Angela Derby had a workers’ compensation claim against the City of Los Angeles, permissibly self-insured. A lien claimant, Lien On Me, Inc., filed a lien in the case on November 14, 2012, seeking reimbursement for medical-legal expenses under Labor Code section 4903(b).

Because the lien was filed before January 1, 2013, it was subject to the lien activation fee established by Labor Code section 4903.06. The lien claimant did not file the declaration required by Labor Code section 4903.05(c), the “anti-fraud” declaration the Legislature added in 2016 (through SB 1160) requiring lien claimants to state, under penalty of perjury, the specific statutory basis authorizing their lien. Section 4903.05(c)(3) provides that failure to file that declaration “shall result in the dismissal of the lien with prejudice by operation of law.”

At a March 25, 2026 hearing, the workers’ compensation administrative law judge (WCJ) addressed whether the lien was subject to dismissal for failure to file the section 4903.05(c) declaration. The lien claimant argued it was exempt from the declaration requirement: because its lien predated January 1, 2013 and was therefore governed by the activation-fee provision of section 4903.06, it contended the separate declaration requirement of section 4903.05(c) simply did not apply to it. The WCJ rejected that argument, and the lien claimant petitioned the Appeals Board for reconsideration.

In the panel decision of Derby v. City of Los Angeles, ADJ3309119 (Cal. Workers’ Comp. Appeals Bd., Aug. 2026) — the WCAB denied the lien claimant’s petition for reconsideration, leaving the dismissal of the lien in place.

The panel, in an opinion authored by Commissioner Snellings, held the lien claimant’s exemption argument failed because it misread the relationship between the two fee provisions. The declaration requirement of section 4903.05(c) and the activation fee of section 4903.06 were both enacted to combat fraud and frivolous filings in the lien system, not to create mutually exclusive tracks.

Relying on its own panel decision in Montelongo v. Gelson’s Market (2022), the panel traced the legislative history of SB 1160, which described the declaration as an “anti-fraud measure” responding to press reports of more than $1 billion in fraudulent activity by medical providers exploiting the lien system, and which the Division of Workers’ Compensation estimated involved roughly $600 million in liens — about 17% of all liens in the system — held by providers charged or convicted of fraud.

The Legislature, the panel emphasized, expressly intended the declaration requirement to apply to “all lien claimants,” with section 4903.05(c)(1) governing liens filed after January 1, 2017 and section 4903.05(c)(2) governing those filed before that date.

The panel further rejected the premise that the two fees serve qualitatively different purposes. Quoting the Ninth Circuit’s decision in Angelotti Chiropractic, Inc. v. Baker (9th Cir. 2015) 791 F.3d 1075, the panel explained that both the $150 filing fee for post-2013 liens and the $100 activation fee for pre-2013 liens were designed to provide a disincentive to file frivolous liens.

Because the two provisions share that anti-fraud, anti-frivolity purpose rather than exempting one class of liens from the other’s requirements, the panel held it could not, and would not, upset the Legislature’s clear intent that the declaration requirement reach all lien claimants.

The panel noted that several other Appeals Board panels have reached the same conclusion, including Carrillo v. Troon Golf Management (2025), Cornejo v. Sears Holding Corp. (2025), Hurst v. Kimco Staffing Services (2026), and Leshen v. State of California Highway Patrol (2026).

Because the lien claimant did not file the required declaration and was not exempt from doing so, its lien was subject to dismissal with prejudice by operation of law, and the panel denied reconsideration accordingly.