W et al v. The City Of New York , et al

Filing 259

MEMORANDUM OPINION & ORDER re: 223 MOTION to Approve Settlement ("Notice of Motion for Final Approval of Settlement"). filed by Lucas T., Brittney W., Emmanuel S., Tyrone M., Thierry E., Ayanna J., Malik M., Alexandria R., Jose T.C., Olivia R., Mikayla G., Xavion M., Ana-Maria R., Myls J., Valentina T.C., Dameon C., Elisa W., Matthew V., Ximena T. Plaintiff's motion for approval of the proposed Consent Decree is denied and the conditional certifica tion of the Plaintiff class is vacated. This Memorandum Opinion and Order resolves Docket Entry No. 223. A pretrial conference in this matter will be held on October 13, 2016, at 2:00 p.m. The parties must submit an updated joint preliminary pre-tr ial statement in accordance with the Initial Conference Order (docket entry no. 32) in advance of that conference. This case remains referred to Magistrate Judge Pitman for general pre-trial management. (As further set forth in this Order.) (Pretrial Conference set for 10/13/2016 at 02:00 PM before Judge Laura Taylor Swain.) (Signed by Judge Laura Taylor Swain on 8/12/2016) (cf)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------x
ELISA W., by her next friend, Elizabeth
Barricelli, et al.
Plaintiffs,

No. 15 CV 5273-LTS-HBP

-againstTHE CITY OF NEW YORK, et al.,
Defendants.
-------------------------------------------------------x
MEMORANDUM OPINION & ORDER
On July 8, 2015, the named plaintiff children (“Named Plaintiff Children”) and
New York City Public Advocate Letitia James (“James” and, together with the Named Plaintiff
Children, “Plaintiffs”) filed the instant action, on behalf of themselves and a purported class of
plaintiffs, asserting claims under the First, Ninth, and Fourteenth Amendments to the United
States Constitution, the Adoption Assistance and Child Welfare Act of 1980, 42 U.S.C. § 670 et
seq. (the “AACWA”) (pursuant to 42 U.S.C. § 1983), New York State Social Services Law and
common law contract law against the City of New York (the “City”), the New York City
Administration for Children’s Services (“ACS”), ACS Commissioner Gladys Carrion (“Carrion”
and, together with the City and ACS, the “City Defendants”),1 the New York State Office of
Children and Family Services (“OCFS”) and OCFS Acting Commissioner Sheila J. Poole
(“Poole” and, together with OCFS, the “State Defendants”),2 stemming from alleged deficiencies

1

Carrion is sued in her official capacity as ACS Commissioner only. (See Docket
Entry Nos. 1 (“Complaint”) and 91 (“Amended Complaint”).)

2

Poole is sued in her official capacity as OCFS Acting Commissioner only. (See
Complaint; Amended Complaint.)

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in New York City’s foster care system. (See generally Complaint; Amended Complaint.)
Plaintiffs filed the Amended Complaint on December 29, 2015. The Court has jurisdiction of
this action pursuant to 28 U.S.C. § 1331.
Plaintiffs now move, pursuant to Federal Rule of Civil Procedure 23, for final
approval of the proposed Consent Decree agreed to between the Plaintiffs and the State
Defendants in this action. (See Docket Entry No. 150-1 (the “Consent Decree”).) Final approval
is opposed by the City Defendants, as well as by two separate groups of intervenors: the Parent
Advocates (comprised of The Bronx Defenders, The Brooklyn Defender Service, The Center for
Family Representation, and Neighborhood Defender Service of Harlem) and the Children’s
Advocates (comprised of Lawyers for Children, The Children’s Law Center of New York, and
The Legal Aid Society).3 A fairness hearing regarding the proposed settlement was held on
August 5, 2016. Two parents of children in foster care filed written objections and were given
the opportunity to speak at the hearing as well; one parent appeared and spoke.
The Court has carefully considered the parties’ voluminous submissions, as well
as the arguments proffered at the August 5, 2016, fairness hearing. For the reasons set forth
below, Plaintiffs’ motion for final approval of the settlement is denied, and the conditional
certification of the Plaintiff class is vacated.

3

On July 12, 2016, the Court granted both the Parent Advocates’ and the
Children’s Advocates’ unopposed motions to intervene in this action for the
limited purpose of objecting to the proposed settlement. (See Docket Entry No.
216.)

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BACKGROUND
The Court assumes the parties’ familiarity with the underlying facts and provides
only a brief procedural background.
Plaintiffs filed the initial Complaint in this action on July 8, 2015, asserting
various causes of action against Defendants stemming from alleged deficiencies in the New
York City foster care system. (See generally Complaint.)
One day later, on July 9, 2015, the State Defendants contacted the Plaintiffs
seeking to discuss a potential settlement. (Docket Entry No. 225, Declaration of Julie A. North
in Support of the Motion for Final Approval (“North Decl.”), at ¶ 11.) Plaintiffs and the State
Defendants thereafter discussed a settlement by phone, and then in three days of in-person
meetings. (North Decl., at ¶¶ 12-13.) An agreement in principle was reached on July 20, 2015,
twelve days after the Complaint was filed. (North Decl., at ¶ 13.) The parties continued
negotiating the specifics of a settlement through September 2015. (Id.)
On October 22, 2015, Plaintiffs and State Defendants filed the proposed Consent
Decree with the Court, purporting to settle Plaintiffs’ claims against the State Defendants. (See
generally Docket Entry No. 50.) Plaintiffs represent that the Consent Decree was negotiated
over the course of several months by counsel for the Named Plaintiff Children and the Public
Advocate, based on the Public Advocate’s investigation of the child welfare system in New York
City and the State Defendants’ understanding of extensive public reporting on the state of the
New York City foster care system. (See Docket Entry No. 224, Memorandum of Law in
Support of the Motion for Final Approval of Settlement (“Pl. Memo”), at p. 19.) Plaintiffs
further represent that the Consent Decree is the “product of months of robust arm’s length
negotiations” between the Plaintiffs and State Defendants and that, over the course of these
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several months, the parties exchanged numerous drafts of the proposed agreement and engaged
in multiple conferences, both telephonic and in person, before filing the proposed Consent
Decree. (See Docket Entry No. 226, Declaration of Marcia Robinson Lowry in Support of the
Motion for Final Approval (“Lowry Decl.”), at ¶ 4; see also North Decl., at ¶¶ 11-15.)
After the proposed Consent Decree was filed, the Court entered an order directing
the parties to commence motion practice, pursuant to Federal Rule of Civil Procedure 23(e),
requesting Court approval of the Consent Decree. (Docket Entry No. 51.)
In early December 2015, before the commencement of the motion practice, the
City Defendants informed Plaintiffs of their intention to file a motion to dismiss the Complaint.
(See Docket Entry No. 80.) In response, Plaintiffs proposed to amend the Complaint to address
the issues the City Defendants indicated they planned to raise (see id.), and filed an Amended
Complaint on December 29, 2015. (Docket Entry No. 91.)
The Amended Complaint alleges, on behalf of a purported class of approximately
10,295 children in the New York City foster care system, that the system: (i) fails to exercise
sufficient oversight over contract agencies to which the City has delegated care of the purported
class of children to ensure that they comply with federal and state law, ACS policies, and the
terms of contracts with the City; (ii) fails to ensure that caseworkers are assigned manageable
caseloads or receive appropriate training and supervision; (iii) fails to develop and implement a
process for placing children into foster placements that matches children’s needs; (iv) fails to
ensure that adequate case plans are timely developed and implemented; (v) fails to ensure that
children in foster care are timely placed in stable permanent homes; and (vi) fails to take
reasonable steps to ensure timely adjudication of family court proceedings involving children in
ACS custody. (See generally Amended Complaint.) As against the State Defendants, the
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Named Plaintiff Children, on behalf of a putative class, assert claims for violation of substantive
due process under the Fourteenth Amendment, violation of a right to permanent home and
family derived from the First, Ninth, and Fourteenth Amendments, and violations of the
AACWA. Plaintiff James joins the Named Plaintiff Children in asserting the AACWA claim
against the State Defendants. As against the City Defendants, the Named Plaintiff Children, on
behalf of a putative class, allege the same claims brought against the State Defendants as well as
claims under the New York State Social Services Law and for breach of contract based on the
contracts between the City and the contract agencies described above. (See generally Complaint
¶¶ 341-358.)
On January 20, 2016, the Plaintiffs and State Defendants filed their joint motion
for preliminary approval of the settlement (Docket Entry No. 95), which was opposed by the
City Defendants (Docket Entry No. 106). On April 5, 2016, the Court held a hearing on
Plaintiffs’ and State Defendants’ joint motion for preliminary approval. Following several
Court-directed adjustments to the Consent Decree and settlement notice materials, the Court
entered an order on April 22, 2016, preliminarily approving the settlement and conditionally
certifying a settlement class consisting of all children who are, or will be, in foster care custody
of the Commissioner of ACS during the duration of the Consent Decree. (Docket Entry No.
154.) That order set a May 13, 2016, deadline for publication of notice to settlement class
members; a June 21, 2016, deadline for objections to the Consent Decree; and a July 15, 2016,
deadline for filing of a motion for final approval of the settlement. (See id.) The order also
scheduled a fairness hearing for August 5, 2016, at 10:30 a.m., for final evaluation of the
Consent Decree. (Id.)
Plaintiffs filed their motion for final approval of the settlement on July 15, 2016.
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(Docket Entry No. 223.) In response, the Court has received: the Parent Advocates’ objections
to the proposed settlement from (Docket Entry No. 221); the Parent Advocates’ opposition to
final approval of the proposed settlement (Docket Entry No. 234); the Children’s Advocates’
objections to the proposed settlement (Docket Entry No. 187); the City Defendants’ opposition
to final approval of the proposed settlement (Docket Entry No. 231); and letters of objection
from two parents of putative class members.

The Proposed Consent Decree
The proposed Consent Decree purports to secure relief from the State Defendants
for the putative class primarily through the creation of two oversight positions: a Monitor (see
Consent Decree § 6) and a Research Expert (see Consent Decree § 7). The Monitor, who would
be retained by the Commissioner of OCFS, with input from Plaintiff Children’s counsel and the
Public Advocate, would be tasked with reviewing and evaluating unspecified alleged systemic
issues affecting New York City’s foster care system that reflect widespread and ongoing
noncompliance with federal and state statutes, regulations and policies. (See Consent Decree
§§ 6.1 & 6.2.) The Commissioner of OCFS would develop the criteria by which the Monitor
reviews and evaluates systemic issues within the foster care system, and the Monitor would
report his or her findings and make recommendations regarding the safety, permanency and
well-being of foster children in New York City. (See Consent Decree § 6.2.) The Monitor
would be granted necessary resources, as well as access to records and data on foster care
programs as determined by the Commissioner of OCFS, and would prepare quarterly reports
outlining his or her activities, findings and recommendations for improvements to the City’s
foster care system. (See Consent Decree § 6.4.) These quarterly reports would be reviewed by
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the Commissioner of OCFS in conjunction with ACS in order to determine what actions may be
needed to address issues raised in the reports, and ACS would thereafter be directed to prepare
corrective action plans for the Commissioner’s approval. (See Consent Decree § 6.5.) The
Monitor is proposed to serve an initial term of three years, and is to be reviewed at that time by
the parties, and further reviewed every two years thereafter. (See Consent Decree § 6.6)
The Research Expert is to be retained by ACS at the direction and approval of the
Commissioner of OCFS, with input from counsel for the Plaintiff Children and the Public
Advocate. (See Consent Decree §§ 7.1 & 7.2.) The Research Expert would be charged with
conducting reviews of case records of children in the custody of ACS in order to determine
compliance with relevant federal and state laws, regulations and policies related to the wellbeing of children. (See Consent Decree § 7.3.) The Research Expert’s proposed research
protocols and methodology (which are as yet entirely unspecified) would be subject to approval
by the Commissioner of OCFS, who would consider recommended changes from Plaintiff
Children’s counsel and the Public Advocate. (See id.) The Research Expert would be
responsible for producing two types of reports: (1) reports on individual cases where voluntary
agencies and/or ACS have violated federal or state statutes, regulations or policies, in which the
Research Expert would recommend corrective action and conduct follow-up reviews; and (2) biannual aggregate reports summarizing the major results of all case records reviewed over the
preceding 6-month period. (See Consent Decree §§ 7.4 & 7.5.) The Research Expert is to serve
an initial term of two years, and is to be reviewed at that time by the parties, and further
reviewed every two years thereafter. (See Consent Decree § 7.6.)
In consideration for this relief, the Consent Decree includes a broad claim release,
which provides that the Plaintiff Children and Public Advocate will withdraw with prejudice all
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claims and remedies sought in Amended Complaint, and release any claims relating to or arising
from any claims raised in Amended Complaint, as against the State Defendants. (See Consent
Decree § 10.1.) The Consent Decree also contains a covenant not to sue as against the State
Defendants, which precludes all suits for injunctive or declaratory relief for the life of the
agreement – seven years – based on facts or causes of action set out in the Amended Complaint.
(See Consent Decree § 10.2.4)

Objections to the Proposed Consent Decree
Both the Parent Advocate Intervenors and the Children’s Advocate Intervenors
have submitted objections to the proposed Consent Decree, highlighting numerous perceived
deficiencies in the settlement terms. The concerns of both groups of intervenors generally
overlap. The intervenors argue that the relief provided in the Consent Decree is inadequate in
that: the roles and objectives of the Research Expert and Monitor are vague and ill-defined; the
remedies conferred by the Consent Decree do not address the alleged civil rights violations
identified in the Amended Complaint; the additional oversight provided by the Monitor and
Research Expert is duplicative of the work of OCFS’s New York City Regional Office
(“NYCRO”); the settlement precludes the possibility of litigation to reform harmful practices
carried out by the State Defendants; and the parents of children in foster care may be precluded
from participation in important decision-making with respect to their children’s placement. (See
4

The covenant not to sue does not cover individual actions against the State
Defendants for damages or injunctive relief, or class-wide or systemic claims
against the State Defendants that do not relate factually or legally to the claims
raised in the Amended Complaint against the State Defendants. (See Consent
Decree § 10.3.) It is difficult to conceive of a systemic claim regarding foster
care that would not relate factually or legally to the claims raised in the Amended
Complaint.

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generally Docket Entry Nos. 187 & 221.) The intervenors also take issue with the fact that the
Consent Decree was agreed to prior to the exchange of discovery in this case. Perhaps most
notably, the intervenors protest the seven-year duration of the Consent Decree and covenant not
to sue, arguing that the length of the agreement is unprecedented and unjustified, that the terms
of the release and covenant are overly broad and that the covenant will strip the Plaintiffs of a
crucial tool for pursuing systemic change for an extraordinary period of time. (See generally id.)
The Court has also received objections from two non-class member parents of
children who are in foster care. One argues that: counsel for the Named Plaintiff Children have
not kept the children or their parents sufficiently informed about this case; the lawsuit does not
adequately address the treatment of children in foster care system, including the high level of
abuse that these children allegedly endure; and that the lawsuit is a front for the passage of
“shady money.” This parent also objects to the fact that the suit does not seek any monetary
relief.5 The other parental objection submitted asserts generally that the parent was not kept
abreast of developments in the suit; that ACS keeps children in foster care for excessive periods
of time in order to make money; and that she has been retaliated against in response to her
advocacy for changes in the City’s foster care system. (See Docket Entry No. 255.) Both nonclass member parent objectors were permitted an opportunity to speak at the August 5, 2016,
fairness hearing. One parent spoke regarding issues relating to the particulars of her son’s foster
care case, her opposition to the manner in which this lawsuit has been structured and conducted,
and systemic issues. The other parent was not present at the hearing.

5

This parent’s objection was filed under seal as authorized by an Order of this
Court. (Docket entry no. 257.)

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DISCUSSION
Legal Standard for Settlement Approval
Pursuant to Federal Rule of Civil Procedure 23(e), “[t]he claims, issues, or
defenses of a certified class may be settled . . . only with the court’s approval.” See Fed. R. Civ.
P. 23(e). The Court may only approve a settlement upon finding that its terms are “fair,
reasonable, and adequate.” See id. This determination falls squarely within the trial court’s
discretion. See Kelen v. World Fin. Network Nat. Bank, 302 F.R.D. 56, 68 (S.D.N.Y. 2014) (“It
is within a trial court's discretion to approve a proposed class action settlement.”); Maywalt v.
Paker & Parsley Petroleum Co., 67 F.3d 1072, 1078 (2d Cir. 1995) (“The ultimate responsibility
to ensure that the interests of class members are not subordinated to the interests of either the
class representatives or class counsel rests with the district court.”).
A district court examining a proposed class action settlement must examine “both
the settlement’s terms and the negotiating process leading to the settlement.” Wal-Mart Stores,
Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 116 (2d Cir. 2005). A court must first “review the
negotiating process leading up to the settlement for procedural fairness, to ensure that the
settlement resulted from an arm’s-length, good faith negotiation between experienced and skilled
litigators.” Charron v. Wiener, 731 F.3d 241, 247 (2d Cir. 2013). A presumption of procedural
fairness attaches to settlements that are negotiated at arm’s length by experienced counsel. See,
e.g., In re Austrian and German Holocaust Litig., 80 F. Supp. 2d 164, 173-74 (S.D.N.Y. 2000).
Once the court has determined whether the settlement was negotiated in a procedurally fair
manner, it moves on to evaluate the settlement’s substantive terms in light of the nine factors set
out by the Second Circuit in City of Detroit v. Grinnell Corporation, 495 F.2d 448 (2d Cir.

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1974).6 See Charron, 731 F.3d at 247.
Courts evaluating class action settlements must remain “mindful of the ‘strong
judicial policy in favor of settlements, particularly in the class action context.’” Wal-Mart, 396
F.3d at 116 (quoting In re PaineWebber Ltd. P’ships Litig., 147 F.3d 132, 138 (2d Cir. 1998)).
Moreover, the adequacy of a settlement should not be judged “in comparison with the possible
recovery in the best of all possible worlds.” Meredith Corp. v. SESAC, LLC, 87 F. Supp. 3d
650, 665 (S.D.N.Y. 2015). Rather, a court need only determine that a settlement falls within a
“range of reasonableness.” Id. at 666. “Due to the presumption in favor of settlement, [a]bsent
fraud or collusion, courts should be hesitant to substitute [their] judgment for that of the parties
who negotiated the settlement.” Peoples v. Annucci, No. 11 CV 2694-SAS, 2016 WL 1464613,
at *10 (S.D.N.Y. Apr. 14, 2016) (internal quotation marks and citation omitted). Nevertheless,
while a district court must “stop short of the detailed and thorough investigation that it would
undertake if it were actually trying the case,” it must also “eschew any rubber stamp approval in
favor of an independent evaluation” of the settlement’s fairness. See Grinnell, 495 F.2d at 463.

6

The nine Grinnell factors are: (1) the complexity, expense and likely duration of
the litigation; (2) the reaction of the class to the settlement; (3) the stage of the
proceedings and the amount of discovery completed; (4) the risks of establishing
liability; (5) the risks of establishing damages; (6) the risks of maintaining the
class action through the trial; (7) the ability of the defendants to withstand a
greater judgment; (8) the range of reasonableness of the settlement fund in light
of the best possible recovery; and (9) the range of reasonableness of the
settlement fund to a possible recovery in light of all the attendant risks of
litigation. See Grinnell, 495 F.2d at 463.
Where, as here, the settlement calls solely for injunctive relief, the final three
Grinnell factors are not at issue, and the fifth factor is evaluated in light of the
likelihood of establishing remedies rather than damages. See Ingles v. Toro, 438
F. Supp. 2d 203, 211 (S.D.N.Y. 2006) (Chin, J.); Marisol A. v. Giuliani, 185
F.R.D. 152, 162 (S.D.N.Y.1999).

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Procedural Fairness
As previously noted, courts must evaluate the procedural fairness of the
negotiation of the settlement in conjunction with reviewing the agreement’s substantive terms.
Charron, 731 F.3d at 247. In assessing procedural fairness, “a proposed settlement is presumed
fair, reasonable, and adequate if it culminates from “arm’s-length negotiations between
experienced, capable counsel after meaningful discovery.” Blessing v. Sirius XM Radio Inc.,
570 F. App’x 1 (2d Cir. 2012) (emphasis added); see also Lizondro-Garcia v. Kefi LLC, 300
F.R.D. 169, 178 (S.D.N.Y. 2014).
Plaintiffs assert that, because the Consent Decree was negotiated at arm’s length
by experienced counsel, it is entitled to a presumption of fairness. See In re Austrian and
German Bank Holocaust Litig., 80 F. Supp. 2d at 173-74. Plaintiffs proffer that both Julie North
and Marcia Robinson Lowry are experienced and capable litigators in the areas of class action
and children’s rights litigation, respectively. (North Decl., at ¶ 9; Lowry Decl., at ¶ 2.) Plaintiffs
further represent that the proposed Consent Decree is the product of months of “robust arm’s
length negotiations” and that, over the course of several weeks beginning in July 2015, counsel
for the Named Plaintiff Children, the Public Advocate and the State Defendants engaged in a
series of meetings, calls and debates concerning a potential settlement. (Lowry Decl., at ¶ 4;
North Decl., at ¶¶ 11-15.) Nevertheless, the record before the Court makes it clear that the
contours of the settlement were agreed to in principle a mere week after the Complaint was filed,
and that the parties have not engaged in “meaningful discovery” beyond a purported
investigation into the state of New York City’s child welfare system and an examination of city,
state and federal public reports detailing the failings of the child welfare system in New York

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City.7 In particular, and as Plaintiffs’ counsel acknowledged at the fairness hearing, there has
been no investigation focused on the State Defendants’ alleged non-compliance with legal
provisions governing its role in the child welfare system. Plaintiffs do not demonstrate how their
purported pre-litigation investigation connected meaningfully to the Named Plaintiff Children or
to the specific allegations regarding State agency violations that are contained within the
Amended Complaint. In the absence of any “meaningful discovery”8 into the merits of the
claims asserted against the settling defendants by the Named Plaintiff Children, the settlement is
not entitled to a presumption of procedural fairness.
The cases cited by Plaintiffs for the proposition that courts routinely approve
settlements in which limited or no formal discovery has been conducted are inapposite. The
court in Handschu v. Special Servs. Div., 605 F. Supp. 1384 (S.D.N.Y. 1985) did recognize that
discovery need not be “formal discovery under the Federal Rules of Civil Procedure,” but further
noted that counsel must be able to demonstrate access to “sufficient information regarding the
facts of their case.” Id. at 1394 (emphasis added). While Plaintiffs purport to have assessed
publicly available information regarding the New York City foster care system, they have made
no showing that they investigated the particular circumstances of the Named Plaintiff Children,

7

Plaintiffs proffer that the facts in the Amended Complaint were well known to the
State Defendants in light of their responsibility in overseeing ACS. However, as
the City Defendants point out, State Defendants did not seek input from ACS in
contextualizing these facts, nor do the State Defendants appear to admit that these
facts establish violations of federal law.

8

As the Children’s Advocates point out, the paucity of the record here is
particularly apparent when compared with that in another class action targeting
New York City’s child welfare system, Marisol A. v. Giuliani, where “[e]xtensive
discovery had been conducted, including over 200 deposition days, over 100,000
pages of documents provided by the City and State, and the exchange of extensive
expert reports.” 185 F.R.D. at 163.

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the State’s compliance with the Constitution and federal and state law, or the allegations of
abuse and systemic deficiencies in the Amended Complaint. In In re Nissan
Radiator/Transmission Cooler Litigation, No. 10CV7493-VB, 2013 WL 4080946 (S.D.N.Y.
May 30, 2013), the court noted that “[the] plaintiffs conducted an investigation prior to
commencing the action, retained experts, and engaged in confirmatory discovery in support of
the proposed settlement.” Id. at *5. That level of discovery clearly exceeds the efforts Plaintiffs
represent they have undertaken here. And in Van Oss v. New York, No. 10CV7524-SAS, 2012
WL 2550959 (S.D.N.Y. July 2, 2012), the court recognized that “although there ha[d] been no
formal discovery, plaintiffs’ counsel ha[d] done an adequate factual investigation to be
thoroughly apprised of the merits of the case.” Id. at *1. Here, however, while Plaintiffs assert
that they have investigated the general state of affairs of the New York City foster care system,
they have failed to proffer anything indicative of an investigation into the merits of the Named
Plaintiff Children’s – or the putative class members’ – claims against the State Defendants.
The Children’s Advocates, Parents’ Advocates and City Defendants all point to
the thin evidentiary record in this case as a factor undermining the settlement’s procedural
fairness, arguing persuasively that the Plaintiffs and State Defendants could not possibly have
developed a proper appreciation for the strengths and weaknesses of the plaintiff children’s
claims against the State Defendants – and, in turn, the propriety of the proposed remedies
– before entering into the settlement. See, e.g., In re General Motors Corp. Pick-Up Truck Fuel
Tank Prod. Liability Litig., 55 F.3d 768, 814 (3d Cir. 1995) (“The inchoate stage of case
development reduces our confidence that the proceedings had advanced to the point that counsel
could fairly, safely, and appropriately decide to settle the action.”). Although none of the parties
opposing settlement have proffered affirmative evidence indicating collusive activity, the nearMOTAPPROVESETTLEMENT.WPD

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total abandonment of the settling parties’ obligation to assess the merits of the Named Plaintiff
Children’s claims leads the Court to conclude that the Consent Decree is not entitled to a
presumption of procedural fairness, and that the proponents have failed to establish that it was
developed under conditions that were procedurally fair to the putative class.

Application of the Grinnell Factors
1. Complexity, Expense, and Duration of the Litigation
This case fits squarely within the common understanding that class actions are
“inherently complex” and therefore benefit from settlement, which “avoids the costs, delays, and
multitude of other problems” associated with complex litigation. In re Austrian and German
Bank Holocaust Litig., 80 F. Supp. 2d at 174. However, here, the Plaintiffs’ agreement will
terminate this litigation only as to the State Defendants, and the litigation will remain ongoing as
to the City Defendants. Plaintiffs characterize this settlement as the first of two steps, and
recognize that there will be a continuing need to litigate against the City Defendants. (See Pl.
Memo at 4.) Plaintiffs assert that actively pursuing this litigation against both sets of defendants
would be more complex and expensive, but many of the examples of costs that Plaintiffs claim
would be mitigated by the settlement – fact discovery, expert discovery, briefing, and
presentation of evidence as to both the 19 Named Plaintiff Children and the broader class of
thousands of children – will be required in order to effectively continue this litigation against the
City Defendants. As such, this factor is at best neutral with regards to the Consent Decree.
2. Reaction of the Class to the Proposed Settlement
The “reaction of the class to the settlement” is one of the most significant factors
courts consider when weighing the fairness of a proposed settlement. See Grinnell, 495 F.2d at
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463. No objections by class members to the Consent Decree have been received. This fact is
neither surprising nor particularly significant here, because the class is composed entirely of
minor children who are in the foster care system, individuals who are both uniquely vulnerable
and, because of their age and dependence on others, generally ill-suited to appreciate the stakes
of litigation involving their interests and to be effective advocates on their own behalf. Such
factors are particularly significant where, as here, the proposed settlement is with defendants
who are not directly involved in the individual plaintiffs’ day to day custody issues and would
have no immediate impact on the individual plaintiffs’ circumstances. The Court concludes that
the objections to the Consent Decree by the Children’s Advocates and the Parent Advocates are
significant for purposes of this factor of the Grinnell analysis, as these organizations are well
suited to advocate on behalf of many of those whose interests would be affected by the Consent
Decree.
The response by the intervenor organizations is starkly negative. Both argue that
the Consent Decree has no provisions to provide meaningful, concrete benefits to the class; that
the Consent Decree is entirely vague about the roles, responsibilities, and authority of the
Monitor and Research Expert; and that the Consent Decree’s seven-year term is an
unprecedented waiver that would significantly stymie future efforts at reforming the foster care
system in New York. As discussed in detail below, the Court finds many of the intervenors’
arguments persuasive.
First, the intervenors argue that the Consent Decree does not provide concrete
benefits to the class. Plaintiffs walk an unusual line in defending the fact that the Consent
Decree calls only for the creation of two temporary oversight roles and itself provides no
substantive changes to the foster care system. Although Plaintiffs recognize that the State has
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ultimate authority over the foster care system, they repeatedly characterize the State’s role as one
of oversight, and argue that the Consent Decree will strengthen the State’s oversight capacity.
Plaintiff’s argument is, however, undermined by its own premise: if the State-level oversight
roles are to be meaningful at all, the State must be able to compel ACS to make operational
changes; if the State has this power, describing its role as merely one of oversight is a
mischaracterization. By contrast, prior settlements with OCFS, like the one in Marisol A.,
contained significant and detailed requirements.
Even if the Court were to conclude that the Monitor and Research Expert
structure contemplated by the Consent Decree were adequate in theory, the wholesale lack of
specificity within the Consent Decree as to the goals, objectives, and responsibilities of these
two new officials raises significant questions as to the reasonableness of the settlement. See
Martens v. Smith Barney, Inc., 181 F.R.D. 243, 269 (S.D.N.Y. 1998) (noting that the Court
cannot “declare its duty to evaluate the settlement complete before the parties more meaningfully
clarify what it does”). The absence of specificity with respect to problems to be studied and
goals to be achieved is particularly striking given the extent to which the Complaint identifies
numerous alleged systemic problems. The Consent Decree leaves it to the Monitor and Research
Expert to recommend areas of attention and goals to the Commissioner of the OCFS, and gives
the OCFS final say over what problems will be recognized at all and what, if anything, is to be
done about them. The covenant not to sue provisions of the Consent Decree would insulate the
OCFS from any systemic challenge to its actions across a broad swath of foster care and
adoption issues for seven years. The Plaintiffs assert that the Consent Decree has specific
provisions about how the goals and objectives of the Monitor and Research Expert will be
defined, but this procedural specificity is no substitute for concrete commitments as to issues to
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be addressed and remedial actions to be taken, in the absence of which the Court’s ability to
determine whether the creation of these offices constitutes adequate compensation for the release
and protection from future litigation is limited at best.
Finally, the intervenors argue that the seven-year covenant not to sue is
unprecedented in its duration. Plaintiffs have proffered no example of a similarly long waiver;
each of their examples of consent decrees whose ultimate term was similarly lengthy involved a
significantly shorter term that was extended by order of the overseeing court. None of those
courts approved a seven-year fixed term of release. Such a lengthy term, especially where the
covenant would bar any systemic claims similar to the sweeping allegations raised by Plaintiffs
in their Complaint, would be questionable even if the consideration provided by the settlement
were clearly and effectively addressed to identified problems. On the current record, where the
only undertakings by the settling defendants are to hire unspecified individuals to identify as yet
unspecified problems in another agency and make recommendations that the released and
protected parties are not bound to follow, the Court concludes that the intervenors’ concerns are
well founded.
The Court therefore concludes that the reaction of the class weighs heavily
against approval of the proposed Consent Decree.
3. Stage of the Proceedings and Discovery Completed
As discussed above in relation to procedural fairness, the record before the Court
indicates that this settlement was sought and negotiated at an extremely early stage in the
proceedings – before discovery had even commenced, let alone before significant discovery had
been exchanged. The State Defendants reached out to Plaintiffs’ counsel regarding settlement
only one day after the Complaint was filed in this action. (North Decl., at ¶¶ 10-11.) A
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settlement was discussed over the following week, with an agreement in principle reached
twelve days after the Complaint was filed. (North Decl., at ¶¶ 10-13.) In a case of this
complexity – with a 111-page Complaint asserting five causes of action under the Constitution
and various statutes – resolution of all issues within twelve days (even if negotiation of the
precise language of that resolution took longer) is difficult, if not impossible, to square with a
conclusion that both parties fully appreciated the strengths and weaknesses of their litigation
positions prior to reaching a settlement. See In re Austrian and German Bank Holocaust Litig.,
80 F. Supp. 2d at 173 (“The parties have less information on the relative strengths and
weaknesses of claims when a settlement is arrived at early in the life of a case. Therefore,
members of the settlement class and the Court may be hindered in their ability to determine the
fairness of the settlement.”). The stage of the litigation at which settlement was reached weighs
against approval of the proposed Consent Decree.
Similarly, the record indicates that discovery was not exchanged between the
settling parties prior to settlement. Although Plaintiffs’ counsel represent that they spent
considerable time investigating the facts underlying the Complaint prior to filing that document,
there is no indication that they participated in the kind of “sufficiently adversarial” pretrial
discovery that would demonstrate that the Plaintiffs attempted “to ferret out facts helpful to the
prosecution of the suit.” Id. at 176 (quoting Martens, 181 F.R.D. at 263.)
Accordingly, the Court concludes that this factor weighs against approval of the
proposed Consent Decree.
4. Risks of Establishing Liability and Damages, and Maintaining the Class
The parties have discussed the remaining Grinnell factors in combination, and the
Court adopts that grouping for ease of analysis. When considering the fifth factor, the court may
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consider how the relief granted by the settlement compares to the scope of relief potentially
available after trial. Cf. Ingles, 438 F. Supp. 2d at 214 (approving settlement where the court
found that it would be “difficult to imagine that the Court would have imposed, following trial,
significantly more extensive and detailed relief”). Here, given the State Defendants’ admitted
power to both oversee and direct action by the New York City foster care authorities, the
absence of specificity as to issues or corrective actions in the Consent Decree suggests strongly
that more specific and robust remedies would be feasible were Plaintiffs to prevail at trial.
Plaintiffs highlight generally the uncertainty of litigation and the possibility that
they will not prevail either on a class certification motion or at trial. The intervenors and the
City Defendants do not meaningfully contest this point, but argue that these factors do not
overcome the significant problems with the settlement process and the Consent Decree itself.
Plaintiffs would still, in any event, be required to establish liability and the propriety of class
action proceedings as against the City Defendants. Thus, although the risks of proceeding
against two groups of defendants is greater than proceeding against only one, the Court
concludes that this factor does not weigh strongly either for or against approval of the settlement.
Summary
As discussed above, the Consent Decree is not entitled to a presumption of
fairness. The Grinnell factors generally weigh against approval of the settlement, or are
relatively neutral. The failure of the Consent Decree to identify concrete issues, much less
remedial measures and goals; the proponents’ failure to demonstrate that the parties had the
requisite understanding of the facts and the strengths and weaknesses of the Plaintiffs’ claims of
legal noncompliance by the State; and the extraordinary length of time for which the parties
propose to bar further systemic litigation all render the Consent Decree patently unfair and
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unreasonable as a settlement of Plaintiffs’ claims against the State Defendants.
The motion for final approval of the Consent Decree is therefore denied and the
conditional certification of the Plaintiff class is vacated.9

CONCLUSION
Plaintiffs’ motion for approval of the proposed Consent Decree is denied and the
conditional certification of the Plaintiff class is vacated. This Memorandum Opinion and Order
resolves Docket Entry No. 223.
A pretrial conference in this matter will be held on October 13, 2016, at 2:00 p.m.
The parties must submit an updated joint preliminary pre-trial statement in accordance with the
Initial Conference Order (docket entry no. 32) in advance of that conference. This case remains
referred to Magistrate Judge Pitman for general pre-trial management.
SO ORDERED.
Dated: New York, New York
August 12, 2016
/s/ Laura Taylor Swain
LAURA TAYLOR SWAIN
United States District Judge

9

Given this conclusion, the Court need not address the other issues raised by the
City Defendants.

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