If you were a licensed foster parent as of August 17, 2015, or if you received foster board payments, permanency assistance, adoption assistance, or higher education payments in the past from the Department of Human Services (DHS), State of Hawaii, the proposed class action settlement affects you.
THERE ARE PEOPLE AFFECTED BY THIS SETTLEMENT WHO WILL NOT RECEIVE ANY PAYMENTS FROM THE $2.3 MILLION SETTLEMENT FUND. Please read your notice carefully and call (808) 524-1800 if you have any questions. It will be very helpful if you have the notice when you call.
The Final Fairness Hearing in the state court litigation was held on Friday June 15, 2018, and the court granted final approval to the Amended Settlement, including attorneys' fees and costs and service awards to named plaintiffs.
On May 25, 2018, the federal court granted final approval to the 2018 settlement of the federal lawsuit. No Class Members (foster parents) submitted written objections and no Class Members appeared in person to object to the 2018 federal settlement. The Legislature has approved funds to implement the settlement. The next step is for the Governor to sign the budget bill. If all of the necessary conditions of the settlement occur, foster care maintenance payments will increase beginning in July 2018. Because DHS makes payments in arrears, the first basic board payment with the increased amounts will be mailed in August 2018 for care provided in July 2018.
What are these lawsuits about?
Plaintiffs filed a lawsuit claiming that the State of Hawaii did not pay enough for monthly foster care maintenance payments, permanency assistance, adoption assistance, and higher education payments. They claimed that the payments were too low under federal law, under state law, under the Department of Human Services’ administrative rules, and under the terms of agreements between resource caregivers and DHS. Plaintiffs believe they are entitled to payment for damages they suffered, equal to the shortfall between the amounts DHS should have paid, and the amounts DHS actually paid.
The State denies that its payments were inadequate or that it owes Plaintiffs any compensation.
Why are there two lawsuits?
The federal lawsuit focuses on how much DHS should pay for foster care maintenance payments in the future, while the state lawsuit focuses on how much DHS has paid in the past for foster care and other care. Although the two lawsuits focus on different time periods, there were overlapping issues such as, DHS’ process for setting payments and making payments, and the different types of payments DHS makes. Because of the overlap, the state lawsuit was put on hold while the federal lawsuit was vigorously litigated by both sides. Both cases have now settled.
Why is this a class action?
The federal court has approved the 2018 Federal Settlement. The state court held a hearing to approve the 2018 State Settlement on June 15, 2018 at 9:00 a.m. at 777 Punchbowl Street, fourth floor, in Judge Crandall’s courtroom. If you have concerns about the terms of the 2018 State Settlement, you may submit objections to the Court. You may also choose to be excluded (“opt out”) from the state court lawsuit by writing a letter to Class Counsel at 1001 Bishop Street, Suite 1800, Honolulu, Hawaii 96813 (please include your name and that you “opt out” of the settlement). Your rights and options—and the deadlines to exercise them—are explained in the notice sent to you. Copies of the notices are available on this website for your reference.
What is the proposed settlement?
The proposed settlement in the federal court lawsuit will increase foster care maintenance payments beginning in July 2018, and will require DHS to monitor cost of living increases and request money from the State to increase foster care maintenance payments when costs increase more than 5%.
The proposed settlement in the State court lawsuit will provide a $2.3 million fund that will be used in part to make payments to persons who were resource caregivers (foster parents), legal guardians/permanent custodians, adoptive parents of children with special needs, and former foster youth who received higher education payments between July 1, 2013 and June 30, 2014. The $2.3 million fund will also be used to pay court-appointed lawyers fees for investigating the facts, litigating the case, and negotiating the settlement, and to pay certain costs to administer the settlement.
Why is this a class action?
In a class action lawsuit, one or more people called Class Representatives sue on behalf of people who have similar claims. All the people with similar claims are called the Class and are referred to individually as Class Members. The Court resolves the issues for everyone in the Class, except for those people who exclude themselves from the Class. There are two Classes in this case. They are described below. The Classes are represented by court-appointed lawyers called Class Counsel.
Because DHS’ foster care maintenance payment rates affect a large group of people (foster parents, permanent custodians/legal guardians, parents who adopted children from foster care, young adults receiving higher education payments, and children in DHS’ child welfare system), Raynette Ah Chong, Sherry Campagna, Michael Holm and Tiare Holm, Patrick Sheehey and Patricia Sheehey, Brittany Sakai, and T.B., a minor (collectively, the Named Plaintiffs) filed this case as a proposed class action.
Why is there a Settlement?
In any litigation, the outcome is uncertain. The Court did not decide the case in favor of Plaintiffs or DHS. However, there is a separate lawsuit in federal court that is related to this state court lawsuit. The federal lawsuit is also a class action, but it focuses on how much DHS should pay for foster care maintenance payments in the future, while the state lawsuit focuses on how much DHS has paid in the past for foster care and other care. Although the two lawsuits focus on different time periods, there were overlapping issues such as, DHS’ process for setting payments and making payments, and the different types of payments DHS makes. Because of the overlap, this state lawsuit was put on hold while the federal lawsuit was vigorously litigated by both sides.
The federal judge made some intermediate rulings that potentially impacted the state case. The federal court ruled that federal law did not prohibit DHS’ system of providing foster care maintenance payments through a series of separate payments (the basic board rate, plus a clothing allowance, plus certain other payments and benefits). The federal court also ruled that the alleged requirement under federal law that DHS cover the cost of (and cost of providing) shelter does not mean that DHS must pay for mortgage payments, rent, property taxes, or other similar fixed costs that a resource family incurs even when they don’t have a foster child in their home. Because rent and mortgage payments in Hawai`i can be higher than other areas in the United States, this ruling was not favorable for Plaintiffs’ argument that DHS should have been paying increased basic board rates.
Plaintiffs in both cases believe their claims are valid, that DHS does not pay adequate foster board rates, that DHS has not increased the basic board rate even as the cost of living in Hawai`i has increased, and that the federal judge’s ruling is wrong and would be reversed on appeal. The State believes strongly in its position that the federal judge was correct and the rulings would be upheld on appeal, and that none of the Plaintiffs would have won anything from a trial.
Because of the substantial risks and delays of continued litigation—including the possibility that the Lawsuits, if not settled now, might result in an outcome that is less favorable or that a fair and final judgment may not occur for several years—Plaintiffs and Class Counsel have determined that the Settlement is in the best interests of all Class Members. Information about the claims, the federal court’s rulings, and the impact of those rulings on this case are described in a document titled State Lawsuit Class Action Settlement Agreement, which can be obtained from this website. maintained by Class Counsel. Other documents from the State Lawsuit and Federal Lawsuit and updates about the Settlement are also available.
Who are the Members of the Settlement Classes?
Judge Crandall has decided that the people who fit these descriptions are Members of Settlement Class 1 and 2, respectively
Settlement Class 1 – Parent Settlement Class: (a) all licensed resource caregivers in Hawaii (foster parents) who received monthly foster care maintenance payments from DHS from August 7, 2012 through February 28, 2017; and (b) all legal guardians and permanent custodians who received monthly permanency assistance from DHS from August 7, 2012 through February 28, 2017; and (c) all adoptive parents of children with special needs who received monthly adoption assistance payments from DHS from August 7, 2012 through February 28, 2017.
The Class Representatives of the Parent Settlement Class are Patrick Sheehey, Patricia Sheehey, Raynette Nalani Ah Chong, Sheryl Campagna, Michael Holm, and Tiare Holm.
Settlement Class 2 – Higher Education Settlement Class: all individuals who received monthly higher education payments from DHS from August 7, 2012 through February 28, 2017.
The Class Representative of the Higher Education Settlement Class is Brittany Sakai.
All Class Members will be bound by the settlement unless they exclude themselves. The process for excluding yourself from the settlement and the lawsuit, also called “opting out,” is described at this page. Not all Class Members will receive payments under this settlement.
What Class or Classes am I a member of?
If you were a resource caregiver (foster parent), an adoptive parent of a former foster child, or a legal guardian/permanent custodian, who received payments from DHS between August 7, 2012, and February 28, 2017, then you are a member of Settlement Class 1 – the Parent Settlement Class.
If you are a former foster youth who received higher education program benefits between August 7, 2012, and February 28, 2017, then you are a member of Settlement Class 2 – the Higher Education Settlement Class.
You received a notice if DHS’ records show that you are a member of at least one of these classes. Therefore, if you received this notice, you will be part of the Settlement unless you opt out.
The Class Members who are also entitled to a payment are called Payment Recipients. To determine if you are a Payment Recipient, see below.
Who is entitled to payments under the settlement?
To be entitled to a monetary payment, a Class Member must be in Settlement Classes 1 or 2, and must have received one or more of these types of payments from DHS for the time period July 1, 2013 to June 30, 2014:
- monthly foster board payments for foster children in your care
- monthly adoption assistance for your adoptive children with special needs
- monthly permanency assistance for children in your legal guardianships/permanent custody
- monthly higher education board allowance (must have been an eligible former foster youth)
Settlement Class Members who are entitled to monetary benefits under the proposed settlement are referred to in the settlement as Payment Recipients.
IF you do not meet the criteria listed above, then you are NOT a Payment Recipient and you will NOT be receiving a payment under this Settlement..
What does the Settlement provide?
The State has agreed to provide $2,341,103.10 (Total Settlement Amount) to be divided among the Payment Recipients and to pay for Class Counsel’s attorneys’ fees and costs and the administrative costs for carrying out the settlement.
The $2,341,103.10 is based on $35 per month per foster child, child in permanent custody/legal guardianship, adoptive child with special needs, and former foster youth in the higher education program, for whom DHS made monthly payments for the time period July 1, 2013 to June 30, 2014 (which is the State’s 2014 fiscal year), pro rated for actual days in care. The time period represents the period right before the foster board rates were raised in July 2014. The $35 figure was negotiated in the settlement, and represents a compromise figure preliminarily agreed to by the Class Representatives and the State.
The amount that each Payment Recipient will receive will be calculated by subtracting the amount of the costs involved in administering this settlement (for example, copying and mailing this notice to, and locating Class Members) and the attorneys’ fees and costs awarded by the Court from the Total Settlement Amount of $2,341,103.10 to arrive at a Net Settlement Amount. This Net Settlement Amount will then be distributed to Payment Recipients based on the number of days each eligible child was in care between July 1, 2013 and June 30, 2014.
Why won’t all Class Members receive a payment?
This settlement is a compromise between the Plaintiffs and the State. The State strongly believes it has no liability to any of the Class Members and does not owe any of them any money. The State believes its position is supported by the rulings of the federal court. But the State is willing to provide some money to some of the Plaintiffs as a way to bring an end to the case rather than continue to litigate. Plaintiffs strongly believe the State should be paying more to all of the Class Members, but also understand there are serious risks in continuing to litigate this case, including the possibility that none of the Class Members may get anything. Based on the federal court’s rulings, and the risks inherent in any lawsuit, the Class Representatives and Class Counsel believe the compromise is fair.
Even if you are not a Payment Recipient, as a member of one or more Settlement Classes, you are bound by the settlement and give up the right to sue the State for the claims that are covered by the settlement and the lawsuit, unless you opt out of the settlement.
Are there any conditions to this Settlement?
This settlement will not become final until the Court approves this settlement, the federal court approves the settlement of the federal lawsuit, and the Hawaii Legislature approves the money that will be needed to pay for both settlements. If the Legislature does not approve the money needed to pay for both settlements, the settlement will not go forward, and the Plaintiffs in the Federal Lawsuit will go to trial.
Do I need to do anything to be a part of the settlement?
If you meet the criteria to be a part of the class, you do not have to do anything to participate in the settlement.
When will payments be made to Payment Recipients?
The Court preliminarily approved the settlement at a hearing on March 24, 2017. The Court will hold a Fairness Hearing on June 23, 2017, to finalize the settlement. If the presiding Judge approves the settlement, after that, there may be appeals. It’s always uncertain whether these appeals can be resolved, and resolving them takes time, perhaps more than a year. The Hawaii Legislature must also approve the funding for the payments. The legislative process lasts several months.
Do I give up anything if I am part of the settlement?
Yes. Unless you exclude yourself, you are staying in the Class and will be part of the settlement even if you don’t get a payment, which means you can’t sue, continue to sue, or be part of any other lawsuit against the State about the legal issues in this case. It also means that all of the Court’s orders will apply to you and legally bind you.
Do I have lawyers in the case?
Yes. The Court has appointed lawyers to represent you and other Class Members. These lawyers are called Class Counsel. Their names are:
Claire Wong Black
1001 Bishop Street, Suite 1800
Honolulu, HI 96813
Hawaii Appleseed Center for Law and Economic Justice
119 Merchant Street, Suit 605
Honolulu, HI 96813
You will not be charged personally for these lawyers. If you want to be represented by another lawyer, you may hire one to appear in Court for you at your own personal expense.
How will the lawyers be paid? Does the Class Representative get paid?
Class Counsel’s fee agreement allows them to ask for up to 25% of any recovery on behalf of the Class Members. However, Class Counsel will ask the Court to approve payment of 20% of the Total Settlement Amount to them for attorneys’ fees and costs. The fees and costs would pay Class Counsel for investigating the facts, litigating the case, and negotiating the settlement. The Court may award less than these amounts. The attorneys’ fees and costs will be deducted from the $2,341,103.10. The State has agreed not to oppose these fees and costs.
The Court is not bound by any agreed upon or requested amounts. You may object to Class Counsel’s request for attorneys’ fees and costs. After considering the objections of Class Members, the Court will determine the amount of attorneys’ fees and costs in accordance with controlling law.
The expenses to administer the settlement (for example, the cost to mail out the proposed settlement notice) will also be deducted from the $2,341,103.10. It is estimated that the administrative expenses will be approximately $18,357.14.
Class Counsel have reserved the right to provide Service Awards for the Named Plaintiffs. These Service Awards are intended to recognize the Named Plaintiffs for the extensive services they performed for the class, the time they spent on this case, and the risks they assumed in connection with this litigation. The amount of the Service Awards, if any, will be deducted from any award of attorneys’ fees and costs by the Court to Class Counsel. In other words, the Service Award will reduce the amount of money going to Class Counsel, NOT the amount of payments to Class Members.
How can I object to the Settlement?
You may object to the settlement if you don’t like any part of it. This includes the attorneys’ fees and cost request for Class Counsel. The Court will consider your views.
To object, you must send a letter saying that you object to Sheehey v. State, Civ. No. 14-1-1709-08 VLC. Be sure to include your name, address, telephone number, your signature, the date, and the reasons you object to the settlement. Mail your objection to the following address postmarked no later than May 31, 2017:
1001 Bishop Street, Suite 1800
Honolulu, HI 96813
Excluding yourself from the Settlement
If you don’t want to be a part of this settlement, then you must take steps to exclude yourself from the settlement.This is sometimes referred to as “opting out” of the Settlement Class. Opting out means that you will not get any settlement payment even if you would be entitled to one if you stayed in the lawsuit. You also cannot object to the settlement. You will not be legally bound by anything that happens in this lawsuit. You may be able to sue the State in the future.
How do I get out of the settlement?
To exclude yourself from the settlement, you must send a letter by mail saying that you want to be excluded from or opt out of this case. Be sure to include your name, address, telephone number, your signature, and the date. Include the name of the case, Sheehey v. State, Civ. No. 14-1-1709-08 VLC. You must mail your exclusion letter postmarked no later than May 31, 2017 to:
Clerk of the Court
First Circuit Court, State of Hawai`i
777 Punchbowl Street
Honolulu, HI 96813
If you ask to be excluded, you will not get any settlement payment even if you would be entitled to one if you stayed in the lawsuit. You also cannot object to the settlement. You will not be legally bound by anything that happens in this lawsuit. You may be able to sue the State in the future.
If I don’t exclude myself, can I sue the State for the same thing later?
No. Unless you exclude yourself, you give up any right to sue the State for the claims that this settlement resolves. If you have a pending lawsuit that asserts the same or similar claims, speak to your lawyer immediately. You must exclude yourself from this Settlement Class to continue your own lawsuit. Remember, the exclusion deadline is May 31, 2017.
The Court will hold a hearing, called a Fairness Hearing, to decide whether to approve the settlement. You may attend and you may ask to speak, but you don’t have to.
When and where will the Court decide whether to approve the settlement?
The Court will hold a Fairness Hearing at 9:00 a.m. on June 23, 2017, at the Circuit Court for the First Circuit, 777 Punchbowl Street, Honolulu, Hawaii, in Courtroom ___(to be determined). At this hearing the Court will consider whether the settlement is fair, reasonable, and adequate. If there are objections, the Court will consider them. The Judge will listen to people who have asked to speak at the hearing. The Court may also decide how much to pay Class Counsel. After the hearing, the Court will decide whether to approve the settlement. We do not know how long these decisions will take. The hearing may be moved to a different date, time, or courtroom without additional notice We will post updates on our website at Foster Care Class Action.
Do I need to attend the Fairness Hearing?
No. Class Counsel will answer questions the Judge may have. But you are welcome to come at your own expense. If you send an objection, you don’t have to come to Court to talk about it. As long as you mailed your written objection on time, the Court will consider it. You may also pay another lawyer to attend on your behalf, but it’s not necessary.
May I speak at the Fairness Hearing?
You may ask the Court for permission to speak at the Fairness Hearing. To do so, you must send a letter saying that it is your “Notice of Intention to Appear in Sheehey v. State, Civ. No. 14-1-1709-08 VLC.” Be sure to include your name, address, telephone number, and your signature. Your Notice of Intention to Appear must be postmarked no later than May 31, 2017, and be sent to Clerk of the Court at the address below. You cannot speak at the hearing if you excluded yourself.
Sheehey Fairness Hearing
Clerk of the Court
First Circuit Court, State of Hawai`i
777 Punchbowl Street
Honolulu, HI 96813
What happens if I do nothing?
If you do nothing, you will be part of this lawsuit, and you won’t be able to be part of any other lawsuit against the State about the legal issues in this case, ever again. As a Payment Recipient, you will be paid your share of the Net Settlement Payment, as calculated by DHS.
Are there more details about the settlement?
This website summarizes the proposed settlement. More details are in a State Lawsuit Class Action Settlement Agreement. You can download a copy of the Settlement Agreement.
- Legislature needs to pay foster parents fairly, Honolulu StarAdvertiser, August 29, 2017
- "Ige prudent about $893M state surplus", Honolulu StarAdvertiser, August 16, 2017
- Editorial - Increase vigilance over foster care, Honolulu StarAdvertiser, August 8, 2017
- Lone legislator snuffs fostercare settlement, Honolulu StarAdvertiser, May 21, 2017
- How House Leaders Scuttled Better Pay For Foster Parents, Honolulu Civil Beat, May 17, 2017
- Hawaii Settles Lawsuit Regarding Payments for Child Foster Care, August 29, 2016
- State reaches settlement with foster parents over stipend increases, August 29, 2016
- State to pay out $85M to settle foster parent lawsuit, August 30, 2016
- Foster care class action lawsuit
- Court settlement boosts Hawaii’s funding for foster care, August 29, 2016
- NEW  Order Approving Amended Settlement, May 25, 2018
- NEW  Motion for Final Approval of Settlement, May 3, 2018
- NEW  Dec of Caron Inagaki re Class Action Notice, April 23, 2018
- NEW Plfs Renewed Unopposed M-for Award of Attys Fees and Service Awards, April 20, 2018
- NEW Sheehey - Final State Class Notice PMT Recipients, April 11, 2018
- NEW Sheehey - Final State Class Notice NOT Pmt Recipients, April 11, 2018
- NEW Ah Chong - FINAL Amd FED Class Notice undated, March 16, 2018
- NEW Order Gg Plfs M-for Prelim Approval of Amd CA Settlement, April 9, 2018
- NEW Plfs Unopposed M-for Prelim Approval of Amd Class Action Stlmt, April 3, 2018
- NEW FINAL Amd STATE Agmt Unsigned, April 2, 2018
- NEW  Plfs Renewd, Unopposed M-for Attys Fees, March 30, 2018
- NEW  Order Prelim Appg Amd Class Action Settlement, March 30, 2018
- NEW  M-for Prelim Approval of Amd Settlement, March 23, 2018
- NEW Ah Chong 2018-03-16 EXECUTED Fed Sttlmt Agrmt, March 16, 2018
- NOTICE OF SETTLEMENT STATUS IN LIEU OF MOTION FOR FINAL APPROVAL OF SETTLEMENT, June 9, 2017
- Plaintiffs' Motion for Attorneys' Fees and Service Awards - State, April 7, 2017
- Plaintiffs' Motion for Attorneys' Fees and Service Awards, March 28, 2017
- Settlement Agreement - State Court, Civ No. 14-1-1709-08 VLC, March 24, 2017
- Settlement Agreement - Federal Court, CV13-00663 LEK-KSC, March 14, 2017
- Defendent's Motion for Preliminary Approval of Settlement - Sheehey v. Bhanot Civ No. CV13-00663 LEK KSC, March 14, 2017
- Judge Kobayashi EO:Court's Inclinations re Defendent's Motions in Limine No. 1 - 4 - Ah Chong v. McManaman Civ No. CV13-00663 LEK KSC, August 12, 2016
- USDC Order Granting in Part and Denying in Part Motions for Summary Judgment - Ah Chong v. McManaman Civ No. CV13-00663 LEK KSC, December 30, 2015
- Plaintiffs' Reply Memo in Support of MSJ - Sheehey v. Wong Civ No. CV13-00663 LEK KSC, November 2, 2015
- Defendent's Opposition to Plaintiffs' MSJ - Sheehey v.Wong Civ No. CV13-00663 LEK KSC, October 26, 2015
- Order Granting in Part and Denying in Part Plaintiffs' Motion for Class Certification - Ah Chong v. McManaman Civ No. CV13-00663 LEK KSC, August 17, 2015
- Plaintiffs' Concise Statement of Material Facts - Sheehey v. McManaman Civ No. CV13-00663 LEK KSC, August 7, 2015
- Plaintiffs' Motion for Summary Judgment - Sheehey v. McManaman Civ No. CV13-00663 LEK KSC, August 7, 2015
- Defendent's First Supplemental Response to Second Interrogatories, May 7, 2015
- Defendent's First Supplemental Response to First Interrogatories, May 6, 2015
- Motion for Class Certification - Sheehey v. McManaman Civ No. CV13-00663 LEK KSC, April 23, 2015
- Federal First Amended Complaint - Sheehey v. McManaman Civ No. CV13-00663 LEK KSC, April 30, 2014
- DHS Memo regarding H.B. 1576, H.D.1 - Relating to Foster Care Services including testimony, February 21, 2014
- Federal Complaint - Ah Chong v. McManaman Civ No. CV13-00663 LEK KSC, December 3, 2013
- Child Trends DataBank Foster Care - Indicators on Children and Youth, December 2015
- DHS Resource Family Basics - summary of information, November 10, 2015
- Resource Caregivers' Reimbursement Rate Analysis for Hawai`i, December 2013
- MARC Report: Establishing Foster Care Minimum Adequate Rates for Children, October 2007