By Andrew Westney

Law360 (April 22, 2020, 8:35 PM EDT) -- The Treasury Department won't start delivering $8 billion to tribes battling the COVID-19 pandemic until Tuesday at the earliest — missing a Sunday deadline — and still hasn't decided if Alaska Native Corporations should share in that money, the government told a D.C. federal judge on Wednesday.

Treasury Secretary Steven Mnuchin asked the court on Wednesday to push back a hearing in a suit by 11 federally recognized tribes that seeks an injunction to block any of the $8 billion in direct tribal funding in the $2 trillion Coronavirus Aid, Relief and Economic Security Act from going to the corporations, known as ANCs.

The hearing was originally slated for Thursday afternoon, but U.S. District Judge Amit P. Mehta agreed Wednesday to give the government an extension.

The judge indicated in a minute order, however, that he wanted to talk to the parties Thursday morning before deciding whether to move the hearing to Friday or Monday.

While the tribes agreed to the shorter delay, they are against holding the hearing Monday, which would fall after the Sunday deadline under the CARES Act for Treasury to distribute all of the $8 billion.

In either case, the tribes will have to wait longer than expected for funds they say are urgently needed, and which the Treasury Department had previously said would go out Friday.

Mnuchin said in Wednesday's filing that "no payment has yet been made to tribal governments from the Coronavirus Relief Fund and that such payments will be made no sooner" than Tuesday.

The department's delay request came shortly before its brief opposing the tribes' injunction motion was due on Wednesday afternoon.

Mnuchin said that he "regrets the late nature of this filing, but the parties have been conferring on a path forward in an attempt to reach agreement."

He added that the "delay in payment is occasioned, in part, on issues arising from certain of the funding submissions made to Treasury that are unrelated to this case and that must be resolved before payments can issue."

The hearing on the tribes' injunction motion was originally scheduled for 3 p.m. Eastern Time on Thursday, but Mnuchin said in his filing Wednesday that his department "has not yet arrived at a final decision on the question whether Alaska native corporations qualify as 'tribal governments'" under the CARES Act to make them eligible for the funding.

The department asked that the hearing be moved to Monday, but quoted the tribes as saying they didn't consent to that move "because they are 'concerned about defendant's ability to disburse funds to tribal governments after the statutory deadline.'"

Lisa Koop Gunn of the Tulalip Tribes, one of the plaintiff tribes, said in a statement Wednesday that the plaintiff tribes are agreeable to a Friday hearing, "subject to Treasury making it clear they will not distribute the money before the court is given the opportunity to decide the issue."

A Treasury spokesperson told Law360 on Wednesday that the department can still make payments to tribes even after the 30-day deadline since the CARES Act's March 27 enactment, and that the lawsuit has added to the work the department has to do before it can send out the money.

Three Alaska tribes and three tribes from the Lower 48 states hit Mnuchin with a complaint last Friday over Treasury's plan to allow the Alaska Native corporations, which together have billions of dollars in revenue and are some of the largest private landowners in Alaska, from receiving part of the $8 billion "tribal stabilization fund" included in the CARES Act.

The fund included in Section 601 of the CARES Act makes emergency money available for costs incurred fighting the virus from the Treasury Department, in consultation with the Department of the Interior's Bureau of Indian Affairs.

The tribes followed that up Monday with a request to Judge Mehta for a preliminary injunction and temporary restraining order, saying the Treasury Department was planning to illegally send "desperately needed funds" meant for tribal governments to the for-profit companies.

The six original plaintiff tribes are the Confederated Tribes of the Chehalis Reservation and the Tulalip Tribes, located in Washington state; the Houlton Band of Maliseet Indians, in Maine; and the Akiak Native Community, Asa'carsarmiut Tribe and Aleut Community of St. Paul Island, in Alaska.

Five more tribes joined the suit on Tuesday as the plaintiffs filed an amended complaint: the Navajo Nation in Arizona, New Mexico and Utah; Quinault Indian Nation in Washington state; the Pueblo of Picuris in New Mexico; the San Carlos Apache Tribe in Arizona; and Elk Valley Rancheria in California.

The Navajo Nation, which has the largest Native American reservation, has been especially hard hit by the virus, with over 1,200 cases and 48 deaths reported as of Tuesday.

"Our Nation is slowly seeing the benefits of the three COVID-19 bills passed by Congress, but it is not arriving fast enough," Navajo Nation Vice President Myron Lizer said in a statement Wednesday. "We need more rapid testing, health care personnel, PPE's, ventilators, and other essential services to adequately address the expected increase of COVID-19 cases on the Navajo Nation. Funds need to be prioritized for federally-recognized tribes, not corporations."

Lizer added that the tribe also needs to "prepare for the long term," with the Centers for Disease Control and Prevention "now warning us of a possible second wave of COVID-19 that may hit the country in the winter season."

"Our Nation's government is in dire need of support for the critical medical and community needs of our people," Navajo Nation Attorney General Doreen N. McPaul said in the statement. "We are literally fighting for dollars to save lives."

In their injunction motion Monday, the tribes called for quick action from Judge Mehta, saying that once the funding is distributed, "it will likely be impossible for the tribes to recover any of the diverted funds and to use them, as Congress plainly directed, to meet the critical needs of their communities, which have been besieged by the coronavirus pandemic."

The controversy over the inclusion of ANCs in the funding centers on language in the CARES Act that identifies "Indian tribes" based on a definition from the Indian Self-Determination and Education Assistance Act that includes Alaska Native corporations, as well as a definition of "tribal governments" in the new law.

Specifically, the ISDEAA, the law that governs federal self-determination contracts with tribes, defines "Indian tribe" as any "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 tribes have said that the ANCs don't meet the last part of the definition because they are not "recognized as eligible" for those federal programs.

And the ANCs are not tribal governments, but companies that can seek funding through other parts of the CARES Act that the tribes cannot, according to the complaint.

In their injunction request, the tribes said that the 12 Alaska Native regional corporations and 225 Alaska Native village corporations were not intended to have access to the tribal funding when Congress passed the CARES Act.

Meanwhile, the federal government could face litigation over a leak of information last Friday that was submitted by federally recognized tribes and Alaska Native corporations to participate in the funding program, including population, land holdings and employment information.

The National Congress of American Indians slammed the leak on Saturday, saying in a statement that it was "extremely disappointed and disturbed by the release of sensitive information" and "demands a full and swift investigation into the source of the data breach."

The tribes 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.

Mnuchin is represented by Assistant Attorney General Joseph H. Hunt, Assistant Branch Director Eric Womack, and Jason C. Lynch of the U.S. Department of Justice's Civil Division, Federal Programs Branch.

The 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 Stephen Cooper and Andrew Kragie. Editing by Peter Rozovsky.

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