By Andrew Westney

Law360 (April 27, 2020, 11:08 PM EDT) -- A D.C. federal judge handed a group of tribes a major win Monday by preventing the Treasury Department from sending any of $8 billion in funding to fight the COVID-19 pandemic to Alaska Native corporations, but stopped short of awarding federally recognized tribes all the money.

U.S. Treasury Secretary Steven Mnuchin had argued that it would be unfair to block the for-profit corporations, known as ANCs, from receiving some of the $8 billion in direct tribal funding in the $2 trillion Coronavirus Aid, Relief and Economic Security Act, saying that they met the requisite definitions to be eligible for funding.

But in granting an injunction Monday to the Confederated Tribes of the Chehalis Reservation and more than a dozen other federally recognized tribes, U.S. District Judge Amit P. Mehta said that "presently, no ANC satisfies the definition of 'tribal government' under the CARES Act and therefore no ANC is eligible for any share of the $8 billion allocated by Congress for tribal governments."

The ANCs can't be considered "the recognized governing body of an Indian Tribe" because "'recognition' as used in Indian law statutes is a legal term of art, and ... no ANC board of directors" meets that definition, the judge said.

The judge declined to order the Treasury Department to distribute the whole $8 billion to the 574 federally recognized tribes, as the plaintiffs had sought. But putting whatever funds the Treasury would have sent to the ANCs on ice gives the tribes a chance to receive that money later, because if the money had gone to the ANCs there would be no way for the court to get it back, according to the opinion.

"To be sure, the more limited remedy could mean that plaintiffs will receive a lesser share of Title V [CARES Act] funds in the short term, if the secretary decides to award some money to ANCs and withholds those payments to comply with the court's order," the judge said. "But at least such funds will remain available for later disbursement to federally recognized tribes for coronavirus-related public services, if the court ultimately enters a final judgment in plaintiffs' favor."

Three Alaska tribes and three tribes from the Lower 48 states filed the original complaint in the case on April 17, saying the 12 Alaska Native regional corporations and 225 Alaska Native village corporations, which together have billions of dollars in revenue and are some of the largest private landowners in Alaska, weren't intended to have any of the $8 billion "tribal stabilization fund" included in the relief act.

The fund included in Section 601 of the act makes emergency money available for costs incurred fighting the virus from the Treasury Department, in consultation with the U.S. Department of the Interior's Bureau of Indian Affairs.

Five more tribes — including the Navajo Nation, which has been especially hard hit by COVID-19 — later joined the suit, and two other suits were filed by the Cheyenne River Sioux Tribe, Rosebud Sioux Tribe and Oglala Sioux Tribe and by the Ute Indian Tribe of the Uintah and Ouray Reservation.

The tribes in the lead case followed up with an April 20 request to Judge Mehta for a preliminary injunction and temporary restraining order, saying the Treasury Department was planning to illegally send "desperately needed funds" meant for tribal governments to the ANCs.

Mnuchin on Thursday finally confirmed to the court the department's plan to include ANCs in the funding, saying they qualify as "Indian tribes" under decades of case law regarding the Indian Self-Determination and Education Assistance Act, whose definition of tribes was adopted in the relief bill.

Mnuchin also said that the plaintiff tribes "are asking this court to second-guess the executive branch's time-pressed determination about which Indian tribes qualify for payments intended to address a public-health emergency," and "this court should not review the executive's emergency determinations."

The Treasury Department has yet to reveal its formula for divvying up the funds, so it's unclear what percentage the ANCs stood to receive.

But the plaintiff tribes had said that data requested by the department regarding applicants' land base, employees and population could lead to the ANCs receiving a bigger share of the pie — a prospect that appeared to give Judge Mehta some concern at a hearing Friday.

Treasury has said that it won't start delivering any of the $8 billion to tribes until Tuesday at the earliest, having missed a Sunday deadline.

The controversy over the inclusion of ANCs in the funding centers on language in the act that identifies "Indian tribes" based on a definition from the ISDEAA that includes Alaska Native corporations, as well as a definition of "tribal governments" in the new law.

The ISDEAA, the law that governs federal self-determination contracts with tribes, defines "Indian tribe" as any "tribe, band, nation or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians."

The tribes argued, and Judge Mehta agreed Monday, that the ANCs don't meet the last part of the definition because they are not "recognized as eligible" for those federal programs.

The judge said in his opinion that the tribes "easily satisfy their burden to show that they will suffer irreparable injury in the absence of immediate injunctive relief," since "any dollars improperly paid to ANCs will reduce the funds to plaintiffs," and "once disbursed, those funds will not be recoverable by judicial decree."

He added that saying the tribes' harm was "merely 'economic' is terribly misguided," as "these are monies that Congress appropriated on an emergency basis to assist tribal governments in providing core public services to battle a pandemic that is ravaging the nation, including in Indian country."

While Treasury has said throughout the case that it is still developing its formula for allocating the money and the data it asked for didn't necessarily indicate how much it would award to each applicant, "it is this very uncertainty that amplifies the likelihood of harm," the judge said.

Judge Mehta also said that using ISDEAA language mentioning ANCs didn't mean that Congress intended them to receive funding in the relief act, as federal courts have found in similar situations that federal laws using the same ISDEAA definition, such as the National Historic Preservation Act, were intended to exclude non-federally recognized tribes.

And though the BIA has considered ANCs to qualify as "Indian tribes" under the ISDEAA, "there is scant evidence on the present record — in fact, none — that BIA or any other federal agency has actually entered into a 'self-determination contract'" under the law with an ANC, the judge said.

Not having all the funding they're entitled to would harm the plaintiff tribes, but Treasury and amici representing the ANCs hadn't shown that the corporations "are currently providing public services comparable to plaintiffs to combat the coronavirus pandemic," which is what the funding is meant to pay for, according to the opinion.

Judge Mehta said as well that Treasury hadn't backed its argument that its decision to provide funds to the ANCs "evades judicial review simply because Congress appropriated the funds to address an emergency."

National Congress of American Indians president Fawn Sharp — who is also president of one of the plaintiff tribes, the Quinault Nation in Washington state — told Law360 on Monday that the ruling "didn't deliver everything we sought, but it delivered the most basic and important request from tribal nations, to affirm the definition of tribal government."

Sharp said her tribe, which has just expanded its coronavirus testing, "needs every bit of relief that's possible under the CARES Act," and she hopes the Trump administration in making its distribution of the funding both follows Congress' intent and listens to tribes.

"We fully expect when our trustee makes a decision for and on behalf of tribal nations, that they will consider what we say and not dismiss it and act unilaterally — to not only fail to uphold their trust responsibility, but to take action in direct contravention of their trust responsibility," she said.

Chehalis Tribe Chairman Harry Pickernell Sr. said in a statement Monday that his tribe "is pleased that the court saw what was obvious to many of us. Corporations have no place taking dollars that were allocated for tribal governments, period!" 

Tulalip Tribes Chairwoman Teri Gobin said in a statement Monday, "It is extremely unfortunate that some are promoting ANCs to be something they are not, at the expenses of tribes, and it is disappointing that the administration is promoting a position that equates these for-profit corporations with Indian Tribal governments."

The Ute Indian Tribe Business Committee in its own statement Monday thanked the judge "for his quick and decisive ruling" and called for the Trump administration to send out funds "as soon as possible."

Representatives for the Treasury Department and amici for the tribes and the ANCs were not immediately available to comment Monday.

The tribes in the lead case are represented by Riyaz Kanji and Cory J. Albright of Kanji & Katzen PLLC, Harold Chesnin of the Confederated Tribes of the Chehalis Reservation and Lisa Koop Gunn of the Tulalip Tribes.

The Cheyenne River Sioux Tribe is represented by Nicole E. Ducheneaux of Big Fire Law & Policy Group LLP.

The Rosebud Sioux Tribe is represented by Natalie A. Landreth, Wesley James Furlong, Erin C. Dougherty Lynch, Matthew N. Newman and Megan R. Condon of the Native American Rights Fund.

The Oglala Sioux Tribe is represented by Jennifer Bear Eagle of the Oglala Sioux Tribe Legal Department.

The Ute Indian Tribe of the Uintah and Ouray Reservation is represented by Frances C. Bassett, Jeffrey S. Rasmussen and Rollie Wilson of Fredericks Peebles & Patterson LLP.

The federal government is represented by Joseph H. Hunt, Eric Womack and Jason C. Lynch of the U.S. Department of Justice's Civil Division.

The lead case is Confederated Tribes of the Chehalis Reservation v. Mnuchin, case number 1:20-cv-01002, in the U.S. District Court for the District of Columbia.

--Additional reporting by Stephen Cooper and Andrew Kragie. Editing by Adam LoBelia.

Update: This story has been updated with further comment from leaders of the plaintiff tribes and further detail from the opinion.

For a reprint of this article, please contact reprints@law360.com.