The children are now between 9 and 21 years old. The woman accused of torturing them, family friend Maria Gonzales Esquivel, is jailed awaiting trial in June.
The children's attorney, Julie Kays, says the siblings were repeatedly denied food and regularly beaten.
"It's hard to describe how sadistic the abuse was that she inflicted," says Kays. "She would force the older kids to beat the younger kids. They would say, 'No, beat us,' and so they would get beaten."
Kays says there were 17 different reports to CPS from daycare workers, school counselors and others who saw bruises on the children and believed they were being abused. The lawsuit says CPS failed to properly investigate and protect the children.
Mindy Chambers with the Department of Social and Health Services says the state agreed to settle the case for $8 million.
"We hope the settlement money will be used for the benefit of these children - for education, for treatment, for what they need as they move into adulthood," she said.
Chambers said she could not speak to alleged mistakes made by caseworkers, but Kays tells KOMO News that several caseworkers failed the children.
"There were multiple caseworkers that were on this file. There were multiple caseworkers who didn't read what the prior referral was about - who didn't read even the notes from the earlier ... worker and the like," Kays says. "And so they were just taking it at face value and not looking at the whole history of this family, which is a pretty alarming lapse in judgment."
The children are now reunited with their mother and living in the area.
The case is the second settlement announced this week in which DSHS is blamed for failure to protect a child from abuse.
In the first case, revealed Tuesday, the state agreed to pay $3 million to settle a lawsuit from a woman who gave birth at age 12 after being raped by her mother's 35-year-old boyfriend.
CPS investigators determined no abuse had occurred in that case, and offered the girl parenting support instead of getting her out of the home where she says the abuse continued for another 15 years.