By Andrew Westney

Law360 (June 25, 2021, 10:33 AM EDT) -- The U.S. Supreme Court on Friday overturned a D.C. Circuit decision that Alaska Native corporations can't receive part of $8 billion in COVID-19 relief funding, saying they qualify as "Indian tribes" under the CARES Act.

By a 6-3 vote, the high court reversed a D.C. Circuit panel's September ruling that the corporations, known as ANCs, are excluded from the funding by language the Coronavirus Aid, Relief and Economic Security Act borrowed from another federal law, the Indian Self-Determination and Education Assistance Act, known as the ISDA.

While the federally recognized tribes had argued that Congress only intended for sovereign governments like them to receive the funding and not the ANCs, Justice Sonia Sotomayor said in the majority opinion that, "under the plain meaning of ISDA, ANCs are Indian tribes, regardless of whether they are also federally recognized tribes."

The decision would make the ANCs eligible to receive some $450 million in CARES Act funding, according to a dissent by Justice Neil Gorsuch.

In their petitions challenging the D.C. Circuit's decision, former Treasury Secretary Steven Mnuchin and several ANCs and groups argued that the circuit panel misread a clause taken from the 1975 ISDA — which addresses tribes "recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians" — as not being intended to apply to ANCs in the CARES Act.

The 17 plaintiff tribes, including the Confederated Tribes of the Chehalis Reservation, the Ute Tribe, the Cheyenne River Sioux Tribe, the Rosebud Sioux Tribe and the Navajo Nation, argued that the D.C. Circuit rightly found that Congress meant for the CARES Act funding to be limited to formally recognized, sovereign tribal governments.

Justice Sotomayor said in the majority opinion on Friday that ANCs' eligibility for benefits under the 1971 Alaska Native Claims Settlement Act, the law that created the corporations and transferred to them nearly $1 billion and about 44 million acres of land, is by itself "eligibility enough to be an Indian tribe."

Justice Sotomayor cautioned that the court's ruling that ANCs are tribes under the ISDA "does not open the door to other Indian groups that have not been federally recognized becoming Indian tribes under ISDA."

But Justice Gorsuch, in a dissent joined by Justice Clarence Thomas and Justice Elena Kagan, slammed that statement, saying that tribes that aren't recognized by the federal government and other Indian groups that receive federal funding "might now suddenly qualify as tribes under the CARES Act, ISDA, and other federal statutes."

"The court's 'plain meaning' argument thus becomes transparent for what it is — a bare assertion that the recognition clause carries a different meaning when applied to ANCs than when applied to anyone else," Justice Gorsuch said.

Six federally recognized tribes filed the original complaint in D.C. federal court in April 2020, arguing the 12 for-profit ANCs and 177 Alaska Native village corporations were not intended to receive any of the $8 billion fund included in the $2 trillion CARES Act.

The D.C. Circuit's ruling reversed a D.C. federal judge's June 2020 decision that the ANCs qualified as "Indian Tribes" under the "eligibility clause" Congress took from the ISDA to draft the CARES Act.

The ISDA defines "Indian tribe" as "any Indian 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 D.C. Circuit panel agreed with the sovereign tribes that brought the suit that "recognition" is a term of art in Indian law, indicating a formal, government-to-government relationship with a tribe that ANCs lack with the United States.

During oral arguments in April, the Supreme Court's most recently appointed justices worried that leaving ANCs out of the CARES Act funding could undermine the application of federal laws in Alaska and limit health care for Alaska Natives.

In Friday's majority opinion, Justice Sotomayor rejected the plaintiff tribes' contention that an "Indian tribe" under the ISDA had to receive services like those provided by federal agencies, including health care and education, to fit the law's definitions, saying the ANC's benefits under ANCSA also qualified the companies under the eligibility clause.

The word "recognized" doesn't have to mean political recognition, and "is too common and context dependent a word to bear so loaded a meaning wherever it appears, even in laws concerning Native Americans and Alaska Natives," according to the majority.

But even if only sovereign tribes could satisfy that clause, ANCs would still qualify as "Indian tribes" under a different reading of the key ISDA language, Justice Sotomayor said.

That approach would require the "Indian tribe" definition to be read not to apply to the ANCs at all in order to make sense of their inclusion in the definition, the justice said, adding that "the most grammatical reading of a sentence in a vacuum does not always produce the best reading in context."

Justice Sotomayor also said the plaintiff tribes' position would have ANCs and Alaska Native villages included in the definition, then immediately completely cut out, because none of them was recognized as having a government-to-government relationship with the United States when the law was enacted in 1975.

While the plaintiff tribes argued that ANCs were included in the definition in case they were formally recognized at some point — as many Alaska Native villages eventually were — that was "highly unlikely" at the time, Justice Sotomayor said, because the for-profit ANCs "are not at all the type of entities normally considered for a government-to-government relationship with the United States."

"Any grammatical awkwardness involved in the recognized-as-eligible clause skipping over the Alaska clause pales in comparison to the incongruity of forever excluding all ANCs from an 'Indian tribe' definition whose most prominent feature is that it specifically includes them," the majority said.

Justice Sotomayor also dismissed the tribes' concerns that a ruling for the ANCs could let the companies try to get involved in other federal programs under laws using the ISDA definition.

"All told, the court's decision today does not 'vest ANCs with new and untold tribal powers,' as respondents fear," she said. "It merely confirms the powers Congress expressly afforded ANCs and that the executive branch has long understood ANCs to possess."

The majority also rejected an argument by the Ute Indian Tribe of the Uintah and Ouray Reservation that the ANCs don't have a "recognized governing body" to qualify for the CARES Act funding, saying that "in the ISDA context, this term has long been understood to apply to an ANC's board of directors."

In his dissent, Justice Gorsuch said that ANCs are covered by the "recognized as eligible" clause, but they can't be considered "recognized" because that has meant formal recognition in Indian law for a long time.

And the CARES Act sets aside money for states and local governments alongside tribal governments, which "reinforces the conclusion that Congress was speaking of government entities capable of having a government-to-government relationship with the United States," Gorsuch said.

"Even if we could somehow set aside everything we know about how the term is used in Indian law and the CARES Act itself, it's far from clear what 'plain meaning' the court [majority] alludes to or how ANCs might fall within it," he added.

The majority's "backup" way to read the clause — that it doesn't apply to ANCs — also doesn't work, Justice Gorsuch said.

"As I see it, an ordinary reader would understand that the recognition clause applies the same way to all Indian groups," he said. "And if that's true, there's just no way to read the text to include ANCs as 'tribal governments' for purposes of the CARES Act."

There isn't anything "implausible" about reading the clause to first include ANCs and then exclude them, Justice Gorsuch said, because "confusion reigned about whether and which Alaskan entities ultimately might be recognized as tribes" when ISDA was enacted.

"In my view, neither of the court's alternative theories for reversal can do the work required of it," Justice Gorsuch said. "The recognition clause denotes the formal recognition between the federal government and a tribal government that triggers eligibility for the full panoply of special benefits given to Indian tribes. Meanwhile, a fair reading of that clause indicates that it applies to ANCs."

ANCSA Regional Association and Alaska Native Village Corporation Association said in a statement Friday that they "applaud the Supreme Court's decision to ensure the federal government honors its promises to Alaska Natives and the communities we represent."

"We are pleased to see the court affirm Alaska Native corporations' eligibility for CARES Act funds to help our people and communities recover from the devastating effects of COVID-19," the groups said. "Alaska's economy is only now starting to recover, and these funds are needed to help our communities get back on their feet."

The Alaska Federation of Natives, which backed the ANCs in amicus briefs, said in a statement Friday that the Supreme Court's decision "agreed with a key point stressed by AFN — that the Alaska Native Claims Settlement Act established ANCs to work to benefit Alaska Natives" and "recognized ANCs as vital participants in these [federal] programs [for Alaska Natives and American Indians]."

Cook Inlet Region Inc., one of the 12 regional ANCs, praised the decision in a statement Friday, saying the group is "committed to a swift disbursement of CARES funding that ensures our people, communities and economy can all get back on their feet."

The Confederated Tribes of the Chehalis Reservation, the Tulalip Tribes and other plaintiff tribes said in a statement Friday that they were "deeply disappointed" with the ruling.

"ANCs are not Indian tribes and do not have tribal governments," Harry Pickernell Sr., Chairman of the Confederated Tribes of the Chehalis Reservation, said in the statement. "But we are heartened that the court made clear that ANCs are not federally recognized, are not sovereigns, do not have a government-to-government relationship with the United States, and should not be included on the Department of the Interior's list of federally recognized tribes."

Tulalip Tribes Chairwoman Teri Gobin said in the statement that the decision "makes it more important than ever that Congress carefully craft legislation to ensure that federal funding and programs are targeted to federally recognized tribes and the Native communities they serve, as it did in the American Rescue Plan Act of 2021."

The 229 federally recognized tribes in Alaska and their intertribal consortia "provide the vast majority of essential governmental services to Alaska Natives statewide," which wasn't disputed by the majority opinion, according to the statement.

"Only Alaska's tribes are responsible for protecting the well-being of our citizens and Alaska Native communities," said Michael Williams Sr., Chief of the Akiak Native Community, one of six federally recognized Alaska tribes who took part as plaintiffs in the suit.

National Congress of American Indians President Fawn Sharp said in a statement Friday that "the relationship between Tribal Nations and the federal government was born out of conflict, and it has fallen upon every generation to carry forward our inherent tribal sovereignty to serve our tribal citizens."

"We must continue to all work together with the United States to actively support strong Nation-to-Nation relationships," Sharp said. "NCAI looks forward to continuing our work representing tribal governments and working with Alaska Native Corporations, tribal partners, and other allies to ensure that the United States meets its treaty obligations and its trust responsibilities to moving forward."

Navajo Nation President Jonathan Nez said in a statement Friday that the case "was never about the funds" but "about upholding tribal sovereignty and the status of federally-recognized tribes."

"Many tribal nations have had to fight hard over the course of many years to gain federal recognition to be eligible for programs and services that ultimately benefit our people across Indian Country," Nez said. "The ruling undermines federally-recognized tribes and will have consequences far beyond the allocation of CARES Act dollars, but we as federally-recognized tribes will continue to stand strong and advocate for our tribal nations."

Native American Rights Fund said in a statement Friday that the decision "takes critical COVID relief money away from federally-recognized tribal governments," but added the group was "heartened by the fact that the impact of this decision is limited" given Congress' use of language in the American Rescue Plan to specify that tribes formally recognized by the federal government are eligible for funding, but not ANCs.

"Today's decision does nothing to disrupt the reality that it is Alaska's 229 tribes that remain the seats of sovereignty" and that "their tribally-controlled tribal consortia that deliver a wide array of governmental services to Alaska Natives across the state," NARF said.

The Treasury Department is represented by Elizabeth B. Prelogar, Brian M. Boynton, Edwin S. Kneedler, Matthew Guarnieri, Michael S. Raab, Daniel Tenny and Adam C. Jed of the U.S. Department of Justice.

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

The Confederated Tribes and other co-plaintiff tribes are represented by Riyaz Kanji, Cory J. Albright, Katie E. Jones and Lynsey R. Gaudioso of Kanji & Katzen PLLC; Kannon K. Shanmugam of Paul Weiss Rifkind Wharton & Garrison LLP; 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 Bruner 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, April E. Olson, Richard W. Hughes, Donna M. Connolly and Reed C. Bienvenu of Rothstein Donatelli LLP. The Navajo Nation is represented by attorney general Doreen McPaul, assistant attorney general Paul Spruhan and Jason Searle.

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 Dougherty Lynch, Matthew N. Newman and Megan R. Condon of the Native American Rights Fund.

The Ute Indian Tribe of the Uintah and Ouray Reservation is represented by Jeffrey Scott Rasmussen, Frances C. Bassett and Jeremy J. Patterson of Patterson Earnhart Real Bird & Wilson.

The cases are Yellen v. Confederated Tribes of the Chehalis Reservation et al., case number 20-543, and Alaska Native Village Corporation Association Inc. et al. v. Confederated Tribes of the Chehalis Reservation et al., case number 20-544, before the Supreme Court of the United States.

--Editing by Alyssa Miller.

Update: This story has been updated with further material from the opinion and comment from the parties and amici.

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