BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Joseph L. Dunn, Chair
2005-2006 Regular Session
SB 1758 S
Senator Figueroa B
As Amended April 20, 2006
Hearing Date: April 25, 2006 1
Family Code 7
BCP:rm 5
8
SUBJECT
Adoption Facilitators
DESCRIPTION
This bill would strengthen regulations concerning adoption
facilitators including increasing the surety bond to
$50,000, impose minimum education requirements, Department
of Social Services (DSS) registration, and restrict
internet advertisements displaying minor children and
authorize increased civil penalties.
BACKGROUND
Couples seeking to adopt have several options, such as
proceeding through a state licensed adoption agency or
adoption facilitator. Adoption facilitators are not
currently licensed by the state and subject only to a
$10,000 bonding requirement. These facilitators locate
children available for adoption and act as intermediaries
in the adoption process, all for a substantial fee.
Current regulations concerning adoption facilitators were
enacted in 1996 and remain in their original form.
On February 27, 2006, the chair of the Senate Committee on
Business, Professions & Economic Development, author of
this bill, held a hearing entitled "Is There A Need for
Improved Regulations and Licensing of Adoption
Facilitators?" Testimony in this hearing focused on the
need for further regulation, bond and consumer protections
for families proceeding through adoption facilitators. As
(more)
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demonstrated by a recent Napa case, some families expend
significant sums of money for the adoption of children that
are unavailable or otherwise not subject to adoption.
These families face the uncertainty of how to take action
against these adoption agencies. Some of these individuals
attempted to seek assistance from the Better Business
Bureau, while many did not report the facilitator's
activity. The lead investigator for the Napa case stated
that many individuals are coming forward for the first time
after being contacted by the Napa police department
investigating the adoption fraud. By increasing bond,
imposing education and registration requirements and
additional civil penalties, SB 1758 would increase consumer
protection and increase the likelihood that families can
recover their financial expenditures from the bond.
CHANGES TO EXISTING LAW
1. Existing law defines adoption facilitators as persons
or organizations, not licensed by the state of
California, that advertise for the purpose of soliciting
parties to an adoption, locating children for adoption or
act as an intermediary between parties to an adoption.
[Fam. Code 8623.]
This bill would require DSS to establish and adopt
regulations for the statewide registration of adoption
facilitators. DSS may adapt procedures used for adoption
service providers to comply with this requirement.
This bill would require adoption facilitators that are
independent of licensed adoption agencies or adoption
attorneys to register with DSS. Facilitators must submit
a disclosure form, proof of proper education, three years
of experience in a licensed adoption agency, business
license and government issued identification.
This bill would require adoption facilitators, and any
staff member providing direct adoption services to
complete at least two years of college courses, with at
least half of the units focusing or social work or a
related field. This educational requirement may be
waived if the individual has over five years of
experience in direct adoption services, has not been
found liable and is not subject to pending suits in
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connection with adoption services, and has three letters
of support from either a licensed adoption agency, member
of the Academy of California Adoption Lawyers, or DSS.
This bill would require DSS to post a list of complying
adoption facilitators on its web site. DSS must also
draft an adoption fraud manual to be available on that
web site.
This bill would allow DSS to charge a filing fee to cover
statewide registration and bond processing costs.
2. Existing law requires facilitators to obtain a
business license and post a $10,000 bond.
This bill would increase the bond to $50,000, executed by
a corporate surety to do business in the state, submitted
along with proof of the above education, experience,
license and fingerprints. The bill is unclear whether
recovery from the bond requires replenishment of the bond
or posting of a new bond prior to conducting further
business. Facilitators would be required to notify DSS
of renewal or replenishment of the bond, or any change of
address.
3. Existing law authorizes civil actions for damages,
rescission or any other civil remedy by any person
aggrieved by an adoption facilitator. [Fam. Code
8638.]
Existing law allows prevailing parties to recover
reasonable attorneys' fees and costs for actions to
revoke or enforce contracts with adoption facilitators.
[Fam. Code 8635.]
This bill would authorize suits for injunctive relief and
allow collection of treble damages or $1,000 per
violation, whichever is greater.
This bill would authorize prevailing parties to recover
reasonable attorneys' fees and costs for any action
concerning adoption facilitators.
This bill would authorize the Attorney General, district
attorney or city attorney to bring an action for
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equitable relief against adoption facilitators in the
name of the people of California. Individuals may also
bring action for injunctive relief on behalf of the
general public.
4. Existing law prevents adoption facilitators from using
misleading advertising to convey that they are licensed
by the State of California. [Fam. Code 8625.]
This bill would prevent facilitators from using
advertising containing photolistings, or specific
information about minor children available for adoption.
COMMENT
1. Stated need for the bill
According to the author, adoption facilitators play a
significant role in the adoption process but yet receive
little oversight and regulation. Existing requirements
of a $10,000 bond and valid business license are
insufficient to provide consumers with adequate
protection as "[m]ost facilitators charge more than
double the bond amount." Furthermore, "consumers who
have questions or complaints about adoption facilitators
do not know which agency to report to."
This bill proposes minimum standards for adoption
facilitators, including a registry system to inform the
public of the status of these facilitators. The author
states that these minimum standards are required due to
the "highly complex and emotional" nature of the adoption
process.
2. Need for further regulation
At the February 27, 2006 hearing, nearly all parties
agreed that adoption facilitators are in need of further
regulation. Existing sections regulating those
facilitators were enacted in 1996 and have not been
updated. The current problem arises due to the commercial
nature of facilitators. As a business, adoption
facilitators match potential adoptive parents with birth
mothers for a fee. As seen in the Napa case, problematic
facilitators entice potential adoptive parents with
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advertisements or descriptions of particular children.
These prospective parents pay thousands of dollars in
fees to the facilitator only to discover that the actual
child described is not available. Many facilitators have
numerous simultaneous clients, making their current bond
of $10,000 insufficient to cover the vast majority of
claims.
As an example, last year Napa police raided a local
adoption facilitator that purported to offer Kazak,
Russian, Vietnamese, Ukrainian and Guatemalan children.
The raid was prompted by reports that the facilitator had
defrauded several families out of thousands of dollars.
Further investigation revealed numerous stories of
families who were shown videos of foreign children, only
to later find out that those children did not exist or
were not available for adoption in that country. Some of
these individuals spent over $30,000 in fees and travel
costs to go see what they thought would be their adopted
child. Many families were either told the child was not
available or presented with alternate children to adopt.
Admittedly, some families did receive children through
this facilitator.
3. Increased bond
As demonstrated in the Napa case, adoption facilitators
usually have many simultaneous clients that each invest
significant sums of money. Current law requires
facilitators to be bonded in the amount of $10,000, an
insufficient amount to satisfy even one average claim
against the facilitator.
This bill would raise the bond to $50,000 and require
that the bond be executed by a corporate surety admitted
to do business in the state. Whenever there is recovery
from an existing bond, facilitators must arguably
replenish the bond prior to conducting further business.
These new provisions attempt to ensure that sufficient
funds are available to cover liability for potential
fraud.
For example, a prospective parent uses the services of a
clever adoption facilitator. The prospective parent pays
out sums totaling $15,000 to that facilitator only to
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realize that they have been defrauded. Under the
increased bond, the prospective parent can seek recovery
from a minimum pool of $50,000. The prospective parent
receives their $15,000 back, and in order to continue
conducting business the facilitator must arguably
replenish the bond amount to the full $50,000. Thus, the
remaining clients of a facilitator have a guaranteed pool
of money to collect from.
Current bill language is unclear whether a new bond must
be posted or the existing bond must be replenished in
cases of recovery.
SUGGESTED AMENDMENT: In Section 6 regarding Family Code
Section 8636(c):
Whenever there is a recovery from a bond required
by
subdivision (a), the person shall file a new
replenish the bond or file a new bond if the
former bond cannot be replenished in accordance
with subdivision (a) before that person may
conduct further business as an adoption
facilitator
Additionally, facilitators must notify DSS when they
replenish or renew their bond, or change their name,
address, telephone number or agent for service of
process. These provisions ensure that the DSS registry
contains up-to-date information for consumers concerning
those facilitators. Consumers can then check the
database prior to enlisting the services of an adoption
facilitator, which both deters the use of unregistered
facilitators and warns consumers of facilitators with
insufficient bonds.
4. Education requirement
Aside from protecting consumers, proposed provisions also
focus on protecting those minor children who are handled
by the adoption facilitators. This bill would require
that the adoption facilitator, or any staff member
providing direct adoption services, complete at least two
years of college courses. Half of that college
coursework must focus on social work or a related field.
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The presumed intent of these provisions is to provide the
facilitator and staff members with minimal education
concerning placement, counseling and social concerns for
both the children and prospective parents.
This educational requirement can be waived upon a showing
of five years of work experience providing direct
adoption services, no prior judgments or current lawsuits
in connection with provision of adoption services, and
three letters of support. Letters of support must attest
to the individual's ethics and work providing direct
adoption services, and be from either a licensed adoption
agency, member of the Academy of California Adoption
Lawyers, or DSS. Individuals complying with all of these
provisions would have substantial experience in direct
adoption services, and hopefully be of sound ethical
character. Allowing these experienced facilitators and
staff to continue their business recognizes both the
value of adoption facilitators in California and the need
to protect children and consumers.
While there is no formal opposition to this bill, current
facilitators may argue that this educational requirement
is too stringent. In comparison, adoption service
providers (ASP) must be either a licensed social worker
or marriage and family therapist with a minimum of five
years of experience providing casework services while
employed by a licensed adoption agency. [Fam. Code.
8502.] Unlike the proposed bill, no educational waiver
exists for ASPs. Additionally, the role of ASPs is
merely to advise birth mothers of their adoption options.
Adoption facilitators take on the role of advisor,
counselor and placement of the child. As raised in the
aforementioned February 26, 2006 hearing, facilitators
may not even provide counseling for birth mothers.
Instead, birth mothers are matched with prospective
adoptive parents who pay for the day-to-day expenses of
their pregnancy. Although birth mothers have the legal
right not to relinquish their newborn child, the interest
of both facilitators and prospective parents lie in the
child being adopted.
Considering the extensive role of facilitators and their
staff in these adoptions, this minimal educational
requirement attempts to ensure that they have some
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knowledge of social work and counseling. Compared to the
requirements for ASPs, who comparatively take on minimal
responsibilities, the proposed requirements are fair.
5. Advertising restrictions
According to news reports, families defrauded by the Napa
county facilitator were lured in with pictures and videos
of children that were never available for adoption. As
chronicled in the American RadioWorks series "Finding
Home: Fifty Years of International Adoption," couples
were enticed by pictures of foreign children advertised
over the internet for adoption. One prospective adoptive
parent stated that upon seeing internet pictures of two
young Ukrainian girls, "[w]e fell in love, and when I
called [the facilitator] about these girls, the first
thing they told me was 'Some other parents have expressed
interest in those girls and you'd better get your money
in.'" <1> The couple mortgaged their house for fees and
traveled to Ukraine only to return empty handed after
failing to locate the girls.
SB 1758 would prevent the use of photolistings to
advertise minor children available for adoption. As seen
above, this provision intends to curb the use of
children's images to lure prospective adoptive parents to
adoption facilitators. From a policy perspective, this
prevents the perception that certain children are "for
sale" on the internet.
Additionally, this bill would prevent advertising
specific information of particular minor children who are
available for adoption. As with photolistings, this
prevents parents from being enticed by attractive
descriptions of children who may not be available. This
also helps to curb the disclosure of personally
identifying information about minor children on the
internet. Unwarranted disclosure may put these children
at risk for abduction or related crimes.
6. Jurisdiction of California courts over internet
adoption advertising
------------------------
<1>http://americanradioworks.publicradio.org/features/adop
tion/transcript.html
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The scope of SB 1758's provisions are limited by the
jurisdiction of California courts. Jurisdiction over
out-of-state adoption facilitators would be determined by
their "minimum contacts," according to International Shoe
Co. v. Washington (1945) 326 U.S. 310. In International
Shoe, the court held that due process requires that
exertion of jurisdiction over non-residents by a state
court requires non-residents to have sufficient "minimum
contacts" between the resident and the forum state.
Moreover, this exercise of jurisdiction may not offend
"traditional notions of fair play and substantial
justice."
Courts have struggled over the necessary "minimum
contacts" required for the exertion of personal
jurisdiction over operators of internet web sites. Most
courts, including the California Supreme Court, use a
sliding scale approach to jurisdiction for internet web
sites. [Zippo Mfg. Co. v. Zippo DOT Com (1997) 952 F.
Supp. 1119, 1124; Snowney v. Harrah's Entertainment, Inc.
(2005) 35 Cal. 4th 1054, 1063.] This sliding scale of
jurisdiction is based upon the level of interaction
between the end user and the web site. Under Zippo,
noninteractive web sites not targeted towards
out-of-state residents alone do not subject the owner to
out-of-state jurisdiction, while interactive web sites
targeted towards out-of-state residents may subject the
operator to that state's jurisdiction. Accordingly,
adoption facilitators who target California residents
through their internet web site may fall under
California's jurisdiction. Other out-of-state adoption
facilitators with insufficient "minimum contacts" would
not be subject to California jurisdiction and the
provisions of this bill.
7. DSS web site
SB 1758 would require DSS to post information on its web
site listing compliance of adoption facilitators with
registration and bond requirements. Similar to the State
Bar of California's web site query to check whether an
attorney is currently able to practice law, this would
allow consumers to check and see if the adoption
facilitator is currently registered and bonded. As
mentioned above, this encourages use of properly
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registered adoption facilitators that have fully complied
with bond requirements.
DSS must also draft an adoption fraud manual, which
includes recourse information for victims of adoption
facilitator fraud. This manual would be available both
on its web site and in hard copy form. By including
recourse information, this manual would help solve
families' current confusion regarding where to turn when
adoption facilitators fail to perform.
8. DSS registration, determination of compliance
Under SB 1758, DSS would adopt a system for registration
of adoption facilitators. Adoption facilitators
operating independently from a licensed public or private
adoption agency, or adoption attorney would be required
to register.
To ease the burden on DSS of creating such a system, SB
1758 provides that DSS may adopt procedures already used
for adoption service providers. Existing law already
requires adoption service providers to register with DSS
and to provide proof of their requisite experience. As
mentioned above, the requirements for an adoption service
provider are similar to that which would be required
under this bill.
9. Civil actions
Existing law allows anyone aggrieved by an adoption
facilitator to bring a civil action for damages,
rescission or any other civil or equitable remedy. This
bill specifically adds that injunctive relief is
available, although that relief may already fall under
current language.
In cases where actual damages are awarded, this bill
would also allow recovery of the treble damages, or
$1,000, whichever is greater. Allowing treble damages
creates a statutory scheme to deter conduct. The
underlying goal of these penalties is to discourage would
be adoption facilitators from violating the required
regulations.
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SB 1758 also authorizes the Attorney General, a district
attorney, or city attorney to bring an action for
injunctive relief, restitution, or other equitable relief
against facilitators in violation. This extended
authority allows those law enforcement officials to
investigate and bring action requiring the cessation of
business in violation of the proposed regulations.
To provide additional enforcement of these regulations,
any individual may bring an action for injunctive relief
on behalf of the general public to enforce these
regulations. These actions must be based upon
information or belief that an adoption facilitator has
violated the regulations. Only actions for injunctive
relief are allowed, thus preventing individuals who have
not suffered any detriment from recovering financially.
For example, an individual could learn that an adoption
facilitator is advertising using photolistings of
children. Concerned about this practice, this individual
could report this activity or bring an action in the name
of the general public for an injunction requiring
cessation of that advertising. Essentially, this allows
individuals and watchdog groups to monitor and force
adoption facilitators into compliance.
By allowing only injunctive relief, these individuals
would not receive any financial compensation for their
time. As discussed below, they may receive attorneys
fees and costs for the action.
10. Recovery of attorneys' fees and costs
Current law allows parties to recover reasonable
attorneys' fees and costs for actions to revoke or
enforce contracts with adoption facilitators. SB 1758
would expand that recovery to include any civil action
against adoption facilitators for violation of the
proposed requirements.
Allowing recovery of attorneys' fees and costs allows
less fortunate individuals to bring civil actions to
recover their losses. Absent an attorneys' fee
provision, these individuals likely could not afford to
bring any legal action against these facilitators. Many
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of these individuals already mortgaged their house, or
otherwise borrowed substantial sums of money to pay for
adoptions that never occurred. Under this provision,
these individuals can bring suit with an attorney who has
the security of knowing that fees and costs are
recoverable.
Combined with the above provision allowing any individual
to bring an action based upon belief of violation of this
chapter, recovery of attorneys' fees facilitates
enforcement of this provision. Individuals would have
confidence that these fees and costs would be recoverable
if they prevail. As a result, adoption facilitators
would be much more likely to be in compliance with the
proposed regulations.
Support: California Association of Adoption Agencies;
Pact, an adoption
alliance; Family Law Section of the State Bar of
California; National Association of Social Workers;
California Alliance of Child and Family Services;
two individuals
Opposition:None Known
HISTORY
Source: Author
Related Pending Legislation: SB 1393 (Florez), would
create an expedited procedure for
intercountry adotions. (This bill is
set to be heard in this committee
today.)
SB 1712 (Migden), would create a
program to aid adoption of "hard to
place" children aged 11-18. (This
bill is set to be heard in this
committee today.)
SB 1325 (Scott), would revise and
recast various provisions relating to
adoption. (This bill is set to be
heard in this committee today.)
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Prior Legislation:SB 2035 (Killea), Chapter 1135, Statutes
of 1996, enacted current regulations
concerning adoption facilitators including
the $10,000 bond.
SB 1674 (Scott), 2002, would have amended
existing law concerning advertisement and
disclosure by facilitators. (Held in the
Senate Judiciary Committee.)
AB 550 (Zettel), 2001 would have prohibited
a court from making an order of adoption
before home-study performed. (Held in the
Senate Judiciary Committee.)
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