In 1980, Children's Rights and local attorneys filed this suit against officials of what is now known as New Mexico's Children, Youth and Families Department (CYFD). CYFD was making virtually no effort to place children, many of whom suffered abuse and neglect, with permanent families. The parties settled in 1983 and entered a consent decree. Initially, CYFD made some progress, but reforms stalled.

In February 1998, after years of litigation about the state's noncompliance with the consent decree, the parties entered into a court-ordered "stipulated exit plan" (SEP), which specified benchmarks that must be met before the court terminates supervision over CYFD. Despite this new agreement, CYFD continued functioning at unsatisfactory levels. A 1999 review of case plans indicated, for example, that only 29.6% of children's cases had an appropriate, current treatment plan reviewed every six months. In October 1999, plaintiffs filed a new contempt motion regarding CYFD's non-compliance with court-ordered standards. The state responded by filing a motion to dismiss the entire case using an arcane legal argument and, agreeing with the state's position, the district court dismissed the entire case. However, Children's Rights appealed and in January 2002, the 10th Circuit Court of Appeals reversed the dismissal and remanded the case for further proceedings.

On January 16, 2003, in a sweeping legal victory, the district court reaffirmed the enforceability of the SEP. On September 27, 2003, Children's Rights and its co-counsel signed a Memorandum of Understanding with CYFD officials intended to focus CYFD's efforts at fixing the problem that has plagued New Mexico's child welfare system for decades: finding permanent families for children whose goal is adoption.

On November 26, 2003, the new Agreement was signed as a federal court order to replace the current court-ordered Stipulated Exit Plan (SEP). The innovative Agreement calls for CYFD to hire two expert consultants to create Adoption Resource Teams (ARTs). These teams will meet with CYFD caseworkers on every case where a child's permanency goal is adoption, to create an Individualized Adoption Plan (IAP) that will identify each child's specific barriers to adoption and set forth steps to break down those barriers. CYFD will be bound to carry out these steps, and the teams will meet on each case every 60 days until the children have permanent homes. Compliance with the new Agreement will be monitored by a Neutral Third Party.