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Wilder v. Bernstein

decided as amended.: June 8, 1988.


Appeal from a judgment of the District Court for the Southern District of New York (Robert J. Ward, Judge), approving the settlement of a class action brought on behalf of Black Protestant children in New York City in need of institutional or foster home care. The settlement, which alters the City's arrangements for placement of children, is challenged by a group of Catholic and Jewish agencies, which were formerly defendants in the litigation. Affirmed. Judge Cardamone concurs in part and dissents in part with a separate opinion.

Newman, Kearse and Cardamone, Circuit Judges.

Author: Newman

JON O. NEWMAN, Circuit Judge:

This appeal challenges the settlement of a class action that effects major changes in the way New York City discharges its obligations to arrange for the care of children requiring placement in institutions and foster homes. Because New York City has historically contracted with religiously affiliated child care agencies to provide placement for most of the children requiring institutional and foster home settings and because New York law provides for religious matching of children and sectarian child care agencies, the lawsuit posed troublesome issues arising under both the Establishment of Religion and the Free Exercise of Religion Clauses of the Constitution. The suit also raised serious issues under the Equal Protection Clause and related statutes arising from alleged inequality of treatment based on the race of the children. The settlement has been achieved between the plaintiffs, representing a class of Black Protestant children, and the defendant municipal officials responsible for the City's child care system (collectively "the City"). The settlement has also been agreed to by a group of private child care agencies, which intervened in the District Court, initially to oppose the settlement. The settlement was opposed in the District Court and now on appeal by a group of administrators of private child care agencies that characterize themselves as "Catholic and Jewish affiliated" agencies. Brief for Defendants-Appellants Schneider et al. at 1. These administrators (hereinafter "the sectarian agencies") were defendants in the District Court but were dismissed as parties when the settlement was approved. Officials of New York State, who were defendants, were dismissed as parties after advising the District Court that they had withdrawn their objections to the settlement.

The appeal, brought by the sectarian agencies, is from the April 28, 1987, judgment of the District Court for the Southern District of New York (Robert J. Ward, Judge), giving final approval to the settlement. The settlement had been initially approved by Judge Ward on October 8, 1986, subject to compliance with four conditions. The final judgment ruled that the conditions had been met. Judge Ward's opinion giving initial approval to the settlement, reported at 645 F. Supp. 1292, is notable for its thoroughness, craftsmanship, scholarship, and sensitivity to the issues presented. Familiarity with that opinion is not only assumed, it is virtually indispensable to an understanding of this appeal. Indeed, in light of its thoroughness, we need only summarize the complex background of this litigation and the provisions of the settlement before turning to the appellants' contentions.


Under New York law children are "placed" in institutions or foster care homes by one of two procedures. Some are taken away from their parents upon a finding by the Family Court of abuse or neglect, N.Y. Family Court Act, Art. 10 (McKinney 1983); others are voluntarily committed by parents, N.Y. Soc. Serv. Law § 384-a (McKinney 1983). In both situations the child is placed in the custody of the New York City Commissioner of Social Services. About 17,000 children are currently in placement.

New York City has the option of caring for these children in its own facilities or contracting with private agencies. In pursuance of a long tradition, it has elected to rely heavily on private agencies. At present more than 90% of the children are placed through private agencies. The City contracts with some 60 private agencies. Most of them are religiously affiliated. These agencies place the child either with a foster family or in an institution run by the agency, depending on the child's needs. About 70% of the children are in foster homes. About 90% of the per diem expenses of the children are paid to the agencies from federal, state, and city funds.

The religious matching aspect of New York's child care scheme is set forth in state constitutional and statutory provisions. The State Constitution provides that a child shall be placed "when practicable, in an institution or agency governed by persons, or in the custody of a person, of the same religious persuasion as the child." N.Y. Const. art. 6, § 32 (McKinney 1987). The primary implementing statute provides that a commitment shall be made "when practicable, to an authorized agency under the control of persons of the same religious faith as that of the child." N.Y. Soc. Serv. Law § 373(1) (McKinney 1983). The statute further provides that it shall be applied "so far as consistent with the best interests of the child" and "where practicable . . . so as to give effect to the religious wishes" of the parents. Id. § 373(7). In the absence of the parents' expressed wishes, "it shall be presumed that the parent wishes the child to be reared in the religion of the parent." Id.

These religious matching provisions were authoritatively construed by the New York Court of Appeals in 1972. In re Dickens v. Ernesto, 30 N.Y.2d 61, 330 N.Y.S.2d 346, 281 N.E.2d 153, appeal dismissed for want of substantial federal question, 407 U.S. 917, 92 S. Ct. 2463, 32 L. Ed. 2d 803 (1972). Considering the provisions in the context of an adoption, the Court said that the statutes "place[] primary emphasis on the temporal best interests of the child, although the religious preference of the natural parents remains a relevant consideration." Id. at 66, 330 N.Y.S.2d at 348. "[R]eligion," the Court continued, "is but one of many factors in the placement of a child," and a religious placement, "though desirable, is not mandatory." Id. at 65-66, 330 N.Y.S.2d at 348.

The pending litigation, brought initially to challenge the state law provisions regarding religious matching in connection with publicly funded child care placements, was initiated in 1973. Subsequently, a three-judge district court was convened pursuant to 28 U.S.C. § 2281 (repealed 1976). The three-judge court confined its decision to the facial validity of the challenged state constitutional and statutory provisions and concluded that they did not violate the Establishment Clause of the First Amendment. Wilder v. Sugarman, 385 F. Supp. 1013 (S.D.N.Y. 1974) (per curiam) (Wilder I). Since the Court's reasoning bears on issues raised in the pending appeal, it must be set forth, at least briefly.

The Court initially analyzed the Establishment Clause claim under the three-part test of Lemon v. Kurtzman, 403 U.S. 602, 612-13, 29 L. Ed. 2d 745, 91 S. Ct. 2105 (1971):

First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion, Board of Education v. Allen, 392 U.S. 236, 243, 20 L. Ed. 2d 1060, 88 S. Ct. 1923 (1968); finally, the statute must not foster "an excessive government entanglement with religion." Walz [v. Tax Commission, 397 U.S. 664, 25 L. Ed. 2d 697, 90 S. Ct. 1409 ,] 674 [(1970)].

Viewing the state law provisions for funding and religious matching as part of an integrated scheme, the three-judge court in Wilder I concluded that the scheme did not have a solely secular purpose and did have an effect that, "[a]bsent countervailing circumstances, . . . could be to impermissibly inculcate religion." 385 F. Supp. at 1023-24, However, the Court concluded, such couuntervailing circumstances arose out of the State's obligation, once it accepted the responsibility for caring for the children in the place of their parents, to enforce the parents' right to determine the religious upbringing of their children, see Pierce v. Society of Sisters, 268 U.S. 510, 69 L. Ed. 1070, 45 S. Ct. 571 (1925), and to assure the children's rights under the Free Exercise Clause, see Board of Education v. Barnette, 319 U.S. 624, 87 L. Ed. 1628, 63 S. Ct. 1178 (1943). The Court analogized the situation to a state's responsibility to make provision for the religious needs of those in its care in prisons, hospitals, and military establishments. See Cruz v. Beto, 405 U.S. 319, 322, 31 L. Ed. 2d 263, 92 S. Ct. 1079 n.2 (1972) (per curiam) (prisons); Katcoff v. Marsh, 755 F.2d 223, 234-35 (2d Cir. 1985) (military); Carter v. Broadlawns Medical Center, 667 F. Supp. 1269, 1280-81 (S.D. Iowa 1987) (hospital); see also Abington School District v. Schempp, 374 U.S. 203, 296-98, 10 L. Ed. 2d 844, 83 S. Ct. 1560 (1963) (Brennan, J., concurring). Finally, the Court considered the suggestion that the State could fulfill its obligations toward the parents and the children by placing the children in the care of non-religious agencies and then arranging for the religious needs of the children to be met outside the purview of the child care agencies, That option, the Court believed, would itself encounter Establishment Clause concerns because the State would become "hopelessly entangled in religion." 385 F. Supp. at 1029. Thus, obviously sensitive to the tension between the Establishment and the Free Exercise Clauses no matter how New York chose to meet the religious needs of children in its care, the Court upheld the statutory scheme on its face and deferred for further proceedings inquiry as to whether the implementation of any aspect of the scheme violated the Constitution.

After the decision in Wilder I, discovery ensued, and the complaint was amended several times. Ultimately a fourth amended complaint was filed in 1983, which set forth four claims that awaited trial at the time of the settlement. These were that the City's child care scheme (1) discriminates on the basis of race in that Black children are placed in disproportionately low numbers in Catholic and Jewish agencies, which tend to be the agencies that are better funded and provide higher quality services, (2) discriminates on the basis of religion in that, among other things, Protestant children wait longer for placement and are placed in inferior programs compared with Catholic and Jewish children, (3) involves an excessive entanglement of government with religion that violates the Establishment Clause, and (4) infringes the Free Exercise rights of Protestant children in that, among other things, there are no agencies operated by members of most of the Protestant sects and that Protestant children are chilled in the exercise of their own religion when placed in the care of Catholic and Jewish agencies. The matters alleged in the Fourth Amended Complaint were claimed to violate the First and Fourteenth Amendments, Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d (1982), and New York antidiscrimination regulations, 18 N.Y.C.R.R. §§ 303.1, 303.2 (1978).

In April 1984 the plaintiffs and the City defendants presented a proposed settlement for approval by the District Court pursuant to Fed. R. Civ. P. 23(e). Judge Ward directed that notice of the proposal be given to members of the plaintiff class and subsequently granted leave to nineteen child care agencies to intervene for the purpose of opposing the settlement. Thereafter the Court received detailed submissions concerning the settlement proposal from the parties, from organizations of child care professionals, and from knowledgeable individual experts. Hearings on the proposal began in August 1984 and continued intermittently as the proposal was revised in response to some of the objections. In January 1985 a revised proposal was submitted to the Court. After notice to the plaintiff class, this proposal was the subject of a hearing in March 1985. Prior to this hearing the State defendants had withdrawn their objections to the proposal. The intervenors withdrew their objections, subject to agreement on the identity of a child care expert who would perform certain tasks in the implementation of the settlement. Once agreement on that person was secured, the settlement was signed by the plaintiffs, the City defendants, defendant Kaufman (the administrator of Ohel Children's Home, an Orthodox Jewish agency), and the nineteen intervenors. On October 8, 1986, Judge Ward issued his opinion approving the settlement, subject to the fulfillment of certain obligations by some or all of the signatories. Once satisfied that these conditions, which are not relevant to this appeal, had been met, Judge Ward entered a final judgment approving the settlement and dismissing with prejudice the defendant sectarian agencies, all of whom had remained opposed to the settlement. These agencies, all Catholic and Jewish, are the sole appellants. Though not signatories to the settlement and not bound as parties by the judgment, they were parties in the underlying lawsuit and remain vitally interested in the judgment because they will be substantially affected by its implementation should they choose to remain participants in the City's program of purchasing child care services from private agencies. Cf. Marino v. Ortiz, 484 U.S. 301, 108 S. Ct. 586, 98 L. Ed. 2d 629, slip op. at 3 (U.S. 1988) (persons who were never parties in district court and failed to intervene may not appeal settlement of class suit).

The Settlement

The settlement proclaims its purposes to be the assurance of placement of children without racial or religious discrimination and "appropriate" recognition of preferences for religious matching in a manner consistent with federal and state constitutions, statutes, and regulations. These purposes are implemented by an elaborate plan for child placement that requires the City to place children on a first-come, first-served basis, with a preference for religious matching honored only to the extent that it does not give a child greater access to a program appropriate for his needs over other children for whom the program is also appropriate but who earlier became candidates for placement.

The settlement recognizes that its attempt to provide equal opportunities for placement requires some system for determining the relative quality of various agencies that provide the services appropriate for any particular child. To this end, the settlement provides for classification of agencies and programs by one or more expert consultants to be selected by the ...

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