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BLH v. South Carolina Department of Social Services

Court of Appeals of South Carolina

April 25, 2018

BLH by parents/ general guardians Kenneth and Angela Hensley, and on behalf of all others similarly situated, Respondent,
v.
South Carolina Department of Social Services, Appellant. Appellate Case No. 2014-002254

          Heard May 11, 2017

          Appeal From Spartanburg County Brian M. Gibbons, Circuit Court Judge.

          Andrew F. Lindemann and Joel Steve Hughes, both of Davidson & Lindemann, PA, of Columbia, for Appellant.

          Charles J. Hodge and T. Ryan Langley, both of Hodge & Langley Law Firm, PC, and James Fletcher Thompson, of James Fletcher Thompson, LLC, all of Spartanburg, for Respondent.

          OPINION

          McDONALD, J.

         This case involves the alleged breach of adoption assistance subsidy [AAS] agreements by the South Carolina Department of Social Services (DSS). DSS contends (1) the circuit court erred in certifying a class when the class representative failed to prove the necessary element of commonality, and (2) the class certification and notification process violates the statutory and constitutional rights of potential class members and their families. We agree that the circuit court erred in granting class certification.

         Facts and Procedural History

         In April 2013, minor BLH brought this action against DSS through her adoptive parents, filing her complaint as a potential class action on behalf of "All children, age 19 or younger on the date of the Motion for Class Certification (January 6, 2012), who are current and former beneficiaries of existing adoption assistance subsidy agreements between their adoptive parents and [DSS], executed on or before June 20, 2002."[1] The complaint alleged DSS breached its AAS contracts with class members by unilaterally cutting adoption assistance benefits to special needs children by twenty dollars per month, beginning in June 2002.[2]

         In October 2013, BLH moved to certify the class pursuant to Rule 23, SCRCP.[3] At an April 2014 hearing, BLH argued the commonality requirement was satisfied because DSS cut all class members' benefits at the same time and in like manner. DSS disagreed, relying on Gardner v. South Carolina Department of Revenue, 353 S.C. 1, 577 S.E.2d 190 (2003), to support its argument. After the hearing, the circuit court issued a Form 4 order granting class certification. DSS moved for reconsideration and requested a formal order addressing its commonality argument.

         On May 21, 2014, the circuit court issued a more detailed order. Concerning commonality, the court ruled there were two "critical common questions of law and fact, " namely: (1) whether the benefits cut breached the contracts with the families of adopted children or violated the implied duty of good faith and fair dealing, and (2) whether, in light of DSS's reinstatement of benefits for families of foster care children, the failure to reinstate benefits for families of adopted children breached the contracts or violated the implied duty of good faith and fair dealing. Separately, the court ordered an "opt-out" notice procedure and ordered DSS- which the court found "regularly corresponds or has previously corresponded with all class members"-to serve each class member a notice "which shall advise them of the facts of this case and their right to opt out within 30 days."

         In August 2014, DSS filed a second motion to reconsider and requested oral argument. In the motion, DSS again asked the court to rule on its position that BLH could not satisfy the commonality element required by Rule 23 and Gardner. DSS further argued the court erred in establishing notice procedures without giving DSS an opportunity to be heard and in requiring DSS to bear the burden and expense of notifying potential class members.

         On September 16, 2014, the circuit court filed an amended order, but the only change related to the class certification issue was the court's inclusion of language indicating it had also relied on two affidavits.[4] On September 30, 2014, DSS filed a third motion for reconsideration requesting a formal order adjudicating the issues raised in its second motion for reconsideration.

         On October 16, 2014, DSS appealed; the court of appeals stayed the appeal until the circuit court could rule on DSS's third motion for reconsideration.

         In February 2015, the circuit court held a hearing on the third motion for reconsideration. Regarding the notice issue, DSS consented to providing BLH with information about potential class members but asserted it should not be required to notify potential class members of the opt-out procedures. Additionally, DSS again challenged the commonality requirement, citing Gardner. On the record, the circuit court denied reconsideration of the class certification, but granted DSS's request to make BLH responsible for notifying potential members of the class of the opt-out procedures. However, DSS was required to provide BLH with information about potential class members within ninety days of the circuit court's filing of its ...


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