$9.5 million sought by plaintiffs' attorneys in Oklahoma DHS lawsuit

BY GINNIE GRAHAM World Staff Writer
Tuesday, June 19, 2012
6/19/12 at 7:43 AM

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The group that sued the Oklahoma Department of Human Services citing failures in the state's child-welfare system is asking $9.5 million for its costs associated with the federal class-action lawsuit, according to a court filing made late Monday night.

Children's Rights, a New York-based nonprofit, in January came to a settlement agreement, which led to a pending improvement plan overseen by a three-person panel.

"(The case) has effected historic and comprehensive reform of the Oklahoma foster care system," the motion states. "The attention of both the Executive and Legislative branches of State Government, as well as the Commission, are now keenly focused on comprehensive and transformational change. The tenor of the public discussion has been dramatically and forever changed.

"Gone is the culture of denial and inattention. Come is the culture of openness and engagement. Gone is a Commission which turned a blind eye. Come is an inquiring and active Commission. Gone is a system with no accountability. Come is a system with hallmark accountability.

"But for the dedication and resources of the lawyers for Children's Rights, none of these changes would have occurred. This historic and comprehensive reform did not come easily."

DHS may file a motion countering the claim, and a judge may set an evidentiary hearing.

The legal costs cover 36,187 hours of work during the four years of the lawsuit, which included 18 attorneys and 13 paralegals at the nonprofit.

About $1 million was spent in non-recoverable costs by Children's Rights and its attorneys.

The cost to DHS for its defense has been about $7 million, and the commission approved another $2 million last fall.

The nonprofit filed the federal lawsuit in Tulsa's U.S. Northern District on behalf of nine foster children in February 2008 and it gained class-action status in May 2009.

Through the years, the nonprofit's lawyers complained the agency was resistant to settling and dragged its feet with extensive filings. DHS officials claimed it was exercising its right to a defense.

The motion states the private firm contracted by DHS - Riggs, Abney, Neal, Turpen, Orbison & Lewis - spent about 1,000 more hours on the lawsuit than the nonprofit. The motion argues the difference is important to show the efficiency of the Children's Rights attorneys.

It argues the private firm did not complete the same type of work including: Not conducting a pre-filing investigation, carried no burden of proof, had access to all DHS documents and witnesses, received assistance from DHS employees and in-house lawyers and was not responsible for the settlement negotiations, which were led by Kent Meyers of Crowe & Dunlevy.

"Defendants' overly aggressive litigation tactics were motivated by a patently unjustified denial of the serious, systemic problems plaguing DHS," the motion states.

"Despite the defendants' constant efforts to derail plaintiffs from pursuing their claims, the settlement agreement reflects for the first time a broad legislative, executive and public recognition that the Oklahoma foster care system is in need of substantial reform and provides a process through which those reforms will be planned and implemented."

The motion details the efforts Children's Rights undertook and the obstacles it encountered.

Children's Rights attorneys moved to compel for compliance with outstanding discovery requests on eight occasions. A U.S. magistrate criticized DHS for its rate of production of child case files.

At one point, two DHS oversight commissioners refused to give depositions, citing medical reasons, the motion states. One commissioner resigned, and the other - Jay Dee Chase, who is a current commissioner - was ordered by Magistrate Frank McCarthy to give a deposition.

The motion includes a breakdown of billable hours by attorneys, showing the local firm of Fredric Dorwart, Lawyers, worked pro bono. Also, the New York office of Kaye Scholer LLP had donated its services.

The hourly rates of the attorneys are based on equivalent rates of local lawyers, except for Executive Director Marcia Lowry, who led the arguments against DHS.

The motion argues that her $700 an hour charge, which is a New York rate, is justified for her unique and extensive experience in child welfare institutional reform litigation.

"No firm in Oklahoma was willing or able to maintain this suit on its own," the motion states.

Since its founding in 1995, Children's Rights has sued 15 other states and jurisdictions seeking improvements in child-welfare systems, with all but two ending in judicial consent decrees or orders.

It did not seek damages in the Oklahoma case.

"The result achieved by the plaintiff class is superior," the motion states "Without requiring this court to actively intervene, the Oklahoma foster care system is now objectively accountable for its action in at least 15 key performance areas.

"The settlement agreement obtained by the plaintiff class may well serve as a model for systems across the country."

The nonprofit was sought by several Oklahoma attorneys and child advocates, who claimed no firm or organization in the state had the resources or expertise to challenge the current child-welfare system.

Children's Rights has net assets of about $14 million, according to its 2010 tax records.

Expenses that year were about $5.7 million and revenue was about $4.9 million.

Lowry, who led the legal arguments against DHS, has the group's top salary at $233,842.

Legal costs received by Children's Rights in other states include $6.4 million in Michigan and $10.5 million in Georgia.

The group has filed lawsuits against child-welfare systems in Connecticut, Georgia, Kansas, Kentucky, Mississippi, Missouri, New Jersey, New Mexico, New York, Pennsylvania, Tennessee, Wisconsin and Washington, D.C.

Legal fees breakdown

The $9.5 million costs requested by Children's Rights in its federal lawsuit against DHS covered more than 36,000 hours of work over the course of four years. It includes:

An 8-month investigation by attorneys of the state's foster-care system that led to the 87-page complaint filed in February 2008 in Tulsa's U.S. Northern District federal court.
Extensive legal research to identify potential legal claims.
Preparation of lengthy and complex brief in response to multiple motions filed by DHS to dismiss the case.
Preparation of legal briefs arguing for the class-action status, which was granted in May 2009.
Review of millions of pages of documents produced by DHS in discovery.
Taking and defending more than 80 fact and expert depositions.
Participating in settlement negations over several months.

Outcome:

A settlement agreement reached in January requires an improvement plan be created by the agency to address specific performance areas. The plan is pending approval by an oversight panel of three people, who are out-of-state experts in the field and hired in agreement by the parties. The plan will:

Hire more child-welfare workers in all areas to lower caseloads to no more than 12.
Recruit 500 foster families and 150 therapeutic foster families.
Eliminate shelter use for young children.
Reduce the number of placements for foster children.
Improve training for workers and foster families.
Provide better ongoing support for workers and foster families.
Restructure the organization.

Cost breakdown:

Attorney's fees: $8.3 million

Out-of-pocket expenditures: $1.2 million

Non-recoverable expenditures: $1 million

Source: Court filing

Original Print Headline: Plaintiffs seek $9.5M for costs in DHS suit

Ginnie Graham 918-581-8376
Ginnie.graham@tulsaworld.com