Federal Judge Dismisses lien claimant challenge

A federal judge dismissed most of the claims in a lawsuit challenging the constitutionality of a California law requiring the Department of Industrial Relations to stay liens filed by, or on behalf of, criminally charged providers, but allowed plaintiffs the opportunity to file an amended complaint later this month.

U.S. District Court Judge George H. Wu, in an order posted to the court’s website on Friday, also rejected a motion asking him to hold the department in contempt for allegedly violating a December order requiring the agency to allow claimants to argue that a stay was inappropriately applied to a particular lien.

Wu said he did not have a problem with Workers’ Compensation Appeals Board judges continuing cases and allowing the department’s Anti-Fraud Unit to submit evidence it used when freezing a lien.

Wu’s order in Vanguard Medical Management Billing et al. v. Christine Baker et al. marks the end for claims that the lien stay constitutes an improper governmental taking of property or violates the supremacy clause of the U.S. Constitution, which he dismissed with prejudice.

​To read the entire order, click here: Order