Case Name: Sheri LIPSCOMB, By and Through Her Next Friend, Carolyn DeFEHR; Autumn Scalf, & William Scalf, By and Through Their Next Friend Gloria Self, on Behalf of Themselves and All Others Similarly Situated, Plaintiffs-Appellants, v. Dan SIMMONS, Individually and in His Official Capacity as Acting Director, Department of Human Resources of the State of Oregon, & Jess Armas, Individually and in His Official Capacity as Acting Assistant Director, Department of Human Resources of the State of Oregon and Acting Administrator, Children's Services Division, Department of Human Resources of the State of Oregon, Defendants-Appellees
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1992-04-27
Citations: 962 F.2d 1374
Docket Number: No. 87-4079
Parties: Sheri LIPSCOMB, By and Through Her Next Friend, Carolyn DeFEHR; Autumn Scalf, & William Scalf, By and Through Their Next Friend Gloria Self, on Behalf of Themselves and All Others Similarly Situated, Plaintiffs-Appellants, v. Dan SIMMONS, Individually and in His Official Capacity as Acting Director, Department of Human Resources of the State of Oregon, & Jess Armas, Individually and in His Official Capacity as Acting Assistant Director, Department of Human Resources of the State of Oregon and Acting Administrator, Children’s Services Division, Department of Human Resources of the State of Oregon, Defendants-Appellees.
Judges: Before: GOODWIN, TANG, FLETCHER, POOLE, D.W. NELSON, NORRIS, BEEZER, BRUNETTI, KOZINSKI, O’SCANNLAIN, and RYMER, Circuit Judges.
Reporter: Federal Reporter 2d Series
Volume: 962
Pages: 1374–1391

Head Matter:
Sheri LIPSCOMB, By and Through Her Next Friend, Carolyn DeFEHR; Autumn Scalf, & William Scalf, By and Through Their Next Friend Gloria Self, on Behalf of Themselves and All Others Similarly Situated, Plaintiffs-Appellants, v. Dan SIMMONS, Individually and in His Official Capacity as Acting Director, Department of Human Resources of the State of Oregon, & Jess Armas, Individually and in His Official Capacity as Acting Assistant Director, Department of Human Resources of the State of Oregon and Acting Administrator, Children’s Services Division, Department of Human Resources of the State of Oregon, Defendants-Appellees.
No. 87-4079.
United States Court of Appeals, Ninth Circuit.
Argued En Banc and Submitted Nov. 15, 1990.
Decided April 27, 1992.
Emily Simon and Mark Kramer, Esqs., Kramer & Fifthian-Barrett, Portland, Ore., for plaintiffs-appellants.
Dave Frohnmayer, Atty. Gen. of’ the State of Ore., Virginia L. Linder, Sol. Gen., Rives Kistler, Asst. Atty. Gen., Salem, Ore., for defendants-appellees.
Stephanie Wald, Supervising Deputy Atty. Gen., San Francisco, Cal., for amicus California Dept, of Social Services.
Darryl L. Hamm, Morrison & Foerster, San Francisco, Cal., for amici L.W., R.S., S.M., J.R., J.R., A.T., S.W. and J.C., et al.
Before: GOODWIN, TANG, FLETCHER, POOLE, D.W. NELSON, NORRIS, BEEZER, BRUNETTI, KOZINSKI, O’SCANNLAIN, and RYMER, Circuit Judges.

Opinion:
GOODWIN, Circuit Judge:
Oregon provides state-funded foster care benefits to all children placed by the state with non-relatives, but it does not provide state-funded foster care for children placed with relatives. We consider whether Oregon's attempt to stretch its foster care dollar violates the United States Constitution. We conclude that it does not.
I. BACKGROUND
Class plaintiffs, challenging the constitutionality of the Oregon system for state funding of foster home care in certain juvenile court placements, appeal a summary judgment order upholding the statutory scheme. A three-judge panel of this court reversed. Lipscomb v. Simmons, 884 F.2d 1242 (1989). Pursuant to Ninth Circuit Rule 35.3, the case was taken en banc. 907 F.2d 114 (9th Cir.1990).
Under Oregon law, when a child has been found to be within the jurisdiction of the juvenile court because of parental abuse or neglect, the court may make the child a ward of the court and may place the child in the legal custody of the Children's Services Division ("CSD") for care, supervision and temporary placement in a foster home. See Or.Rev.Stat. § 419.507(1)(b). Oregon participates in the federal Foster Care Maintenance Payments program, Title IV-E of the Social Security Act, 42 U.S.C. § 670-676. Federally funded foster care is administered under federal regulations which require equal payments to relatives and non-relatives in foster care placements that qualify for Title IV-E payments. See Miller v. Youakim, 440 U.S. 125, 126-28, 99 S.Ct. 957, 959-60, 59 L.Ed.2d 194 (1979). Oregon has a separate system for funding the foster care of children who are not eligible under Title IV-E. Under this program, the State assists only children who are placed with foster parents who are not related to them. See Or.Rev.Stat. § 418.-625(2). Only the state-funded child care regulations which apply to children not eligible for Title IV-E money are challenged in this case.
The district court ruled on stipulated facts and cross motions for summary judgment. The relevant facts are not in dispute. The district court divided the class plaintiffs into two sub-classes:
(1) All children who have been or will be temporarily in the custody of Children's Service Division, who have been or will be placed in foster care with relatives, and who have been or will be denied foster care benefits because of defendants' policy and practice of not providing state-funded foster care benefits to children placed with relatives; and
(2) All children who have been or will be temporarily in the custody of the Children's Service Division and who have not been or will not be placed in foster care with relatives, or whose placement with relatives has been or will be terminated, because of defendants' policy and practice of not paying state-funded foster care benefits to children placed with relatives.
II. DISCUSSION
The distinction between these two subclasses is important to the analysis. The children in sub-class (1) do not claim that their relatives will care for them only if they get state assistance. Rather they claim only that they are entitled to state funding even though their relatives are both willing and financially able to care for them. Because members of the first subclass will continue to have relatives as foster parents, their claim of constitutional injury is difficult to comprehend.
In contrast, the children in sub-class (2) are those who will be denied placements with relatives solely because of the Oregon policy of not providing foster care payments and benefits. In other words, the Oregon policy denies children in this subclass opportunities for placements with two different categories of relatives: (1) relatives who have the financial resources to care for the children but are unwilling to do so without a state subsidy, and (2) relatives who are willing to care for the children but are financially incapable of doing so without the payments at issue here.
What the case boils down to is whether, in these circumstances, the United States Constitution requires the State of Oregon to fund foster placements with all relatives if it chooses to fund all foster placements with non-relatives. The social cost of Oregon's policy is to deny some children the opportunity to be placed in the homes of relatives who are financially able but unwilling to care for the children without state assistance or who are willing but financially unable to provide care without state assistance, and also to deny payments to children who are nonetheless placed in the homes of relatives.
The social benefit of Oregon's policy is that it saves an estimated $4 million biannually in money Oregon need not spend to provide foster care for those children being cared for by relatives who are both financially able and willing to provide such care without state support. Oregon argues that nothing in the Constitution prevents it from taking advantage of those financially able and generous relatives who are willing to provide foster care under the existing policy in order to save that $4 million and spend it on foster care benefits for children placed with non-relatives. According to Oregon, spending those savings on foster care payments to non-relatives expands the pool of non-relatives willing and able to provide foster care. It also increases the amount of money available to each child placed with a non-relative.
Plaintiffs conceded in the district court that social welfare legislation allocating funds requires some classification of potential recipients. The case was briefed and argued in the district court on the sole question whether the state's attempt to manage its scarce child welfare funds violated the equal protection clause of the Fourteenth Amendment. No effort appears to have been made to resolve the question on statutory grounds, as was the case in Miller v. Youakim, 440 U.S. 125, 99 S.Ct. 957, 59 L.Ed.2d 194 (1979). On appeal the parties again avoided statutory questions and argued the case as a constitutional equal protection claim.
Under equal protection, state social and economic legislation ordinarily is entitled to broad deference from the federal courts and will be sustained so long as it is rationally related to a legitimate state interest. See, e.g., Exxon Corp. v. Eagerton, 462 U.S. 176, 195-96, 103 S.Ct. 2296, 2308, 76 L.Ed.2d 497 (1983). As the Supreme Court explained in Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970):
In the area of economics and social welfare, a State does not violate the Equal Protection Clause merely because the classifications made by its laws are imperfect. If the classification has some "reasonable basis," it does not offend the Constitution simply because the classification "is not made with mathematical nicety or because in practice it results in some inequality." Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78, 31 S.Ct. 337, 340, 55 L.Ed. 369 (1911).
[T]he intractable economic, social, and even philosophical problems presented by public welfare assistance programs are not the business of this Court. The Constitution may impose certain procedural safeguards upon systems of welfare administration, Goldberg v. Kelly, [397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970)]. But the Constitution does not empower this Court to second-guess state officials charged with the difficult responsibility of allocating limited public welfare funds among the myriad of potential recipients.
Id., 397 U.S. at 485-87, 90 S.Ct. at 1161-63 (citations omitted). Appellants argue in the alternative that the statute either fails the usual rationality review or triggers heightened scrutiny which it is unable to satisfy.
A. The Case for Heightened Scrutiny
Legislative classifications are subject to a heightened standard of scrutiny when they disadvantage a "suspect" or "quasi-suspect" class or burden the exercise of fundamental rights independently protected against governmental interference. See, e.g., City of Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432, 440, 105 S.Ct. 3249, 3254, 87 L.Ed.2d 313 (1985).
1. Suspect classifications
Oregon's policy of excluding relatives from state foster care payments, say the plaintiffs, denies the children as well as their relatives equal protection of the laws. Plaintiffs invite us to recognize a new suspect class for purposes of equal protection analysis: children who have been removed from abusive homes and who are related to their (potential) foster parents. We decline the invitation.
To the extent plaintiffs contend that Oregon's classification scheme disadvantages relatives vis a vis non-relatives, we note that the Supreme Court has declined to recognize close relatives as a suspect or quasi-suspect class for equal protection purposes. See Lyng v. Castillo, 477 U.S. 635, 638, 106 S.Ct. 2727, 2729, 91 L.Ed.2d 527 (1986). To the extent plaintiffs' claim implies that the non-affluent constitute a suspect or quasi-suspect class, it likewise cannot be sustained. Courts have refused to fashion equal protection into a judicial tool to redress economic inequalities. See Dandridge v. Williams, 397 U.S. at 483-87, 90 S.Ct. at 1160-63.
2. Interference with fundamental rights
Plaintiffs also maintain that Oregon's classification scheme violates equal protection because it impinges on the exercise of their fundamental constitutional right to live with extended family members. Although the Supreme Court has never squarely held that the right to maintain relationships with one's family members is a fundamental right protected by the Constitution, there is substantial authority for the proposition that due process places a limit on the state's ability to interfere with certain extant relationships among family members. See, e.g., Moore v. City of E. Cleveland, 431 U.S. 494, 499, 503, 97 S.Ct. 1932, 1935, 1937, 52 L.Ed.2d 531 (1977) (plurality); Cleveland Bd. of Educ. v. LaFleur, 414 U.S. 632, 639-40, 94 S.Ct. 791, 796, 39 L.Ed.2d 52 (1974); Loving v. Virginia, 388 U.S. 1, 12, 87 S.Ct. 1817, 1823, 18 L.Ed.2d 1010 (1967); Pierce v. Society of Sisters, 268 U.S. 510, 534-35, 45 S.Ct. 571, 573-74, 69 L.Ed. 1070 (1925); Meyer v. Nebraska, 262 U.S. 390, 399, 43 S.Ct. 625, 626, 67 L.Ed. 1042 (1923).
The existence of a negative right to freedom from governmental interference, how ever, does not dictate the recognition of an affirmative right on the part of foster children to be placed by the state with relatives. The government generally is under no obligation to facilitate or fund the exercise of constitutional rights. See Harris v. McRae, 448 U.S. 297, 316-17, 100 S.Ct. 2671, 2687-88, 65 L.Ed.2d 784 (1980); Maher v. Roe, 432 U.S. 464, 478-80, 97 S.Ct. 2376, 2385-86, 53 L.Ed.2d 484 (1977). As the Supreme Court has explained:
[O]ur cases have recognized that the Due Process Clauses generally confer no affirmative right to governmental aid, even where such aid may be necessary to secure life, liberty, or property interests of which the government itself may not deprive the individual. As we said in Harris v. McRae: "Although the liberty protected by the Due Process Clause affords protection against unwarranted government interference ., it does not confer an entitlement to such [governmental aid] as may be necessary to realize all the advantages of that freedom." 448 U.S. at 317-318, 100 S.Ct. at 2688 (emphasis added).
DeShaney v. Winnebago County Dep't of Social Servs., 489 U.S. 189, 196, 109 S.Ct. 998, 1003-04, 103 L.Ed.2d 249 (1989) (citations omitted).
Plaintiffs attempt to distinguish DeSha-ney and the public funding cases based on the state's temporary custody of plaintiffs. Because of this custodial relationship, plaintiffs argue, Oregon is obliged to ensure that plaintiffs are able to live with their relatives. A legislative classification that fails to provide foster children this opportunity, plaintiffs conclude, violates the equal protection clause.
Certain basic principles are agreed upon. Once the state assumes wardship of a child, the state owes the child, as part of that person's protected liberty interest, reasonable safety and minimally adequate care and treatment appropriate to the age and circumstances of the child. See DeShaney, 489 U.S. at 199-200, 109 S.Ct. at 1005-06; Youngberg v. Romeo, 457 U.S. 307, 315-16, 102 S.Ct. 2452, 2457-58, 73 L.Ed.2d 28 (1982); Estelle v. Gamble, 429 U.S. 97, 103-04, 97 S.Ct. 285, 290-91, 50 L.Ed.2d 251 (1976).
The word "custody" is not a talisman, however. In our view, custody cases such as DeShaney and Youngberg stand for the proposition that the government has an affirmative obligation to facilitate the exercise of constitutional rights by those in its custody only when the circumstances of the custodial relationship directly prevent individual exercise of those rights. The Supreme Court made this principle clear in DeShaney:
[W]hen the State by its affirmative exercise of its power so restrains an individual's liberty that it renders him unable to care for himself, and at the same time fails to provide for his basic human needs — e.g., food, clothing, shelter, medical care, and reasonable safety — it transgresses the substantive limits on state action set by the Eighth Amendment and the Due Process Clause. The affirmative duty to protect arises not from the State's knowledge of the individual's predicament or from its expression of intent to help him, but from the limitation which it has imposed on his freedom to act on his own behalf.
489 U.S. at 200, 109 S.Ct. at 1005-06 (citations omitted).
Significantly, Oregon's classification does not prohibit any foster child from living with his or her relatives. See Lyng, 477 U.S. at 638, 106 S.Ct. at 2729 (holding that a regulation that did not provide certain payments to relatives, but did not "order or prevent" relatives from associating, did not "directly and substantially" interfere with any fundamental right). The barrier to plaintiffs' exercise of any fundamental right is that their relatives either lack or are unwilling to spend the money to take care of them. Because Oregon has no affirmative obligation to fund plaintiffs' exercise of a right to maintain family relationships free from governmental interference, we decline to apply heightened scrutiny and consider only whether Oregon's classification is rationally related to a legitimate state interest.
B. Rational Basis Review
In weighing the validity of the classification of foster children by the State of Oregon, we need not ascertain the actual reason for the classification but may consider any facts from which the state reasonably could have concluded that the challenged classification would promote a legitimate state purpose. See, e.g., Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 466, 101 S.Ct. 715, 725, 66 L.Ed.2d 659 (1981); New Orleans v. Dukes, 427 U.S. 297, 303, 96 S.Ct. 2513, 2516, 49 L.Ed.2d 511 (1976) (per curiam); McGowan v. Maryland, 366 U.S. 420, 426, 81 S.Ct. 1101, 1105, 6 L.Ed.2d 393 (1961).
1. Conceivable basis test
We believe there are valid state interests which could motivate Oregon to allocate state welfare funds differently in the two classes of foster home placements. Oregon has chosen to furnish, alternatively, foster home placement with relatives willing to provide foster care without CSD payments or, if no willing relative is available, foster care purchased in the foster care market. The state has a rational basis for not paying state funds to family members who provide foster care: The state wishes to take advantage of relatives who are willing and able to take care of foster children regardless of whether they receive help from the state. Thus, the state hopes to maximize the amount of money available for the benefit of abused and neglected children in need of foster care. Larger CSD foster care payments per child may serve at least two purposes. They may give foster parents the ability to provide better care for unrelated children. They may also expand the pool of qualified foster parents by attracting more people into the foster care market.
The problem confronting Oregon is straightforward: It simply does not have enough money to pay for every child needing foster care. The legislature reasonably could have decided to spend more of the funds allocated to the foster care program to recruit well-qualified providers who might need the additional financial incentive to be willing to serve as foster parents and to enable them to provide a higher level of care, rather than to spread the money equally among a smaller universe of providers that would include relatives. In addition, the availability of federal AFDC monies for needy relatives willing to serve as foster parents could have persuaded the Oregon policy makers that their decision not to extend CSD benefits to related foster parents was the most rational way to allocate the finite resources available to the state. By traditional standards of judicial review of social welfare legislation, such reasoning is not irrational.
Oregon's decision to spend more money per child not placed with relatives while depriving some children of the option of living with relatives — instead of paying less money per child but enabling more children to live with relatives — is a policy decision. That decision may or may not be the decision that the members of this court would make after balancing the social costs against the social benefits. But that cost-benefit analysis is appropriately made by Oregon officials, not by the federal judiciary. Our inquiry is limited to whether Oregon's policy choice bears a rational relationship to the legitimate purpose of maximizing the level of benefits available to all the children in the foster care program. We conclude that it does.
Neither Oregon's policy nor our decision today is without precedent. Oregon is not alone in its policy of not supporting relative placements of children who do not qualify for Title IV-E funds, and we are not alone in finding such a policy constitutional. Courts have upheld similar policies adopted by at least two other states, California and Illinois. As the district court in this case noted, a three-judge district court rejected an equal protection challenge to the Illinois policy for reasons equally applicable here:
At the time this statute was enacted, the Illinois General Assembly could reasonably have been concerned about how to use available public funds to provide as many foster homes as possible. It could reasonably have set out to provide for allocation of the available funds in a manner designed to secure the maximum number of foster parents for children who would otherwise remain parent-less .
The challenged classification will cause some children to be separated from their relatives for financial reasons. The state may reasonably have concluded, however, that the greater good of the greater number of children in need of foster homes is served by the classification which has been made. It may have concluded that if the classification were not made, the state's foster homes program would be jeopardized. As the class eligible to receive payments is made more inclusive, the individual payments become smaller. The possibility exists that if related persons are added to the eligible class, the individual payments would be reduced to an amount insufficient to induce qualified unrelated persons to provide foster homes for dependent children. Thus, the purpose of the payments would not be served, and either the fiscal integrity of the program would be impaired or the standards for approval of unrelated persons might have to be compromised.
Youakim v. Miller, 374 F.Supp. 1204, 1208-09 (N.D.Ill.1974) (rejecting the constitutional challenge), vacated on other grounds, 425 U.S. 231, 96 S.Ct. 1399, 47 L.Ed.2d 701 (1976) (remanding for reconsideration in light of intervening administrative interpretation of the AFDC statute), on remand, 431 F.Supp. 40 (N.D.Ill.1976), aff'd, 440 U.S. 125, 99 S.Ct. 957, 59 L.Ed.2d 194 (1979). See King v. McMahon, 186 Cal.App.3d 648, 667-69, 230 Cal.Rptr. 911, 923-24 (1986) (quoting Youakim ).
2. Specific applications
Critics of Oregon's policy argue that the allocation of resources is not the only relevant consideration. The state, they argue, in assuming parens patriae responsibility for a child, must be guided by a consideration of the child's best interests. That is a modest enough demand with which few will disagree. Indeed, the Oregon legislature has required CSD to design its rules and regulations "to protect the best interests of children in foster homes." Or.Rev.Stat. § 418.640(1). Requiring the state to watch out for the best interests of its foster children is not to say, however, that every child is entitled to the optimal foster care placement available to him or her. In our view, the Constitution requires only that the State provide adequate care to the children in its custody.
Critics of Oregon's classification assert that a child is likely to be better off in the home of a relative than with strangers. The critics state a proposition not likely to provoke extended debate, see, e.g., Miller v. Youakim, 440 U.S. at 141, 99 S.Ct. at 967, and Oregon law in fact embodies a preference for placing foster children in the homes of relatives where possible. See Or.Admin.R. 412-27-045. Granting the accepted generalities, the case for declaring the plan irrational proceeds next to show that the plan results in unfavorable results in the cases of individual plaintiff children. The critics contend that such outcomes, in which Oregon departs from its stated preference for placing children with relatives but realizes no countervailing cost savings, are irrational and render the entire policy unconstitutional. See Dissent at 1387-88.
As discussed below, we do not agree that Oregon's foster care policy has produced irrational outcomes. We must emphasize, however, that the equal protection clause has never been interpreted to require that social welfare legislation produce a rational result in every application or that it perfectly advance the government's legitimate policy interests. The legislature "need not draw a statutory classification to the satisfaction of the most sharp-eyed observers" in order to meet the requirements of equal protection. See Lyng v. Automobile Workers, 485 U.S. 360, 372, 108 S.Ct. 1184, 1193, 99 L.Ed.2d 380 (1988). As the Supreme Court has recognized, generalized rules are essential in administering public welfare programs and pass constitutional muster "even though such rules inevitably produce seemingly arbitrary consequences in some individual cases." Califano v. Jobst, 434 U.S. 47, 53, 98 S.Ct. 95, 99, 54 L.Ed.2d 228 (1977). Accordingly, courts have ignored individual anomalies and have inquired only whether there is a rational basis for the program viewed as a whole. See, e.g., Bowen v. Gilliard, 483 U.S. 587, 599-600, 107 S.Ct. 3008, 3016-17, 97 L.Ed.2d 485 (1987); United States R.R. Retirement Bd. v. Fritz, 449 U.S. 166, 177-79, 101 S.Ct. 453, 460-62, 66 L.Ed.2d 368 (1980); Weinberger v. Salfi, 422 U.S. 749, 777, 95 S.Ct. 2457, 2472, 45 L.Ed.2d 522 (1975).
It is flattering to be told by litigants that we have the wisdom and the power to know what is best, and to order it done in every case in which, without our intervention, a bureaucratic solution would produce a less than ideal result in an individual application. However, we have been given no such mandate and should be cautious about reaching out for it.
3. Adequacy of care
There is no evidence in this case that any child has been denied an adequate foster care placement as a result of the operation of Oregon's policy. Named plaintiff Sheri Lipscomb's circumstances are illustrative. The stipulated facts are that Sheri is a disabled child who was removed from her home because of abuse and neglect by her parents. She was fortunate enough to have her aunt and uncle, Carolyn and Robert DeFehr, agree to serve as her temporary foster parents despite Oregon's policy of denying them funding. They have continued to provide a home for Sheri even though they fear that at some point they will have to give her up because they may be unable to pay for her medical care. There is no evidence in the record, however, that Sheri would not receive adequate or equivalent care if placed with a nonrela-tive.
In the case of the other named plaintiffs (Autumn and William Scalf), the parties have stipulated that they were unable to remain with related foster parents as a result of Oregon's policy. Once again, however, there is no evidence that their placement with unrelated foster parents has denied them adequate care. A tendered affidavit to the effect that they have had difficulty in practicing their religion was not a part of the district court record. There is no claim before us that this difficulty, if any, rises to the level of a First Amendment violation or a denial of adequate care. Because such a claim is not before us, we do not consider what steps the First Amendment might require Oregon to take in accommodating the religious needs of foster children.
The cases of Sheri Lipscomb and the Scalfs are not examples of inadequate care caused by Oregon's policy. They are illustrative of only a part of the complex task faced by Oregon and other states in stretching finite resources to provide social services to everyone deserving of them in as fair and efficient a manner as possible. Plaintiffs would have us read the Constitution as requiring Oregon to spend money to provide what would arguably be optimal placements for some children at the expense of the vast majority of other children who need foster care, many of whom are not fortunate enough to have a relative willing and able to take them in even if state funding were available. We decline this invitation.
Implicit to the critics' argument is the assumption that a placement is inadequate simply because it is with a non-relative. Although we agree with the critics that in any given case a child may be better off with a relative than with a non-relative, a placement with a nonrelative is not necessarily inadequate and thus constitutionally infirm.
Critics of Oregon's policy rest their claim on an over-generalization: those who do not qualify as relatives under Oregon law cannot provide adequate care. We find this over-generalization particularly troubling in the context of trying to determine the best interest of children who have been abused and neglected by their closest relatives: their parents. Contrary to the critics' view, we believe that in any given case the child's interests may be better served by a placement with a non-relative, particularly one who possesses the qualifications to be a superior foster parent for almost any child. Moreover, a non-relative may be available who has forged even stronger bonds with the child over time than the available relative. As the California Court of Appeal noted in upholding a California regulation similar to Oregon's policy, ultimately the most significant consideration in placing a child is "the best interests of the child, not the fact of a relationship by blood or marriage." King v. McMahon, 186 Cal.App.3d at 664, 230 Cal.Rptr. 911 (construing California's regulation). Thus, generalizations about children being better off with relatives than with non-relatives have only limited value in assessing how well a particular foster parent serves the best interests of a particular child.
This observation is especially true in Oregon because of the state's limited definition of relatives. See Or.Rev.Stat. § 418.625(2); Or.Admin.R. 412-27-030 (defining a relative as a "grandparent, sister, brother, aunt or uncle who is related by blood, adoption or marriage"). For example, a child might be far better off with an ex-step parent with whom he has bonded rather than with a distant uncle, regardless of Oregon's failure to define as a relative an ex-step parent who has not adopted the child.
This is also especially true in Oregon because placement with a relative does not indicate that the state has determined that placement with thát particular relative will serve the best interests of that particular child. Rather, under Oregon law, CDS's placement reflects only the fact that the relative can provide adequate care, not that the relative is the best available foster parent for the child.
[Oregon] . will protect a child's right to live with his or her immediate or extended family except when there is indication that family members will not adequately provide for the child's welfare. In determining either the temporary or permanent placement of a child, CSD will consider placement with relatives in preference to person that the child does not know if there is reason to believe that the child's relatives will be able to provide appropriate care, stability and security for the child.
Or.Admin.R. 412-27-045 (emphasis supplied). There is therefore no support for the dissent's assertion that, in denying the members of the second subclass a placement with relatives, the state has necessarily denied the children "the care and companionship of those adults who, in the state's own professional judgment, are best suited to provide them a loving family environment." Dissent at 1390 (emphasis in the original).
III. CONCLUSION
In a perfect world perhaps every juvenile ward could have a custom-made child care plan funded by the state, giving both the benefits of care provided by loving relatives and medical services, counseling, and other professional services that would answer that child's particular needs at no cost to those relatives. The State of Oregon, finding itself in an imperfect budgetary environment, believed that it has allocated its limited resources in the best possible way in order to accomplish the goals of its foster care program.
At argument it was suggested that Oregon would be on firmer constitutional ground if it were to fashion a need-based schedule of payments to relatives providing foster care. The state is free to- adopt any statutory scheme that meets minimal constitutional requirements. It is not the function of the judicial branch of the federal government, however, to fashion new and improved child-care plans for the states. Whether we would vote for the state's plan if it were placed before us as members of the legislative assembly is not the question we are to decide.
The judgment of the district court is AFFIRMED.
. By stipulation of the parties the case was certified November 15, 1991, as a class action after the state suggested that certain of the claims had become moot because of the passage of time.
. Eligibility under Title IV-E depends on whether children would be entitled to benefits under Title IV-A of the Social Security Act (Aid to Families with Dependent Children (AFDC)) in the household from which they have been removed. See 42 U.S.C. § 606(a), 607, 672(a).
.It is agreed that the placement and payment decisions by the defendants constitute "state action" within the meaning of 42 U.S.C. § 1983, and that the decisions of the named defendants are made pursuant to the state statutes and regulations that are challenged in this case.
. While the controversy before us concerns only Oregon welfare allocations of state money, the invalidation of the Oregon plan would have substantial effects elsewhere in the circuit. California, for example, asserts in its amicus brief that the reversal of the district court in this case would have an immediate impact of more than $65 million per year of additional state funds that would have to be found to pay relatives over and above any funds they now receive from other programs. Brief of Amicus Curiae California Department of Social Services at 15.
. In Youakim, the Supreme Court struck down on statutory grounds, without reaching any constitutional questions, an Illinois statute that denied payments to relatives who met state licensing requirements for participation in the federal foster care benefit program currently administered under Title IV-E. See 440 U.S. at 145, 99 S.Ct. at 969.
. In the traditional due process context, the Court has likewise recognized that "freedom of personal choice in matters of family life is a fundamental liberty interest protected by the Fourteenth Amendment." Santosky v. Kramer, 455 U.S. 745, 753, 102 S.Ct. 1388, 1394, 71 L.Ed.2d 599 (1982).
. It is undisputed that various combinations of other state and federal funding are available to children placed by CSD in foster homes with relatives. Relatives offering foster home care may be eligible on a need basis for AFDC. Disabled foster children also may be eligible to receive Supplemental Security Income assistance. 42 U.S.C. § 1381, 1382(a); 20 C.F.R. § 416.906. Foster children who receive AFDC or SSI are automatically eligible for Medicaid. 42 C.F.R. § 435.110(a), 435.120.
. The California Court of Appeal noted that there was no evidence in the record that the lack of state payments discouraged relatives from providing foster care. 186 Cal.App.3d at 665, 230 Cal.Rptr. 911. The court's holding, therefore, may not be as applicable to the second subclass here.
. As noted above, the district court decided this case on stipulated facts. These facts are set forth clearly in the district court's order, and they constitute the factual record for purposes of this appeal. See District Court Opinion at 2-6; see generally 9 J. Wigmore, Evidence § 2588, at 586 (3d ed. 1940). The dissenters rely on the affidavits of Sheri Lipscomb, the Scalf children, the DeFehrs and the Selfs. Dissent at 1387-88 & nn. 5, 7. These affidavits are not evidence and were not considered by the district court in reaching its decision. Their use by the dissent is interesting. The substance of the affidavits was largely incorporated into the factual allegations of the plaintiffs' complaint, which the defendants denied. See Defendants' Answer at 2. Because the affidavits were not part of the summary judgment record upon which the district court relied, the defendants had no reason to depose the affiants, to offer counteraffidavits, or otherwise to develop a competing factual record.
In contrast to the detailed "factual" picture painted by the dissent, the parties stipulated only that Sheri Lipscomb is "a handicapped child who was removed from her home in April 1986 on account of abuse and neglect by her parents" and placed with her aunt and uncle, Carolyn and Robert DeFehr, and that the De-Fehrs have no medical coverage and "are afraid that they will be forced to give her up on account of their inability to pay for her medical care." Stipulation of Facts at 2, ¶ 2.
In the case Autumn and William Scalf, the parties merely stipulated that the children were removed from their home in January 1986 on account of abuse and neglect by their parents and placed by CSD with their aunt and uncle, Gloria and Ron Self, where they received no state foster care benefits but did receive Title IV-E benefits for a limited time. Id., ¶ 3. In August 1986, "at the request of Ron and Gloria Self because no foster care benefits were available for Autumn and William Scalf and because Ron and Gloria Self were concerned that they would be unable to care for the needs of Autumn and William Scalf, CSD placed Autumn and William Scalf in foster care with persons unrelated to them," where they receive state foster care benefits and related medical coverage. Id., ¶ 4.
. The relevant statutes direct CSD to consider the interests of all children in its custody, not one particular group. See Or.Rev.Stat. § 418.-485, 418.640(1). CSD reasonably may balance competing claims for its limited funds in order to maximize the benefits to all children in its custody; it is not required to provide optimal benefits to plaintiffs at other children's expense.