Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-05-01985/USCOURTS-ca8-05-01985-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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1

The Honorable Thomas C. Mummert, III, United States Magistrate Judge for

the Eastern District of Missouri, sitting by consent of the parties. See 28 U.S.C.

§ 636(c); see also Fed. R. Civ. P. 73.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 05-1985

___________

*

Missouri Department of *

Social Services, *

*

Appellant, * Appeal from the United States

* District Court for the 

v. * Eastern District of Missouri.

*

Michael O. Leavitt, as Secretary of the *

United States Department of Health *

and Human Services, *

*

Appellee. *

___________

Submitted: November 15, 2005

Filed: June 2, 2006

___________

Before ARNOLD, BEAM, and RILEY, Circuit Judges.

___________

ARNOLD, Circuit Judge.

The Missouri Department of Social Services (DSS) appeals the order of the

district court,1

 granting summary judgment to the Secretary of the Department of

Health and Human Services (DHHS). We affirm.

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I.

DSS sought reimbursement under Title IV-E of the Social Security Act for

services performed by state juvenile officers. See Federal Payments for Foster Care

and Adoption Assistance, 42 U.S.C. §§ 670-679b. In Missouri, juvenile officers are

judicial employees, who are supervised by the juvenile court or circuit court judges.

Mo. Rev. Stat. § 211.351. They work in the state's child-protection system and

remove children from homes, file petitions in juvenile court, and help develop and

manage case plans as part of a family support team that includes DSS. See id.; Mo.

Rev. Stat. §§ 207.020.1(17), 211.401.

Under Title IV-E, states may receive federal financial participation "for the

provision of child placement services and for the proper and efficient administration"

of a state plan for foster care and adoption assistance. 42 U.S.C. § 674(a)(3). For

a state to receive payments under this program, it must designate a single state agency

(SSA) that will "administer, or supervise the administration of," the state plan.

42 U.S.C. § 671(a)(2); 45 C.F.R. §§ 205.100(a)(1)(i), 1355.20(p)(4). States may

receive federal financial assistance under Title IV-E for program-related services

performed by other state agencies under certain circumstances: The SSA must have

a written agreement with the other agency that details the services that the other

agency will provide and how it will bill for those services, 45 C.F.R. § 95.507(b)(6),

and the services cannot be performed by an agency that reviews the administrative

decisions of the SSA or otherwise substitutes its judgment for that of the SSA, see

45 C.F.R. § 205.100(b)(3).

Missouri has designated DSS as the state agency responsible for administering

its IV-E plan. Believing that it could secure federal funds for some of the

administrative activities of juvenile officers, DSS entered into an agreement with the

Office of the State Courts Administrator (OSCA), a judicial office that provides

Missouri courts with administrative and technical support. Under that agreement,

OSCA had each juvenile office participate in random-moment time studies to allow

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DSS to track what portion of the juvenile officers' time was eligible for

reimbursement. The agreement also provided that if a juvenile office was found to

have violated a state or federal regulation, OSCA would notify the juvenile office of

the violation, follow-up to determine whether the office took corrective action, and

then report back to DSS. If DSS determined that the juvenile office was still not

complying, it would not seek federal reimbursement for the office's activities until the

problem was resolved.

Shortly after the time studies were completed, DSS submitted claims for

juvenile officers' services to the Administration for Children and Family Services

(ACF) of the DHHS. The ACF denied the claims, and DSS appealed to the

Departmental Appeals Board (DAB). Before the DAB, DSS contended that the

agreement that it entered into with OSCA allowed it to claim federal financial

participation under 42 U.S.C. § 672(a)(2)(B); under that section, state agencies other

than DSS may provide for the placement and care of foster children and DSS may

claim federal financial participation for those activities. While we note that the form

of § 672(a)(2)(B) has recently changed, Deficit Reduction Act of 2005, Pub. L.

No. 109-171, 120 Stat. 4, 151 (Feb. 8, 2006), those changes do not affect our analysis.

Alternatively, DSS argued for the first time that it could receive IV-E funding for the

juvenile officers' program-related activities because the OSCA agreement could be

seen as a contract for removal and pre-placement services. Such services, DSS

argued, were eligible for reimbursement under § 671(a)(2).

The DAB upheld the ACF's decision denying the claims. It concluded that

DSS could not obtain federal assistance for the activities of OSCA or the juvenile

officers under § 672 since neither OSCA nor the officers were responsible for the care

and placement of IV-E children in Missouri. The DAB also rejected DSS's reliance

on § 671, finding that even if the juvenile officers' activities would otherwise have

been eligible for federal financial participation as removal and pre-placement

services, DSS did not supervise the juvenile officers' actions and the OSCA

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agreement did not give DSS any such oversight. The DAB determined that because

the SSA must administer or supervise all aspects of the state's IV-E plan, the juvenile

officers' actions were not reimbursable. See 42 U.S.C. § 671(a)(2). The district court,

after determining that the DAB's findings were supported by the record and that the

decision as a whole was not arbitrary or capricious, granted summary judgment to the

Secretary of DHHS.

II.

We review the district court's grant of summary judgment de novo, applying

the same standards used by the district court. Gipson v. INS, 284 F.3d 913, 916 (8th

Cir. 2002). The parties agree that the DAB's decision to disallow Missouri's claims

will be set aside only if it is "arbitrary, capricious, an abuse of discretion, or otherwise

not in accordance with law" or is "unsupported by substantial evidence." 5 U.S.C.

§ 706(2)(A), (E).

We first address DSS's contention that it is entitled to funding for the juvenile

officers' program-related activities under § 672(a)(2). Under § 672(a)(2)(B), the SSA

may seek reimbursement for the cost of child care and placement services for foster

children performed by other state agencies. The costs eligible for reimbursement

include administrative costs incurred in placing a child, 45 C.F.R.

§ 1356.60(c)(2)(iii), as well as "closely related" activities, Missouri Dep't of Soc.

Servs., DAB No. 844, 1987 HHSDAB Lexis 784, *33 (March 2, 1987). DSS

continues to argue that the juvenile officers were responsible for the placement and

care of children; it also contends that since removal is a necessary precondition to

placing a child in foster care, removal is "closely related" to placement and is thus

eligible for reimbursement.

But regardless of whether removal is closely related to placement, the state

cannot obtain federal assistance for closely-related activities of an agency other than

DSS under § 672(a)(2), unless that agency is also responsible for the actual placement

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and care of children. See id.; Maryland Dep't of Human Res., DAB No. 1225, 1991

HHSDAB Lexis 1018, *2, *12-13 (Feb. 7, 1991). In this case, the DAB determined

that it is DSS that has ultimate control over the placement and care of children, not

OSCA or the juvenile officers. The record supports this determination. Evidence

presented to the DAB tended to show that although juvenile officers put children in

temporary protective custody, it is DSS that decides where those children are

ultimately placed. In addition, the DAB heard evidence that juvenile courts vest legal

custody of removed children in DSS, not OSCA or the juvenile officers. In fact, the

agreement between DSS and OSCA provides for that. Thus, the DAB's determination

that Missouri could not claim federal financial assistance for juvenile officer activities

under § 672 was supported by the record and not arbitrary or capricious.

DSS also contends that having judicial employees in charge of removal and

pre-placement services, rather than using employees supervised by the designated

SSA, does not undermine the policy behind the SSA requirement of § 671(a)(2).

Relying on a case interpreting analogous language from the Medicaid Act, see

42 U.S.C. § 1396a(a)(5), DSS contends that the SSA requirement in § 671(a)(2) exists

to avoid a diversity of operating standards within the state and to facilitate federal

oversight of the state program. Cf. Hillburn ex rel. Hillburn v. Maher, 795 F.2d 252,

261 (2d Cir. 1986), cert. denied, 479 U.S. 1046 (1987). The Missouri scheme meets

these goals, says DSS, even though judicial employees maintain ultimate authority

about when to remove children from their homes.

But to obtain funding, Missouri must comply with the controlling statutes and

regulations. For a state to be eligible for IV-E payments, it must put together a state

plan that is approved by the Secretary of DHHS. 42 U.S.C. § 671(a). In that plan, the

state must designate an SSA that shall either "administer, or supervise the

administration of" the state's IV-E program. 42 U.S.C. § 671(a)(2); see also

45 C.F.R. § 205.100(a)(1). That SSA may not delegate to other agencies the

"administrative discretion in the administration or supervision of the plan including

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the issuance of policies, rules, and regulations on program matters." 45 C.F.R.

§ 205.100(b)(1). While other state agencies may perform program-related services,

they cannot "have authority to review, change, or disapprove any administrative

decision of the SSA, or otherwise substitute their judgment for that of the agency."

45 C.F.R. § 205.100(b)(3).

Under Missouri state law, however, DSS does not supervise the juvenile

officers' program-related activities; rather, they are supervised only by other juvenile

officers and the local juvenile court or circuit judges. See Mo. Rev. Stat. § 211.351.

Juvenile officers have the discretion to file removal petitions in juvenile court, and

they may refuse DSS removal requests; Missouri law specifically forbids a DSS

employee from "acting upon his own, [to] remove a child." Mo. Rev. Stat.

§ 210.125.3. And nothing in the agreement between DSS and OSCA gave DSS any

supervisory authority over the juvenile officers' operations. Even if having juvenile

officers make the removal decision does not frustrate the purposes of the SSA

requirement, it is nonetheless a requirement with which the state must comply.

Because DSS cannot supervise the juvenile officers' removal and pre-placement

activities, the DAB's decision that those actions were not reimbursable was not

arbitrary or capricious and was supported by substantial evidence on the record.

III.

For the reasons stated above, we affirm the district court's grant of summary

judgment to the Secretary of DHHS.

______________________________

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