Kevin S. Settlement: Remedial Orders and CYFD Compliance

The Kevin S. settlement is a March 2020 federal agreement that requires New Mexico to rebuild its foster care system around trauma-responsive care, safe placements, behavioral health services, and protections for Native American children. Six years in, the state has missed most of its targets, an arbitrator has issued three remedial orders, nine children died in state custody in 2025, and the attorney general has sued the agency responsible for carrying the settlement out.¹²

Where the Case Came From

The lawsuit was filed September 22, 2018, in the U.S. District Court for the District of New Mexico on behalf of 14 named foster children, along with Disability Rights New Mexico and the Native American Disability Law Center. The defendants were the secretaries of the Children, Youth and Families Department (CYFD) and the Human Services Department, now the Health Care Authority.¹³

The complaint alleged that CYFD failed to screen children for trauma, delayed or denied mental and behavioral health treatment, cycled children through dozens of placements, housed them in offices and homeless shelters, and sent them to out-of-state facilities. Native American children were placed without the efforts the Indian Child Welfare Act requires to keep them with relatives or tribal communities. The plaintiff class covered roughly 4,700 children in state custody at the time.⁴³

What the Settlement Requires

The parties reached a final agreement on March 26, 2020, and the lawsuit was dismissed with prejudice. The state committed to a three-year implementation period, with performance sustained for at least 24 consecutive months before oversight can end. Obligations sit in four appendices.⁵⁶

Trauma screening and treatment. Every child entering custody must receive a functional trauma assessment, staff must be trained on trauma impacts, and children with medical need must have access to trauma-responsive services. Care must be guided by individualized planning meetings using High Fidelity Wraparound and Child and Family Teaming models.⁶

Safe and stable placements. The state must recruit culturally reflective, community-based foster homes. Children may not be placed in hotels, motels, offices, or out-of-state facilities except in extraordinary circumstances, and children in congregate or out-of-state care must receive monthly clinical review.⁶

ICWA compliance. The state must draft a state ICWA law with New Mexico’s tribes and pueblos, create processes for traditional interventions as first-line services, recruit more Native foster families, and fund children’s participation in traditional ceremonies.⁶

Behavioral health services. The Human Services Department must expand the behavioral health workforce, especially in rural areas, establish medication oversight to prevent overmedication of foster children, incentivize evidence-based provider training, and notify caregivers within 10 days when a recommended service is denied or delayed.⁶

Who Enforces It

Three child welfare experts serve as “Co-Neutrals” to evaluate progress through annual reports and data validation: Kevin Ryan, Pam Hyde, and Judy Meltzer. An implementation team of attorneys from Disability Rights New Mexico, Pegasus Legal Services for Children, and Public Counsel monitors day-to-day compliance.⁶⁷ The case is overseen by U.S. District Judge Kea W. Riggs, and arbitration enforcement is handled by Charles Peifer.¹

The Compliance Record

By mid-2021, the state had met only 11 of the settlement’s 49 mandated reform targets.⁸ A 2022 Co-Neutral report on data for 2,949 children found a “troubling lack of progress” toward trauma-responsive care, continued reliance on out-of-state placements and office housing, and failed cultural services for Native American children.⁷

By 2023 CYFD was hemorrhaging staff. The department imposed a hiring freeze in May 2023, some supervisors were carrying up to 40 cases, the Santa Fe office had zero permanency planning workers, and foster youth were placed in agency offices at least 29 times during June and July 2023 alone. In September 2023, the Co-Neutrals described the system as being in a “state of chaos.”⁸

The Corrective Action Plan

On June 30, 2023, the parties signed a Corrective Action Plan. By the end of 2023, no caseworker was to exceed 200 percent of applicable caseload standards, dedicated recruitment staff were to be assigned in five high-needs counties, and High Fidelity Wraparound capacity was to double from 10 sites to 20. CYFD had to report critical incidents involving children in offices, hotels, or congregate settings to the Co-Neutrals within one business day. The CAP also let plaintiffs go straight to arbitration if the state missed any commitment.⁹

Remedial Order No. 1 (January 2025)

The state missed the CAP’s benchmarks across the board. On January 21, 2025, arbitrator Charles Peifer found the state had failed to meet the settlement’s performance standard on caseworker caseloads, foster home recruitment, well-child checks, and data submissions. As of January 2024, only 23 percent of CYFD’s 364 caseworkers had compliant caseloads. The state recruited 129 new foster families against a target of 190. Only 46 percent of the 889 children entering custody in 2023 got timely wellness checks.¹⁰¹¹

Peifer found children in custody “subject to irreparable harm” and issued Remedial Order No. 1 the same day. CYFD had to seek legislative funding for enough caseworkers to meet caseload standards, create a new emergency worker classification for overnight and on-call shifts, dedicate recruitment staff in each of five high-needs counties, and improve electronic access to medical records for caseworkers and foster parents.¹²

Remedial Order No. 2 (August 2025)

A second remedial order followed on August 18, 2025, prompted in part by disclosures that at least three children in custody had died earlier that year and that CYFD had not included fatalities or serious injuries in the critical incident reports provided to the Co-Neutrals. The state must now notify the Co-Neutrals within one business day of any child fatality or critical incident and provide a safety plan for the affected child. The Co-Neutrals were granted authority to review independently all fatalities and critical incidents dating back to January 2025.¹³

Remedial Order No. 3 (March 2026)

A February 2026 expert report found the state had recruited 122 of a targeted 265 new nonrelative foster homes and secured 121 of 244 targeted treatment foster care placements. Only 20 percent of primary caseworkers had compliant caseloads as of mid-December 2025. The agency had filled 22 of its 35 emergency response positions. One area improved sharply: timely well-child visits for children entering custody rose from 23 percent in the first half of 2025 to 89 percent in November.²¹⁴

On March 2, 2026, Peifer adopted Stipulated Remedial Order No. 3, acknowledging that most of Orders Nos. 1 and 2 had been met while carving out unmet provisions. By July 1, 2026, the state must hit at least 50 percent of its annual targets for caseworker caseload compliance, foster home recruitment, and treatment foster care placements. The Co-Neutrals are to report on overall progress by September 1, 2026, with status hearings September 23 and 24.¹⁵

Children in Offices and Deaths in Custody

More than 400 children stayed overnight in CYFD offices in 2024, double the year before.¹⁶ Between August 18 and December 31, 2025, there were 201 critical incidents involving 65 children, 124 of them in CYFD offices; 17 involved serious injuries, suicide attempts, or allegations of abuse or neglect. Nine children died in state custody in 2025 and 10 nearly died.² During an October 2025 hearing, CYFD leadership acknowledged it lacked a centralized system to track child fatalities.¹⁷

On January 19, 2026, Governor Michelle Lujan Grisham signed Executive Order 2026-003, banning overnight stays for children in state custody in CYFD offices effective March 1, 2026. “Children who have experienced trauma deserve safety, stability and dignity — not sleeping in offices,” the governor said. CYFD reported it had stopped new office stays on January 16 and opened a transitional facility in Las Cruces.¹⁸ Investigative reporting after the order found caseworkers using a “couch stay” workaround, with children spending days at CYFD offices and nights on couches at youth homeless shelters. CYFD denied moving children to couch stays and said all children and youth had been moved into “safe, appropriate placements.”¹⁶

The Attorney General’s Parallel Case

Attorney General Raúl Torrez opened a CYFD investigation in April 2025 after the death of a teenager at an AMI Kids facility. On April 8, 2026, he released a 214-page report, Systemic Failures: How CYFD Endangers the Children It’s Meant to Protect, drawing on more than 150 witness interviews and over 20,000 pages of records. The report linked 14 child deaths over two years to “lapses in CYFD decision-making” and said the agency had “inverted” its legislative mandate by prioritizing family reunification over child safety. Independent monitors found CYFD met zero of its 42 targeted performance outcomes in 2024.¹⁹²⁰

The report cataloged ten systemic failures, including hiring unlicensed workers, flawed investigations with skipped interviews and missed home visits, failure to implement the Comprehensive Addiction and Recovery Act (leaving over 1,200 drug-affected newborns at risk annually), use of office buildings as placements, reliance on congregate care linked to violence and suicide, and misuse of confidentiality laws to withhold information from oversight bodies. The report specifically named CYFD’s failure to implement Kevin S. as a primary driver of the dysfunction.²⁰²¹ The report also documented that CYFD’s general counsel resisted more than ten formal records requests during the inquiry.²²

The same day, Torrez filed a lawsuit in Santa Fe District Court seeking to bar CYFD from using state confidentiality statutes to obstruct oversight and retaliate against foster parents and caregivers, and called for a “legislatively led comprehensive initiative” to redesign the department from scratch.²³

Structural Pressures Behind the Numbers

The system is losing families as fast as it recruits them. Between March 2024 and March 2025, New Mexico gained an average of 52 new foster families per month while 49 discontinued their licenses. As of March 2025, the state had 2,164 children in custody but only 1,059 active resource homes.²⁴ A case management technology project initially budgeted at $36 million has grown to $90.4 million, with completion pushed from 2022 to November 2027.²¹ Leadership has churned: Teresa Casados became the fifth CYFD secretary in six years when she took the interim role in May 2023, and she announced her retirement on September 5, 2025. Deputy Secretary Valerie Sandoval was named acting secretary.²⁵

Where Things Stand

The settlement is still in active enforcement. The next hard deadline is July 1, 2026, when the state must show it has hit at least 50 percent of annual targets for caseworker caseload compliance, foster home recruitment, and treatment foster care placements. The Co-Neutrals are expected to report on overall progress by September 1, 2026, with status hearings scheduled for September 23 and 24.¹⁵ The attorney general’s separate lawsuit over CYFD’s use of confidentiality statutes is pending in state court.²³ Under the settlement’s original terms, the state cannot be released from federal oversight until it sustains compliant performance for 24 consecutive months, a threshold it has not approached.⁶

1
Civil Rights Litigation Clearinghouse. Kevin S. v. Jacobson
2
Searchlight New Mexico. Experts Find CYFD Failed to Make Progress in Many Kevin S. Remedial Goals
3
Kevin S. Settlement. Plaintiff Profiles
4
Kevin S. Settlement. FAQ About the Lawsuit
5
CYFD. Kevin S. Settlement
6
Kevin S. Settlement. The Settlement
7
Disability Rights New Mexico. Kevin S. Settlement and Implementation for Foster Youth
8
Searchlight New Mexico. State of Chaos: New Mexico’s Child Welfare Crisis Is Worse, Monitors Say
9
New Mexico Department of Justice. Kevin S. Corrective Action Plan
10
Kevin S. Settlement. Decision and Award
11
Santa Fe New Mexican. Arbitrator Orders State to Make Fixes in Child Welfare Case
12
Kevin S. Settlement. Remedial Order No. 1
13
Kevin S. Settlement. Remedial Order No. 2
14
New Mexico Department of Justice. Kevin S. Co-Neutrals Report
15
Public Counsel. Stipulated Remedial Order No. 3
16
Searchlight New Mexico. CYFD Offices by Day, Shelters by Night
17
Source NM. New Mexico Child Welfare Agency to Overhaul Death, Serious Injury Review Policies
18
Office of the Governor. Governor Lujan Grisham Bans Overnight Stays for Children in State Custody
19
NM Political Report. CYFD in Crisis: AG Files Lawsuit After 14 Child Deaths Tied to Agency Failures
20
New Mexico Department of Justice. Systemic Failures: How CYFD Endangers the Children It’s Meant to Protect
21
New Mexico Department of Justice. Systemic Failures – Failure A
22
New Mexico Department of Justice. CYFD Report
23
Source NM. New Mexico AG Releases Blistering Report, Announces Lawsuit Against State Child Welfare Agency
24
New Mexico Department of Justice. Systemic Failures – Failure E
25
Source NM. Casados, Latest Head of Troubled New Mexico’s Troubled Children’s Agency, Announces Retirement