Case 1:09-cv-01574-SEB-JMS Document 48 Filed 01/26/10 Page 1 of 38

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

C.H., et. al,

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Plaintiffs,

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vs.

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JAMES W. PAYNE,

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Defendant.

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_______________________________________)

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THE INDIANA ASSOCIATION OF

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RESIDENTIAL CHILD CARE AGENCIES, )

INC. d/b/a IARCCA, an Association of

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Children and Family Services (“IARCCA”), )

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Plaintiff,

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vs.

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INDIANA DEPARTMENT OF CHILD

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SERVICES and HON. JAMES PAYNE,

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DIRECTOR in his official capacity,

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Defendants.

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1:09-cv-1574- SEB-JMS
Formerly, 1:09-cv-1580 WTL-DML (Consolidated with 1:09-cv-1574 for pretrial purposes only)

ENTRY GRANTING A PRELIMINARY INJUNCTION

This matter is before the Court on Plaintiffs’ Motions for Preliminary Injunction, filed pursuant to Federal Rule of Civil Procedure 65. The cases at bar have been consolidated for pretrial proceedings. A hearing was held on January 20, 2010, at which the parties presented evidence and oral argument. Having considered the parties’ briefing, the documentary and testimonial evidence, and oral arguments, the Court orally

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summarized from the bench at the conclusion of the hearing its conclusions. For those reasons, as well as the additional reasons detailed below, the Court GRANTS Plaintiffs’ motions for injunctive relief.
Factual and Procedural Background1 A. C.H., et al. v. Payne One group of Plaintiffs represents themselves and four classes of litigants consisting of foster parents and foster children directly receiving foster care maintenance payments from the Indiana Department of Child Services (“DCS”) and adoptive parents and adopted special needs children directly receiving adoption assistance payments from DCS (“Class Action Plaintiffs”). Title IV-E of the Social Security Act, 42 U.S.C. § 670, et seq. (“Title IV-E”), provides federal funding for the purposes of foster care and adoption assistance to states which have submitted state plans to the federal government and have had them approved. The State of Indiana has submitted such a plan which has been approved and, thus, has agreed to be bound by all of the federal requirements under Title IV-E. DCS, headed by Director James Payne, is the state agency which administers the Title IV-E monies provided by the federal government.
1 Although these cases have been consolidated for pretrial proceedings, the facts pertaining to each case, while similar, embody many important differences. Accordingly, we summarize the facts of each case separately.
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Under Title IV-E, the federal government underwrites a set percentage of the State’s expenses which are allowable and reimbursable under federal law.2 The funds used to provide the non-federal share of the Title IV-E expenses come from stateappropriated funds. Prior to January 1, 2009, county tax levies and funds were used for this purpose. However, effective January 1, 2009, Indiana’s law changed, so that now only state money is used to match the federal IV-E funds.
Foster care maintenance payments are funds paid directly by DCS to DCS-licensed foster parents (among other persons and entities), who are caring for or supervising children who have been removed from the homes of their relatives and are wards of DCS. If a child is eligible to receive foster care maintenance payments,3 the State is required to pay an amount sufficient to “cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies, a child’s personal incidentals, liability insurance with respect to a child, reasonable travel to the child’s home for visitation, and reasonable travel for the child to remain in the school in which the child is enrolled at the time of placement.” 42 U.S.C. § 675(4)(A). DCS agrees that foster care maintenance
2 The reimbursement rate is set prior to each federal fiscal year by the federal government. This rate has risen in each of the last three fiscal years, from 62.69% in fiscal year (“FY”) 2008, to 64.26% in FY 2009, and 65.93% in FY 2010. In February 2009, the federal stimulus bill raised the reimbursement rate an additional 6.2% for expenses incurred from October 1, 2008 through December 31, 2010. Thus, the current reimbursement rate is 72.13%.
3 To be eligible for foster care maintenance payments, the child, among other requirements, must have met the eligibility requirements for the former Aid to Families with Dependent Children in the month of his or her removal from the home. See 42 U.S.C. § 672(a)(2).
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payments must cover all the reasonable costs of each of the items listed above. These
payments are paid as a per diem each month for the prior month’s services. Therefore,
the monthly payment made on January 1, 2010, was for services rendered in December
2009.
Adoption assistance payments paid under Title IV-E are paid to eligible special
needs children4 and include one-time, non-recurring payments for costs such as attorneys’
fees for the adoption. Such assistance also includes continuing monthly payments for the
children until they are at least eighteen years of age or are no longer receiving support
4 In Indiana, a “special needs child” is defined as follows:
(1) The county office of family and children has determined that the child cannot or should not be returned to the home of the child’s parent or parents and that the parent or parents have signed or will sign a consent to adoption regarding the child or that parental rights have been or will be terminated by a court in accordance with IC 31-35.
(2) One (1) of the following conditions exist: (A) The child is two (2) years of age or older. (B) The child is a member of a sibling group of two (2) or more children of which at least one (1) is two (2) years of age or older and who will be placed with the sibling group in the same home. (C) The child has a medical condition or physical, mental, or emotional disability as determined by a physician licensed to practice in Indiana or another state or territory.
(3) Reasonable but unsuccessful efforts must be made to place the child in an appropriate adoptive home without providing adoption assistance. Reasonable efforts include, but are not limited to, the following: (A) Photo listing the child with the Indiana adoption resource exchange for a minimum of six (6) months. (B) Inability to recruit appropriate, interested adoptive parent or parents who are able to meet the child’s needs without the use of adoption assistance.
465 Ind. Admin. Code 2-7-2.
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from the adoptive parents. The statute provides that the amount of the adoption assistance payments “shall be determined through agreement between the adoptive parents and the State . . . which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances.” 42 U.S.C. § 673(a)(3). Under federal law, adoption assistance payments cannot exceed the foster care maintenance payment which would have been paid had the adopted child been in foster care. Id. As with foster care maintenance payments, adoption assistance payments are paid prospectively (i.e., the January 1, 2010 payment was for the month of December 2009).
The federal government does not direct the specific amounts of the payments; each state determines the amounts of its own payments. From 2006 until the payment incurred for services beginning January 1, 2010, the standard per diem for foster care maintenance payments for children not requiring special needs or therapeutic foster care was $25 per day. However, on January 1, 2009, when the State of Indiana assumed responsibility for the rates, DCS undertook to reexamine the rate structure and determined that the rates needed retooling. In an attempt to arrive at a reasonable rate for payment, DCS engaged in a benchmarking process which included a comparison of Indiana payments to other states’ rates.
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As part of this review, DCS also relied heavily on a 2008 report from the United States Department of Agriculture entitled “Expenditures on Children by Families” (“USDA Report”), which contains data on the actual expenditures made by all categories of parents for various categories of items for their children. In that report, the data is separated by age of child, income level of the family, size of the family, and general geographic area. The USDA report is not specifically focused on foster children, and, thus, includes certain expenses that are not part of the foster care rate, such as mortgage, rent, health care, and various education costs, but also excludes some expenses which are particular to the care of children in foster care, including traveling costs incurred for visits to the foster child’s biological family.5 As part of its process of rate determination, DCS began with the amount of the total expenditures listed in the report for children aged fifteen to seventeen who were living in the lowest income group in the geographical region titled “the Urban Midwest” and deducted from that amount expenditures deemed to be non-reimbursable under Title IV-E, such as health care, education, and child care expenditures.6 Using that amount, DCS divided by a factor of 365 (days in a year) to reach a per diem of $20.68.7
5 Evidence was adduced to establish that the cost of providing necessary essentials for a foster child was, on average, significantly higher than the costs associated with raising children not in foster care, due to the fact that many children in foster care suffer from emotional, behavioral, or developmental problems.
6 Although DCS removed education and child care expenditures from its calculation, some expenses within those categories are in fact reimbursable under Title IV-E.
7 The USDA Report indicated that in families with only one child the expense figure (continued...)
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DCS also examined a 2006 nationwide report concerning foster care per diem rates entitled “Hitting the M.A.R.C. – Establishing Foster Care Minimum Adequate Rates for Children” (“the M.A.R.C. Report”). This report sets M.A.R.C.’s, or “minimum adequate rates for children” for three age-groups of children for each state. Although the M.A.R.C. Report focuses on foster children, it does not include the costs of transporting such children for visits with family or the costs of childcare for working parents, some of which are reimbursable expenses under Title IV-E. The 2006 figures disclose that Indiana’s foster care reimbursement rate was among the highest in the country per the M.A.R.C. Report. At that same time Indiana’s rates were above the M.A.R.C. for twoand nine-year-old children, but below the M.A.R.C. for the sixteen-year-old group.
Based on its analysis of these reports, DCS concluded that Indiana’s foster care maintenance payments needed to be reduced, and in late fall of 2009 DCS announced an across-the-board ten percent (10%) reduction in those payments, which reduced the per diem rate from $25 to $22.50. This is the amount scheduled to be paid beginning February 1, 2010, for foster care maintenance services rendered in January 2010.8 This figure, while above the amount reached using calculations based on the USDA Report, is below the 2006 M.A.R.C., both with regard to the nine- and sixteen-year-old age groups.
(...continued) should be multiplied by a factor of 1.25 to reflect a more reasonable amount.
8 At some point before DCS instituted the ten percent reduction in foster care maintenance payments, the State Budget Agency had requested that DCS set aside a reserve of another ten percent of its funds for reversion back to the State.
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However, according to Douglas Weinberg, Deputy Director and Chief Financial Officer of DCS, even after the ten percent reduction, Indiana’s payments still rank as the fifthhighest of all the states in the country. Prior to reaching its decision to impose this cut, DCS made no attempt to contact foster care parents who were receiving such payments to inquire as to the impact of any reductions in the current per diem rate or to otherwise solicit public comment or input.
With regard to adoption assistance payments, as with foster care maintenance payments, the federal government does not impose any requirements on states as to the exact amount of the payments to recipients, but provides only that those payments not exceed the foster care per diem if the child were in foster care. Thus, in Indiana, the 2009 adoption assistance per diem was set at seventy-five percent (75%) of the $25 per day foster care rate, that is, $18.50. Defendants contend that duly promulgated Indiana regulations require that the adoption assistance payments not exceed seventy-five percent of the per diem rate for foster care maintenance payments.9 See 465 Ind. Admin. Code 27-3. Thus, in reducing the amount of the adoption assistance rates to correlate with the reductions in the reduced foster care maintenance rates, DCS set the 2010 adoption assistance per diem at seventy-five percent of the reduced foster care rate of $22.50, that is, $16.88. Again, at no point during the process of rate readjustment did DCS confer
9 Plaintiffs contend that the State may, and does, pay above that percentage while still obtaining Title IV-E reimbursement for its expenditures, provided that the adoption assistance per diem does not exceed the foster care rate as provided by federal law.
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with the adopting parents regarding the impact of these reductions on their specific circumstances and the needs of their adoptive children.
Currently, according to the documentary evidence, there are more special needs children awaiting adoption than there are prospective adoptive parents, and the reduction in adoption assistance rates has prompted some possible adoptive parents to decide not to adopt children. Affidavit of Carolyn Thurston ¶ 3. Various Plaintiff class members also testified that the ten percent reduction in foster care maintenance payments will almost certainly affect both their ability to cover the costs of the basic necessities for their children as well as to provide for their more specialized needs.
The total amount of State money saved annually by the 10% reductions in the foster care maintenance and adoption assistance payments is approximately $10 million. The major part of these savings comes in adoption assistance payments because more children are receiving these payments than receive foster care maintenance payments.
B. The Indiana Association of Residential Child Care Agencies, Inc. v. The Indiana Department of Child Services
Plaintiff, the Indiana Association of Residential Child Care Agencies, Inc. (“IARCCA”), is an Indiana non-profit corporation representing approximately 110 agencies. IARCCA’s members provide a variety of services to Indiana families and children, including residential care and foster care placement services, for which they receive varying rates of reimbursement from DCS. Title IV-E provides that, for institutions such as IARCCA’s members, foster care maintenance payments “shall include
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the reasonable costs of administration and operation of such institution” as are necessarily required to provide the other items enumerated in § 675(4)(A), including: food, clothing, shelter, daily supervision, etc.
IARCCA’s members provide services to two categories of clients that are relevant to this lawsuit: Residential treatment service providers (“Residential Providers”), who provide residential treatment for children in need of various developmental, mental, emotional, and educational services and Licensed Child Placing Agencies (“Placement Providers”), who focus on placement of children into foster care and/or adoptions. Some providers provide both residential and placement services. Children are placed with providers via referrals from DCS, juvenile courts and county probation departments, the Indiana Department of Education and the Indiana Bureau of Developmental Disabilities.
DCS has Residential Treatment Services Provider Contracts (“Residential Contracts”) with each Residential Provider which set forth the standards, terms, and conditions applicable to child caring institutions licensed under Indiana statutes and operating under DCS licensing regulations in providing residential care and treatment services to children. The Contracts require Residential Providers to provide basic necessities, such as food and shelter as well as other treatment and services necessary to address the problems of abuse and neglect their children have suffered. Some treatments exceed the DCS per diem rate, but the rate is designed to cover many services and programs beyond the provision of basic necessities.
Licensed Child Placing Agency Contracts (“LCPA Contracts”) entered into by the 10

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individual Placement Providers and DCS went into effect on January 1, 2010. Prior to that date, a statewide master contract had not been in effect for Placement Providers. The LCPA Contracts contain the standards, terms, and conditions applicable to child placing agencies operating under Indiana statutes and pursuant to DCS licensing regulations in providing child welfare services, including placement of children for adoption, foster care, or residential care. The children served under these contracts do not reside with the Placement Provider; they are placed in foster care and supervised by the Placement Provider.
The Residential Contracts and LCPA Contracts do not specify the rates that DCS will pay for the services described therein nor do they enumerate any criteria on which the rates will be based. Providers are notified of the rates that DCS will pay when they receive their Individual Child Placement Agreements (“ICP Agreements”). The Providers receive an ICP Agreement tailored to each child under their care or supervision. These agreements include more individualized information than contained in the master Residential or LCPA Contracts, including information regarding the specific services that each child is to receive. Because the rates provided by the State for each child differ depending upon the types of services each receives, the Providers are advised of the specific reimbursement rates for the categories of services which they provide only at the time they receive the ICP Agreements.
After DCS assumed responsibility for the rate-setting and payment responsibilities effective January 1, 2009, it assessed the reasonableness and fairness of the rates then
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being paid by the State to Residential and Placement Providers. Mr. Weinberg testified that, upon review of the rates paid to Residential Providers, DCS discovered that there existed a significant disparity in payments received among the individual Providers for what appeared to be similar programs and services.10 In order to attempt to better understand these disparities, in April 2009, DCS Director James Payne sent a letter to Residential Providers requesting proposed rate-setting information. DCS requested detailed program descriptions and budgetary information from the Residential Providers, but even after a careful review of the information submitted, DCS could not provide a reasonable rationale for the rate differences.
On the basis of these data, Mr. Weinberg testified that DCS consulted a number of Residential Providers in an attempt to justify the differences in the proposed rates. Thereafter, Mr. Weinberg concluded that the overall rate structure needed to be “compressed” in order to achieve more consistency among the varying amounts of payments made to Providers for similar services. He testified that those Residential Providers who were on the higher end of the rate scale could reasonably be expected to absorb rate reductions without incurring a significant detrimental impact on the quality of care they could provide, given that they could also develop other revenue sources (i.e., charitable solicitations and fundraising) and improve their inefficiencies in administering their funding.
10 According to Mr. Weinberg, in certain cases the rates paid to some Providers were five times higher than the rates paid to other Providers for what appeared to be similar programs and services.
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In October 2009, DCS informed Residential Providers by letter that the rates they were scheduled to receive in 2010 to cover the same services they provided in 2009 would be decreased by as much as ten percent. However, this reduction would not be imposed uniformly among Providers: Residential Providers on the lower end of the rate spectrum would receive less of a reduction than those Providers on the higher end; some would receive no reductions at all. The reductions ranged from zero to ten percent; thirtyfour percent of Residential Providers would receive no reductions and four percent would receive the full ten percent cut. This works out to an average reduction of four percent. DCS’s October 2009 letter to Residential Providers contained no detailed explanation of the manner in which any of these rate reductions was calculated. A separate, subsequent letter to Residential Providers informed them that they could request reviews of possible “technical errors” with their respective rates, but again did not explain either how DCS had arrived at the specific rates or how a Provider might know whether a rate was in error, or, for that matter, how to lodge an appeal.
Mr. Weinberg testified that, in October 2009, he had expected DCS to conduct similar reviews in 2010 of the 2011 rates, opining that the rate structures in place when the State assumed responsibility for the payments were so out of kilter that more time than a single year would be necessary to sort everything out. However, based on existing budgetary concerns, the effective dates of the proposed rate reductions were accelerated. On November 30, 2009, therefore, the Residential Providers were sent another letter by DCS informing them that their rates were to be reduced across the board by an additional
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four percent. The effect of this reduction was to lower some Providers’ rates for certain services beneath the Title IV-E levels. The November 30, 2009 letter also stated that the reduction “must be applied to all [ICP Agreements] that are currently in existence for children that are currently in placement as of the date of this letter and/or [ICP Agreements] that are entered into between now and January 1, 2010.” Exh. Attached to Affidavit of Cathleen Graham (“Graham Aff.”) at 96 (November 30, 2009 Letter) (emphasis in original). DCS further notified Residential Providers of its intent to terminate their Residential Contracts effective January 4, 2010, “in the event you choose not to accept such a rate reduction.” Id. Thus, unless a Residential Provider accepted the contract containing the rate reduction, no contract would be in place between DCS and that Residential Provider as of January 4, 2010.
Beginning in mid-summer of 2009, DCS undertook a similar review of the rates paid to the Placement Providers. As discussed above, in order to standardize payment rates for the services provided by Placement Providers throughout the State, a master contract was created. The proposed rate information solicited by DCS from Placement Providers did not contemplate payment for behavioral therapy or counseling services because those services were not covered under Title IV-E. Those services accordingly were unbundled from the proposed rates, but Mr. Weinberg testified that even with their separation out of the calculations, the average rate proposed by the Placement Providers was forty percent higher than the 2008 Title IV-E reimbursement rate and, further, as was true among the Residential Providers, large variations existed among the rates proposed
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by the Placement Providers for similar services. In an effort to address these rate disparities, DCS convened a rate workgroup,
which included certain Placement Providers who were members of IARCCA. According to Mr. Weinberg, rather than adopt a state-wide rate, these representatives of the Placement Providers requested rate compression as a solution.11 Thus, in late November or early December 2009, DCS sent letters to all Placement Providers notifying them of rate reductions ranging from zero to twenty percent,12 with an overall average reduction of eight percent. According to Mr. Weinberg, approximately twenty-three percent of the programs received no reduction and approximately six percent received the maximum reduction. DCS also subsequently informed the Placement Providers of an additional across-the-board 6.3% reduction in their contract rates.13
This notice of reductions allowed Residential Providers a mere ten days (that is, until December 14, 2009) and Placement Providers a mere sixteen days (that is, until December 20, 2009) to decide whether to sign their individual contracts and thereby
11 Plaintiffs deny that they ever made such a request. When asked on cross-examination, Mr. Weinberg could not recall the names of any specific individual or individuals who proposed the compression idea.
12 Because the rates did not increase in 2009, this represents a twenty percent reduction in the Providers’ 2008 rates.
13 This additional reduction was based on DCS’s determination that about sixty-three percent of the LCPA contract rate represented the pass through per diem to the foster parent for maintenance payments. Thus, to reflect the ten percent reduction in the foster parents’ per diem rate, DCS reduced the Placement Providers’ contract rates the additional 6.3%.
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accept the reimbursement rate decreases.14 Mr. Payne informed the Providers by letter
that, if they did not accept the rate reductions by the designated deadline, DCS would
need to make arrangements to “transition [their] children to other providers.” Exh.
Attached to Graham Aff. at 99 (December 4, 2009 Letter). In order to avoid the
possibility of having the children whom they serve moved to another location or provider,
but also in an attempt to preserve their rights, many Providers who signed the contracts
attached a “Reservation of Rights” form which provided in part as follows:
The rates of payment prescribed by this contract are inadequate and violate the rights of the undersigned agency and the children placed under the agreement as established by federal law. This agency is signing the contract because of the Department of Child Services’ explicit statements that failing to sign by a deadline 14 days after the contract was tendered would result in termination of the agency as a provider and immediate relocation of the children in its care, which would be contrary to the best interests of those children. This 14-day deadline is insufficient to allow the agency to determine whether it could continue to provide adequate care at the reduced rate. Signing this contract does not waive the agency’s right to challenge the rates of payment as allowed by law.
Graham Aff. ¶ 22. On December 15, 2009, DCS informed IARCCA by letter that it
viewed these Reservations of Rights submitted by the Residential Providers to be a “legal
nullity” and repeated that the Residential Providers who had signed their contracts, even
those who had signed with a Reservation of Rights, would be paid according to the
14 We were informed at the hearing that many providers are not-for-profit organizations who are required by their bylaws to convene their boards of directors before making significant financial decisions or entering into contracts. Plaintiffs contend that this accelerated time period was wholly insufficient to allow them to schedule such meetings, let alone to analyze their budgets and determine whether they could continue to provide the services they are contractually obligated to perform with the decreased rates, particularly since the deadline fell during the endof-the-year holiday period. Plaintiffs viewed this timetable as harsh and insensitive to their interests and those they are seeking to serve.
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reduced rates in effect beginning on January 1, 2010. On December 17, 2009, however, DCS informed Placement Providers that all LCPA Contracts from Providers who had attached the Reservation of Rights to the contract would be rejected, and that, unless the Reservation of Rights was asserted in a separate document, the Contracts would be deemed invalid and DCS would subsequently discontinue future placements with and payments to those Providers. Id. ¶¶ 23-24.
Five Providers, all members of IARCCA, testified regarding the anticipated effects of the reductions in rates on their organizations. According to their testimony, because of the cuts many Providers will be forced to reduce staff, which is likely to affect both the children’s safety as well as the effectiveness and the adequacy of their therapeutic programs. Because the majority of children served by Residential and Placement Providers suffer from emotional, behavioral, and developmental problems, there is special need for stable environments, individualized attention, and tailor-made therapies. In turn, the staff reductions will threaten the continuation of the Providers’ professional accreditations.
The rate cuts also threaten to impact Providers’ ability to provide individualized therapeutic services such as counseling, vocational programs, and placement of children in homes identified as suitable for meeting their specific needs. For example, Joe Huecker, Director of Regional Youth Services, a Placement Provider with offices in Jeffersonville, Evansville, and Madison, Indiana, testified that a number of the children served by his organization have been reclassified by DCS from “special needs” foster
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care (which garners a higher reimbursement rate) to “traditional” foster care (which garners a lower reimbursement rate). According to Mr. Huecker, a number of the children who were so reclassified unquestionably still require a special needs designation due, for example, to a history of their inflicting sexual abuse on other children. Such a classification is necessary to ensure placement in a foster home suitable to their needs. In Mr. Huecker’s view, the reclassifications by DCS occurred as simply and foremost another way (indeed, a disingenuous way) to reduce DCS’s overall costs.
Legal Analysis I. Standard of Review
The grant of injunctive relief is appropriate if the moving party is able to demonstrate: (1) a reasonable likelihood of succeeding on the merits; (2) irreparable harm if preliminary relief is denied; and (3) an inadequate remedy at law. Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America, Inc., 549 F.3d 1079, 1086 (7th Cir. 2008). If the moving party fails to demonstrate any one of these three threshold requirements, the emergency relief must be denied. Id. However, if these threshold conditions are met, the Court must then assess the balance of harm – the harm to Plaintiffs if the injunction is not issued against the harm to Defendant if it is issued – and, where appropriate, also determine what effect the granting or denying of the injunction would have on nonparties (the public interest). Id.
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In determining whether to grant injunctive relief, the district court must take into account all four of these factors and then “exercise its discretion ‘to arrive at a decision based on the subjective evaluation of the import of the various factors and a personal, intuitive sense about the nature of the case.” Id. (quoting Lawson Products, Inc. v. Avnet, Inc., 782 F.2d 1429, 1436 (7th Cir. 1986)). This process involves engaging in what is called the “sliding scale” approach, meaning that “the more likely it is the plaintiff will succeed on the merits, the less balance of irreparable harms need weigh toward its side; the less likely it is the plaintiff will succeed, the more the balance need weigh towards its side.” Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 12 (7th Cir. 1992). The sliding scale approach “is not mathematical in nature, rather ‘it is more properly characterized as subjective and intuitive, one which permits district courts to weigh the competing considerations and mold appropriate relief.’” Ty, Inc. v. Jones Group, Inc., 237 F.3d 891, 895-96 (7th Cir. 2001) (quoting Abbott Laboratories, 971 F.2d at 12).
II. Discussion A. The Likelihood of Success on the Merits: 1. Private Cause of Action Defendants first contend that Plaintiffs do not have a likelihood of succeeding on
the merits of their federal claims because Title IV-E does not create rights enforceable under 42 U.S.C. § 1983, foreclosing any private right of action. Plaintiffs do concede that Title IV-E, by its terms, does not expressly provide a private right of action for alleged
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violations of its terms and provisions. However, Section 1983 “may supply a claim against state actors even when the underlying statute lacks express authorization of private litigation.” McCready v. White, 417 F.3d 700, 703 (7th Cir. 2005) (citations omitted). Section 1983 provides a remedy for violations of “rights, privileges, or immunities secured by the Constitution and laws” of the United States. In Gonzaga University v. Doe, 536 U.S. 273 (2002), the Supreme Court made clear that the concept of “rights” differs from “broader or vaguer ‘benefits’ or ‘interests’” created by certain statutes, and nothing “short of an unambiguously conferred right” supports a cause of action brought under § 1983. Id. at 283. Thus, “only statutes conferring rights on identifiable persons may be enforced through § 1983.” McCready, 417 F.3d at 703. Plaintiffs must also show that the right is framed in mandatory, rather than precatory terms, and that it is not so “vague and amorphous that its enforcement would strain judicial competence.” Blessing v. Freestone, 520 U.S. 329, 341 (1997).
While the parties do not cite, nor has our research revealed, any Seventh Circuit authority expressly addressing this issue, several courts in other jurisdictions have previously addressed the issue of whether 42 U.S.C. § 672(a)(1) creates rights enforceable by foster parents and foster children under § 1983, and the majority of these courts conclude that such rights are indeed created. See California Alliance of Child & Family Servs. v. Allenby [Allenby I], 459 F. Supp. 2d 919, 923-26 (N.D. Cal. 2006); Missouri Child Care Ass’n v. Martin, 241 F. Supp. 2d 1032, 1040-41 (W.D. Mo. 2003); Kenny A. v. Perdue, 218 F.R.D. 277, 303 (N.D. Ga. 2003); California State Foster Parent
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Ass’n v. Wagner, 2008 WL 191283, at *1 (N.D. Cal. Jan. 22, 2008). But see Carson v. Heineman, 240 F.R.D. 456 (D. Neb. 2007). We agree with what we regard as these wellreasoned analyses.
The provision of the statute entitled “Foster Care Maintenance Payments Program” provides in applicable part that “[e]ach State with a plan approved under this part shall make foster care maintenance payments” with respect to particular foster children defined therein. 42 U.S.C. § 672 (emphasis added). “Foster care maintenance payments” are “payments to cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies, a child’s personal incidentals, liability insurance with respect to a child, and reasonable travel to the child’s home for visitation.” 42 U.S.C. § 675(4)(A). For institutional care, “such term shall include the reasonable costs of administration and operation of such institution as are necessarily required to provide the items described in the preceding sentence.” Id.
This language clearly and unambiguously confers a right to receive foster care maintenance payments to individuals who have foster children who otherwise meet the eligibility criteria. The statute explicitly requires any State with an approved plan to provide payments on behalf of eligible foster children to cover the specific costs listed in § 675(4)(A). In our view, the language contained in § 672(a)(1) is the type of rightscreating language referenced in Gonzaga. The right to reimbursement is couched in mandatory terms (providing that each State with an approved plan “shall” make foster care maintenance payments) and is neither vague nor amorphous as the statute clearly
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enumerates the items and services the payments are required to cover. Thus, at least for purposes of ruling on Plaintiffs’ request for injunctive relief, we conclude that a cause of action to enforce of this entitlement by foster parents is available under § 1983. Moreover, enforcement of this right by IARCCA is also proper because Title IV-E contemplates payments directly to such providers. 42 U.S.C. § 671(a)(10).
The statute mandating that adoption assistance payments be made, 42 U.S.C. § 673(a)(3), is also enforceable through § 1983. The statute provides in relevant part that the amount of the payments “shall be determined through agreement between the adoptive parents and the State or local agency administering the program . . . which shall take into consideration the circumstances of the adopting parents and needs of the child being adopted. . . .” Id. Furthermore, the statute provides that the amount of the payment may only be readjusted “with the concurrence of the adopting parents.” Id.
We agree with the analysis incorporated by the Ninth Circuit in ASW v. Oregon, 424 F.3d 970 (9th Cir. 2005), supporting its conclusion as excerpted below that § 671 and § 673(a)(3) create rights enforceable by adopting parents and children:
This language [in § 673(a)(3)] evinces a clear intent to create a federal right. The statutory text unambiguously requires the State to engage in an individualized process with each family that takes into account their unique requirements in determining the amount of their adoption assistance payments throughout the duration of their participation in the program. . . [T]hese particular statutory provisions are unambiguously framed in terms of the specific individual benefitted and contain explicit duty creating language.
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Id. at 975-76 (internal citations omitted). Thus, at least for purposes of ruling on Plaintiffs’ request for injunctive relief, we conclude that 42 U.S.C. § 673 is enforceable through § 1983.
2. Associational Standing Defendants also challenge IARCCA’s standing to sue in this litigation. IARCCA does not allege that it directly sustained any injury to itself; rather, it seeks to assert claims for the alleged injuries to its members. “[A]n association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333, 343 (1977). In deciding this issue, we see that clearly the first prong of this test is met here because, for the reasons detailed in Part II(A)(1), supra, where we have determined that individual Providers have standing to challenge the rates that DCS proposes to pay for the services they are providing. Regarding the second prong, this action to require DCS to comply with state and federal law in setting the reimbursement rates it will pay to Providers is consistent with IARCCA’s concurrent, independent interest in establishing and maintaining an appropriately high quality of care for children and their families. Finally, the third prong of the test is satisfied because the relief sought by IARCCA is
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injunctive or declaratory, which will inure to the benefit of all of its members who stand to suffer direct injury by violations of federal law. See Retired Chicago Police Ass’n v. City of Chicago, 7 F.3d 584, 602-03 (7th Cir. 1993). Accordingly, we hold that IARCCA is a permissible and proper plaintiff in this action, insofar as it seeks injunctive and declaratory relief on behalf of itself and its members.
3. Class Action Plaintiffs a. Foster Care Maintenance Payments
Federal law as previously cited provides that foster care maintenance payments “must cover the cost of (and the cost of providing)” the enumerated items, including food, clothing, shelter, etc. 42 U.S.C. § 675(4)(A). DCS does not dispute the clear meaning of this statutory language, to wit, that the payments provided must cover the total actual cost of the specified, covered items. See California Alliance of Child & Family Servs. v. Allenby [Allenby II], ___ F.3d. ___, 2009 WL 4755730, at *3 (9th Cir. Dec. 14, 2009) (“[B]ecause the [statute] leaves ‘cover’ unqualified, the common understanding is that it must refer to meeting all the costs of food, clothing, shelter, etc.”). Moreover, because Title IV-E requires foster care maintenance payments to fully cover the items specified in § 675(4)(A), it follows that the methodology used by the State to determine an appropriate foster care maintenance per diem must take into consideration the actual costs of providing the enumerated items. See Martin, 241 F. Supp. 2d at 1045 (“At a minimum, the State is obligated to have a process for determining rates that takes into account the
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statutory criteria mandated by [the statute]”) (citations omitted). Based on the evidence adduced at the hearing and in the written documents submitted into the record, we find that Plaintiffs have established a likelihood of succeeding in their proof that the reduced rate is insufficient to cover the actual costs of providing the required items or at least that, in determining the rate for the foster care maintenance payments, the State did not employ a methodology that fully encompassed Title IV-E’s mandatory cost factors.
At the hearing, Mr. Weinberg testified that in setting the rates DCS relied primarily upon the USDA Report. However, the appropriateness of DCS’s reliance on that report is questionable because it measures the expenses of raising all children, not only foster children or foster children specifically. The USDA Report contains certain expenses that are not reimbursable under Title IV-E and fails to consider other expenses that are. Moreover, evidence introduced establishes that, because foster children often have emotional, behavioral, and/or developmental problems, the costs of providing basic necessities such as clothing, food, and shelter are often significantly higher for foster parents. In addition, the USDA Report’s figures represent actual expenditures by families on various items rather than the reasonable cost of providing those items. Further, because DCS relied on the figures for the lowest income group in its calculations, those numbers are likely eschewed by the poverty of the recipients rather than reflecting what the items actually cost in a setting not restricted by such impecunious circumstances. In comparison, the M.A.R.C. Report focuses on the Title IV-E expenses specific to foster care children. Following the across-the-board ten percent reduction, Indiana’s 2010
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foster care maintenance payments will fall well below the 2006 M.A.R.C. in two of the three age-group classifications.15 Based on this evidence, establishing that the ten percent reduction in payments likely fails to “cover the costs” made mandatory by the statute’s requirements, Plaintiffs have established a likelihood of succeeding on the merits on this part of their claim.
Moreover, because Title IV-E requires foster care maintenance payments to fully cover the items specified in § 675(4)(A), while the State is not required to use any particular methodology to determine an appropriate foster care maintenance per diem, it is obligated to use a methodology that takes into consideration the actual costs of providing the enumerated items. See Martin, 241 F. Supp. 2d at 1045. The methodology employed by DCS did not satisfy this requirement. As discussed above, the USDA Report does not focus on the needs of foster care children and does not account for certain expenses that are reimbursable under Title IV-E, such as transportation expenses for visits with biological families, and certain education and child care expenses that DCS deducted from its calculation. It is true, as Defendants point out, that the 2010 rate reached by DCS ($22.50) is higher than the calculation it reached using only the figures in the 2008 USDA Report ($20.68), ostensibly to cover the costs not contemplated therein. However, there is no evidence that DCS employed any particular methodology in determining that the
15 The M.A.R.C. in Indiana was calculated in 2006 to be $630 per month for a two-yearold, $722 per month for a nine-year-old, and $791 per month for a sixteen-year-old. Assuming 30.4 days in a month (365/12), Indiana’s 2010 monthly reimbursement rate is $684 ($22.50 x 30.4).
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additional $1.82 would be sufficient to fully cover the cost of providing the Title IV-E items for foster care children in Indiana. Nor is there evidence that DCS ever consulted with any of the foster parents affected by the rate reduction to determine whether the reduced per diem could still be expected to cover the mandatory items.
In addition, to the extent that budgetary concerns drove the decision to impose the uniform across-the-board ten percent reduction,16 rather than consideration of the specific factors mandated by the statute, such a procedure is in our view inappropriate under Title IV-E. The Court does not underestimate the pressures on the State to respond to the myriad of demands to provide services and to do so in a fiscally realistic and responsible way. The fact that the task of consolidating such a wide range of data with relatively limited resources available to draw on and to inform these decisions is a difficult and challenging one is a matter well understood and fully appreciated by this Court. However, budgetary concerns cannot excuse reliance on a methodology that does not encompass the mandatory cost factors set out in Title IV-E.
For the foregoing reasons, we conclude that Plaintiffs will likely be able to show that, in determining the 2010 rates for foster care maintenance payments, DCS did not employ a methodology based on the statutory factors mandated in 42 U.S.C. § 675(4)(A), as required under Title IV-E. That the reduced per diem is demonstrably insufficient to cover all of the Title IV-E costs is also the clear conclusion of the evidence adduced by
16 As discussed above, DCS was instructed to reserve 10% of its budget and subsequently cut the foster care maintenance payments by the same percentage.
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the parties at this juncture. Accordingly, we hold that Plaintiffs are likely to succeed on the merits of their claim that the State’s ten percent across-the-board reduction in foster care maintenance payments violates Title IV-E.
b. Adoption Assistance Payments The section of Title IV-E governing adoption assistance payments, 42 U.S.C. § 673(a)(3), explicitly requires, in determining the amount of the payments, the State to “take into consideration the circumstances of the adopting parents and the needs of the child being adopted.” In interpreting a State’s duty under this section, the United States Department of Health and Human Services has explained that: Title IV-E adoption assistance is not based upon a standard schedule of itemized needs and countable income. Instead, the amount of the adoption assistance payment is determined through the discussion and negotiation process between the adoptive parents and a representative of the State agency based upon the needs of the child and the circumstances of the family. The payment that is agreed upon should combine with the parents’ resources to cover the ordinary and special needs of the child projected over an extended period of time and should cover anticipated needs. U.S. Dep’t of Health and Human Servs., Child Welfare Policy Manual § 8.2D.4, Answer to Question 1, available at http://www.acf.hhs.gov/j2ee/programs/cb/laws_policies/laws/ cwpm/policy_dsp.jsp?citID=54 (last visited January 25, 2010). In our view, Plaintiffs will have little difficulty in establishing that the uniform ten percent reduction made by DCS, reached without any consultation with adoptive parents, does not meet that statutory standard.
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This statutory requirement clearly requires a State to engage in an individualized determination of the payment amount based on the specific needs of the children being adopted. See ASW, 424 F.3d at 976 (“[The text of 42 U.S.C. § 673(a)(3)] unambiguously requires the State to engage in an individualized process with each family that takes into account their unique requirements in determining the amount of their adoption assistance payments throughout the duration of their participation in the program.”). It is undisputed that DCS engaged in no such process here, instead simply acting to reduce the adoption assistance payments by ten percent to correspond with the reduction in the foster care maintenance payments.
In light of the clear mandate set out in § 673(a)(3) requiring the State to consider the individual needs of adopting parents and children when setting and readjusting the payments, in our view, the only time an across-the-board cut of adoption assistance payments might be allowable under the statute would be in circumstances where a State’s adoption assistance payments exceed its foster care maintenance payments. See 42 U.S.C. § 673(a)(3) (“[I]n no case may the amount of the adoption assistance payment . . . exceed the foster care maintenance payment which would have been paid during the period if the child with respect to whom the adoption assistance payment is made had been in a foster family home.”). However, there is no indication here that Indiana’s adoption assistance rates at any time exceeded those of the foster care maintenance payments, even when compared to the reduced 2010 rate. After the ten percent reduction (assuming it is determined to be lawful), the 2010 foster care maintenance payment rate
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would be $22.50. Because the 2009 adoption assistance rate was $18.75, well below even the reduced foster care rate, we can find no justification for imposing a blanket reduction in the adoption assistance payments for 2010 without (at least) first consulting with adoptive parents and considering the individualized needs of the children being adopted.17 Because DCS failed to consult or confer with adoptive parents or consider the specific needs of their children before making the rate reduction decision, we find that Plaintiffs have established a clear likelihood of success in establishing that this uniform ten percent cut in adoption assistance payments violates Title IV-E.
4. Provider Plaintiffs a. Title IV-E
Defendants argue that there is no requirement under Title IV-E that a particular method be used by a State to determine the amount of its foster care maintenance payments, and thus, the method used by DCS to set the Providers rates, while maybe not the method that the Providers wanted, is not violative of Title IV-E. We agree that Title
17 DCS contends that state regulations require that the adoption assistance payments in Indiana be no more than seventy-five percent of the foster care maintenance payments, and thus, the ten percent cut in adoption assistance payments was required. The applicable regulatory provision provides: “The amount of the adoption assistance shall not exceed the [foster care] per diem paid by any county department of public welfare in Indiana or seventy-five percent (75%) of the per diem paid by the placing county department of public welfare, whichever is greater.” 465 IAC 2-7-3. However, the county departments no longer perform this task since the State took over child welfare costs, including adoption assistance payments, from counties on January 1, 2009. Moreover DCS has stipulated that, under certain circumstances, it has made adoption assistance payments in amounts equal to the foster care maintenance payment rate.
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IV-E does not mandate that a State use any particular methodology in setting its rates and we are not requiring such here. However, as discussed in detail above, whichever method the State chooses it must consider the mandatory cost factors enumerated in § 675(4)(A).18 See Martin, 241 F. Supp. 2d at 1046 (“This Court is not holding that Defendants need a certain or particular methodology, just that the Defendants need a methodology that considers the required factors.”). The process employed by DCS does not do so.
At a minimum, federal law obligates a State to have a process for determining rates that takes into account Title IV-E’s criteria. Id. at 1042-44. DCS’s 2010 rate-setting procedure was primarily performed by Mr. Weinberg, whose tenure with the agency was less than a year, who had no knowledge of how the rates had been set before 2010, and who did not follow any specific written procedure. Beyond the letter informing them of the 2010 rates, Providers were given no information to explain or justify the established rates or the criteria on which they were based. Without a clear rate-setting method, there is no way to discern whether DCS considered the actual cost of the items Title IV-E requires in determining foster care maintenance payments. Based on Mr. Weinberg’s testimony, the process utilized by DCS appears to have focused heavily (perhaps exclusively) on instituting consistency and compression of the Providers’ rates, as opposed to determining the actual costs of services. The rate-setting process also appears
18 Under Title IV-E, Providers are entitled to reimbursement for expenses such as recruitment and training of foster parents, placement of children into foster care, case plan development and management, and certain administrative costs.
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to have been almost entirely motivated and controlled by budgetary concerns as is clear from the fact that, less than a month after determining that some Providers merited no decrease in their rates, DCS instituted additional across-the-board reductions applicable to all Providers. As a result, following the rate reductions, certain Providers are now assigned rates below their Title IV-E claimable rates, even though their contracts with DCS require them to provide more services than the minimum required by Title IV-E. For the reasons detailed above, we hold that IARCAA has a reasonable likelihood of success in showing that the process used by DCS in determining the 2010 rates for Providers did not properly take into account the Title IV-E factors.
b. Indiana Code 4-2219 As a State agency, DCS is subject to the rule-making provisions of Indiana Code Article 4-22. Under Indiana law, agency rules must be promulgated according to various statutory procedures, including, inter alia: notice (Ind. Code § 4-22-2-23); solicitation of public comment (Ind. Code § 4-22-2-23.1); notice of public hearing (Ind. Code § 4-22-224); and public hearing (Ind. Code § 4-22-2-26; 27). A “rule” is defined as: “an agency statement of general applicability that: (1) has or is designed to have the effect of law; and
19 There is no Eleventh Amendment prohibition to our consideration of this issue because Defendants waived their immunity by removing this case to federal court on December 23, 2009. See Lapides v. Board of Regents of Univ. Sys. of Georgia, 535 U.S. 613, 624 (2002) (“[R]emoval is a form of voluntary invocation of a federal court’s jurisdiction sufficient to waive the State’s otherwise valid objection to litigation of a matter (here of state law) in a federal forum.”).
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(2) implements, interprets, or prescribes: (A) law or policy; or (B) the organization, procedure, or practice requirements of an agency.” Ind. Code § 4-22-2-3(b).
Defendants contend that DCS was not required to engage in formal rulemaking on rates because rate-setting is a contractual matter between DCS and each Provider. However, we find persuasive the IARCCA’s contention that the rate cut directive DCS instituted was in the nature of a rule, and thus, subject to the statutory requirements governing rulemaking. The rulemaking function “embraces an element of generality, operating upon a class of individuals or situations” and, rather than operating retrospectively, “the exercise of administrative rulemaking power looks to the future.” Blinzinger v. Americana Healthcare Corp., 466 N.E.2d 1371, 1375 (Ind. Ct. App. 1984) (citations omitted). It is true that DCS initially imposed a range of rate reductions that affected Providers differently based on the services they provided and the amount of their prior reimbursement rates. However, DCS subsequently instituted additional cuts of 4% and 6.3%, which have general applicability to the classes of Residential Providers and Placement Providers, respectively, and which all Providers were required to accept if they wanted to continue to contract with DCS. Such uniform action is a hallmark of rulemaking. In addition, these rate reductions apply prospectively, not retroactively, and are applied as though they had the effect of law because Providers who do not accept the reduced rate may neither contract with DCS nor obtain referrals from the State. For these reasons, we conclude that the IARCCA is likely to be able to establish that the general
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rate reductions instituted by DCS constitute rules and are thus subject to the provisions of Indiana Code Article 4-22.
It is undisputed that there is no statute or administrative rule in place explicating the procedures used by DCS to set the Residential or LCPA rates. Even after they received notice of the reduced rates, Providers were given no explanation for the chosen rates or the criteria on which they were based or the way in which an appeal could be lodged. DCS failed to solicit public comment or to take action to ensure that the ratesetting process was open and transparent and otherwise in compliance with the State of Indiana’s statutory requirements. While the State clearly has both the prerogative and the responsibility to determine overall funding levels, it may not operate within those boundaries in an arbitrary, or apparently arbitrary, fashion. For these reasons, we find that the IARCCA has a reasonable likelihood of prevailing on its state law claim.
B. Irreparable Harm and Inadequate Remedy at Law The injuries that all categories of plaintiffs stand to suffer if an injunction is not issued are significant and the type for which there is no adequate remedy at law. There is much more than money at issue in this case. The evidence presented at the hearing and adduced from the record demonstrates that, absent a preliminary injunction, Plaintiffs are likely to suffer a variety of substantial harms due to the rate cuts, including, inter alia: a reduction in the monies necessary for the provision of basic care and support for foster children and special needs adopted children; a reduction in the number of persons willing
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to be adoptive or foster parents, leading to difficulties placing children in safe and supportive environments; staffing cutbacks, resulting in the loss of necessary supervision and stability for children, many of whom have severe emotional and behavioral problems and require individualized treatment; reclassification of children for financial reasons, resulting in the loss of certain benefits for those children; and the deleterious transfer of children from their current, presumably safe and secure custodial arrangements.
It is the quality of care promised to the children under the applicable statutes that is at stake in the case at bar. Any deficiency in such care cannot later be undone with monetary compensation. See American Commercial Lines, LLC v. Northeast Maritime Institute, Inc., 588 F. Supp. 2d 935, 949 (S.D. Ind. 2008) (Barker, J.) (“[L]egal remedies are inadequate if damages would be inadequate to relieve the wrong.”) (citations omitted). Accordingly, we find that Plaintiffs have met their burden to show that, in the absence the preliminary relief they seek, they will likely suffer irreparable harm for which there is no adequate remedy at law.
C. Balance of the Harms and the Public Interest The balance of the harms also weighs in favor of granting a preliminary injunction in the case at bar. We say again that, the current economic climate imposes enormous challenges on the State’s ability to deliver on essential governmental services in the face of declining revenues. As the same time, the financial burden that Plaintiffs are faced with if Defendants are not enjoined from implementing the proposed rate reductions is no
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less substantial or critical. The implementation of the proposed funding cuts may be expected to result in immediate reductions in care, housing, services, staffing, supervision, and stability for some of Indiana’s most vulnerable citizens – the children who are beneficiaries of the payments at issue. When compared with the potential emotional upheaval and deprivation of basic necessities that the recipients of the funds are likely to suffer if a preliminary injunction is not granted, the balance of hardships clearly tips in Plaintiffs’ favor. Moreover, the public interest is served by ensuring that the statutes and regulations in place to provide for the safety and well-being of these particularly vulnerable children are strictly followed by the governmental agencies named here as defendants.
D. Bond Rule 65(c) of the Federal Rules of Civil Procedure provides that: “The court may issue a preliminary injunction . . . only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” Id. However, the Seventh Circuit has recognized that, “[u]nder appropriate circumstances bond may be excused, notwithstanding the literal language of Rule 65(c).” Wayne Chem., Inc. v. Columbus Agency Serv. Corp., 567 F.2d 692, 701 (7th Cir. 1977). In light of the nature of the claims at issue, which concern Plaintiffs’ ability to afford to provide basic necessities for their children or the children they serve, coupled with the hardship they would face if a
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bond were to be required, no bond shall be required to be posed by Plaintiff in this instance.

III. Conclusion
For the foregoing reasons, the Court GRANTS Plaintiffs’ Motions for Preliminary
Injunction. Defendants, the Indiana Department of Child Services (“DCS”) and James
W. Payne, Director, and all of their agents, servants, and employees, are hereby
PRELIMINARILY RESTRAINED from:
(1) reducing or otherwise altering any reimbursement rate to any licensed child placing agency (“LCPA”) or residential placement provider in the Title IV-E program below the DCS rates being paid on August 1, 2009;
(2) taking any action to circumvent this order, including but not limited to transferring a child to a less expensive placement, reclassifying a child to a less expensive rate, or declining to assign a child to a more expensive placement, solely or primarily to reduce expenditures on the child; and
(3) reducing or otherwise altering all foster care maintenance payments paid directly to foster parents and all adoption assistance payments paid to adoptive parents below the amounts being paid on December 31, 2009. The State is therefore PRELIMINARILY ENJOINED from implementing or otherwise effectuating the planned ten percent reduction in these payments, which was scheduled to go into effect on January 1, 2010, absent further order of this Court.

Said PRELIMINARY INJUNCTION took effect at the conclusion of the hearing on January 20, 2010, by order of the Court and shall remain in effect and extend until further order of the Court or, in any event, no later than a final ruling on the merits.
IT IS SO ORDERED.

Date: 01/26/2010

_______________________________

37

SARAH EVANS BARKER, JUDGE

United States District Court

Southern District of Indiana

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Copies to: David S. Christoff INDIANA OFFICE OF THE ATTORNEY GENERAL david.christoff@atg.in.gov Kenneth J. Falk ACLU OF INDIANA kfalk@aclu-in.org James J. Hutton OFFICE OF THE INDIANA ATTORNEY GENERAL james.hutton@atg.in.gov Betsy M. Isenberg INDIANA OFFICE OF THE ATTORNEY GENERAL Betsy.Isenberg@atg.in.gov Jon Laramore BAKER & DANIELS - Indianapolis jon.laramore@bakerd.com Anne Kramer Ricchiuto BAKER & DANIELS - Indianapolis anne.ricchiuto@bakerd.com Gavin Minor Rose ACLU OF INDIANA grose@aclu-in.org April Edwards Sellers BAKER & DANIELS - Indianapolis april.sellers@bakerd.com
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 Case 1:09-cv-01574-SEB-MJD Document 10 Filed 12/22/09 Page 1 of 5

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

C.H., et al., Plaintiffs, v.
JAMES W. PAYNE, Defendant.

)

)

)

)

)

No. 1:09-cv-01574-SEB-JMS

)

)

)

)

MOTION FOR CLASS CERTIFICATION

COME NOW Plaintiffs, by counsel, and requests that this Court certify this case

as a class action pursuant to Rule 23(a) and (b)(2) of the Federal Rules of Civil

Procedure. In support of this Motion, the plaintiffs state as follows:

1. The plaintiffs bring this action on their own behalf and on behalf of four (4)

classes of those similarly situated pursuant to Rule 23(a) and (b)(2) of the Federal

Rules of Civil Procedure. Class A

2. Class A is represented by parents C.H. and R.H., and is defined as:

all foster parents who are receiving, or will receive, foster care maintenance payments from the Indiana Department of Child Services pursuant to 42 U.S.C. § 672.

3. As defined, Class A meets all the requirements of Rule 23(a) of the Federal Rules

of Civil Procedure. Specifically:

a. The class is so numerous that joinder of all members is impractical. At this point the current size of the class is not known, but it is believed to be large, consisting of hundreds if not thousands of foster parents.

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b. There are questions of law or fact common to the class: whether the unilateral reduction of foster care maintenance payments violates federal law.
c. The claims of the representative parties are typical of those of the class. d. The representative parties will fairly and adequately protect the interests of
the class. 4. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure
are met in this cause in that the defendant, at all times, has acted or has refused to act in a manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole. Class B 5. Class B is represented by children J.J. #1, J.J # 2, J.J # 3, and is defined as: all children in foster care, or who will be in foster care, for whom foster care maintenance payments are being made, or will be made, through the Indiana Department of Child Services pursuant to 42 U.S.C. § 672. 6. As defined, Class B meets all the requirements of Rule 23(a) of the Federal Rules of Civil Procedure. Specifically: a. The class is so numerous that joinder of all members is impractical. At
this point the current size of the class is not known, but it is believed to be large, consisting of hundreds if not thousands of children in foster care. b. There are questions of law or fact common to the class: whether the unilateral reduction of foster care maintenance payments violates federal law. c. The claims of the representative parties are typical of those of the class. d. The representative parties will fairly and adequately protect the interests of the class. 7. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure are met in this cause in that the defendant, at all times, has acted or has refused to
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Case 1:09-cv-01574-SEB-MJD Document 10 Filed 12/22/09 Page 3 of 5
act in a manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole. Class C 8. Class C is represented by parents C.H., R.H., D.S. and J.S., and is defined as: all adoptive parents who are receiving adoption assistance payments through the Indiana Department of Child Services pursuant to 42 U.S.C. § 673 9. As defined, Class C meets all the requirements of Rule 23(a) of the Federal Rules of Civil Procedure. Specifically: a. The class is so numerous that joinder of all members is impractical. At
this point the current size of the class is not known, but it is believed to be large, consisting of hundreds if not thousands of adoptive parents. b. There are questions of law or fact common to the class: whether the unilateral reduction of adoption assistance payments violates federal law. c. The claims of the representative parties are typical of those of the class. d. The representative parties will fairly and adequately protect the interests of the class. 10. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure are met in this cause in that the defendant, at all times, has acted or has refused to act in a manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole. Class D 11. Class D is represented by children S.H. #1, S.H. # 2, A.H., B.H, N.M.S., and N.J.S., and is defined as: all adoptive children for whom adoption assistance payments are being made through the Indiana Department of Child Services pursuant to 42 U.S.C. § 673
3

Case 1:09-cv-01574-SEB-MJD Document 10 Filed 12/22/09 Page 4 of 5
12. As defined, Class D meets all the requirements of Rule 23(a) of the Federal Rules of Civil Procedure. Specifically: a. The class is so numerous that joinder of all members is impractical. At this point the current size of the class is not known, but it is believed to be large, consisting of hundreds if not thousands of adoptive children. b. There are questions of law or fact common to the class: whether the unilateral reduction of adoption assistance payments violates federal law. c. The claims of the representative parties are typical of those of the class. d. The representative parties will fairly and adequately protect the interests of the class.
13. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure are met in this cause in that the defendant, at all times, has acted or has refused to act in a manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole
All Classes 14. The plaintiffs’ counsel should be appointed to represent the classes pursuant to
Rule 23(g) of the Federal Rules of Civil Procedure. 15. In further support of this Motion, the plaintiffs separately file their supporting
memorandum of law. WHEREFORE, the plaintiffs respectfully request that this case be certified as a class action pursuant to Rule 23(a) and (b)(2) of the Federal Rules of Civil Procedure, with the classes as defined above, and request all other proper relief.
4

Case 1:09-cv-01574-SEB-MJD Document 10 Filed 12/22/09 Page 5 of 5
/s/ Gavin M. Rose Gavin M. Rose No. 26565-53 ACLU of Indiana 1031 E. Washington St. Indianapolis, IN 46202 317/635-4059, ext. 106 fax: 317/635-4105 grose@aclu-in.org
Kenneth J. Falk No. 6777-49 ACLU of Indiana 1031 E. Washington St. Indianapolis, IN 46202 317/635-4059 ext. 104 fax: 317/635-4105 kfalk@aclu-in.org
Attorneys for Plaintiffs and the Putative Classes
CERTIFICATE OF SERVICE
I hereby certify that on this 22nd day of December, 2009, a copy of the foregoing was filed electronically with the Clerk of this Court. The parties may access this filing through the Court's system. I further certify that on the 22nd day of December, 2009, a copy of the foregoing was sent to the following persons by first-class U.S. mail, postage pre-paid.
James W. Payne, Director Department of Child Services IGCS E-306-MS47 302 W. Washington St. Indianapolis, IN 46204
Office of the Attorney General IGCS – 5th Floor 302 W. Washington St. Indianapolis, IN 46204
/s/ Gavin M. Rose Gavin M. Rose Attorney at Law
5

 
 Case 1:09-cv-01574-SEB-MJD Document 1313 Filed 06/269/12 Page 1 of 4 PageID #: 257862

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

C.H., et al.,

)

)

Plaintiffs,

)

)

vs.

)

)

JAMES W. PAYNE, in his official

)

Capacity as Director of the

)

Indiana Department of Child Services, )

)

Defendant.

)

____________________________________)

)

THE INDIANA ASSOCIATION OF

)

RESIDENTIAL CHILD CARE

)

AGENCIES, INC., d/b/a IARCCA,

)

An Association of Children and Family )

Services (“IARCCA”),

)

)

Plaintiff,

)

)

THE INDIANA DEPARTMENT OF

)

CHILD SERVICES and

)

JAMES W. PAYNE, director, in his

)

Official capacity,

)

)

Defendants.

)

No. 1:09-cv-1574-SEB-MJD
Formerly, 1:09-cv-1580 WTL-DML (Consolidated with 1:09-cv-1574 for pretrial purposes only)

STIPULATION RESOLVING PENDING MOTIONS Defendants Department of Child Services and Director James Payne (collectively "DCS") and Plaintiff IARCCA (all three collectively the "Parties") resolve pending motions by stipulating as follows:

Case 1:09-cv-01574-SEB-MJD Document 1313 Filed 06/269/12 Page 2 of 4 PageID #: 257873
1. On June 15, 2012, the Indiana Department of Administration withdrew, at DCS’s request, the Request for Proposals ("RFP") relating to residential care (No. 12-99) in accordance with the parties’ agreement in principal.
2. Within seven days of the Court’s approval of this Stipulation, IARCCA shall withdraw without prejudice its Motion to Enforce Settlement Agreement and Supplement to Motion for Preliminary Injunction (Dkt. #120).
3. Within seven days of receiving notice of approval of this Stipulation, IARCCA shall withdraw without prejudice its Motion for Preliminary Injunction (Dkt. #97) and Amended and Supplemental Verified Complaint (Dkt. #96) and DCS shall withdraw without prejudice its Motion to Strike (Dkt. #104).
4. The Parties stipulate and the Court orders as indicated by its approval of the stipulation, that either of them may “enforce any breach of [the Parties’ February 9, 2011 Settlement] Agreement or applicable law in this court” (as stated in Paragraph 4(c) of the Settlement Agreement), without having to exhaust administrative remedies, until September 30, 2012.
5. The Parties further stipulate that if neither party files alleging a breach under paragraph 4 above on or before September 30, 2012, the Parties shall sign and file a Stipulation of Dismissal with prejudice within ten business days thereafter.

Case 1:09-cv-01574-SEB-MJD Document 1313 Filed 06/269/12 Page 3 of 4 PageID #: 257884

/s Wayne C. Turner Wayne C. Turner Patrick A. Ziepolt Bingham Greenebaum Doll LLP 2700 Market Tower 10 West Market Street Indianapolis, Indiana 46204 (317) 635-8900 Fax: (317) 236-9907 wturner@bgdlegal.com pziepolt@bgdlegal.com
Anne L. Cowgur Taft Stettinius & Hollister LLP One Indiana Square Suite 3500 Indianapolis, IN 46204 (317) 713-3500 Fax: (317) 713-3699 acowgur@taftlaw.com
Attorneys for Defendants

/s Jon Laramore Jon Laramore April E. Sellers Anne Ricchiuto Faegre Baker Daniels LLP 300 North Meridian Street, Suite 2700 Indianapolis, IN 46204 (317) 237-0300 Fax: (317) 237-8248 Jon.laramore@bakerd.com April.sellers@bakerd.com Anne.ricchiuto@bakerd.com
Attorneys for Plaintiff

APPROVED AND ORDERED this ___ day of _________, 2012.

Dated: 06/29/2012

______________________M_a_r_k_J._D_i_ns_m_o_r_e ________ Judge, United States DistricUtnCiteoduSrtta,teSs oMuatghisetrrante Judge District of Indiana, IndianaSpooultihserDn iDviisstriioctnof Indiana

Case 1:09-cv-01574-SEB-MJD Document 1313 Filed 06/269/12 Page 4 of 4 PageID #: 257895
Distribution To:
Wayne C. Turner Patrick A. Ziepolt Bingham Greenebaum Doll LLP 2700 Market Tower 10 West Market Street Indianapolis, IN 46234-4900
Jon Laramore April E. Sellers Anne Ricchiuto Baker & Daniels LLP 300 North Meridian Street, Suite 2700 Indianapolis, IN 46204
Anne L. Cowgur Taft Stettinius & Hollister LLP One Indiana Square Suite 3500 Indianapolis, IN 46204
Gavin M. Rose Kenneth Falk ACLU of Indiana 1031 E. Washington Street Indianapolis, IN 46202
#16901818

 
 Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 1 of 12

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

C.H., R. H., D. S. and T.S., on their own behalf and on behalf of those similarly situated; S.H . #1, S.H. # 2, A.H., B.H, minor children, by their parents and next friends, C. H. and R. H, and N.M.S and N.1.S, minor children, by their parents and next friends, D. S. and J. S., on their own behalf and on behalf of those similarly situated; J.1. #1, J.1 # 2, J.1 # 3, minor children, by their next friends, C.H. and R. H., on their own behalf and on behalf of those similarly situated,
Plaintiffs,
v.
JAMES W. PAYNE, in his official capacity as Director ofthe Indiana Department of Child Services,
Defendant.

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )
~1 : (j~·cv·157 4SEB ·JMS
) ) ) ) ) COMPLAINT-CLASS ACTION

CLASS ACTION COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Introduction 1. The State of Indiana, through the Department of Child Services, receives money from the federal government through Title IV-E of the Social Security Act, 42 U.S.C. § 670, et seq., under which, among other things, monthly payments in the form of foster care assistance and adoption assistance are given to, respectively, foster parents and adoptive parents. Defendant, the director of the Department of Child Services, has

Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 2 of 12
recently enacted a 10% reduction in these payments, effective in January of2010. These reductions violate federal law and are unlawful. Jurisdiction, venue, cause of action 2. This Court has jurisdiction ofthis matter pursuant to 28 U.S.C § 1331. 3. Venue is proper in this district pursuant to 28 U.S.C. § 1391. 4. Declaratory relief is authorized by 28 U.S.C. §§ 2201 and 2202. 5. This action is brought pursuant to 42 U.S.C. § 1983 to redress the deprivation, under color of state law, of rights secured by the Constitution and laws of the United States. Parties 6. C.H. and R. H. are adult persons living in Marion County, Indiana. 7. D. S. and T. S. are adult persons living in Marion County, Indiana. 8. S.H . #1, S.H. # 2, A.H., and B.H. are the adopted minor children of A.H. and R.H. 9. N.M.S. and N.1.S. are the adopted minor children ofD.S. and T.S. 10. J.1. #1, J.1 # 2, J.1 # 3 are foster children who are wards of the State of Indiana pursuant to adjudications in Child in Need of Services Proceedings who have been placed with C.H. and R.H. as foster parents.
11. James W. Payne is the duly appointed Director of the Indiana Department of Child Services. Class action allegations 12. This action is brought on behalf of classes of persons similarly situated pursuant to Rule 23(a) and (b)(2) ofthe Federal Rules of Civil Procedure.
2

Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 3 of 12
Class A 13. Class A, represented by parents C.H. and R.H., is defined as:
all foster parents who are receiving, or will receive, foster care maintenance payments from the Indiana Department of Child Services pursuant to 42 U.S.C. § 672. 14. As defined, the class meets all the requirements of Rule 23(a) ofthe Federal Rules of Civil Procedure. Specifically: a. The class is so numerous that joinder of all members is impractical. At
this point the current size of the class is not known, but it is believed to be large, consisting of hundreds ifnot thousands of foster parents. b. There are questions of law or fact common to the class: whether the unilateral reduction of foster care maintenance payments violates federal law. c. The claims of the representative parties are typical of those of the class. d. The representative parties will fairly and adequately protect the interests of the class. 18. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure are met in this cause in that the defendant, at all times, has acted or has refused to act in a manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole. Class B 19. Class B, represented by children J.J. # 1, J.J # 2, J.J # 3, is defined as: all children in foster care, or who will be in foster care, for whom foster care maintenance payments are being made, or will be made, through the Indiana Department of Child Services pursuant to 42 U.S.c. § 672. 20. As defined, the class meets all the requirements of Rule 23(a) of the Federal Rules of Civil Procedure. Specifically:
3

Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 4 of 12
a. The class is so numerous that joinder of all members is impractical. At this point the current size of the class is not known, but it is believed to be large, consisting of hundreds if not thousands of children in foster care.
b. There are questions of law or fact common to the class: whether the unilateral reduction of foster care maintenance payments violates federal law.
c. The claims of the representative parties are typical of those of the class. d. The representative parties will fairly and adequately protect the interests of
the class. 21. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure are met in this cause in that the defendant, at all times, has acted or has refused to act in a manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole.
Class C 22. Class C, represented by parents C.H., R.H., D.S. and T.S., is defined as:
all adoptive parents who are receiving adoption assistance payments through the Indiana Department of Child Services pursuant to 42 U.S.C. § 673 23. As defined, the class meets all the requirements of Rule 23(a) ofthe Federal Rules of Civil Procedure. Specifically: a. The class is so numerous that joinder of all members is impractical. At
this point the current size of the class is not known, but it is believed to be large, consisting of hundreds if not thousands of adoptive parents. b. There are questions of law or fact common to the class: whether the unilateral reduction of adoption assistance payments violates federal law. c. The claims of the representative parties are typical of those of the class. d. The representative parties will fairly and adequately protect the interests of the class.
4

Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 5 of 12
24. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure are met in this cause in that the defendant, at all times, has acted or has refused to act in a manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole
Class D 25. Class D, represented by children S.H . #1, S.H. # 2, A.H. , B.H, N.M.S. and N.J.S. is defined as:
all adoptive children for whom adoption assistance payments are being made through the Indiana Department of Child Services pursuant to 42 U.S.C. § 673 26. As defined, the class meets all the requirements of Rule 23(a) of the Federal Rules of Civil Procedure. Specifically: a. The class is so numerous that joinder of all members is impractical. At
this point the current size of the class is not known, but it is believed to be large, consisting of hundreds if not thousands of adoptive children. b. There are questions of law or fact common to the class: whether the unilateral reduction of adoption assistance payments violates federal law. c. The claims of the representative parties are typical ofthose of the class. d. The representative parties will fairly and adequately protect the interests of the class. 27. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure are met in this cause in that the defendant, at all times, has acted or has refused to act in a manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole Legal background
5

..

Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 6 of 12

28. Title IV-E of the Social Security Act, 42 U.S.C. § 670, et seq., provides for federal funds for the purposes of foster care and adoption assistance to states which have submitted, and approved, state plans to the federal government. 29. Indiana has submitted such plans, agreeing to be bound by the requirements of Title IV-E, and has received the federal funding provided by Title IV-E. 30. The Department of Child Services is the single state agency responsible for administering the funds received under Title IV-E by the State of Indiana. IND. CODE § 31-25-2-8(a)(2). 31. 42 U.S.C. § 672 provides for foster care maintenance payments on behalf of eligible children who have been removed from relative homes and placed into foster care through a State agency, in Indiana the Department of Child Services. 32. The foster care maintenance payments, defined by 42 U.S.C. § 675(4), are defined as, among other things, payments "to cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies, a child's personal incidentals, liability insurance with respect to a child, and reasonable travel to the child's home for visitation." 33. 42 U.S.C. § 673 provides for adoption assistance payments to be made for special needs children with the payments continuing after the child's adoption. 34. Specifically, 42 U.S.C. § 673(a)(3) provides that:
(l)(A) Each State having a plan approved under this part shall enter into adoption assistance agreements (as defined in section 675(3) of this title) with the adoptive parents of children with special needs. (B) Under any adoption assistance a!,rreement entered into by a State with parents who adopt a child with special needs, the State(i) shall make payments of nonrecurring adoption expenses incurred by or on behalf of such parents in connection with the adoption of such child, directly
6

Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 7 of 12
through the State agency or through another public or nonprofit private agency, in amounts determined under paragraph (3), and (ii) in any case where the child meets the requirements of paragraph (2), may make adoption assistance payments to such parents, directly through the State agency or through another public or nonprofit private agency, in amounts so determined.
***
(3) The amount of the payments to be made in any case under clauses (i) and (ii) of paragraph (l)(B) shall be determined through agreement between the adoptive parents and the State or local agency administering the program under this section, which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances. However, in no case may the amount of the adoption assistance payment made under clause (ii) of paragraph (l)(B) exceed the foster care maintenance payment which would have been paid during the period if the child with respect to whom the adoption assistance payment is made had been in a foster family home.
35. A child with special needs is defined by Indiana regulation, 465 lAC 2-7-2, to be
a child who meets the following criteria:
(l) The county office of family and children has determined that the child cannot or should not be returned to the horne of the child's parent or parents and that the parent or parents have signed or will sign a consent to adoption regarding the child or that parental rights have been or will be terminated by a court in accordance with IC 31-35.
(2) One (1) ofthe following conditions exists:
(A) The child is two (2) years of age or older.
(B) The child is a member of a sibling group of two (2) or more children of which at least one (1) is two (2) years of age or older and who will be placed with the sibling group in the same home.
(C) The child has a medical condition or physical, mental, or emotional disability as determined by a physician licensed to practice in Indiana or another state or territory.
7

Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 8 of 12
(3) Reasonable but unsuccessful efforts must be made to place the child in an appropriate adoptive home without providing adoption assistance. Reasonable efforts include, but are not limited to, the following: (A) Photo listing the child with the Indiana adoption resource exchange for a minimum of six (6) months. (B) Inability to recruit appropriate, interested adoptive parent or parents who are able to meet the child's needs without the use of adoption assistance. Reasonable efforts need not be made to place the child without adoption assistance if to do so would be against the best interests of the child because of such factors as the existence of significant emotional ties with prospective adoptive parents while in the care of such parents as a foster child. Factual allegations 36. In December of 2009, defendant Payne sent notices to all persons receiving foster care payments as foster parents or adoption assistance payments as adoptive parents that their monthly payments would be reduced 10%, effective January 1,2010. The notice is attached as Exhibit 1. 37. On information and belief this planned reduction is because of budgetary constraints and is not the product of any individual assessment of the families receiving the payments or any assessment of the general costs of providing care for the children in question and whether those costs have decreased by 10% since the beginning of 2009. 38. In fact, defendant Payne engaged in no such individual assessment prior to imposing the reduction and the cost of living and providing care for the children in Class Band D has not decreased since 2008. 39. S.H. #1, S.H. #2, A.H. and RH., are children adopted by C.H. and R.H. 40. The children were adopted after being found to be Children in Need of Services and being made wards of the state.
8

..

Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 9 of 12

41. Because of the children's situations they are special needs children under Indiana law. 42. Therefore, at the time of their adoptions, which occurred prior to December 31, 2009, C.H. and R.H. entered into an agreement with the Department of Child Services that the Department would provide the children a monthly adoption assistance payment. 43. That payment has been provided and is used by C.H. and R.H. to care and provide for the children. 44. Additionally, C.H. and R.H. are the foster parents of J. J. #1, J.J. #2, and J.J. #3 and receive monthly foster care assistance from the Department of Child Services for the care and maintenance of the children. 45. C.H. and R.H. have now received Exhibit 1, informing them that their payments will decrease 10% effective January 1, 2010. 46. No individual assessment has been done to determine if the children's expenses have decreased. In fact they have not and the loss of 10% of the payments will make it much more difficult C.H. and R.H. to provide for the children. 47. N.M.S. and N.J.S. are the adoptive children of D.S. and T.S. The adoption was completed prior to January 1,2010. 48. Prior to their adoption the children were wards of the Department of Child Services after being found to be Children in Needs of Services. 49. Because of the children's situations, they are special needs children under Indiana law and therefore, at the time of the adoption, D.S. and T.S. entered into an agreement with the Department of Child Services that the Department would provide the children a monthly adoption assistance payment.

9

Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 10 of 12
50. That payment has been provided and is used by D.S. and T.S. to care and provide for the children. 51. D.S. and T.S. have now received Exhibit 1 and have been infonned that the adoption assistance payment will be cut 10% effective January 1, 2010. 52. None of the adoptive parents have agreed or consented to the 10% reduction in their monthly adoption assistance payments. 53. No individual assessment has been done to detennine if the children's expenses have decreased. In fact they have not and the loss of 10% of the payments will make it much more difficult for D.S. and T.S. to provide for the children. 54. The actions and inactions of defendant are causing plaintiffs irreparable harm for which there is no adequate remedy at law. 55. Af all times defendant has acted under color of state law. Legal claims:
For Classes A and B: 56. Defendant's actions in unilaterally reducing foster care maintenance payments for 10% solely because of budgetary concerns, without a proper methodology, and without taking into consideration any of the cost factors noted in 42 U.S.c. § 675(4), and the individual circumstances of foster parents and children in foster care, violates the requirements of Title IV(E), 42 U.S.C. § 672(a) and 42 U.S.C. § 675(4), which require that these foster care payments be suflicient to cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies and a child's personal incidentals, among other costs.
10

Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 11 of 12
57. Defendant's actions in unilaterally reducing foster care maintenance payments 10% reduces the payments below the level where they will cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies and a child's personal incidentals, among other costs and therefore violate the requirements of Title IV(E), 42 U.S.c. § 672(a) and 42 U.S.c. § 675(4).
For Classes C and D: 58. The unilateral and non-consensual 10% reduction of adoption assistance payments violates the explicit terms of Title IV-E, 42 U.S.C. § 673(a)(3), which states that the amount of such payments "may be readjusted periodically, with the concurrence of the adopting parents" and to the extent that the reduction is based on the unlawful reduction of foster care payments, it is similarly unlawful. 59. The unilateral and non-consensual 10% reduction of adoption assistance payments, solely because of budgetary concerns, violates the explicit term of Title IV-E, 42 U.S.C. § 673(a)(3), which states that such payments must "take into consideration the circumstances of the adopting parents and the needs of the child being adopted." Request for relief
WHEREFORE, plaintiffs request that this Court: a. Accept jurisdiction of this cause and set it for hearing at the earliest opportunity. b. Certify this case as a class action with the classes as defined above. c. Declare that defendant has violated federal law for the reasons noted above. d. Enter a preliminary injunction, later to be made permanent, enjoining the defendant's planned 10% reduction in foster care and adoption assistance payments.
11

Case 1:09-cv-01574-SEB-MJD Document 1 Filed 12/22/09 Page 12 of 12
e. Award plaintiffs their costs and reasonable attorneys' fees pursuant to 42 U.S.C. § 1988. f. Award all other proper relief.
"No.!\,.eluwnu...J'<alk 777-49 ACLU ofIndiana 1031 E. Washington St. Indianapolis, IN 46202 317/635-4059 ext. 104 fax: 317/635-41 kfalk@ac -m.org
G inM. Rose 0.26565-53
ACLU of Indiana 1031 E. Washington St. Indianapolis, IN 46202 317/635-4059 ext. 2106 fax: 317/635-4105 grose@ac1u-in.org Attorneys for Plaintiffs and the Proposed Classes
12

Case 1:09-cv-01574-SEB-MJD Document 1-1 Filed 12/22/09 Page 1 of 2
EXHIBIT 1

Case 1:09-cv-01574-SEB-MJD Document 1-1 Filed 12/22/09 Page 2 of 2
Mitchell E. Daniels, Jr., Governor James W. Payne, Director
Indiana Department of Child Services
Room E306 - MS47 302 W. Washington'Street Indianapolis, Indiana 46204-2739
317-234·5437 FAX: 317-234-4497
www.in.gov/dcs
Child Support Hotline: 800-840-8757 Child Abuse and Neglect Hotline: 800-800-5556

December I, 2009
RE: Reduction in Your Monthly Adoption Assistance Payments
The Department of Child Services (DCS) has finalized the 20 10 foster care per diem rates and corresponding maximum monthly payments for new adoption assistance agreements. After difficult deliberations, DeS has determined that a ten percent (10%) reduction in all current foster care rates and adoption payments is necessary. The maximum monthly adoption payments are required by law to be based on a percentage of the applicable foster care per diem rate. Therefore, we are reducing all monthly adoption payments by ten percent (10%) of the amount that we are currently paying under existing adoption assistance agreements or subsidy orders. This reduction will begin with your next payment for the month of January 2010.
In arriving at these decisions, we considered many factors in addition to the need to reduce overall program expenses. Those factors include an analysis of current costs and a comparison ofIndiana's foster care rates to those of other states. Indiana's standard foster care per diem, after the 10% reduction, still remains among the highest in the United States.
While it is oflittle comfort in these stressful times, please know that you are not alone. Like other government agencies and business entities, DeS has spent countless hours trying to find ways to reduce expenses. These have been incredibly difficult deliberations and everyone involved recognizes the magnitude of the decisions being made. We understand the stress involved and we appreciate your continued commitment to children. DeS will evaluate the foster care per diem rates and adoption payments as economic conditions warrant.
I am confident wewill get through these difficult times by partnering together. DeS remains committed to our mission to protect Indiana's abused and neglected children and to partner with you and others to provide safe, nurturing and stable homes for our children. I appreciate your commitment to Indiana's families and look forward to our continued collective work to keep children safe.
r + Very truly yours,
James W. Payne, Director

Proltr/in/!"

olir

i-hildrm. families ,

and. filtHr!!

 
 Case 1:09-cv-01574-SEB-MJD Document 21 Filed 01/10/10 Page 1 of 13

IN THE UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

C.H., R.H., D.S., and T.S., on their own behalf )

behalf and on behalf of a class of those similarly )

situated; S.H . #1, S.H. # 2, A.H., and B.H, minor )

children, by their parents and next friends C.H. )

and R.H, and N.M.S and N.J.S, minor children, by )

their parents and next friends D.S. and J.S., on )

their own behalf and on behalf of a class of those )

similarly situated; H.K., on her own behalf and on )

behalf of a class of those similarly situated; and )

S.D. and C.W., minor children, by their mother and )

next friend H.K., on their own behalf and on behalf )

of a class of those similarly situated,

)

)

Plaintiffs,

)

)

v.

)

)

JAMES W. PAYNE, in his official capacity

)

as Director of the Indiana Department of

)

Child Services,

)

)

Defendant.

)

No. 1:09-cv-01574-SEB-JMS COMPLAINT-CLASS ACTION

FIRST AMENDED CLASS ACTION COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

Introduction

1. The State of Indiana, through the Department of Child Services, receives money

from the federal government through Title IV-E of the Social Security Act, 42 U.S.C. § 670, et seq., under which, among other things, monthly payments in the form of foster

care assistance and adoption assistance are given to, respectively, foster parents and

adoptive parents. Defendant, the director of the Department of Child Services, has

recently enacted a 10% reduction in these payments, effective in January of 2010. These

reductions violate federal law and are unlawful.

Case 1:09-cv-01574-SEB-MJD Document 21 Filed 01/10/10 Page 2 of 13
Jurisdiction, venue, cause of action 2. This Court has jurisdiction of this matter pursuant to 28 U.S.C ' 1331. 3. Venue is proper in this district pursuant to 28 U.S.C. ' 1391. 4. Declaratory relief is authorized by 28 U.S.C. '' 2201 and 2202. 5. This action is brought pursuant to 42 U.S.C. ' 1983 to redress the deprivation, under color of state law, of rights secured by the Constitution and laws of the United States. Parties 6. C.H. and R.H. are adult persons living in Marion County, Indiana. 7. D.S. and T.S. are adult persons living in Marion County, Indiana. 8. H.K. is an adult person living in Marion County, Indiana. 9. S.H. #1, S.H. # 2, A.H., and B.H. are the adopted minor children of A.H. and R.H. 10. N.M.S. and N.J.S. are the adopted minor children of D.S. and T.S. 11. S.D. and C.W. are foster children who are wards of the State of Indiana pursuant to adjudications in Child in Need of Services Proceedings who have been placed with H.K. as foster parent. 12. James W. Payne is the duly appointed Director of the Indiana Department of Child Services, and is sued in his official capacity. Class action allegations 13. This action is brought on behalf of four (4) classes of persons similarly situated pursuant to Rule 23(a) and (b)(2) of the Federal Rules of Civil Procedure.
Class A 14. Class A, represented by foster parent H.K., is defined as:
2

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all foster parents who are receiving, or will receive, foster care maintenance payments directly from the Indiana Department of Child Services pursuant to 42 U.S.C. § 672. 15. As defined, the class meets all the requirements of Rule 23(a) of the Federal Rules of Civil Procedure. Specifically: a. The class is so numerous that joinder of all members is impractical. At
this point the current size of the class is not known, but it is believed to be large, consisting of hundreds if not thousands of foster parents. b. There are questions of law or fact common to the class: whether the unilateral reduction of foster care maintenance payments violates federal law. c. The claims of the representative parties are typical of those of the class. d. The representative parties will fairly and adequately protect the interests of the class. 18. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure are met in this cause in that the defendant, at all times, has acted or has refused to act in a manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole. Class B 19. Class B, represented by foster children S.D. and C.W., is defined as: all children in foster care, or who will be in foster care, for whom foster care maintenance payments are being made, or will be made, directly from the Indiana Department of Child Services pursuant to 42 U.S.C. § 672. 20. As defined, the class meets all the requirements of Rule 23(a) of the Federal Rules of Civil Procedure. Specifically: a. The class is so numerous that joinder of all members is impractical. At this point the current size of the class is not known, but it is believed to be large, consisting of hundreds if not thousands of children in foster care.
3

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b. There are questions of law or fact common to the class: whether the unilateral reduction of foster care maintenance payments violates federal law.
c. The claims of the representative parties are typical of those of the class. d. The representative parties will fairly and adequately protect the interests of
the class. 21. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure are met in this cause in that the defendant, at all times, has acted or has refused to act in a manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole.
Class C 22. Class C, represented by adoptive parents C.H., R.H., D.S. and T.S., is defined as:
all adoptive parents who are receiving adoption assistance payments through the Indiana Department of Child Services pursuant to 42 U.S.C. § 673, and whose payments were reduced by 10% as of January 1, 2010. 23. As defined, the class meets all the requirements of Rule 23(a) of the Federal Rules of Civil Procedure. Specifically: a. The class is so numerous that joinder of all members is impractical. At
this point the current size of the class is not known, but it is believed to be large, consisting of hundreds if not thousands of adoptive parents. b. There are questions of law or fact common to the class: whether the unilateral reduction of adoption assistance payments violates federal law. c. The claims of the representative parties are typical of those of the class. d. The representative parties will fairly and adequately protect the interests of the class. 24. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure are met in this cause in that the defendant, at all times, has acted or has refused to act in a
4

Case 1:09-cv-01574-SEB-MJD Document 21 Filed 01/10/10 Page 5 of 13
manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole
Class D 25. Class D, represented by adoptive children S.H. #1, S.H. # 2, A.H., B.H, N.M.S., and N.J.S., is defined as:
all adoptive children for whom adoption assistance payments are being made through the Indiana Department of Child Services pursuant to 42 U.S.C. § 673, and whose payments were reduced by 10% as of January 1, 2010. 26. As defined, the class meets all the requirements of Rule 23(a) of the Federal Rules of Civil Procedure. Specifically: a. The class is so numerous that joinder of all members is impractical. At
this point the current size of the class is not known, but it is believed to be large, consisting of hundreds if not thousands of adoptive children. b. There are questions of law or fact common to the class: whether the unilateral reduction of adoption assistance payments violates federal law. c. The claims of the representative parties are typical of those of the class. d. The representative parties will fairly and adequately protect the interests of the class. 27. The further requirements of Rule 23(b)(2) of the Federal Rules of Civil Procedure are met in this cause in that the defendant, at all times, has acted or has refused to act in a manner generally applicable to the class, thereby making final injunctive and declaratory relief appropriate with respect to the class as a whole Legal background 28. Title IV-E of the Social Security Act, 42 U.S.C. § 670, et seq., provides for federal funds for the purposes of foster care and adoption assistance to states which have submitted, and approved, state plans to the federal government.
5

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29. Indiana has submitted such plans, agreeing to be bound by the requirements of Title IV-E, and has received the federal funding provided by Title IV-E. 30. The Department of Child Services is the single state agency responsible for administering the funds received under Title IV-E by the State of Indiana. IND. CODE § 31-25-2-8(a)(2). 31. 42 U.S.C. § 672 provides for foster care maintenance payments on behalf of eligible children who have been removed from relative homes and placed into foster care through a State agency, in Indiana the Department of Child Services. 32. The foster care maintenance payments, defined by 42 U.S.C. § 675(4), are defined as, among other things, payments “to cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies, a child’s personal incidentals, liability insurance with respect to a child, and reasonable travel to the child’s home for visitation.” 33. 42 U.S.C. § 673 provides for adoption assistance payments to be made for special needs children with the payments continuing after the child’s adoption. 34. Specifically, 42 U.S.C. § 673(a)(3) provides that:
(1)(A) Each State having a plan approved under this part shall enter into adoption assistance agreements (as defined in section 675(3) of this title) with the adoptive parents of children with special needs. (B) Under any adoption assistance agreement entered into by a State with parents who adopt a child with special needs, the State— (i) shall make payments of nonrecurring adoption expenses incurred by or on behalf of such parents in connection with the adoption of such child, directly through the State agency or through another public or nonprofit private agency, in amounts determined under paragraph (3), and (ii) in any case where the child meets the requirements of paragraph (2), may make adoption assistance payments to such parents, directly through the State agency or through another public or nonprofit private agency, in amounts so determined.
6

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* * *
(3) The amount of the payments to be made in any case under clauses (i) and (ii) of paragraph (1)(B) shall be determined through agreement between the adoptive parents and the State or local agency administering the program under this section, which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances. However, in no case may the amount of the adoption assistance payment made under clause (ii) of paragraph (1)(B) exceed the foster care maintenance payment which would have been paid during the period if the child with respect to whom the adoption assistance payment is made had been in a foster family home.
35. A child with special needs is defined by Indiana regulation, 465 IAC 2-7-2, to be
a child who meets the following criteria:
(1) The county office of family and children has determined that the child cannot or should not be returned to the home of the child's parent or parents and that the parent or parents have signed or will sign a consent to adoption regarding the child or that parental rights have been or will be terminated by a court in accordance with IC 31-35.
(2) One (1) of the following conditions exists:
(A) The child is two (2) years of age or older.
(B) The child is a member of a sibling group of two (2) or more children of which at least one (1) is two (2) years of age or older and who will be placed with the sibling group in the same home.
(C) The child has a medical condition or physical, mental, or emotional disability as determined by a physician licensed to practice in Indiana or another state or territory.
(3) Reasonable but unsuccessful efforts must be made to place the child in an appropriate adoptive home without providing adoption assistance. Reasonable efforts include, but are not limited to, the following:
(A) Photo listing the child with the Indiana adoption resource exchange for a minimum of six (6) months.
7

Case 1:09-cv-01574-SEB-MJD Document 21 Filed 01/10/10 Page 8 of 13
(B) Inability to recruit appropriate, interested adoptive parent or parents who are able to meet the child's needs without the use of adoption assistance. Reasonable efforts need not be made to place the child without adoption assistance if to do so would be against the best interests of the child because of such factors as the existence of significant emotional ties with prospective adoptive parents while in the care of such parents as a foster child. Factual allegations 36. In December of 2009, defendant Payne sent notices to all persons receiving foster care payments as foster parents or adoption assistance payments as adoptive parents that their monthly payments would be reduced 10%, effective January 1, 2010. The notice is attached as Exhibit 1. 37. On information and belief this planned reduction is because of budgetary constraints and is not the product of any individual assessment of the families receiving the payments or any assessment of the general costs of providing care for the children in question and whether those costs have decreased by 10% since the beginning of 2009. 38. In fact, defendant Payne engaged in no such individual assessment prior to imposing the reduction and the cost of living and providing care for the children in Class B and D has not decreased since 2008. 39. S.H. #1, S.H. #2, A.H. and B.H., are children adopted by C.H. and R.H. 40. The children were adopted after being found to be Children in Need of Services and being made wards of the state. 41. Because of the children’s situations they are special needs children under Indiana law.
8

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42. Therefore, at the time of their adoptions, which occurred prior to December 31, 2009, C.H. and R.H. entered into an agreement with the Department of Child Services that the Department would provide the children a monthly adoption assistance payment. 43. That payment has been provided and is used by C.H. and R.H. to care and provide for the children. 44. C.H. and R.H. have now received Exhibit 1, informing them that their payments will decrease 10% effective January 1, 2010. 45. No individual assessment has been done to determine if the children’s expenses have decreased. In fact they have not and the loss of 10% of the payments will make it much more difficult for C.H. and R.H. to provide for the children. 46. N.M.S. and N.J.S. are the adoptive children of D.S. and T.S. The adoption was completed prior to January 1, 2010. 47. Prior to their adoption the children were wards of the Department of Child Services after being found to be Children in Needs of Services. 48. Because of the children’s situations, they are special needs children under Indiana law and therefore, at the time of the adoption, D.S. and T.S. entered into an agreement with the Department of Child Services that the Department would provide the children a monthly adoption assistance payment. 49. That payment has been provided and is used by D.S. and T.S. to care and provide for the children. 50. D.S. and T.S. have now received Exhibit 1 and have been informed that the adoption assistance payment will be cut 10% effective January 1, 2010.
9

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51. No individual assessment has been done to determine if the children’s expenses have decreased. In fact they have not and the loss of 10% of the payments will make it much more difficult for D.S. and T.S. to provide for the children. 52. H.K. is the foster parent of S.D. and C.W., who are both wards of the Department of Child Services after being found to be Children in Need of Services. 53. As such, H.K. receives foster care maintenance payments directly from the Department of Child Services on behalf of both S.D. and C.W. 54. No individual assessment has been done to determine if the children’s expenses have decreased. In fact they have not and the loss of 10% of the payments will make it much more difficult for H.K. to provide for the children. 55. H.K. has now received Exhibit 1, informing her that her payments would decrease 10% effective January 1, 2010. 56. None of the adoptive parents have agreed or consented to the 10% reduction in their monthly adoption assistance payments. 57. With the 10% reduction in foster care maintenance payments, these payments are insufficient to cover the cost of (and the cost of providing) the foster children’s food, clothing, shelter, daily supervision, school supplies, a child’s personal incidentals, liability insurance with respect to a child, and reasonable travel to the child’s home for visitation. 58. The actions and inactions of defendant are causing plaintiffs irreparable harm for which there is no adequate remedy at law. 59. At all times defendant has acted under color of state law. Legal claims:
10

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For Classes A and B: 60. Defendant’s actions in unilaterally reducing foster care maintenance payments for 10% solely because of budgetary concerns, without a proper methodology, and without taking into consideration any of the cost factors noted in 42 U.S.C. § 675(4), and the individual circumstances of foster parents and children in foster care, violates the requirements of Title IV(E), 42 U.S.C. § 672(a) and 42 U.S.C. § 675(4), which require that these foster care payments be sufficient to cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies and a child’s personal incidentals, among other costs. 61. Defendant’s actions in unilaterally reducing foster care maintenance payments 10% reduces the payments below the level where they will cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies and a child’s personal incidentals, among other costs and therefore violate the requirements of Title IV(E), 42 U.S.C. § 672(a) and 42 U.S.C. § 675(4).
For Classes C and D: 62. The unilateral and non-consensual 10% reduction of adoption assistance payments violates the explicit terms of Title IV-E, 42 U.S.C. § 673(a)(3), which states that the amount of such payments “may be readjusted periodically, with the concurrence of the adopting parents” and to the extent that the reduction is based on the unlawful reduction of foster care payments, it is similarly unlawful. 63. The unilateral and non-consensual 10% reduction of adoption assistance payments, solely because of budgetary concerns, violates the explicit term of Title IV-E,
11

Case 1:09-cv-01574-SEB-MJD Document 21 Filed 01/10/10 Page 12 of 13

42 U.S.C. § 673(a)(3), which states that such payments must “take into consideration the

circumstances of the adopting parents and the needs of the child being adopted.”

Request for relief

WHEREFORE, plaintiffs request that this Court:

a. Accept jurisdiction of this cause and set it for hearing at the earliest opportunity.

b. Certify this case as a class action with the classes as defined above.

c. Declare that defendant has violated federal law for the reasons noted above.

d. Enter a preliminary injunction, later to be made permanent, enjoining the defendant’s planned 10% reduction in foster care and adoption assistance payments.

e. Award plaintiffs their costs and reasonable attorneys’ fees pursuant to 42 U.S.C. § 1988.

f. Award all other proper relief.

_/s/ Gavin M. Rose________ Gavin M. Rose No. 26565-53 ACLU of Indiana 1031 E. Washington St. Indianapolis, IN 46202 317/635-4059 ext. 106 fax: 317/635-4105 grose@aclu-in.org

Kenneth J. Falk No. 6777-49 ACLU of Indiana 1031 E. Washington St. Indianapolis, IN 46202 317/635-4059 ext. 104 fax: 317/635-4105 kfalk@aclu-in.org
Attorneys for Plaintiffs and the Proposed Classes

12

Case 1:09-cv-01574-SEB-MJD Document 21 Filed 01/10/10 Page 13 of 13

CERTIFICATE OF SERVICE

I hereby certify that on January 10, 2010, a copy of the foregoing was filed electronically with the Clerk of this Court. The parties may access this filing through the Court's system:

David Christoff Office of the Attorney General <david.christoff@atg.in.gov>

James Hutton Office of the Attorney General <james.hutton@atg.in.gov>

Betsy M. Isenberg Office of the Attorney General <betsy.isenberg@atg.in.gov>

/s/ Gavin M. Rose Gavin M. Rose Attorney at Law

13

Case 1:09-cv-01574-SEB-MJD Document 21-1 Filed 01/10/10 Page 1 of 2

Case 1:09-cv-01574-SEB-MJD Document 21-1 Filed 01/10/10 Page 2 of 2

 
 Case 1:09-cv-01574-SEB-MJD Document 88 Filed 02/25/11 Page 1 of 4

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

C.H., et al,
Plaintiffs,
vs.
JAMES W. PAYNE, in his official capacity as Director of the Indiana Department of Child Services,
Defendant.
THE INDIANA ASSOCIATION OF RESIDENTIAL CHILD CARE AGENCIES, INC. d/b/a IARCCA, an Association of Children and Family Services ("IARCCA"),
Plaintiff,
vs.
THE INDIANA DEPARTMENT OF CHILD SERVICES and JAMES W. PAYNE, director, in his official capacity,
Defendants.

) ) ) ) ) No. 1:09-cv-1574-SEB-JMS ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Formerly, 1:09-cv-1580 WTL-DML ) (Consolidated with 1:09-cv-1574 for ) pretrial purposes only) ) ) ) ) ) )

JOINT STIPULATION OF DISMISSAL Pursuant to Fed. R. Civ. Pro. 41(a)(1)(A)(ii), Plaintiff Indiana Association of Residential Child Care Agencies, Inc. d/b/a IARCCA ("IARCCA") and Defendants the Indiana Department of Child Services and James W. Payne (collectively, "DCS"), which are the parties to this matter ("Parties") stipulate as follows:

Case 1:09-cv-01574-SEB-MJD Document 88 Filed 02/25/11 Page 2 of 4
1. The Parties have agreed to, signed, and executed a Settlement Agreement dated February 9, 2011, addressing all claims and defenses in this matter.
2. As the parties have agreed, this Court retains jurisdiction to enforce any breach of the Settlement Agreement or applicable law, without having to exhaust administrative remedies, until 30 days after rates go into effect under the rules to be promulgated at 465 Indiana Administrative Code 2-16 and 2-17 (which rates are now scheduled to go into effect January 1, 2012).
3. The parties agree that the Court's Order on Preliminary Injunction, dated January 20, 2010, may be vacated, and by approving this Stipulation of Dismissal the Court vacates its Entry Granting Preliminary Injunction.
4. The parties hereby stipulate, and this Court hereby orders, that the claims brought by IARCCA against DCS in this lawsuit including, without limitation, those claims made in paragraphs 13 through 38 of IARCCA's Verified Complaint for Declaratory and Injunctive Relief ("Complaint") are dismissed without prejudice and that the claims made in the Complaint cannot be reopened, subject to the provisions of Paragraph 2 above.
2
BDDB01 6554745v1

Case 1:09-cv-01574-SEB-MJD Document 88 Filed 02/25/11 Page 3 of 4

BAKER & DANIELS LLP

INDIANA ATTORNEY GENERAL

s/ Jon Laramore Jon Laramore April E. Sellers Anne K. Ricchiuto 300 N. Meridian Street, Suite 2700 Indianapolis, IN 46204-2770 (317) 237-0300 (Telephone) (317) 237-1000 (Facsimile) jon.laramore@bakerd.com april.sellers@bakerd.com anne.ricchiuto@bakerd.com
Attorneys for IARCCA

s/ Betsy M. Isenberg Betsy M. Isenberg Indiana Government Center South – 5th Flr 302 W. Washington Street Indianapolis, IN 46204 (317) 232-6201 (Telephone) (317) 232-7979 (Facsimile)
Attorneys for The Indiana Department of Child Services and James W. Payne

2011.

APPROVED AND SO ORDERED this _____ day of__________________,

Date: 02/25/2011

Judge, United States District Court, Southern District of Indiana, Indianapolis Division
_______________________________
SARAH EVANS BARKER, JUDGE United States District Court Southern District of Indiana

3
BDDB01 6554745v1

Case 1:09-cv-01574-SEB-MJD Document 88 Filed 02/25/11 Page 4 of 4
Copies to: Jon B. Laramore April E. Sellers Anne K. Ricchiuto BAKER & DANIELS LLP 300 North Meridian Street Suite 2700 Indianapolis, IN 46204 Betsy M. Isenberg Indiana Attorney General Indiana Government Center South – 5th Floor 302 W. Washington Street Indianapolis, IN 46204-2770 Kenneth Falk Gavin M. Rose ACLU of Indiana 1031 E. Washington Street Indianapolis, IN 46202
4
BDDB01 6554745v1

 
 Case 1:09-cv-01574-SEB-MJD Document 76 Filed 11/19/10 Page 1 of 3

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

C.H., et al., Plaintiffs, v.
JAMES W. PAYNE, Defendant.

)

)

)

)

)

No. 1:09-CV-1574 SEB-DML

)

)

)

)

)

Plaintiffs’ Motion to Approve Form and Manner of Notice to the Class and Motion to Set Case for Fairness Hearing

Come now plaintiffs, by counsel, and say that:

1. On this date the parties have filed their Stipulation to Fully Settle Action Following

Notice to the Class and Subject to Class Approval and Court Order Pursuant to Rule 23 of the

Federal Rules of Civil Procedure.

2. This Stipulation seeks to settle a class action and, accordingly, class notice must be given

pursuant to Rule 23(e) of the Federal Rules of Civil Procedure so that this Court may determine

if the settlement is fair, adequate and appropriate.

3. Attached to this Motion is a proposed form of notice.

4. The undersigned counsel and counsel for defendant have agreed that the notice is

appropriate and should be given in the following manner:

-posted notice in all offices of the Department of Child Services

-in newspapers of general circulation in Indianapolis, Fort Wayne, Evansville, Gary, New Albany and Richmond

5. Plaintiffs’ counsel will report back no earlier than 30 days after the notice is initiated as

to any comments from the class.

Case 1:09-cv-01574-SEB-MJD Document 76 Filed 11/19/10 Page 2 of 3
6. It would therefore be appropriate to set this matter for a fairness hearing in late January of
2011.
WHEREFORE, plaintiffs request that the Court approve the attached notice as well as the
proposed manner of providing the notice, and for all other proper relief.
/s/ Kenneth J. Falk Kenneth J. Falk No. 6777-49
/s/ Gavin M. Rose Gavin M. Rose No. 26565-53 ACLU of Indiana 1031 E. Washington St. Indianapolis, IN 46202 317/635-4059 fax: 317/635-4105 kfalk@aclu-in.org grose@aclu-in.org
Attorneys for the Plaintiffs
CERTIFICATE OF SERVICE I hereby certify that on this 19th day of November, 2010, a copy of the foregoing was filed electronically with the Clerk of this Court. The parties may access this filing through the Court's system:
Betsy Isenberg James Hutton Deputy Attorneys General betsy.isenberg@atg.in.gov james.hutton@atg.in.gov
Jon Laramore April Sellers Anne Ricchiuto
2

Case 1:09-cv-01574-SEB-MJD Document 76 Filed 11/19/10 Page 3 of 3

BAKER & DANIELS LLP jon.laramore@bakerd.com april.sellers@bakerd.com anne.ricchiuto@bakerd.com

/s/ Kenneth J. Falk Kenneth J. Falk Attorney at Law

3

Case 1:09-cv-01574-SEB-MJD Document 76-1 Filed 11/19/10 Page 1 of 2

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

C.H., et al., Plaintiffs, v.
JAMES W. PAYNE, Defendant.

)

)

)

)

)

No. 1:09-CV-1574 SEB-DML

)

)

)

)

)

ORDER

Come now plaintiffs, having filed their Motion to Approve Form and Manner of Notice

to the Class and Motion to Set Case for Fairness Hearing, and the Court having reviewed the

Motion, and being duly advised, finds that good cause exists to grant the Motion, and,

IT IS THEREFORE ORDERED that the class notice attached the Motion shall be given

to the class as follows:

-Posted notice in all offices of the Department of Child Services.

-In newspapers of general circulation in Indianapolis, Fort Wayne, Evansville, Gary, New Albany and Richmond.

IT IS FURTHER ORDERED that no earlier than 30 days following the initial posting

and publication of the notice, plaintiffs’ attorneys shall file their report with this Court as to the

results of the class notice, and,

IT IS FURTHER ORDERED that this case is set for a fairness hearing pursuant to Rule

23(e) of the Federal Rules of Civil Procedure on ___________________________________,

2011 at ______ M. in Room 216, United States Courthouse, 46 E. Ohio Street, Indianapolis,

Indiana.

Case 1:09-cv-01574-SEB-MJD Document 76-1 Filed 11/19/10 Page 2 of 2

____________ Date

_____________________________________________ Judge, United States District Court

cc:

Kenneth J. Falk ACLU of Indiana kfalk@aclu-in.org
Gavin M. Rose ACLU of Indiana grose@aclu-in.org
James Hutton Office of the Attorney General james.hutton@atg.in.gov
Betsy M. Isenberg Office of the Attorney General betsy.isenberg@atg.in.gov
Jon Laramore BAKER & DANIELS LLP jon.laramore@bakerd.com
April Sellers BAKER & DANIELS LLP april.sellers@bakerd.com
Anne Ricchiuto BAKER & DANIELS LLP anne.ricchiuto@bakerd.com

Case 1:09-cv-01574-SEB-MJD Document 76-2 Filed 11/19/10 Page 1 of 3
To: All foster parents and foster children receiving foster care maintenance directly from the Indiana Department of Child Services and all adoptive parents, and their children, who were receiving adoption assistance payments that were reduced in January of 2010
In December of 2009, we filed a lawsuit against the Department of Child Services challenging the planned reduction in foster care maintenance payments and adoption assistance payments that were scheduled to go into effect in January of 2010. The lawsuit is filed in federal court in Indianapolis and is entitled C.H., et al. v. James W. Payne, No. 1:10-cv-381. The case was certified as a class action with four classes, which means that the individuals who filed the case represent not only themselves but all others like them in the classes. The classes are defined as:
Class A-
all foster parents who are receiving, or will receive, foster care maintenance payments directly from the Indiana Department of Child Services pursuant to 42 U.S.C. § 672.
Class B –
all children in foster care, or who will be in foster care, for whom foster care maintenance payments are being made, or will be made, directly from the Indiana Department of Child Services pursuant to 42 U.S.C. § 672.
Class C-
all adoptive parents who are receiving adoption assistance payments through the Indiana Department of Child Services pursuant to 42 U.S.C. § 673, and whose payments were reduced by 10% as of January 1, 2010.
Class D-
all adoptive children for whom adoption assistance payments are being made through the Indiana Department of Child Services pursuant to 42 U.S.C. § 673, and whose payments were reduced by 10% as of January 1, 2010.
In January, the Court issued a preliminary injunction that prevented any cut in the foster care or adoption payments. This is a temporary order in place until the case is fully resolved. However, rather than continue with the case, we have reached a settlement that resolves the case. Because this is a class action, court rules require that class members be notified of the settlement and be given an opportunity to comment on it. We have summarized the settlement below and at the end of this memo we have set out how you can comment on it if you wish to do so.
Under the settlement the following terms apply to foster parents and foster children receiving payments directly from the Department of Child Services (DCS).

Case 1:09-cv-01574-SEB-MJD Document 76-2 Filed 11/19/10 Page 2 of 3
1) DCS agrees that it will cease its efforts to reduce the foster care payments and will continue to pay at least $25 a day until it establishes a new policy. One of the criticisms in our lawsuit was that DCS had no clear method by which it was establishing the new rates. It is currently establishing a new method to compute the costs of the items that are to be included in foster care maintenance payments. It anticipates introducing these new rates on or before January 1, 2011.
2) It is entirely possible that the new rates that the DCS will introduce in the future may be lower than the current rates. By entering into this settlement we are not waiving our right to bring a new lawsuit to challenge these rates.
Under the settlement the following terms apply to adoptive parents and their children whose adoption assistance payments were scheduled to be reduced on January 1, 2010.
1) DCS will continue to pay all monthly adoption assistance payments that were being paid as of December 31, 2009. This includes payments being made from both Title IV-E and State funds. These payments will not be reduced without the agreement of the adoptive parents.
2) DCS will no longer rely on any practice or policy that allows it to set a maximum amount for the adoption assistance payments of 75% of the foster care maintenance payments.
3) However, federal law provides that the adoption assistance payments made under Title IV-E cannot be greater than the foster care payments. Therefore, if foster care payments are reduced in the future, this may have an effect on the adoption payment, depending on the new foster care rate.
4) If the adoption assistance payment is less than the foster care payment, you have the right to request that the adoption amount be raised if you can show it is justified by a change in circumstances.
After we won the preliminary injunction DCS started an appeal of the case to the appeals court in Chicago that is the appellate court over Indiana. DCS will dismiss its appeal of our case once the settlement is approved. And, once the settlement is approved we will dismiss this case with prejudice. This means that no class member will be able to file it again. However, nothing stops you, or the attorneys, from filing a new case if foster care payments and adoption assistance payments are reduced in the future.
The settlement also provides that we are to be paid attorneys’ fees and costs in this case of $104,811.92. This is paid by the DCS. Our services are free to our clients. The fees go to the not-for-profit organization that employs us.
As we indicated above, under the rules governing class actions, the Court cannot approve the proposed settlement without giving you notice and an opportunity to respond. Then the

Case 1:09-cv-01574-SEB-MJD Document 76-2 Filed 11/19/10 Page 3 of 3
Court must determine that the proposed settlement is fair, reasonable, and adequate. This is the notice to the class. No fewer than thirty (30) days after notice is given, we will inform the Court of any comments by class members so that the Court can make the determination of fairness or not as required by the federal rules.
Therefore, if you have an opinion about the proposed settlement, please mail your comments at the earliest opportunity to us at the address below. You may also call us or e-mail us as well. We would be happy to send any of your written comments to the Judge. If you want me to do this, please put in your letter or e-mail the following language: “I authorize you to give the Court a copy of this letter including my actual name.” If you do not do this we will not give the Court a copy of the letter and we will not disclose your actual name. We will, however, summarize all comments that are made. But, unless you tell us specifically otherwise, we will keep all your comments anonymous.
Thank you very much.
Kenneth J. Falk ACLU of Indiana 1031 E. Washington St. Indianapolis, IN 46202 317/635-4059 ext. 104 fax: 317/635-4105 kfalk@aclu-in.org
Gavin M. Rose ACLU of Indiana 1031 E. Washington St. Indianapolis, IN 46202 317/635-4059 ext. 106 fax: 317/635-4105 grose@aclu-in.org

 
 Case 1:09-cv-01574-SEB-MJD Document 94 Filed 11/30/11 Page 1 of 6 PageID #: 1776

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

C.H., et al,
Plaintiffs,
vs.
JAMES W. PAYNE, in his official capacity as Director of the Indiana Department of Child Services,
Defendant.
THE INDIANA ASSOCIATION OF RESIDENTIAL CHILD CARE AGENCIES, INC. d/b/a IARCCA, an Association of Children and Family Services ("IARCCA"),
Plaintiff,
vs.
THE INDIANA DEPARTMENT OF CHILD SERVICES and JAMES W. PAYNE, director, in his official capacity,
Defendants.

) ) ) ) ) No. 1:09-cv-1574-SEB-JMS ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Formerly, 1:09-cv-1580 WTL-DML ) (Consolidated with 1:09-cv-1574 for ) pretrial purposes only) ) ) ) ) ) )

NOTICE OF INTENT TO RE-OPEN LITIGATION AND REQUEST FOR HEARING The Plaintiff, the Indiana Association of Residential Child Care Agencies, Inc.
("IARCCA"), respectfully notifies the Court of its intent to seek injunctive relief and requests that the Court set a hearing, and further states as follows:

Case 1:09-cv-01574-SEB-MJD Document 94 Filed 11/30/11 Page 2 of 6 PageID #: 1777
Procedural Background 1. IARCCA initiated this action in December 2009 against the Indiana Department of Child Services ("DCS") and James W. Payne ("Payne"), in his official capacity as director of DCS, after DCS announced that it was cutting the rates that DCS pays to the agencies (the "Providers") that provide treatment to abused, neglected and delinquent Indiana children and their families. IARCCA contended that the rate cuts were arbitrary and unlawful. 2. After this Court granted a preliminary injunction, the parties entered into a settlement agreement in March 2011 for the resolution of all claims in the case. A true and accurate copy of the settlement agreement is attached hereto as Exhibit A. 3. The settlement agreement required DCS to promulgate certain administrative rules and a provider manual to govern the setting of the rates that DCS pays to the Providers, and to issue rates consistent with those rules. 4. The settlement agreement also included agreement by the Providers to a 5% across-the-board rate cut with certain exceptions. Exceptions were for Providers being paid less than their IV-E claimable rates and Psychiatric Residential Treatment Facilities to be paid at the Medicaid rate. 5. Pursuant to the settlement agreement, the parties submitted, and the Court approved, an order dismissing the case without prejudice. (Dkt. 88) The stipulation of dismissal allowed for IARCCA to seek relief in this Court for "any breach of the settlement agreement between them, or any breach of applicable law … without having to exhaust administrative remedies."
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The New Rules & Rates 6. DCS filed the new rules on or about April 26, 2011 (for Residential Providers) and May 25, 2011 (for LCPA Providers). DCS sought, and the Providers submitted, cost reports on or about May 31, 2011. DCS published the provider manual on or about October 20, and at that same time published Bulletins that set caps on rates. A true and accurate copy of those Bulletins is attached hereto as Exhibit B. 7. On October 17, 2011, DCS issued letters to the Providers setting forth the rates that DCS would agree to pay beginning on January 1, 2012. A true and accurate copy of one such letter is attached hereto as Exhibit C. 8. The new rates announced by DCS represent drastic decreases to the amounts DCS has historically paid to reimburse Providers for the services they provide – in some cases, DCS intends to cut rates by more than 50%. The rate cuts for most Providers are significantly greater than the cuts this Court previously enjoined in January 2010. 9. DCS did not comply with the settlement agreement, its own new rules, or applicable law in developing the new rates. 10. For example, DCS has announced – outside of the rulemaking process – caps on the amount of administrative costs it will reimburse, as a percentage of all costs. And DCS has included as "administrative" costs several non-administrative functions, counting them against the cap. This action is unlawful because it is arbitrary and not authorized by law. 11. Similarly, the cost report format required that program management costs (including program directors, quality assurance, and case managers) be classified in the administrative column. These are program management costs that should not be subject to an “administrative” cap and lead to improperly low rates under DCS's own rules.
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12. Making matters worse, at the time DCS required Providers to submit their cost reports, it had not published the provider manual, which it used to establish rates. Therefore, the Providers were forced to categorize their anticipated costs without the benefit of the definitions and other guidance found in the provider manual. These actions by DCS are contrary to the settlement agreement and violate Indiana law.
13. Additionally, DCS is requiring Providers to incur certain costs, but is refusing to include them among reimbursable costs, such as a required number of visits with foster children and parents.
14. As a further example of DCS's violations, DCS is applying staff ratios in an unlawful manner. Licensing regulations (see e.g. 465 IAC 2-9-48, 465 IAC 2-10-48, 465 IAC 2-12-48, and 465 IAC 2-13-48) require that child-caring institutions and group homes “employ staff to perform administrative, supervisory, service, and direct care functions.” Yet despite this separation of supervisory staff from direct-case workers in DCS's own rules, DCS includes supervisors and case managers in the direct care staff ratio calculations in the new rates, in violation of the licensing provisions. In a few cases, during the same week a Provider's reimbursement for staff was cut, DCS licensing personnel informed that same Provider that it needed additional staff to comply with DCS licensing rules under which the Providers are required to operate.
15. Approximately 80 Providers who are IARCCA members have filed requests for administrative review with DCS, as provided for by the new rules.
16. DCS's responses to those requests are due on or about December 16, 2011. 17. Because of the ongoing administrative review process, IARCCA is not filing a motion for injunctive relief concurrently with this notice. It will not be until after the
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conclusion of the administrative review process – December 16 – that IARCCA's members will know the full extent of their harm from the new rates. IARCCA will file as soon as possible, keeping in mind the need to give DCS appropriate time to respond to IARCCA's arguments.
Request For Hearing 18. If the new rates go into effect, the Providers will be unable to care adequately for Indiana's most vulnerable children, as required by state and federal law. 19. Assuming the parties are not able to reach any other resolution, IARCCA anticipates filing an amended and supplemental complaint, seeking injunctive relief to prevent the new rates from taking effect on January 1, 2012. IARCCA anticipates filing that complaint on or about December 7, 2011 and therefore requests that the Court set this matter for hearing before the end of December.
Respectfully submitted, BAKER & DANIELS LLP By/s/April E. Sellers Jon Laramore, #17166-49 April E. Sellers, #21081-49 Anne Ricchiuto, #25760-49 BAKER & DANIELS LLP 300 North Meridian Street, Suite 2700 Indianapolis, IN 46204 Telephone: (317) 237-0300 Facsimile: (317) 237-1000 Attorneys for Plaintiff, The Indiana Association of Residential Child Care Agencies, Inc.
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CERTIFICATE OF SERVICE I certify that a copy of the foregoing Notice of Intent To Re-Open Litigation and Request For Hearing was filed via the ECF system on November 30, 2011.
Betsy M. Isenberg Indiana Attorney General Indiana Government Center South- 5th Floor 302 W. Washington Street Indianapolis, IN 46204-2770 Gavin M. Rose Kenneth Falk ACLU of Indiana 1031 E. Washington Street Indianapolis, IN 46202
/s/April E. Sellers
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 Case 1:09-cv-01574-SEB-MJD Document 96 Filed 12/08/11 Page 1 of 16 PageID #: 1795

IN THE UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

C.H., et al.,

)

)

Plaintiffs,

)

)

v.

)

)

JAMES W. PAYNE, in his official

)

capacity as Director of the Indiana

)

Department of Child Services,

)

)

Defendant.

)

)

)

THE INDIANA ASSOCIATION OF

)

RESIDENTIAL CHILD CARE

)

AGENCIES, INC. d/b/a IARCCA, an

)

Association of Children and Family

)

Services ("IARCCA")

)

)

Plaintiff,

)

)

v.

)

)

THE INDIANA DEPARTMENT OF

)

CHILD SERVICES and JAMES W.

)

PAYNE, director, in his official capacity, )

)

Defendants.

)

CASE NO. 1:09 cv-01574 SEB-MJD
CASE NO. 1:09-cv-1580 WTL-DML (Consolidated with 1:09-cv-1574)

AMENDED AND SUPPLEMENTAL VERIFIED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
For its complaint against The Indiana Department of Child Services ("DCS") and

James W. Payne ("Payne"), in his official capacity as director of DCS, Plaintiff, The Indiana

Association of Residential Child Care Agencies, Inc. ("IARCCA"), states as follows:

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Background: The Parties 1. IARCCA is a non-profit corporation, incorporated and with its principal place of business in Indiana, comprised of approximately 110 member agencies that provide residential treatment, foster care and home-based services to abused, neglected and delinquent Indiana children and their families ("Providers"). 2. Approximately 80 of IARCCA's 110 members provide services that include a residential component ("Residential Providers"). Licensed Child Placing Agencies ("LCPAs") are focused on placing children in qualified foster care. Some IARCCA members are both Residential Providers and LCPAs. IARCCA represents the interests of its members relating to DCS's contracts with IARCCA member agencies. 3. According to Ind. Code § 31-25-2-8, DCS is the single State agency responsible for administering Title IV-E of the Federal Social Security Act (see 42 U.S.C. § 670 et seq.) ("Title IV-E"). 4. Defendant Payne is Director of DCS.
Background: This Litigation 5. DCS pays each Provider a per diem rate for each child, based on the types of services that the child will receive. 6. IARCCA initiated this action in December 2009 against DCS and Payne, in his official capacity as director of DCS, after DCS announced that it was cutting the rates that DCS pays to Providers that provide treatment to abused, neglected and delinquent Indiana children and their families. IARCCA contended that the rate cuts were arbitrary and unlawful.1
1 IARCCA originally filed the case in Marion County Superior Court, and the Defendants removed it, thereby waiving their Eleventh Amendment immunity. C.H. v. Payne, 683 F. Supp. 2d 865, 883 n. 19 (S.D. Ind. 2010) (“[R]emoval is a form of voluntary invocation of a federal
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7. The Court entered a preliminary injunction enjoining DCS from implementing the rate cuts that were proposed at that time. Dkt. 49.
8. The parties entered into a settlement agreement in February 2011 for the resolution of all claims in the case. A true and accurate copy of the settlement agreement (with exhibits) is attached hereto as Exhibit A.
9. The settlement agreement required DCS to promulgate certain administrative rules and a provider manual to govern the setting of the rates that DCS pays to the Providers, and to issue rates consistent with those rules. Id. ¶ 2.
10. The settlement agreement also included agreement by the Providers to a five percent across-the-board rate cut with certain exceptions. Id. ¶ 1. Exceptions were for Providers being paid less than their IV-E claimable rates, and for those Providers that are Psychiatric Residential Treatment Facilities ("PRTFs") to be paid at the Medicaid rate. Id. ¶ 1(a)-(c).
11. The settlement agreement "[p]ermits either party to enforce any breach of this Agreement or applicable law in this court, without having to exhaust administrative remedies . . . ." Id. ¶ 4(c).
Background: The New Rules and Rates 12. DCS filed the new rules on or about April 26, 2011 (for Residential Providers) and May 25, 2011 (for LCPA Providers). See 465 IAC 2-16-1 et seq. (as to Residential Providers) and 2-17-1 et seq. (as to Placement Providers).
court's jurisdiction sufficient to waive the State's otherwise valid objection to litigation of a matter (here of state law) in a federal forum.”) (quoting Lapides v. Board of Regents of Univ. Sys. of Georgia,535 U.S. 613, 624 (2002)).
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13. To assist it with rate setting as contemplated by the rules, DCS sought, and the Providers submitted, cost reports on or about May 31, 2011. Cost reports are reports prepared annually by each Provider describing the costs they incurred during the prior year in providing services to their youth placements.
14. On October 17, 2011, DCS issued letters to Providers setting forth the rates that DCS would agree to pay beginning on January 1, 2012. Dkt. 94, Ex. C (sample rate letter).
15. Months after the cost reports were due – and three days after the rates based on those reports had been set – DCS published two provider manuals on or about October 20, and at that same time published Bulletins that set "caps" on rates. The provider manuals are attached hereto as Exhibit B; see also Dkt. 94, Ex. B (Bulletins). While the rules contemplated, in concept, some allowable maximums on certain categories of rates, the rules were silent on what those maximums would be or how they would be calculated. The Bulletins also do not explain how the rate caps were calculated.
16. While the submission of cost reports was not new in 2011, the information in the provider manuals about how certain costs must be allocated and which were reimbursable constituted significant changes from past practice. Because they lacked the manuals and Bulletins when cost reports were prepared, Providers understood belatedly that they had not necessarily "adhered" to some of the new guidelines (of which they were not aware) in their cost reporting. Nevertheless, DCS set rates based on the cost reports that had already been submitted, without an opportunity to revise them in accordance with the provider manuals.
17. The proposed 2012 rates represent drastic decreases to the amounts DCS has historically paid to reimburse Providers for the services they provide – in some cases, DCS
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intends to cut rates by more than 50 percent. The rate cuts for most Providers are significantly greater than the cuts this Court previously enjoined in January 2010. DCS did not comply with the settlement agreement, its own new rules, or other applicable
law in developing the new rates. 18. DCS is a state agency subject to the rule-making provisions of Ind. Code Art. 4-22. These requirements apply to all children in a State's foster care program, whether or not they are financially qualified for funds administered under Title IV-E.2 19. DCS is required, under Ind. Code Art. 4-22, to promulgate administrative rules that set forth a method by which DCS will set per diem reimbursement rates for Providers. 20. In the Bulletins it issued in October, DCS published "Cost Caps" that would apply to various cost categories. 21. As noted above, although the rules contemplate that reasonable ceilings would be placed on certain costs, DCS set those ceilings outside of the rule-making process, in Bulletins. Providers had no input into those Bulletins, which were not subject to public comment. Thus, DCS has not promulgated administrative rules concerning the setting of rate caps on the rates it will pay to Providers, yet it has calculated rates based on these caps. And the existing Rules do not specify what the caps will be, yet it has informed Providers that those caps will apply across the board.
2 For a state to receive funds under Title IV-E, the state must make foster care maintenance payments for qualified children, to cover the cost of food, shelter, clothing, daily supervision, school supplies, personal incidentals, liability insurance and reasonable travel to the child's home for visitation. Federal law requires that the rates be sufficient to cover the costs of items described in Title IV-E, including the administration costs involved with providing those items. By paying per diem rates to Providers, DCS receives federal matching funds to cover part of the costs for the services outlined in Title IV-E to children in Indiana. The rates paid by DCS to Providers also cover health-related, education-related and other services not covered by Title IV.
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22. One such cap limits the amount of administrative costs DCS will reimburse, as a percentage of all costs. And DCS has included in its definition of "administrative" costs several non-administrative functions, counting them against the cap. 465 IAC 2-16-3. For example, the 2011 cost report format required that program management costs (including program directors, quality assurance, and case managers) be classified in the administrative column. These are program costs that should not be subject to an “administrative” cap and lead to improperly low rates under DCS's own rules.
23. By contrast, the rules contemplate some additional allowance for "indirect" costs incurred by Provider. Indirect costs are agency infrastructure-type costs, such as human resources staff, financial staff, management information systems, and recordkeeping. DCS failed to include an allowance for indirect costs in its methodology and Bulletin, resulting in these costs being disallowed for Providers. This is problematic because Providers are required to perform the tasks included in indirect costs, such as keep records, budget, conduct audits, adhere to personnel requirements and background checks, and have an administrative infrastructure that supports the direct administration of programs.
24. In addition to being arbitrary, the capped rates fail to reimburse Providers for certain costs that DCS requires Providers to incur, such as required staffing ratios needed to maintain licensing.
25. DCS's failure to promulgate administrative rules concerning the setting of rate caps for Providers violates Ind. Code Art. 4-22.
DCS has failed to adhere to its own administrative rules regarding rate setting. 26. As noted, DCS did promulgate rules for use in Provider rate-making. But
it has failed to adhere to them in setting Providers' rates.
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27. For example, DCS is applying staff ratios in an unlawful manner. Licensing regulations (see e.g. 465 IAC 2-9-48, 465 IAC 2-10-48, 465 IAC 2-12-48, and 465 IAC 2-13-48) require that child-caring institutions and group homes “employ staff to perform administrative, supervisory, service, and direct care functions,” describing four separate, segregated functions. Yet despite this separation of supervisory staff from direct-case workers in DCS's own rules, DCS includes supervisors and case managers in the direct care staff ratio calculations in the new rates, in violation of the licensing provisions. In one instance, during the same week a Provider's reimbursement for staff was cut, DCS licensing personnel informed that same Provider that it needed additional staff to comply with DCS licensing rules under which the Providers are required to operate.
28. Approximately 80 percent of IARCCA's Provider members have filed requests for administrative review with DCS, as provided for by the new rules. DCS's responses to those requests are due on or about December 16, 2011.
29. DCS's proposed rates are set to go into effect on January 1, 2012. Based on the current billing and reimbursement system between DCS and Providers, they will experience the impact of those cuts immediately in January.
30. DCS's proposed rates will have a negative effect on the children in the Providers' care.
31. DCS's proposed rates will leave Providers with many unreimbursed costs. Some of IARCCA's members have already had to close programs and lay off staff because of the cuts. They are concerned that DCS's new staff ratios fail to provide for adequate supervision of children. Several anticipate losing their accreditation.
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32. Unless restrained by this Court, the DCS's arbitrary and unlawful reduction of reimbursement rates to Providers will cause irreparable harm to the children served by the Providers.
Count I: Violation of Ind. Code Sec. 4-22 33. DCS's failure to set rate caps according to promulgated rules violates Ind. Code Art. 4-22. 34. The specific caps set by DCS, published only in "Bulletins," were not promulgated in accordance with any stated or written rules or criteria – beyond the fact that the rules contemplated that there would be maximums set for certain types of costs. 35. IARCCA is entitled to declaratory relief that DCS's use of arbitrary caps on per diem rates set other than pursuant to promulgated rules violates state law and to injunctive relief restraining DCS from setting current rates except pursuant to promulgated rules.
Count II: Violations of Indiana Administrative Code 36. DCS has violated its own rules in three principal areas: staff ratios, administrative costs, and fringe benefits. 37. First, in its Bulletins, DCS has set staffing ratios that do not comply with accreditation standards or even DCS's own licensing rules. 38. Many Providers are required to comply with accreditation standards to provide services, which call for no less than 5:1 staffing ratio. 39. Licensing rules require Providers "to employ a sufficient number of qualified persons to provide care and supervision for the children at all times." DCS's staffing ratios do not allow for children to be transported individually to school or counseling appointments and still sufficiently staff children who remain in the facility. For some Providers,
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they do not allow compliance with 465 IAC 2-9-58(f) and 59(b), which require a second person

be available to "continuously maintain direct observation" of a child being restrained or

confined. Licensing rules require that facilities with three (3) or more children under the age of

eight (8) to maintain a 1:4 staff ratio. DCS's new staffing ratios do not permit that.

40. The staffing ratios are inconsistent with DCS's own licensing rules,

because they include supervisors and case managers in the direct care staffing ratio calculations.

But licensing rules require that Providers employ staff to perform "administrative, supervisory,

service, and direct care functions," and provide that "functions may be combined only upon the

approval of the department." See 465 IAC 2-9-48, 2-10-48, 2-12-48 and 2-13-48. Furthermore,

Providers must be fully compliant with their staffing ratios for the state to claim Title IV-E funds

for the children in their care. Thus, if Providers adhere to DCS's staffing ratios, they put their

own licenses and their Title IV-E eligibility in jeopardy.

41.

Second, the Rules require that DCS cover "reasonable costs related to

administration" of Providers. See 465 IAC 2-17-21(a). But DCS, as announced in its Bulletin,

capped administrative costs at 20% of direct costs – without any regard to whether that

percentage is reasonable. That cap fails to cover several costs that are required under licensing

rules. Indiana's Rule includes costs associated with casework, case management, and quality

assurance procedures. See 465 IAC 2-16-3. By capping allowable costs at an unreasonable

number, DCS has effectively disallowed a range of costs that the Rule requires it to cover.

42.

DCS has failed to allow for both indirect costs and direct administrative

costs, as required by the rules – instead simply setting a cap on administrative costs. See 465

IAC 2-16-21(d)(5) and 2-17-23(d)(5) (disallowing costs exceeding "any indirect cost allocations

as a percentage of total costs in excess of the maximum percentage of total costs established by

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the department for allowable indirect costs") and (6) (disallowing costs exceeding maximum

percentage of total administrative costs established by the department). This violation is

especially egregious because DCS's cost report required that Providers list both direct and

indirect administrative costs – leading Providers, reasonably, to expect that DCS would cover

costs in both categories.

43.

The cap that DCS chose for administrative costs also fails to cover several

costs that are required under the licensing statute and rules that apply to Providers. These include

costs to conduct a criminal history check for all employees and volunteers (required by Ind. Code

31-27-3-3); costs to maintain personnel records (required by 465 IAC 2-9-44, 48); costs to

develop a written plan for the orientation, training and development of staff (required by 465

IAC 2-9-54); and costs to develop and administer health programs (required by 465 IAC 2-9-69).

44. Finally, the rules require that DCS set a maximum allowable variation

from the median fringe benefit rate for all Providers. See 465 IAC 2-16-21(d)(2) and 2-17-

23(d)(2). DCS did not do that. Instead, DCS capped the allowable fringe benefit at 25% of

salaries and payroll taxes. This number is simply the mean fringe benefit as reported by

Providers – it is not by any definition a range around the median, and it therefore violates DCS's

own rule, and it by definition puts half of Providers over the cap.

45. DCS's failure to follow its own administrative rules has harmed Providers

by negatively impacting their expected rates for 2012. IARCCA is entitled to a declaration that

DCS's actions violate their own regulations and injunctive relief precluding DCS from

continuing those violations.

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Count III: Violation of Title IV-E 46. DCS's failure to set rates according to written criteria and methods violates Title IV-E. 47. The State’s rate caps violate Title IV-E because they fail to reimburse Providers for all the reasonable costs enumerated in Title IV-E, including “food, clothing, shelter, daily supervision, school supplies, a child’s personal incidentals, liability insurance with respect to a child, reasonable travel to the child’s home for visitation, and reasonable travel for the child to remain in the school in which the child is enrolled at the time of placement,” and reasonable administrative costs pertaining to those items. 42 U.S.C. § 675(4)(A). 48. Because of the arbitrary and still unexplained nature of the caps on administrative costs, fringe benefits, and staffing, DCS cannot demonstrate its compliance with Title IV-E, which requires reimbursements to cover all of these costs. 49. By eliminating its former process of calculating separate rates for each program and provider upon which it would claim federal reimbursement, and choosing instead to claim reimbursement based only on the rates paid, DCS has designed a system that “leaves on the table” potential federal reimbursement. While DCS is not obligated to maximize federal reimbursement, eliminating the so-called IV-E claimable rate for each program and provider eliminates the other method for measuring whether DCS has complied with the substantive requirements of IV-E. 50. By failing to follow its own rate-making process, establishing arbitrary caps, and eliminating its separate system for measuring IV-E compliance, Indiana has eliminated any way to demonstrate its compliance with Title IV-E.
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51. IARCCA is entitled to a declaration that DCS's actions violate Title IV-E and injunctive relief precluding DCS from cutting current rates without first demonstrating that they cover all costs required by Title IV-E.
Count IV: Breach of Settlement Agreement 52. The parties' settlement agreement provides that DCS will not "amend or Repeal the Rules, or otherwise . . . effect any significant changes in the rate-setting process that are inconsistent with the method in the Rules, without IARCCA's consent, until two (2) years from the date the Rules are enacted." Ex. A, ¶ 2. 53. By 1) failing to follow the rules that it did promulgate and 2) by adhering to rate caps that were set outside of the rules, DCS has violated its obligation not to effect changes in rate setting that are significant and inconsistent with the Rules. 54. IARCCA's members have been harmed by DCS's violation of the settlement agreement. 55. IARCCA is entitled to a declaration that DCS's actions violate the settlement agreement and injunctive relief precluding DCS from cutting current rates without adhering to its terms.
Count V: Violation of 42 U.S.C. § 1983 56. The DCS's failure to follow its rules for rate setting violates Title IV-E. 57. Payne, in seeking to enforce reimbursement rates set arbitrarily, is acting under color of state law and in violation of the requirements of Title IV-E. This conduct further violates 42 U.S.C. § 1983 because it is an action under color of state law that violates the rights under federal statute of IARCCA and its member agencies. 58. Payne is liable to IARCCA's members for violation of 42 U.S.C. § 1983.
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59. IARCCA is entitled to relief under 42 U.S.C. § 1983 including recovery of attorneys' fees incurred in bringing this action under 42 U.S.C. § 1988.
WHEREFORE, IARCCA requests the Court: (a) to enter declaratory judgment that DCS's setting of per diem rate payments to Providers other than pursuant to promulgated rules violates Indiana Code Art. 4-22; (b) to enter declaratory judgment that DCS's cuts in per diem rate payments to Providers described in this Complaint violate Title IV-E of the Social Security Act; (c) to enter declaratory judgment that DCS has breached its settlement agreement with IARCCA by failing to follow its own rules in setting rates; (d) to enter preliminary injunctive relief precluding DCS from reducing rates until it adheres to its rules governing the establishment of per diem rates; (e) to enter permanent injunctive relief requiring DCS to set rates and to increase or reduce rates only in accordance with written standards promulgated in accordance with federal and state law; (f) to enter preliminary and permanent injunctive relief precluding DCS from taking any action concerning any children in the care of Providers, based solely on decisions about the rates to Providers; (g) to award IARCCA its damages according to proof; and (h) to award IARCCA its costs, attorneys' fees and all other appropriate relief.
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BAKER & DANIELS LLP By/s/Jon Laramore Jon Laramore, #17166-49 April E. Sellers, #21081-49 Anne K. Ricchiuto, #25760-49 BAKER & DANIELS LLP 300 North Meridian Street, Suite 2700 Indianapolis, IN 46204 Telephone: (317) 237-0300 Facsimile: (317) 237-1000 Attorneys for Plaintiff, The Indiana Association of Residential Child Care Agencies, Inc.
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Case 1:09-cv-01574-SEB-MJD Document 96 Filed 12/08/11 Page 16 of 16 PageID #: 1810
CERTIFICATE OF SERVICE I certify that a copy of the foregoing was filed electronically on December 8, 2011. Notice of this filing will be sent to the parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system. This document was also emailed to the following:
Wayne C. Turner Anne Cowgur Patrick Ziepolt BINGHAM MCHALE LLP 10 West Market Street Market Tower, Suite 2700 Indianapolis, IN 46204 wturner@binghammchale.com acowgur@binghammchale.com pziepolt@binghammchale.com
/s/Jon Laramore
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 Case 1:09-cv-01574-SEB-MJD Document 97 Filed 12/08/11 Page 1 of 3 PageID #: 1960

IN THE UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

C.H., et al.,

)

)

Plaintiffs,

)

)

vs.

)

)

JAMES W. PAYNE, in his official

)

capacity as Director of the Indiana

)

Department of Child Services,

)

)

Defendant.

)

)

)

THE INDIANA ASSOCIATION OF

)

RESIDENTIAL CHILD CARE

)

AGENCIES, INC. d/b/a IARCCA, an

)

Association of Children and Family

)

Services ("IARCCA")

)

)

Plaintiff,

)

)

v.

)

)

THE INDIANA DEPARTMENT OF

)

CHILD SERVICES and JAMES W.

)

PAYNE, director, in his official capacity, )

)

Defendants.

)

CASE NO. 1:09 cv-01574 -SEB-MJD
CASE NO. 1:09-cv-1580 WTL-DML (Consolidated with 1:09-cv-1574)

APPLICATION FOR PRELIMINARY INJUNCTION Pursuant to Federal Rule of Civil Procedure 65, Plaintiff, The Indiana Association of Residential Child Care Agencies, Inc. ("IARCCA") respectfully requests the Court to issue a preliminary injunction enjoining and restraining Defendants, the Indiana Department of Child Services ("DCS") and James W. Payne from reducing rates for per diem payments to any provider of services to children in Indiana pursuant to DCS's role under Indiana Code §31-25-2-

Case 1:09-cv-01574-SEB-MJD Document 97 Filed 12/08/11 Page 2 of 3 PageID #: 1961
8. This application is based upon the facts set forth in IARCCA's Amended and Supplemental Verified Complaint, and IARCCA's Memorandum in Support.
WHEREFORE, IARCCA respectfully requests the Court to: 1. Set IARCCA's application for a preliminary injunction for hearing at the Court's earliest convenience, but no later than December 30, 2011; 2. After opportunity for hearing, issue a preliminary injunction as requested in this application; and 3. Award IARCCA all other just and proper relief.
BAKER & DANIELS LLP
By: /s/ Jon Laramore Jon B. Laramore, #17166-49 April E. Sellers, #21081-49 Anne K. Ricchiuto, #25760-49 300 N. Meridian Street, Suite 2700 Indianapolis, IN 46204 Phone: 317-237-0300 Attorneys for Plaintiff, The Indiana Association of Residential Child Care Agencies, Inc.
CERTIFICATE OF SERVICE I certify that a copy of the foregoing was filed electronically on December 8, 2011. Notice of this filing will be sent to the parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system. This document was also emailed to the following:
2
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Wayne C. Turner Anne Cowgur Patrick Ziepolt BINGHAM MCHALE LLP 10 West Market Street Market Tower, Suite 2700 Indianapolis, IN 46204 wturner@binghammchale.com acowgur@binghammchale.com pziepolt@binghammchale.com __/s/ Jon Laramore Jon B. Laramore
3
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 U.S. District Court Southern District of Indiana (Indianapolis) CIVIL DOCKET FOR CASE #: 1:09-cv-01574-SEB-MJD

H. et al v. PAYNE Assigned to: Judge Sarah Evans Barker Referred to: Magistrate Judge Mark J. Dinsmore Case in other court: 7th Circuit, 10-01394 Cause: 28:1983 Civil Rights

Date Filed: 12/22/2009 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: Federal Question

Plaintiff C. H.

represented by Gavin Minor Rose ACLU OF INDIANA 1031 E. Washington Street Indianapolis, IN 46202 317-635-4059 ext.106 Fax: 317-635-4105 Email: grose@aclu-in.org ATTORNEY TO BE NOTICED

Plaintiff R. H.

Kenneth J. Falk ACLU OF INDIANA 1031 East Washington Street Indianapolis, IN 46202-3952 (317) 635-4059 x104 Fax: (317) 635-4105 Email: kfalk@aclu-in.org ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED

Plaintiff T. S.

Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED

Kenneth J. Falk

Plaintiff S. H. #1
Plaintiff S. H. #2
Plaintiff A. H.
Plaintiff B. H. minor children by their parents and next friends
Plaintiff C. H.

(See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk

Plaintiff R. H.
Plaintiff N. M. S.
Plaintiff N. J. S. minor children, by their parents and next friends
Plaintiff D. S.
Plaintiff J. S. on their own behalf and on behalf of those similarly situated

(See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk

Plaintiff J. J. #1
Plaintiff J. J. #2
Plaintiff J. J. #3, minor children by their next friends
Plaintiff C. H.
Plaintiff R. H. on thier own behalf and on behalf of those similarly situated

(See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk

Plaintiff D. S.
Plaintiff IARCCA, an Association of Children and Family Services ("IARCCA")
Plaintiff H.K. on her own behalf and on behalf of a

(See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Anne Kramer Ricchiuto BAKER & DANIELS - Indianapolis 300 N. Meridian Suite 2700 Indianapolis, IN 46204 317-237-1420 Fax: 317-237-1000 Email: anne.ricchiuto@bakerd.com ATTORNEY TO BE NOTICED
April Edwards Sellers BAKER & DANIELS - Indianapolis 300 N. Meridian Suite 2700 Indianapolis, IN 46204 (317) 237-0300 Fax: (317) 237-1000 Email: april.sellers@bakerd.com ATTORNEY TO BE NOTICED
Jon Laramore BAKER & DANIELS - Indianapolis 300 N. Meridian Suite 2700 Indianapolis, IN 46204 (317)237-0300 Fax: (317)237-1000 Email: jon.laramore@bakerd.com ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address)

class of those similarly situated
Plaintiff S.D. minor child
Plaintiff C.W. minor child
V. Defendant JAMES W. PAYNE in his official capacity as Director of the Indiana Department of Child Services

ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Gavin Minor Rose (See above for address) ATTORNEY TO BE NOTICED
Kenneth J. Falk (See above for address) ATTORNEY TO BE NOTICED
represented by Betsy M. Isenberg INDIANA OFFICE OF THE ATTORNEY GENERAL 302 West Washington Street IGCS - 5th Floor Indianapolis, IN 46204 (317) 232-6231 Fax: (317) 232-7979 Email: Betsy.Isenberg@atg.in.gov ATTORNEY TO BE NOTICED

Date Filed 12/22/2009

# Docket Text
1 COMPLAINT against JAMES W. PAYNE, filed by R. H., N. M. S., J. J.(#1), T. S., D. S., C. H., R. H.(on thier own behalf and on behalf of those similarly situated), J. J.(#3, minor children by their next friends), J. S., J. J.(#2), S. H.(#1), S. H.(#2), A. H., B. H., N. J. S. (Attachments: # 1

12/22/2009 12/22/2009 12/22/2009 12/22/2009 12/22/2009
12/22/2009 12/22/2009
12/22/2009
12/22/2009 12/22/2009
12/24/2009

Exhibit 1- Letter regarding changes in monthly payments.)(JD) (Entered: 12/22/2009)
2 CIVIL COVER SHEET, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S. (JD) (Entered: 12/22/2009)
3 RECEIPT #IP016037 in the amount of $ 350.00 (JD) (Entered: 12/22/2009)
4 Summons Issued as to JAMES W. PAYNE. (JD) (Entered: 12/22/2009)
5 NOTICE of Appearance by Kenneth J. Falk on behalf of Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S. (JD) (Entered: 12/22/2009)
6 NOTICE of Appearance by Gavin Minor Rose on behalf of Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S. (JD) (Entered: 12/22/2009)
7 MAGISTRATE JUDGE's NOTICE of Availability to Exercise Jurisdiction issued. (JD) (Entered: 12/22/2009)
8 MOTION to Proceed by Anonymous Name, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Attachments: # 1 Affidavit C.H. and R.H., # 2 Affidavit D.S. and J.S., # 3 Text of Proposed Order)(Rose, Gavin) (Entered: 12/22/2009)
9 BRIEF/MEMORANDUM in Support re 8 MOTION to Proceed by Anonymous Name, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Rose, Gavin) (Entered: 12/22/2009)
10 MOTION to Certify Class, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Rose, Gavin) (Entered: 12/22/2009)
11 BRIEF/MEMORANDUM in Support re 10 MOTION to Certify Class, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Rose, Gavin) (Entered: 12/22/2009)
12 RETURN of Service by CMRRR, filed by R. H., N. M. S., J. J.(#1), T. S., D. S., C. H., R. H.(on thier own behalf and on behalf of those similarly situated), J. J.(#3, minor children by their next friends), J. S., J. J.(#2), S. H.(#1), S. H.(#2), A. H., B. H., N. J. S.. JAMES W. PAYNE served on 12/23/2009. (Falk, Kenneth) (Entered: 12/24/2009)

12/28/2009 12/29/2009 12/29/2009 12/29/2009 12/29/2009 12/29/2009 12/30/2009
12/31/2009
01/10/2010

13 Unopposed MOTION to Consolidate Cases, filed by Plaintiff IARCCA, an Association of Children and Family Services ("IARCCA"). (Attachments: # 1 Text of Proposed Order)(Laramore, Jon) (Entered: 12/28/2009)
14 MOTION for Preliminary Injunction, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., IARCCA, an Association of Children and Family Services ("IARCCA"), J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Attachments: # 1 Text of Proposed Order)(Rose, Gavin) (Entered: 12/29/2009)
15 NOTICE of Appearance by David S. Christoff on behalf of Defendant JAMES W. PAYNE. (Christoff, David) (Entered: 12/29/2009)
16 NOTICE of Appearance by Anne Kramer Ricchiuto on behalf of Plaintiff IARCCA, an Association of Children and Family Services ("IARCCA"). (Ricchiuto, Anne) (Entered: 12/29/2009)
17 NOTICE of Appearance by James J. Hutton on behalf of Defendant JAMES W. PAYNE. (Hutton, James) (Entered: 12/29/2009)
18 NOTICE of Appearance by Betsy M. Isenberg on behalf of Defendant JAMES W. PAYNE. (Isenberg, Betsy) (Entered: 12/29/2009)
19 ENTRY Following Telephone Conference: On December 29, 2009, the parties appeared telephonically by counsel for a status conference in the above two causes of action. Subject to the Court's approval, all parties agreed that pre-trial proceedings in the two causes of action can be consolidated, without prejudice to any party's right to insist upon separate trials. The parties contemplate taking one deposition in advance of any preliminary injunction hearing, which they expect to be completed sometime during the next week. The parties jointly requested, and the Magistrate Judge recommends, that the District Judge schedule a half-day preliminary injunction hearing one afternoon during the week of January 18, 2010. They parties also agreed to simultaneously submit prehearing briefs, briefs which the Magistrate Judge recommends be due five days before the preliminary injunction hearing. Signed by Judge Jane Magnus-Stinson on 12/30/2009.(SWM) (Entered: 12/30/2009)
20 SCHEDULING ORDER. Having reviewed the Magistrate Judge's report regarding the telephone status conference in the above matters on 12/29/09, the Court now sets an evidentiary hearing for 1/20/2010 at 09:30 AM in room #216 before Judge Sarah Evans Barker. The parties shall file any prehearing briefs and stipulations no later than 1/15/2010. Signed by Judge Sarah Evans Barker on 12/31/2009.(LBK) (Entered: 12/31/2009)
21 AMENDED COMPLAINT against JAMES W. PAYNE, filed by T. S.,

01/10/2010
01/10/2010 01/10/2010 01/10/2010 01/12/2010 01/12/2010 01/13/2010 01/13/2010

C. H., IARCCA, an Association of Children and Family Services ("IARCCA"), J. J.(#3, minor children by their next friends), S. H.(#2), A. H., R. H., N. M. S., J. J.(#1), D. S., R. H.(on thier own behalf and on behalf of those similarly situated), J. S., B. H., S. H.(#1), J. J.(#2), N. J. S.. (Attachments: # 1 Exhibit)(Rose, Gavin) (Entered: 01/10/2010)
22 Amended MOTION for Adult Plaintiffs to Proceed by Anonymous Name, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Attachments: # 1 Affidavit (H. family), # 2 Affidavit (S. family), # 3 Affidavit (K. family), # 4 Text of Proposed Order)(Rose, Gavin) (Entered: 01/10/2010)
23 BRIEF/MEMORANDUM in Support re 22 Amended MOTION for Adult Plaintiffs to Proceed by Anonymous Name, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Rose, Gavin) (Entered: 01/10/2010)
24 MOTION to Certify Class (Renewed), filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Rose, Gavin) (Entered: 01/10/2010)
25 BRIEF/MEMORANDUM in Support re 24 MOTION to Certify Class (Renewed), filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Rose, Gavin) (Entered: 01/10/2010)
26 NOTICE of Appearance by April Edwards Sellers on behalf of Plaintiff IARCCA, an Association of Children and Family Services ("IARCCA"). (Sellers, April) (Entered: 01/12/2010)
27 ORDER granting pltfs' 8 and 22 Motion(s) to Proceed by Anonymous Names and Motion to Seal Affidavits Containing Actual Names (see Order for details). Signed by Judge Jane Magnus-Stinson on 1/12/2010. (SWM) (Entered: 01/12/2010)
28 STIPULATION to Certification of Cause as Class Action, re 24 MOTION to Certify Class (Renewed), filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Attachments: # 1 Text of Proposed Order)(Rose, Gavin) (Entered: 01/13/2010)
29 SEALED Affidavits of Adult Plaintiffs, re 27 Order on Motion, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Attachments: # 1 Affidavit (C.H. and R.H.), # 2 Affidavit (D.S. and T.S.), # 3 Affidavit (H.K.))(Rose, Gavin) (Entered: 01/13/2010)

01/15/2010 01/15/2010 01/15/2010 01/15/2010 01/15/2010 01/15/2010 01/15/2010

30 STIPULATION, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Attachments: # 1 Exhibit State Plan, # 2 Exhibit USDA Report, # 3 Exhibit Hitting the MARC, # 4 Exhibit Foster Care Notice, # 5 Exhibit Adoption Assitance Notice, # 6 Exhibit Foster parent listing)(Falk, Kenneth) (Entered: 01/15/2010)
31 BRIEF/MEMORANDUM in Support re 14 MOTION for Preliminary Injunction, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Falk, Kenneth) (Entered: 01/15/2010)
32 NOTICE Designation of Evidence - Part 1, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S., re 14 MOTION for Preliminary Injunction. (Attachments: # 1 Exhibit 1 (Dep. of Weinberg), # 2 Exhibit 2 (Part 1 of 6) (Aff. of DePanfilis), # 3 Exhibit 2 (Part 2 of 6) (Aff. of DePanfilis)) (Rose, Gavin) (Entered: 01/15/2010)
33 NOTICE Designation of Evidence - Part 2, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S., re 14 MOTION for Preliminary Injunction. (Attachments: # 1 Exhibit 2 (Part 3 of 6) (Aff. of DePanfilis), # 2 Exhibit 2 (Part 4 of 6) (Aff. of DePanfilis)) (Rose, Gavin) (Entered: 01/15/2010)
34 RESPONSE in Opposition re 14 MOTION for Preliminary Injunction, filed by Defendant JAMES W. PAYNE. (Isenberg, Betsy) (Entered: 01/15/2010)
35 NOTICE Designation of Evidence - Part 3, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S., re 14 MOTION for Preliminary Injunction. (Attachments: # 1 Exhibit 2 (Part 5 of 6) (Aff. of DePanfilis), # 2 Exhibit 2 (Part 6 of 6) (Aff. of DePanfilis)) (Rose, Gavin) (Entered: 01/15/2010)
36 NOTICE Designation of Evidence - Part 4, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S., re 14 MOTION for Preliminary Injunction. (Attachments: # 1 Exhibit 3 (Supp. Aff. of H.K.), # 2 Exhibit 4 (Aff. of Campbell), # 3 Exhibit 5 (Aff. of Howard), # 4 Exhibit 6 (Supp. Aff. of C.H. and R.H.), # 5 Exhibit 7 (Aff. of Thurston), # 6 Exhibit 8 (Supp. Aff. of D.S. and T.S.), # 7 Exhibit 9 (Aff. of Mark and Michelle Pratt), # 8 Exhibit 10 (Aff. of Gwin), # 9 Exhibit 11 (Aff. of Hodge), # 10 Exhibit 12 (Aff. of Cunningham), # 11 Exhibit 13 (Aff. of Sullen), # 12 Exhibit 14 (Aff. of Lehman), # 13 Exhibit 15 (Aff. of Sherman), # 14 Exhibit 16 (Aff. of Nicley), # 15 Exhibit 17 (Aff. of

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Greene), # 16 Exhibit 18 (Aff. of Upton), # 17 Exhibit 19 (Aff. of Goff), # 18 Exhibit 20 (Aff. of Akamu), # 19 Exhibit 21 (Aff. of Brown), # 20 Exhibit 22 (Aff. of M. Williams), # 21 Exhibit 23 (Aff. of Fowler), # 22 Exhibit 24 (Aff. of G. Williams)) (Rose, Gavin) (Entered: 01/15/2010)
37 NOTICE Supplemental Designation of Evidence, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S., re 14 MOTION for Preliminary Injunction. (Attachments: # 1 Exhibit 25 (Add'l Excerpts from Dep. of Weinberg)) (Rose, Gavin) (Entered: 01/18/2010)
38 Amended MOTION of Adult Plaintiffs to Proceed by Anonymous Name (Second), filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Attachments: # 1 Text of Proposed Order)(Rose, Gavin) (Entered: 01/19/2010)
39 NOTICE of Parties' First Extension of Time, filed by Defendant JAMES W. PAYNE. (Christoff, David) (Entered: 01/20/2010)
40 MOTION to Amend/Correct 21 Amended Complaint Substitute Attached Corrected Amended Complaint for First Amended Complaint to Correct Typographical Error, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S.. (Attachments: # 1 Exhibit Corrected First Amended Complaint, # 2 Exhibit Corrected First Amended Complaint (Exh. 1), # 3 Text of Proposed Order)(Rose, Gavin) (Entered: 01/20/2010)
42 STIPULATION regarding Admissibility of exhibits, filed by Plaintiffs A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., IARCCA, an Association of Children and Family Services ("IARCCA"), J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S., Defendant JAMES W. PAYNE. (MAC) (Entered: 01/22/2010)
41 MINUTE ENTRY for January 20, 2010. Evidentiary hearing on Plaintiffs' motions for preliminary injunction held and concluded. The preliminary relief requested by the plaintiffs, Docket No. 14 , was granted in accordance with the Court's ruling from the bench. A separate, written ruling will follow. The Unopposed Motion to Consolidate for pretrial purposes, but not for trial, Docket No. 13 , was granted. A separate, written ruling will follow. The Court accepted the Stipulation filed in 1:09-cv-1574 regarding the status of the CH Plaintiffs to proceed as four distinct classes pursuant to Fed. R. Civ. P. 23. A separate, written ruling formally certifing the classes will follow. Given the Court's acceptance of the Stipulation, no rulings are required on the motions filed in 1:09-cv-1547 at Docket Nos. 10 and 24 . The Court accepted the IARCCA's original memorandum filed in 1:09-cv-1580 at Docket No.

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02/02/2010

14. Therefore, no ruling is required on the Motion to Amend/Correct filed at Docket No. 16 . (Hearing recorded by Laura Howie-Walters, Court Reporter). Signed by Judge Sarah Evans Barker on 1/21/2010. (PGS) (Entered: 01/21/2010)
43 ORDER granting pltfs' 38 Amended Motion to proceed by anonymous name and Motion to seal affidavits (see Order for details). Signed by Judge Jane Magnus-Stinson on 1/21/2010. (SWM) (Entered: 01/22/2010)
44 ORDER Granting re 13 Unopposed MOTION to Consolidate Cases filed by IARCCA, an Association of Children and Family Services ("IARCCA"). The parties shall file all future pleadings, motions, and other documents in Cause No. 1:09-cv-1574 SEB-JMS only, utilizing the consolidated caption shown. (S.O.). Signed by Judge Sarah Evans Barker on 1/25/2010.(MAC) (Entered: 01/26/2010)
45 ORDER CERTIFYING Claims of C.H. Plaintiffs to Proceed as a Class Action. Kenneth J. Falk and Gavin M. Rose of the ACLU of Indiana are hereby appointed class counsel pursuant to Rule 23(g) of the Federal Rules of Civil Procedure (S.O.). Signed by Judge Sarah Evans Barker on 1/25/2010.(MAC) (Entered: 01/26/2010)
46 ORDER granting plaintiffs' 40 Motion to Amend/Correct First Amended Class Action Complaint. Signed by Judge Sarah Evans Barker on 1/25/2010. (MAC) (Entered: 01/26/2010)
47 AMENDED COMPLAINT against JAMES W. PAYNE, filed by T. S., C. H., IARCCA, an Association of Children and Family Services ("IARCCA"), J. J.(#3, minor children by their next friends), S. H.(#2), A. H., R. H., N. M. S., J. J.(#1), D. S., R. H.(on thier own behalf and on behalf of those similarly situated), J. S., B. H., S. H.(#1), J. J.(#2), N. J. S.. (Attachments: # 1 Exhibit 1)(MAC) (Entered: 01/26/2010)
48 ORDER Granting re 14 MOTION for Preliminary Injunction filed by N. M. S., A. H., J. J., N. J. S., D. S., IARCCA, an Association of Children and Family Services ("IARCCA"), T. S., S. H., J. S., R. H., B. H., C. H. PRELIMINARY INJUNCTION took effect at the conclusion of the hearing on January 20, 2010, by order of the Court and shall remain in effect and extend until further order of the Court or, in any event, no later than a final ruling on the merits (See Order). Signed by Judge Sarah Evans Barker on 1/26/2010.(MAC) (Entered: 01/26/2010)
49 AMENDED ENTRY granting a preliminary injunction-This entry is amended to correct a typographical error on page 25 of the prior entry issued on 1/26/10. With the exception of that one word correction, this entry is in all other respects identical to the prior entry. Signed by Judge Sarah Evans Barker on 2/2/2010.(CBU) (Entered: 02/02/2010)

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02/26/2010

50 ANSWER to 1 Complaint, filed by JAMES W. PAYNE.(Christoff, David) (Entered: 02/04/2010)
51 ENTRY regarding CMP and Initial Pretrial Conference. SCHEDULING ORDER: Initial Pretrial Conference set for 4/6/2010 09:00 AM in room #361 before Judge Jane Magnus-Stinson. The CMP is due no later than 7 days prior to the iptc (see Entry for other details). Signed by Judge Jane Magnus-Stinson on 2/5/2010.(SWM) (Entered: 02/05/2010)
52 ANSWER to 47 Amended Complaint, filed by JAMES W. PAYNE.(Christoff, David) (Entered: 02/16/2010)
53 NOTICE OF APPEAL as to 49 Entry, 48 Order, filed by Defendant JAMES W. PAYNE. (Christoff, David) (Entered: 02/18/2010)
54 DOCKETING STATEMENT by JAMES W. PAYNE re 53 Notice of Appeal (Christoff, David) (Entered: 02/18/2010)
55 SEVENTH CIRCUIT APPEAL INFORMATION SHEET re 53 Notice of Appeal - Instructions for Attorneys - Parties' Short Record, Instructions, and Designation of Record information attached. (TMA) (Entered: 02/18/2010)
56 Transmission of Notice of Appeal and Docket Sheet to US Court of Appeals re 53 Notice of Appeal. - for Court of Appeals Use Only. (TMA) (Entered: 02/18/2010)
57 USCA Appeal Fees received $ 455 receipt number IP16834 re 53 Notice of Appeal filed by JAMES W. PAYNE. (cc: USCA) (TMA) (Entered: 02/19/2010)
58 USCA Case Number 10-1394 for 53 Notice of Appeal filed by JAMES W. PAYNE. (Attachments: # 1 Circuit Rule 3(b) Notice)(TMA) (Entered: 02/19/2010)
59 NOTICE of FILING of OFFICIAL TRANSCRIPT of Proceedings held before Judge Sarah Evans Barker on 01/20/2010. (Howie-Walters, Laura) (Entered: 02/25/2010)
60 TRANSCRIPT of Proceedings held on 01/20/2010, before Judge Sarah Evans Barker. Court Reporter/Transcriber Laura Howie-Walters, Telephone number (317) 632-3422. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.. Redaction Statement due 3/18/2010. Release of Transcript Restriction set for 5/26/2010. (Howie-Walters, Laura) Released on 5/26/2010 (LBK). (Entered: 02/25/2010)
61 DESIGNATION of Record on Appeal by C.W., A. H., B. H., C. H., R.

03/05/2010 03/05/2010 03/18/2010 03/18/2010 03/19/2010 03/29/2010
04/06/2010

H., R. H.(on thier own behalf and on behalf of those similarly situated), S. H.(#2), S. H.(#1), H.K., IARCCA, an Association of Children and Family Services ("IARCCA"), J. J.(#3, minor children by their next friends), J. J.(#1), J. J.(#2), JAMES W. PAYNE, D. S., J. S., N. M. S., N. J. S., T. S., S.D. re 53 Notice of Appeal (Attachments: # 1 Exhibit A Civil Docket for 1:09cv1574, # 2 Exhibit B - Civil Docket for 1:09cv1580)(Isenberg, Betsy) (Entered: 02/26/2010)
62 MOTION to Stay of Preliminary Injunction, filed by Defendant JAMES W. PAYNE. (Attachments: # 1 Affidavit of James W. Payne, # 2 Affidavit of Lisa Rich)(Hutton, James) (Entered: 03/05/2010)
63 BRIEF/MEMORANDUM in Support re 62 MOTION to Stay of Preliminary Injunction, filed by Defendant JAMES W. PAYNE. (Hutton, James) (Entered: 03/05/2010)
64 RESPONSE in Opposition re 62 MOTION to Stay of Preliminary Injunction, filed by Plaintiffs C.W., A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., H.K., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S., S.D.. (Falk, Kenneth) (Entered: 03/18/2010)
66 SCHEDULING ENTRY: The Court hereby converts the initial pretrial currently set for April 6, 2010 is now moved from 9:00 a.m. to 8:30 a.m. and converted to a status conference to address case status and case disposition. A client representative with settlement authority is required to attend in person. Signed by Judge Jane Magnus-Stinson on 3/18/2010.(SWM) (Entered: 03/19/2010)
65 RESPONSE in Opposition re 62 MOTION to Stay of Preliminary Injunction, filed by Plaintiff IARCCA, an Association of Children and Family Services ("IARCCA"). (Attachments: # 1 Exhibit Excerpts from Public Law 182)(Sellers, April) (Entered: 03/19/2010)
67 ENTRY for 3/29/2010: The magistrate judge has been advised that the parties have been involved in settlement discussions at the 7th Circuit, and does not wish to interfere with that process or cause unnecessary duplication of effort. Accordingly, the parties shall submit - not file - a joint report concerning the progress of those discussions, and the parties positions whether the conference set for April 6 should be reset as a status conference only, or whether continued discussions concerning settlement should be held. Issued by Judge Jane Magnus-Stinson on 3/29/2010.(SWM) (Entered: 03/30/2010)
68 Minute Entry for proceedings held before Judge Jane Magnus-Stinson: Status Conference held on 4/6/2010. The status and development of the action were discussed, and as a result of this conference the following Entry is made pursuant to Rule 16(d) of the Federal Rules of Civil Procedure. The magistrate judge and the parties discussed the case status

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05/11/2010
05/18/2010 05/27/2010 06/16/2010 11/19/2010

generally, and the potential for agreed resolution specifically. Outstanding discovery was also discussed, and the parties were reminded of their obligations to use best efforts to resolve discovery disputes without Court involvement. Parties are to report the status of their negotiations to the magistrate judge by April 20, 2010. (SWM) (Entered: 04/07/2010)
69 SCHEDULING ENTRY: Settlement Conference set for 5/6/2010 01:00 PM in room #361 before Judge Jane Magnus-Stinson. Parties shall appear by counsel and in person and shall submit (not file) a confidential statement to the magistrate judge setting forth their respective settlement positions on or before May 4, 2010. Issued by Judge Jane MagnusStinson on 4/26/2010.(SWM) (Entered: 04/26/2010)
70 ENTRY FOR APRIL 29, 2010. The settlement conference set for May 6, 2010 is VACATED AND RESET for May 11, 2010, at 9:00 A.M. in Room 361, United States Courthouse, 46 E. Ohio Street, Indianapolis,Indiana. All deadlines and requirements set forth in the Courts order of April 26, 2010, docket number 69, setting the settlement conference remain in effect. Signed by Judge Jane Magnus-Stinson on 4/29/2010.(MRI) (Entered: 04/29/2010)
71 Minute Entry for proceedings held before Judge Jane Magnus-Stinson: Settlement Conference reconvened on 5/11/2010. Conference held and case is resolved as to the C.H. plaintiff class, not as to the IARCCA claims. IARRCA and Defendants remain in negotiations about long and short term issues, but defendants desire the litigation to proceed. Defendants motion to stay injunction [dkt. 62] is ripe for ruling. (MAC) (Entered: 05/12/2010)
72 Letter from Severns & Stinson, Attorneys at Law regarding referral for assistance of adoption issues. (MAC) (Entered: 05/18/2010)
73 ORDER denying defendants 62 Motion to Stay. Defendants Motion is MOOT with respect to C.H. group of plaintiffs and DENIES with respect to the IARCCA. Signed by Judge Sarah Evans Barker on 5/27/2010. (MAC) (Entered: 05/28/2010)
74 Reassignment of Case to Magistrate Judge Debra McVicker Lynch. Judge Jane Magnus-Stinson no longer assigned to the case. Please include the new case number (1:09-cv-1574-SEB-DML), which includes the initials of the newly assigned judge, on all future filings in this matter. (TMA) (Entered: 06/16/2010)
75 STIPULATION to Fully Settle Action Following Notice to the Class and Subject to Class Approval and Court Order Pursuant to Rule 23 of the Federal Rules of Civil Procedure, filed by Plaintiffs C.W., A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., H.K., J. J., J. J., J. J.,

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D. S., D. S., J. S., N. M. S., N. J. S., T. S., S.D.. (Falk, Kenneth) (Entered: 11/19/2010)
76 MOTION to Approve Form and Manner of Notice to the Class and Motion to Set Case for Fairness Hearing, filed by Plaintiffs C.W., A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., H.K., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S., S.D.. (Attachments: # 1 Text of Proposed Order, # 2 Proposed Class Notice)(Falk, Kenneth) (Entered: 11/19/2010)
77 ORDER GRANTING 76 Motion to Approve Form and Manner of Notice to the Class Action and Motion to Set for Fairness Hearing; SCHEDULING ORDER: Fairness Hearing set for 2/23/2011 10:00 AM in room #216, United States Courthouse, 46 E. Ohio Street, Indianapolis, Indiana before Judge Sarah Evans Barker. Therefore, the class notice attached the Motion shall be given to the class as follows: Posted notice in all offices of the Department of Child Services. In newspapers of general circulation in Indianapolis, Fort Wayne, Evansville, Gary, New Albany and Richmond. Futhermore that no earlier than 30 days following the initial posting and publication of the notice, plaintiffs' attorneys shall file their report with this Court as to the results of the class notice. Signed by Judge Sarah Evans Barker on 12/10/2010.(CKM) (Entered: 12/13/2010)
78 Reassignment of Case to Magistrate Judge Mark J. Dinsmore. Magistrate Judge Debra McVicker Lynch no longer assigned to the case. Please include the new case number (1:09-cv-1574-SEB-MJD), which includes the initials of the newly assigned judge, on all future filings in this matter. (JD) (Entered: 12/18/2010)
79 MOTION to Withdraw Appearance of James J. Hutton, filed by Defendant JAMES W. PAYNE. (Attachments: # 1 Text of Proposed Order)(Isenberg, Betsy) (Entered: 02/08/2011)
80 MOTION to Withdraw Appearance of David S. Christoff, filed by Defendant JAMES W. PAYNE. (Attachments: # 1 Text of Proposed Order)(Isenberg, Betsy) (Entered: 02/08/2011)
81 REPORT of Class Counsel in CH v. Payne Following Notice to the Class by C.W., A. H., B. H., C. H., R. H., R. H.(on thier own behalf and on behalf of those similarly situated), S. H.(#2), S. H.(#1), H.K., J. J.(#3, minor children by their next friends), J. J.(#1), J. J.(#2), D. S., J. S., N. M. S., N. J. S., T. S., S.D.. (Falk, Kenneth) (Entered: 02/08/2011)
82 Submission of Proposed Order, filed by Plaintiffs C.W., A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., H.K., J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S., S.D.. (Attachments: # 1 Text of Proposed Order)(Falk, Kenneth) (Entered: 02/09/2011)

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02/25/2011

83 ORDER GRANTING 79 Motion to Withdraw Appearance of James J. Hutton. IT IS, THEREFORE, ORDERED by the Court that the appearance of James J. Hutton be withdrawn and that Deputy Attorney General Betsy M. Isenberg, continue to represent the Defendants and their interests. Signed by Judge Sarah Evans Barker on 2/9/2011. (CKM) (Entered: 02/09/2011)
84 ORDER GRANTING 80 Motion to Withdraw Appreance of David S. Christoff. IT IS, THEREFORE, ORDERED by the Court that the appearance of David S. Christoff be withdrawn and that Deputy Attorney General Betsy M. Isenberg, continue torepresent the Defendants and their interests. Signed by Judge Sarah Evans Barker on 2/9/2011. (CKM) (Entered: 02/09/2011)
85 STIPULATION of Dismissal, filed by Plaintiffs C.W., A. H., B. H., C. H., C. H., C. H., R. H., R. H., R. H., S. H., S. H., H.K., IARCCA, an Association of Children and Family Services ("IARCCA"), J. J., J. J., J. J., D. S., D. S., J. S., N. M. S., N. J. S., T. S., S.D., Defendant JAMES W. PAYNE. (Laramore, Jon) (Entered: 02/24/2011)
86 Minute Entry for proceedings held before Judge Sarah Evans Barker on 2/23/2011. On February 23, 2011, the parties appeared by counsel for a hearing, in accordance with Fed.R. Civ. P. 23(e), for the Court to consider the proposed settlement of the claims brought by the C.H. plaintiffs against James W. Payne. The Court found that the proposed settlement was fair, reasonable, and adequate pursuant to Rule 23(e) and that approval of the parties settlement was therefore appropriate. A separate order will issue. (Court Reporter Laura Howie-Walters.) (MAC) (Entered: 02/28/2011)
87 ORDER Approving re 75 Stipulation between parties in C.H. v. PAYNE. as fair, reasonable and adequate pursuant to Rule 23(e) of the Fed.R.Civ.P. and Dismissing the action pursuant to the Stipulation.This case shall be dismissed with prejudice, subject to the terms of the Stipulation, as soon as defendant files with the Court proof that the pending appeal in the Seventh Circuit has been dismissed and this Order shall be deemed to be immediately effective as of that date (S.O.) Signed by Judge Sarah Evans Barker on 2/25/2011. (MAC) (Entered: 02/28/2011)
88 ORDER Approving re 85 Stipulation of Dismissal. The parties hereby stipulate, and this Court hereby orders, that the claims brought by IARCCA against DCS in this lawsuit including, without limitation, those claims made in paragraphs 13 through 38 of IARCCA's Verified Complaint for Declaratory and Injunctive Relief ("Complaint") are dismissed without prejudice and that the claims made in the Complaint cannot be reopened, subject to the provisions of Paragraph 2 above.

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(S.O.) Signed by Judge Sarah Evans Barker on 2/25/2011.(MAC) (Entered: 02/28/2011)

89 MANDATE of USCA as to 53 Notice of Appeal filed by JAMES W.

HU

UH

HU

UH

PAYNE - Upon consideration of the motion to dismiss case pursuant to

FRAP 42(b), filed by counsel for the appellants on February 28, 2011 IT

IS ORDERED that this case is DISMISSED, pursuant to Federal Rule of

Appellate Procedure 42(b). (No record to be returned.) (TMA) (Entered:

03/01/2011)

90 NOTICE Regarding Dismissal of Appeal, filed by Defendant JAMES W.

HU

UH

PAYNE (Isenberg, Betsy) (Entered: 03/02/2011)

Case #: 1:09-cv-01574-SEB-MJD