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CONSUMER ADVOCATES RIGHTS v. STATE

December 16, 2005.

CONSUMER ADVOCATES RIGHTS ENFORCEMENT SOCIETY, INC. (CARES, INC.), on behalf of California child-support payors; and NICK ARELLANO, individually as a child-support payor and on behalf of all those similarly situated and as guardian ad litem for RYAN ARELLANO, individually as a child supported and on behalf of all those similarly situated, Plaintiffs,
v.
STATE OF CALIFORNIA; COUNTY OF MONTEREY; STEPHEN H. KENNEDY; CURTIS L. CHILD; JAMES L. HANSEN; LISA ORTIZ; BERNIE SIMON and DOES 1 through 50, inclusive, Defendants.



The opinion of the court was delivered by: WILLIAM ALSUP, District Judge

ORDER GRANTING MOTION TO DISMISS

INTRODUCTION

In this action challenging the administration of child-support payment cases in California under the Temporary Assistance to Needy Families ("TANF") program, defendants move under Federal Rule of Civil Procedure 12(b)(6) to dismiss the complaint. The Court GRANTS defendants' motion to dismiss.

  STATEMENT

  Plaintiff Nick Arellano is Ryan Arellano's non-custodial parent and guardian ad litem. He has been obliged to pay child support for Ryan through the Monterey County Department of Child Support Services since November 3, 1993. His case has been administered pursuant to Title IV-D, 42 U.S.C. 651-669, a cooperative federal-state program designed to ensure the availability of child-support enforcement and paternity-establishment services to states that participate in the TANF program. As a participant, California receives federal funds and uses them to make monetary payments, including child-support, to financially-needy families. The state later recovers its contributions from the parents responsible for such obligations. Under the Act, it cannot claim an amount exceeding the benefits it actually disbursed to the family, however, and any excess payments must be applied to outstanding obligations. California must also comply with basic federal goals and regulations governing its administration of child-support cases. Beyond meeting these minimum standards, the state has considerable autonomy in designing its own public-assistance program.

  Plaintiff Arellano made regular reimbursement and child-support payments to the department pursuant to a court order until September 1997. Around that time, Ryan's mother requested that his child-support case be closed; she also waived all outstanding obligations he owed. Beginning in 1998, disputes emerged between plaintiff Arellano and the Monterey County Child Support Division, the local agency that was directly responsible for administering his case. Specifically, plaintiff Arellano took issue with the division's notices that he owed substantial sums of money and practices of intercepting his tax refunds and levying his bank accounts in order to collect those sums. He was also aggrieved by the division's failure to provide him with notice or information as to how he could resolve his disputes or a statement regarding his reimbursement account.

  On February 19, 2005, plaintiff Arellano commenced this action challenging these alleged administrative errors. He represents a putative class of other parents allegedly subjected to similar errors, his son Ryan and similarly-situated children. Consumer Advocates Rights Enforcement Society, Inc., the other named plaintiff, is a California non-profit public-benefit organization that aids in the enforcement of rights of families whose support is processed through the county/state child-support system. Defendants are or were previously involved in managing various aspects of child-support services that allegedly affected or continue to impact the administration of plaintiff Arellano's and the putative class members' child-support cases.

  This action accuses defendants of violating both federal and state laws by mismanaging child-support cases in California. Specifically, the complaint alleges: (1) defendants have deprived plaintiffs of property without due process of law, in violation of 42 U.S.C. 1983; (2) defendants have deprived plaintiffs of property without due process of law and infringed on their Fifth and Fourteenth Amendment rights, in violation of 42 U.S.C. 657, by collecting and retaining excess child-support payments; (3) defendants have failed to provide plaintiffs with the requisite notice and due process protections in handling their accounts; (4) defendants Hansen and Ortiz, child-support attorneys for the Monterey County Local Child Support Agency and/or Department of Child Support Services, fraudulently obtained plaintiff Arellano's earnings from his employer; (5) defendants have unlawfully charged interest on undistributed child-support payments; (6) defendants have breached their fiduciary duty to plaintiffs; and (7) defendants' fiduciary duty requires them to provide plaintiffs with an accounting. Plaintiffs request that the Court direct defendants to redress their alleged misconduct.*fn1

  Defendants now move to dismiss the complaint on the following five grounds: (1) plaintiffs have no private right of action under Title IV-D; (2) the Eleventh Amendment shields them from all claims; (3) many of plaintiffs' claims are barred by the statute of limitations; (4) defendant Child, former director of California's Department of Child Support Services, is entitled to qualified immunity as to any damages claims; and (5) the Court lacks subject-matter jurisdiction over the state claims. Defendants also assert that plaintiff Arellano lacks standing to bring the action on behalf of Ryan and that the putative class members lack standing as well.*fn2

  ANALYSIS

  Pursuant to Federal Rule of Civil Procedure 12(b)(6), dismissal for failure to state a claim is proper if it appears beyond doubt that plaintiff can prove no set of facts to support a claim entitling him to relief. Dismissal may be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). Furthermore, all material allegations of the complaint are taken as true and are construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). If dismissal is granted, plaintiffs are only provided leave to amend if they can cure the complaint's defects. Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987).

  1. PRIVATE RIGHT OF ACTION.

  Defendants contend that plaintiffs have no private right of action against them because the federal laws they allegedly violated do not unambiguously confer upon plaintiffs any individual rights. Plaintiffs claim to possess a private right of action because the relevant laws benefit them, provide them with clear and enforceable rights and impose binding obligations on defendants that work to their advantage.

  The Supreme Court held in Blessing v. Freestone, 520 U.S. 329 (1997), that custodial mothers of children eligible to receive child support under Title IV-D lacked a private right of action against a state under Section 1983 to obtain "substantial compliance" with the title. It based this decision on the recognition that Congress did not intend for the law in question to benefit individual children and custodial parents. The ruling further identified the following factors as critical to this determination: (1) whether the right asserted under the statute is so "vague and amorphous" that enforcement would strain ...


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