Child Support Litigation without a Marriage

Part of Real World Divorce: web edition | Kindle edition

"I'm just a dumb country girl whose greatest accomplishment is getting pregnant with a married man's child after scraping his sperm off an airplane toilet" -- Jacqueline, Unbreakable Kimmy Schmidt, S2:E7

In many states, especially with short-term marriages, our interviewees report that the most lucrative portion of a divorce lawsuit is the child support claim. In all states surveyed the child support statutes and guidelines offer the same revenue to married and unmarried plaintiffs. Thus it is common to have custody and child support lawsuits in a family court without the parties ever having been married or even more than slightly acquainted. "The outcome of the custody decision in an paternity case may result in millions of dollars in tax-free [child support] profits for the successful plaintiff," noted one attorney, "so we mount just as vigorous defense as we would in a divorce lawsuit."

Note that in some states, e.g., Massachusetts, court records regarding custody and child support litigation between unmarried parties are sealed and therefore it is impossible to get hard numbers on the size or revenue of this part of the family law industry. Statistics from Texas, however, suggest that the ratio of child support to divorce cases is roughly 3:1 (see the Litigation, Alimony, and Child Support in the U.S. Economy chapter).

One reason why the trend is away from marriage/divorce and toward pure child support litigation is that most states provide financial incentives to have children with multiple co-parents. Sticking with Massachusetts and Texas, it is roughly twice as lucrative to have three children with three different defendants than to have three children with a single child support defendant. Example numbers for Massachusetts: given defendants earning $250,000 per year, three children with the same co-parent yield a tax-free $55,380 per year ($1.27 million over 23 years); three children from three different defendants have a cash value of $120,432 per year ($2.77 million over 23 years). In all states where child support is unlimited, a one-night sexual encounter with a high-income partner is more lucrative than a long-term stable marriage to a medium-income partner.

Why do states financially reward what was traditionally considered bad-for-children behavior? "It took sociologists a long time to come around to the view that two-parent families were good for children on average. One reason is that they thought that social institutions are inherently oppressive things: Traditional marriage is necessarily coercive, and it stymied our liberty and freedom and it was an institution that promoted gender inequality," noted Jon Shields, a professor of Government at Claremont McKenna College, in The Atlantic (April 30, 2016).

Men can profit from children

Statistically more than 90 percent of Americans receiving child support are women (Census 2014 data). However, the laws are technically gender-neutral and men can profit from biological children, even without a marriage that would yield alimony. "Halle Berry faces ex-boyfriend Gabriel Aubry in secret trial over child support" (New York Daily News, July 14, 2015) describes a California case in which a man was receiving $192,000 per year, tax-free, after winning joint custody of a little girl. The mother was also ordered to pay $300,000 to the father to cover his legal bills. The Toronto Sun reported on the same day that "In the filing, [the mother's] lawyer stated, 'There is no case, no law, no logic that says a healthy, active man gets to simply live off child support that the wealthier mother earns.'" (It seems that the lawyer was incorrect; People magazine reported on September 23, 2016 that the father's profit was enhanced to $240,000 per year via a court order.) The parents' celebrity led to the news article, but we heard about plenty of men making money from children of professional women, such as doctors and lawyers.

How well does it pay per hour?

"How Do Mothers Spend Their Time at Home?" (Pew Research, April 8, 2014) doesn't offer data on single fathers, but single moms without jobs ("stay-at-home") spent 15 hours per week caring for children and enjoyed 35 hours per week of leisure time. Jessica Kosow, the plaintiff described in our Massachusetts chapter who receives $94,000 per year in tax-free child support, thus earns $121 per hour for performing child care, the equivalent of roughly $200 per hour pre-tax, 7.5X the average hourly wage for all jobs in Massachusetts. A plaintiff with two children, each from a different co-parent, in Minnesota would get no more than $45,192 per year due to that state's cap on child support. Nonetheless, this corresponds to $58 per hour, roughly 4X the state's average wage when adjusted for taxes.

The analysis is slightly different for plaintiffs who have jobs. Pew says that an average working single mother will care for children for just 10 hours per week. Consider the Illinois doctors we used as examples in the Rationale chapter. Each earns $200,000 per year after taxes and if "they had two children the parent who won custody would get $56,000 per year." That works out to after-tax compensation of $108 per hour. The Massachusetts litigants that we used as an example for "income shares" each earned $125,000 per year and had just one child: "the winner will collect $20,072 per year from the loser." The works out to $39 per hour, tax-free, roughly 2X the spending power of the taxable $27 per hour that the average W-2 worker in the state earns.

Child Support Profits Without a Child

In jurisdictions where child support is substantially more than the $9,000-per-year that the USDA estimates as the actual cost of caring for a child we learned about the practice of selling abortions. From the Massachusetts chapter:

Due to the $40,144 number at the top of the guidelines, the 23 years over which child support is payable, and the convention whereby a defendant must pay a plaintiff's legal fees, Massachusetts is one of the most lucrative states for the marketing of abortions. In our interviews we learned about a 40-year-old entrepreneur who was dating a seemingly carefree 25-year-old. Two months later, the young woman presented the man with a positive pregnancy test result, a Microsoft Excel spreadsheet showing the $923,312 in child support that he would owe over 23 years, plus a likely $300,000 college budget and additional amounts for health insurance, day care, etc. Her attorney offered to sell her abortion for $250,000 plus legal fees and the cost of the abortion itself. The man paid the $250,000, which was tax-free to the woman. Could that be considered extortion? "It is not extortion nor illegal to threaten to have a baby," responded Harvard Law School professor Jeannie Suk, when asked to consider the facts of this incident. Asked to comment on the prevalence of abortion transactions in Massachusetts, another attorney said "This is a good state in which to work your mind and education, but it is a great state in which to work your body and child."

Attorneys report that one issue in abortion sales is establishing paternity. "When I'm involved in an abortion transaction on the father's side," noted one lawyer, "I recommend a paternity test if there is any possible doubt. The person who sells an abortion is not necessarily the most reliable source of information." Is it possible to do a paternity test on a fetus? "Absolutely," the lawyer continued. "They can do it after a couple of months using the mother's blood and a blood sample from the father. It's called 'NIPP' [Non-Invasive Prenatal Paternity] and relies on the fact that some of the baby's DNA makes its way into the mother's blood."

Attorney-handled abortion sales are generally discreet and remain confidential on both sides. "Hedge Funder Offered $75,000 to His Girlfriend for Abortion" (Yahoo Style, December 11, 2016) shows the pitfalls of negotiating an abortion transaction without an attorney. More than 3000 reader comments on this 2016 article provide a window into the American public's knowledge of family law:

Note, for example, the misconception that the mother's opportunity to profit from child support in New York will cease after 18 years (correct answer: 21).

[Revenue for being pregnant with someone else's child is considerably smaller. "Coming to U.S. for Baby, and Womb to Carry It" (New York Times, July 4, 2014) gives a range of $20,000 to $30,000 in taxable cash compensation for being a surrogate mother. Revenue for egg donation is only about $10,000, according to "Putting a Price on a Human Egg" (Wall Street Journal, July 26, 2015).]

Child Support Profits from a Child Parent

In 2012, the Arizona state government sued Nick Olivas for child support and medical expenses going back to the birth of his 6-year-old daughter, of whose existence he had been unaware. An unusual aspect of the case was that Olivas was 14 years old at the time of conception (the mom was 20). A September 3, 2014 article from the Arizona Republic, "Statutory rape victim forced to pay child support," notes "State law says a child younger than 15 cannot consent with an adult under any circumstance, making Olivas a rape victim." Alia Beard Rau, the author, found additional examples from other states:

The most well-known case was of a Kansas boy who, at age 13, impregnated his 17-year-old baby-sitter. Under Kansas law, a child under the age of 15 is legally unable to consent to sex. The Kansas Supreme Court in 1993 ruled that he was liable for child support.

California issued a similar state court ruling a few years later in the case of a 15-year-old boy who had sex with a 34-year-old neighbor. In that case, the woman had been convicted of statutory rape.

In both cases, it was the state social-services agency that pursued the case after the mother sought public assistance.

What about the fact that some people might see this situation as unfair to the young Mr. Olivas?

"We don't see those cases very often, and we're really glad for that," said attorney Janet Sell, chief counsel with the Attorney General's Office's Child and Family Protection Division.

"They have to comply with us," said Scott Lekan, DES child support operations administrator. "We're trying to keep them off the cash assistance, and we're trying to get back some of the cash assistance money. It benefits everybody at the end of the day."

American Child Support Profits Without an American Child

There are at least two ways for the parent of a non-American child to profit from child support collected from an American. The first method is to obtain a court order from a foreign court and then have an American court enforce it against the American. This was the approach taken in 2013-2014 by Annabelle Bond, one of the world's wealthiest individuals. She obtained a $500,000 per year child support award from a court in Hong Kong against a New Yorker and got the New York courts enforce it (see the New York chapter).

[Note that, with the exception of a handful of countries that follow the Common Law system (e.g., Australia, the United Kingdom) it is not economically rational to pursue a child support case in a foreign country when there is any possibility of obtaining the jurisdiction of a U.S. state. The child that would yield $2 million in profit from a California court, for example, would yield no profit at all from a German, Danish, or Swedish court.]

The second method can be used by foreigners temporarily in the U.S., e.g., for seasonal resort employment. Businesses on Cape Cod and Martha's Vineyard, for example, rely heavily on young Bulgarian, Serbian, Russian, and other Eastern European workers. If one of them were to have a one-night encounter with a hotel guest earning at least $250,000 per year, then return to Eastern Europe, she could be assured of at least $40,000 per year in child support under the Massachusetts guidelines. This is more than six times the average net salary of $528 per month in Serbia and more than eight times the average net salary of $400 per month in Bulgaria. We asked Jerry Nissenbaum, a Massachusetts divorce litigator, what practical steps would be required for this to work. He responded "She’ll go back to Bulgaria and stay a year or so to bond with the child and not let dad bond (she doesn’t want to get stuck here). Then she comes back with the baby, files a complaint, gets the $40,000 order. The Massachusetts Department of Revenue will collect it for her and send it to her US-based bank account that she can use with a debit card in Bulgaria, or wherever she is in the world."

Why isn't this approach more popular? In the summer of 2014 we interviewed fifteen Eastern European women working on Martha's Vineyard. They estimated incorrectly that the maximum child support obtainable from an out-of-wedlock pregnancy would be between $8,000 and $10,000 per year, no matter how wealthy the father. Their stated basis for this number was their estimate of the actual cost of housing, feeding, and clothing a child (compare to the $8541 per year that Massachusetts pays to foster parents of a 12-year-old). They believed, incorrectly, that if they returned to Bulgaria, Serbia, or some other country with a comparatively low cost of living, that their child support payments would be reduced. They incorrectly believed that they could collect child support only from the time of a lawsuit, rather than retroactively to the birth of the child. The Eastern Europeans surveyed incorrectly believed that they would be responsible for their attorneys fees, i.e., they were unaware that a judge would order their defendant to pay their fees and that the U.S. taxpayer would pay for any ongoing legal costs of collection. They believed, incorrectly, that Massachusetts had a 50/50 custody presumption and that if they could not remain legally in the U.S. that the child would end up with the father. They believed, incorrectly, that they would have to stay in Massachusetts in order to keep collecting child support from a Massachusetts father.

In 2016 we asked summer workers from Moldova working in Bar Harbor, Maine what they estimated to be the potential profit from an American pregnancy. None thought that it would be practical to obtain any revenue at all or had an understanding that the state operated a Division of [Child] Support Enforcement and Recovery that would work on their behalf. Moldovans surveyed thought that an American would be able to earn roughly $5,000 per year collecting child support from a high-income sex partner. (Real answer: $24,024 per year, minimum, more than 7X the average monthly wage of $3,144 in Moldova.)

Note that federal law requires every state to set up and run a child support enforcement agency. The total budget of these agencies was about $6 billion in 2011 (video). Their services are available to foreigners. It should be possible for a citizen of Brazil, for example, to come to Park City, Utah for a week of skiing, return to Brazil with an established pregnancy, and then call up the Utah Office of Recovery Services to get paternity established and up to $1.28 million in cash transferred in accordance with the Utah child support guidelines. Utah and federal taxpayers will fund any litigation that ensues.

Does this make rational sense? Plainly from an economics point of view it does, but there is more to life than making money. Perhaps foreigners would rather be in a long-term marriage with children of the marriage. Yet in fact there are hundreds of millions of single parents in foreign countries, including Civil Law jurisdictions where child support is not profitable. If a German or Lithuanian, for example, expected to become a single parent, why not do that with an American child support defendant paying $100,000 per year rather than a German defendant paying $6,000 per year or a Lithuanian defendant paying the 2016 maximum of 120 euros per month (about $1500 per year)?

Sexual Profits without Sexual Intercourse

Bill Clinton said "I did not have sexual relations with that woman." Had Monica Lewinsky become pregnant following their intimate Oval Office encounters, however, he would have been unable to say "I will not pay child support to that woman." (Given Clinton's later earnings, under District of Columbia law, Lewinsky would have been able to collect roughly $42 million tax-free; analysis).

Variations of the "it was only oral sex" defense have been tried in jurisdictions around the U.S. and have failed every time, according to "Fatherhood by Conscription: Nonconsensual Insemination and the Duty of Child Support," (Georgia Law Review, Vol. 46, February 2012) by Michael Hidgon, a law school professor. The article provides additional examples of adult women who had sex with teenage boys and were able to collect, despite the fact that conception occurred during an illegal statutory rape. A jury in Wisconsin found that a woman had given a man a date rape drug and that "Daniel's sexual intercourse with Jennifer was involuntary," but the woman was still entitled to the same level of child support revenue as any other plaintiff in Wisconsin. The article describes that "An appellate court in Illinois reached a similar result in Phillips v. Irons. In that case, Dr. Richard Phillips and Dr. Sharon Irons began a dating relationship, during which time the couple engaged in oral sex on three occasions. … unbeknownst to him, Irons used Phillips’s semen (obtained from oral sex) to successfully inseminate herself." The mother, a married physician, was able to collect child support.

The practice is common enough that the Urban Dictionary contains an entry for "spermjacking." From "Man Receives Oral Sex; Must Pay Child Support?!" (Attorney Sarah Berent, 2011): "If you don’t want any babies, use protection – and make sure your partner isn’t hiding a test tube under the pillow."

The idea of child support guidelines is federal; the profits vary state-by-state

Nothing in the U.S. Constitution explicitly provides for the federal government to regulate marriage, divorce, child custody, or child support. Generally these matters are left to state legislatures and courts to resolve. Nonetheless, the federal government requires that each state develop and periodically revise child support guidelines. As introduced in the History chapter, his requirement was imposed on the states by the Code of Federal Regulations, Title 45, section 302.56 and went into effect in 1989. The guidelines then become a "rebuttable presumption" as to the proper amount of child support to be paid. It is possible for a recipient to collect more, or for a payor to owe less, but the person asking for the deviation from the guidelines bears the burden of proof. Typically the guidelines will apply to a range of income levels, e.g., from $0 per year in combined parental income up to $180,000 or $360,000. Federal law requires that "economic data" be used in setting guidelines.

As part of the review [every four years] of a State's guidelines required under paragraph (e) of this section, a State must consider economic data on the cost of raising children and analyze case data, gathered through sampling or other methods, on the application of, and deviations from, the guidelines. The analysis of the data must be used in the State's review of the guidelines to ensure that deviations from the guidelines are limited.

One question that nobody seems to ask is why the federal government doesn't develop nationwide child support guidelines like those in Canada and other multi-state nations.  Why are states having to pay consultants and employees every four years to do something that the USDA is already doing? Why are states trying to work with federal data that they don’t understand as well as the federal employees who gathered the data? Why would government regulation require taxpayer-funded bureaucrats in 51 jurisdictions to undertake the same task in parallel, oftentimes with absurd results such as the 10 digits of precision in the Kansas formula?

If we assume that it is in fact reasonable for each state to develop its own idiosyncratic guidelines, we are left with the question of what the top of these guidelines should be. R. Mark Rogers, the former Federal Reserve Bank of Atlanta economist whom we interviewed, explains that no data are available regarding expenditures by families with over $400,000 per year in income. Thus states and judges that are actually complying with this federal law will not award child support by formula against high-income defendants. Instead, according to Rogers, judges should conduct an analysis of a child's needs and a defendant's ability to pay. In practice, this is not generally what happens. Some states simply have formulaic guidelines that apply to potentially infinite amounts of income and therefore yield potentially infinite amounts of child support. States that fall into this category include California, Virginia, and Wisconsin. Other states take the opposite approach, e.g., Alaska, Minnesota, Nevada, and Texas, and cap child support at an amount that is comfortably profitable, but usually less than what can be earned by working at the median wage for a college graduate. Where there is no cap and the guidelines don't cover out to infinity, the typical state tells judges to use their discretion in situations where the combined parental income is over the top of the guidelines. Judges often simply ignore the directive and extrapolate beyond the guidelines with a simple percentage. Maryland and Massachusetts are examples of such states. This approach leads to the most litigation, according to the attorneys we interviewed, because a plaintiff may be told by her lawyer to expect $100,000 per year or more in child support while the defendant is told by his lawyer that, if the judge follows the law, the plaintiff can't get more than the top-of-the-guidelines number ($20,000 to $40,000 per year for one child, depending on the state) unless it can be demonstrated that the child has unusual needs.

Economists we interviewed pointed out that the cost of food and clothing in the United States has fallen in the past few decades while the cost of housing has gone up. Thus, as long as a dedicated space for the child is provided, the costs of caring for a child 30, 50, or 70-percent time are similar. This increases the stakes of winning or losing custody to close to 200 percent of the child support. In Massachusetts, for example, when the two parents are both equally strong earners, winning a 70-percent primary parent schedule will yield at least $23,764 per year, a tax-free total of $546,572 over the 23 years during which child support is payable. Thus the winner of the war for "primary" parent will be $1.1 million wealthier than if he or she had lost that war or $546,572 wealthier than in a shared parenting situation.

The role of physicians and technology

One of us stayed at the MGM Grand Hotel in Las Vegas during the 2015 AAGL Global Congress on Minimally Invasive Gynecology. By sitting next to a table of four gynecologists, it was learned that two of the four had been asked by patients “Is there a pill that I can take to ensure pregnancy after a one-night stand?” and “How can I get pregnant starting from oral sex or from a used condom on the side of the bed?” [Answers: Clomifene, but watch out for twins, and they refused to prescribe it (readily available online, however); cervical cap, which was dispensed.]

The two gynecologists who had never been asked these questions were from Nevada and Texas. The two gynecologists who had been asked to assist with pregnancies from casual and/or non-traditional sexual encounters were from California and Massachusetts, both of which offer potentially unlimited child support profits.

Summary

"Most women go from worrying about getting pregnant, to worrying about not getting pregnant. Date the former and you'll have an ally in childlessness; date the latter and you'll discover an implacable and state-sanctioned enemy."

-- Antonio Garcia Martinez, author of Chaos Monkeys

Marriage and divorce may fade from the American landscape, but family court litigation will endure as long as it remains profitable to have an out-of-wedlock child. With shared parenting becoming the norm nationwide, while unlimited child support guidelines stay in place, the trend will be men tapping working women.

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