Gotta give credit to the 9th Circuit for disagreeing with the government-employee immunity.
I had relatives go through something similar when their daughter fell on steps and got a bump on the back of her head. The kids were taken, even though the doctor said he didn't think it was abuse, the policy was that he had to report it and the CPS came in and removed the kids during the (slow) investigation. This girl already had developmental difficulties, and removing her from her parents was doing damage to her. The father figured he'd better resign from his senior position at their church, and fortunately, the grandparents were able to travel and care for the children for a month.
While there are bad cases out there, I think this overaggressive approach is ridiculous...though I have to feel some empathy for the government drones -- it's not their policies they are having to enforce. It's the elected officials and senior bureaucrats who are setting the policies to act this way.