ASW v. Oregon Ex Rel. Department of Human Services , 424 F.3d 970 ( 2005 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ASW, Individually and as 
Guardian ad litem for MSW and
OSW, minors; SSW; ALC,
Individually and as Guardian ad
litem for SRC and JSC, minors;
JKC; JSS, Individually and as
Guardian ad litem for BKS, a
No. 03-35950
minor; SDS; CEW,
Plaintiffs-Appellants,
 D.C. No.
CV-03-06038-ALA
v.
OPINION
STATE OF OREGON, by and through
its Department of Human
Services; JEAN I. THORNE, in her
official capacity as Director,
Oregon Department of Human
Services,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Oregon
Ann L. Aiken, District Judge, Presiding
Argued and Submitted
May 2, 2005—Portland, Oregon
Filed September 13, 2005
Before: Procter Hug, Jr., A. Wallace Tashima, and
Richard R. Clifton, Circuit Judges.
Opinion by Judge Clifton
13141
ASW v. STATE OF OREGON 13145
COUNSEL
Maria F. Ramiu (argued) and Alice Bussiere, Youth Law
Center, San Francisco, California, and Arthur C. Johnson and
Dennis M. Gerl, Johnson, Clifton, Larson & Corson, PC,
Eugene, Oregon, for the plaintiffs-appellants.
Hardy Myers, Attorney General, Mary H. Williams, Solicitor
General and David E. Leith, Assistant Attorney General
(argued), State of Oregon, Salem, Oregon, for the defen-
dants-appellees.
OPINION
CLIFTON, Circuit Judge:
Plaintiffs are parents of adopted children with special needs1
1
Children with special needs include, inter alia, a child who has a docu-
mented medical, physical, mental, or emotional condition, a history of
13146 ASW v. STATE OF OREGON
who receive adoption assistance payments from the State of
Oregon. They appeal the district court’s dismissal of their
class action lawsuit under 42 U.S.C. § 1983, which alleged
several violations of their statutory rights under the Adoption
Assistance and Child Welfare Act of 1980, 42 U.S.C. §§ 620
et seq. (the “Act”), as well as their right to due process prior
to reduction of their adoption assistance payments. Defen-
dants, the State of Oregon and the Director of the Oregon
Department of Human Services (together, “Oregon” or the
“State”), moved to dismiss the action asserting that Plaintiffs
failed to state a claim as a matter of law. The district court
granted the State’s motion. Because we conclude 42 U.S.C.
§§ 671(a)(12) and 673(a)(3) create federal rights enforceable
through a § 1983 cause of action, we reverse.
I. BACKGROUND
The Adoption Assistance and Child Welfare Act of 1980
established a program of federal payments to participating
states to provide funds for financial assistance to aid families
adopting special needs children out of foster care. 42 U.S.C.
§§ 670-76. The State of Oregon accepts funds from the fed-
eral government under this program and thus obligates itself
to abide by the federal requirements.2 Accordingly, Oregon
must enter into a binding written agreement with each pair of
adoptive parents. 42 U.S.C. §§ 673(a)(1) & 675(3). The
amount each family receives in adoption assistance payments
“shall take into consideration the circumstances of the adopt-
ing parents and the needs of the child being adopted, and may
be readjusted periodically, with the concurrence of the par-
abuse, neglect or other identified predisposing factor that places the child
at risk for future problems and need for treatment, is a member of a sibling
group which will be placed together and is difficult to place because there
are three or more children, is a member of an ethnic/racial/cultural minor-
ity, or is eight years of age or older. Or. Admin. R. 413-130-0020.
2
Oregon’s Adoption Assistance Program is codified at Or. Admin. R.
413-130-0000 et seq.
ASW v. STATE OF OREGON 13147
ents” if the circumstances of the parents or the needs of the
child change. § 673(a)(3). Additionally, the federal statute
provides that each grant recipient is entitled to a fair hearing
before the applicable state agency to challenge any claim for
benefits that “is denied or is not acted upon with reasonable
promptness.” § 671(a)(12).
The State sent a form letter in December 2002 to all fami-
lies in Oregon receiving adoption assistance payments to
inform them that because of budgetary shortfalls their pay-
ments would be reduced 7.5%. The form letter asked the fam-
ilies to agree to the reduction or risk having their adoption
assistance payments terminated. The families were also
informed that they would not be entitled to individual hear-
ings to challenge the reductions. Although the families did not
agree to the reductions, their adoption assistance payments
were not terminated. The payments were, however, uniformly
reduced by 7.5% beginning in February 2003. The State
selected 7.5% as the amount of the reduction to coincide with
its decision to reduce foster care maintenance payments by
that same amount, also effective February 2003.
Plaintiffs brought a 42 U.S.C. § 1983 class action against
the State, asserting, inter alia, that they have a federal right
to have the amount of their adoption assistance payments
based on an individualized assessment of their special needs
and circumstances, as well as a federal right to have a fair
hearing before an administrative agency to contest reductions
in their payments. Plaintiffs claimed these rights were vio-
lated by the State’s unilateral action.3 Plaintiffs sought a dec-
laration of their rights and an injunction to prevent the State
from uniformly and unilaterally reducing their adoption assis-
tance payments and denying them the opportunity to chal-
lenge the reductions in a “contested case hearing.” The district
court concluded that the rights Plaintiffs claimed the State
3
Plaintiffs’ complaint also included a breach of contract claim. That
cause of action is not before us.
13148 ASW v. STATE OF OREGON
violated were not enforceable through a § 1983 cause of
action and granted the State’s motion to dismiss. Plaintiffs
timely appealed.
II. MOOTNESS
Oregon argues that Plaintiffs’ claims are moot because a
state administrative rule, Or. Admin. R. 413-130-0127, which
became effective November 1, 2003, increased monthly adop-
tion assistance payments by 8.108%, thus making the amount
of the monthly payments slightly larger than they had been
before the reduction nine months earlier. Mootness is a ques-
tion of law that we review de novo. S. Or. Barter Fair v.
Jackson County, 372 F.3d 1128, 1133 (9th Cir. 2004). We
conclude the case is not moot because, although the increase
authorized by rule 413-130-0127 exceeded the 7.5% reduc-
tion, it did nothing to alter the provisions of rule 413-130-
0125 challenged here.
[1] “A case loses its quality as a ‘present, live controversy’
and becomes moot when there can be no effective relief.” San
Lazaro Ass’n v. Connell, 286 F.3d 1088, 1095 (9th Cir. 2002).
Because Plaintiffs brought suit under Ex parte Young, 209
U.S. 123 (1908), they cannot seek monetary redress for a past
harm and thus their case is moot unless they are in a position
to benefit from prospective relief. See Verizon Md., Inc. v.
Pub. Serv. Comm’n, 535 U.S. 635, 645 (2002); Taylor v.
Westly, 402 F.3d 924, 929-930 (9th Cir. 2005) (explaining
that the Eleventh Amendment generally “shields state govern-
ments from money judgments in federal courts, and from
declaratory judgments against the state governments that
would have the practical effect of requiring the state treasury
to pay money to claimants”).4 The State argues that because
4
We do not believe that Plaintiffs’ request for a declaration that Or.
Admin. R. 413-130-0125 violates Title IV-E of the Social Security Act
would effect an “ ‘end run’ around . . . Edelman v. Jordan, 415 U.S. 651
(1974).” Green v. Mansour, 474 U.S. 64, 73 (1985). The requested declar-
ASW v. STATE OF OREGON 13149
there is no ongoing violation of federal law, there is no valid
form of relief Plaintiffs can be awarded. The cases Oregon
relies on, however, are inapposite. See, e.g., Green, 474 U.S.
at 73 (holding that plaintiff’s claim was moot where Congress
amended the relevant statute clarifying, and thereby resolving,
the controversy that had arisen due to ambiguities in the origi-
nal statute); In re Investigation Pursuant to the Comprehen-
sive Envtl. Response, 820 F.2d 308, 311-12 (9th Cir. 1987)
(dismissing the case because Congress enacted substantial
amendments to the relevant statutory provisions while the
case was on appeal, the court reasoned that “[w]here new leg-
islation represents a complete substitution for the law as it
existed . . . arguments based upon the superseded part are
moot”). By contrast, Or. Admin. R. 413-130-0127 did not
repeal, substitute, or even amend the challenged administra-
tive rule in any way. Accordingly, its adoption did not elimi-
nate Plaintiffs’ claim for relief.
[2] Moreover, we are “particularly cautious when a case
has become moot because the defendant has voluntarily
ceased to pursue the challenged course of action.” Smith v.
Univ. of Wash. Law Sch., 233 F.3d 1188, 1194 (9th Cir.
2000). Here, not only was the increase in benefits voluntary,
Oregon explicitly left the mechanism in place whereby it can
uniformly reduce adoption assistance payments at any time in
the future. The posture of this case therefore contrasts sharply
with Native Village of Noatak v. Blatchford, 38 F.3d 1505,
1510 (9th Cir. 1994), where the relevant statute had been
repealed and the plaintiffs simply feared the possibility that
the state would continue to discriminate under the new statute.
It is not a mere “theoretical possibility” that Oregon could
atory relief addresses the methodology for determining adoption assistance
payments under 42 U.S.C. § 673(a) and does not resolve Oregon’s liability
for any withheld funds. As the State concedes, should Plaintiffs seek mon-
etary damages, they would need to bring individual contract claims against
the State to enforce the terms of their binding agreements.
13150 ASW v. STATE OF OREGON
adopt an administrative rule providing for uniform reductions
in adoption payments. Oregon already has such a rule, which
it purposely chose not to repeal. Indeed, based on its argu-
ments before this Court, it is probable that when faced with
a similar budgetary crisis, Oregon would again consider uni-
formly and unilaterally reducing adoption assistance pay-
ments. In light of that very real possibility, Oregon has not
met its “heavy burden of persuading” the court that “subse-
quent events make it absolutely clear that the allegedly
wrongful behavior could not reasonably be expected to
recur.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs.
(TOC), Inc., 528 U.S. 167, 189-90 (2000).
[3] Because Plaintiffs’ challenge to Or. Admin. R. 413-
130-0125 is not rendered moot by the adoption of Or. Admin.
R. 413-130-0127, we proceed to a discussion on the merits.
III. MERITS
We review de novo the district court’s decision to grant the
State’s motion to dismiss pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure. See Decker v. Advantage
Fund Ltd., 362 F.3d 593, 595-596 (9th Cir. 2004). We accept
as true all well pleaded facts in the complaint and construe
them in the light most favorable to the nonmoving party. See
Decker, 362 F.3d at 595; Rodriguez v. Panayiotou, 314 F.3d
979, 983 (9th Cir. 2002).
[4] Plaintiffs correctly point out that legislation enacted
pursuant to Congress’s spending power can give rise to
enforceable rights under 42 U.S.C. § 1983. See Gonzaga
Univ. v. Doe, 536 U.S. 273, 280-81 (2002) (explaining why
the two cases in which it had previously found enforceable
rights, Wright v. Roanoke Redev. & Hous. Auth., 479 U.S. 418
(1987) and Wilder v. Virginia Hosp. Ass’n, 496 U.S. 498
(1990) were correctly decided).5 To sustain a § 1983 cause of
5
See, e.g., Price v. City of Stockton, 390 F.3d 1105, 1114 (9th Cir. 2004)
(42 U.S.C. § 5304(k) provides individuals displaced by federally funded
ASW v. STATE OF OREGON 13151
action, Plaintiffs must demonstrate that they are seeking
redress for the violation of a federal right, not merely a viola-
tion of federal law. Id. at 283. In other words, Plaintiffs must
establish either that they have a federal right under 42 U.S.C.
§ 673(a)(3) to individualized adoption assistance payment
determinations, or that under § 671(a)(12) they have a federal
right to a fair hearing before the State agency to challenge
reductions in their adoption assistance payments.
[5] The Supreme Court has identified three factors, which
if present, establish a rebuttable presumption of an enforce-
able federal right.6 Blessing v. Freestone, 520 U.S. 329, 341
(1997). A federal statutory provision creates an individual
right if (1) Congress intended the provision in question to
benefit the plaintiff;7 (2) the plaintiff demonstrates that the
right assertedly protected by statute is not so “vague and
amorphous” that its enforcement would strain judicial compe-
tence; and (3) the statute unambiguously imposes a binding
obligation on the state. Id.
redevelopment activities with an enforceable right to benefits); Rabin v.
Wilson-Coker, 362 F.3d 190, 201-02 (2d Cir. 2004) (42 U.S.C. § 1396r-6
creates an enforceable right to transitional medical assistance benefits);
S.D. ex rel. Dickson v. Hood, 391 F.3d 581, 605-06 (5th Cir. 2004) (under
42 U.S.C. § 1396a(a)(10)(A) of the Medicaid Act plaintiff had an enforce-
able right to medically necessary incontinence supplies).
6
In Gonzaga University, the Court acknowledged the continuing rele-
vance of the Blessing test to “guide judicial inquiry into whether or not a
statute confers a right.” 536 U.S. at 282. See Price, 390 F.3d at 1109 n.4
(concluding that “the Blessing test still applies to claims asserted under
Section 1983”).
7
Clarifying the first prong of the Blessing analysis, in Gonzaga Univer-
sity the Court explained that if Congress intends to confer individual rights
on a class of beneficiaries, it must do so unambiguously through “explicit
right-or duty-creating language” that is “phrased in terms of the person
benefitted.” 536 U.S. at 283-84, 284 n.3.
13152 ASW v. STATE OF OREGON
A. Statutory Right to Individualized Payment
Determinations
Our initial inquiry is whether the text and structure of the
Act contains the requisite “rights-creating” language that
evinces a congressional intent to confer an entitlement to indi-
vidualized payment determinations. Price, 390 F.3d at 1110.
We conclude that it does.
[6] Section 671 requires Oregon to have a plan that man-
dates that adoption assistance will be provided in accordance
with § 673. Section 673(a)(3) requires that the amount of
adoption assistance payments be determined “through agree-
ment between the adoptive parents and the State . . . which . . .
take[s] into consideration the circumstances of the adopting
parents and the needs of the child being adopted.” Further-
more, the amount of the payment may only be readjusted
“with the concurrence of the adopting parents, depending
upon changes” in the circumstances of the adopting parents
and the needs of the child.8 This language evinces a clear
intent to create a federal right. See Price, 390 F.3d at 1111.
The statutory text unambiguously requires the State to engage
in an individualized process with each family that takes into
account their unique requirements in determining the amount
of their adoption assistance payments throughout the duration
8
This assumes that the parents continue to qualify to participate in the
adoption assistance program. Additionally, Oregon is correct that the
amount of the adoption assistance payment is limited under § 673(a)(3) in
that it cannot “exceed the foster care maintenance payment which would
have been paid during the period if the child with respect to whom the
adoption assistance payment was made had been in a foster family home.”
It is the methodology of calculating the payments, however, not the partic-
ular amount of the payment, that Plaintiffs challenge here. Furthermore,
Plaintiffs contend, and the State does not dispute, that at no time did their
adoption assistance payments exceed the applicable foster care mainte-
nance payments, even after the reduction in foster care payments made by
the State in February 2003. Accordingly, the limiting language contained
in § 673(a)(3) is not applicable.
ASW v. STATE OF OREGON 13153
of their participation in the program.9 Just as “Title VI of the
Civil Rights Act of 1964 and Title IX of the Education
Amendments of 1972 create individual rights because those
statutes are phrased with an unmistakable focus on the bene-
fitted class,” Gonzaga Univ., 536 U.S. at 284,10 these particu-
lar statutory provisions are unambiguously framed in terms of
the specific individuals benefitted and contain explicit duty
creating language. Thus, this case is analogous to Price v.
City of Stockton, where, in concluding that 42 U.S.C. § 5304
created enforceable individual rights, we emphasized that the
statutory text “require[d] that benefits be provided to particu-
lar persons . . . evinc[ing] a clear intent to create a federal
right.” 390 F.3d at 1111. See also Rabin, 362 F.3d at 201 (the
phrase “each family” suggests an individualized as opposed to
an aggregate focus); Hood, 391 F.3d at 603 (a statute that pro-
vides medical assistance to all individuals who meet certain
eligibility requirements “is precisely the sort of ‘rights-
creating’ language identified in Gonzaga”).
[7] The second and third prongs of the Blessing test are also
satisfied. The right to individualized payment determinations
that reflect the unique circumstances of the parents and the
special needs of their adopted child is a concrete and objective
9
Oregon’s argument that it would be economically inefficient to engage
in individualized determinations for recipients of adoption assistance pay-
ments whenever it lowered its foster care maintenance payments is irrele-
vant. Unlike foster care maintenance payments, codified in a standardized
rate schedule, § 673(a)(3) explicitly creates a right to individualized pay-
ment determinations for adoption assistance payments. That right cannot
be abrogated for the convenience of the State.
10
In Gonzaga University, the Court emphasized that the Family Educa-
tional Rights and Privacy Act of 1974 did not speak in terms of the indi-
vidual, but instead had an aggregate focus that was “not concerned with
whether the needs of any particular person have been satisfied.” 536 U.S.
at 288. Unlike the statute in Gonzaga University, which was “two steps
removed from the interests of the individual student” who had his personal
records disclosed, id. at 287, the focus of the particular statutory provi-
sions at issue here is on the individual parents and their right to individual-
ized payment determinations.
13154 ASW v. STATE OF OREGON
right, the enforcement of which does not “strain judicial com-
petence.” Blessing, 520 U.S. at 340-41. Furthermore, there is
no ambiguity as to what Oregon was required to do under
§ 673(a)(3) as a condition of receiving federal funding under
Title IV-E. Cf. Pennhurst State Sch. & Hosp. v. Halderman,
451 U.S. 1, 24-25 (1981) (holding that the phrases “appropri-
ate treatment” and “least restrictive” were too vague to be
enforceable as the State did not agree to any specific terms
and conditions as a prerequisite to receiving federal funding);
Suter v. Artist M., 503 U.S. 347, 358, 363 (1992) (referencing
Pennhurst, the Court explained that the phrase “reasonable
efforts” standing alone does not provide specific information
regarding “exactly what is required of States by the Act” and
thus was not an enforceable individual right).
We are not persuaded by the fact that in 31 Foster Children
v. Bush, 329 F.3d 1255 (11th Cir. 2003), the Eleventh Circuit
reviewed a different provision of Title IV-E, namely
§ 671(a)(16), and concluded that it did not create the right the
plaintiffs were seeking to enforce. We do not look at the Act
in its entirety and determine at that level of generality whether
it creates individual rights. See Blessing, 520 U.S. at 342-43.11
Instead, we review only the particular statutory provision at
issue.12
11
In response to the Court’s broad reasoning in Suter, Congress enacted
42 U.S.C. § 1320a-2, explicitly stating that simply because § 671(a)(15),
the provision at issue in Suter, did not create an enforceable private right
of action, does not mean that other provisions in Title IV-E did not create
federal rights. Section 1320a-2 also overturned Suter to the extent the
Court held that simply by virtue of being a plan requirement Congress
foreclosed the possibility that the provision could create an individually
enforceable federal right. See, e.g., Price, 390 F.3d at 1113 (holding that
notwithstanding the fact that the provision at issue was a plan certification
requirement, based on a review of the text and structure of the legislation,
Congress also intended the provision to confer an enforceable entitlement
to specific benefits).
12
The plaintiffs in 31 Foster Children brought suit under § 675 asserting
they had a right to prompt placement with permanent families and to have
ASW v. STATE OF OREGON 13155
Because Plaintiffs have asserted a federal right presump-
tively enforceable under § 1983, the burden falls on the State
to rebut this presumption by showing that Congress has “spe-
cifically foreclosed a remedy under § 1983” either expressly
“or impliedly, by creating a comprehensive enforcement
scheme that is incompatible with individual enforcement
under § 1983.” Blessing, 520 U.S. at 341. Section 673(a) does
not explicitly foreclose a § 1983 action, therefore, the State
must demonstrate that Congress created a comprehensive
enforcement scheme that is incompatible with individual
enforcement under § 1983. See id.
[8] We begin our analysis by recognizing that we do “not
lightly conclude that Congress intended to preclude reliance
on § 1983 as a remedy for the deprivation of a federally
secured right.” Price, 390 F.3d at 1114 (quoting Wilder, 496
U.S. at 520). The Act provides that disputes over adoption
assistance benefits may be heard before the State agency, but
does not mention nor preclude federal review. 42 U.S.C.
§ 671(a)(12). The mere availability of administrative review
mechanisms to protect Plaintiffs’ interests cannot defeat their
ability to invoke § 1983. See Blessing, 520 U.S. at 348; Mo.
Child Care Ass’n v. Cross, 294 F.3d 1034, 1039 (8th Cir.
2002) (concluding that the provisions for administrative
review in the Act were “not sufficiently indicative of Con-
gress’s true intent to limit the available remedies”).
[9] Oregon cites a recent decision of the Supreme Court,
City of Rancho Palos Verdes v. Abrams, 125 S. Ct. 1453
(2005), in which the Court held that the alternative judicial
remedy Congress provided in the Telecommunications Act of
their medical and educational backgrounds provided to their caregivers as
part of the case review system. 329 F.3d at 1261. There is no mention in
the statutory text, however, of a right to prompt placement or to have med-
ical and education backgrounds provided to caregivers. By contrast,
§ 673(3) unambiguously creates a right to individualized payment deter-
minations. Thus, the reasoning of 31 Foster Children is inapposite.
13156 ASW v. STATE OF OREGON
1996 (“TCA”) precluded the petitioner from sustaining a
§ 1983 cause of action. Oregon argues that because Congress
provided for the enforcement of adoption assistance agree-
ments under state law, §§ 671(a)(12) and 673(a)(3) do not
create rights that are enforceable under § 1983. The Court,
however, explicitly rejected the proposition that the availabil-
ity of a private judicial remedy conclusively establishes a con-
gressional intent to preclude a § 1983 cause of action. 125
S. Ct. at 1459. Instead, the Court explained that the disposi-
tive issue is whether the private remedy provided by statute
is more restrictive than those available through a § 1983
action, such that the § 1983 action would function as an end
run around the enforcement mechanism Congress provided.
Id. at 1458, 1460. Observing that the enforcement mechanism
provided by the TCA limited relief in ways that § 1983 did not,13
the Court concluded that “[e]nforcement of § 332(c)(7)
through § 1983 would distort the scheme of expedited judicial
review and limited remedies created by [the TCA].” Id. at
1462.
[10] By contrast, the Act does not include a comprehensive
enforcement mechanism incompatible with a § 1983 action. It
simply provides the beneficiary with an “opportunity for a fair
hearing before the State agency” to contest individual benefit
claims under the Act. 42 U.S.C. § 671(a)(12). Notably, Con-
gress did not place any temporal or remedial limitations such
as those the Court considered dispositive in concluding that
Congress intended the statutory enforcement mechanism in 47
U.S.C. § 332(c)(7) to be exclusive. Furthermore, Oregon’s
argument that § 673(a)(1), which requires the State to enter
into binding agreements with adoptive parents, creates a com-
prehensive enforcement scheme incompatible with § 1983
13
The enforcement mechanism available under the TCA (1) mandated
that judicial review be sought within 30 days and the final action heard
and decided on an expedited basis; (2) likely excluded compensatory dam-
ages; and (3) did not provide for attorneys’ fees and costs. Rancho Palos
Verdes, 125 S. Ct. at 1459-60.
ASW v. STATE OF OREGON 13157
mischaracterizes the right Plaintiffs are seeking to enforce
here. Regardless of whether their contracts have been
breached, Plaintiffs are seeking to enforce their right under
§ 673(a)(3) to individualized payment determinations, which
is a federal statutory right that is not dependent on the terms
of their individual contracts. And, even if Plaintiffs were able
to sue on their contracts to enforce their right to individual-
ized payment determinations, “the state-court remedy is
hardly a reason to bar an action under § 1983, which was
adopted to provide a federal remedy for the enforcement of
federal rights.” See Wright, 479 U.S. at 429.
[11] We conclude therefore that Plaintiffs may proceed
with an action under § 1983 on their claim that they were enti-
tled to individualized payment determinations. We do not
comment on the merits; we merely hold that Plaintiffs’ claim
is not subject to dismissal for failure to state a claim.
B. Statutory Right to an Administrative Hearing
[12] Plaintiffs also contend that they have a federal right
under 42 U.S.C. § 671 (a)(12) to individual hearings challeng-
ing the reduction of their adoption assistance payments.14 We
agree. Section 671(a)(12) requires that an individual, whose
claim for benefits is denied or not acted upon with reasonable
promptness, be given an opportunity for a fair hearing before
the State agency. Applying the Blessing test discussed in the
preceding section confirms that Congress intended to create a
federal right to a fair hearing before a State agency, in that the
text of the provision explicitly describes an objective individ-
ual and judicially reviewable right that is phrased in manda-
tory rather than precatory terms. See, e.g., Timmy S. v.
Stumbo, 916 F.2d 312, 317 (6th Cir. 1990) (holding that the
Act grants foster parents an enforceable right to an adminis-
trative hearing).
14
Plaintiffs contend that right was violated when Oregon issued Or.
Admin. R. 413-130-0125(4), which denied them access to a “contested
case hearing.”
13158 ASW v. STATE OF OREGON
Oregon counters that 45 C.F.R. § 205.10(a)(5), made appli-
cable to Title IV-E through 45 C.F.R. § 1355.30, defines and
restricts Plaintiffs’ right to a hearing. Specifically,
§ 205.10(a)(5) provides that a “hearing need not be granted
when either State or Federal law requires automatic grant
adjustments for classes of recipients unless the reason for an
individual appeal is incorrect grant computation.” Yet, accept-
ing as true the facts pled in their complaint, neither State nor
Federal law required automatic grant adjustments, as none of
the Plaintiffs were receiving adoption assistance payments in
excess of the applicable cap after the uniform reduction in
foster care payments.
Oregon also argues that although Plaintiffs were denied an
opportunity for a contested case hearing, they could have
challenged the rule implementing the reduction through a rule
hearing under Or. Rev. Stat. § 183.400.15 Section 183.400,
however, restricts the scope of the available hearing and limits
the possible remedies. In particular, rules are reviewed only
for compliance with the statutory provisions authorizing the
rule and the rulemaking procedures followed. See Beaver
Creek Co-Op. Tel. Co. v. Pub. Util. Comm’n, 50 P.3d 1231,
1235 (Or. Ct. App. 2002) (explaining that while “numerous
individual fact situations can arise under any rule . . . judicial
review of the rule as applied to each of those situations is
reserved to other forums,” i.e., “contested case” hearings).
Moreover, monetary relief can only be sought through a con-
tested case hearing, not a rule hearing. Burke v. Children’s
Servs Div., 607 P.2d 141, 147-48 (Or. 1980).
[13] We conclude that the right to a hearing under Or. Rev.
Stat. § 183.400 does not meet the requirements of a
§ 671(a)(12) hearing. Section 671(a)(12) falls squarely within
15
Oregon’s Administrative Procedures Act provides for three distinct
types of hearings: hearings to challenge a rule (§ 183.400), hearings in
“contested cases” (§ 183.482) and hearings in “other than contested cases”
(§ 193.484).
ASW v. STATE OF OREGON 13159
the category of what Oregon defines as a “contested case”
hearing as it invokes the application of a rule to a particular
factual situation. Furthermore, as monetary relief is not avail-
able under a rule hearing, such a hearing does not satisfy the
requirement for a “fair hearing” for “any individual whose
claim for benefits” has been denied. Pursuant to § 671(a)(12),
Plaintiffs have a right to an individualized fact-specific hear-
ing to adjudicate their unique situation in which benefits were
“denied or . . . not acted upon with reasonable promptness,”
resulting in monetary relief where appropriate.
IV. CONCLUSION
[14] Because it is possible that Plaintiffs could prove a set
of facts in support of their claims that would entitle them to
relief, we hold the district court erred in dismissing Plaintiffs’
action for failure to state a claim under Rule 12(b)(6). Specifi-
cally, the district court erred in concluding that Plaintiffs do
not have federally enforceable rights to individualized pay-
ment determinations and to a fair hearing before a State
agency to challenge individual benefit reductions pursuant to
42 U.S.C. §§ 673(a)(3) and 671(a)(12), respectively.
REVERSED and REMANDED.