By Andrew Westney

Law360 (June 8, 2020, 8:01 PM EDT) -- Several tribes have urged a D.C. federal judge to order the Treasury Department to send out $3.2 billion in COVID-19 relief to tribal governments by Friday, saying the department has tried to shift the blame to tribes for the department's own "incompetence" and "abysmal" process to get the money.

An attorney for Treasury Secretary Steven Mnuchin said in a June 3 hearing that he expected to push back from June 5 to June 12 his plan to start allocating the remaining $3.2 billion from $8 billion in direct tribal government funding provided by the CARES Act. The department said it needed the extra time because hundreds of tribes had not submitted the right data to receive the money, which was supposed to be completely distributed by April 26 under the terms of the law.

In a renewed motion for a preliminary injunction Friday, the Agua Caliente Band of Cahuilla Indians and other tribes said that June 12 should be made "an immediate and definite date" for Treasury to send out all of the funds, saying that would already go 47 days past the original deadline.

And while Treasury "appears to blame tribes for the delays in making the distribution," the tribes said, "the reality … is that defendant's incompetence and abysmal data submission system is the root cause of the delay."

The government distributed $4.8 billion of the Coronavirus Aid, Relief and Economic Security Act funds in early May based on tribal population information, saying it would distribute the remaining $3.2 billion based on additional tribal employment and expenditure data that each tribe would be required to submit to the department.

After U.S. District Judge Amit P. Mehta denied an initial injunction bid on May 11 by the tribes seeking to force the department to distribute the remaining money immediately, Treasury set the June 5 date to start sending it out, nearly six weeks after the 30-day deadline to distribute all of the money under the law enacted March 27.

In that decision, Judge Mehta said the department's delay was not yet egregious enough to warrant an injunction, but "should the secretary's delay verge on doubling the time Congress mandated to fully disburse Title V funds to tribal governments, then the question of egregiousness becomes a closer one than it is today."

At the June 3 hearing, an attorney for the department told the judge the department planned to push its distribution back to June 12, saying that "several hundred submissions" from tribes were incomplete.

In a June 2 filing, Mnuchin counselor Daniel Kowalski had said that as of early afternoon that day, applications that were received from 336 tribes — well over half the 574 federally recognized tribes — had problems that the department planned to contact them to resolve.

In Friday's motion, the tribes said the Treasury department had "intentionally refrained from making any firm commitment" to a specific date to send out the money despite being weeks past the deadline.

"Given the emergency nature of the CARES Act, the fact that the present delay is within the range in which this district has found to be unreasonable, and that defendant still refuses to commit to a definitive distribution date, defendant's delay in performing his statutory duty is sufficiently egregious as to warrant injunctive relief," according to the motion.

And the tribes said that several problems with the department's submission process had led to the additional delay, with the online portal for tribal submissions being "inaccessible" and "hopelessly dysfunctional," including forcing tribes "to chop up their submissions into small increments in order to navigate the portal's small file size limits."

In addition, when Mnuchin "sought additional information because information was allegedly not correct or incomplete, he failed to explain what was incomplete and incorrect," according to the motion.

The tribes also questioned why Treasury "appears to be attempting to characterize distribution of the Title V funds as an application process," since "nowhere in the CARES Act does Congress refer to tribal governments being subject to an application process" to get the funds, the tribes said in a footnote.

Due to the delay, "certain plaintiff tribes now have curtailed essential services and must make additional layoffs," and "the threat to the health and welfare of plaintiffs' tribal members in this ongoing health crisis is only compounding," the tribes said.

Representatives for the parties were not immediately available for comment Monday.

The tribes are represented by Keith M. Harper, Catherine F. Munson and Mark H. Reeves of Kilpatrick Townsend & Stockton LLP.

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

The case is Agua Caliente Band of Cahuilla Indians et al. v. Mnuchin, case number 1:20-cv-01136, in the U.S. District Court for the District of Columbia.

--Additional reporting by Kelly Zegers and Emma Whitford. Editing by Orlando Lorenzo.

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