Tribes, Treasury Seek Wins In COVID-19 Funding Row

By Andrew Westney
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Law360 (June 1, 2020, 4:02 PM EDT) -- The Treasury Department and federally recognized tribes have asked a D.C. federal judge for quick wins in the tribes' suits against the government seeking to block Alaska Native corporations from receiving millions of dollars in federal COVID-19 relief, battling over whether the companies qualify for the funds under the CARES Act.

The Confederated Tribes of the Chehalis Reservation, the Navajo Nation, three Alaska tribes and others said Friday that U.S. District Judge Amit P. Mehta "hewed to the plain language of the statute and accepted principles of statutory construction" when he issued an April injunction preventing Alaska Native corporations, known as ANCs, from receiving any of the $8 billion in direct tribal funding included in the $2 trillion Coronavirus Aid, Relief and Economic Security Act.

While the law includes ANCs in its definition of "Indian tribe" borrowed from the Indian Self-Determination and Education Assistance Act, a federal law governing tribal contracting, that definition also includes an "eligibility clause" that limits the definition by targeting only tribes "recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians," according to the tribes' motion for summary judgment.

ANCs "indisputably do not satisfy the terms of the eligibility clause," because it restricts eligible tribes to those that are formally recognized by the federal government under the List Act, the tribes said.

And the ANCs also don't meet the CARES Act's definition of "tribal government" because "federally cognizable Indian tribes are recognized and have recognized governing bodies, while state-chartered corporations do not," the tribes said.

But U.S. Treasury Secretary Steven Mnuchin, whose department is in charge of distributing the money, said in his own motion for summary judgment Friday that the federal government has long interpreted the eligibility clause as not applying to ANCs, a "reasonable and persuasive" approach "as it hews most closely to 'the cardinal principle' of statutory interpretation: that every term in the statute should be given some effect."

And ANCs are meant to help provide Alaska Natives with health care and other services, making it "eminently sensible that they would be eligible for contracting under ISDEAA and for funding under Title V of the CARES Act," Mnuchin said.

ANCs don't have to be federally recognized to qualify as a government for the purposes of the CARES Act, as the law "also defined 'government' to mean 'governing body,'" — such as ANCs' boards of directors — "undermining any argument that an ANC must 'govern' in the traditional sense," Mnuchin said.

Six tribes filed the original complaint in the case on April 17, saying the 12 Alaska Native regional corporations and 225 Alaska Native village corporations — which have billions of dollars in revenue and are among the largest private landowners in Alaska — weren't intended to receive any of the "tribal stabilization fund" included in the relief act.

Five more tribes, including the Navajo Nation, which has been especially hard hit by COVID-19, later joined the suit.

Two other cases have been consolidated with the lead suit, including one brought by the Cheyenne River Sioux Tribe, Rosebud Sioux Tribe, Oglala Sioux Tribe and others, and another brought by the Ute Indian Tribe of the Uintah and Ouray Reservation.

The Confederated Tribes of the Chehalis Reservation and other plaintiff tribes said in their motion Friday that Congress in the CARES Act made "careful use of statutory language to connote that only the duly recognized governing bodies of those tribes with which the United States maintains a government-to-government relationship may receive Title V funding," and that the record "lays bare that the Interior and Treasury Departments — in a stark example of agency action contrary to law — sought instead simply to wish that language away."

"As for-profit business corporations — whose operations include oil and gas drilling, refining, and marketing; mining and other resource development; government and military contracting; real estate; and construction — ANCs are self-evidently not governments, and they have never been understood as such," the tribes said.

The Sioux tribes, the Navajo Nation, the Ute tribe and others said in their own summary judgment motion Friday that the ANCs "are not tribal governments under any measure," and that "by attempting to benefit from Title V, these ANCs are directly competing with, and taking resources from, federally recognized tribes — something that has never been countenanced in any case, statute, or regulation."

The federal government gives ANCs "limited contracting authority to carry out certain programs and services on behalf of Native people under specific and limited circumstances," but "it is federally recognized tribes that are performing essential governmental services in Alaska and in the Lower 48" and "it is solely to federally recognized tribes that Title V funding for those government services can be distributed," those tribes said.

Alaska Native corporations and associations that have intervened alongside the federal government said in their motion for summary judgment Friday that Congress sometimes chooses to explicitly exclude ANCs from a statutory definition of "Indian tribes" or "tribal governments," but in the CARES Act decided to specifically incorporate them.

"Congress included the expressly-ANC-inclusive definition of 'Indian tribes' for the very purpose of clarifying its definition of 'tribal governments,'" the ANCs said. "And Congress could not have gone out of its way to expressly include in its definition of 'Indian tribes' a whole class of tribes that somehow lack 'tribal governments.'"

In addition, ANCs "are a critical avenue for providing federal aid to Alaska Natives in need," and "accepting plaintiffs' argument threatens to unwind not only half a century of congressional expansion of the role of ANCs in federal Indian policy in Alaska, but settled practice under which ANCs participate in important government programs providing for the health, education, and welfare of Alaska Natives that use the same ANC-inclusive definition that Congress incorporated into the CARES Act," according to the ANCs' motion.

The Treasury Department paid out $4.8 billion of the CARES Act funds to tribes starting May 5, but has said that it is reserving a portion it believes should go to the ANCs. The department also apparently intends to include ANCs in deciding how to divvy up the remaining $3.2 billion, which it has said in another suit before the same judge that it plans to start distributing this coming Friday.

Counsel for the parties was not immediately available for 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 and Rose M. Weckenmann 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, Jeremy J. Patterson and Rollie Wilson of Native Law Group.

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.

Ahtna Inc. is represented by Michael J. O'Leary and Jonathan Katchen of Holland & Hart LLP. Calista Corp. et al. are represented by Ragan Naresh, Paul D. Clement, Erin E. Murphy and Matthew D. Rowen of Kirkland & Ellis LLP. The ANC associations are represented by Daniel W. Wolff, David Chung and Kirsten L. Nathanson of Crowell & Moring LLP, and Christine V. Williams and J. Harrison Powell II of Outlook Law LLC.

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 Emma Whitford and Kelly Zegers. Editing by Jack Karp.

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