Economic Analysis of Relocation Cases (December 2000)
Material for South Carolina Bench/Bar Judicial Legal Education Seminar, December 2000
Note: In 2004 the South Carolina Supreme Court issued an opinion in Latimer v. Farmer, 360 S.C. 375, 602 S.E.2d 32 (2004) removing the previous presumption against relocation and creating a four-part test to analyze proposed relocations: 1) the potential advantages of the proposed move; 2) whether the move would improve the quality of life for the custodial parent and the child, and it is not the result of a whim on the part of the custodial parent; 3) the integrity of the motives of both the custodial and noncustodial parent in seeking the move or seeking to prevent it; and 4) the availability of a realistic substitute visitation arrangement that will adequately foster an ongoing relationship between the non custodial parent and the child. Most of the analysis in this material remains valid in examining proposed relocations.
South Carolina’s current method of resolving relocation cases is a mess that is unfair to both custodial and noncustodial parents. The case law gives neither practitioners nor judges any good guidance. For example, while the Supreme Court’s decision in McAlister v. Patterson, 278 S.C. 481, 299 S.E.2d 322, 323-24 (1982), gives rise to a presumption against relocation, since McAlister, the Court of Appeals has uniformly allowed relocations. In, Pitt v. Olds, 333 S.C. 478, 511 S.E.2d 60, 61-62 (1999), the only relocation case decided by the Supreme Court since McAlister, the decision of the Court of Appeals was reversed and the relocation rejected. Yet within a matter of months the Court of Appeals again approved a relocation in Rice v. Rice, 335 S.C. 449, 517 S.E.2d 220 (Ct.App. 1999).
The Custodial Parent
Current relocation jurisprudence is unfair to custodial parents because it unduly interferes with a custodial parent’s right to raise a child where he or she believes best. In all but close custody cases, the location a parent resides is generally a minor issue. Yet in relocation cases the court elevates it to the primary consideration. This ignores the obvious: good parenting is more important than the town where a child lives. In making the social statistics of various communities of equal concern to the parenting abilities of the litigants, the court unduly interferes with the best interests of the children to be raised in an environment supportive of their custodial parent.
Significantly, as evinced in Saenz v. Roe, 526 U.S. 489 (1999), the U.S. Supreme Court interprets the Fourteenth Amendment to include the right to travel, which includes the right of a citizen of one state to enter and to leave another state. Reviving “Privileges and Immunities” jurisprudence as a basis of constitutional protection, the Saenz court held that the Fourteenth Amendment precluded California from reducing welfare benefits for recent arrivals to the state as an infringement upon their right to travel. Thus, the McAlister presumption against relocating with children outside of the state is ripe for challenge.
The Non-Custodial Parent
Yet if current relocation jurisprudence is unfair to custodial parents, it is also unfair to noncustodial parents. Too often, when the court allows the relocation, it shows little concern for how the relocation will affect the noncustodial parent’s ability to maintain a relationship with his or her children. Non-custodial parents correctly argue that relocations impose substantial costs on them while diminishing their relationship with their children; the court needs to be mindful of these costs.
The Flaws in Current Relocation Jurisprudence
Part of the problem with relocation cases is that the courts treat them as garden variety custody cases, employing a “best interests of the child” analysis. Yet, rarely is a relocation proposed with the child foremost in the custodial parent’s mind. No reported South Carolina cases deal with relocation due to the child’s need for a geographically specific residence. It is doubtful the court would have difficulty deciding a relocation case where a child’s legitimate medical or educational needs could only be addressed by the relocation.
Additionally, in making a “best interests” determination, the court frequently attempts to do things for which it is not well equipped. The court currently examines whether the children would be better off being raised in one location or another-a decision that generally should be left to the discretion of the custodial parent-as well as the motives of the custodial parent in requesting the relocation, which is extremely difficult to determine with any confidence. The court would do well to avoid situations in which it decides that the custodial parent can retain custody only so long as she does not relocate. E.g.,Pitt, supra. On the other hand, the court should also avoid authorizing relocations in which substantial monetary and relationship costs are imposed on the noncustodial parent before the court truly understands these costs. E.g., Rice v. Rice, 517 S.E.2d at 222-28.
Making Relocation Cases Easier and Fairer
Instead of the current system, the court should examine relocation cases with the intent of harmonizing two conflicting goals: first, the goal of the custodial parent to raise his or her children in an environment that is supportive of that parent; second, the goal of the noncustodial parent to not have the relationship with the children harmed by the unilateral decisions of the custodial parent. The focus of relocation cases needs to change from whether to allow the relocation to whether these two competing goals can be harmonized.
To make relocations cases easier, the court should begin by focusing on the characteristics that make relocation cases sui generis. First, relocation cases are primarily modification actions. Even when custody has not been formally litigated previously, parents have typically reached some accommodation on custody, visitation and support that the court can use as the prior status quo. Second, even when brought by the noncustodial parent, and even when fashioned as a change of custody case, relocation cases are frequently attempts to modify the visitation of the noncustodial parent (because the relocation makes the prior visitation arrangement untenable), rather than attempts by the noncustodial parent to change custody.
Finally, relocation cases seek modification of the noncustodial parent’s visitation for reasons having little or nothing to do with noncustodial parent’s fitness to exercise visitation. Relocation cases are typically brought for one of three reasons: 1) the custodial parent remarries and desires to live with the new spouse; 2) the custodial parent or step-parent has unique educational or employment opportunities elsewhere; or 3) the custodial parent desires to reside closer to immediate family members. All three of these reasons for relocating have important, and frequently positive, consequences for the child; none is done with the child primarily in mind. Current case law requires the court to attempt to balance the collateral benefits of the move against the changes in the relationship between the child and the noncustodial parent. It is difficult to determine how or how much a child will benefit if the custodial parent can earn an additional $10,000.00 a year, live near siblings or parents, or be in a stable marriage.
In modification cases-and many relocation cases are modification cases-the court is not even supposed to consider modification until there has been a substantial change of circumstances. Yet in relocation cases, the change in circumstances is the custodial parent’s desire to relocate. Should this desire constitute a substantial change of circumstances sufficient to modify the noncustodial parent’s visitation?
By applying the “best interests” standard to relocation cases, the court allows-even unwittingly encourages-custodial parents to relocate by allowing them to impose substantial monetary and relationship costs on the noncustodial parent without any showing that the noncustodial parent’s behavior has merited such an imposition.
Further, beyond the determination of the child’s “best interests,” is the allocation of the costs and benefits of the relocation-an allocation that case law largely ignores. It is the seemingly unfair allocation of these costs and benefits that makes relocation cases so contentious. If, instead of focusing on the whether to allow relocation, the court placed greater emphasis on allocating the costs and benefits of a proposed relocation, the court would probably end up allowing more relocations-providing custodial parents more freedom to parent their children-while allocating the benefits of relocation more fairly, thus making these cases less harsh on the noncustodial parent.
Most of the effects of a relocation either impact equally on the parent and the child (e.g., a child seeing the noncustodial parent three times, rather than thirty times, a year) or impact the parent directly and the child only indirectly (e.g., remarriage, transportation costs and employment opportunities). Thus (and ironically), focusing on the child, rather than on the parents, especially the noncustodial parent, makes an analysis of the relocation unnecessarily difficult.
Instead of trying to determine the child’s “best interests,” the court should instead determine whether a relocation can be allowed without imposing any unfair burden on the noncustodial parent. Often relocation orders are unjust because they impose burdens on the noncustodial parent, who has done nothing to merit the burden. The court should presume that the custodial parent will benefit from the relocation (if not, the parent would not relocate) and strive to make the relocation Pareto optimal by fashioning an order that allows the noncustodial parent to be better off too.
Applying Economic Analysis
To make relocations Pareto optimal the court needs to undertake an economic analysis of the proposed relocation. In any relocation, two main factors need to be addressed: 1) the monetary costs and benefits of the relocation; and 2) the effects of the relocation on the child’s relationship with the noncustodial parent and how it balances with the relocation’s effect on the custodial parent’s relationship with the child.
The monetary costs of relocation can include increased travel expense and time. The monetary benefits can include wage increases; household income increases due to remarriage; or reduced expenses due to family member support or family-provided day care. These expenses or savings often have minimal or no effect on the child support guidelines.
The relationship effects are more difficult to gauge. Sometimes the relocation will cause the custodial parent to be able to spend more time each day with the child; for example, when a marriage-based relocation allows the custodial parent to remain at home. Other times it will cause the custodial parent to spend less time with the child, as when employment opportunities require more work from the custodial parent.
The noncustodial parent’s time with the child will typically (but not always) be reduced by the relocation. Even when not reduced, the time will generally be in lengthier but less frequent blocks-which again can have positive or negative consequences. The court’s goal should be to preserve the noncustodial parent’s relationship with the child at the level that existed prior to the relocation.
The Utility of the Relocation
In any relocation case, the court’s goal should be dividing utility fairly. The court may assume that the relocating custodial parent will obtain positive utility from the relocation; otherwise, that parent would not be seeking relocation. However, it may not be that the relocation has overall positive utility. Frequently, a proposed relocation will be sought when the custodial parent can impose substantial costs on the noncustodial parent but obtain a smaller benefit. In such cases, the relocation cannot be made Pareto optimal and generally should not be allowed.
In cases in which the relocation is beneficial overall, economic analysis simply requires the court to analyze and understand the distribution of the child’s time with each parent and the distribution of the monetary costs and benefits of the relocation in order to determine and allocate utility. A just result simply requires that the noncustodial parent not be required to suffer negative utility from the relocation (since the court may assume that the relocating parent will either incur positive utility from the relocation or will decide not to relocate).
The relocating parent should have the burden of providing the court with a relocation plan that has positive utility for the noncustodial parent and of proving the positive utility of that plan. Each plan should address the two factors of the relocation case: 1) how the relocation will have positive monetary benefits for the noncustodial parent, including a proposal regarding ongoing child support; and 2) how the relocation will positively affect the noncustodial parent’s relationship with the child.
In dealing with the monetary benefits of the move, the custodial parent should address modification of child support and the costs of transporting the child to and from visitation. The costs of transportation should include the cost of airfare (if the child or the child and parent will be flying to and from visitations) or the cost of road travel, and should include a reasonable value to the noncustodial parent’s travel time.
Once the costs of visitation transportation have been addressed, the remainder of the monetary analysis is easy. The court must simply look at the current child support obligation, the proposed child support obligation and the cost of transportation the proposed relocation imposes on the noncustodial parent. If the noncustodial parent will lose money from the relocation, the relocating parent has not met his or her burden.
Often the way the relocating parent will be able to make the relocation have a positive monetary benefit for the noncustodial parent will be to allow a substantial reduction in child support. Typically the courts are reluctant to have such substantial modifications from the guidelines. However, where a custodial parent desires to relocate to obtain substantially greater income, the child support guidelines are not proportionally affected by the greater income. Where the custodial parent can obtain $20,000.00 greater income from a relocation, why should child support not be substantially reduced if that is what it will take the make the relocation fair (or palatable) to the noncustodial parent? There is justice in requiring the custodial parent to disgorge some of the monetary benefits from the relocation to the noncustodial parent when such relocation is a unilateral decision by the custodial parent and is not based on the noncustodial parent’s behavior. A plan that requires positive monetary utility for the noncustodial parent before allowing relocation will discourage relocations which have a net negative monetary utility, or which have a positive monetary utility for the relocating parent but a negative monetary utility for the noncustodial parent.
The other part of the relocation proposal should address a visitation plan that has positive utility for the noncustodial parent. In creating a proposed plan, the relocating parent must balance the transportation costs of more frequent visitation against the desire for the noncustodial parent to have more frequent contact with the child. Probably this balance will be achieved differently depending upon the age and maturity of the child and the noncustodial parent’s relationship with the child.
In general, a very young child needs more frequent contact with a parent to maintain a relationship. More frequent contact will require greater transportation costs, which makes it less likely that the relocating parent can propose a plan with positive monetary utility for the noncustodial parent. However, this is simply another way of concluding that the burden should be higher on a parent who desires to relocate with a young child than one who desires to relocate with an older child.
Where the noncustodial parent has a very substantial relationship with the child, more frequent contact may again be necessary to preserve the relationship at the same level. Again more frequent contact will impose greater transportation costs, which will make it less likely that the relocating parent can propose a plan with positive monetary utility for the noncustodial parent. However, this is simply another way of concluding that the burden should be higher on a parent who desires to relocate when the child has a very substantial relationship with the noncustodial parent.
Finally, where the custodial parent proposes moving to a place that is exceedingly distant or difficult to reach, greater transportation costs will make it less likely that the relocating parent can propose a plan with positive monetary utility for the noncustodial parent. Again, this is simply another way of concluding that the burden should be higher on a parent who desires to relocate to a place that is exceedingly distant or difficult to reach.
Requiring the relocating parent to propose a visitation schedule that has positive utility for the non-relocating parent’s relationship with the child encourages relocating parents to be generous in visitation proposals. Further, an order which requires generous visitation for the noncustodial parent as part of a relocation reduces the risk of interference in the noncustodial parent’s relationship after the relocation.
Where the relocating parent cannot show that the relocation will have positive utility for the noncustodial parent’s relationship with the child, the relocation should generally not be allowed-especially where the custodial parent cannot show that the move will create a substantial improvement in the custodial parent’s relationship with the child.
By requiring the relocating parent to meet the burden of showing positive utility for the non-relocating parent, the courts would require the relocating parent to examine the true costs and benefits of the desired relocation and to propose a fair allocation of these benefits if the relocation is indeed beneficial. In requiring that relocations be Pareto optimal, the court protects noncustodial parents from any unjust burdens from the relocation while allowing custodial parents greater freedom to parent their children in a location of their choosing.
In cases where a relocation proposal can be made which will have positive utility for the noncustodial parent on both monetary and relationship issues, the relocation should be allowed. In cases where a relocation proposal cannot be made which will have positive utility for the noncustodial parent on either monetary and relationship issues, the relocation should be not be allowed on the terms proposed by the custodial parent.
In cases where the relocation proposal will have positive utility for one factor but not the other, the court may employ a balancing test. Sometimes the court may legitimately decide the child will be better off relocating where the child will spend a few weeks less time each year with the noncustodial parent but where the net monetary benefit of the relocation is $10,000.00 or where the custodial parent’s ability to parent the child will be substantially improved. Sometimes the court will legitimately come to the opposite conclusion. Sometimes the court will find that the move should be allowed if the noncustodial parent obtains $50.00 of the $10,000.00 monetary benefit of the move. Other courts may legitimately find that it should be allowed only if the noncustodial parent obtains all of the $10,000.00 monetary benefit. In any case, the court should at least understand the costs and benefits (both monetary and in the parties’ relationship with the child) of the proposed relocation and should insure that the costs of the move are not imposed upon noncustodial parent while the relocating parent obtains the benefits. By examining the underlying monetary issues (including transportation costs), the court will be in a much better position to balance these factors than it would be with a simple “best interests” analysis.
Finally, even when the custodial parent’s proposal is insufficient, the court should consider issuing an order allowing the relocation but fashioning its own remedy unless it is convinced a proposed relocation is for bad or vindictive purposes. The order should allow the relocation on terms and conditions that make sure the noncustodial parent does not have increased monetary costs or a decreased relationship with the child if the relocation takes place. By allowing the custodial parent the option to relocate on those conditions, the court does not restrict the freedom of custodial parents to raise the children in an environment of their choice, while also making sure that the noncustodial parent does not unfairly bear the burden of that choice.
Contrary to popular perception, “economics” does not refer simply to the study of monetary issues. Rather, “economics” is “a social science concerned chiefly with description and analysis of the production, distribution and consumption of goods and services.”Websters Ninth New Collegiate Dictionary at 395. Here, economic analysis refers not only to the study of the monetary issues surrounding relocation, but also the allocation of time with the child.
Rice v. Rice, 335 S.C. 449, 517 S.E.2d 220, 222-28 (Ct.App. 1999); Henggeler v. Hanson, 333 S.C. 598, 510 S.E.2d 722, 726 (Ct.App. 1998); Pitt v. Olds, 327 S.C. 512, 489 S.E.2d 666, 670 (Ct.App. 1997); VanName v. VanName, 308 S.C. 516, 419 S.E.2d 373, 374-75 (Ct.App. 1992); Eckstein v. Eckstein,306 S.C. 167, 410 S.E.2d 578, 580 (Ct.App. 1991); Sealy v. Sealy, 295 S.C. 281, 368 S.E.2d 85, 87-88 (Ct.App. 1988); Marshall v. Marshall, 282 S.C. 534, 320 S.E.2d 44, 48-49 (Ct.App. 1984).
While the court currently evaluates the custodial parent’s motives in seeking the relocation, there is little discussion in the case law of the noncustodial parent’s motives in opposing the relocation. If the court is going to examine the parties’ motives, it should examine whether the noncustodial parent’s motive in opposing the relocation is to control or exact revenge on the custodial parent.
Pitt rejected remarriage as a basis for relocation. Id., 511 S.E.2d at 61-62. However, this overlooks the value that the custodial parent’s marriage can have on the child. See Tropea v. Tropea, 665 N.E.2d 145, 151 (N.Y. 1996) (“While some courts have suggested that the custodial spouse’s remarriage … can never suffice to justify a distant move, such a rule overlooks the value for the children that strengthening and stabilizing the new, post-divorce family unit can have in a particular case”) (citations omitted).
In a California relocation case frequently cited by other state courts, that court underwent a similar analysis, though not so formally. See, In re Marriage of Burgess, 913 P.2d 473 (Cal. 1996). Under Burgess, once the trial court determines that the custodial parent’s relocation is not designed to frustrate the other parent’s visitation, but is requested for sound, good faith reasons, any further examination into the custodial parent’s “inherently subjective decision making” is not required. Id. at 481, n. 5. “It would undermine the interest in minimizing costly litigation over custody and require the trial courts to micromanage family decision making by second-guessing reasons for everyday decisions about career and family.”Id. at 481.
However in authorizing the relocation, Burgess gave its family courts “broad discretion to modify orders concerning contact and visitation to minimize the minor child’s loss of contact and visitation with the noncustodial parent in the event of a move, e.g., by increasing the amount of visitation with the noncustodial parent during vacations from school, allocating transportation expenses to the custodial parent, or requiring the custodial parent to provide transportation of the children to the noncustodial parent’s home. Indeed, such modifications of orders regarding contact and visitation may obviate the need for costly and time-consuming litigation to change custody….Similarly, a noncustodial parent’s relocation far enough away to preclude the exercise of existing visitation rights can be ground for modifying a visitation order to allow for a different schedule for contact with the minor children, e.g., longer but less frequent, visitation periods.” Id. at 484 (emphasis added).See also Richard A. Warshak, Ph.D., Social Science and Children’s Best Interests in Relocation Cases: “Burgess” Revisited, 34 Family Law Quarterly 83 (Spring 2000) [hereinafter Burgess Revisited].
In cases where the parties had been exercising true shared physical custody prior to the proposed relocation, or where there are real concerns regarding the custodial parent’s ongoing custody, this proposed analysis is not appropriate. See e.g., Burgess, supra. “In case[s] involving joint physical custody, in deciding whether it is in the child’s best interest to change custody when one custodial parent seeks to relocate with the minor children, the trial court should ask itself whether the custody change is ‘expedient-essential-imperative.’”Id., at 482-83 (citations omitted). “The trial court must determine de novo what arrangement for primary custody is in the best interests of the minor children. Id., at 483, n. 12.
However, should the court allow the relocation where shared physical custody previously existed, it should still attempt to equitably balance transportation costs and responsibilities in its final order.
This analysis has been greatly influenced by the works of two scholars. John Rawls, in his book “A Theory of Justice,” developed a view of justice based on the notion of a disinterested observer. Under Rawls’analysis, a system is “just” if an observer, unaware of which position he or she would occupy within a given system, would be equally willing to occupy any given position within that system. Too often current relocation decisions impose a tremendous and undeserved hardship on noncustodial parents. Since few would chose to be the noncustodial parent under these cases, the system is unjust. This attempt to design a mechanism for deciding relocations cases is intended to create a mechanism for allowing relocations while comporting with Rawls’ theory of justice.
Vilfredo Pareto was an Early-20th Century Italian economist who analyzed social change in economic terms. In his view, any proposed change which could leave all actors better off was a change worth making. Such change is labeled “Pareto optimal.” Often changes which make some actors much better off and some slightly worse off can be made Pareto optimal by transferring some of the benefits from the better off to the worse off (either though taxation, grants or regulation). In coming up with this mechanism for deciding relocation cases, an attempt has been made to use Pareto’s analysis, which was not specifically developed for custody cases, to reject relocations which are not beneficial overall and to have relocations which might be beneficial overall also be Pareto optimal.
“Utility” is an economic term meaning the difference between the benefits and costs of a proposed action. Positive utility occurs when the benefits of a proposed action outweigh the costs. In a relocation case, when the proposed benefits outweigh the costs, the relocation can be said to have positive utility.
“Costs” not only refers to monetary costs but the costs created by reduced visitation by the noncustodial parent or visitation in a less desirable manner (e.g., fewer but lengthier visits).
In the rare cases in which failure to allow the relocation will cause monetary hardship on the custodial parent (e.g., the custodial parent must either end his or her career or relocate), the court should instead try to allocate fairly the monetary costs imposed by the relocation.
Determining the value of the noncustodial parent’s travel time is quite easy. The court usually has determined the noncustodial parent’s income for the purpose of setting child support. Simply convert that income figure by an hourly rate and multiply the hourly rate by the number of hours the custodial parent will be required to travel to effectuate visitation. For example, a parent earning $40,000.00 per year at a full time job earns approximately $20.00 per hour. A relocation plan that imposes 100 hours of travel per year, imposes $2,000.00 of costs on that parent (not including expenses for mileage, meals and motels). The elegance of this design is that a parent who substantially under-reports income will be penalized proportionally when it comes time to determine the “cost” of travel time.
This presumes that the relocating parent does not believe that the noncustodial parent’s previous visitation schedule was problematic. In cases where visitation has been problematic, the relocating parent should be required to propose a visitation schedule that is a good as the one the court would likely have imposed had the relocation not been requested, but the custodial parent simply was seeking to modify visitation.
See Burgess Revisited, supra. “In the youngest children the good father-child relationship was closely related to a regular and frequent visiting schedule and to a visiting pattern that included continuity and pleasure in the visiting. For most children, this meant overnight and weekend stays.” Id., at 89 citing Judith S. Wallerstein & Joan Berlin Kelly, Surviving the Breakup 149, 219 (1980).
South Carolina implicitly recognizes this distinction. While the McAlister case creates a presumption against relocating with a child out of state (McAlister, supra, 299 S.E.2d at 323), S.C. Code Ann. § 63-3-530 (30) states that “the court may not issue an order which prohibits a custodial parent from moving his residence to a location within the State unless the court finds a compelling reason or unless the parties have agreed to such a prohibition.”
Typically, in such a situation, a relocation will have a positive monetary benefit but not allow the noncustodial parent as much time with the child.