ASW, Individuаlly and as Guardian ad litem for MSW and OSW, minors; SSW; ALC, Individually and as Guardian ad litem for SRC and JSC, minors; JKC; JSS, Individually and as Guardian ad litem for BKS, a minor; SDS; CEW, Plaintiffs-Appellants,
v.
State of OREGON, by and through its Department of Human Services; Jean I. Thorne, in her official capacity as Director, Oregon Department of Human Services, Defendants-Appellees.
No. 03-35950.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted May 2, 2005.
Filed September 13, 2005.
Maria F. Ramiu (argued) and Alice Bussiere, Youth Law Center, San Francisco, CA, and Arthur C. Johnson and Dennis M. Gerl, Johnson, Clifton, Larson & Corson, PC, Eugene, OR, for the plaintiffs-appellants.
Hardy Myers, Attorney General, Mary H. Williams, Solicitor General and David E. Leith, Assistant Attorney General (argued), Statе of Oregon, Salem, OR, for the defendants-appellees.
Appeal from the United States District Court for the District of Oregon; Ann L. Aiken, District Judge, Presiding. D.C. No. CV-03-06038-ALA.
Before HUG, TASHIMA, and CLIFTON, Circuit Judges.
CLIFTON, Circuit Judge.
Plaintiffs are parents of adopted children with special needs1 who receive adoption assistance payments from the State of Oregon. They appeal the district court's dismissal of their class action lawsuit under 42 U.S.C. § 1983, which alleged several violations of their statutory rights under the Adoption Assistance and Child Welfare Act of 1980, 42 U.S.C. §§ 620 et seq. (the "Act"), as well as their right to due process priоr to reduction of their adoption assistance payments. Defendants, the State of Oregon and the Director of the Oregon Department of Human Services (together, "Oregon" or the "State"), moved to dismiss the action asserting that Plaintiffs failed to state a claim as a matter of law. The district court granted the State's motion. Because we conclude 42 U.S.C. §§ 671(a)(12) and 673(a)(3) create federal rights enforceable through a § 1983 cause of action, we reverse.
I. BACKGROUND
The Adoption Assistance and Child Welfare Act of 1980 estаblished a program of federal payments to participating states to provide funds for financial assistance to aid families adopting special needs children out of foster care. 42 U.S.C. §§ 670-76. The State of Oregon accepts funds from the federal government under this program and thus obligates itself to abide by the federal requirements.2 Accordingly, Oregon must enter into a binding written agreement with each pair of adoptive parents. 42 U.S.C. §§ 673(a)(1) & 675(3). The amount each family receives in adoption assistance payments "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 parents" if the circumstances of the parents or the needs of the child change. § 673(a)(3). Additionally, the federal statute provides that each grant recipient is entitled to a fair hearing before the applicable state agency to challenge any claim for benefits that "is denied or is not acted upon with reasonable promptness." § 671(a)(12).
The State sent a form letter in December 2002 to all families in Oregon receiving adoption assistance payments to inform them that because of budgetary shortfalls their payments would be reduced 7.5%. The form letter asked the families to agree to the reduction or risk having their adoption assistance payments terminated. The families were also informed that they would not be entitled to individual hearings to challenge the reductions. Although the families did not agree to the reductions, their adoption assistance payments were not terminated. The payments were, however, uniformly reduced by 7.5% beginning in February 2003. The State selected 7.5% as the amount of the reduction to coincide with its decision to reduce foster care maintenance payments by that same amount, also effective February 2003.
Plaintiffs brought a 42 U.S.C. § 1983 class action against the State, asserting, inter alia, that they have a federal right to have the amount of their adoption assistance payments based on an individualized assessment of their special needs and circumstances, as well as a federal right to have a fair hearing before an administrative agency to contest reductions in their payments. Plaintiffs claimed these rights were violated by the State's unilateral action.3 Plaintiffs sought a declaration of their rights and an injunction to prevent the State from uniformly and unilaterally reducing their adoption assistance payments and denying them the opportunity to challenge the reductions in a "contested case hearing." The district court concludеd that the rights Plaintiffs claimed the State violated were not enforceable through a § 1983 cause of action and granted the State's motion to dismiss. Plaintiffs timely appealed.
II. MOOTNESS
Oregon argues that Plaintiffs' claims are moot because a state administrative rule, Or. Admin. R. 413-130-0127, which became effective November 1, 2003, increased monthly adoption assistance payments by 8.108%, thus making the amount of the monthly payments slightly larger than they had been before the reduction nine months earlier. Mootness is a question of law that we review de novо. S. Or. Barter Fair v. Jackson County,
"A case loses its quality as a `present, live controversy' and becomes moot when there can be no effective relief." San Lazaro Ass'n v. Connell,
Moreover, we are "particularly cautious when a case has become moot because the defendant has voluntarily ceased to pursue the challenged course of action." Smith v. Univ. of Wash. Law Sch.,
Because Plaintiffs' challenge to Or. Admin. R. 413-130-0125 is not rendered moot by the adoption of Or. Admin. R. 413-130-0127, we proceed to a discussion on the merits.
III. MERITS
We review de novo the district court's decision to grant the State's motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. See Decker v. Advantage Fund Ltd.,
Plaintiffs correctly point out that legislation enacted pursuant to Congress's spending power can give rise to enforceable rights under 42 U.S.C. § 1983. See Gonzaga Univ. v. Doe,
The Supreme Court has identified three factors, which if present, establish a rebuttable presumption of an enforceable federal right.6 Blessing v. Freestone,
A. Statutory Right to Individualized Payment Determinations
Our initial inquiry is whether the text and structure of the Act contains the requisite "rights-creating" language that evinces a congressional intent to confer an entitlement to individualized payment determinations. Price,
Section 671 requires Oregon tо have a plan that mandates that adoption assistance will be provided in accordance with § 673. Section 673(a)(3) requires that the amount of adoption assistance payments be determined "through agreement between the adoptive parents and the State . . . which . . . take[s] into consideration the circumstances of the adopting parents and the needs of the child being adopted." Furthermore, the amount of the payment may only be readjusted "with the concurrence of the adopting parеnts, depending upon changes" in the circumstances of the adopting parents and the needs of the child.8 This language evinces a clear intent to create a federal right. See Price,
The second and third prongs of the Blessing test are also satisfied. The right to individualized payment determinations that reflect the unique circumstances of the parents and the special needs of their adopted child is a concrete and objective right, the enforcement of which does not "strain judicial competence." Blessing,
We are not persuaded by the fact that in 31 Foster Children v. Bush,
Because Plaintiffs have asserted a federal right presumptively enforceable under § 1983, the burden falls on the State to rebut this presumption by showing that Congress has "spеcifically foreclosed a remedy under § 1983" either expressly "or impliedly, by creating a comprehensive enforcement scheme that is incompatible with individual enforcement under § 1983." Blessing,
We begin our analysis by recognizing that we do "not lightly conclude that Congress intended to precludе reliance on § 1983 as a remedy for the deprivation of a federally secured right." Price,
Oregon cites a recent decision of the Supreme Court, City of Rancho Palos Verdes v. Abrams, ___ U.S. ___,
By contrast, the Act does not include a comprehensive enforcement mechanism incompatible with a § 1983 action. It simply provides the beneficiary with an "opportunity for a fair hearing before the State agency" to contest individual benefit claims under the Act. 42 U.S.C. § 671(a)(12). Notably, Congress did not place any temporal or remedial limitations such as those the Court considered dispositive in concluding that Congress intended the statutory enforcement meсhanism in 47 U.S.C. § 332(c)(7) to be exclusive. Furthermore, Oregon's argument that § 673(a)(1), which requires the State to enter into binding agreements with adoptive parents, creates a comprehensive enforcement scheme incompatible with § 1983 mischaracterizes the right Plaintiffs are seeking to enforce here. Regardless of whether their contracts have been breached, Plaintiffs are seeking to enforce their right under § 673(a)(3) to individualized payment determinations, which is a federal statutory right that is not dependent on the terms of their individual contracts. And, even if Plaintiffs were able to sue on their contracts to enforce their right to individualized payment determinations, "the state-court remedy is hardly a reason to bar an action under § 1983, which was adopted to provide a federal remedy for the enforcement of federal rights." See Wright,
We conclude therefore that Plaintiffs may proceed with an action under § 1983 on their claim that they were entitled to individualized payment determinations. We do not comment on the merits; we merely hold that Plaintiffs' claim is not subject to dismissal for failure to state a claim.
B. Statutory Right to an Administrative Hearing
Plaintiffs also contend that they have a federal right under 42 U.S.C. § 671(a)(12) to individual hearings challenging the reduction of their adoption assistance payments.14 We agree. Section 671(a)(12) requires that an individual, whose claim for benefits is denied or not acted upon with reasonable promptness, be given an opportunity for a fair hearing before the State agency. Applying the Blessing test discussed in the preceding section confirms that Congress intended to create a federal right to a fair hearing before a State agency, in that the text of the provision explicitly describes an objective individual and judicially reviewable right that is phrased in mandatory rather than precatory terms. See, e.g., Timmy S. v. Stumbo,
Oregon counters that 45 C.F.R. § 205.10(a)(5), made applicable to Title IV-E through 45 C.F.R. § 1355.30, defines and restricts Plaintiffs' right to a hearing. Specifically, § 205.10(a)(5) provides that a "hearing need not be granted when either State or Federal law requires automatic grant adjustments for classes of recipients unless the reason for an individual appeal is incorrect grant computation." Yet, accepting as true the facts pled in their complaint, neither State nor Federal law required automatic grant adjustments, as none of the Plaintiffs were receiving adoption assistance payments in excess of the applicable cap after the uniform reduction in foster care payments.
Oregon also argues that although Plaintiffs were denied an opportunity fоr a contested case hearing, they could have challenged the rule implementing the reduction through a rule hearing under Or. Rev.Stat. § 183.400.15 Section 183.400, however, restricts the scope of the available hearing and limits the possible remedies. In particular, rules are reviewed only for compliance with the statutory provisions authorizing the rule and the rulemaking procedures followed. See Beaver Creek Co-Op. Tel. Co. v. Pub. Util. Comm'n,
We conclude that the right to a hearing under Or.Rev.Stat. § 183.400 does not meet the requirements of a § 671(a)(12) hearing. Section 671(a)(12) falls squarely within the category of what Oregon defines as a "contested case" hearing as it invokes the application of a rule to a particular factual situation. Furthermore, as monetary relief is not available under a rule hearing, such a hearing does not satisfy the requirement for a "fair hearing" for "any individual whose claim for benefits" has been denied. Pursuant to § 671(a)(12), Plaintiffs have a right to an individualized fact-specific hearing to adjudicate their unique situation in which benefits were "denied or . . . not acted upon with reasonable promptness," resulting in monetary relief where appropriate.
IV. CONCLUSION
Because it is possible that Plaintiffs could prove a set of facts in support of their claims that would entitle them to relief, we hold the district court erred in dismissing Plaintiffs' action for failure to state a claim under Rule 12(b)(6). Specifically, the district court erred in concluding that Plaintiffs do not have federally enforceable rights to individualized payment determinations and to a fair hearing before a State agency to challenge individual benefit reductions pursuant to 42 U.S.C. §§ 673(a)(3) and 671(a)(12), respectively.
REVERSED and REMANDED.
Notes:
Notes
Children with special needs include,inter alia, a child who has a documented medical, physical, mental, or emotional condition, a history of abuse, neglect or other identified predisposing factоr that places the child at risk for future problems and need for treatment, is a member of a sibling group which will be placed together and is difficult to place because there are three or more children, is a member of an ethnic/racial/cultural minority, or is eight years of age or older. Or. Admin. R. 413-130-0020.
Oregon's Adoption Assistance Program is codified at Or. Admin. R. 413-130-0000et seq.
Plaintiffs' complaint also included a breach of contract claim. That cause of action is not before us
We do not believe that Plaintiffs' request for a declaration that Or. Admin. R. 413-130-0125 violates Title IV-E of the Social Security Act would effect an " `end run' aroundEdelman v. Jordan,
See, e.g., Price v. City of Stockton,
InGonzaga University, the Court acknowledged the continuing relevance of the Blessing test to "guide judicial inquiry into whether or not a statute confers a right."
Clarifying the first prong of theBlessing analysis, in Gonzaga University the Court explained that if Congress intends to confer individual rights on a class of beneficiaries, it must do so unambiguously through "explicit right-or duty-creating language" that is "phrased in terms of the person benefitted."
This assumes that the parents continue to qualify to participate in the adoption assistance program. Additionally, Oregon is correct that the amount of the adoption assistance payment is limited under § 673(a)(3) in that it cannot "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 was made had been in a foster family home." It is the methodology of calculating the payments, however, not the partiсular amount of the payment, that Plaintiffs challenge here. Furthermore, Plaintiffs contend, and the State does not dispute, that at no time did their adoption assistance payments exceed the applicable foster care maintenance payments, even after the reduction in foster care payments made by the State in February 2003. Accordingly, the limiting language contained in § 673(a)(3) is not applicable
Oregon's argument that it would be economically inefficient to engage in individualized determinations for recipients of adoption assistance payments whenever it lowered its foster care maintenance payments is irrelevant. Unlike foster care maintenance payments, codified in a standardized rate schedule, § 673(a)(3) explicitly creates a right to individualized payment determinations for adoption assistance payments. That right cannot be abrogated for the convenience of the State
InGonzaga University, the Court emphasized that the Family Educational Rights and Privacy Act of 1974 did not speak in terms of the individual, but instеad had an aggregate focus that was "not concerned with whether the needs of any particular person have been satisfied."
In response to the Court's broad reasoning inSuter, Congress enacted 42 U.S.C. § 1320a-2, explicitly stating that simply because § 671(a)(15), the provision at issue in Suter, did not create an enforceable private right of аction, does not mean that other provisions in Title IV-E did not create federal rights. Section 1320a-2 also overturned Suter to the extent the Court held that simply by virtue of being a plan requirement Congress foreclosed the possibility that the provision could create an individually enforceable federal right. See, e.g., Price,
The plaintiffs in31 Foster Children brought suit under § 675 asserting they had a right to prompt placement with permanent families and to have their medical and educational backgrounds provided to their caregivers as part of the case review system.
The enforcement mechanism available under the TCA (1) mandated that judicial review be sought within 30 days and the final action heard and decided on an expedited basis; (2) likely excluded compensatory damages; and (3) did not provide for attorneys' fees and costsRancho Palos Verdes,
Plaintiffs contend that right was violated when Oregon issued Or. Admin. R. 413-130-0125(4), which denied them access to a "contested case hearing."
Oregon's Administrative Procedures Act provides for three distinct types of hearings: hearings to challenge a rule (§ 183.400), hearings in "contested cases" (§ 183.482) and hearings in "other than contested cases" (§ 193.484)
