State of Vermont Dept. of Social and Rehabilitation Services v. U.S. Dept. of Health and Human Services

• Decision Date: 12 August 1986
• Docket Number: D,No. 970,970
• Parties: STATE OF VERMONT DEPARTMENT OF SOCIAL AND REHABILITATION SERVICES, Plaintiff-Appellee, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES and Otis Bowen, M.D., Secretary * , in his official capacity, his agents and assigns, Defendants-Appellants.ocket 85-6320.
• Court: U.S. Court of Appeals — Second Circuit

Page 57

798 F.2d 57

STATE OF VERMONT DEPARTMENT OF SOCIAL AND REHABILITATION

SERVICES, Plaintiff-Appellee, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES and Otis Bowen, M.D., Secretary ^*, in his

official capacity, his agents and

assigns, Defendants-Appellants.

No. 970, Docket 85-6320.

United States Court of Appeals, Second Circuit.

Argued March 20, 1986.

Decided Aug. 12, 1986.

Steven B. McLeod, Sp. Asst. Atty. Gen., Barre, Vt. (Michael O. Duane, Asst. Atty. Gen., Vermont Dept. of Social and Rehabilitation Services, of counsel), for plaintiff-appellee.

Christopher B. Baril, Asst. U.S. Atty., Rutland, Vt. (Joyce Elise McCourt, Asst. Regional Atty., Dept. of HHS, Boston, Mass., George W.F. Cook, U.S. Atty., D. Vt., Richard K. Willard, Asst. U.S. Atty. Gen., of counsel), for defendants-appellants.

Carol R. Golubock, Washington, D.C. (Marion Wright Edelman, Children's Defense Fund, Washington, D.C., Nancy Flickinger, Patrick O'Keefe, Robert P. Parker, Peter K. Rofes and Daniel M. Singer, Fried, Frank, Harris, Shriver & Jacobson, Washington, D.C., of counsel), for amicus curiae Children's Defense Fund.

Before KAUFMAN, TIMBERS and MINER, Circuit Judges.

MINER, Circuit Judge:

The Secretary of the United States Department of Health and Human Services ("Secretary") appeals from a judgment of the United States District Court for the District of Vermont (Billings, J.) reversing a decision of the Department of Health and Human Services Grant Appeals Board ("GAB") which held the state of Vermont ineligible for certain previously distributed federal foster care funds. For the reasons set forth below, we reverse.

I. BACKGROUND

A. The Federal Statutory Scheme

The instant appeal arises out of conflicting state and federal approaches to the problem of foster care. In response to demonstrated inadequacies in our nation's system of foster care, see generally 125 Cong.Rec. S29938 (daily ed. Oct. 29, 1979) (remarks of Sen. Cranston), Congress enacted Pub.L. No. 96-272, the Adoption Assistance and Child Welfare Act (the "Act"), signed into law by President Carter on June 17, 1980. The Act amended Title IV of the Social Security Act and sought to provide the states with fiscal incentives to encourage a more active and systematic monitoring of children in the foster care system. In particular, the Act amended the Title IV-B program, 42 U.S.C. Secs. 620-628, which provides funds to the states for the improvement of child welfare services, and created the Title IV-E program, 42 U.S.C. Secs. 670-676, which provides reimbursement to the states for foster care maintenance and adoption assistance payments made by the states on behalf of eligible children.

In amending Title IV-B, Congress authorized annual appropriations of $266 million "[f]or the purpose of ... establishing, extending, and strengthening child welfare services...." 42 U.S.C. Sec. 620(a). Of this $266 million, each state would receive a proportionate share of the initial $141 million appropriation. For a state to receive its share of any funds appropriated in excess of $141 million, the Act provides that the state must certify, inter alia, that it:

(2) has implemented and is operating to the satisfaction of the Secretary--

* * *

* * *

(B) a case review system (as defined in section 675(5) of this title) for each child receiving foster care under the supervision of the State....

42 U.S.C. Sec. 627(a). Section 675(5) of the Act defines "case review system" as procedure for assuring that

(B) the status of each child is reviewed periodically but no less frequently than once every six months by either a court or by administrative review (as defined in paragraph (6)) in order to determine the continuing necessity for and appropriateness of the placement, the extent of compliance with the case plan, and the extent of progress which has been made toward alleviating or mitigating the causes necessitating placement in foster care, and to project a likely date by which the child may be returned to the home or place for adoption or legal guardianship, and (C) with respect to each such child, procedural safeguards will be applied, among other things, to assure each child in foster care under the supervision of the State of a dispositional hearing to be held, in a family or juvenile court or another court (including a tribal court) of competent jurisdiction, or by an administrative body appointed or approved by the court, no later than eighteen months after the original placement (and periodically thereafter during the continuation of foster care), which hearing shall determine the future status of the child (including, but not limited to, whether the child should be returned to the parent, should be continued in foster care for a specified period, should be placed for adoption, or should (because of the child's special needs or circumstances) be continued in foster care on a permanent or long-term basis); and procedural safeguards shall also be applied with respect to parental rights pertaining to the removal of the child from the home of his parents, to a change in the child's placement, and to any determination affecting visitation privileges of parents.

42 U.S.C. Sec. 675(5).

As is evident from the statute, and more particularly, its legislative history, see, e.g., 125 Cong.Rec. S22685 (daily ed. Aug. 3, 1979) (remarks of Sen. Cranston), Congress afforded the states considerable flexibility to develop administrative procedures compatible with their own unique foster care circumstances. Despite this general flexibility, however, Congress insisted that any state requesting excess funds satisfy certain minimum requirements. First, within six months after a child's placement in foster care, and at least once every six months thereafter for the duration of his or her stay, the Act mandates that a status review be conducted, either by a state court or by an impartial state administrative body. 42 U.S.C. Sec. 675(5)(B). Second, with respect to children still in foster care after eighteen months, the Act requires that a court or court appointed body hold periodic dispositional hearings to determine the child's future status. Id. Sec. 675(5)(C).

B. Vermont's Statutory Scheme

Prior to the Act's passage, Vermont's statutory foster care procedures provided that, at the request of certain persons or agencies, the state's attorney "shall prepare and file a petition [with the juvenile court] alleging that a child is in need of care or supervision." Vt.Stat.Ann. tit. 33, Sec. 645 (1981). Thereafter, the juvenile court was required to hold a hearing and issue an order containing its findings with respect to the allegations in the petition. If the court found that the child was in need of care or supervision, the court was required to continue the hearing for the purpose of "considering the disposition to be made in the proceedings." Id. Sec. 654(b). The court was empowered to place the child in foster care and terminate the parental rights of the child's parents and transfer those rights to an individual, agency, or institution. Id. Sec. 656(a).

When a court ordered placement in foster care, Vermont law required that the court's dispositional order be reviewed "two years from the date [it was] entered and each two years thereafter." Id. Sec. 658(a). That review would include a juvenile court hearing only if a party to the initial dispositional hearing so requested, or if the court in its own discretion so ordered. In those cases where the juvenile court's dispositional order terminated parental rights, Vermont law did not require that the disposition of the child's situation be reviewed.

After passage of the federal Act, the Vermont legislature amended the state's foster care procedures in order to render the state eligible to receive the additional Title IV-B federal funds. The most significant changes included shortening the time for review of the juvenile court's dispositional order placing a child in foster care from two years to eighteen months, and requiring that review of the dispositional order include a hearing by the juvenile court or by an administrative body appointed or approved by the court. Vt.Stat.Ann. tit. 33, Sec. 658 (1985 Supp.). The amended procedures did not, however, require any dispositional review for children whose parents had had their parental rights terminated ("TPR" children), even if such a child remained in foster care after termination. Vermont conceded in the district court that a dispositional hearing for a TPR child who remains in foster care is undertaken (after the initial hearing) only if the juvenile court, in its discretion, orders or conducts such a hearing, or if adoption proceedings are initiated in the probate court with respect to that child.

C. Proceedings Below

In fiscal year 1981, the first year for which the Act was applicable, states were instructed to declare their eligibility for the additional Title IV-B funds by a statement of self-certification. Vermont submitted its self-certification on July 29, 1981, attesting to the fact that it was in compliance with the Act's procedures. That self-certification was accepted by the Secretary's agent, the Acting Commissioner of the Administration for Children, Youth and Families ("ACYF"). Accordingly, for fiscal year 1981, Vermont received $346,872 in additional Title IV-B funds.

In April of 1982, all states, including Vermont, were informed that their self-certifications would be subject to a verification review by ACYF to assure compliance with the Act. During the course of its review, ACYF discovered that Vermont did not have procedures to assure periodic dispositional hearings for TPR children and in fact had not been providing such hearings. On August 12, 1983, ACYF's Acting Commissioner notified Vermont that it had failed to satisfy the requirements of the Act for fiscal year 1981 in three respects. The Commissioner's notice stated:

[S]ince Vermont did not...