Torres v Jacobson First Amended Complaint with exhibits

STATE OF NEW MEXICO COUNTY OF SANTA FE FIRST JUDICIAL DISTRICT ANNETTE TORRES, ANNABEL TORRES, LAUREN CAMBRA, MONICA BRO...

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STATE OF NEW MEXICO COUNTY OF SANTA FE FIRST JUDICIAL DISTRICT ANNETTE TORRES, ANNABEL TORRES, LAUREN CAMBRA, MONICA BROSHIOUS, CRISTELA CASTRO, SAMANTHA RIVERAall residents of New Mexico on behalf of themselves and individuals similarly situated and ORGANIZERS IN THE LAND OF ENCHANTMENT, New Mexico membership based organization, representing low-income families. Plaintiffs, vs.

No. D-101-CV-2018-02769

MONIQUE JACOBSON, in her official capacity as Secretary of the New Mexico Children, Youth and Families Department,

Defendant. FIRST AMENDED CLASS ACTION COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF ON BEHALF OF NEW MEXICANS DENIED CHILD CARE ASSISTANCE Introduction 1.

Plaintiffs seek injunctive and declaratory relief against the State of New Mexico’s

Children, Youth and Families Department (CYFD) Early Child Services Bureau (the Department) to stop the State from illegally denying Child Care Assistance to low-income families. The named Plaintiffs, their members and tens of thousands of other low-income families are denied child care assistance because Defendant: 1) illegally denies assistance to families with income above 150 percent of the federal poverty level, 2) illegally denies families full assistance and requires families to pay a portion of child care costs, known as co-payments using a calculation that is not in

regulation, 3) has implemented and is enforcing unconstitutionally vague regulations and 4) does not provide applicants with basic due process necessary to challenge a denial of assistance. The Court has a legal duty to put an end to these illegal state actions in order to remedy the harm inflicted on the Plaintiffs and thousands of other New Mexico families. 2.

New Mexico’s child care assistance program is partially funded and administered

through the federal Child Care and Development Block Grant (CCDBG). See 42 U.S.C.A §§ 98579858. Federal law gives states complete flexibility in setting up a child care assistance program. 42 U.S.C.A § 9857 (b)(1). 3.

The New Mexico legislature appropriates funding for child care assistance to the

Children Youth and Families Department’s Early Childhood Services Division from the CCDBG and other sources for child care assistance. See General Appropriations Act of 2018, p. 114, available at https://www.nmlegis.gov/Sessions/18%20Regular/final/HB0002.pdf. 4.

Defendant’s regulations establish priorities for expending the funds appropriated by

the legislature for families with income up to 200 percent of the federal poverty level. See NMAC 8.15.2.9 (F). 5.

Child care assistance is a protected property right in New Mexico because eligible

families are entitled to receive the benefits by virtue of meeting the eligibility criteria set by Defendant in expending the funding allocated for the program. This means that the benefits cannot be denied or reduced without due process, including notice and the right to be heard. 6.

Child care is a basic necessity for New Mexico’s low-income families. Without child

care, low-income New Mexicans cannot support their families because they are unable to work or

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attend school. The cost of child care is out of reach for most low-income families.1 Without assistance, families with income below 200 percent of the federal poverty level spend up to 30.1 percent of their income on child care, compared to just 6.9 percent for families with incomes above 200 percent of the federal poverty level.2 This means that families who do not receive assistance do not have sufficient income to pay for other necessities, including food and housing. 7.

When eligible families are illegally denied child care assistance by Defendant or are

required to pay an unaffordable share of child care costs, they are put in the untenable position of turning down gainful employment, dropping out of school, or seeking alternative child care that is often low-quality, unsafe or not developmentally appropriate for their children. 8.

As of July 2018, only 19,769 low-income New Mexican children participate in

CYFD’s Child Care Assistance Program.3 According to the most recent data available by the Department, CYFD’s Child Care Assistance Program serves just one-third of all eligible children living in the State.4 9.

Despite this, Defendant has implemented illegal policies that conflict with current

regulations and that restrict eligibility for child care assistance. These policies violate state statutes and constitutional law. As a result, Plaintiffs and other New Mexico families have suffered grave injuries. Plaintiffs challenge multiple illegal policies and practices.                                                               National Women’s Law Center, State Child Care Assistance Policies Fall Short in Meeting Families’ Needs, November 2017, p. 1, available at https://nwlc-ciw49tixgw5lbab.stackpathdns.com/wp-content/uploads/2016/11/factsheet-on-state-child-care-assistance-policies-2017.pdf.   1

 National Women’s Law Center, Child Care Is Fundamental to America’s Children, Families, and Economy, p. 1, available at https://nwlc.org/resources/child-care-is-fundamental-to-americas-children-families-and-economy/.   3  N.M. Human Services Department, Monthly Statistical Report: July, 2018, p. 54, available at http://www.hsd.state.nm.us/uploads/FileLinks/587930e6bdd0402c9d4990a78c041734/MSR_July2018_Final_Versi on.pdf    4  2016 New Mexico Child Care Data Report, Center for Education Policy Research, January 2017, p. 3, available at https://cyfd.org/docs/Child_Care_Report_012017.pdf   2

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10.

First, Plaintiffs challenge CYFD policies that restrict access to child care assistance

and which were illegally implemented by the Department without promulgation of a regulation, in violation of the State Rules Act and the CYFD Act. See NMSA 14-4-1, et. seq. and 9-2a-1, et. seq. These illegal policies include: a. Denying child care assistance to families with income over 150% of the federal poverty level (FPL). The New Mexico Administrative Code states that CYFD will expend funding for child care assistance on families with income below 200% of the federal poverty level. See NMAC 8.15.2.9(F). Despite this, CYFD issued a state plan denying services to families with income above 150% FPL. Defendant lowered the eligibility standard and reduced access to services without changing its regulation as required by NMSA § §144-5.2 and 14-4-5.3; 9-2A-7 (D) and (E). b. Requiring families to pay an arbitrary share of costs in order to get benefits. Defendant denies some families full assistance and requires them to pay a share of child care costs in the form of co-payments. The factors and calculation methodology used to determine benefit levels and the share of costs a family must pay are not in state regulation or even publically available. Defendant’s regulations provide vague information that families are responsible for co-payments based on the size and income of a household and block of time the child is in care. However, the calculation method and base co-pay levels are not explained in regulation. Defendant publishes a chart on its website with some additional information about co-payment costs for different income levels. However, even with the chart on Defendant’s website, there is no way for an applicant to determine what copayment his or her family must make based on household size and hours in care. Defendant’s implementation of base co-payment levels and a calculation methodology are

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illegal because they have not been promulgated into regulation, with notice and a public hearing as required by NMSA § §14-4-5.2 and 14-4-5.3; 9-2A-7 (D). 11.

Second, Plaintiffs challenge CYFD’s illegal regulations and practices which deny

Plaintiffs due process of law as guaranteed under Article II, Section 18 of the New Mexico Constitution. These practices include: a. Unconstitutionally vague co-payment regulations: The Department’s regulations do not provide information that explains the amount of benefits a family qualifies for and the corresponding legal obligation for a family to pay a portion of child care costs. As a result, families have to guess how much assistance they are eligible to receive and have no basis to determine if Defendant’s eligibility decision is correct. b. Failure to provide notice and advise applicants of their right to a fair hearing: CYFD routinely turns families away from CYFD offices who do not meet the illegal and arbitrary eligibility levels set by Defendant. Defendant does not consistently provide families with written notification stating why benefits are denied or reduced, or that the denial can be appealed. In May of 2018, CYFD assistance general counsel told Plaintiffs’ counsel that there has never been a fair hearing on behalf of an individual denied child care assistance. 12.

To ensure that the Department administers the child care assistance program in

accordance with the State Rules Act, NMSA 14-4-1, et. seq. and the CYFD Act, NMSA 9-2a-1, et. seq. and provides families with the due process to which they are entitled under Article II, Section 18 of the New Mexico Constitution, Plaintiffs, through their undersigned counsel, bring this action for declaratory and injunctive relief. IV. PARTIES

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13.

Plaintiff, ORGANIZERS IN THE LAND OF ENCHANTMENT (OLÉ) is a

domestic nonprofit corporation registered with the New Mexico Secretary of State. Its main office is in Albuquerque, New Mexico. OLÉ is a statewide membership organization consisting of working families and childcare center owners, directors and educators/caregivers. OLÉ members and staff work to improve access to quality, affordable child care for working families to ensure that parents can become and remain gainfully employed and that children are given the opportunity to learn and thrive while in a child care setting. Defendant’s illegal restrictions on eligibility for child care assistance, unconstitutionally vague regulations, and failure to provide procedural due process harm OLÉ members and cause OLÉ staff members to divert time and resources to helping families navigate the child care assistance application process and find alternative options for care. Defendant’s failure to promulgate regulations with a public comment and hearing injures OLÉ’s interest in expanding access to affordable child care in New Mexico. 14.

Plaintiff ANNETTE TORRES is a resident of Los Lunes, New Mexico. Ms. Torres

works full-time as an employee of the State of New Mexico. She is a single mother with a threeyear-old child. Since the birth of her child in 2015, Ms. Torres’ family has had income between 150 and 200 percent of the federal poverty level. Ms. Torres applied for child care assistance three times in 2015 following the birth of her daughter. As is more fully described below, CYFD illegally denied Plaintiff Annette Torres child care assistance each time she applied because Defendant has an illegal policy of denying child care assistance to families with incomes over 150 percent of the federal poverty level. On two occasions, Defendant denied Ms. Torres verbally and did not provide her with a written notice explaining why she was denied or advising her of her right to appeal and of the process for doing so.

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15.

Plaintiff ANNABEL TORRES is a resident of Albuquerque, New Mexico. Ms.

Torres is a full-time employee for the State of New Mexico. She is a single mother to three children, ages two-years old, three-years-old and five-years-old. All three children attend day-care full time. Ms. Torres has been participating in CYFD’s child care assistance program for three years. Currently, Ms. Torres pays $441 a month as a co-payment, including gross receipts tax. As is more fully described below, Defendant illegally required Ms. Torres to make co-payments using a calculation that has no legal basis. 16.

Plaintiff CRISTELA CASTRO is a resident of Santa Fe, New Mexico. She is a full-

time medical assistant. She is a single mother to three children, ages six-months-old, three-yearsold and five-years-old. Ms. Castro has been participating in CYFD’s child care assistance program for three years. In 2016, Ms. Castro had to pull her oldest son out of the child care assistance program because she could not afford the copay of $268. Currently, Ms. Castro pays $189 per month and gross receipts tax for two of her three children to attend day care. As is more fully described below, Defendant illegally required Ms. Castro to make co-payments that have no legal basis. 17.

Plaintiff LAUREN CAMBRA and her husband, John Cambra are residents of

Albuquerque, New Mexico. Mr. Cambra is employed full-time as a security guard. Plaintiff Lauren Cambra is currently on maternity leave, but will return to work as a cashier in September of 2018. Mr. and Mrs. Cambra are parents to two children, ages two-months-old and two-years-old. Mr. and Mrs. Cambra applied for child care assistance in August of 2017 and were approved. Defendant required Mr. and Mrs. Cambra to make co-payments of $89 per month for full time care of their oldest child in addition to gross receipts tax. As is more fully described below, Defendant illegally required Mr. and Mrs. Cambra to make co-payments that have no legal basis.

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18.

Plaintiff MONICA BROSHIOUS is a resident of Albuquerque, New Mexico. Ms.

Broshious is employed full-time as a pre-school teacher. She is a single mother of two children, ages eight-years-old and seven-years-old. Ms. Broshious applied for child care assistance in June of 2018 and was approved. CYFD requires Ms. Broshious to pay $152 per month for the full-time care of both children with some after-hours care. As is more fully described below, Defendant illegally required Ms. Broshious to make co-payments that have no legal basis. 19.

Plaintiff SAMANTHA RIVERA is a resident of Albuquerque, New Mexico. Ms.

Rivera is a full-time preschool teacher. She is a single mother to two children, ages two-years-old and four-years-old. Both children require daycare full-time. Ms. Rivera has been participating in CYFD’s child care assistance program for three years. Ms. Rivera currently pays $110 a month as a co-payment, in addition to gross receipts tax. As is more fully described below, Defendant illegally required Ms. Rivera to make co-payments that have no legal basis. 20.

Defendant MONIQUE JACOBSEN is the Secretary of the New Mexico Children,

Youth and Families Department (“CYFD”). It is the Secretary's duty to manage all operations of the department and to administer and enforce the laws with which she or the department is charged. NMSA §9-2A-7(A). The Secretary must approve all regulations promulgated by HSD. NMSA §92A-7(D). Plaintiffs assert this civil action against Defendant Jacobsen in her official capacity only. II. JURISDICTION AND VENUE 21.

This Court has jurisdiction over this action and over the parties. Jurisdiction is

proper pursuant to the New Mexico Rules Act, NMSA 1978 § 14-4-1, et. seq. the Children, Youth and Families Act, NMSA 9-2A-1, et. seq., the Declaratory Judgment Act, NMSA 1978 §§ 44-6-1 to -15, and the New Mexico Constitution, Art. II, Section 18.

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22.

Venue for this action lies in the First Judicial District Court of Santa Fe County,

pursuant to NMSA 1978, § 38-3-1(G) (1988). V. Legal Framework for New Mexico’s Child Care Assistance Program 23.

New Mexico’s Child Care Assistance Program is authorized and funded under the

federal Child Care and Development Block Grant (CCDBG). The purposes of the CCDBG include: 1) to improve child care for participating children, 2) to increase the number and percentage of lowincome children in high-quality child care settings, 3) to promote parental choice to empower working parents to make their own decisions regarding the child care services that best fit their family’s needs, and 4) to assist states in delivering high-quality child care to maximize parents’ options and support parents trying to achieve independence from public assistance. 42 U.S.C.A. § 9857(b). 24.

The CCDBG requires states to create, implement, and file a plan with the Federal

Department of Health and Human Services (DHHS) detailing how the state will administer its child care program in accordance with federal law. 42 U.S.C.A. § 9858c. A new plan must be filed every three years. 42 U.S.C.A. § 9858c(b). The Department’s current plan, effective for federal fiscal years 2016 through 2018, can be found here:  http://www.newmexicokids.org/wpcontent/uploads/2015/04/CYFD_CCDF_ReAuth_2016.pdf . 25.

A CCDBG state plan must include 1) the eligibility criteria and priority rules for

child care assistance, 2) a description of the sliding fee scale (including any factors other than income and family size used in establishing the fee scale) that explains family cost-sharing requirements, known as co-payments, and 3) a process for timely appeal and resolution process for co-payment inaccuracies and disputes. 45 CFR §98.16(i)(5), 45 CFR §98.16 (k) and 45 CFR §98.45((l)(6).

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26.

The CYFD Act at NMSA 9-2A-7 gives the Secretary of CYFD the duty to operate

the department, manage operations and to administer and enforce the laws with which he or the department is charged. The Secretary is responsible for making and adopting reasonable and procedural rules and regulations that are necessary to carry out the duties of the department and its divisions. All rules and regulations filed by CYFD, must be filed in accordance with the State Rules Act. The CYFD Act requires the secretary to engage in rulemaking when the department has insufficient state funds to operate any of the programs it administers and a reduction in services or benefit levels are necessary. See NMSA § 1978 9-2A-7(E). 27.

Defendant has promulgated regulations at 8.15.2.1 NMAC to implement the Child

Care Assistance Program in New Mexico. CYFD’s regulations state that a family is eligible for assistance if they meet the following requirements: 1) Have countable income below the program limit, 2) are New Mexico residents, 3) the child receiving care is a U.S. citizen or eligible immigrant, 4) the child receiving assistance is between 6 weeks to 13 years old, and 5) where the family meets and work or educational requirement. The regulations also state that families are responsible for paying a portion of child care costs, known as co-payments once they have been approved for assistance, and the procedures for appealing adverse decisions via a fair hearing. Income Eligibility for Child Care Assistance in New Mexico 28.

Defendant’s regulations at NMAC 8.15.2.9 state that the Department will expend

federal and state funds on child care assistance based on six priority levels: a. Priority 1 includes families who receive Temporary Assistance for Needy Families (TANF). b. Priority 1-A is listed in the regulations, but currently reserved with no content. c. Priority 1-B includes families whose income is at or below 100% FPL.

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d. Priority 2 includes families transitioning off of Temporary Assistance for Needy Families (TANF), at least in part because of earned income. TANF is a cash assistance program for very low income families with children. e. Priority 3 is listed in the regulations, but currently reserved with no content. f. Priority 4 includes families whose income is above one hundred percent of the federal poverty level, but below two hundred percent of the federal poverty level. 29.

CYFD regulations state that the Department prioritizes children with special needs,

homeless families, and teen parents within Priority 1- B and Priority 4. See NMAC 8.15.2.9(C) and (F). 30.

The regulations state that the Department may maintain a waitlist if it does not have

sufficient funding for families meeting the criteria listed in Priority levels 1-B and 4. NMAC 8.15.2.9(C) and (F) 31.

Defendant’s State Plans, from 2016 to 2018, state that “based on budget availability,

new clients may be eligible based on 0 percent to 150 percent of the federal poverty level (FPL). Existing clients who recertify will maintain eligibility up to 200 percent FPL.” See Exhibit 1, Section 3.1.5 of the New Mexico Child Care and Development Plan for FFY 2016-2018 p. 75. 32.

However, until January of 2018, Defendant’s website stated that clients with income

above 100 percent of the federal poverty level will be placed on a waiting list, due to state budget shortfalls. See Exhibit 2, screenshot of www.cyfd.org from January 9, 2018. 33.

In January of 2018, Defendant changed its website to state that “The Child Care

Assistance Program subsidizes the cost of child care for low-income families (at or below 150% of the federal poverty level) that are working and/or in school and have a need for child care.” See https://cyfd.org/child-care-services/child-care-assistance.

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34.

CYFD has implemented a policy reducing eligibility below 200% of the federal

poverty level every year since 2013. In 2013, Defendant denied applications for families with incomes above 100% of the federal poverty level and since 2014, has had a policy of denying applications of families with income above 150 percent of the federal poverty level. These eligibility standards conflict with the standards for expenditure priorities in regulation. A history of CYFD’s restriction on child care assistance eligibility published by the NM Legislative Finance Committee is attached as Exhibit 3. Child Care Co-payments 35.

Federal law requires that state agencies administering child care assistance programs

periodically revise, by rule, a sliding fee scale that provides for cost sharing (co-payments) that is not a barrier to families who participate in the State’s child care program. 42 U.S.C.A. § 9858c(c)(5). 36.

A state’s sliding fee scale must take into account income and the size of the family

in determining each family’s co-payment and may use other factors when determining copayments. Any other factor used in determining co-payments must be described in the state plan. 45 C.F.R. 98.16(k). 37.

CYFD’s regulations and the state plan state that co-payments are based upon

household size, income and if the child is part time, the block of time they are in care. See NMAC 8.15.2.13(A) and (B). 38.

CYFD regulations state that: i. co-payments for each additional child are determined at one half of the co-payment for the previous child. See NMAC 8.15.2.13(B).

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ii. the Department will develop and publish an annual co-payment schedule based on the federal poverty guidelines. See NMAC 8.15.2.24. 39.

CYFD’s State Plan provides a link to one of its websites where the co-payment

schedule can be located: https://cyfd.org/child-cae-services. Due to a misspelling, the web link in the 2018 State Plan does not work. The correct link for the co-payment schedule for April 2018 through

March

2019

is

https://cyfd.org/docs/Copay_Table_Effective_April_2018_thru_March_2019_.pdf. The chart lists a monthly amount that a family is expected to pay based on income and family size for a child, without an indicating how that number is adjusted based on hours of care. The co-payment schedule is attached as Exhibit 4. 40.

The U.S. Department Health and Human Services recommends that states require

family co-payments to be no more than 7% of family income in order to be affordable. See Federal Register, Vol. 81, No. 190, at p. 67467, issued September 30, 2016. Despite this, the CYFD copayment chart sets co-payments as high as 9% of monthly income for just one child in care and a large share of families pay more than 9% of their income because they have multiple children. For example, a single parent of two children with income at 150% of the FPL would be expected to pay 10% of their income towards childcare. 41.

A document titled “Co-payment Procedure” states that copayments are “derived

from FACTS/EPICS and the co-payment calculator tool.” The procedure explains that copayments for part time child care are based on the percentage of time the child is in child care. As an example, a child is considered “full time” when he or she receives 30 or more hours of child care a week. In that scenario the full rate is due to the child care provider and the family must pay a portion of that payment based on the sliding scale fee. However, the base rates and the portion families must pay

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based on income and household size is not in regulation or the worker procedural guidance. The “Co-payment Procedure” is attached as Exhibit 5. 42.

The “Co-payment Procedure” is only available to the public via a public records

request and costs $.25 a page or by visiting the CYFD central office in Santa Fe at a time convenient for the Department. 43.

Defendant does not have a manual for workers. As of September 20, 2018,

Defendant only has a “draft procedures” document. See CYFD response to public record request, attached as Exhibit 6. 44.

Information about the Child Care Assistance Program is also published on three

different websites operated by Defendant. The first website, www.newmexicokids.org, allows families to search for licensed child care providers, includes a link to the CYFD child care regulations, and is where CYFD publishes its State Plan.

The second website,

https://pulltogether.org/, contains basic information on child care assistance, i.e. what age a child must be to be approved for child care assistance, and where a family can apply for assistance. The third website,  https://cyfd.org/child-care-services/child-care-assistance, also contains basic eligibility information for the child care assistance program, as well links for downloadable applications for assistance, and a link to a chart that states maximum co-payments for one child based on a family’s monthly income. None of Defendant’s websites explain how a family can determine the amount of assistance they will qualify for. VI. FACTUAL ALLEGATIONS Individual Plaintiffs

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45.

Defendant’s illegal administration of the child care assistance program deprives

Plaintiffs and their members of benefits to which they are entitled and due process of law. The facts concerning the Plaintiffs are described below. Plaintiff Annette Torres 46.

Plaintiff ANNETTE TORRES is a single mother of one child who is three-years-

old. Plaintiff Torres is employed full-time with the State of New Mexico. She requires full-time child care for her daughter during her work hours. 47.

Plaintiff Torres’ monthly income is $2,561.60. This places her family income just

below 190 percent of the federal poverty level. 48.

Since the birth of her daughter, Plaintiff Torres has applied for a child care assistance

with CYFD three times. Each time Plaintiff Torres applied for child care assistance, a CYFD caseworker turned her away from the local offices and told her she was not eligible because her income was above the eligibility threshold and told her that she did not qualify for a child care assistance waiting list. On two occasions, Ms. Torres was turned away without a written denial notice and was not told that she has a right to appeal. 49.

Without assistance, Plaintiff Torres pays $300 per month on childcare. This is 11.71

percent of her income. Plaintiff Torres struggles to afford child care and other basic needs for her family. As a result, she routinely and consistently has to rely on her family to help with childcare costs and groceries to feed her family. Affidavit of Annette Torres is attached as Exhibit 7. Plaintiff Annabel Torres 50.

Plaintiff ANNABEL TORRES is a single mother three young children, ages two,

three and five years old. She is employed full-time with State of New Mexico. Plaintiff Torres’ monthly income is $3,231, placing her family’s income at 157 percent of the federal poverty level.

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She relies on the CYFD child care assistance program to provide child care for her children while she is working. Plaintiff Torres and her children have been participating in the child care assistance program for three years. 51.

In January 2018, Plaintiff Torres applied to renew her child care assistance benefits.

She was approved for a 12-month contact. 52.

Plaintiff Torres’ monthly co-payment is $401 per month. This is over 12 percent of

her family’s monthly income. In addition, Plaintiff Torres’ child care provider charges her $40 per month in gross receipts taxes. 53.

Plaintiff Torres cannot afford the co-payment set by CYFD. She is unable to afford

her monthly co-payment, as well as her other bills and meet the basic needs of her family. In order to makes ends meet, Plaintiff Torres has had to cut back on necessities and has had to rely on her mother to purchase diapers and milk for her children. On multiple occasions, she has had to borrow money from her mother to pay her rent. 54.

Plaintiff Torres’ CYFD case file does not contain the calculation method that

Defendant used to determine the co-payment. There is no basis in regulation or statute that validates the co-payment Defendant set for Plaintiff Torres’ family. Plaintiff Torres has no way to determine if the co-payment is correct or to challenge the amount that Defendant requires her family to pay. Affidavit of Annabel Torres attached as Exhibit 8. Plaintiff Cristela Castro 55.

Plaintiff CRISTELA CASTRO is a single mother three young children, ages two

months old, three years old and five years old. She is employed full-time as a medical assistant. Plaintiff Castro’s monthly income is $2,411 per month, placing her family at 115.26 percent of the federal poverty level. She relies on the CYFD child care assistance program to provide child care

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for two of her three children while she is working. Plaintiff Castro and her children have been participating in the child care assistance program for three years. 56.

When she first applied in March of 2015, she was a part of a four-person household,

with an income of $3,580 per month. This put her family’s income at 180% of the federal poverty level. Despite, CYFD’s documented policy of denying benefits to families with income over 150 percent of the federal poverty level, she was inexplicably approved for four months of part-time care for two children. The CYFD caseworker set her copayment at $327 per month, excluding gross receipts tax. This payment was 9.1% of her family’s income. CYFD later reduced her copayment to $189 a month when her household went from four to three people. 57.

In July of 2016, Plaintiff Castro’s copayment went up to $268 per month for both

children because her income increased to $2,990 per month. This was 9% of her family’s income. 58.

Plaintiff Castro cannot pay the co-payment and meet her family’s basic needs. In

order to reduce the copayment, took unenrolled my oldest child from the childcare assistance program and obtained free child care through a special program administered by Presbyterian Medical Services. CYFD reduced her copay by $30. 59.

After her third child was born in April of 2018, Plaintiff Castro added her newborn

daughter to her CYFD case and asked for assistance for full-time care. She could not afford to keep her two youngest children enrolled full-time and pay for her family’s basic needs. As a result, she made the difficult decision to reduce family’s income and stay home with her children on Fridays. 60.

Plaintiff Castro currently pays $189 per month in copays for both children. Ms.

Castro cannot afford the total monthly co-payment assessed by CYFD, combined with gross receipts taxes. In order to pay for childcare, Ms. Castro has had to postpone paying certain bills, and reduce the frequency and amount of food she buys.

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61.

Plaintiff Castro’s CYFD case file does not contain the calculation method that

Defendant used to determine the co-payment. There is no basis in regulation or statute that validates the co-payment Defendant set for Plaintiff Castro’s family. Plaintiff Castro has no way to determine if the co-payment is correct or to challenge the amount that Defendant requires her family to pay. Affidavit of Cristela Castro attached as Exhibit 9. Plaintiff Lauren Cambra 62.

Plaintiff LAUREN CAMBRA, and her husband, John Cambra are the parents of two

children, ages two-months-old and two-years-old. Mr. Cambra is employed full-time as a security guard and attends school part-time. Plaintiff Cambra is currently on maternity leave. 63.

The Cambra family’s total monthly income is $2,080, which is just below 100

percent of the federal poverty level. The Cambra family relies on the CYFD child care assistance program to provide child care for their child while they are working. Plaintiff Cambra’s family has been participating in the CYFD child care assistance program for one year. 64.

Plaintiff Cambra initially applied for child care assistance in January 2017 and was

denied. At the time, her household income was $1,924 per month, placing her family below 100 percent of the federal poverty level. CYFD verbally informed her that her family was not eligible for assistance because their income was over the program limit. Defendant did not provide any information about a waitlist or about the family’s right to appeal the denial of benefits. 65.

Plaintiff Cambra applied for child care assistance again in August of 2017 when Mr.

Cambra was in school and Ms. Cambra was working full time. As a household of three, their income was $2,109 per month, placing them at 123 percent of the federal poverty level. CYFD approved the family for twelve months of child care assistance benefits. The CYFD caseworker set their copayment at $89 per month for the part-time care for one child, excluding gross receipts

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tax. Mr. Cambra now works as a full time security guard and Ms. Cambra has been on family leave since July of 2018. 66.

The Cambra family cannot afford the co-payment set by CYFD. In fact, the family

currently owes their child care provider $590 in overdue co-payments. Plaintiff Cambra and her husband have had to delay making payments on their vehicle to be able to afford their child care co-payment. They have also had to rely on their respective parents to provide diapers and wipes for their children. As a result, the family has had to stop taking their son to day care. Ms. Cambra needs to obtain child care for both her newborn and for her son starting in September of 2018, so she can return to work. She recently made the difficult decision not to return to her previous position as a supervisor, because her family could not afford child care for the hours she was required to be at work. Ms. Cambra has instead found a lower paying job with reduced hours, so they do not incur the same child care costs. 67.

The Cambra family’s CYFD case file does not contain the calculation method that

Defendant used to determine the co-payment. There is no basis in regulation or statute that validates the co-payment Defendant set for the Cambra family. Mr. and Ms. Cambra have no way to determine if the co-payment is correct or to challenge the amount that Defendant requires the family to pay. Affidavit of Lauren Cambra attached as Exhibit 10. Plaintiff Monica Broshious 68.

Plaintiff MONICA BROSHIOUS is a single mother two children, ages eight-years-

old and seven-years-old. She is employed full-time as a preschool teacher. Plaintiff Broshious’ monthly income is $1,954 per month, placing her family at 112 percent of the federal poverty level. She relies on the CYFD child care assistance program to provide child care for her children while

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she is working. Plaintiff Broshious and her children have been participating in the child care assistance program for three months. 69.

Plaintiff Broshious applied for child care assistance in June of 2018. Based on her

income noted above, she was approved for twelve months of child care assistance. The CYFD caseworker set my copayment at $152 per month for the full-time care of both children with some afterhours care. This accounts for almost 8% of her family’s monthly income. 70.

Ms. Broshious cannot afford her monthly copayment. In order to make the

payments, Ms. Broshious has had to delay paying other bills, delay buying groceries, and cut out non-essential activities for the children. 71.

Plaintiff Broshious’ CYFD case file does not contain the calculation method that

Defendant used to determine the co-payment. There is no basis in regulation or statute that validates the co-payment Defendant set for Plaintiff Broshious’ family. Ms. Broshious has no way to determine if the co-payment is correct or to challenge the amount that Defendant requires her family to pay. Affidavit of Monica Broshious attached as Exhibit 11. Plaintiff Samantha Rivera 72.

Plaintiff SAMANTHA RIVERA is a single mother two children, ages two-years-

old and four-years-old. She is employed full-time as a preschool teacher. Plaintiff Rivera’s monthly income is $1,678.22, placing her family below 100 percent of the federal poverty level. She relies on the CYFD child care assistance program to provide full time child care for her children while she is working. Plaintiff Rivera and her children have been participating in the child care assistance program for three years. 73.

In December of 2017, Plaintiff Rivera applied to renew her child care assistance

benefits. She was approved for a 12-month contract. Plaintiff Rivera’s current monthly co-payment

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is $110 per month. CYFD has not provided Ms. Rivera with an explanation of how the co-payment was calculated. 74.

Plaintiff Rivera cannot afford the monthly payment of $110. In order to pay for child

care, Ms. Rivera often cannot afford groceries for the week and is unable to pay utility bills and other housing costs. 75.

Plaintiff Rivera’s CYFD case file does not contain the calculation method that

Defendant used to determine the co-payment. There is no basis in regulation or statute that validates the co-payment Defendant set for Plaintiff Rivera’s family.

Plaintiff Rivera has no way to

determine if the co-payment is correct or to challenge the amount that Defendant requires her family to pay. Affidavit of Samantha Rivera attached as Exhibit 12. Nora Barrazas 76.

Nora Barrazas is a witness in this lawsuit. Ms. Barrazas is a mother of three young

children, ages fifteen years old, seven years old and five years old. Ms. Barrazas is employed fulltime by a manufacturing company and her husband works full time in construction. Due to the number of hours Ms. Barrazas and her husband works each week, the family needs child care for two of her children. Ms. Barrazas and her children have participated in the CYFD child care assistance program for 2 years. 77.

In October of 2017, Nora Barrazas applied to renew her child care assistance case

with CYFD. The Barraza family’s monthly income at that time was $4,643, which put them just below 200% of the federal poverty level. On October 31, 2017, the Department approved Ms. Barrazas for a twelve-month contract and increased her family’s co-payment from $407.00 to $557.00 per month. This is 12 percent of her family’s monthly income. CYFD did not explain the

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calculation method it used to calculate Ms. Barraza’s co-payment or to determine that it should increase by the amount it did. 78.

The Barrazas family cannot afford the co-payment set by CYFD. Because Ms.

Barrazas was unable to afford her co-payment, she contacted OLÉ and inquired whether OLÉ staff could investigate her case and determine whether her co-payment was calculated in error. 79.

An OLÉ staff member, Kristin Gamboa, contacted the NM Center on Law and

Poverty for assistance in determining if the copayment was correct. At that time, the co-payment chart available on CYFD’s website did not contain any information on copays for families with the Ms. Barrazas’ monthly family income of $4,624.95. 80.

In November 2017, the NM Center on Law and Poverty requested a fair hearing on

behalf of Ms. Barrazas to contest the decrease in benefits to Ms. Barrazas’ family and the correspoinding increase in child care copayment. 81.

Despite regulations requiring CYFD to schedule fair hearings within 60 days of a

request (See NMAC 8.15.2.22(A)), the hearing was not initially scheduled until May 8, 2018, almost 6 months after the request was made. 82.

At the fair hearing, a CYFD Regional Operations Manager could not provide a basis

in law or policy that explains the calculation of Ms. Barrazas’ co-payment. 83.

Ms. Barrazas’ family cannot afford any of the co-payments CYFD has set for her

family and as a result, has to purchase less food for her family and cannot pay her family’s phone bill. 84.

Ms. Barrazas’ CYFD case file does not contain the calculation method that

Defendant used to determine the co-payment. CYFD’s regulations do not contain a basis for the payment Defendant set for Ms. Barrazas’ family. Plaintiff Barrazas has no way to determine if the

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co-payment is correct or to challenge the amount that Defendant requires her family to pay. Affidavit of Nora Barrazas is attached as Exhibit 13.

Organizational Plaintiff - Organizing in the Land of Enchantment (OLÉ) 85.

OLÉ is a non-profit, statewide membership organization of over 5,000 members that

works to expand access to early education for every child in New Mexico. OLÉ’s Working Families Association is an organization of parents of young children, early educators, and early education center owners who advocate for strengthening New Mexico's early childhood education system. 86.

Defendant harms OLÉ members, including low income families, when Defendant

illegally denies child care assistance to members who need child care to work or attend school. 87.

OLÉ members advocate for quality child care, in part, by participating in meetings

publicly held by CYFD and by explaining the needs and experiences of low income families who seeking to access child care. OLÉ members submit written and verbal comments to CYFD when the Department proposes regulatory and programmatic changes to the child care assistance program. 88.

For years, OLÉ has advocated for CYFD to adopt clear and comprehensive

eligibility standards and affordable co-payments. 89.

OLÉ staff also help low-income, working parents navigate and understand CYFD’s

eligibility rules and requirements for participation in the child care assistance program. CYFD’s illegal denial of assistance and failure to establish a regulatory basis for its eligibility determinations causes OLÉ to divert resources from other initiatives to instead provide direct services and

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advocacy to help families navigate the child care assistance application process. The Affidavit of OLÉ’s Executive Director, Andrea Serrano is attached as Exhibit 14. 90.

For years, the Center on Law and Poverty has been working with OLÉ to address

Defendant’s illegal administration of the Child Care Assistance Program. The Center on Law and Poverty drafted extensive comments on the state plan in 2015 and 2018. In April of 2018, the Center wrote to CYFD and asked that the Department address violations of the State Rules Act and failure to provide due process by taking the steps requested as relief in this complaint. See letters attached as Exhibits 15 and 16. 91.

Plaintiffs’ Counsel in this case met with Ann Marie De Lovato, CYFD Assistant

General Counsel on April 27, 2019 and discussed these issues. A letter summarizing the outcomes of the meeting and requesting a response by May 16, 2018 is attached as Exhibit 17. Over four months have passed and CYFD has not responded to the letter or taken steps to comply with the law. IV. CLAIMS FOR RELIEF A. Defendant Denies Child Care Assistance to Eligible Families in violation of the State Rules Act and CYFD Act 92.

New Mexico’s Children, Youth and Families Department Act (CYFD Act) requires

that any regulation promulgated by CYFD comply with the provisions of the CYFD Act and the State Rules Act. NMSA 1978 § 9-2A-7(D). 93.

Defendant cannot adopt, amend, or repeal a regulation affecting any person outside

the Department without a public hearing on the proposed action before the Secretary or a hearing officer designated by the Secretary. NMSA 1978 § 9-2A-7 (D). 94.

Should the Department choose to adopt, amend or repeal a regulation affecting any

person outside the Department, it must publish notification of the following at least 30 days prior 24

to a public hearing date: 1) the subject matter of the regulation; 2) the action proposed to be taken; 3) the time and place of the hearing; 4) the manner in which interested persons may present their views; and 5) the method by which copies of the proposed regulation or proposed amendment or repeal of an existing regulation may be obtained. NMSA 1978 § 9-2A-7(D). 95.

Except in the case of an emergency rule, no rule shall be valid or enforceable until

it is published in the New Mexico register as provided by the State Rules Act. NMSA § 1978 144-5 (A). 96.

The CYFD Act describes regulatory requirements that the Secretary must

specifically take when reducing services or benefit levels due to state budgetary constraints. NMSA 1978 § 9-2A-7 (E). This includes compliance with the State Rules Act. Id. 97.

The New Mexico Rules Act at NMSA 1978 § 14-4-2 sets minimum standards that

all state agencies must follow in promulgating regulations. The Attorney General has promulgated regulations that establish procedural rules for all state agencies to follow at NMAC 1.24.25. The procedural requirements for rule-making in the state rules act are more specific than the CYFD act. 98.

New Mexico’s State Rules Act defines a “rule” as “any rule, regulation, or standard,

including those that explicitly or implicitly implement or interpret a federal or state legal mandate or other applicable law and amendments thereto or repeals and renewals thereof, issued or promulgated by any agency and purporting to affect one or more agencies besides the agency issuing the rule or to affect persons not members or employees of the issuing agency, including affecting persons served by the agency.” NMSA 1978 14-4-2-F. 99.

State agency actions or policies that meet the definition of a rule are not valid or

enforceable until they are promulgated according to the procedures in the NM Rules Act, which

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includes public notice in the form specified by the Act and a public hearing. NMSA 1978 § 14-45 et al. 100.

Defendant has implemented policies that restrict eligibility for child care assistance

without taking the steps required by the CYFD and NM Rules Act. These policies are not published in the NM Register and as such are not valid or enforceable. i. 101.

Defendant illegally caps eligibility for child care assistance at 150 percent of the federal poverty level. Defendant’s policy of restricting eligibility for child care assistance to families with

incomes below 150 percent of federal poverty level is a rule as defined in NMSA 1978 § 14-4-2(F) because it is a standard for determining eligibility for the program and impact people outside the Department, including people that the Department serves. 102.

CYFD implemented the eligibility restriction without notice, public comment, or

holding a hearing in violation of the NM Rules Act, NMSA 1978 §§ 14-4-5.2(A), 14-4-5.3 and the CYFD Act, at NMSA 1978 § 9-2A-7(D) and (E). The criteria are not published in the state register in violation of NMSA 1978 § 14-4-5(A). 103.

As a result, Defendant is illegally denying child care assistance to families with

monthly incomes greater than 150 percent of the federal poverty level. Defendant’s regulations establish priorities for assistance that include families with incomes up to 200% of the federal poverty level. See NMAC 8.15.2.9 (F). 104.

Defendant’s illegal restriction on eligibility causes the named Plaintiffs and

members of the Claimant Class to go without child care assistance. Named Plaintiffs and members of the Claimant Class cannot meet their basic needs because they are either paying a large percentage of their income towards assistance or are unable to work or attend school because they do not have access to child care assistance. 26

ii. 105.

Defendant requires low income families to pay a portion of child care costs based on an illegal calculation The criteria used by the Department to determine the portion of child care costs that

Defendant pays for eligible applicants and the portion that the client must pay meet the definition of a rule as defined in NMSA 1978 § 14-4-2(F) because they are a standard for determining eligibility for child care assistance and impact people that are not employees of the Department and that are served by the agency. 106.

CYFD determines the amount of a families’ co-payment using a co-payment chart

and calculations programmed into the CYFD IT system, known as FACTS. Neither the co-payment chart nor the calculation methodology have been promulgated into regulation. In fact, even CYFD’s co-pay procedure does not explain the calculation methodology. See Exhibit 5. 107.

CYFD has not a held a hearing or sought public comment on co-payment levels and

the criteria it uses to calculate co-payments based on income, family size and hours the child is in care, in violation of the State Rules Act, NMSA 1978 § §14-4-5.2(A), 14-4-5.3 and the CYFD Act, at NMSA 1978 § 9-2A-7(D). The criteria are not published in the state register in violation of NMSA 1978 § 14-4-5(A). 108.

Named Plaintiffs and the members of the Claimant Class are required to pay child

care co-payments that are not affordable and that were not established through the public process required by state law. Without a regulation that explains how co-payments are calculated, families cannot determine what their co-payment should be when they are considering enrolling in the program and families have no way of determining if the co-payment CYFD requires them to pay is correct. If the co-payment is incorrect, the family has no way to challenge it.

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109.

When Defendant fails to promulgate eligibility requirements into regulation, New

Mexico families and organizations like Plaintiff OLÉ are denied their due process right to comment on Defendant’s eligibility standards for child care assistance, as required by state law. B. Defendant Denies Child Care Assistance without Due Process 110.

New Mexico’s State Constitution provides that “no person shall be deprived of life,

liberty or property without due process of law.” N.M. Const. art. II, § 18. 111.

Because child care assistance is a protected property right in New Mexico,

Defendant cannot deny assistance without due process. 112.

Defendant violates the constitutional rights of eligible families by denying child care

assistance on the basis of unconstitutionally vague regulations and without providing notice and an opportunity to appeal. C. CYFD’s Vague Regulations 113.

A regulation is unconstitutionally vague and denies due process if men of common

intelligence must guess at its meaning and differ as to its application. Vague regulations violate due process if they inhibit a constitutionally protected interest. 114.

Defendant’s regulations do not provide enough information for a family to

determine the amount of child care assistance for which they are eligible and what portion of child care costs they must pay. Yet, Defendant uses these regulations to determine families eligible for a specific amount of child care assistance and to determine what percentage of costs a family must pay. 115.

The regulations only state: 1) co-payments will be based upon the size and income

of the household, 2) co-payments for each additional child are determined at one half the copayment for the previous child 3) that co-payments for children in part-time care are determined

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based upon the block of time that the child is in care, and 4) that a copayment chart will be published on Defendant’s website. See NMAC 8.15.2.13(A)-(C). Using this information, families cannot tell what co-payment the Department should require them to pay. 116.

Defendant’s regulations do not: 1) explain how size and income of a household

impact the amount a family must pay for child care when receiving assistance, 2) how the time in care reduces or increase the amount a participant must pay per child, and 3) how full-time and parttime care are defined for purposes of co-payments. Even using the copayment chart of Defendant’s website, a family could not determine the amount of benefits they are eligible for based on the factors described above. 117.

Due to the ambiguity in the Department’s co-payment and eligibility regulations,

families denied assistance or that receive reduced benefits cannot determine if the decision was correct. This means that the family never receives actual notice of the basis of an eligibility decision and therefore cannot challenge a negative decision. D. Defendant denies Child Care Assistance without notice and information about the right to appeal 118.

Procedural due process requires notice and the opportunity to be heard before the

State deprives a constitutionally protected interest or right. 119.

Adequate notice must be reasonably calculated, under all the circumstances, to

apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” The Department’s regulations codify the right to a fair hearing at NMAC 8.15.22. 120.

Defendant does not have a standard procedure for processing applications and

notifying families of the reason a negative action was taken in their case and about the opportunity to appeal. As a result, families have no way to challenge a denial or reduction in benefits.

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121.

Defendant routinely denies applications for assistance by turning families away from

local offices that workers believe are not eligible for assistance. Defendant does not consistently provide written notice and does not inform families of their right to a fair hearing. 122.

In fact, Defendant’s Assistant General Counsel told Plaintiffs’ Counsel that CYFD

has never held a fair hearing concerning a decision to deny or reduce child care assistance. IRREPARABLE HARM AND NEED FOR PERMANENT INJUNCTIVE RELIEF 1.

As a direct and proximate result of the conduct of Defendants, Plaintiffs and the

Claimant Class have suffered and continue to suffer the violation of their statutory and constitutional rights. 123. Plaintiffs and the Claimant Class are suffering and will continue to suffer immediate and irreparable harm unless this Court issues a preliminary and permanent injunction requiring Defendants to rescind their unlawful cap on eligibility for child care assistance and lawfully promulgate eligibility criteria for child care assistance into regulation. Without an injunction, members of the Claimant Class: a) will be unable to access child care assistance if they have incomes between 150 and 200 percent of the federal poverty level in violation of CYFD’s current regulations and state rulemaking law, b) will be denied assistance with all child care costs and instead receive a partial benefit amount that is illegally based on a calculation that is not in regulation or publically available and c) will continue to be denied basic due process required by the NM Constitution because families cannot challenge an incorrect eligibility decision if there is no basis for Defendant’s benefit calculation in regulation and Defendant does not provide adequate notice of eligibility decisions. Plaintiffs facing the denial of child care assistance have to forego purchasing basic necessities, like groceries or paying for housing

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in order to pay for child care assistance. As such, Plaintiffs and members of the Claimant Class will suffer irreparable harm absent injunctive relief. 2.

Plaintiffs have no adequate remedy at law. V. PRAYER FOR RELIEF

WHEREFORE, Plaintiffs respectfully request that this Court enter an Order: 1. Provide child care assistance to eligible families seeking child care assistance with incomes up to 200% of the federal poverty level until and unless the Department lawfully promulgates a different eligibility standard in regulation. 2. Promulgate regulations in accordance with the NM Rules Act and CYFD Act that clearly state all standards that are used to determine if a family is eligible for child care assistance and how much assistance a family will receive. This includes the method and base amounts the Department uses to calculate co-payments. 3. Immediately implement a standardized system to adequately notify families denied any amount of child care assistance in writing of the reason for a denial or reduction in benefits and information about their right to appeal. 4. Grant any further relief that this Court may deem necessary and proper. Respectfully submitted, NM CENTER ON LAW AND POVERTY By: /s/ Sovereign Hager Sovereign Hager [email protected] Monica Ault [email protected] NM CENTER ON LAW AND POVERTY 924 Park Ave SW, Suite C Albuquerque, New Mexico 87102 Phone: (505) 255-2840 Fax: (505) 255-2778 31

Counsel for Plaintiffs

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