United States District Court, D. Hawaii
RAYNETTE AH CHONG, PATRICIA SHEEHEY, PATRICK SHEEHEY, individually and or behalf of the class of licensed foster care providers in the State of Hawaii, Plaintiff,
PATRICIA MCMANAMAN, in her official capacity as the Director of the Hawaii Department of Human Services, Defendant.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION FOR SUMMARY JUDGMENT AND GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT
Leslie E. Kobayashi United States District Judge
On August 7, 2015, Defendant Rachel Wong, DrPH, in her official capacity as the Director of the Hawai`i Department of Human Services (“DHS” and “Defendant”),  filed her Motion for Summary Judgment (“Defendant’s Motion”),  and Plaintiffs Raynette Ah Chong (“Ah Chong”), Patricia Sheehey, and Patrick Sheehey (“the Sheeheys, ” all collectively, “Plaintiffs”), filed their Motion for Summary Judgment (“Plaintiffs’ Motion”). [Dkt. nos. 143, 145.] On October 26, 2015, Defendant filed her memorandum in opposition to Plaintiffs’ Motion (“Defendant’s Opposition”), and Plaintiffs filed their memorandum in opposition to Defendants’ Motion (“Plaintiffs’ Opposition”). [Dkt. nos. 173, 174.] On November 2, 2015, Defendant filed her reply (“Defendant’s Reply”), and Plaintiffs filed their reply (“Plaintiffs’ Reply”). [Dkt. nos. 180, 181.]
These matters came on for hearing on November 30, 2015. After careful consideration of the motions, supporting and opposing memoranda, and the arguments of counsel, Plaintiffs’ Motion and Defendant’s Motion are both GRANTED IN PART AND DENIED IN PART for the reasons set forth below.
Plaintiffs bring this case pursuant to 42 U.S.C. § 1983, seeking declaratory judgments and injunctive relief on the grounds that DHS’s foster care maintenance payments and adoption assistance payments are inadequate,  which they allege violates the Child Welfare Act, Title IV-E of the Social Security Act, §§ 670-679c (“CWA” or “Title IV-E”). [First Amended Complaint at ¶¶ 1-3.] The First Amended Complaint prays for this Court to: 1) assume jurisdiction over this action; 2) issue a declaratory judgment that Defendant is violating the CWA; 3) enjoin Defendant temporarily and permanently from failing to pay foster care maintenance payments that satisfy the requirements of the CWA; 4) order Defendant to prepare and implement a foster care maintenance payment system that complies with the CWA; 5) order Defendant to base adoption assistance payments on the foster care maintenance payment prepared and implemented in accordance with the payment system requested in this case; 6) award Plaintiffs the full costs of this action and reasonable attorneys’ fees; and 7) order such other relief the Court may deem just and proper. [Id. at pgs. 20-21.]
On August 17, 2015, this Court issued the Order Granting in Part and Denying in Part Plaintiffs’ Motion for Class Certification (“8/17/15 Certification Order”). [Dkt. no. 156.] This Court certified a class of “all currently licensed foster care providers in Hawai`i who are entitled to receive foster care maintenance payments pursuant to the Child Welfare Act when they have foster children placed in their homes” (“the Class”) and appointed Ah Chong as the representative of the Class. [Id. at 33-34.] All claims not prosecuted by the Class are being prosecuted on behalf of the named Plaintiffs only. [Id. at 34.]
I. Overview of the CWA
The purpose of the CWA is to “enabl[e] each State to provide, in appropriate cases, foster care . . . and adoption assistance for children with special needs.” 42 U.S.C. § 670. The federal funds appropriated under the CWA are “used for making payments to States which have submitted, and had approved by the Secretary [of Health and Human Services], State plans under this part, ” i.e. Title IV-E plans. Id. Title IV-E plans must, inter alia:
(I) provide for foster care maintenance payments in accordance with section 672 of this title and for adoption assistance in accordance with section 673 of this title; and]
(II) provide for periodic review of the standards referred to in the preceding paragraph and amounts paid as foster care maintenance payments and adoption assistance to assure their continuing appropriateness[.]
42 U.S.C. § 671. The CWA contains the following relevant definitions:
(3) The term “adoption assistance agreement” means a written agreement, binding on the parties to the agreement, between the State agency, other relevant agencies, and the prospective adoptive parents of a minor child which at a minimum (A) specifies the nature and amount of any payments, services, and assistance to be provided under such agreement, and (B) stipulates that the agreement shall remain in effect regardless of the State of which the adoptive parents are residents at any given time. The agreement shall contain provisions for the protection (under an interstate compact approved by the Secretary or otherwise) of the interests of the child in cases where the adoptive parents and child move to another State while the agreement is effective.
(4)(A) The term “foster care maintenance payments” means payments to cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies, a child’s personal incidentals, liability insurance with respect to a child, reasonable travel to the child’s home for visitation, and reasonable travel for the child to remain in the school in which the child is enrolled at the time of placement. . . .
42 U.S.C. § 675.
Although the CWA expressly defines what expenses must be covered by the foster care maintenance payment, it does not define what the adoption assistance payment covers. However, it states that the adoption assistance payment
shall be determined through agreement between the adoptive parents and the State or local agency administering the program under this section, which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances. However, in no case may the amount of the adoption assistance payment . . . exceed the foster care maintenance payment which would have been paid during the period if the child with respect to whom the adoption assistance payment is made had been in a foster family home.
42 U.S.C. § 673(a)(3) (emphases added).
II. Foster Care Maintenance Payments and Adoption Assistance Payments in Hawai`i
In Hawai`i, the foster care maintenance payment program and the adoption assistance payment program are administered by DHS’s Child Welfare Services Programs. See Haw. Admin. R. Title 17, Subtitle 11, Chapters 1617, 1620. Haw. Admin. R. § 17-1617-2 states, in pertinent part:
“Foster care maintenance payments” means payments issued by the department to compensate eligible caregivers for the provision of care and supervision to eligible foster children. Foster care maintenance payments consist of a basic board rate, and if appropriate, difficulty of care payments based on an assessment of the child’s need for higher level of care and supervision.
“Foster care related payments” means payments for specified related costs not covered in the foster care maintenance payments for an eligible child, including but not limited to clothing, transportation, limited medical expenses, and activity fees.
The “basic board rate” covers “the amount of care and supervision provided for a child whose medical needs, emotional and psychological development, and behavior are within expected norms.” Haw. Admin. R. § 17-1617-3(e)(1). The “difficulty of care” (“DOC”) payment is paid
in addition to the basic board rate, for a child who requires more care and supervision as documented by a treating professional because of the child’s physical, emotional, psychological, and/or behavioral needs, or as documented by appropriate school personnel when the child requires academic or educational assistance that is over and above the average assistance needed for a child.
§ 17-1617-3(e)(2). There is no regulation defining the “basic board rate, ” but Plaintiffs have presented evidence that the current rates were calculated based on the cost of food, housing, and miscellaneous expenses. [Pltfs.’ Concise Statement of Material Facts (“Pltfs.’ CSOF”), filed 8/7/15 (dkt. no. 146), Decl. of Claire Wong Black (“Black Decl.”), Exh. 7 (excerpts of 6/19/15 Depo. of Lisa Nakao (“Nakao Depo.”)) at 33-36.
As of July 1, 2014, the monthly basic board rates are: $576 for children up to age five; $650 for children ages six to eleven; and $676 for children ages twelve and up. Where applicable, the monthly DOC payment can be up to $570. [Separate & Concise Statement of Facts in Supp. of Def.’s Motion (“Def.’s CSOF), filed 8/7/15 (dkt. no. 144), at ¶ 10; Pltfs.’ Concise Counterstatement of Facts (“Pltfs.’ Responsive CSOF”), filed 10/26/15 (dkt. no. 175), at 2 (admitting, inter alia, paragraph 10 of Def.’s CSOF). However, prior to July 1, 2014, the basic board rate was $529, and the rate had been the same since the legislature established it in 1990. See, e.g., Black Decl., Exh. 18 (Foster Care Maintenance Payment Analysis for Hawai`i, dated December 2013, by Susan Meyers Chandler, Ph.D. (“Chandler Report”)) at 2. Haw. Admin. R. § 17-1617-22, which was adopted on December 9, 2010, states that DHS “shall review at five-year periods the established rate of foster care maintenance payments to assure its continued appropriateness.”
The parties agree that, “[a]s a matter of policy[, ] DHS pays the maximum adoption payment to adoptive parents.” [Def.’s CSOF at ¶ 25; Pltfs.’ Responsive CSOF at ¶ 25 (admitting this portion of paragraph 25 of Def.’s CSOF).] In other words, all adoption assistance payments are equal to the amount of the basic board rate that DHS would have paid for the child if he or she was still in foster care. See, e.g., Motion for Class Certification, filed 4/23/15 (dkt. no. 120), Decl. of Raynette Nalani Ah Chong (“Ah Chong Decl.”) at ¶ 5 (“I received $676 per month in adoption assistance payments for the older of my adopted children until he turned 21. I currently receive $676 per month in adoption assistance payments for the younger of my adopted children.”). The purpose of this policy is “to avoid disincentivizing the adoption of children with special needs.” [Def.’s CSOF, Decl. of Kayle Perez (“Perez Decl.”) at ¶ 5.
III. The Instant Motions
Although the First Amended Complaint states a single § 1983 claim for violation of the CWA, there are three distinct theories of liability that are relevant the motions currently before this Court: 1) DHS’s foster care maintenance payments are inadequate; 2) DHS does not conduct the required periodic review of the foster care maintenance payment rates to determine whether they are still appropriate; and 3) because the adoption assistance payments are limited to the amount of the inadequate basic board rate, DHS does not conduct individualized assessments to determine the appropriate amount of an adoptive child’s assistance payment.
Defendant’s Motion seeks summary judgment as to all portions of Plaintiffs’ claim based on the following grounds: 1) there is no private right of action under § 1983 to challenge either the adequacy of a state’s foster care maintenance payments or the failure to conduct periodic review; 2) there is no federally enforceable right associated with the receipt of adoption assistance payments; 3) the Sheeheys’ claim alleging inadequate foster care maintenance payments is moot; and 4) Defendant is entitled to summary judgment because the Hawai`i foster care maintenance payments substantially comply with the CWA. Plaintiffs’ Motion seeks summary judgment as to the inadequacy of the foster care maintenance payments and the failure to conduct periodic reviews. At the hearing on the motions, both sides acknowledged that there are issues of fact for trial. However, they argue that the motions present issues of law that this Court can rule upon, and those rulings will clarify and focus the scope of the trial.
I. Preliminary Issues
A. Private Right of Action
Defendant argues that “there is no private right of action under § 1983 to assert a claim for violation of 42 U.S.C. §§ 672 and 675(4)(A).” [Mem. in Supp. of Def.’s Motion at 14.] This Court has previously ruled that Plaintiffs’ claim challenging whether DHS’s foster care maintenance payments comply with § 675(4)(A) is a cognizable § 1983 claim. [EO: Order Denying Def.’s Motion for Partial Judgment on the Pleadings, filed 11/7/14 (dkt. no. 104), at 2 (citing Cal. State Foster Parent Ass’n v. Wagner, 624 F.3d 974, 982 (9th Cir. 2010) (holding that foster parents may bring a § 1983 claim to enforce the right “to foster care maintenance payments from the State that cover the cost of the expenses enumerated in § 675(4)(A)”)).] Defendant acknowledges that this Court is bound by Ninth Circuit precedent, but reserves the right to argue on appeal that Wagner was wrongly decided. [Mem. in Supp. of Def.’s Motion at 13-14 & n.1.]
Defendant also argues that there is no private right of action to challenge a state’s failure to conduct periodic reviews of its foster care maintenance payments pursuant to § 671(a)(11). [Id. at 18.] This Court concludes that, insofar as the Ninth Circuit recognizes that foster parents - called resource caregivers in Hawai`i - have the right to challenge the adequacy of the foster care maintenance payments, they also have the right to challenge a state’s failure to conduct periodic reviews of the payments to ensure that the payments are adequate. One without the other would render the right to challenge adequacy of payments meaningless. The private right to enforce § 671(a)(11) is a logical extension of the private right to enforce § 675(4)(A).
As to Plaintiffs’ adoption assistance payment claim, the Ninth Circuit has held that a plaintiff can bring a § 1983 claim to challenge the failure to make individualized adoption assistance payment determinations under § 673(a)(3). ASW v. Oregon, 424 F.3d 970, 975-78 (9th Cir. 2005). In the instant Motion, Defendant reserves the right to argue on appeal that ASW was wrongly decided. [Mem. in Supp. of Def.’s Motion at 31 n.8.]
This Court is bound by the controlling Ninth Circuit precedent. Defendant’s Motion is therefore DENIED as to the argument that the applicable statutes ...