Press Release

Morrison & Foerster Wins Major Federal Court Ruling Requiring Immediate Implementation of Increased State Payments to Foster Parents in California

02 Jun 2011

District Court Warns State Defendants of Possibility of Contempt If They Don't Comply

SAN FRANCISCO (May 27, 2011) – Morrison & Foerster LLP, along with co-counsel the Children's Advocacy Institute at the University of San Diego School of Law, won a major triumph for California foster parents, as U.S. District Judge William Alsup ruled that the State must immediately sharply increase its reimbursement payments to volunteer foster parents for the expenses they incur taking care of abused and neglected children on California's behalf, and raised the prospect of state officials being held in contempt of court if they do not comply.

The victory is the latest in a court case that was filed to reverse the statewide decline in the number of foster parents willing to volunteer their time to care for foster children, resulting in such children having to be placed in more expensive care for the state taxpayer that is also less likely to lead to the children being adopted. The case was filed on behalf of foster parent advocacy groups California State Foster Parent Association, California State Care Providers Association, and Legal Advocates for Permanent Parenting. 

The federal Child Welfare Act requires states receiving federal funds for foster care to reimburse licensed foster parents for the cost of food, clothing, shelter, daily supervision, school supplies, personal incidentals, liability insurance, reasonable travel to school and the child's home for visitations, and reasonable travel for the child to remain in the school in which the child is enrolled at the time of placement.  California has applied for and accepts this federal funding, yet, according to the State's own analysis, only reimburses foster parents for about 60 percent of the costs of providing for the children in their care. 

In October 2007, Morrison & Foerster and co-counsel at the Children's Advocacy Institute filed suit against the State in the U.S. District Court for the Northern District of California in San Francisco. In October 2008, the court ruled in favor of the foster parents, finding that during the past 30 years, the reimbursements paid to foster parents had been based upon no methodology whatsoever; the reimbursements were arbitrarily determined and inserted into state law.  Judge Alsup held "The record in this case indicates that California's rates are not based on the [federal] statutory criteria; in fact, it indicates that California has no mechanism in place to ensure that it is meeting that federal obligation.  It does not track foster care costs; it does not analyze the adequacy of its rates; and it has no mechanism for making adjustments to rates that may be needed." 

The State appealed—but did not challenge the finding that it was shortchanging the foster parents.  Instead, the State only challenged the right of the foster parents to go to court in the first place. In August 2010, the U.S. Court of Appeals for the Ninth Circuit affirmed the District Court's finding that the Child Welfare Act grants foster care providers the right to seek redress for inadequate foster care payments in civil court.  Since this watershed decision, foster parent groups in several other states have likewise filed suit.

After a Public Records Act Request revealed the State was doing little to comply with the original order in a timely way, the Plaintiffs went back to Judge Alsup seeking compliance with the original ruling that California create and implement a new method of determining payments to foster parents. The Judge ordered the Defendants to complete a study of what the new rates should be and then implement new rates by April 8.  When that date came and went with no increase, the Plaintiffs appeared before Judge Alsup a second time last Thursday, asking that the State be immediately ordered to pay rates that actually reimburse foster parents for the costs they incur, based upon the State's own estimates of those costs. 

The State in defense argued that it could not implement new rates until the state legislature approved them. In his ruling for the Plaintiffs just one day after the hearing, Judge Alsup forcefully rejected that defense, ruling that "Federal law … does not bend to accommodate state law legislative hurdles."

Judge Alsup noted "[D]efendants have the rates; they just have not put them into effect." He then ordered: "The State of California shall send checks to foster parents at the new rates beginning with the next round of checks."

The judge also ruled that if the State fails to comply with the order, then the Director of the California Department of Social Services and the Deputy Director of the Children and Family Services Division would have to personally appear in court to show cause for why they should not be held in contempt.

Counsel in the case and child advocates praised the Judge's ruling.

"California is now finally being forced to meet its end of the bargain with foster parents," said Marc David Peters, Morrison & Foerster partner and co-lead counsel on the case.  "Though foster parents have been shouldering the burden of caring for abused and neglected children, the State has not given them the reimbursements they are entitled to under federal law. Thanks to this ruling, this unfair practice is going to come to an end, with the benefits flowing to the State's most vulnerable children." 

Morrison & Foerster partner Kim Van Voorhis, co-lead counsel on the case, echoed these comments, "We hope that this ruling will be the final chapter in what has been a persistently unfair treatment of foster parents, where the State knowingly shortchanged them the amounts required to care for foster children."

Ed Howard, Senior Counsel for the Children's Advocacy Institute and counsel at the last court hearing, added, "For 30 years, the State simply plucked from thin air the amount they would reimburse volunteer foster parents for the costs they incur caring for abused and neglected children. The result has been to shortchange the abused and neglected children, with fewer of these children being adopted into loving homes, and all at a greater cost to the taxpayer. Judge Alsup has, with an exclamation point, put an end to this long-enduring, costly, immoral injustice."

"This decision means that California's most vulnerable children are no longer second class citizens. Ensured of reimbursement for the children's needs, foster parents can afford to purchase the basic necessities that our abused and neglected children need. In addition, this Order acknowledges the important role foster parents play in the lives of the children entrusted to them. This could not have happened without the outstanding legal work by Morrison & Foerster and the Children's Advocacy Institute. We are forever grateful for their help," said Legal Advocates for Permanent Parenting's Regina Deihl,

Along with Ms. Van Voorhis and Dr. Peters, the Morrison & Foerster team included associates Steve Keane and Naghmeh Ordikhani.

Morrison & Foerster handled the case pro bono.

Here is a link to Friday's court ruling:




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