Dr. Eduardo Anguizola – who is facing multiple counts of insurance fraud filed by Orange County prosecutors – has filed a federal lawsuit that claims 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, among other arguments.
Other plaintiffs in the federal case include Vanguard Medical Management Billing, One Stop Multi-Specialty Medical Group, One Stop Multi-Specialty Medical Group & Therapy and Nor Cal Pain Management Medical Group: medical billing companies and other businesses connected to the doctor’s practice.
His request for a preliminary injunction halting the provisions of SB 1160 is scheduled for hearing on June 29 before Federal Judge George H. Wu.
Judge Wu previously ruled on the constitutional challenge to the re-instatement of the $100 lien filing fee as a result of SB 863 several years ago in the Angelotti Chiropractic case. He issued an injunction against enforcement of the law declaring the filing fee to be unconstitutionally applied to the plaintiffs who filed the case. He was later overturned by the Ninth Circuit Court of Appeals in the published case of Angelotti Chiropractic v Christine Baker and the lien filing fee was reinstated after several years delay.
He will now rule on the Anguizola constitutional challenges to a new and different lien law on June 29.
The California Attorney General has now filed a responsive pleading arguing against the relief requested by the Anguizola plaintiffs.
SB 1160 provides that liens are automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers’ compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs.
The California Attorney General argues in opposition that “Plaintiffs’ facial challenges require them to demonstrate that under no circumstances can Section 4615 be applied in a constitutional manner to anyone, a showing they have not made.”
“Even if their claims were treated as as-applied challenges, Plaintiffs have not shown a likelihood of success, failing to establish various elements of their claims under their respective factual circumstances. And Plaintiffs have failed to establish that any of them will suffer any harm – let alone irreparable harm – in the absence of a preliminary injunction. Because they have failed to establish either a likelihood of success or irreparable harm,”
With respect to the claimed constitutional issue of the automatic stay violating Dr. Anguizola’s right to hire a criminal attorney, the defense argues “While a criminal defendant who can hire his own attorney has the right to be represented by the attorney of his choice, that right does not go beyond “the individual’s right to spend his own money to obtain the advice and assistance of . . . counsel.” (citations omitted)
“Nothing on the face of Section 4615 interferes with a criminal defendant’s ability to hire an attorney. The statute does not prevent a medical provider charged with workers’ compensation fraud from using other assets and financial resources to fund his or her defense, including previously reimbursed lien filings. And the liens subject to the automatic stay are merely contingent, subject to potentially years of delay before payment or outright denial.”
Thus for these and other reasons specified in the responsive filing, the Attorney General concludes that the plaintiffs “are not entitled to a preliminary injunction halting the enforcement of Section 4615.”
In a few weeks the industry will know how Judge Wu views these issues.