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Click here for the full text of this decision FACTS:Robert O’Donnell and William Brown operate Guardian Ad Litem, a child-support payment collection and disbursement business. GAL has built its client base by obtaining guardian ad litem appointments from state district courts in Dallas and Collin Counties in divorce and child-support cases. For a small monthly fee, GAL collects child-support payments from noncustodial parents and disburses them to custodial parents. GAL keeps records, and if a noncustodial parent fails to pay, it files suit to obtain payment. GAL’s relationship with parents is established primarily through divorce decrees issued by the appointing state district courts. As part of a comprehensive restructuring of federal welfare programs, Congress enacted the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, 42 U.S.C. �654b(a)(1), which states that: “In order for a State to meet the requirements of this section [and receive certain federal funding], [a] State agency must establish and operate a unit (which shall be known as the “State disbursement unit”) for the collection and disbursement of payments under support orders.” PRWORA makes clear that the state disbursement unit referred to in the statute must be operated directly by a state agency. Finally, PRWORA mandates that SDUs use modern technology for, among other things, the receipt of payments from (non-custodial) parents and for disbursements to custodial parents and other obligees. To comply with PRWORA, the Texas Legislature: selected the Texas attorney general to run Texas’ SDU; required that the SDU forward child support payments as authorized by federal law; and specified that the attorney general may adopt rules in compliance with federal law for the operation of the SDU. In 2002, the Texas attorney general determined that GAL was no longer allowed to receive child-support disbursements from the SDU. The attorney general reasoned that 42 U.S.C. �654b(b)(1), authorized the SDU to disburse funds only to custodial parents and other obliges, and GAL was not a parent or an obligee. The attorney general, however, concluded that federal law would allow GAL to receive disbursements if GAL’s clients signed an authorization form. Nonetheless, O’Donnell and Brown filed suit against the attorney general, claiming that GAL was an obligee and thus could receive child-support disbursements from the SDU under �654b(b)(1) and that GAL is authorized to receive disbursements pursuant to it clients’ divorce decrees, which appoint GAL guardian ad litem, because they are binding contracts. Additionally, O’Donnell and Brown claimed that the attorney general’s actions in relation to the operation of the SDU violated several of their state constitutional rights. The district court rejected each claim after a bench trial. O’Donnell and Brown appealed. HOLDING:Affirmed. The district court rejected O’Donnell and Brown’s argument that GAL is an obligee, because an obligee, unlike GAL, is owed a duty of support by a noncustodial parent; thus, only parents and children fit the definition, a conclusion supported by other federal statutory definitions of the term obligee and by the Office of Child Support Enforcement’s definition of the term. The district court also rejected all of O’Donnell and Brown’s remaining claims. It found that the divorce decrees were not contracts, because GAL’s clients cannot opt out of a state court’s appointment of GAL to their case. Therefore, the decrees do not provide O’Donnell and Brown with vested property or contract rights or consent from GAL’s clients. The 5th U.S. Circuit Court of Appeals concluded that the district court properly held in the attorney general’s favor. The court found no error in any of the district court’s legal or factual findings and affirmed for the reasons stated by the district court in its “well-reasoned, well-written” 2005 order. OPINION:Per curiam; Reavley, DeMoss and Benavides, J.J.

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