Hensley v. Koller, No. 12-2147

Decided July 3, 2013

The Fourth Circuit Court of Appeals reversed the district court’s denial of the parties’ cross-motions for summary judgment. A minor brought this class action to challenge South Carolina’s reduction of monthly adoption assistance benefits asserting that its conduct violated the Adoption Assistance and Child Welfare Act, 42 U.S.C. § 670 et seq. (2006) (“the Act”).

The South Carolina Department of Social Services (“DSS”) provides adoption assistance subsidies and foster care maintenance payments pursuant to federal funding authorized by the Act. To receive funding under the Act, a state must develop a plan for a subsidy and maintenance program and must obtain approval of that plan by the United States Secretary of Health and Human Services. The Act sets forth specific requirements governing foster care maintenance payments and adoption assistance payments. For adoption assistance payments, a state with an approved plan “shall enter into adoption assistance agreements with the adoptive parents of children with special needs.” The adoption assistance payments are determined by the particular circumstances, but in no case may the amount exceed the foster care maintenance payment, which would have been made had the child been in a foster family home.

In 1997, BLH, a minor child, was placed in foster care. The foster parents received monthly foster care maintenance payments of $675, which included an upward adjustment because BLH was a special needs child. In 1999, the foster parents applied to be BLH”s adoptive parents. They sought to convert the foster care maintenance payment into an adoption assistance subsidy. The foster parents entered into an Adoption Subsidy Agreement under which DSS agreed to furnish them monthly adoption assistance payments of $675. Two months later, a state court declared them the adoptive parents of BLH. They received the monthly $675 payments for three years. In 2002, DSS began reducing by twenty dollars all monthly foster care maintenance payments and adoption assistance subsidies. In 2004, DSS rescinded the twenty-dollar reduction to foster care maintenance payments, but did not rescind the reduction to adoption assistance subsidies. Thus, for BLH, the payments remained at $655 per month.  BLH filed in state court a class action against Lillian Koller, individually and in her official capacity as director of DSS. Koller removed the caseto federal court. BLH added former directors of DSS to their complaint (collectively, with Koller, “the Directors”). The district court denied the Directors’ motion for summary judgment.

On appeal, the Directors asserted qualified immunity from suit. The qualified immunity inquiry asks (1) whether an official violated a federal right, and (2) whether that right was clearly established at the time the official acted.

Here, the Fourth Circuit determined whether § 673 (a)(3) creates a privately enforceable right to parental concurrence, which the Directors may have violated. The Supreme Court in Blessing v. Freestone laid out a three-factor test to determine whether a particular statutory provision gives rise to a federal right privately enforceable under 42 U.S.C. § 1983. For the first-factor, the court addressed whether Congress intended § 673 (a)(3) to benefit the plaintiff. Because the Act provides that the adoption assistance payments are determined through agreement and may be readjusted periodically, it does apply to the plaintiff. For the second factor, the court addressed whether the asserted right is not “so vague and amorphous that its enforcement would strain judicial competence.” The court found that the term “concurrence” was not too vague. § 673 (a)(3)’s requirement that a state may not readjust an adoption assistance payment amount without an adoptive parent’s “concurrence,” clearly means agreement or assent. For the third factor, the court addressed whether the statute unambiguously imposes a binding obligation on the States, which is demonstrated by mandatory, rather than precatory terms. The court found that there was no ambiguity as to what statues must do under § 673 (a)(3) as a condition of receiving federal funding under the Act. Therefore, § 673 (a)(3) does give rise to a privately enforceable federal right; however, only violations provide for recovery. The language of the statute prohibits adoption assistance subsidies that exceed foster care maintenance payments. As a result, § 673 (a)(3) establishes a right to parental concurrence in subsidy readjustment determinations except when the subsidy must be reduced due to reductions in foster care maintenance payments. Here, the subsidy had to be reduced due to South Carolina’s reduction in all foster care maintenance payments. The State’s failure to do so would have violated federal law. For, under § 673 (a)(3), a failure to reduce BLH’s adoption assistance payment would have resulted in a payment “exceeding the foster care maintenance payment” she would have received had she remained in foster care. Therefore, the plaintiffs cannot establish that the Directors violated the plaintiffs’ rights under the Act and the Directors are entitled to qualified immunity.

Full Opinion

– Sarah Bishop

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