A split Second Circuit panel weighed in on an issue dividing federal appellate courts Friday, siding with the Sixth and Ninth circuits in finding that the Child Welfare Act creates a specific, enforceable financial entitlement for foster households.

The panel majority of Circuit Judge Guido Calabresi and U.S. District Judge William Sessions III of the District of Vermont, sitting by designation, sent a suit filed by foster care advocacy group New York State Citizens' Coalition for Children back to the district court. The lawsuit was filed against the state's Office of Children and Family Services.

The majority agreed with the U.S. District Judge William Kuntz of the Eastern District of New York that the coalition had standing to sue on behalf of its members. However, Kuntz's dismissal, after finding no enforceable right to payments in the CWA, was reversed.

The case began with the coalition filing a Section 1983 suit against the state on behalf of its foster parent members in 2010. The group claimed OCFS failed to make adequate foster care support payments as required under the CWA.

The suit bounced back and forth between the district and appellate courts over the ensuing years. In each return, the panel majority noted, state attorneys raised new issues over the coalition's standing, with the most recent iteration being an argument that it was third-party standing rules which barred the coalition's suit.

Tackling the issue first, the majority agreed with the district court that the coalition's expenditure of resources to help foster families dealing with the payment issues represented a nontrivial resource expenditure. After questioning if the third-party standing doctrine continues to exist after the U.S. Supreme Court's 2014 Lexmark v. Static Control Components ruling, the panel majority found the coalition easily qualified for an exception for standing where the injured party faced barriers to bringing legal action on its own.

“The coalition has demonstrated that the manifest desire of their foster parent members for anonymity constitutes a significant disincentive for those parents to sue in their own names,” the majority wrote.

Turning to the main issue in the case, the panel majority examined which of three possible scenarios exist under the CWA: an explicit right to payments, solely a regulatory framework guiding state aid, or the hand off of authority to states to enact the requirements?

The review of the act's text and statutory structure led the panel majority to find it was indeed imbued with a specific monetary entitlement, and the provision of federal agency review for states' compliance wasn't enough to supplant enforcement through federal suit.

The act clearly defines foster care payments, the panel majority's review found, using mandatory language to define where and for what federal funds are to be used to support children participating in the states' individual frameworks. The two avenues for addressing funding compliance given to the states, and the one provided to the secretary, don't provide a substantial federal process, according to the panel majority.

“While the act requires states to conduct internal review and contemplates that the secretary will ensure that the state remains in substantial compliance, the only individual review mechanism specifically provided for in the act is at the state level,” the majority wrote.

The tests for determining whether a right to sue for enforcement was one of the points of contention between the panel majority and Circuit Judge Debra Ann Livingston, who dissented.

Livingston argued that the U.S. Supreme Court's 2002 decision in Gonzaga University v. Doe established that, absent an unambiguous conference of the right to suit in a statute, one does not exist. That CWA does not provide an unambiguous right that forces states to cover the entire cost of foster care, she went on to argue.

The majority's opinion, she argued, violated the principle that the federal protection of rights did not unduly interfere with states' legitimate activities, “upending the relationship between the federal government and state foster care systems while ushering dozens of federal judges in this Circuit into the delicate and sensitive world of local child‐welfare policymaking.

“I see nothing in the CWA indicating that Congress intended such a result—let alone that it unambiguously did so,” she added.

The panel majority said Gonzaga didn't obviate the three-factor test for determining a right to sue established by the Supreme Court in 1997's Blessing v. Freestone ruling, it simply clarified misinterpretations.

“To the extent that the dissent is trying to read the tea leaves to predict that the Supreme Court may move away from Blessing in the future, this Court is not tasked with—and is, in fact, prohibited from—such guesswork,” the majority held.

As such, the panel majority went on to find the CWA created a binding payment obligation on states in the program, which was codified as a right for foster children and their parents, and provided the same kind of judicial enforcement ability and guidance that federal courts regularly look to when handling other federal benefits programs.

The Second Circuit's decision created a lopsided split among the circuits, the majority panel noted. By joining the Sixth and Ninth circuits, the Manhattan appellate court created a 3-1 divide with the Eighth Circuit as the sole appellate circuit holding the CWA does not provide a right to sue over benefits.

The coalition was represented by Morrison & Foerster partners Grant Esposito and Brian Matsui. Neither responded to a request for comment. A similar request sent to the coalition itself likewise received no response.

A spokeswoman for the New York State OCFS declined to comment on pending litigation.