S.S. v. Wayne County Children and Youth Services

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

S.S., S.V., and S.A., through their :

adoptive parents and next friends :

LINDA BAKER and WARREN

BAKER,

Plaintiffs,

V. : 3:20-CV-215

: (JUDGE MARIANI)

WAYNE COUNTY CHILDREN AND

YOUTH SERVICES,

Defendant.

MEMORANDUM OPINION

On February 6, 2020, Plaintiffs S.S., S.V., and S.A., through their adoptive parents

and next friends Linda Baker and Warren Baker, filed their Complaint in the above-

captioned matter. (Doc. 1). Plaintiffs allege violations of Title Il of the Americans with

Disabilities Act of 1990 (“ADA”), Section 504 of the Rehabilitation Act of 1973, and the

Equal Protection Clause of the Fourteenth Amendment to the United States Constitution,

claiming that they were never offered the option for adoption assistance benefits that are

normally available to individuals in Pennsylvania who adopt children with developmental

and emotional difficulties. (/d). On April 6, 2020, Defendant Wayne County Children and

Youth Services filed a timely Motion to Dismiss pursuant to Federal Rule of Civil Procedure

12(b)(6). (Doc. 7). This matter was referred to Magistrate Judge Martin C. Carlson to

prepare a Report and Recommendation (“R&R”). On August 31, 2020, Magistrate Judge

Carlson issued an R&R recommending that Defendant's Motion to Dismiss should be

granted. (Doc. 22). Plaintiffs filed Objections (Doc. 23) on September 9, 2020, to which

Defendant filed a Brief in Opposition (Doc. 25). Upon de novo review of Magistrate Judge

Carlson’s R&R, the Court will grant in part and overrule in part Plaintiffs’ Objections and

adopt the pending R&R as modified herein.

A District Court may “designate a magistrate judge to conduct hearings, including

evidentiary hearings, and to submit to a judge of the court proposed findings of fact and

recommendations for the disposition” of certain matters pending before the Court. 28

U.S.C. § 636(b)(1)(B). If a party timely and properly files a written objection to a Magistrate

Judge's Report and Recommendation, the District Court “shall make a de novo

determination of those portions of the report or specified proposed findings or

recommendations to which objection is made.” /d. at § 636(b)(1)(C); see also, Brown v.

Astrue, 649 F.3d 193, 195 (3d Cir. 2011); M.D. Pa. Local Rule 72.3.

Here, in the R&R evaluating Defendant’s Motion to Dismiss, Magistrate Judge

Carlson did not reach the sufficiency of the facts alleged in Plaintiffs’ Complaint, as he found

“the issue of administrative exhaustion presented a threshold question on which

determination should be made before reaching the merits of the plaintiffs claims.” (Doc. 22

at 3). Based on a joint stipulation filed by the parties as to the issue of administrative

exhaustion, Magistrate Judge Carlson ultimately found “that the plaintiffs failed to fully

exhaust their administrative remedies because they failed to either seek reconsideration of

the adverse agency decision by the Secretary of the Department or file an appeal of that

decision to the Commonwealth Court of Pennsylvania.” (/d).

In response to the pending R&R, Plaintiffs filed Objections to Magistrate Judge

Carlson's findings (Doc. 23), as well as a Memorandum of Law in Support of those

Objections (Doc. 24). Plaintiffs’ Objections assert that Magistrate Judge Carlson's

recommendation is “in error as Plaintiff's [sic] did exhaust their administrative remedies and

were not required, as a matter of law, to exhaust their judicial appellate remedies.” (Doc. 24

at 18). In response, Defendant asserts that “Plaintiffs’ argument that they were not required

to file an appeal to the Commonwealth Court is contrary to the remedies clearly enumerated

in 55 Pa. Code § 3140.210 and 55 Pa. Code § 275.4, as well as Judge Caputo’s prior ruling

that Plaintiffs must exhaust their administrative remedies under those specific statutory

sections.” (Doc. 25 at 11).

“It is a basic tenet of administrative law that a plaintiff must exhaust all required

administrative remedies before bringing a claim for judicial relief.” Robinson v. Dalton, 107

F.3d 1018, 1020 (3d Cir. 1997) (citing McKart v. United States, 396 U.S. 185, 193 (1969).

In Pennsylvania, “where an adequate administrative process is available, a party may not

forgo that process in favor of seeking judicial relief.” Southeast. Pa. Transp. Auth. V. City of

Phila., 101 A.3d 79, 90 (Pa. 2014) (citing Bayada Nurses, Inc. v. Com., Dep't of Labor and

Indus., 8 A.3d 866, 875 (Pa. 2010); Empire Sanitary Landfill, Inc. v. Commonwealth Dep't of

Envt'l Res., 684 A.2d 1047, 1053 (Pa. 1996)).

Although litigants generally must exhaust administrative remedies prior to resorting

to judicial remedies, the Pennsylvania Supreme Court has recognized three exceptions:

‘The first exception is where the jurisdiction of an agency is

challenged. The second exception is where the constitutionality of a statutory

scheme or its validity is challenged. The third exception is where the legal or

equitable remedies are unavailable or inadequate, or the administrative

agency is unable to provide the requested relief.’

Keystone Reaf LLC v. Pa. Dep’t of Health, 186 A.3d 505, 514 (Pa. Cmwith. 2018) (citing

Empire Sanitary Landfill, Inc., 684 A.2d at 1054).

There are few cases that address administrative exhaustion within the particular

context of denial of adoption assistance benefits by the Pennsylvania Department of Human

Services, which is governed by the Pennsylvania Adoption Opportunities Act and the

regulations promulgated thereunder. See 62 P.S. §§ 771-74; see also 55 Pa. Code §§

3140.201-210. However, in determining whether a party has satisfied the requirements of

administrative exhaustion prior to seeking judicial relief, the Court is guided by the Supreme

Court, who has explained:

We have previously recognized that the doctrine of administrative exhaustion

should be applied with a regard for the particular administrative scheme at

issue. Exhaustion is generally required as a matter of preventing premature

interference with agency processes, so that the agency may function efficiently

and so that it may have an opportunity to correct its own errors, to afford the

parties and the courts the benefit of its experience and expertise, and to

compile a record which is adequate for judicial review. Plainly these purposes

have been served once the Secretary has satisfied himself that the only issue

is the constitutionality of a statutory requirement, a matter which is beyond his

jurisdiction to determine, and that the claim is neither otherwise invalid nor

cognizable under a different section of the Act. Once a benefit applicant has

presented his or her claim at a sufficiently high level of review to satisfy the

Secretary's administrative needs, further exhaustion would not merely be futile

for the applicant, but would also be a commitment of administrative resources

unsupported by any administrative or judicial interest.

Weinberger v. Salfi, 422 U.S. 749, 765-66 (1975) (internal citations omitted).

The policy behind exhaustion of administrative remedies is well summarized in the

above-quoted passage from Weinberger. Although that case involved interpretation of

administrative exhaustion requirements under 42 U.S.C. § 405(g), the Court believes the

principles it sets forth have application to the exhaustion of administrative remedies rules

applicable to administrative agencies in the Commonwealth.

In light of the principles set forth above, a review of the statutory scheme at issue

here reveals that the parties’ “Right to hearing and appeal” is set forth in 55 Pa. Code §

3140.210, which states:

(a) A child applying for or receiving adoption assistance or a person acting on

behalf of a child has a right to a Departmental hearing to appeal:

(1) A finding of ineligibility after determination of eligibility.

(2) A denial or reduction of service.

(3) The termination or suspension of service.

(b) The hearings will be conducted in accordance with Chapter 275 (relating to

appeal and fair hearing and administrative disqualification hearings) unless

otherwise provided by this chapter.

55 Pa. Code § 3140.210.

Section 275.4 of Chapter 275 provides for the procedure of administrative hearings

on appeal. /d. at § 275.4. Under this Section, “[a] hearing request must be made to the

agency which notified the client of its decision or action.” Id. at 275.4(a)(2)(i). Following a

decision from the Administrative Law Judge (ALJ), “felither party to a proceeding has 15

days from the date of the decision of the Director of the Office of Hearings and Appeals

within which to request reconsideration of that decision by the Secretary of the Department.”

Id. at § 275.4(h)(4)(ii). Further, “[i]n cases where there is a request for reconsideration, the

time limit, 30 days, for appealing the decision of the Department to the Commonwealth

Court will begin on the date the Secretary responds to the request.” /d. at § 275.4(h)(4)(iv).

Section 275.4 also defines “final administrative action” to include “a hearing and

subsequent decision by the hearing officer, optional review by the Secretary or his designee

as provided in subsection (h)(4), and, where the appeal of the appellant is sustained,

immediate implementation of the hearing decision by the appropriate agency.” §

275.4(b)(2). The fact that review by the Secretary is designated as “optional” by this

Section does not change our analysis here, as the prevailing standard for fulfilling

administrative exhaustion requirements is whether the party has exhausted all remedies

available through the administrative agency prior to seeking judicial relief. See Pa. Transp.

Auth., 101 A.3d at 90 (Pa. 2014) (“As a rule, where an adequate administrative process is

available, a party may not forgo that process in favor of seeking judicial relief.”); see also

Cnty. of Berks ex rel. Baldwin v. Pa. Labor Relations Bd., 678 A.2d 355, 360 (Pa. 1996) (“It

is fundamental that prior to resorting to judicial remeclies, litigants must exhaust all tie

adequate and available administrative remedies which the legislature has provided.”).

Thus, the Court finds that in the context of adoption assistance benefits under the

Pennsylvania Adoption Opportunities Act, a party exhausts the available administrative

remedies when they seek reconsideration of the ALJ's decision by the Secretary in

accordance with at § 275.4(h)(4).

Here, following a directive from the late Honorable A. Richard Caputo,' and in

accordance with § 275.4, Plaintiffs appealed the denial of adoption assistance benefits by

Defendant to the Pennsylvania Department of Human Services on April 20, 2018. (Joint

Stipulation, Doc. 21 at] 7). A hearing was held on the matter before ALJ David A. Dudley

on February 19, 2019. (/d. at 11). On July 9, 2019 the ALJ upheld the denial of benefits

and denied the appeal. (Final Administrative Action Order, Doc. 21-9). This decision was

affirmed by the Chief ALJ Tracey L. Henry later that same day. (/d). Subsequently,

Plaintiffs did not request reconsideration of the ALu’s decision, nor did they appeal the

decision to the Commonwealth Court of Pennsylvania. (Doc. 21 at J] 14, 15). Instead,

Plaintiffs refiled their Complaint with this Court on February 6, 2020. (Doc. 1).

Thus, as Plaintiffs did not request reconsideration of the ALJ’s decision by the

Secretary pursuant to § 275.4(h)(4), they did not reach a “final administration action” as

' Plaintiffs’ claims were first considered in federal court in S.S. et al. v. Wayne Cty. Children &

Youth Servs., No. 3:17-cv-935, 2018 WL 806470, at *3 (M.D. Pa. Feb. 9, 2018), where Judge Caputo found

that Plaintiffs’ Complaint “alleged sufficient facts to survive dismissal on the issue whether the minor

children might be considered to have been constructively in the custody of Wayne County, rendering them

eligible for adoption assistance subsidies despite the AOA’s custody requirement.” However, Judge

Caputo ultimately granted Defendant's Motion and dismissed Plaintiffs’ Complaint without prejudice, finding

that “Plaintiffs have failed to exhaust their administrative remedies,” and directing Plaintiffs to the remedies

available under 55 Pa. Code § 3140.201 for families who are denied access to adoption assistance. /d. at

1,

defined by § 275.4(b)(2). Further, none of the three exceptions to the exhaustion of

administrative remedies rule recognized by the Pennsylvania Supreme Court are present

here. The Court therefore finds that Plaintiffs failed to exhaust the administrative remedies

available to them under the Pennsylvania Adoption Opportunities Act and the regulations

promulgated thereunder. As failure to exhaust administrative remedies is a ground to

dismiss a case for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6),

Defendant's Motion to Dismiss should be granted without prejudice. Devine v. St. Luke's

Hosp., 406 Fed. App’x 654, 656 (3d Cir. 2011) (citing Anjelino v. New York Times Co., 200

F.3d 73, 87-88 (3d Cir. 2000).

In the R&R, after a review of the Joint Stipulation submitted by the parties on August

28, 2020, Magistrate Judge Carlson found:

That joint statement reveals that the plaintiffs failed to fully exhaust their

administrative remedies because they failed to either seek reconsideration of

the adverse agency decision by the Secretary of the Department or file an

appeal of that decision to the Commonwealth Court of Pennsylvania. Based on

this statement, we find that the plaintiffs have failed to do that which the district

court instructed when dismissing the plaintiffs’ first complaint: completely and

fully exhaust their administrative remedies in state court before attempting to

file a second complaint with this court. We accordingly recommend that this

complaint be likewise dismissed.

(R&R, Doc. 22 at 3).

The Court declines to adopt the Magistrate Judge’s recommendation that exhaustion

of administrative remedies in this context requires Plaintiffs to file a petition for review or any

other form of appeal to the Commonwealth Court of Pennsylvania. For support of the

proposition that parties are required to exhaust claims in state court before seeking review

of claims in federal court, the Magistrate Judge cites to Walker v. Vaughn, 53 F.3d 609, 614

(3d Cir. 1995). However, that case is readily distinguishable from the scenario presented

here, as the Third Circuit in Walker addressed a district court’s denial of a petition for a writ

of habeas corpus filed pursuant to 28 U.S.C. § 2254 for failure to exhaust state court

remedies. Section 2254(b) states, in part:

(b)(1) An application for a writ of habeas corpus on behalf of a person in custody

pursuant to the judgment of a State court shall not be granted unless it appears

that - -

(A) the applicant has exhausted the remedies available in the courts of

the State; or

(B)(i) there is an absence of available State corrective process; or

(ii) circumstances exist that render such process ineffective to protect

the rights of the applicant.

28 U.S.C. § 2254(b)(1).

This Section provides an express statutory requirement that an applicant for a writ of

habeas corpus proceeding under § 2254 must exhaust available State court remedies prior

to seeking relief in federal court. On its face, 28 U.S.C. § 2254 has no application to the

requirement that a party must exhaust administrative remedies in order to challenge a

decision of a Pennsylvania administrative agency. Thus, Walker is inapplicable here.

For the aforementioned reasons, the Court will grant in part and overrule in part

Plaintiffs’ Objections (Doc. 23), adopt the pending R&R (Doc. 22) as modified, grant

Defendant’s Motion to Dismiss (Doc. 7), and dismiss Plaintiffs’ Complaint (Doc. 1) without

prejudice. A separate Order follows.

— WM

Robert D. Mari

United States District Judge

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