Tribe's Sudden TRO Bid Over Virus Funds Irks Treasury Dept.

By Joyce Hanson
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Law360 (June 19, 2020, 9:12 PM EDT) -- The U.S. Department of the Treasury has told an Oklahoma federal court that it may fight the Shawnee Tribe's efforts to win a temporary restraining order related to coronavirus relief funds, saying the tribe suddenly lodged its TRO bid even though the parties had been discussing their issues outside of court.

The Shawnee Tribe's counsel had been in contact with the Treasury Department's lawyers on Wednesday to discuss the tribe's thoughts about filing a case, and the Treasury Department had "even worked to confirm the answers to several, specific questions," according to the government's Thursday notice of intent to oppose the ex parte motion for a TRO.

But the tribe suddenly decided, unbeknownst to the Treasury Department's lawyers, that it would file suit instead, the government said.

"Counsel for plaintiff responded by email at 1:05 p.m. on June 17, '[Counsel,] thank you for the prompt update. I appreciate it. I'll be in touch soon,'" the notice of intent said. "That was the last that counsel for defendants heard of this matter. Counsel was not informed that the case had been filed, nor was counsel informed that the TRO motion had been filed."

The Treasury Department said its opposition also would be based on the grounds that payments to tribal governments from Title V of the Coronavirus Aid, Relief and Economic Security Act are now being litigated through five related cases in the U.S. District Court for the District of Columbia, all before the same judge. The district court recently ruled that cases challenging Treasury Department's methodology "are unreviewable and, in any event, are at this point unduly delayed," Treasury said.

The Shawnee suit filed on Thursday accuses the Treasury Department and U.S. Department of the Interior of undercounting and undercompensating the tribe when allocating coronavirus relief funds through the CARES Act.

The government disregarded population data provided by the tribe and instead opted for an Indian Housing Block Grant metric, which doesn't count tribe members who live off-reservation, the tribe claimed. This arbitrary choice violated the federal Administrative Procedure Act, it said.

"Despite having three separate reliable sources to the Shawnee Tribes' population data ... the Treasury issued funds based upon the incomplete and unreliable IHBG metric population data ... which was arbitrary and capricious," the Shawnee Tribe wrote Thursday.

The IHBG metric relies on the number of people who select "American Indian or Alaska Native" on their census form in a given geographic area.

Earlier this month, the Prairie Band Potawatomi Nation of Kansas also challenged this metric in a lawsuit. But a D.C. federal judge recently denied the nation's bid to stop the allocation of remaining CARES Act funds while their case proceeds.

In April, the Shawnee Tribe provided both the Treasury Department and the Bureau of Indian Affairs with a population figure of 3,021 tribal citizens living in the northeast corner of Oklahoma, according to the complaint. In May, the DOI and Treasury Department announced that $4.8 billion of the $8 billion pot for tribes would be allocated according to population.

Tribes with fewer than 37 members would receive a minimum $100,000 award, the complaint said. This is the amount the Shawnee Tribe received, though the tribe's bid for a temporary restraining order seeks at least $12 million from whatever remaining funds there are of the $8 billion.

"Under the IHBG race-based data, 25 tribal governments, including the Shawnee Tribe, are listed as having a population of zero, a practical impossibility," the tribe claimed, noting that it doesn't have a reservation.

The Department of Housing and Urban Development maintains population data for the sole purpose of distributing HUD funds, "which the Shawnee Tribe does not receive and is, thus, erroneously undercounted," the complaint added.

In an amicus brief filed in the Prairie Band Potawatomi Nation's lawsuit, the Gila River Indian Community, the Penobscot Nation, the Nottawaseppi Huron Band of the Potawatomi and the Morongo Band of Mission Indians all concurred that the chosen metric is flawed.

But the tribes discouraged the court from pausing the dispersal of remaining funds, saying such a delay in payments would "harm hundreds of other tribal governments."

A lawyer for the tribe, Pilar M. Thomas of Quarles & Brady LLP, told Law360 on Friday that time is of the essence as the tribe seeks coronavirus emergency funds that would last through the end of the year. She also said the tribe hopes for a quick decision on its TRO request and isn't surprised about the Treasury Department's opposition.

"Treasury has opposed every single lawsuit against them for the way they handled the coronavirus relief funds, including this one," Thomas said. "We weren't surprised by the opposition and expected it."

Representatives for the government and the tribe did not immediately respond Friday to requests for comment.

The Shawnee Tribe is represented by Gregory Bigler of Bigler Law and Pilar M. Thomas and Nicole L. Simmons of Quarles & Brady LLP.

The Treasury Department is represented by Jason C. Lynch and Kuntal Cholera of the U.S. Department of Justice's Civil Division.

The case is Shawnee Tribe v. Steven T. Mnuchin et al., case number 4:20-cv-00290, in the U.S. District Court for the Northern District of Oklahoma.

--Additional reporting by Andrew Westney and Emma Whitford. Editing by Jay Jackson Jr.

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

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