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New York State Citizens' Coalition for Children v. Poole

United States Court of Appeals, Second Circuit

April 19, 2019

New York State Citizens' Coalition for Children, Appellant,
v.
Sheila J. Poole, Acting Commissioner for the New York State Office of Children and Family Services, in his official capacity, Appellee,

          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 ...


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