Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-01026/USCOURTS-cand-3_05-cv-01026-4/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
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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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

CONSUMER ADVOCATES RIGHTS

ENFORCEMENT SOCIETY, INC. (CARES, INC.), on

behalf of California child-support payors; and NICK

ARELLANO, individually as a child-support payor and

on behalf of all those similarly situated and as guardian

ad litem for RYAN ARELLANO, individually as a child

supported and on behalf of all those similarly situated,

Plaintiffs,

 v.

STATE OF CALIFORNIA; COUNTY OF

MONTEREY; STEPHEN H. KENNEDY; CURTIS L.

CHILD; JAMES L. HANSEN; LISA ORTIZ; BERNIE

SIMON and DOES 1 through 50, inclusive,

Defendants. /

No. C 05-01026 WHA

ORDER GRANTING

MOTION TO DISMISS

INTRODUCTION

In this action challenging the administration of child-support payment cases in

California under the Temporary Assistance to Needy Families (“TANF”) program, defendants

move under Federal Rule of Civil Procedure 12(b)(6) to dismiss the complaint. The Court

GRANTS defendants’ motion to dismiss.

STATEMENT

Plaintiff Nick Arellano is Ryan Arellano’s non-custodial parent and guardian ad litem. 

He has been obliged to pay child support for Ryan through the Monterey County Department of

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Child Support Services since November 3, 1993. His case has been administered pursuant to

Title IV-D, 42 U.S.C. 651–669, a cooperative federal-state program designed to ensure the

availability of child-support enforcement and paternity-establishment services to states that

participate in the TANF program. As a participant, California receives federal funds and uses

them to make monetary payments, including child-support, to financially-needy families. The

state later recovers its contributions from the parents responsible for such obligations. Under

the Act, it cannot claim an amount exceeding the benefits it actually disbursed to the family,

however, and any excess payments must be applied to outstanding obligations. California must

also comply with basic federal goals and regulations governing its administration of

child-support cases. Beyond meeting these minimum standards, the state has considerable

autonomy in designing its own public-assistance program. 

Plaintiff Arellano made regular reimbursement and child-support payments to the

department pursuant to a court order until September 1997. Around that time, Ryan’s mother

requested that his child-support case be closed; she also waived all outstanding obligations he

owed. Beginning in 1998, disputes emerged between plaintiff Arellano and the

Monterey County Child Support Division, the local agency that was directly responsible for

administering his case. Specifically, plaintiff Arellano took issue with the division’s notices

that he owed substantial sums of money and practices of intercepting his tax refunds and

levying his bank accounts in order to collect those sums. He was also aggrieved by the

division’s failure to provide him with notice or information as to how he could resolve his

disputes or a statement regarding his reimbursement account.

On February 19, 2005, plaintiff Arellano commenced this action challenging these

alleged administrative errors. He represents a putative class of other parents allegedly subjected

to similar errors, his son Ryan and similarly-situated children. Consumer Advocates Rights

Enforcement Society, Inc., the other named plaintiff, is a California non-profit public-benefit

organization that aids in the enforcement of rights of families whose support is processed

through the county/state child-support system. Defendants are or were previously involved in

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 Title 42 U.S.C. 1983 provides in pertinent part that “[e]very person, who under color of . . . [law]

subjects or causes to be subjected any citizen of the United States to . . . the deprivation of any privileges or

immunities secured by the constitution and laws shall be liable to the party injured in an action at law.”

Title 42 U.S.C. 657 provides in pertinent part that “[i]n no event shall the total of the amounts paid to

the Federal Government and retained by the State exceed the total of the amounts that have been paid to the

family as assistance by the State.” 

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managing various aspects of child-support services that allegedly affected or continue to impact

the administration of plaintiff Arellano’s and the putative class members’ child-support cases. 

This action accuses defendants of violating both federal and state laws by mismanaging

child-support cases in California. Specifically, the complaint alleges: (1) defendants have

deprived plaintiffs of property without due process of law, in violation of 42 U.S.C. 1983;

(2) defendants have deprived plaintiffs of property without due process of law and infringed on

their Fifth and Fourteenth Amendment rights, in violation of 42 U.S.C. 657, by collecting and

retaining excess child-support payments; (3) defendants have failed to provide plaintiffs with

the requisite notice and due process protections in handling their accounts; (4) defendants

Hansen and Ortiz, child-support attorneys for the Monterey County Local Child Support

Agency and/or Department of Child Support Services, fraudulently obtained plaintiff Arellano’s

earnings from his employer; (5) defendants have unlawfully charged interest on undistributed

child-support payments; (6) defendants have breached their fiduciary duty to plaintiffs; and 

(7) defendants’ fiduciary duty requires them to provide plaintiffs with an accounting. Plaintiffs

request that the Court direct defendants to redress their alleged misconduct.1

Defendants now move to dismiss the complaint on the following five

grounds: (1) plaintiffs have no private right of action under Title IV-D; (2) the Eleventh

Amendment shields them from all claims; (3) many of plaintiffs’ claims are barred by the

statute of limitations; (4) defendant Child, former director of California’s Department of Child

Support Services, is entitled to qualified immunity as to any damages claims; and (5) the Court

lacks subject-matter jurisdiction over the state claims. Defendants also assert that plaintiff

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2

 Michael Leavitt, Secretary of the United States Department of Human Health and Services, was also

named as a defendant in the complaint. Mr. Leavitt filed a separate motion to dismiss, arguing that 42 U.S.C.

1983 did not provide plaintiffs with a basis for asserting jurisdiction over him in order to allege violations of

federal law because he did not act under color of state law or in conspiracy with a state actor. Plaintiffs

stipulated and agreed to dismiss all claims as to Mr. Leavitt. As a result, Mr. Leavitt was dismissed and is no

longer a defendant in this action. 

4

Arellano lacks standing to bring the action on behalf of Ryan and that the putative class

members lack standing as well.2

ANALYSIS

Pursuant to Federal Rule of Civil Procedure 12(b)(6), dismissal for failure to state a

claim is proper if it appears beyond doubt that plaintiff can prove no set of facts to support a

claim entitling him to relief. Dismissal may be based on the lack of a cognizable legal theory or

the absence of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica

Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). Furthermore, all material allegations of the

complaint are taken as true and are construed in the light most favorable to the nonmoving

party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996). If dismissal is

granted, plaintiffs are only provided leave to amend if they can cure the complaint’s defects. 

Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987).

1. PRIVATE RIGHT OF ACTION.

Defendants contend that plaintiffs have no private right of action against them because

the federal laws they allegedly violated do not unambiguously confer upon plaintiffs any

individual rights. Plaintiffs claim to possess a private right of action because the relevant laws

benefit them, provide them with clear and enforceable rights and impose binding obligations on

defendants that work to their advantage.

The Supreme Court held in Blessing v. Freestone, 520 U.S. 329 (1997), that custodial

mothers of children eligible to receive child support under Title IV-D lacked a private right of

action against a state under Section 1983 to obtain “substantial compliance” with the title. It

based this decision on the recognition that Congress did not intend for the law in question to

benefit individual children and custodial parents. The ruling further identified the following

factors as critical to this determination: (1) whether the right asserted under the statute is so

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“vague and amorphous” that enforcement would strain judicial competence, and (2) whether the

provision imposes any binding obligation on the state, i.e., whether the language is mandatory

or precatory. Id. at 340–41, 343. 

In Gonzaga University v. Doe, 536 U.S. 273 (2002), the Supreme Court clarified

Blessing’s holdings. The Court ruled that federal funding provisions do not authorize private

enforcement by a Section 1983 action unless Congress clearly manifested an unambiguous

intent to confer individual rights to seek relief under those provisions. In making this

determination, courts should consider the “text and structure” of the statutes at issue to ascertain

whether they employ “rights-creating” language that clearly imparts an “individual entitlement”

and has an “unmistakable focus on the benefitted class.” The opinion also stated that Congress

likely did not intend to impart such entitlements in cases where: (1) statutes have an

“aggregate” focus rather than a focus on whether the needs of any particular person have been

satisfied; (2) statutes speak only in terms of institutional policy and practice; (3) a statutory

provision references the individual only in the context of describing the type of policy or

practice that will trigger a funding prohibition; and (4) a provision allows a state entity to avoid

a loss of federal funds through substantial compliance. Id. at 286–88. 

Here, plaintiffs’ claims do not allege violations of laws that confer upon them specific,

individualized rights. Plaintiffs bring this action under the Title IV-D provisions, which are

found in 42 U.S.C. 601–669. The statutory language reveals the legislation’s purpose to

provide flexibility to states in operating programs that will facilitate the care of needy children

in their own homes and encourage two-parent families. Subdivision (b) of Section 601

explicitly states that the Title IV-D provisions shall not be interpreted to provide entitlement to

“any individual or family.” Accordingly, Title IV-D does not provide plaintiffs with

enforceable personal rights. Even if the laws have the effect of benefitting them, their failure to

qualify as “intended beneficiaries” of the provisions precludes them from maintaining a Section

1983 private right of action against defendants. See Gonzaga, 536 U.S. at 283. 

Plaintiffs argue that Sections 608, 654(27), 654b, 657 and 666 provide them with

adequate individual entitlements. Section 608 sets forth requirements that state plans must

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 This section lists numerous such regulations. For example, it prohibits states receiving grants under

the title from “[using] any part of [their] grant[s] to provide assistance to a family, unless the family includes a

minor child who resides with the family . . . or a pregnant individual.” It also provides that a state agency

responsible for administering the state plan that determines that an individual is not cooperating with the state in

its administration efforts must “deduct from the assistance that would otherwise be provided to the family of the

individual . . . an amount equal to not less than 25 percent of the amount of such assistance” and “may deny the

family any assistance under the State program.”

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 Specifically, this section directs the state agency to “operate a state disbursement unit in accordance

with” section 654b of the title and “have sufficient State staff” and possibly contractors “reporting directly to the

state agency to–(i) monitor and enforce support obligations through the unit in cases being enforced by the

State.”

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 Section 654b provides in pertinent part:

[T]he State agency must establish and operate a unit (which shall be known as

the “State disbursement unit”) for the collection and disbursement of payments

under support orders. . . . The State disbursement unit shall be operated . . .

directly by the State agency. . . . [It] shall use automated procedures [and]

electronic processes . . . for the collection of support payments . . . [and] may

delay the distribution of collections toward arrearage until the resolution of any

timely appeal with respect to such arrearage. 

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 In particular, it provides that “[i]n the case of a family receiving assistance from the State, the State

shall–(A) pay to the Federal Government the Federal Share of the amount so collected; and (B) retain, or

distribute to the family, the State share of the amount so collected” and in the case of a family formerly

receiving State assistance, “[t]o the extent that the amount so collected exceeds the amount required to be paid

to the family for the month in which collected, the State shall distribute the amount so collected” according to a

series of guidelines the statute goes on to delineate.

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 This section establishes that “each State must have in effect laws requiring the use of [various]

procedures . . . to increase the effectiveness of the program which the State administers.” The provision then

goes on to list numerous procedures and regulations that are intended to fulfill this goal.

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follow and certain prohibitions on their actions.3 Section 654(27) requires state agencies

administering the state plans to operate state disbursement units and enforce support collections

accordingly.4

 Section 654b obliges state agencies to establish such units in order to collect and

disburse child-support payments. It also delineates the specific procedures the units must

follow in order to “ensure prompt disbursement of the custodial parent’s share of payment.”5

Section 657 sets forth rules that govern states’ distribution of child-support payments.6 Section

666 requires that states pass laws and regulations for collecting support with liens and

withholding from income, as well as rules regarding the establishment of paternity.7 The

language of these statutes is directed towards states — not individuals — for purposes of

improving child-support administration and lessening the need for public assistance. Nothing in

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8

 Plaintiffs’ counsel filed a supplemental brief regarding the Ninth Circuit ruling in Barnes on

December 12, 2005. Just four days earlier, plaintiffs’ counsel was specifically instructed not to file any

additional pleadings at the hearing concerning defendants’ motion to dismiss. While the Court reviewed this

brief, it disapproves of plaintiffs’ submission of it. 

9

 22 Cal. Code Regs. § 116140(e) requires local child-support agencies to provide written notice to

obligor before reporting any obligations to the Department of Child Support Services and allow obligor 30 days

to contest the accuracy of the information. Cal. Fam. Code § 17522 requires the agencies to provide obligors

notice and an opportunity to contest alleged obligations prior to levying their accounts or property. Cal. Fam.

Code § 5246 and Cal. Code of Civ. Proc. § 706.30 impose similar notice and hearing requirements with regard

to enforcement of orders by withholding obligors’ income from their employers. 

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the statutes unambiguously confers rights upon plaintiffs that they may enforce. As such,

plaintiffs do not possess individual rights to enforce states’ alleged violations of Title IV-D’s

provisions. See Sanchez v. Johnson, 416 F.3d 1051, 1057 (9th Cir. 2005) (language in statute

must contain “individually focused rights creating language”).

Plaintiffs also aver violations of notice and due process. In particular, they maintain that

defendants violate these rights in connection with their levies against plaintiff Arellano’s bank

account and interceptions of his tax returns in May, June and July 2001, as well as June 2002

(Compl. ¶¶ 47, 49, 51). Plaintiffs request that the Court take judicial notice of the pleadings,

orders and evidence in Barnes v. Healy, a class-action lawsuit in the United States District

Court for the Eastern District of California that plaintiffs maintain is nearly identical to the

instant action. In Barnes, Judge Shubb found due process violations for the state defendants’

failure to provide adequate notice and hearing procedures in collecting and distributing childsupport payments. Plaintiffs point out that the Ninth Circuit upheld Judge Shubb’s ruling. See

Barnes v. Healy, 980 F.2d 572 (9th Cir. 1992).8

 They assert that the Barnes ruling compels the

Court to find a private right of action in this case as well.

Trouble is, plaintiffs possess a remedy for these claimed violations under state law. 

Various California statutory provisions ensure that obligors are apprised of any state actions to

unilaterally collect child-support obligations.9 The state provides a procedure for challenging

levies on bank accounts. Cal. Code of Civ. Proc. § 703.510; see also § 689.030. There is also a

specific complaint-resolution process available to anyone aggrieved by the child-support

process. 22 Cal. Code Regs. §§ 120100–120222. These regulations permit challenges for

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accounting disputes with the local child-support agency regarding obligations. Id.

§ 120201(a)(1)(A) & (C). There are no analogous federal provisions securing plaintiffs’ such

safeguards. Plaintiffs therefore should have sought appropriate remedies for the alleged notice

and due process violations in a state action. 

Moreover, the Barnes decision does not govern the instant case. In Barnes, the

Ninth Circuit held that plaintiffs had a private right of action to allege state violations of due

process based on a specific federal statutory provision, 45 C.F.R. 302.54. That provision set

forth state plan requirements that explicitly afforded individuals annual notice as to the

collection and distribution of their payments. See Barnes, 980 F.2d at 575. The court agreed

with plaintiffs that the provision prevented plaintiffs from effectively evaluating error and

availing themselves of an administrative adjudicatory process. Id. at 579–81. Following the

decision, in 1993, the statute’s notice provisions were revised to ensure more meaningful notice. 

The instant action differs considerably. Here, plaintiffs are not alleging that they were deprived

of meaningful notice to which they are entitled under a specific federal statute governing

child-support administration. They do not assert violations of particular federally-conferred

rights protecting their property interests as participants in the TANF program. As explained

above, the only federal statutes that they do allege were violated govern states’ management of

child-support cases. Under the recent United States Supreme Court rulings in Blessing and

Gonzaga, these provisions cannot be construed to establish any individual rights. As such, the

Barnes decision fails to provide plaintiffs’ with a private right of action to aver notice and due

process deprivations in federal court.

Furthermore, the complaint fails to delineate which class members were denied notice

and due process. It is also devoid of any allegations as to how they were so deprived. These

deficiencies preclude this Court from considering their claimed violations in the aggregate, as

plaintiffs have presented them. Put differently, the state statutes provide due process through

various notices and hearings. If plaintiff Arellano failed to get a notice (which is not at all

clear), it was an aberration. That does not mean others in the class were inadvertently denied

notice. And, anyone denied notice on an ad hoc basis can seek remedies in state court. 

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10 The Court adopts the state limitations period for the instant federal claims. It is settled practice to do

so in cases such as this, in which there is no governing federal statute of limitations. See Wilson v. Garcia,

471 U.S. 261, 266 (1985) (federal court should adopt state limitations period given that the Civil Rights Act

does not contain a limitations provision).

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Finally, plaintiff Arellano’s claimed notice and due process violations are barred by the

statute of limitations. A personal injury/civil rights action such as this must be commenced

within two years of the date the liability allegedly accrued. Cal. Code of Civ. Proc. § 331.5.10

A cause of action accrues when a plaintiff knew or should have known of the injury that forms

the basis of the action. Kimes v. Stone, 84 F.3d 1121, 1128 (9th Cir. 1996). The acts

underlying plaintiff Arellano’s alleged notice and due process deprivations occurred in May,

June and July of 2001 and in June of 2002. He knew in 1998 that he disagreed with the

county’s figures about child-support obligations it claimed he owed. He knew in 2001 and

2002 that his tax refunds and bank account were being used to cover those obligations (Compl.

¶¶ 47–55). Yet, plaintiffs waited until February 2005 to commence this action. Plaintiff

Arellano’s purported notice and due process violations are therefore untimely.

Plaintiffs have not alleged a federal claim. Accordingly, plaintiffs’ complaint is

DISMISSED with respect to the federal claims. Defendants’ remaining grounds for dismissal of

these claims therefore need not be addressed.

2. FURTHER STATE-LAW CLAIMS.

In light of plaintiffs’ lack of a federal claim, this Court declines to exercise jurisdiction

over plaintiffs’ state-law claims pursuant to Title 28 U.S.C. 1367(c)(3). 

Title 28 U.S.C. 1367(c)(3) authorizes the Court to decline to exercise supplemental

jurisdiction over a state claim if it has dismissed all claims over which it has original

jurisdiction. Declining jurisdiction in circumstances like this serves the objectives of economy,

convenience and fairness to the parties, and comity. See Executive Software N. Am., Inc. v.

United States Dist. Court, 24 F.3d 1545, 1557 (9th Cir. 1994). The Supreme Court has

acknowledged that “[i]n the usual case in which all federal-law claims are eliminated before

trial,” these factors “will point toward declining to exercise jurisdiction over the remaining

state-law claims.” Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 & n.7 (1998); see also

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San Pedro Hotel Co., Inc. v. City of L.A., 159 F.3d 470, 478 (9th Cir. 1998) (district court not

required to provide explanation when declining jurisdiction under Section 1367(c)). 

 Here, dismissal of the state-law claims is proper. Since the federal claims are dismissed,

it is unnecessary for this Court to decide the remaining state-law claims. In addition, there will

be no duplication of effort to remit the state claims to state court. This Court has not invested

substantial time in supervising this case. On the other hand, there is currently a pending action

in state court between the state and county defendants and plaintiff Arellano concerning this

matter. As such, the state court is in a much better position to address the state-law claims in

the first instance. Plaintiffs may either bring a separate action raising these claims or inject

them into the pending state action with little inconvenience. Either of these options would

constitute a fair and efficient manner by which plaintiffs could raise these causes of action. 

This order thus DISMISSES plaintiffs’ state-law claims.

CONCLUSION

For the reasons stated above, plaintiffs’ federal claims and state causes of action are

DISMISSED. Leave to amend is deemed as futile. Judgment will be entered.

IT IS SO ORDERED.

Dated: December 16, 2005. 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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