Court Gives Foster Parents Route to Fight NY for More Money

MANHATTAN (CN) – Reviving a suit on behalf of foster parents who claim that New York underpays them, the Second Circuit ruled Friday that federal law guarantees their right to payment.

The New York State Citizens’ Coalition for Children brought the suit in 2010, alleging that New York had been reimbursing foster care parents at 43% below the actual costs of raising a child in foster care. Even states with lower living costs such as Texas, Arizona, Tennessee and Wyoming pay more.

“In fact, on average, New York pays less to foster parents than what it costs to kennel a dog in the state,” according to the complaint, which sought to enjoin the state from allowing local social services districts from setting their own maintenance payment rates under a maximum threshold.

Though a federal judge found that the group had standing, the case stumbled on the finding that the Adoption Assistance and Child Welfare Act of 1980 did not contain an enforceable right to payment.

The Second Circuit reversed on that point 2-1 Friday.

“The act uses mandatory language, binding participating states,” U.S. Circuit Judge Guido Calabresi wrote for the majority. “It evinces a congressional focus on meeting the needs of individual foster children and translates that focus into a specific monetary entitlement granted to an identified class of beneficiaries: foster parents.”

While the Child Welfare Act give states leeway on how to calculate costs and distribute payments, the court found that those determinations are also subject to judicial review.

“If rate-settings that require a state to determine what is reasonable, adequate, efficient, and economical are fit for judicial review, then rate-setting that merely requires a state to quantify costs for set expenses must also be,” the 32-page opinion states.

The court also found the coalition had standing as a third party because it had spent hundreds of hours fielding phone calls from foster families over the issue, and that foster parent members wanted anonymity during the court proceedings.

In one case, the court found, a coalition member who lodged a complaint faced retaliation.

U.S. Circuit Judge Debra Ann Livingston dissented, saying the court had essentially imposing a categorical foster care spending requirement on recipient states, ignoring any restrictions by state legislators.

Livingston argued that requiring New York to make maintenance payments could lead to a “disastrous result” in which payments are decreased overall to foster parents.

“Whatever the majority’s good intentions, exposing New York’s foster care system to amorphous [statutory] claims that are not contemplated in the CWA is no way to further the CWA’s goals, nor to benefit foster care systems more generally,” Livingston wrote.

“Indeed, the majority’s decision raises the prospect that scarce foster care resources, instead of going to foster children, will be squandered in litigation destined to produce arbitrary and inconsistent results.”

She noted further that the Department of Health and Human Services has not interpreted the statutes to require a minimum spending mandate on states.

Livingston also took issue with a 2007 study cited in the original complaint, which pegged New York State reimbursement at 43% below actual living costs, noting the underlying Bureau of Labor Statistics survey was based on a national survey of household expenditures.

The 2007 study’s recommended payment rates do not vary based on family income level, she wrote, nor does the study take into account family income levels or the potential costs of caring for a foster child with special needs.

Chanwoo Park and Grant Esposito, attorneys for the coalition with the firm Morrison Foerster, did not immediately return emails seeking comment.

Representatives for the New York State Office of Children and Family Services, the agency named as the defendant in the suit, did not immediately return an email seeking comment.

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