BLH by parents/ general guardians Kenneth and Angela Hensley, and on behalf of all others similarly situated, Respondent,
South Carolina Department of Social Services, Appellant. Appellate Case No. 2014-002254
May 11, 2017
From Spartanburg County Brian M. Gibbons, Circuit Court
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.
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.
and Procedural History
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." 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.
October 2013, BLH moved to certify the class pursuant to Rule
23, SCRCP. 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.
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."
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.
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. On September 30, 2014, DSS filed
a third motion for reconsideration requesting a formal order
adjudicating the issues raised in its second motion for
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.
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 ...