A federal appeals court ruled Monday in San Francisco that California isn't paying group foster care homes enough to cover the cost of taking care of children.
A three-judge panel of the 9th U.S. Circuit Court of Appeals said the state has violated the federal Child Welfare Act by failing to include cost-of-living increases in payments in recent years.
The court ruled in a lawsuit filed in federal court in San Francisco in 2006 by the Sacramento-based California Alliance of Child and Family Services, which represents 87 group homes in the state.
Group homes serve children who need foster care but cannot appropriately be placed with foster families. Most children in the group homes have been abused or neglected or are on probation for juvenile
At the time the lawsuit was filed, the payments to group homes amounted to 80 percent of actual costs adjusted for inflation.
The appeals court said the reduced payments violated the law, which requires that the state set a rate structure to cover the cost of basic items such as food, shelter and supervision as a condition of receiving federal funding contributions.
Circuit Judge Pamela Rymer wrote, “The natural meaning of 'cover the cost' is to pay in full, not in part….The state isn't doing this.”
The court sent the case back to U.S. District Judge Marilyn Patel in San Francisco to issue an injunction requiring that the state comply with the law. The panel overturned a 2007 ruling in which Patel said the 80 percent payments were in substantial compliance with the law.
The lawsuit was the first of two filed by the alliance. A second lawsuit filed this year challenged an additional 10 percent cut made by the Legislature during the state budget crisis last summer.
While Patel had upheld the earlier reductions, she last month issued a preliminary injunction blocking the additional 10 percent cut, saying the further paring could cause “irreparable injury beyond repair” to the at-risk children served.
Bill Abrams, a lawyer for the alliance, said today's ruling strengthens the group's position in both lawsuits and increases the chances that Patel's ruling last month will be upheld on appeal.
The group homes have had to cut programs, staff and beds and “have been on life support,” Abrams said.
Alliance Executive Director Carroll Schroeder said, “This is a great win for the kids of California.”
California Department of Social Services spokeswoman Lizelda Lopez said the agency is in the process of reviewing the ruling and deciding on its next step.
The decision could be appealed further to an expanded panel of the appeals court or to the U.S. Supreme Court.