Can the judge take my step-children from us and their mother?

Heres the situation. My husband and his ex-wife have a very difficult time getting along. It has to do with her. She can't seem to let it go and move on with her life. She has caused numerous problems in our lives. When the divorce was final she got custody of the children. Then Child Protective Services got involved and found her to be abusive and neglectful so they went to court and the judge gave custody to my husband. Well she then played dirty and made false accusations against me, which involved the police and Child Protective Services. They found the allegations to be un-substantiated. She got a restraining order on me on behalf of two of the chidlren so thats how she got the two children to live with her. There are four children involved. We have two and she has two. She just doesn't know when to quit. She wants full custody of all four children. She doesn't even have a job and she lives in a two bedroom apartment, beside that she's awaiting court for four charges against her. Larceny, transferring money, tampering with evidence and contributing to the deliquency of a minor. We have filed our response, but they have both been warned numerous times that if they can't get along and keep their custody battles out of court that they will place the children into state care. Can they really do this? Should we hire a lawyer? We are nervous, because we don;t know what can happen.