Youakim v. McDonald

• Decision Date: 06 December 1995
• Docket Number: 95-2813,Nos. 95-2575,s. 95-2575
• Citation: 71 F.3d 1274
• Parties: Marcel YOUAKIM, Linda Youakim, individually, and as foster parents, and Tim Robertson, and all others similarly situated, Plaintiffs-Appellees/Cross-Appellants, v. Jess McDONALD, Director, Illinois Department of Children and Family Services, * Defendant-Appellant/Cross-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1274

71 F.3d 1274

Marcel YOUAKIM, Linda Youakim, individually, and as foster

parents, and Tim Robertson, and all others

similarly situated, Plaintiffs-Appellees/Cross-Appellants, v. Jess McDONALD, Director, Illinois Department of Children and Family Services, ^*

Defendant-Appellant/Cross-Appellee.

Nos. 95-2575, 95-2813.

United States Court of Appeals,

Seventh Circuit.

Argued Sept. 27, 1995.

Decided Dec. 6, 1995. ^**

Rehearing and Suggestion for Rehearing En Banc Denied Jan. 17, 1996.

Diane Redleaf, John M. Bouman, Robert E. Lehrer (argued), Michelle J. Gilbert, Stacey E. Platt, Legal Assistance Foundation of Chicago, Chicago, IL, Kenneth Kandaras, John Marshall Law School, Chicago, IL, Peter J. Schmiedel, Office of the Public Guardian, Juvenile Division, Chicago, IL, for Plaintiffs-Appellees in No. 95-2575.

Rita M. Novak, Office of the Attorney General, Chicago, IL, Esther Nkonye Iwerebon, Eric J. Glover, Daniel M. Feeney, Christina M. Tchen (argued), Skadden, Arps, Slate, Meagher & Flom, Chicago, IL, for Defendant-Appellant, in No. 95-2575.

Diane Redleaf, John M. Bouman, Robert E. Lehrer (argued), Michelle J. Gilbert, Stacey E. Platt, Legal Assistance Foundation of Chicago, Chicago, IL, Kenneth Kandaras, John Marshall Law School, Chicago, IL, for Plaintiffs-Appellants in No. 95-2813.

Rita M. Novak, Office of the Attorney General, Chicago, IL, Eric J. Glover, Christina M. Tchen (argued), Skadden, Arps, Slate, Meagher & Flom, Chicago, IL, for Defendant-Appellee in No. 95-2813.

Before WOOD, Jr., ROVNER, and EVANS, Circuit Judges.

ILANA DIAMOND ROVNER, Circuit Judge.

The dispute before us in this twenty-two year old case concerns the implementation of legislative reforms to Illinois' foster care benefit program. See P.A. 89-21, amending, 20 ILCS 505/5. Earlier this year, the Illinois Department of Children and Family Services ("DCFS" or "the Department") proposed its Home of Relative Reform Plan ("HMR Reform"), which was passed by the Illinois General Assembly and signed into law by Illinois' Governor in June of this year. Under HMR Reform, all homes providing foster care must be licensed under state law before resident children will be eligible to receive foster care benefits. Prior to the effective date of the reforms (July 1, 1995), however, Illinois required a license only for homes providing foster care to non-relative children. Children who were cared for by relatives, by contrast, were eligible to receive benefits although they resided in unlicensed homes. The effect of the reforms, then, is to terminate the foster care benefits of children in relative homes while the homes attempt to become licensed.

Plaintiffs, a class of foster parents and children who stand to lose their benefits because their homes are not yet licensed, invoked the district court's continuing jurisdiction to enforce the August 24, 1976 judgment entered in this case for the purpose of challenging the implementation of the reforms. Plaintiffs do not quarrel with the new licensing requirement but contend that their benefits cannot be terminated before they are provided an adequate opportunity to become licensed. They argue that the transition process, by denying them such an opportunity, violates the earlier judgment and the Due Process Clause of the Fourteenth Amendment. On the day before the reforms were to take effect, the district court enjoined the Department's Director from terminating or suspending foster care payments to children in unlicensed relative homes without first providing those homes the opportunity to have a license application determined on its merits. The district court explained in a detailed opinion how the proposed implementation of HMR Reform would violate the 1976 judgment and plaintiffs' right to due process. See Youakim v. McDonald, No. 73 C 635, slip op. (N.D.Ill. June 30, 1995). The Director appeals that interlocutory injunction to this court, invoking our jurisdiction under 28 U.S.C. Sec. 1292(a)(1). ¹ We now affirm the district court's injunction as modified below.

I. BACKGROUND

The relevant facts are not disputed. The parties stipulated to many of the facts below and the district court made further factual findings after a two-day evidentiary hearing. Because the Director has not challenged the district court's findings here, we accept them as true and describe them below along with the stipulated facts. First, however, we provide a brief history of the earlier litigation that culminated in the entry of the 1976 judgment.

A. The Earlier Case

The initial dispute in this case involved Illinois' decision to exclude children in relative homes from eligibility for foster care benefits. See Miller v. Youakim, 440 U.S. 125, 130-31, 99 S.Ct. 957, 961-62, 59 L.Ed.2d 194 (1979) (citing Ill.Ann.Stat. ch. 23, Sec. 2212.17 (Supp.1978)). Illinois paid such benefits only to children in homes that were licensed under state law, and it prohibited the licensing of relative homes. Thus, a child placed with a relative was ineligible to receive foster care benefits although the same child would have been eligible had he been placed in the home of a non-relative. The district court certified a class of related children and foster parents and subsequently held that Illinois' policy of denying foster care benefits to otherwise eligible children in relative homes violated Secs. 401 and 408 of the Social Security Act, 42 U.S.C. Secs. 601 & 608. See Youakim v. Miller, 431 F.Supp. 40 (N.D.Ill.1976). In a judgment dated August 24, 1976, the court invoked the Constitution's Supremacy Clause to enjoin Illinois from enforcing any state law or administrative policy that had the effect of denying full foster care benefits to such children. The district court's judgment was affirmed by this court, 562 F.2d 483 (7th Cir.1977), and by a unanimous United States Supreme Court, 440 U.S. 125, 99 S.Ct. 957, 59 L.Ed.2d 194 (1979). The present dispute involves developments in Illinois since the Supreme Court's 1979 decision.

B. Pre-Reform System

When DCFS takes over custody or guardianship of a child, it attempts to make a substitute placement with either a relative, a non-relative, a group home, or an institution. Subsequent to the Supreme Court's decision in Miller, Illinois has paid foster care benefits to children placed in three categories of homes--preapproved, approved, and licensed. Both the preapproved and approved categories were comprised entirely of relative homes, because Illinois law still required, as it had prior to the Miller decision, that all non-relative caregivers be licensed. Although a relative home could also obtain a license, it was not required to do so before a child could be placed and receive foster care benefits.

In contrast to non-relative homes, DCFS is permitted to place a child in a relative home even before that home becomes licensed or approved under state law. The home must only pass an initial safety check that is considerably less detailed and onerous for both DCFS and the caregiving family than the licensing and approval processes. See 89 Ill.Admin.Code Sec. 335.202 (detailing "pre-conditions" for placement of child in relative home) (repealed effective July 1, 1995). A home that has passed this initial safety check is referred to as a "preapproved" home. Such a home could subsequently become approved or licensed under state law, although it had no financial incentive to do so because licensure was not a requirement for the receipt of full foster care benefits. Because these homes were neither approved nor licensed under state law, however, the federal government did not reimburse the State for benefits paid to resident children under the terms of the Social Security Act. See 42 U.S.C. Sec. 672(c) (providing for federal reimbursement of payments made only to children in licensed or approved homes).

In 1986, Illinois officially recognized a category of "approved" relative homes, which were required to meet standards "substantially the same with regard to the safety, health and welfare of children as those promulgated for licensure of unrelated foster family homes pursuant to the Child Care Act of 1969." 89 Ill.Admin.Code Sec. 335.102 (repealed effective July 1, 1995); see also 89 Ill.Admin.Code Sec. 402 (setting out licensing standards for foster family homes) (amended effective July 1, 1995). ² Once DCFS confirmed that a relative home met its licensing standards, the State of Illinois qualified for federal reimbursement of foster care benefits paid to resident children even if the home was not actually licensed. See 42 U.S.C. Sec. 672(c) (a "foster family home" under the Social Security Act includes a home that "has been approved, by the agency of such State having responsibility for licensing homes of this type, as meeting the standards established for such licensing"). The district court found that Illinois created the approved category in 1986 at least in part to make it easier for DCFS to place dependent children with relative caregivers.

When a child is first placed in DCFS custody or guardianship, she is assigned a caseworker who attempts to procure a placement for that child. The caseworker also has the responsibility, once a placement is made, of shepherding the caregiver through the approval and licensing processes. The caseworker assigned in any given circumstance may be employed by DCFS itself, or by one of sixty-seven child welfare agencies (e.g., Catholic Charities) that work on behalf of the Department. As of April 30, 1995, the cases of 31,596 out of 47,007 dependent children placed in private homes were managed by private welfare agencies rather than by DCFS itself. ³ Nine of the sixty-seven participating private welfare agencies are what we will call "approval only," meaning that caseworkers from those agencies have no authority to license or to participate in the licensing of a foster family home. Children who were assigned to a caseworker from such an agency...