HOUSTON — During a hearing on Tuesday, state officials presented evidence showing that over $320 million has been allocated for court-mandated improvements to Texas’s foster care system since 2019. They argued that this investment demonstrates the unnecessary nature of continued federal oversight and called for the conclusion of a lengthy 15-year federal lawsuit.
Audrey O’Neill, commissioner of the Texas Department of Family and Protective Services (DFPS), emphasized the significance of the remedial orders, specifically referencing the 2018 injunction that outlined critical areas for reform. “I believe these reforms are substantial and permanent,” she stated.
O’Neill and Stephanie Muth, the commissioner of the Texas Health and Human Services Commission, spent considerable time testifying before U.S. District Judge Randy Crane. The hearing focused on the state’s request to be released from seven years of federal monitoring, arguing they have achieved “substantial” compliance with the injunction.
Of the $320 million spent since 2019, approximately $66 million has been allocated to federal court monitors who oversee various aspects of the foster care system, including the daily intake of children into foster care and the efficiency of child abuse investigations. The remaining $254 million appears to have been invested in enhancements to worker training, recruitment, retention, and staffing, which includes a dedicated team of 60 state employees responsible for compiling data for the federal monitors.
However, attorneys representing about 6,800 Texas children in long-term foster care, who initiated the original 2011 lawsuit, sought to demonstrate that the system remains unstable, even with the state’s own key witnesses. Lead plaintiff lawyer Paul Yetter questioned O’Neill about the transition of foster care management to private contractors—an initiative that commenced after the Texas legislature approved comprehensive reforms in 2017. O’Neill acknowledged, “There have been challenges” with this shift, noting that roughly 61% of children in Texas foster care are currently under the care of private entities.
Yetter also prompted O’Neill to recount how she terminated the state’s largest private foster care contractor, EMPOWER, in July due to its failure to adequately manage foster care cases in Dallas and several surrounding counties. Persistent staffing issues were first noted in 2024 when former state caseworkers were compelled to transition to EMPOWER following job eliminations. Many of these workers quickly resigned, leading to a reliance on “master caseworkers” to fill staffing gaps. However, when these master caseworkers returned to their roles in late 2025, EMPOWER continued to grapple with staffing shortages. Following the deaths of two children under its care in March, DFPS took steps to assume control through a court receivership, ultimately leading to EMPOWER’s dismissal when improvements were deemed insufficient.
Despite these challenges, the state’s legal team, led by attorney Allyson Ho, argued for a return of the Texas foster care system to state control. Ho’s team has actively sought to conclude the ongoing litigation, successfully overturning prior contempt sanctions related to the state’s failure to address abuse and neglect in foster care facilities. They also persuaded a panel from the 5th Circuit Court of Appeals to remove U.S. District Judge Janis Jack from the case, citing her “antagonistic demeanor” toward state officials, resulting in Judge Crane assuming oversight.
During her testimony, Muth highlighted the establishment of the $35 million Terrell Center for Youth, a psychiatric facility for traumatized foster youth, as a significant reform stemming from the lawsuit. She noted that while the state has made strides to minimize the number of children entering foster care, those that do are exhibiting more severe behavioral and mental health issues than in previous years. “We are seeing a number of children coming in with higher needs than in the past,” Muth explained, emphasizing that the center was specifically designed to address these needs.
The hearing is anticipated to extend for the remainder of the week, after which Judge Crane will determine whether the state can terminate federal monitoring or if a modified timeline for the case will be established.
