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LAURIE Q. v. CONTRA COSTA COUNTY

February 17, 2004.

LAURIE Q., by her guardian ad litem, et al., Plaintiffs,
v.
CONTRA COSTA COUNTY, Defendant



The opinion of the court was delivered by: MARILYN PATEL, Chief Judge, District

MEMORANDUM AND ORDER RE: DEFENDANT'S MOTION TO DISMISS
Plaintiffs Laurie Q. et al, individually and on behalf of others similarly situated, are or were special needs foster children in the care and custody of defendant Contra Costa County ("the County"). Plaintiffs maintain that the County, allegedly the representative payee of Social Security benefits for the children, impeded the adoption process and used the benefits for purposes unrelated to the children. Plaintiffs also allege that defendant engaged in widespread violations of the laws enacted to protect the children. Now before the court is defendant's motion to dismiss portions of the first, third, and sixth causes of action contained in plaintiff's second amended complaint.*fn1 Defendant argues to the court that the Eleventh Amendment bars plaintiffs' prayers for compensatory monetary relief, that the doctrine of Younger abstention prevents this court from granting injunctive relief on plaintiff's first cause of action, and that named plaintiffs' claims have been mooted because they are no longer within the County's foster care system. Having considered the parties' arguments and submission, and for the reasons set forth below, the court now enters the following memorandum and order. Page 2

BACKGROUND*fn2

  I. General Factual and Procedural History

  Laurie Q., Angel L., Megan W., Christina T., Rebecca T., Jesse B., Kendra G., and Cherida L., the named plaintiffs in this action, are minors who had been or are committed to the custody of the County. Plaintiffs claim that Laurie Q. suffers from attention deficit hyperactive disorder; Angel L. is developmentally delayed; Megan W., Christine T., and Rebecca T. have special needs; Jesse B. is hyperactive; and Cherida J. is diagnosed with Joubert's Syndrome, a massive congenital brain anomaly, and cortical blindness. Plaintiffs submit that all but Cherida J. tested positive for drugs and /or alcohol at birth and that Laurie Q., Angel L., Christine T., and Rebecca T. were subject to sexual and/or physical abuse at some point. As minors, each of the named plaintiffs was taken into legal custody, made dependents of the County, and placed in foster care.

  The Aid to Families with Dependent Children — Foster Care ("AFDC — FC") program is a cooperative federal — state program authorized by Title IV of the SSA, 42 U.S.C. § 601 et seq. The program includes a foster care provision authorizing disbursements of funds for children placed in foster care upon a judicial determination that the children's homes are not conducive to their welfare. See 42 U.S.C. § 608. The federal government provides financing on a matching fund basis to states that administer the AFDC — FC program. Participation in the program is voluntary, but participating states must comply with the requirements of the Social Security Act ("SSA"). There is no cap on the amount of federal reimbursement. Currently, of the total costs for foster care maintenance in California, the federal government covers 50 percent, the state covers 37.5 percent, and each county's share is 12.5 percent.

  Because of their status as indigent disabled persons, plaintiffs are entitled to receive benefits that assist in alleviating expenses incurred as a result of their special needs. These benefits include Supplemental Security Income ("SSF") and Adoption Assistance Program ("AAP") funds. Under the SSA, a qualified individual or organization may be appointed as a representative payee for an SSI beneficiary. 42 U.S.C. § 1383(a)(2)(A)(ii)(I). The payee receives the funds for the use and benefit of the SSI beneficiary. Id. Here, the County served as the representative payee for the minor beneficiaries who were made dependents. Page 3

  Plaintiffs allege that defendant County has engaged in widespread violation of laws enacted to protect the children and to ensure them a safe childhood in a permanent family. Inter alia, plaintiffs allege that defendant wrongfully delayed the adoption of disabled children, misappropriated government benefits intended for the children and failed to advise potential adoptive parents of the availability of funds for individuals adopting special needs children. According to plaintiffs, defendant's behavior has violated numerous state and federal laws.

  The named plaintiffs in this action originally filed suit against the Commissioner of the federal Social Security Administration and Contra Costa County in 1996. On May 22, 1997, this court dismissed all claims against the Commissioner of the Social Security Administration for lack of subject matter jurisdiction, leaving only the claims against the County. On December 19, 1997, the named plaintiffs filed a "Second Amended Complaint" that alleged six substantive causes of action against the County. On August 17, 1998, this court dismissed plaintiffs' second, fourth, and fifth causes of action, leaving only the first, third, and sixth causes of action largely intact.

  II. Operation of California's Foster Care System

  California's foster care system involves an interlocking web of statutes that places responsibility for the care and governance of children with several different public-sector actors. The process of admitting a child into the foster care system begins with the filing of a petition to bring that child "within the jurisdiction of the juvenile court." Cal. Welf & Inst. Code § 300; see also Id. at § 311. The juvenile court is authorized to take jurisdiction over children under a variety of circumstances, such as when "there is a substantial risk that the minor will suffer[] serious physical harm inflicted nonaccidentally upon the minor by the minor's parent or guardian." Id. at § 300(a). Upon the filing of a petition, the juvenile court first holds a jurisdictional hearing to address the sole question of whether the child falls into one of the several categories according to which the juvenile court may take jurisdiction according to section 300. Id. at § 355(a). After determining that jurisdiction properly lies, the juvenile court is required to receive evidence regarding the "proper disposition" to be made of the "minor" and must then enter judgment as to that disposition; the court may make the child "a dependent child of the court," order a legal guardianship and appoint a guardian, Page 4 allow the child to remain in the custody of her parent or guardian under supervision, or make any of several other arrangements to facilitate the child's well-being. Id. at §§ 358, 360.

  The children in California's foster care system are those who have been taken from the custody of their parents or guardians and made dependent children of the court; not surprisingly, therefore, the juvenile court retains jurisdiction over all children within the system. Id. at §§ 300, 366. The court reviews the status of each dependent child at least every six months. Id at § 366.*fn3 At those periodic hearings, the juvenile court must determine, inter alia, "the continuing necessity for and appropriateness of the placement, the extent of compliance with the case plan . . . and the extent of progress which has been made toward alleviating or mitigating the causes necessitating placement in foster care." Id at § 366(a). The "case plan" referenced in section 366(a) is a document setting forth the circumstances that caused the child to be placed in foster care, the goals of the child's placement, the services that the state and county are providing for the child, the success of those services in aiding the child, and future plans for placing the child permanently; the legislature has declared the case plan "the foundation and central unifying tool in child welfare services." Id at § 16501.1(a), (f).

  Case plans are prepared by the county agency or individual in charge of administering the foster care program; the county must complete the first case plan within thirty days of the child's "initial removal" from the custody of her parent or guardian, and must update and review the plan at least every six months. Id. at § 16501.1(d). The juvenile court is obligated to review the case plan at each of the periodic hearings it holds, and may modify the plan as it sees fit. Id. at § 16501.l(f)(12). While the caseworker assigned to each child may modify the plan during the interim between court hearings, the court can hear challenges to those modifications and subsequently reverse or alter them. Id.

  If the juvenile court adjudges that a child who has been made a dependent of the court cannot be returned home to her parent or guardian, the juvenile court must hold a hearing in order to set forth a plan for that child's long-term care and otherwise determine the "future status of the minor." Id. at § 366.25(a). In some cases, the court may also permanently terminate parental rights in order to establish a subsequent alternative legal guardianship of the child. Id. at § 366.26. A hearing under section 366.25 or 366.26, and a subsequent decision by the juvenile court to seek a long-term solution involving either adoption or Page 5 permanent guardianship for the child, converts the child's situation into a so-called "permanent plan" case and triggers several other statutory requirements. The court maintains jurisdiction over the child until she is adopted, and the status of the child (including the case plan) must be reviewed every six months "to ensure that the adoption or guardianship is completed as expeditiously as possible." Id. at § 366.3. The use of passive voice in the previous sentence is quite deliberate; California law does not specify whether it is the juvenile court or an administrative body that must perform this review. In fact, the law declares only that "a child in foster care shall receive administrative reviews periodically but no less frequently than once every six months," and warns that "[t]he requirements of this section shall not be interpreted as requiring duplicate concurrent court and administrative reviews." Id. at § 16503(a), (d).*fn4

  Contra Costa County has elected to employ review by both an administrative panel and the Juvenile Court on an alternating basis in these "permanent plan" cases. Six months after the child is given "permanent plan" status an "Administrative Review Panel" conducts an assessment of her case plan; six months later review is before the Juvenile Court.*fn5 Def. App. Exh. 3, at I.*fn6 This pattern continues as long as the child remains within the County's foster care system. However, the County has adopted a system of ultimate judicial review for case plan modifications that is more stringent than state law requires. Under that system, judicial review of administratively recommended modifications is, in essence, mandatory. If the Administrative Review Panel "recommend[s] modifications [to the case plan] which are different from the current Juvenile Court orders, the Social Worker or Supervisor will be instructed to schedule a court hearing to address the recommended modifications." Id at III.C.3. In addition, any participant in an administrative review hearing who "disagree[s] with the outcome" of that proceeding "may request that the matter be heard in the Juvenile Court." Id at III.C.4. The County's documents do not indicate whether the Juvenile Court may decline to hear the matter if there have been no modifications to the case plan.

  In addition to its responsibilities as overseer of the case plan, the Juvenile Court is empowered to "make any and all reasonable orders for the care, supervision, custody, conduct, maintenance, and support of the minor, including medical treatment." Cal. Welf & Inst. Code § 362(a), Of particular relevance here is the fact that "the court may . . . join in the juvenile court proceedings any agency that the court determines has failed to meet a legal obligation to provide services to the minor." Id. Page 6

  III. Plaintiffs' Remaining Claims

  A. First Cause of Action: Claims Under Title IV-E

  1. Substantive Claims

  In 1980, Congress enacted the Adoption Assistance and Child Welfare Act (AACWA), which amended Title IV of the SSA in an effort "to provide the states with fiscal incentives to encourage a more active and systemic monitoring of children in the foster care system." Vermont Dep't of Soc. and Rehab. Serv. v. United States Dep't of Health and Human Serv., 798 F.2d 57, 57 (2d. Cir. 1986), cert. denied, 479 U.S. 1064 (1987). The AACWA created the Title IV-E program, 42 U.S.C. § 670-676, which provides reimbursement to the states for foster care maintenance and adoption assistance payments made by the states on behalf of eligible children. Plaintiffs have three surviving section 1983 claims alleging violations of Title IV-E.

  Plaintiffs first accuse the County of failing to prepare adequate case plans as mandated by 42 U.S.C. § 675(1) and 671(a)(16). Under section 671(a)(16) a state or county claiming eligibility for benefits under the AACWA must institute a plan "that provides for the development of a case plan (as defined in section 675(1) of this title) for each child receiving foster care maintenance payments under the State plan." Section 675 defines a case plan as a written document that must include a "description of the type of home or institution in which a child is to be placed" and "a plan for assuring that the child receives safe and proper care." 42 U.S.C. § 675(1)(A) & (B). Plaintiffs contend that the County's failure to prepare appropriate case plans has resulted in a lack of recognition of plaintiffs' special needs and a consequent deficiency of essential services and therapeutic interventions.

  Plaintiffs also maintain that defendant has failed to review the required case plans in a timely fashion. According to plaintiffs, this failure violates sections 671(a)(16), 675(5)(B) and 675(5)(C). Pursuant to section 671(a)(16), a case plan must provide "a case review system which meets the requirements described in section 675(5)(B) of this title with respect to each child." Under section 675(5)(B), a procedure must be in place to assure that the status of a child is reviewed no less than every six months by either a court or by administrative review, inter alia, to "determine the safety of the child" and "the extent of compliance with the case plan." Section 675(5)(C) requires a procedure in place to assure the application Page 7 of certain procedural safeguards, such as a permanency hearing in a court of competent jurisdiction not more than 12 months after a child has entered foster care and "not less frequently than every twelve months thereafter during the continuation of foster care."

  Third, plaintiffs allege that defendant has failed to ensure that certain foster children receive adequate funding. According to plaintiffs, this conduct violates sections 672(a), which requires each state to make foster care maintenance payments to children who would have received AFDC payments but for their removal from their homes. Foster care maintenance payments are defined in section 675(4)(A). See reference in 42 U.S.C. § 672(a). Specifically, section 675(4)(A) states that "`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, and reasonable travel to the child's home for visitation." 42 U.S.C. § 675(4)(A). Plaintiffs believe that the County's violations of the AACWA give rise to causes of action under 42 U.S.C. § 1983. 2. Class Action Organization

  On January 31, 2003, this court granted in part and denied in part the named plaintiffs' request to certify a class. The court did not grant class certification regarding either the third or sixth causes of action, but did certify a main class and a subclass of plaintiffs as to the first cause of action. The main class of plaintiffs consists of children "who were, are now, or will be dependents of the County and are eligible for federally funded foster care maintenance payments" under the AACWA. The subclass consists of all children who were or are "eligible for federal foster care aid" under the AACWA, and who thus may not have received adequate payments from the County. Plaintiffs have sought injunctive relief against the County for both the main class and the subclass and requested that this court ensure that the County complies with all applicable law in the treatment and care of these children. Plaintiffs have also requested monetary damages for the subclass of children who might be owed federal foster care aid, seeking equitable restitution of any funds that the County may have unlawfully appropriated.

  B. Third Cause of Action: Claims Relating to SSA Section 1383

  Under the SSA, a qualified individual or organization may be appointed as a representative payee for an SSI beneficiary 42 U.S.C. § 1383(a)(2)(A)(ii)(I). The payee receives the funds for the use and Page 8 benefit of the SSI beneficiary. Id. In this case, the County has served as the representative payee for two of the named plaintiffs who were made dependents.

  Two surviving claims relate to section 1383 of the SSA. First, plaintiffs contend that defendant has shirked its responsibility as a representative payee for the children by failing to place SSI benefits in individual trust accounts. The SSA requires that:
Each representative payee of an eligible individual under the age of 18 who is eligible for the payment of benefits described in subclause (II) shall establish on behalf of such individual an account in a financial institution into which such benefits shall be paid, and shall thereafter maintain such account for use in accordance with clause (ii).
42 U.S.C. § 1383(a)(2)(F)(I)(1). Clause (ii) mandates that the funds in the account are to be used solely for allowable expenses, which are also defined by the statute. 42 U.S.C. § 1383(a)(2)(F)(ii)(I) & (II). Furthermore, one of the regulations promulgated under the law states that representative payees are to be governed by the rules applicable to trustees. 20 C.F.R. § 404.2045.

  Second, plaintiffs maintain that the County has impermissibly commingled the SSI benefits in a general fund and failed to pay interest on the benefits. There is no specific section of the SSA preventing commingling of funds. However, the language of section 1383(a)(2)(F)(I)(I) imposing a duty to keep individual accounts implies that commingling of funds would violate the SSA. Nowhere does the SSA require representative payees to place SSI funds in an interest — bearing account. In support of their argument that representative payees should place SSI funds in interest — bearing accounts, plaintiffs cite to 20 C.F.R. § 404.2045, which states that representative payees are to be governed by the rules applicable to trustees. The court has ...


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