Shawnee Tribe Seeks More Virus Funds After DC Circ. Ruling

By Joyce Hanson
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Law360 (April 5, 2021, 7:49 PM EDT) -- The Shawnee Tribe has asked a federal judge to order the U.S. government to give it a larger share of COVID-19 relief, saying the D.C. Circuit has reversed the judge's dismissal of the tribe's suit claiming it was denied a fair disbursement of coronavirus relief bill funds.

The appellate court has ruled that U.S. District Judge Amit P. Mehta wrongly found that the U.S. Department of the Treasury's allocation of COVID-19 funding for tribal governments in Title V of the Coronavirus Aid, Relief and Economic Security Act wasn't reviewable under the Administrative Procedure Act, the Shawnee said Friday in a motion for summary judgment. The ruling remanded the case to Judge Mehta for entry of a preliminary injunction favoring the Shawnee, the tribe said.

The tribe was joined by the Miccosukee Tribe and the Prairie Band Potawatomi Nation in their bid for declaratory judgment under the APA, asserting that the government ignored metrics that would have accurately captured tribal population numbers and instead used incorrect data to underallocate Title V funds to the tribes.

Specifically, the three tribes said, Congress had called for the allocation of $8 billion in federal funds for tribes when the pandemic hit, but the government used a housing program formula via Indian Housing Block Grant data that falsely reported the Shawnee's and Miccosukee's populations as zero and reduced the Prairie Band's population by approximately 83%.

"There is absolutely no genuine issue of material fact that the government's use of the IHBG data was arbitrary and capricious because: (1) the D.C. Circuit has already said so, which is now the law of the case; and (2) in any event, the government's decision to use such data on its face was implausible, has no basis in reasoned-decisionmaking or in the administrative record, fails to consider an important aspect of the problem and amounts to nothing more than picking a card out of a hat," according to the motion.

The D.C. Circuit's Jan. 5 decision revived the Shawnee Tribe's bid to increase its share of the billions of dollars in coronavirus relief funds, ruling that the Treasury likely underpaid the Shawnee and some other tribes by basing funding on population data that fell far short of their true membership numbers.

In its opinion, the three-judge panel reversed the D.C. district court's Sept. 10 dismissal of the suit, saying Judge Mehta wrongly found that Treasury's allocation of coronavirus relief funding wasn't reviewable under the APA.

While the department had argued it had the latitude to distribute the $8 billion as it saw fit, the coronavirus relief bill requires the Treasury secretary to make sure payments to tribes were based on their "increased expenditures" due to the pandemic, the panel said.

And the department's reliance on the Indian Housing Block Grant population data, which showed the Shawnee Tribe as having zero members rather than the 3,021 members the tribe reported to the Treasury, for part of the funding meant the Oklahoma-based tribe's minimal award of $100,000 may have been much less than its pandemic-related spending, according to the opinion authored by Circuit Judge David S. Tatel.

While the panel didn't rule on the merits of the case, it reversed the lower court's denial of a preliminary injunction to the Shawnee Tribe and ordered it to issue one, based on the tribe's likelihood of winning on its claim that the government's use of the IHBG population data is, "at least with respect to some tribes, an unsuitable proxy."

Other tribes that may have also been shortchanged by Treasury's method include the Miccosukee Tribe of Indians of Florida, with 605 members, and the Eastern Delaware Band of Indians, with more than 11,000 members, both of whom were among the 25 tribes the IHBG data listed as having zero members.

The Treasury Department paid out $4.8 billion, or 60%, of coronavirus relief funds to tribes based on population information starting on May 5, and then almost all of the remaining funds in June based on employment and expenditure data.

The Treasury Department was not immediately available for comment, but it said in a March 5 status report on the Shawnee suit that it is finalizing a revised methodology for issuing advance virus fund payments to the tribe.

"Although Treasury recognizes plaintiffs' concerns about the need for prompt payments, Treasury does not intend to make advance payments to plaintiffs without first ascertaining the amount plaintiffs, and others, may receive under a revised methodology," the department said. "As an initial matter, a decision to issue payments prior to a final decision as to a revised methodology would prejudge the decision, including the entitlement to any additional payments and the amount of any such payments, and may have unintended ramifications for similarly situated entities."

In its June complaint, the Shawnee Tribe argued that the Treasury neglected better data in awarding the tribe the statutory minimum of $100,000, saying it is owed at least $6 million in coronavirus relief funding. The federal government relied on the inaccurate IHBG data from the U.S. Department of Housing and Urban Development that estimates tribal populations based on census projections for particular geographical areas, instead of using population data provided by tribes, according to the complaint.

When Judge Mehta tossed the suit on Sept. 10, he echoed his reasoning in an Aug. 19 order denying the tribe's bid for a preliminary injunction.

The judge pointed to the text of Title V, which states the amount of funding a tribe receives "shall be ... determined in such manner as the secretary determines appropriate," saying that language "cannot be reasonably read to place any restriction on how the secretary must allocate the $8 billion to achieve that goal."

Judge Mehta has handled multiple suits challenging tribal funding under the coronavirus relief bill, and in his ruling alluded to an injunction request by the Prairie Band Potawatomi Nation, which he rejected in June for similar reasons.

The Prairie Band filed a new complaint on Jan. 4 in D.C. federal court, arguing along the same lines as the Shawnee Tribe. The suit is still pending.

Counsel for the tribes did not respond immediately to requests for comment Monday.

A U.S. Department of Justice spokesperson declined to comment Monday.

The Shawnee Tribe is represented by Pilar Thomas, Jonathan P. Labukas and Nicole L. Simmons of Quarles & Brady LLP.

The Prairie Band Potawatomi Nation is represented as an amicus by Michael G. Rossetti, Carol Heckman and James P. Blenk of Lippes Mathias Wexler Friedman LLP.

The Miccosukee Tribe of Indians of Florida is represented as an amicus by Daniel G. Jarcho, Daniel F. Diffley, George B. Abney I and Jean Richmann of Alston & Bird LLP.

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

The case is Shawnee Tribe et al. v. U.S. Department of the Treasury et al., case number 1:20-cv-01999, in the U.S. District Court for the District of Columbia.

--Additional reporting by Diamond Naga Siu, Andrew Westney and Emma Whitford. Editing by Jay Jackson Jr.

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