White v. N.C. DHHS, ___ N.C. App. ___ (May 7, 2024)
Held:
Reversed
There is a dissent
by Tyson, J.
- Facts and procedural history: This case involves a child who was adopted at seven months of age in 2014. The child was placed with his adoptive parents through the Children’s Home Society (CHS; a private adoption agency) after mother executed a relinquishment to CHS three days after the child’s birth. The child was exposed to multiple substances while in utero and was born prematurely. In the years since the adoption, the child was diagnosed with ADHD and various ocular conditions and evaluated for possible autism spectrum disorder. In March 2021, the adoptive parents first discussed with CHS the possibility of receiving Title IV-E adoption assistance benefits for the child and applied for adoption assistance that May. DSS determined the child did not meet the Title IV-E eligibility criteria because the adoption was finalized before the adoption assistance agreement was executed. The adoptive parents appealed the decision through the various appellate stages including an appeal to superior court. The administrative agency decisions affirmed the denial of adoption assistance; however, the superior court reversed the decision, concluding that the denial of the request for adoption assistance was arbitrary, capricious, and an abuse of discretion based on the superior court’s determination the child qualified for assistance in 2014 and thereafter. The superior court ordered that the adoptive parents receive adoption assistance retroactively to the date the adoption was finalized in 2014, in addition to awarding attorney’s fees. DHHS, DSS, and CHS appeal the superior court order, pursuant to the procedure specified in G.S. 150B-52, arguing the court exceeded the authority granted for judicial review of administrative decisions.
- Appellate review of an order of the superior court reversing an administrative decision is “twofold and is limited to determining: (1) whether the superior court applied the appropriate standard of review and, if so, (2) whether the superior court properly applied this standard.” Sl. Op. at 11 (citation omitted).
- In reviewing a final agency decision, the superior court’s scope of review is limited by the nature of the asserted error and the corresponding standard of review (either de novo or whole record) provided in G.S. 150B-51(b) and (c). Asserted errors of law are questions of law reviewed de novo, while assertions that an agency decision is arbitrary, capricious, or an abuse of discretion are reviewed using the whole record test. “Using the whole record standard of review, [a reviewing court] examine[s] the entire record to determine whether the agency decision was based on substantial evidence such that a reasonable mind may reach the same decision.” Sl. Op. at 10 (citation omitted).
- In order to qualify for adoption assistance benefits under Title IV-E of the Adoption Assistance and Child Welfare Act, 42 U.S.C. § 670 et seq., a child must (1) meet eligibility criteria and (2) the State agency and prospective adoptive parents must enter into an adoption assistance agreement prior to the adoption being finalized. Eligibility criteria includes the child meeting the federal definition of “a child with special needs” whereby the State must determine “that there exists with respect to the child a specific factor or condition (such as his ethnic background, age, or membership in a minority or sibling group, or the presence of factors such as medical conditions or physical, mental, or emotional handicaps) because of which it is reasonable to conclude that such child cannot be placed with adoptive parents without providing adoption assistance under this section[.]” 42 U.S.C. § 673(c)(1)(B). The State must also determine that “a reasonable, but unsuccessful, effort has been made to place the child with appropriate adoptive parents without providing adoption assistance under this section[.]” 42 U.S.C. § 673(c)(1)(B).
- G.S. 108A-25(a) grants DHHS and DSS authority to administer the adoption assistance program pursuant to federal law and Social Services Commission rules. At the time of the child’s adoption in 2014, administrative rules enumerated eligibility requirements to include “[t]he child is, or was, the placement responsibility of a North Carolina agency authorized to place children for adoption at the time of adoptive placement”; that “[t]he child has special needs that create a financial barrier to adoption” (mirroring the statutory requirement in G.S. 108A-49(b), cited at Sl. Op. at 5); and that “[r]easonable but unsuccessful efforts have been made to place the child for adoption without the benefits of adoption assistance[.]” 10A N.C.A.C. 70M.0402(a)(2)–(4) (2014). Administrative rules at the time also included the requirement that “the adoptive parents must have entered into an agreement with the child’s agency prior to entry of the Decree of Adoption.” 10A N.C.A.C. 70M.0402(b)(4) (2014).
- Federal policy places an affirmative duty on adoption agencies to notify prospective adoptive parents of the availability of adoption assistance and deems any failure of the agency to do so an extenuating circumstance justifying a fair hearing and grant of assistance if the child is eligible for assistance. However, the policy provides that “[i]t is not the responsibility of the State or local agency to seek out and inform individuals who are unknown to the agency about the possibility of [T]itle IV-E assistance for special needs children who are also unknown to the agency.” Sl. Op. at 17-18 (quoting U.S. Dep’t of Health & Hum. Servs., Admin. for Child., Youth & Fams., Pol’y Announcement, Log No. ACYFCB-PA-01-01, at 12–13 (Jan. 23, 2001)) (emphasis in original). In those cases, the adoptive family must request adoption assistance.
- The superior court exceeded its limited judicial review authority and erred in determining DHHS’s decision was without substantial justification, not supported by the whole record, and arbitrary, capricious, and an abuse of discretion. The court improperly weighed the evidence presented to DHHS and substituted its evaluation of the evidence for that of DHHS in concluding that the child met federal and State eligibility criteria for adoption assistance at the times of adoption and application, and also erred in concluding that the child’s ineligibility was solely the result of the respondent agencies’ failure to advise the adoptive parents about the adoption benefits program. The court of appeals found it “unreasonable to conclude that [the child] could not be placed with adoptive parents without adoption assistance when he was, in fact, placed with Petitioners without adoption assistance.” Sl. Op. at 15 (emphasis in original). “North Carolina’s appellate courts have never adopted or applied the ‘extenuating circumstances’ doctrine when interpreting Title IV-E[.]” Sl. Op. at 16. The superior court misapplied the policy. CHS was relieved of its duty to advise the adoptive parents of assistance requirements since the child did not meet eligibility requirements in 2014, despite the child’s Medicaid coverage since birth. DHHS and DSS were relieved of the duty to advise due to being unaware of the private adoption.
- Dissent: The superior court’s findings are supported by the whole record and support the order determining the adoptive parents are entitled to retroactive adoption assistance benefits. The extenuating circumstances doctrine applies. CHS and DSS had custody and control over the child until he was adopted and had information about the child, his mother, his birth, and his medical history. They owed the duty to disclose potential available State and federal adoption assistance benefits to the prospective adoptive parents and failed to do so.
Category:
Adoption of a Minor ChildStage:
Topic: