliminary injunction invalidating the statute on its face. They also fail to establish a likelihood of irreparable harm. To the extent Plaintiffs’ allege irreparable harm stemming solely from the deprivation of Plaintiffs’ due process rights, their failure to offer sufficient evidence to support their procedural due process claims also dooms their claim of irreparable harm.”

The next and perhaps final hearing on the preliminary injunction is set on this Thursday, September 28, 2017 at 8:30 am in courtroom 9D in downtown Los Angeles.