Local law firm seeks class action over state adoption subsidies

Indianapolis-based law firm Cohen & Malad LLP filed a lawsuit Monday against the Indiana Department of Child Services that claims the state failed to pay millions of dollars in promised subsidies to families who adopted children from the state foster-care system.

The lawsuit, filed in LaPorte County on behalf of Debbie Moss of LaPorte, seeks class-action status for 1,400 families on a waiting list for money meant to help them raise adopted children. A judge has to approve the case before it becomes a class action.

Moss has three grandsons that she adopted out of foster care.

Cohen & Malad was joined in the suit by LaPorte-based law firm Friedman & Associates.

Cohen & Malad attorney Richard Shevitz said DCS negotiates adoption rates with many families who qualified for them and signed contracts, but later told the families they would be placed on a waiting list until the money was available.

At the same time, DCS returned nearly $240 million to state coffers between 2009 and 2013.

“The state’s failure to pay adoption subsidy payments DCS promised to pay in a contract puts children and their caretakers at a considerable disadvantage,” Cohen & Malad attorney Lynn Toops said in a prepared statement. “Our lawsuit aims to make DCS follow through with its promises to these children and families.”

Former DCS Director James Payne removed adoption subsidy money from the agency's budget in January 2009 at a time when former Gov. Mitch Daniels was requiring agencies to return some of their allocated funds so Indiana could balance its books.

Nonpayment of the subsidies amounts to a breach of the contracts DCS signed with the adoptive parents, Shevitz said.

"This is obviously something that has real consequences for real people," Shevitz said during a news conference, the South Bend Tribune reported.

DCS spokesman James Wide said the agency has no comment on the lawsuit.

After Moss adopted her three grandsons in July 2012, she would have been due about $40,000 in payments based on the daily payments she had negotiated with DCS, Shevitz said.

One of Moss' daughters, the mother of the boys, lost her parental rights because she failed to protect them from abuse. Moss acted as a foster parent to the boys before adopting them.

As a foster parent, Moss had been reimbursed $25 per day per child. After she adopted the boys, Moss and the state negotiated a rate of $18.88 a day.

Cohen & Malad said the state, even when it pays the adoption subsidy, saves thousands of dollars per child annually when they are adopted from foster care because of the lower reimbursement rate.

Failure to pay, however, has reduced the willingness of foster parents to adopt children. The law firm said Indiana has seen a 35-percent drop in adoptions since 2011.

“This decline in adoptions from the DCS foster care system is likely attributable to Indiana’s failure to pay the promised adoption subsidies because 60 percent of children adopted in Indiana are adopted by foster care parents receiving $25-per-day foster-care assistance payments,” the lawsuit says. “A recent survey shows that 58 percent of adoptive families said they could not have adopted without a subsidy.”

Indiana is the only state not paying an adoption subsidy, the lawsuit says.

Cohen & Malad has built a national reputation with class-action suits. Last year, the firm collected $6.3 million in a class action against the Indiana Bureau of Motor Vehicles after it was caught overcharging for driver’s licenses. Plaintiffs in the case were awarded refunds of $3.50 to $15 each.

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