Thanks for your advice guys. Backing off a little.
Quick recap if you need it:
BM sentenced as a felon for drug theft/addiction. BM has already been sentenced and in and out of jail (6 days jail, 10 years probation). There's other evidence that BM isn't fit to have primary custody of SD (14). SD claims she does better and is happier with DH and I, she wans us to go to court. DH has 0 custody. (His biggest flaw is avoiding stressful situations - including getting a lawyer. We've also been working to obtain the resources necessary for SD to spend more time with us, including a house with a bedroom for her, which we have now.)
So I wanted to thank you all for your advice with this situation. I think the biggest thing I took away is that, for as much as I want to take the reins with this, like I do everything else in my relationship (I wear the pants, lol), and as much as I want to protect SD and fight for her, this isn't really my fight. While in tears, I told DH this. I told him it was hard on me to have him come to me with all of this drama, get me all fired up to fight for SD, and then him not do anything (because of his avoidance/procrastination). I am powerless and it hurts.
Being powerless legally, I decided I have to back off or risk losing my sanity. I signed up for this relationship and purposefully chose to live my life in a way that focused on SD, and so this fight feels like my fight, but it's not. At the end of the day, she's not mine and it would do me good to remember that.
So thanks again for reminding me of that. This balance is hard. I'm 30 with no kids of my own. I feel like I've given a lot to this situation just to be reminded that it's something that can be so limited by, or even taken away by other people. Her bio-parents will always have more control than I do. Do I really want to give so much of myself to something that I hardly have power over like this? I'm not so sure anymore.
And honestly, it feels good to step back for once.