WCAB Resolves Lien Deadline Issue

WCAB Resolves Lien Deadline Issue

Lien claimants who filed required supplemental lien declarations on July 2 or 3 of 2017 wondered: would the Workers’ Compensation Appeals Board (WCAB) agree to adjudicate those liens? Recently, the WCAB finally made their decision.

California’s Division of Workers’ Compensation (DWC) mass-dismissed over 292,000 previously filed liens in August, for failure to timely file the retroactive lien declarations by the deadline of July 1. In October, the DWC lifted the dismissal notice on liens for which claimants filed the declaration on July 2 or 3, since July 1 fell on a Saturday.

The liens’ fates were unclear, until last week’s WCAB decision: if the claimant filed their declaration by 5pm on Monday, July 3, they were on time.

Deadline Dilemma

In 2016, Senate Bill 1160 (along with introducing automatic authorization) mandated the new lien declaration requirements. The bill amended Labor Code § 4903.5 to require a lien claimant to submit a declaration affirming that their lien falls under one of seven categories.

As defined by the amended Labor Code, the categories listed in sections (A) through (G) are the only legally valid rationales for claiming a lien.

Claimants were required to include the declarations with all new liens filed after January 1, 2017. The requirement also applied retroactively to liens filed from January 1, 2013.  Claimants who filed a lien (and paid the filing fee) between January 1, 2013, and December 31, 2016 had until July 1, 2017 to submit the retroactive supplemental lien declaration form.

July 1 fell on a Saturday, when DWC offices were closed.

On August 14, the DWC dismissed “by operation of law” over $2.7 billion worth of liens for which claimants failed to submit the supplemental declaration by July 1. Claimants who filed on July 2 or 3 cried foul, claiming that the Saturday date pushed the effective deadline to the following business day. California Code of Regulations (CCR) § 10508 states:

If the last day for exercising or performing any right or duty to act or respond falls on a weekend, or on a holiday for which the offices of the Workers' Compensation Appeals Board are closed, the act or response may be performed or exercised upon the next business day.

WCAB Rulings

Advocacy group California Society of Industrial Medicine (CSIMS) petitioned for an extended deadline. The DWC ultimately acknowledged the unfairness and lifted the dismissal notice for cases in which the declaration was filed by end of business on July 3rd.

But the Division stopped short of validating the lien declarations in question:

DWC’s reversal of the dismissal notation is not a decision or order on the timeliness of the declarations, and shall not be construed as such.

Then, in late October, the WBAC decided in Rodriguez v. Garden Planting Co. that claimants who filed the declarations by 5pm on July 3rd were entitled to argue their case. Now, with their decision in Hernandez v. Henkel Loctite Corporation; Zurich American Insurance Co., the Appeals Board affirms that those declarations were in fact timely filed.

The WCAB decisions was en banc, setting a precedent that applies to all cases like it.  That’s good news for the claimants in all 2,794 lien cases for which the declaration was filed after July 1st, but before the newly affirmed deadline of 5pm, July 3, 2017.

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