GM 14-082

District Court Judge Issues Opinion Upholding Tribal Contracting Rights under ISDEAA

On October 7, 2014, Judge Christopher R. Cooper of the United States District Court for the District of Columbia issued a decision in Pyramid Lake Paiute Tribe v. Burwell, No. 13-1771 (D.D.C.), upholding important statutory obligations on the Indian Health Service (IHS) and protecting tribal contracting rights under the Indian Self-Determination and Education Assistance Act (ISDEAA). The decision also addresses several procedural questions of importance to tribes litigating ISDEAA matters in the D.C. District Court.

The dispute arose when the Pyramid Lake Paiute Tribe (Tribe), acting on behalf of the Fort McDermitt Paiute and Shoshone Tribes pursuant to a resolution, submitted a contract proposal under the ISDEAA to operate the Fort McDermitt Emergency Medical Services (EMS) program, a program that the IHS had operated directly since 1993. However, after receiving the contract proposal, the IHS decided to terminate the EMS program, which the IHS had deemed financially unviable. The IHS declined the Tribe’s proposal on two bases. First, the IHS reasoned that because the program had been terminated, the funding available to the Tribe under Section 106(a)(1) of the ISDEAA was $0, and the IHS could decline the contract proposal because it requested an amount higher than the amount available. Second, the IHS declined the proposal on the ground that the EMS program was partially funded with third party revenues collected by the IHS from programs other than the EMS program. The IHS stated in the declination letter that third party revenues are not available for contracting.

Judge Cooper held that the IHS violated the ISDEAA by cancelling the EMS program after receiving the Tribe’s contract proposal, since the ISDEAA requires the IHS, upon receipt of a contract proposal, to either accept the proposal or decline on the basis of one or more of several specifically listed criteria. Accordingly, Judge Cooper agreed with the Tribe that the IHS does not have discretion to cancel a program after it receives a proposal from a tribe to contract for that program. Judge Cooper also held that “[g]iven the structure and purpose of the ISDEAA, … the applicable funding level for a contract proposal is to be determined from the date the agency receives the tribe’s proposal,” rather than the date the agency issues its decision on the proposal. Therefore, the IHS cannot take actions after receiving a contract proposal to decrease the amount of funding available for a given program. Finally, Judge Cooper held that “the applicable funding level for a contract proposal under [the ISDEAA] is determined based on what the Secretary otherwise would have spent, not on the source of the funds the Secretary uses.” Therefore, “If the Secretary chooses to augment its spending on a program with other funds available to her, nothing in the Act permits her to deduct those amounts from the tribe’s funding under an otherwise acceptable ISDEAA contract.” Judge Cooper ordered the IHS to enter into negotiations to establish a contract for the EMS program, funded at the level the Secretary “would have otherwise provided” for the program had the IHS continued to operate the program, regardless of the source of those funds.

In issuing his decision, Judge Cooper rejected the federal government’s argument that the court should give deference to the IHS’s own interpretation of the ISDEAA. Ordinary rules of administrative law normally require substantial deference to agency interpretation. However, Judge Cooper held that the ordinary deference to agency interpretation is trumped by special rules of interpretation requiring that statutes affecting Indian rights be construed in favor of tribes. These special rules of construction are explicitly incorporated into the ISDEAA, which also puts the burden on the Secretary to prove that a contract declination was legitimate. Judge Cooper agreed with the Tribe’s argument that these and other provisions of the ISDEAA required the court to interpret the statutory requirements for itself, according to the special Indian rules of interpretation, even if the IHS’s interpretation might otherwise be defensible or even reasonable. This holding is important to tribes litigating any number of questions regarding the IHS’s or BIA’s compliance with ISDEAA requirements.

Judge Cooper also ruled that, in declining a contract proposal, the IHS was required to specifically set forth all of the grounds for declination in the declination letter itself. Judge Cooper therefore refused to consider additional potential reasons for declination that the IHS raised later in the context of the litigation. Judge Cooper also ruled that the ISDEAA allows the federal courts to award injunctive relief (such as his order requiring the IHS to negotiate with the Tribe to establish a contract) without requiring tribes to meet a stringent test, which requires a showing of several factors including irreparable harm, often required for injunctive relief in other contexts. Finally, Judge Cooper refused to dismiss the case under Rule 19 of the Federal Rules of Civil Procedure based on the federal government’s argument that other tribes within the same IHS Service Unit were necessary parties to the litigation. Again, while more technical and procedural in nature, these holdings cement important protections for tribes litigating ISDEAA matters. The federal government has 60 days from the date of the decision to seek an appeal with the United States Court of Appeals for the District of Columbia Circuit.

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