Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_99-cv-00355/USCOURTS-caed-2_99-cv-00355-3/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 05:702 Administrative Procedure Act

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

 

STATE OF CALIFORNIA,

DEPARTMENT OF SOCIAL SERVICES

and 

ENEDINA ROSALES 

NO. CIV. S-99-0355 FCD JFM 

Plaintiffs,

v. MEMORANDUM AND ORDER

MIKE LEAVITT, SECRETARY OF

HEALTH AND HUMAN SERVICES

Defendant.

----oo0oo----

This matter is before the court on plaintiff’s State of

California, Department of Social Services (“DSS”) and defendant’s

Michael Leavitt, Secretary of Health and Human Services

(“Secretary”) motions for relief from judgment pursuant to Rule

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1 All further references to a “Rule” are to the Federal

Rules of Civil Procedure.

2 In 1996, Congress repealed AFDC as a separate program

and enacted, in its place, the Personal Responsibility and Work

Opportunity Reconciliation Act, Pub. L. No. 104-193 (“Welfare

Reform Act”). Title IV-E still incorporates the AFDC eligibility

requirements as they existed prior to the enactment of the

Welfare Reform Act, however. Thus, for the sake of consistency,

this Order shall refer to 42 U.S.C. § 672 as it was worded in

1996, prior to the repeal of AFDC.

2

60(b) of the Federal Rules of Civil Procedure.1 Plaintiffintervenor Enedina Rosales (“Rosales”) and various individuals

claiming to be protected by this court’s prior order (“Movants”)

have filed cross motions to enforce judgment pursuant to Rule 71. 

The court heard oral argument on the motion on June 16, 2006 and

announced from the bench its decisions to grant the motions for

relief for judgment and to grant in part and deny in part the

motions to enforce judgment. By this order, the court

memorializes its reasons for the decisions, previously stated on

the record at the hearing. 

FACTUAL AND PROCEDURAL BACKGROUND

This case concerns eligibility for benefits under the

federal-state Aid to Families with Dependent Children-Foster Care

Program (“AFDC-FC”). The AFDC-FC Program, enacted as Title IV-E

of the Social Security Act, provides funds to assist with certain

costs of foster care for dependent children. See 42 U.S.C.

§§ 672, 674, 675(4)(A).2 The program is jointly funded by the

federal and state governments, and the funds are disseminated by

state agencies. See id. §§ 670-72, 674. To receive matching

funds, states must have a foster care plan in place that meets

federal requirements and disburses funds in accordance with that

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3 Section 672(a) provides as follows: “Each State with a

plan approved under [AFDC] shall make foster care maintenance

payments . . . with respect to a child who would meet the

requirements of [the AFDC program] but for his removal from the

home of a relative . . . if–

. . .

(4) such child–

(A) received aid under the State plan . . . in or

for the month in which [a voluntary placement]

agreement was entered into or court proceedings leading

(continued...)

3

plan. See id. § 671(a). If the state plan complies with the

mandatory federal requirements, the Secretary must approve the

plan. See id. § 671(b). 

The California Department of Social Services has a

federally-approved foster care plan, and disseminates federal and

state funds under that plan. The State’s approved plan provides

that, to be eligible for AFDC-FC, a child must have been eligible

for AFDC with the parent or relative from whom she was removed. 

(See Pltf’s Complaint for Review of Admin. Action, filed Feb. 24,

1999, Ex. 1 (hereinafter “Complaint”)). Thus, if the child was

ineligible for AFDC benefits in the home of removal, she will

remain ineligible for AFDC-FC benefits in the foster home, even

if she would otherwise be eligible for AFDC in the foster home.

The Land v. Anderson Decision

On May 20, 1997, the California Court of Appeal, Second

District, issued a decision in Capitola Land, et al. v. Anderson,

55 Cal. App. 4th 69 (1997). Pending before the Land court were

three separate cases granting writs of mandate, holding that the

DSS regulations implementing the AFDC-FC Program were contrary to

the plain meaning of Section 672(a).3 The DSS regulations

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(...continued)

to the removal of such child from the home were

initiated, or

(B) (I) would have received such aid in or for

such month if application had been made therefor, or

(ii) had been living with a relative . . . within six

months prior to the month in which such agreement was

entered into or such proceedings were initiated, and

would have received such aid in or for such month if in

such month he had been living with such a relative and

application therefor had been made.

42 U.S.C. § 672(a) (1996).

4

mirrored the Secretary’s interpretation of Section 672(a). Under

the Secretary’s interpretation of Section 672(a), AFDC “linkage”

is established if the child was eligible for AFDC in the home of

the parent during the month the petition for removal is filed,

and either (1) was living in the home of the parent or relative

from whom the child was removed; or (2) had been living with that

parent or relative within the six months prior to the filing of

the removal petition. However, if a child is living with a

relative other than the one from whom the child is being removed,

the child is ineligible for AFDC-FC payments if removal

proceedings are initiated more than six months after the date the

child is no longer living with the parent. 

The Land court concluded that AFDC linkage could be

established if the child was living with a relative, other than

the one from whom the child was removed, and was eligible for

AFDC in the home of that relative in the month the petition for

removal was filed. See Capitola Land, 55 Cal.App.4th at 84. 

Accordingly, it held that the DSS requirement violated the AFDCFC statute.

/////

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5

The State’s Response to Land

On December 23, 1997, DSS submitted a proposed State Plan

Amendment to HHS (“1997 Plan Amendment” or “Plan Amendment”). 

(See Complaint, Ex. 1). The proposed change consisted of an AllCounty Letter intended to implement the Land decision, along with

representations that DSS would subsequently amend and submit for

review its state regulations implementing Land. On February 10,

1998, DSS received notice from the regional office of HHS that

the Plan Amendment was being forwarded to the central office with

a recommendation that the Amendment be disapproved. (See id. Ex.

2). On April 3, 1998, the HHS regional administrator notified

DSS it was disapproving the Amendment. (See id. Ex. 3).

Appeal of HHS’ Disapproval of the State Plan Amendment

After being notified of HHS’ disapproval of the 1997 Plan

Amendment, DSS filed a petition for review directly with the

Ninth Circuit. On February 2, 1999, the Ninth Circuit dismissed

the appeal for lack of jurisdiction. See California v. Shalala,

166 F.3d 1019 (9th Cir. 1999). The court observed, however, that

a district court would have jurisdiction to review of the

Secretary’s actions pursuant to the Administrative Procedure Act,

5 U.S.C. §§ 701-06 (“APA”). See id. at 1020.

The Allen Case

On August 13, 1997, Linda Allen filed a petition for writ of

mandate in California state court, seeking to compel the State to

provide AFDC-FC benefits. See Linda Allen v. Eloise Anderson,

Case No. BS046627 (L.A. Cty. Sup. Ct., filed August 13, 1997). 

On February 23, 1998, DSS filed a cross-petition and crosscomplaint against the Secretary in order to secure matching funds

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4 Section 11402.1 states in relevant part:

“Notwithstanding any other provision of law, until and unless

federal financial participation is obtained, no payment of

AFDC-FC may be made from either state or county funds on behalf

of a child determined to be eligible for AFDC-FC solely as a

result of the decision of the California Court of Appeal in Land

v. Anderson (1997) 55 Cal. App. 4th 89.” 

6

for any payments it might be obligated to make due to court

order. The Secretary then removed the action to the district

court for the Central District of California. See Linda Allen v.

Eloise Anderson, Case No. 98-2128 CBM (C.D. Cal., filed May 1,

1998).

On October 5, 1998, the district court granted the

Secretary’s motion to dismiss the cross-claim and cross-petition. 

DSS filed a notice of appeal with the Ninth Circuit on December

4, 1998. The Ninth Circuit dismissed the appeal as moot on

October 13, 1999, in light of the August 21, 1998 enactment of

California Welfare and Institutions Code section 11402.1.4

The Litigation

The DSS, on behalf of the State of California, filed this

action on February 24, 1999, seeking administrative review of the

Secretary’s disapproval of the 1997 Plan Amendment. See 5 U.S.C.

§ 702. Enedina Rosales, a court-appointed foster parent for her

grandson, Anthony, intervened in this action by order filed June

24, 1999. 

On October 13, 1999, the parties stipulated to stay this

action during the pendency of the Allen appeal. On November 1,

1999, the parties notified this court of the outcome of the Allen

appeal, but requested that the stay continue, given DSS’s plan to

move to vacate the district court judgment in Allen. The DSS so

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moved, and on March 17, 2000, the motion to vacate was granted by

the Allen court. 

The parties then submitted a Joint Status Report on April 3,

2000, requesting that the stay be lifted in this matter. The

court approved the request, and re-calendared the Secretary’s

previously-filed motion to dismiss. Subsequently, on April 14,

2000, intervener filed a motion for summary judgment, in which

DSS joined. By order dated September 1, 2000, the court granted

the Secretary’s motion to dismiss, holding that “plaintiff and

intervener have not met their onerous burden of demonstrating

that the Secretary acted in an arbitrary and capricious manner in

denying approval of the State Plan Amendment based upon this

reasonable interpretation of section 672(a).” (September 1, 2000

Memorandum and Order Granting Secretary’s Motion to Dismiss at

12.) DSS did not appeal the court’s decision, but intervener

Rosales filed a timely appeal. 

The Ninth Circuit Remand Order

The Ninth Circuit reversed the court’s order granting the

Secretary’s motion to dismiss holding that “the Secretary’s

proffered interpretation is by every measure unreasonable: it is

inconsistent with the statutory language as construed in light of

[prior Supreme Court decisions]; it has no support in the

legislative history; and it undermines the statutory protections

for foster children that Congress intended to provide.” 

CDSS/Rosales v. Thompson, 321 F.3d 835, 856-857 (9th Cir. 2003). 

The court then remanded the action “for a determination of what

relief to grant Ms. Rosales consistent with this opinion.” Id.

at 857.

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5 The Ninth Circuit stated in its opinion that “[t]his

remand will . . . give an opportunity for the State of California

to reenter the litigation should it choose to do so and express

its view on the appropriate form of relief.” CDSS/Rosales, 321

F.3d at 857.

8

The Post Remand Proceedings

 Shortly after the Ninth Circuit issued its decision in

CDSS/Rosales, DSS informed the court that it wished to reenter

the litigation.5 By order dated February 20, 2004, the court

ordered DSS and the Secretary to pay retroactive AFDC-FC benefits

to Rosales and similarly situated relative foster care families

who were denied benefits as a result of the Secretary’s erroneous

interpretation of Section 672(a). 

Subsequently, based upon the lack of progress made in

implementing the court’s order, Rosales filed a motion to compel

performance of the Secretary. DSS also filed a motion to amend

the February 2004 order to extend the date by which DSS was

required to issue an All County Letter (“ACL”) informing county

welfare departments and other affected agencies of the procedures

and time line for implementing the court’s order within 90 days

of the court’s order. On August 17, 2004, the court issued an

Amended Order, directing the Secretary to approve the State Plan

Amendment submitted by DSS as of December 23, 1997 and directing

DSS to make AFDC-FC payments for the entire period, subsequent to

December 23, 1997 in which the child was entitled to AFDC-FC

payments under CDSS/Rosales, and was otherwise eligible for such

benefits and those payments were not paid. The court also

ordered that DSS issue an ACL to all County Welfare Departments

and Chief Probation Officers to review all foster care cases open

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9

on or after March 3, 2003 to determine eligibility in accordance

with CDSS/Rosales and consistent with the court’s order.

The Deficit Reduction Act

On February 8, 2006 Congress enacted the Deficit Reduction

Act (“DRA”), amending the language of 42 U.S.C. § 672. The DRA

modifies Title IV-E’s reference to AFDC-DC eligibility, providing

that a State must pay benefits on behalf of a child removed from

the home of a relative if, among other things, the child would

have been eligible for AFDC benefits “while in the home.” 42

U.S.C. § 672(a) (West 2006). This modification of § 672(a)

reinstated the Secretary’s original interpretation of § 672,

limiting payment of benefits to children who were eligible for

AFDC with the parent or relative from whom they were removed. 

The House Report and Conference Report explaining the revisions

to § 672(a) in the DRA declared that the amendments are in direct

response to the Ninth Circuit’s decision in CDSS/Rosales and

effectively nullify the decision. H.R. Conf. Rep. No. 109-362,

at 364 (2005); H.R. Rep. No. 109-276, at 967-68 (2005). 

On March 30, 2006, DSS issued an All County Letter to All

County Welfare Directors and Chief Probation Officers, providing

interim instructions for federal statutory changes to

CDSS/Rosales criteria. (Ex. A to Decl. of Glenn Freitas in Supp.

of DSS’ Mot. for Relief (“Freitas Decl.”), filed Apr. 13, 2006). 

The letter instructed counties to immediately cease basing new

eligibility decisions for foster care upon the CDSS/Rosales

criteria and base eligibility only on the home of the parent from

whom the child was removed. (Id.) The letter further instructed

counties to evaluate any case previously determined eligible for

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benefits under the CDSS/Rosales criteria as soon as possible. 

(Id.) However, the counties were directed to “‘track’ all

Rosales cases” until clarification was received from the court

and the HHS. (Id.)

On June 9, 2006, HHS issued an information memorandum to

state agencies administering Title IV-E of the Social Security

Act regarding the effect of the DRA. (Attachment 1 to Def.’s

Reply to Intervenor’s Opp’n to Mot. for Relief, filed June 9,

2006 (“Information Memo”)). In this memorandum, HHS set forth a

“phase-in” policy, whereby foster care maintenance payments

should be continued through the month of the child’s next annual

redetermination of eligibility. (Id.)

The Current Motions

On April 13, 2006, DSS filed its motion for relief from

judgment based upon the enactment of the DRA. On April 24, 2006,

by stipulation, the hearing on DSS’ motion was moved to June 2,

2006. On May 16, 2006, the Secretary filed his motion for relief

from judgment, noticing a hearing date of June 16, 2006. On May

19, Rosales and Movants filed their cross-motions to enforce the

judgment. In order to hear all matters relating to this issue at

once, the court moved the hearing on DSS’ motion for relief to

June 16, 2006. 

On June 16, 2006, this court held a hearing on the motions

and heard oral argument from the parties. After review of the

record, the materials submitted by the parties, and the arguments

made at the hearing, the court GRANTED DSS’ and the Secretary’s

motion for relief from judgment, effective June 9, 2006, and 

/////

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11

GRANTED in part and DENIED in part Rosales’ and Movant’s motions

to enforce judgment.

STANDARD

A. Rule 60

Rule 60(b) of the Federal Rules of Civil Procedure provides,

in relevant part, “[o]n motion and upon such terms as are just,

the court may relieve a party or a party’s legal representative

from a final judgment, order, or proceeding for . . . any []

reason justifying relief from the operation of judgment.” Fed.

R. Civ. Proc. 60(b) (West 2006). A party is bound “to obey an

order issued by the court with jurisdiction over the person and

subject matter unless and until that order is reversed by

appropriate judicial proceedings.” Class v. Norton, 507 F.2d

1058, 1060 (2d Cir. 1974) (citing Walker v. Birmingham, 388 U.S.

307 (1967). However, “[s]ound judicial discretion may call for

the modification of the terms of an injunctive decree is the

circumstances, whether of law or fact, . . . have changed.” Sys.

Fed’n No. 91, Ry. Employees’ Dep’t, AFL-CIO v. Wright, 364 U.S.

642, 647 (1961). The district court has wide discretion in

balancing the interests implicated by a motion for relief from

judgment under Rule 60. Id. at 647-48. However, this discretion

is not without limits. Id. at 648. Where new circumstances

involve a change in the law, not facts, the limits of this

discretion are more clear, and the court is required to respect

and enforce the change in the law. See Pennsylvania v. Wheeling

& Belmont Bridge Co., 59 U.S. (18 How.) 421 (1855); see also

Wright, 364 U.S. at 648; Norton, 507 F.2d at 1061-62.

///// 

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6 Rosales also argues that the issue is not ripe for

review because HHS had not issued formal instructions

interpreting the DRA. However, subsequent to the filing of

Rosales’ opposition, HHS issued its information memorandum,

instructing state agencies how to apply the DRA. As such, this

point is moot. 

12

B. Rule 71

Rule 71 permits a non-party to enforce an order of the court

in the same manner as a party if the order was made for the

benefit of such a non-party. Fed. R. Civ. P. 71 (West 2006). As

a preliminary matter, a court must first determine if the nonparty is a person or entity “in whose favor” an order has been

entered. Dunn v. N.Y. State Dep’t of Labor, 594 F. Supp. 239,

242 (S.D.N.Y. 1984). If the “in whose favor” threshold is met, a

non-party may invoke the jurisdiction of the federal court to

“render such orders as may be necessary to effectuate and prevent

the frustration of orders it has previously issued.” Id.

(quoting U.S v. N.Y. Telephone Co., 434 U.S. 159, 172 (1977)). 

ANALYSIS

A. Motion for Relief from Judgment

DSS and the Secretary seek relief from this court’s

judgment, arguing that the enactment of the DRA clearly evinced

Congress’ intent to nullify the Ninth Circuit’s holding regarding

the interpretation of § 672(a) in CDSS/Rosales. Rosales argues

that the motions should not be granted because the DRA is

constitutionally invalid due to Congress’ failure to comply with

the bicameral requirement.6 Further, to the extent that the DRA

necessitates relief from judgment, Rosales argues that the relief 

should be purely prospective in nature, and take effect only from

the date of this court’s order granting relief under Rule 60(b).

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1. Validity of the Deficit Reduction Act

Rosales argues that relief from judgment should not be

granted because the DRA is constitutionally invalid. 

Specifically, Rosales argues that the DRA does not comply with

the Presentment Clause of the United States Constitution, Art. 1

section 7, because the DRA was not passed in identical form by

the House of Representatives and the Senate.

In the Fall of 2005, the House and the Senate passed

different versions of a budget bill. To reconcile the

differences between the two bills, the legislation was sent to a

House-Senate Conference Committee, where it was modified. On

December 19, 2005, the Housed passed the bill as agreed upon by

conference report. On December 21, 2005, the Senate passed an

amended version of the conference report. In the course of

transmitting the amended version of the bill to the House, a

change was made to section 5101 of the bill, altering the

duration of the Medicare payments for certain durable medical

equipment from 13 months to 36 months. On February 1, 2006, the

House passed the amended bill, with the 36 month duration on

Medicare payments. Subsequently, the legislation passed by the

House was altered to reflect the 13 month duration on Medicare

payments, as passed in the Senate. On February 8, 2006,

President Bush signed the bill that was passed by the Senate, but

not by the House. Therefore, the Senate passed and the President

signed a bill reflecting a 13 month duration on Medicare 

payments, and the House passed a bill reflecting a 36 month

duration on Medicare payments.

/////

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The Secretary argues that, under the “enrolled bill rule”

set forth in Marshall Field & Co. v. Clark, 143 U.S. 649 (1892),

the DRA is valid. In Marshall Field, the Supreme Court addressed

the validity of the Tariff Act of 1890. 143 U.S. at 667. 

Plaintiffs argued that the legislation was not valid and could

not be applied because the enrolled version of the bill was not

the same version which had been before the House and the Senate. 

Id. at 668-69. However, the Speaker of the House of

Representatives and the President of the Senate had signed the

enrolled bill. Id. at 668. The Supreme Court held that these

signatures constituted “an official attestation by the two houses

of such bill as one that has passed Congress.” Id. at 672. 

Accordingly, the Court further held that “[t]he respect due to

coequal an independent departments requires the judicial

department to act upon that assurance, and to accept, as having

passed congress, all bills authenticated in [this] manner . . .

.” Id.

In this case, in approving the Deficit Reduction Act, the

President signed the bill that had been duly enrolled and

authenticated by both the Speaker of the House, Dennis Hastert,

and the President Pro Tempore of the Senate, Theodore F. Stevens. 

(Attachment 2 to Def.’s Reply to Intervenor’s Opp’n to Mot. for

Relief, filed June 9, 2006). Pursuant to the Supreme Court’s

ruling in Marshall Field, the “authentication [of an Act] as a

bill that has passed congress should be deemed complete and

unimpeachable.” Marshall Field, 143 U.S. at 672. As such, the

court is required to rely on the attestations of the Speaker of

the House and the President Pro Tempore of the Senate that a bill

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7 Rosales relies on United States v. Munoz-Flores, 495

U.S. 385 (1990) to support her argument that the DRA is

constitutionally invalid. However, the facts of Munoz-Flores are

distinguishable from the facts of this case. In Munoz-Flores,

the Court assessed the validity of the Victims of Crime Act where

defendant argued that it violated the Origination Clause. Id. at

387. However, the alleged constitutional issues were clear from

the face of the enacted legislation because the bill had

originated from the Senate, not the House. Therefore, the Court

reviewed the constitutionality of the congressional enactment,

not procedural irregularities prior to enactment. Id. at 391. 

15

has been enacted by both houses of Congress. Therefore, for the

purposes of these motions, the Court must recognize the DRA as a

valid and operable legislation.7 See also, United States v.

Pabon-Cruz, 391 F.3d 86, 99 (2d Cir. 2004); United States v.

Thomas, 788 F.2d 1250, 1253 (7th Cir. 1986); Cherry v. Steiner,

716 F.2d 687 (9th Cir. 1983) (“The enrolled bill doctrine is

intended to forestall judicial inquiry into procedural

irregularities occurring prior to the enactment of bills . . .

.”). 

2. Terms of Relief

The Secretary and DSS assert that the provisions modifying

the the terms of AFDC-FC eligibility in the DRA should be applied

prospectively from the date of the enactment of the legislation,

February 8, 2006. Rosales argues that the modified eligibility

criteria should not be applied until this court issues its order,

granting the Secretary and DSS’ relief from judgment.

Rule 60(b) provides that the court may relieve a party from

judgment “upon such terms as are just.” The unique circumstances

and procedural posture of this case require that the court

consider the important, and, in some cases, competing interests

that are affected by the parties’ motions. The law is clear that

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a party is not relieved from judgment until this court or an

Article III appellate court grants such relief. Walker, 388 U.S.

307. Respect for the judiciary and judicial orders requires that

parties comply with a court’s decision and orders until the court

issues orders to the contrary. However, Congress clearly set

forth its intent, through the enactment of the DRA, that the

Ninth Circuit’s interpretation of § 672(a) in CDSS/Rosales is no

longer applicable. The Secretary has a compelling interest in

ensuring that this Congressional intent is implemented in timely

manner by the states. DSS has an important interest in ensuring

that it is complying with federal law in order to receive

reimbursement at the federal participation rate. Rosales has an

important interest in enforcing the court’s judgment for so long

as it remains the applicable law.

The DRA was enacted on February 8, 2006. The language

relating to eligibility for AFDC-FC benefits made clear that the

requirements had changed from the Ninth Circuit’s findings in

CDSS/Rosales. However, the DRA was silent on how HHS or state

agencies should interpret this change in the language and on hoe

state agencies should implement this change into their plans

which need approval by the Secretary. There is no evidence

submitted to the court that HHS issued any guidance to DSS

regarding implementation procedures. Nevertheless, on March 30,

2006, DSS instructed counties to immediately cease basing new

eligibility decisions for foster care upon the CDSS/Rosales

criteria and to evaluate any case previously determined eligible

for benefits under the CDSS/Rosales criteria as soon as possible. 

With the issuance of this letter, DSS effectively instructed

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counties to disregard this court’s prior orders. On April 13,

2006, more than two months after enactment of the DRA and after

instructing non-compliance with the court’s orders, DSS filed its

motion for relief from judgment pursuant to Rule 60, and then

stipulated to a hearing date on June 2, 2006. On May 16, 2006,

more than three months after enactment of the DRA, the Secretary

filed his motion for relief from judgment, noticing the motion

for hearing on June 16, 2006. On June 9, 2006, HHS issued an

information memorandum, setting forth a “phase-in” policy for

implementing the DRA’s modification in AFDC-FC eligibility,

whereby foster care maintenance payments should continue through

the month of the child’s next annual redetermination of

eligibility. 

After review of the record and the materials submitted by

the parties, and after consideration of the interests involved in

and affected by this litigation, the court finds that relief from

judgment on “just terms” requires that relief be granted from

June 9, 2006, when the formal information memorandum was issued

by HHS, instructing state agencies how the language of the DRA

was to be implemented. Principles of judicial comity require

that the court’s order be respected and complied with until

lifted. Parties cannot choose when and how they will comply with

a court order. To the extent that DSS and the Secretary desired

to be relieved from judgment on the date of enactment of the DRA,

they could have filed a motion earlier and moved for an expedited

briefing schedule. However, such was not the case in this

litigation.

///// 

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Further, pursuant to the relevant statutory regime, the

State and DSS need guidance and approval of the Secretary

regarding the State Plan. The court will not issue an order that

requires the State and DSS to self-interpret legislation, in this

case the DRA, without guidance from the Secretary. Based upon

the evidence submitted to the court, DSS had no knowledge of HSS’

“phase-in” policy and cannot be expected to anticipate the

Secretary’s implementation policy before HHS issues any formal

guidance. 

As of June 9, 2006, with the issuance of the information

memorandum, it was clear to DSS that the Secretary’s policy

pursuant to the enactment was to no longer reimburse payments

made to ineligible CDSS/Rosales applicants and that such payments

should stop after the month of the child’s next annual

redetermination of eligibility. Therefore, DSS’ and the

Secretary’s motion for relief from judgment is GRANTED, effective

June 9, 2006. 

B. Motion to Enforce Judgment

Rosales and various individual Movants bring cross-motions

to enforce the court’s August 17, 2004 judgment. Specifically,

Rosales and Movants move to enforce the court-ordered review of

open foster care cases to determine eligibility for benefits

pursuant to CDSS/Rosales. 

As a preliminary matter, DSS and the Secretary argue that

Movants do not have standing to bring a motion to enforce

judgment pursuant to Rule 71. Rule 71 provides that “[w]hen an

order is made in favor of a person who is not a party to the

action, that person my enforce obedience to the order by the same

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process as if a party.” The court’s August 17, 2004 order

provided that DSS was to issue an All County Letter, directing

the appropriate parties to review all foster care cases open on

or after March 3, 2003 to determine eligibility in accordance

with CDSS/Rosales. In this case, the declarations and materials

submitted by Movants demonstrate that all Movants had foster care

cases open on or after March 3, 2003. (See Decl. of Marjorie

Shelvy in Supp. of Mot. to Enforce J. (“Shelvy Decl.”), filed May

19, 2006; Req. for Judicial Notice, filed May 19, 2006). 

Therefore, the court’s August 17, 2004 order was made in favor of

Movants, and they have standing to move to enforce the courtordered review pursuant to Rule 71. 

Rosales and Movants argue that DSS has failed to comply with

the court’s order because it has failed to conduct the courtordered review and, consequentially, failed to pay out benefits

to CDSS/Rosales-eligible applicants. 

As evidence of the failure to comply, Rosales and Movants

assert that DSS did not issue any Notice of Action letters

(“NOAs”) to applicants that were denied benefits after a review

for eligibility under the interpretation of § 672(a) set forth in

CDSS/Rosales. The court’s August 17, 2004 order did not

explicitly require DSS to issue NOAs. Rosales and Movants argue

that State regulations, namely § 22-071 of the Manual of Policies

and Procedures (“MPP”), require the issuance of NOAs after the

denial of benefits. However, it is DSS’ position that MPP § 22-

071 does not require notice when there is no change in a child’s

foster care benefits. (Ex. F to Shelvy Decl.). The court’s

August 17, 2004 order also did not direct DSS to re-evaluate its

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policies and the interpretation of MPP § 22-071. Nor is this

issue properly before the court. Therefore, DSS’ failure to

issue NOAs after the court-ordered review was not required by the

court’s prior order, nor is it evidence that DSS or the counties

failed to follow the court order.

As other evidence of the failure to comply, Rosales and

Movants point to the denial of benefits in each of their

individual cases. The court has reviewed the submissions of

Rosales and Movants. In the cases of Movants Deegan, Jefferson,

and Spencer, the materials submitted indicate that the child was

not entitled to AFDC-FC benefits because there is no indication,

and in some cases contrary assertions, that the child was living

with the Movant relative prior to removal. In the cases of

Rosales and Movants Larry and Brenda Buggs, the evidence

submitted is insufficient to determine whether the parties are

eligible for AFDC-FC benefits. Further, even if DSS wrongly

denied AFDC-FC benefits in two or potentially five individual

cases, this showing is insufficient to demonstrate that DSS has

failed to comply with the court’s August 17, 2004 order. 

Further, to the extent that Rosales and Movants disagree with the

county’s denial of benefits, there are administrative remedies

available to adequately address these claims. See MPP § 22-078.

Therefore, because neither Rosales nor Movants have provided

any evidence that DSS has not complied with the court’s order

prior to March 30, 2006, the cross-motions to enforce judgment

are DENIED in part. However, evidence has been presented that

DSS effectively disregarded the court’s order through it March

30, 2006 letter, instructing counties to immediately cease basing

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new eligibility decisions for foster care upon the CDSS/Rosales

criteria and to evaluate any case previously determined eligible

for benefits under the CDSS/Rosales criteria as soon as possible. 

DSS had not been relieved of the court’s August 17, 2004 order at

the time this letter was issued, and, as set forth above, DSS has

only been relieved from judgment effective June 9, 2006. 

Accordingly, Rosales and Movants motions are also GRANTED in

part.

CONCLUSION

For the reasons stated above, the court makes the following

orders:

(1) The Court GRANTS DSS’ and the Secretary’s motions for

relief from judgment pursuant to Rule 60(b)(6) of the

Federal Rules of Civil Procedure. The court finds that

relief from judgment on “just” terms requires that

relief be granted from June 9, 2006, when a formal

information memo was issued by Health and Human

Services (“HHS”), instructing state agencies, including

DSS, how the language of the DRA was to be implemented. 

As such, relief from judgment is effective June 9,

2006.

(2) The Court GRANTS in part and DENIES in part Rosales’

and Movants’ motions to enforce judgment. Because

neither Rosales nor Movants have provided any evidence

that DSS has not complied with the court’s order prior

to March 30, 2006, the motions to enforce judgment are

DENIED in part. However, because evidence has been

presented that DSS instructed counties to effectively

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disregard the court’s order through the March 30, 2006

letter, the motions are GRANTED in part. Therefore,

the court orders:

(a) DSS shall make AFDC-FC payments from March 30,

2006 through June 9, 2006, for those cases in

which the child was entitled to AFDC-FC payments

under CDSS/Rosales v. Thompson, 321 F.3d 835 (9th

Cir. 2003), and was otherwise eligible for such

benefits and those payments were not paid.

(b) The Secretary shall reimburse DSS, and the State

of California, at the federal participation rate,

for all AFDC-FC benefits paid by DSS pursuant to

the approved Title IV-E AFDC-FC State Plan

Amendment and this court’s prior order which

remained effective until June 9, 2006.

IT IS SO ORDERED.

DATED: July 17, 2006

/s/ Frank C. Damrell Jr. 

FRANK C. DAMRELL, Jr.

UNITED STATES DISTRICT JUDGE

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