Settlement to Repay Adoptive Families

July 29, 2008

By Karen McCowan  |  Register-Guard  —  

The state of Oregon has agreed to pay a combined $1.7 million to thousands of families who adopted Oregon foster children and then saw their promised state assistance abruptly reduced during a 2003 state budget shortfall.

The payments to the families of more than 6,688 former foster children are part of a class action lawsuit settlement approved Monday by U.S. District Court Judge Ann Aiken.

Andy Stahl of Eugene was one of four adoptive parents who sued the state in 2003, challenging its unilateral decision to cut by 7.5 percent the monthly adoption subsidies it had agreed in writing to pay parents.

Stahl is the father of a son and daughter adopted through the state’s assistance program. He called the settlement a long-overdue remedy for “a real slap in the face” to thousands of parents who had negotiated state assistance based on the special needs of individual Oregon foster children they were adopting.

Stahl declined to discuss his children’s needs to protect their privacy, but he said adoption assistance generally covers such expenses as counseling for attachment disorders and effects of physical abuse or prenatal drug exposure.

Stahl, executive director of Forest Service Employees for Environmental Ethics, said his family lost only about $38 per month during the 10-month period of reduced assistance. But he initiated the suit “as a matter of principle” because of the state’s approach and because of the serious impact on families with lower incomes or who adopted more foster children.

He was particularly galled by the way the state notified parents.

“They sent all of us a letter saying, ‘We are reducing your payment by 7.5 percent. Please return the attached form with your signature on it or we will cut your payment to zero,’ ” Stahl said. “These contracts can only be changed by mutual agreement, so they were essentially blackmailing families to agree to the cuts.”

Al Christensen, a Dayton adoptive parent who joined Stahl in the case, agreed.

“I was shocked, because each of these contracts is individually negotiated based on the child’s needs,” said Christensen, who has three adopted children and a foster child and lost about $1,800 in state assistance during the 2003 cutbacks. “I thought to myself,‘How can the government break the contracts?’ ”

The U.S. District Court in Eugene in 2004 rejected the adoptive families’ claim that they had a right to individual hearings to determine whether reduced payments were appropriate. But the families appealed to the Ninth Circuit Court of Appeals, which overturned the decision in 2005, rejecting the state’s claim that it would be “economically inefficient” to renegotiate each contract.

Federal law “explicitly creates a right to individualized payment determinations for adoption assistance,” the appeals court held. “That right cannot be abrogated for the convenience of the State.”

The state appealed to the U.S. Supreme Court, which declined to hear the case.

The Oregon attorney general’s office, which represented the state, then contacted the adoptive parents to suggest a settlement, said Eugene attorneys Art Johnson and Michele Smith, who helped represent the parents.

“It’s been a long time coming,” Johnson said.

He said the state took more than two years to provide estimates of what it owed each family. The parties then had mediation sessions with U.S. Magistrate Judge Thomas Coffin to reach a settlement.

Jake Weigler, a spokesman for the attorney general’s office, said Monday that the state is “pleased to find a compromise that will put this difficult period behind us.”

“Deep budget cuts forced the state to make difficult choices and we’re glad that this has been brought to a resolution,” he said.

Attorney Maria Ramiu of the San Francisco-based Youth Law Center argued the appeal on behalf of the parents. She said the Ninth Circuit ruling sets an important national precedent for foster children and their adoptive families.

“One of the things to come out of this case is (affirmation) that the Federal Adoption Assistance Act of 1980 establishes a federal right for recipients of that program to have their payments individually determined to meet the needs of that child in that family,” she said. “States cannot just go in and implement across-the-board cuts.”

The $1,733,225 settlement will reimburse all adoptive parents who received a 7.5 percent reduction in their child’s adoption assistance in 2003.

They will have an opportunity to testify about the settlement’s fairness at a hearing on Sept. 24.

If the court then gives final approval, the parents will receive their payments without having to file an application.

None of the settlement funds will go to the attorneys in the case. Because it is a civil rights action, the court may direct the state to pay a reasonable attorney fee.