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A Better Partnership
July 19, 2017

COA: Under the Adoption Code courts can only preclude expenses that are related to the adoption of a child

The Michigan Court of Appeals clarified the proper framework and analysis for whether a court has the authority to disallow fees charged by an adoption agency under the Adoption Code in the two cases In re MJG, Minor. No. 332928 and In re BGP, Minor. No. 333700. Under those rulings, if a fee is for a service that is not related to the adoption itself, then it does not fall under the scope of the statute, and the circuit court has no authority to preclude the expense.     

Both cases arise from the adoption of a minor child under the Adoption Code, MCL 710.21 et seq, and concern the fees paid by the adoptive parents for services ostensibly related to the adoption process. Under MCL 710.54, Michigan courts have the power to supervise the adoption process and permit or prohibit certain fees paid by adoptive parents “in connection with the adoption.” In MJG case, the trial court opined that preliminary, administrative and client liaison fees, marketing services fee, fundamental readying and legal analysis fee, and adoption opportunity services fee are not fees paid “in connection with the adoption” and therefore, are not subject to court approval. Adoption Network Law Center (ANLC) appealed.

Similarly, in BGP case, the circuit court disallowed administrative and marketing fees but did not provide any explanation for its denial of these particular fees. Nonparty American Adoption, Inc., appeals the circuit court’s order and argues that it was denied due process because it was unable to participate in a hearing related to the fees.
 
On appeal in the MJG case, the Court of Appeals first set forth the proper framework for analyzing fees placed before the court concerning the adoption process. The court’s framework consists of the following inquiries: (1) Do the fees at issue fall within the scope of the statute, thus giving the court authority to disallow them? (2) If the fees do fall within the scope of the statute, are they prohibited? And (3) If they are not prohibited, are they permitted?
 
The Court of Appeals found that the preliminary and administrative fees are not connected to any adoption and should not have been disallowed, but the client liaison services fees were properly disapproved. Marketing services fees were not required to be submitted to the court and thus, should not have been disallowed. In addition, the Court of Appeals held that the portion of the fundamental readying and legal analysis fees that was unrelated to the adoption, such as obtaining information from the birth mother, should have been allowed, while portions in connection with the adoption, such as generating a profile for the birth mother, were properly disallowed. Similarly, the Court of Appeals held that with the exception of counseling, services performed for the “adoption opportunity services fee,” such as arranging communications between the adoptive parents and the birth mother or with legal entities, were in connection with adoption and were properly disallowed. Hence, the case was affirmed in part, reversed in part, and remanded for further proceedings.
 
In BGP, meanwhile the Court of Appeals found that the administrative fees were not connected, or related in fact, to the adoptions. As a result, the circuit court had no authority to deny these fees and the circuit court is to approve the fees for these administrative fees. While in MJG the Court of Appeals held that marketing fees fall outside the scope of the statue and courts lack authority to deny them, in the immediate case American Adoption lacks standing to challenge the denial of the marketing fees. The only parties with standing to challenge the denial of the marketing fees are the petitioners and the recipients of the fees.  The judgment was reversed in part and remanded for proceedings consistent with this holding.

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