Argued: June 15, 2015
On
Appeal from the United States District Court for the Eastern
District of New York
Plaintiff,
the New York State Citizens' Coalition for Children, sues
Defendant, the Acting Commissioner for the New York State
Office of Children and Family Services, on behalf of the
Coalition's foster parent members. The Coalition alleges
that the State pays its foster parents members inadequate
rates to cover the costs of caring for their foster children,
in violation of the Adoption Assistance and Child Welfare Act
of 1980. The district court dismissed the suit, holding that
the Act does not create an enforceable right to payments, but
finding that the Coalition does have standing to sue. We
AFFIRM the finding that the Coalition has standing to sue on
behalf of its members under Nnebe v. Daus, 644 F.3d
147 (2d Cir. 2011) and reject the State's argument that
the Coalition is barred by the third-party standing rule. We
REVERSE the district court's dismissal of the
Coalition's claims and hold that the Act grants foster
parents a right to payments, enforceable through 42 U.S.C.
§ 1983.
Before: Calabresi, Livingston, Circuit Judges, and Sessions,
District Judge [*]
CALABRESI, CIRCUIT JUDGE
This
case asks whether Spending Clause legislation that directs
specific payments to identified beneficiaries creates a right
enforceable through 42 U.S.C. § 1983. We hold that it
does.
Congress
enacted the Adoption Assistance and Child Welfare Act of 1980
("the Act") "to strengthen the program of
foster care assistance for needy and dependent
children." Pub. L. 96-272, 94 Stat. 500 (1980). One of
the ways the Act does so is by creating a foster care
maintenance payment program. 42 U.S.C. § 671(a)(1).
Under this program, participating states receive federal aid
in exchange for making payments to foster parents "on
behalf of each child who has been removed from the home of a
relative." Id. § 672(a)(1), (2). These
payments are calculated to help foster parents provide their
foster children with basic necessities like food, clothing,
and shelter.
The
particular question before us is whether the Act grants
foster parents a right to these payments enforceable through
a Section 1983 action. Three Courts of Appeals have reached
this issue. The Sixth and Ninth Circuits have held that it
does. Cal. State Foster Parent Ass'n v. Wagner,
624 F.3d 974 (9th Cir. 2010); D.O. v. Glisson, 847
F.3d 374 (6th Cir. 2017). The Eighth Circuit has held that it
does not. Midwest Foster Care and Adoption Ass'n v.
Kincade, 712 F.3d 1190 (8th Cir. 2013).
We join
the Sixth and Ninth Circuits in holding that the Act creates
a specific entitlement for foster parents to receive foster
care maintenance payments, and that this entitlement is
enforceable through a Section 1983 action. The district
court, Kuntz J., held to the contrary. Accordingly,
we VACATE the order dismissing the case and
REMAND for further proceedings.
I.
Background
This
appeal arises from a Section 1983 action filed in federal
district court by the New York State Citizens' Coalition
for Children ("the Coalition"). The Coalition's
suit, brought on behalf of its foster parent members, alleges
that the New York State Office of Children and Family
Services ("the State") has failed to make adequate
foster care maintenance payments as required by the Act.
The
district court dismissed the Coalition's suit, holding
that the Act creates no federally enforceable right to
receive foster care maintenance payments. The Coalition
appealed. On appeal, the State asserted, for the first time,
that the Coalition lacked standing to bring this suit on
behalf of its members. We remanded the case to the district
court for additional factfinding on that issue. On remand,
the district court found that the Coalition has standing: The
Coalition must expend resources to advise and assist foster
parents because of the State's allegedly inadequate
reimbursement rates.
The
Coalition then returned to this Court for review of the
district court's original holding that they could not
enforce the Act through Section 1983. The State, yet again,
raised a new argument on appeal, this time that the Coalition
lacks standing to bring this suit under the third-party
standing rule.
Before
considering the original issue before us-that is, whether the
Act creates a federally enforceable right to receive foster
care maintenance payments- we must address the State's
claim that the Coalition lacks organizational and third-
party standing to litigate these claims on behalf of its
foster parent members.
II.
Standing
To
bring a Section 1983 suit on behalf of its members, an
organization must clear two hurdles. First, it must show that
the violation of its members' rights has caused the
organization to suffer an injury independent of that suffered
by its members. Nnebe v. Daus, 644 F.3d 147, 156 (2d
Cir. 2011). Second, it must "demonstrat[e] a close
relation to the injured third part[ies]," and "a
hindrance" to those parties' "ability to
protect [their] own interests." Mid-Hudson Catskill
Rural Migrant Ministry v. Fine Host Corp., 418 F.3d 168,
174 (2d Cir. 2005). We conclude that the Coalition has
cleared both hurdles.
A.
Organizational Standing
In a
string of opinions, this Court has held that organizations
suing under Section 1983 must, without relying on their
members' injuries, assert that their own injuries are
sufficient to satisfy Article III's standing
requirements. Nnebe, 644 F.3d at 156-58; League
of Women Voters v. Nassau Cty., 737 F.2d 155, 160-61 (2d
Cir. 1984); Aguayo v. Richardson, 473 F.2d 1090,
1099-1100 (2d Cir. 1973). To establish its own injury, an
organization must show that it has suffered a
"perceptible impairment" to its activities.
Nnebe, 644 F.3d at 157. This showing can be met by
identifying "some perceptible opportunity cost"
that the organization has incurred because of the violation
of its members' rights. Id.
The
Coalition asserts that the State's alleged violations of
the Act has cost it hundreds of hours in the form of phone
calls from aggrieved foster families. The district court
found, and we agree, that the Coalition has spent nontrivial
resources fielding these calls, and that it will continue to
have to do so absent relief. This showing is sufficient to
establish that the Coalition has suffered its own injury.
B.
Third Party Standing
When
any plaintiff asserts the rights of others, it has
traditionally also faced, in our court, a rule of prudential
standing: the so-called third-party standing bar. With some
exceptions, this rule prevents "litigants from asserting
the rights or legal interests of others [simply] to obtain
relief from injury to themselves." Keepers, Inc. v.
City of Milford, 807 F.3d 24, 40 (2d Cir. 2015) (quoting
Rajamin v. Deutsche Bank Nat. Trust Co., 757 F.3d
79, 86 (2d Cir. 2014)).
There
is considerable uncertainty as to whether the third-party
standing rule continues to apply following the Supreme
Court's recent decision in Lexmark v. Static
Control Components, Inc., 134 S.Ct. 1377 (2014). In
Lexmark, the Supreme Court cast doubt on the entire
doctrine of prudential standing, explaining that a court can
no more "limit a cause of action that Congress has
created" than it can "apply its independent policy
judgment to recognize a cause of action that Congress has
denied." Id.at 1388. Nevertheless, in
United States v. Suarez, a post- Lexmark
case, we continued to hold that courts are required to
address third-party standing. 791 F.3d 363, 367 (2d Cir.
2015). In Suarez, however, we did not address
Lexmark.
But we
need not, in the case before us, resolve this tension.
Whatever the status of the third-party standing bar, our
cases have developed an exception to it where a plaintiff can
show "(1) a close relationship to the injured party and
(2) a barrier to the injured party's ability to assert
its own interests." Keepers, Inc., 807 F.3d at
41. That exception applies here.
It is
evident that the Coalition enjoys a close relationship with
the foster parents it counsels, not least because those
foster parents have authorized the Coalition to file suit on
their behalf. The State argues, however, that the Coalition
has failed to show that it would be "difficult if not
impossible" for the foster parents to protect their own
rights. December 22, 2017 Appellee Letter Br. at 14.
But the
third-party standing rule does not demand anything near
impossibility of suit. See 15 James William Moore,
Moore's Federal Practice §
101.51[3][c][iii] (3d ed. 2008). Instead, a mere
"practical disincentive to sue"-such as a desire
for anonymity or the fear of reprisal-can suffice to overcome
the third-party standing bar. Id.; See also
Keepers, 807 F.3d at 42; Comacho v. Brandon,
317 F.3d 153, 160 (2d Cir. 2003).
And
here, the Coalition has demonstrated that the manifest desire
of their foster parent members for anonymity constitutes a
significant disincentive for those parents to sue in their
own names. It did so by submitting an anonymous affidavit
from one of its members articulating two reasons the member
desired anonymity. First, the member feared retaliation
because a state agency had previously retaliated against them
after they had lodged a complaint against it. Second, the
parent also sought to protect their anonymity out of concern
for their foster children's well-being:
Even if the names of my children are filed under seal or
redacted from public documents, disclosure of my name…
puts my foster children's anonymity at risk… The
children that have come from traumatic and often abusive
environments. Any negative repercussions resulting from the
public disclosure of the fact that they are all in foster
care will only add to their history of trauma, and I want to
protect my children from that.
D. Ct. Dkt. # 17-3 ¶¶ 10-11. It is no stretch to
believe that foster parents, who have opened their homes to
children in need, would forgo financial benefits to protect
those children.
We are
thus satisfied that the Coalition is properly positioned to
represent its members' rights effectively. And we are
satisfied that those members are significantly impaired from
pursuing those rights on their own. Accordingly, we conclude
that the third-party standing rule does not bar the Coalition
from pursuing its claims.
III.
A Right to Foster Care Maintenance Payments Enforceable
through Section 1983.
Having
found that the Coalition has standing, we turn to the main
question in this case: Do foster parents have a right to
foster care maintenance payments enforceable through a
Section 1983 action? Section 1983 is a vehicle for
individuals to enforce "any right[] . . .
secured" by federal law. 42 U.S.C. § 1983 (emphasis
added). Whether that vehicle is available to foster parents
seeking to obtain foster care maintenance payments turns on
whether (a) the Act means to confer on foster parents a right
to those payments, in which case Section 1983 would be
available. Or, whether the Act, instead, intends (b) simply
to focus on the operations of the regulated entity (the
states), and is designed only to give states guidance in
administering aid to foster parents; or (c) relies solely on
the regulatory authority (the Secretary of Health and Human
Services) to see to it that the Act's requirements are
met, with the result that Section 1983 would be foreclosed.
Our
review of the Act's text and statutory structure leads us
to conclude that Congress did indeed create a specific
monetary entitlement aimed at assisting foster parents in
meeting the needs of each foster child under their care. What
is more, we find that the Act's provision of (limited)
federal agency review for a state's substantial
compliance is insufficient to supplant enforcement through
Section 1983. We therefore hold that the Coalition can bring
a Section 1983 action on behalf of its foster parent members.
A.
Statutory Background
The
Adoption Assistance and Child Welfare Act of 1980, 42 U.S.C.
§ 670 et seq., is Spending Clause legislation
directed at state administration of foster care and adoption
assistance services. Relevant here, the Act creates a
"Foster Care Maintenance Payments Program," the
details of which must be recounted in some detail.
1.
State Plan Requirements.
To
receive federal aid under the Act, states must submit a plan
for approval to the Secretary of Health and Human Services
(the Secretary). Section 671 details what a state plan must
provide to qualify. Section 671's requirements are
numerous and far-ranging; they run from dictating how
information about individuals involved in the foster care
system may be disclosed, Id. § 671(a)(8), to
providing guidelines on how and when a state should give
priority to reuniting families, Id. §
671(a)(15). Significantly, one of Section 671's
thirty-five requirements is that the state plan provide for
foster care maintenance payments. Id. §
671(a)(1).
2.
Foster Care Maintenance Payments.
Once a
state plan has been approved, Section 672, titled
"Foster care maintenance payments programs,"
directs participating states-that is, states with an approved
plan-to make maintenance payments to foster parents on behalf
of each foster child under their care. Section 675 then
defines the costs that compose those payments.
The
mandate appears in Subsection 672(a)(1). This subsection,
titled "Eligibility," has two components. The first
provides that "[e]ach State with a plan approved under
this part shall make foster care maintenance payments on
behalf of each child . . . ." Id. §
672(a)(1). The second addresses which foster children are
eligible for foster care maintenance payments to be made on
their behalf. Id. § 672(a)(1)(A), (B)
(incorporating Section 672(a)(2), (3)). Eligibility is
dictated by the financial resources of the child, how the
child was removed from the home, who is responsible for the
child, and where the child is placed. Id. §
672(a)(2), (3).
Subsection
672(b) provides that the state can make these payments either
to the child's foster parent, to the institution where
the child is placed, or to a local agency.
Section
675 then defines what exactly constitutes a "foster care
maintenance payment":
[T]he term "foster care maintenance payments" means
payments to cover the cost of (and the cost of providing)
food, clothing, shelter, daily supervision, school supplies,
a child's personal incidentals, liability insurance with
respect to a child, reasonable travel to the child's home
for visitation, and reasonable travel for the child to remain
in the school in which the child is enrolled at the time of
placement.
Section
675(4) further states that these payments "shall
include," for institutional placements, the reasonable
costs of operating the institution, and "shall also
include" the costs of caring for the offspring of any
foster children if the foster child and his or her children
are in the same placement. In defining foster care
maintenance payments, the Act exclusively uses mandatory
language.[1]
3.
Federal Reimbursement.
Section
674 details when a state is entitled to reimbursement from
the Federal Government. Briefly put, states are entitled to
reimbursement of a percentage of payments made under Section
672, as well as other costs including training and
information systems expenditures. Id. §
674(a)(1), (3).
4.
Review and Enforcement Mechanisms.
The Act
creates three avenues for review of a state's compliance
with its obligations under the Act: two through the state and
one through the Secretary.
Both
avenues for state review are dictated by Section 671, the
section governing the requirements the state must meet to
qualify for the program. First, Section 671 requires the
state to conduct "periodic review of the . . .amounts
paid as foster care maintenance payments . . .to assure their
continuing appropriateness." Id. §
671(a)(11). The second avenue of state review is addressed to
recipients of benefits under the Act. Section 671 requires
the state to provide "an opportunity for a fair hearing
before the State agency to any individual whose claim for
benefits available pursuant to this part is denied or is not
acted upon with reasonable promptness." Id.
§ 671(a)(12).
The
third avenue for review, found in Section 1320a-2a, is the
only avenue for federal review expressly provided for in the
Act. Section 1320a-2a directs the Secretary to create
regulations to ensure states' "substantial
conformity" with the dictates of federal law and the
state's own plan. Id. § 1320a-2a(a). If a
state fails to conform substantially, then the Secretary may
withhold funds "to the extent of the [state's]
failure to so conform." Id. §
1320a-2a(b)(3)(C).
The
State has not pointed us to any mechanism for the Act's
beneficiaries to obtain federal review of their claims. Thus,
the only mechanism of federal control over state behavior is
the cutting off of funds. Nor has the State pointed us to any
claim-processing requirements―e.g., no burdens of
proof, exhaustion requirements, or limitation of
remedies―that allowing a Section 1983 action would
upset.
* * *
In sum,
the Act requires a state to submit a plan to the Secretary
for approval. Once the Secretary approves the state's
plan, the Act directs the state to make payments to foster
parents on behalf of each eligible child to cover costs such
as food, clothing, and school supplies. The Federal
Government then reimburses the state for a percentage of
those payments so long as it remains in "substantial
compliance" with its own plan, the regulations of the
Secretary, and the requirements of the Act. While the Act
requires states to conduct internal review and contemplates
that the Secretary will ensure that the state remains in
substantial compliance, the only individual review mechanism
specifically provided for in the Act is at the state level.
B.
The Presumption
The
Supreme Court, in Blessing v. Freestone, 520 U.S.
329 (1997), articulated a three-factor test for determining
whether a statute creates a right enforceable through Section
1983. First, "Congress must have intended that the
provision in question benefit the plaintiff."
Id. at 340. In Gonzaga University v. Doe,
536 U.S. 273, 283 (2002), the Court clarified that this
factor requires more than a showing that the "plaintiff
falls within the general zone of interest that the statute is
intended to protect." The statute must confer a right on
the plaintiff as shown by use of rights- creating
language-that is, language that demonstrates a statutory
focus on the needs of the individual, rather than the
operations of the regulated entity. Id. at 287-88.
Second, the plaintiff must "demonstrate that the right
assertedly protected by the statute is not so vague and
amorphous that its enforcement would strain judicial
competence." Blessing, 520 U.S. at 340-41
(internal quotation marks omitted). And, third, the
"statute must unambiguously impose a binding obligation
on the States." Id. at 341.
If a
statute grants a right to a plaintiff class, the right is fit
for judicial enforcement, and the state is obligated to
fulfill the right, then a rebuttable presumption attaches
that a Section 1983 action enforcing the right is available.
Id.; Gonzaga, 536 U.S. at 284 & n. 4. A
state defendant can overcome this presumption, however, by
showing that Congress intended to foreclose a remedy under
Section 1983, either expressly "or impliedly, by
creating ...