Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-04095/USCOURTS-cand-3_06-cv-04095-8/pdf.json

Nature of Suit Code: 444
Nature of Suit: Civil Rights Welfare
Cause of Action: 42:1983 Civil Rights Act

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CALIFORNIA ALLIANCE OF CHILD AND

FAMILY SERVICES,

Plaintiff,

 v.

CLIFF ALLENBY, Interim Director of the

California Department of Social Services, in

his official capacity; MARY AULT, Deputy

Director of the Children and Family Services

Division of the California Department of Social

Services, in her official capacity,

Defendants. /

No. C 06-4095 MHP

MEMORANDUM & ORDER

Re: Defendants’ Request for an Amended

Judgment 

On February 24, 2010, this court issued a judgment in this action. Docket No. 92

(Judgment). Two days later, counsel for defendants requested that the court modify the judgment. 

Docket No. 93 (Request). The court treats this request as a motion to amend the judgment under

Federal Rule of Civil Procedure 59(e). The court sought further briefing from the parties, and the

parties complied. See Docket Nos. 98, 101, 103. Having considered the parties’ arguments and

submissions and for the reasons stated below, the court enters the following memorandum and order.

DISCUSSION

California Welfare and Institutions Code section 11462(m) requires the California

Department of Social Services (“CDSS”) to annually submit a list to the California Legislature

specifying new group home requirements and industrywide increases in costs. The subsection

states:

(m) The department shall, by October 1 of each year, commencing October 1, 1992,

provide the Joint Legislative Budget Committee with a list of any new departmental

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United States District Court

For the Northern District of California

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requirements established during the previous fiscal year concerning the operation of

group homes, and of any unusual, industrywide increase in costs associated with the

provision of group care that may have significant fiscal impact on providers of group

homes care. The committee may, in fiscal year 1993-94 and beyond, use the list to

determine whether an appropriation for rate adjustments is needed in the subsequent

fiscal year.

The subsection allows, but does not require, the legislature to use this list to determine rate

adjustments for group care providers.

The court’s February 24, 2010 judgment, however, relies upon section 11462(m) to require,

to the extent not already incorporated through the California Necessities Index (“CNI”), that costs

reported in this list be included when group care rates are adjusted. It states, in paragraph 4(d), that:

The standardized schedule of rates shall be adjusted annually, no later than the first

day of the State’s fiscal year, July 1, to reflect, as described at California Welfare and

Institutions Code section 11462(m), ‘any new departmental requirements established

during the previous fiscal year concerning the operation of group homes, and of any

unusual, industrywide increase in costs associated with the provision of group care

that may have significant fiscal impact on providers of group homes care,’ to the

extent that the additional costs of such new departmental requirements and

industrywide increase in costs are excluded from the CNI calculations.

Defendants correctly claim that Welfare and Institutions Code section 11462(m) is not part of

the Rate Classification Level (“RCL”) methodology, and consequently, need not be considered when

the standardized schedule of rates is set. Welfare & Institutions Code section 11462(m) is simply a

reporting requirement regarding expenses which may or may not be reflected in the CNI, and does

not require that the enumerated expenses be incorporated into the RCL. Indeed, plaintiff agrees that

“[s]ection 11462(m) requires the Department of Social Services to report to the Legislature increases

in certain costs that are not reflected in the California Necessities Index (“CNI”), and thus provides a

way for the Legislature to adjust rates to account for such increased costs.” Docket No. 101

(Opposition) at 1:4-7. There is no requirement that this list, created for the convenience of the

legislature, be incorporated into the RCL.

The composition of costs included in the RCL is not at issue here. According to the Ninth

Circuit, “Alliance accepts the State’s system for calculating costs to be covered, but takes issue with

the State’s underfunding of foster care maintenance payments as a result of having failed to adjust

the standardized schedule of rates by an amount equal to the CNI since 2001.” California Alliance

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of Child & Family Servs. v. Allenby, 589 F.3d 1017, 1019 (9th Cir. 2009). The Ninth Circuit

recognized that “Alliance does not contend that the State must cover every dime spent on the care of

foster children. Rather, its position is that the State is not paying the amount the State itself treats as

costs—that is, the RCL as adjusted each year in accordance with the CNI—and this is what falls

short of complying with the CWA.” Id. at 1022. There is no evidence here that California has

determined that new group home requirements or industrywide cost increases necessitate a rate

adjustment. In other words, the State has yet to find these expenses to be reimbursable. Thus, the

RCL need not necessarily be adjusted based on these expenses. The Ninth Circuit’s decision

specifically does not require the State to cover every dime spent on the care of foster children;

instead, the State is only required to cover the expenses it has found to be reimbursable.

Plaintiff contends that without reference to section 11462(m), the State could impose “new

requirements with new costs on group homes in the future” without adjusting the RCL. Opposition

at 2:21-24. This amorphous future possibility is not yet ripe for review. Moreover, the State is not

required to cover all actual costs borne by foster care providers. The Ninth Circuit has found that

even though “the State’s definition of covered items for foster care maintenance payments does not

precisely mirror the federal statute,” the same “does not make it noncompliant.” Id. at 1023. “The

State’s plan generally tracks the federal definition of daily living expenses, making the State

substantially compliant.” Id. Plaintiff does not argue that the exclusion of expenses enumerated in

the list required by section 11462(m) make the State not substantially compliant with federal

requirements. In sum, section 11462(m) does not require that costs reported in this list be included

when the RCL is adjusted. Paragraph 4(d) of the February 24, 2010 judgment is stricken.

CONCLUSION

Paragraph 4(d) of the judgment entered on February 24, 2010 is stricken. An amended

judgment will be entered.

IT IS SO ORDERED.

Dated: April 30, 2010 

MARILYN HALL PATEL

United States District Court Judge

Northern District of California

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