Mnuchin Tells DC Circ. Alaska Native Cos. Can Get Virus Relief

By Andrew Westney
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Law360 (August 18, 2020, 9:28 PM EDT) -- Treasury Secretary Steven Mnuchin urged the D.C. Circuit on Tuesday to uphold a lower court's ruling that Alaska Native corporations are eligible to partake in the $8 billion of coronavirus relief earmarked for tribal governments, saying Congress clearly meant to include them when it passed the CARES Act.

The Confederated Tribes of the Chehalis Reservation and other federally recognized tribes have asked the appellate court to overturn a D.C. district judge's June 29 decision, arguing that the for-profit companies don't qualify as "Indian tribes" with "recognized governing bodies" that are eligible for funding under the Coronavirus Aid, Relief and Economic Security Act.

Mnuchin told the circuit court in a response Tuesday that the lower court correctly interpreted the definition of "Indian tribes" to include ANCs, and that "governing body" is "a generic term that describes any leadership structure," such as the ANCs' boards of directors.

While the federally recognized tribes have argued that "recognized" means a tribe must have been formally recognized by the federal government under the List Act, that term "simply makes clear that the body to which payments are made must be the known and accepted governing body," Mnuchin said.

"Given the myriad ways that an entity may be structured and the possibility of leadership disputes, this modifier ensures that the money is sent to the correct governing body," according to the brief.

In a separate brief Tuesday, several ANCs and related groups said that the CARES Act was tailored to help address the health needs of Alaska Natives, many of whom don't belong to a federally recognized tribe.

"Congress knows how to include ANCs in programs designed to provide special benefits to Native peoples and did so in the definition it expressly incorporated into the CARES Act," the ANCs said. "That express inclusion of ANCs should be given effect, and the aid Congress intended to flow to ANCs should be freed without further delay."

Six tribes filed the original complaint in D.C. district court in April, arguing that the 12 for-profit Alaska Native regional corporations and 177 Alaska Native village corporations, which taken together have billions of dollars in revenue and are among the largest private landowners in Alaska, were not intended to receive any of the $8 billion "tribal stabilization fund" included in the $2 trillion CARES Act.

With his June 29 decision, U.S. District Judge Amit P. Mehta lifted an injunction he put in place when he thought the federally recognized tribes were likely to win their bid to block funding to the corporations.

Judge Mehta said that whether ANCs qualify as "Indian tribes" for the CARES Act hinges on an "eligibility clause" taken from the Indian Self-Determination and Education Assistance Act, a federal law governing tribal contracting, 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."

Congress in the CARES Act "could not have intended the eligibility clause to apply [to] ANCs," the judge said, since "none had done so since ISDEAA's inception" and Congress therefore "must have known that it had selected a definition of 'Indian tribe' that expressly encompasses ANCs, notwithstanding their falling outside the definition's eligibility clause."

Payments to ANCs are on hold while the tribes pursue their expedited appeal with the D.C. Circuit, with oral arguments scheduled for Sept. 11.

The Confederated Tribes of the Chehalis Reservation and other tribes in late July told the circuit court that by ruling that the ANCs qualify as "Indian tribes" eligible for the funding, Judge Mehta went against case law that rejected the idea that the corporations have the same status as federally recognized tribes.

Mnuchin, whose department is in charge of distributing the relief funds, argued in his brief Tuesday that the tribes' reading of the key language "would wrongly read the express inclusion of ANCs as a nullity" by interpreting the eligibility clause as cutting out the ANCs.

The secretary also contended that the claims aren't reviewable under the Administrative Procedure Act because "the CARES Act established a series of short, rigid deadlines incompatible with judicial review" and "establishes a detailed process but requires no prepayment announcement of who will be paid," which "means that judicial review would ordinarily be impossible until the money has been spent and shows that judicial review would invite speculative lawsuits seeking to enjoin possible payment options."

The seven intervening ANCs, alongside the Alaska Native Village Corporation Association and the Association of ANCSA Regional Corporations Presidents and CEOs, also said the eligibility clause doesn't prevent them from accessing funding, as it "cannot be read to undo implicitly what Congress did expressly in including ANCs in the definition of 'Indian tribes'" in the CARES Act.

"ANCs plainly satisfy the ordinary meaning of ISDEAA's so-called eligibility clause, as they have long been recognized as eligible for special programs provided to Natives because of their Native status," according to the brief.

The ANCs are also "tribal governments" for purposes of the law, as considering them "Indian tribes" that don't have tribal governments would be akin to including the District of Columbia as a state in a statute but then cutting it out because it isn't a state government, the ANCs argued.

"The role of front-line provider" of services "often falls to ANCs when crises strike," and therefore "depriving ANCs of CARES Act funds not only would be contrary to the text and basic purpose of the statute, but would deprive thousands of Alaska Natives of desperately needed assistance at the exact moment they need it most," according to the brief.

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

The Confederated Tribes of the Chehalis Reservation and other 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 Quinault Indian Nation is represented by Lori Brunner of the Quinault Office of the Attorney General. The San Carlos Apache Tribe is represented by Alexander B. Ritchie. The Elk Valley Rancheria, California, is represented by Bradley G. Bledsoe Downes. The Pueblo of Picuris is represented by Eric Dahlstrom of Rothstein Donatelli LLP.

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 and Wesley James Furlong of the Native American Rights Fund.

The Ute Indian Tribe of the Uintah and Ouray Reservation is represented by Rollie Wilson of Patterson Earnhart Real Bird & Wilson LLP.

The federal government is represented by acting assistant attorney general Ethan P. Davis and Adam C. Jed, Michael S. Raab and Daniel Tenny of the U.S. Department of Justice's Civil Division.

The intervening ANCs are represented by Ragan Naresh, Paul D. Clement, Erin E. Murphy and Matthew D. Rowen of Kirkland & Ellis LLP.

The cases are the Confederated Tribes of the Chehalis Reservation et al. v. Steven Mnuchin et al., case number 20-5204, Cheyenne River Sioux Tribe et al. v. Mnuchin et al., and Ute Tribe of the Uintah and Ouray Reservation v. Mnuchin et al., case numbers 20-5205 and 20-5209, in the U.S. Court of Appeals for the District of Columbia Circuit.

--Additional reporting by Adrian Cruz. Editing by Alanna Weissman.

Correction: An earlier version of this article misstated the number of Alaska Native village corporations and the scheduled date of oral arguments in the case.  The errors have been corrected.

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