Hensley v. SCDSS, 838 S.E.2d 510

Background

Kenneth and Angela Hensley fostered and then adopted BLH; DSS executed an Adoption Subsidy Agreement promising a $675 monthly payment, renewable annually.
In June 2002 DSS reduced all federally funded foster and adoption subsidies by $20/month; in 2004 DSS restored the $20 for foster care but not for adoption subsidies.
The Hensleys sued in federal court (constitutional and §1983 claims); the Fourth Circuit held federal law required adoption payments not to exceed foster payments and granted qualified immunity to defendants.
In 2013 the Hensleys filed a state-law breach-of-contract class action alleging DSS breached the Adoption Subsidy Agreement by reducing payments and not restoring them for adoptive parents.
The circuit court certified the proposed class; DSS appealed. The court of appeals treated the certification order as immediately appealable (citing confidentiality concerns) and reversed for lack of commonality.
The South Carolina Supreme Court vacated the court of appeals opinion and dismissed the appeal, holding the class-certification order was not immediately appealable because confidentiality risk was speculative and important class-certification issues (e.g., individualized inquiries, administrative-exhaustion) remained unresolved.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Immediate appealability of class-certification order	Hensley: COA may review certification immediately because disclosure of adoption status would cause irreparable harm and no appellate remedy would repair it.	DSS: Class-certification interlocutory orders are ordinarily not immediately appealable; any confidentiality risk can be addressed by the circuit court's notice process.	The Court held the certification order is not immediately appealable; the confidentiality risk was speculative and the circuit court must first address notice and protection.
Applicability of Doe v. Howe to expand immediate appeals for confidentiality	Hensley/COA: Doe supports immediate appeal where pretrial order risks disclosure of sensitive personal information.	DSS/SCTOP: Doe was narrow (anonymous plaintiff in child sexual-assault case) and should not be extended to other interlocutory orders; Ex parte Capital U-Drive-It is distinguishable.	The Court declined to extend Doe beyond its narrow facts and refused to treat it as controlling for this class-certification appeal.
Rule 23 commonality / predominance concerns	Hensley: Identified two common questions (whether 2002 reduction or 2004 non-restoration breached agreements); argued class treatment appropriate and damages calculable by formula.	DSS/COA: Many issues (consent, renewals, appeals, damages calculation) require individualized inquiry; common issues do not sufficiently outweigh individual issues for efficient class resolution.	The Court agreed common questions existed but emphasized the circuit court must assess whether individualized issues (including exhaustion/damages) undermine class procedure; COA erred to decide merits on interlocutory appeal.
Effect of administrative-exhaustion requirement on class suitability	Hensley: Administrative remedies need not defeat class treatment; damages and liability may be resolved on common proof.	DSS: Parents were required to exhaust administrative appeals challenging subsidy reductions; exhaustion could require individual hearings and preclude class adjudication.	The Court held the exhaustion question was unresolved and factual/procedural determinations by the circuit court could affect class certification; thus premature appellate review was improper.

Key Cases Cited

Hensley v. Koller, 722 F.3d 177 (4th Cir. 2013) (held federal law limited adoption payments to not exceed foster payments and granted qualified immunity to state directors).
Doe v. Howe, 362 S.C. 212 (Ct. App. 2004) (allowed immediate appeal of denial to proceed anonymously in child sexual‑assault suit; emphasized risk of stigmatizing disclosure).
Ex parte Capital U‑Drive‑It, Inc., 369 S.C. 1 (2006) (held family‑court unsealing was a final, appealable order and observed disclosure may be irreparable).
Salmonsen v. CGD, Inc., 377 S.C. 442 (2008) (reiterated class‑certification orders are generally not immediately appealable).
Gardner v. S.C. Dep’t of Revenue, 353 S.C. 1 (2003) (reversed certification where factual differences were crux of predominant legal issue).
McGann v. Mungo, 287 S.C. 561 (Ct. App. 1986) (early post‑Rule 23 decision discussing commonality and the need to balance common vs. individual issues).
Knowles v. Standard Sav. & Loan Ass’n, 274 S.C. 58 (1979) (rejected argument that class certification is immediately appealable as a decision on the merits).
Stinney v. Sumter Sch. Dist. 17, 391 S.C. 547 (2011) (affirmed that exhaustion of administrative remedies applies when an administrative remedy is provided by statute).