New Rights under §1983, New Worries for CA

A New Right

Yesterday the Ninth Circuit issued its opinion in CA State Foster Parent v. Wagner. The court affirmed the district court’s denial of the state’s motion that the Children Welfare Act (42 U.S.C. § 670 et seq.) did not create a federal cause of action under §1983. For the first time the Ninth Circuit held that the CWA “grants foster care providers a federal statutory right to payments that cover certain enumerated costs, a right redressable under § 1983[.]” (Slip Opinion at pg. 6).

A right the court the court states (and carefully outlines) “flows from” controlling Supreme Court and Ninth Circuit authority governing “when federal statutes create federal rights…” (pg.6) (explaining later in the opinion the question is one of Congressional intent and under Supreme Court authority “a federal statute can create an enforceable right under § 1983 when it explicitly confers a specific monetary entitlement on an identified beneficiary.” See Wilder v. Virginia Hosp. Ass’n, 496 U.S. 498, 110 S. Ct. 2510, 110 L. Ed. 2d 455 (1990) (recognizing health care providers’ right to reasonable reimbursement rates under the Medicaid Act); Wright v. Roanoke Redev. & Hous. Auth., 479 U.S. 418, 107 S. Ct. 766, 93 L. Ed. 2d 781 (1987) (recognizing public housing tenants’ right to reimbursement for utilities charges in excess of rental costs permitted by the Public Housing Act); see also Gonzaga, 536 U.S. at 280 (reaffirming Wilder and Wright).

A New Worry

The suit was brought by three associations representing individual foster parents in CA. Under the CWA Congress provided money to state governments to pay for children’s foster care and adoption assistance programs. The statute “spells out the specific foster care provider expenses that states’ payments are supposed to cover.” (pg. 5) see also 42U.S.C. §§ 672(a) and 675(4)(A). The last adjustment to these costs was made by California in 1990. The suit was the result of those parents becoming concerned that the state’s payments were falling short of the costs enumerated in the CWA.

The suit follows Allenby where the court assumed, but never decided, there was a federal right created by the CWA. See California Alliance of Child and Family Services v. Allenby, 589 F.3d 1017 (9th Cir. 2009) (“Allenby II”). The court also issue its opinion despite the parties in Wagner have resolved the merits through mediation. The decision presented not only an unusual procedural posture, but what was likely becoming an increasing question in light of the state’s budget problem. The decision places pressure on a financially strapped state to increase payments to comply with the CWA. How the state will manage this new costs will be interesting to watch unfold.