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FOR IMMEDIATE RELEASE
March 14, 2002
State Asks High Court to Review Decision on Foster Care Funding


OLYMPIA - March 14, 2002 - The U.S. Supreme Court today will be asked to reverse a Washington Supreme Court decision that prohibits the state from using foster children's Social Security money to provide for their care.

 Supreme Court petition
(MS Word 106K)

 

The state's petition is being filed by Attorney General Christine Gregoire at the request of the Department of Social and Health Services.

At least one national child-advocacy group, the Child Welfare League of America, has publicly announced its support for the state's position in the case. In addition, the U. S. Department of Justice has supported the state's efforts to maintain its current program.

The case, DSHS v. Keffeler, involves Social Security payments that are received by DSHS on behalf of state-supported foster children, typically when there is no parent, guardian or relative available.

About two-thirds of the 1,500 foster children who receive Social Security payments in Washington are eligible to do so because they are both disabled and indigent. The other third are eligible because they are surviving dependents of deceased or disabled parents.
Under the Social Security Act, the payments are intended to pay for such current needs as food, clothing and shelter. Like Washington, public agencies in most other states also use Social Security money to help defray foster-care costs.

"Losing these benefits would be a terrible blow to the entire state foster-care program, and, more importantly, to the children we serve," said DSHS Assistant Secretary Rosalyn Oreskovich, who heads the agency's Children's Administration.

"Most of these children have no one else to apply for Social Security benefits on their behalf. In those cases, we step forward to obtain the benefits, which they will continue to receive once they return to their own homes, are adopted or become adults."

The class-action lawsuit that is the subject of the state's appeal involves all past, present and future foster children for whom the state sought and obtained Social Security money. An Okanogan County judge enjoined DSHS from using Social Security payments to reimburse foster-care costs and ordered the state to pay restitution. That ruling was appealed directly to the state Supreme Court, which ruled against DSHS in a 5-3 decision last October.

On March 13, the U.S. Supreme Court granted a state request for a stay of the state Supreme Court order while the case is under appeal to the nation's the high court.
The stay was supported by U.S. Solicitor General Theodore Olson in a brief filed in response to a Supreme Court invitation to comment on the state's request for a stay. In the brief, Olson said that when parents or guardians receive Social Security money on behalf of children, they should use it to cover the cost of feeding, clothing and sheltering the children. "There is no legal or logical reason why the State should not be able to use the child's benefits in the same way," Olson said.

In announcing its support of the state's position, Child Welfare League of America Vice President Robert McKeagney said that obtaining benefits for eligible children "helps to ensure support for the cost of essential services, both during and after a particular child's stay in foster care. A decision to prohibit the use of these funds for these basic services could result in significant harm to these and many other children who require the care and protection of the State of Washington."

A decision by the Supreme Court whether to hear the state's appeal is expected by the end of the Court's current term on June 30. If the case is accepted, oral argument will likely occur next fall, with a decision in the spring of 2003.

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BACKGROUND PAPER ON CASE INVOLVING STATE USE OF SOCIAL SECURITY PAYMENTS RECEIVED ON BEHALF OF FOSTER CHILDREN

Washington State Department of
Social and Health Services, Et Al.
v.
Guardianship Estate of Danny Keffeler,
By Wanda Pierce, Guardian,
and Other Persons Similarly Situated

Children in Washington who are abused, abandoned or neglected are frequently placed in the care of the state Department of Social and Health Services. Children who are dependents of deceased or disabled parents or who are low-income and disabled are eligible to receive Social Security payments to help cover the cost of their food, clothing and shelter. In situations where eligible children have no suitable parents or guardians to act on their behalf, the Commissioner of Social Security appoints DSHS as "representative payee" for purposes of receiving the Social Security money. Under a regulation adopted by the Secretary of DSHS, this money is used on behalf of the children to help pay for the cost of their foster care. Public agencies in all states similarly use Social Security funds to meet the needs of foster children. In addition, the legal principles of this case apply when a parent or other guardian is appointed as representative payee for a child who is eligible for Social Security payments.

Case Background

In 1989, Danny Keffeler was voluntarily placed in state foster care by his mother, Mary Lou Pierce. Ms. Pierce died in an automobile crash the following year. The Okanogan County Superior Court then appointed Danny's grandmother, Wanda Pierce, guardian of his estate. Although Mrs. Pierce was appointed guardian, she did not care for Danny. The court placed Danny in the care of DSHS, and he was left in foster care.

Danny was awarded Social Security benefits, and Mrs. Pierce was appointed his representative payee. Mrs. Pierce did not provide any of the benefits to the Department to pay for the cost of Danny's foster care. The Social Security Administration removed Mrs. Pierce and appointed DSHS as representative payee, and for the next two years DSHS served as Danny's representative payee. During this time, DSHS applied the benefits to Danny's cost of care. Mrs. Pierce objected to her removal as Danny's payee, and after several hearings before federal administrative law judges, her objection was sustained and she was reinstated as payee.

Legal History

In 1995, Mrs. Pierce filed suit against DSHS on behalf of the Estate of Danny Keffeler to recover the benefits the department used to pay for Danny's care during the time when the Department was his payee. The action was also brought on behalf of a class of foster children in the Department's care who receive Social Security benefits. The complaint alleged that the Department's use of the benefits violated the Social Security Act.

In 1997, the Okanogan County Superior certified the class to include all past, present, and future foster children in Washington who receive Social Security payments for whom the Department acts or has sought to act as representative payee.
In 1998, the trial court ruled in favor of the plaintiffs. The court's order enjoined the DSHS from using Social Security benefits to pay for the cost of a foster child's care and "from in any way administering the funds to offset the State's cost of maintaining a child in foster care." The order required the Department to provide an accounting of the benefits received and spent on class members since April 18, 1975. Based on this accounting, plaintiffs were authorized to file claims. The trial court also awarded the Estate of Danny Keffeler $4,998, which was the amount of the benefits the Department had used to pay for Danny's care.

DSHS appealed the trial court's injunction to the Washington Court of Appeals, which certified the case to the Washington Supreme Court. The state did not appeal the financial award, and paid the money to Danny Keffeler's estate. The state Supreme Court accepted the case and stayed the trial court's injunction pending review. Subsequently, the U.S. Department of Justice filed a friend of the court brief in support of DSHS and participated in oral argument before the Court. The Supreme Court returned the case to the trial court for additional fact-finding, and then held a second oral argument. The Department of Justice also participated in this argument in support of the Department.

On October 11, 2001, the state Supreme Court entered its judgment in the case. A five-justice majority opinion affirmed the trial court's decision. In December, the state Supreme Court denied DSHS's motion for reconsideration. In January, U.S. Supreme Court Justice Sandra Day O'Connor granted a temporary stay of the state Supreme Court order, thus keeping the program in place for the time being. Among other things, the state argued that if the program were suspended while the case is on appeal, many children would lose their benefits because their individual Social Security accounts would accumulate more than the $2,000 maximum allowed by federal law. The stay was supported by U.S. Solicitor General Theodore Olson in a brief filed at the Supreme Court's request. On March 13, 2002, the U. S. Supreme Court ordered that the stay remain in effect pending the high's court's disposition of the case.

Status of case:

On March 14, 2002, a Petition for a Writ of Certiorari asking the U.S. Supreme Court to reverse the Washington Supreme Court decision was filed by Attorney General Christine Gregoire at the request of DSHS. A decision by the Supreme Court whether to hear the state's appeal is expected by the end of the Court's current term on June 30. If the case is accepted, oral argument will likely occur next fall, with a decision in the spring of 2003.

Summary of Issue Before the U.S. Supreme Court:

The Court has been asked to decide whether a representative payee violates the Social Security Act when the payee uses the benefits to pay for the beneficiary's current care.

 


 

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