Cherokee Nation of Oklahoma v. U.S.
| Decision Date | 25 June 2001 |
| Docket Number | No. 99CV92.,99CV92. |
| Citation | 190 F.Supp.2d 1248 |
| Parties | CHEROKEE NATION OF OKLAHOMA; and Shoshone-Paiute Tribes of the Duck Valley Reservation, on behalf of themselves and all others similarly situated, Plaintiffs, v. UNITED STATES of America, Donna E. Shalala, Secretary of the United States Department of Health and Human Services, and Michael H. Trujillo, Director of the Indian Health Service, United States Department of Health and Human Services, Defendants. |
| Court | U.S. District Court — Eastern District of Oklahoma |
Weldon W. Stout, Jr., Bart Fite, Muskogee, OK, Lloyd Benton Miller, Devin R. Odell, Anchorage, AK, William R. Perry, Anne D. Noto, James E. Glaze, Sonosky, Chambers, Sachse & Endreson, Washington, DC, for Plaintiffs.
Bruce Green, Linda A. Epperley, U.S. Atty., Muskogee, OK, Lisa Olson, Sheila M. Lieber, David W. Ogden, Civil Div., Washington, DC, for Defendants.
Before the court for its consideration is the plaintiffs Cherokee Nation and the Shoshone-Paiute Tribes' motion for partial summary judgment of liability on the first and second causes of action and the plaintiffs' motion for declaratory judgment on the third cause of action. Also at issue is the defendants' cross motion for summary judgment.
The court finds the facts as follows. The Indian Self-Determination and Education Assistance Act of 1975, 25 U.S.C. § 450 et. seq. (hereinafter the "ISDA") was designed to promote tribal autonomy and self-governance. In the ISDA, Congress allowed tribes to assume direct operation of federal programs administered to tribes that formerly had been controlled by the Indian Health Services (hereinafter "IHS"). The ISDA directs the Secretary of the Interior:
... upon the request of any Indian tribe ..., to enter into a self-determination contract .... with a tribal organization to plan, conduct, and administer programs or portions thereof .... [that are provided] for the benefit of Indians because of their status as Indians. 25 U.S.C. § 450f(a)(1).
If the tribe elects to assume operation of programs, the tribe enters into a Self-Determination Contract or a Self-Governance Compact.1 If a tribe enters into one of these agreements with the government, the only role of the IHS is to monitor the operations of the tribes. The ISDA was designed to assure that funding for services provided to tribes would not be decreased solely because a tribe had assumed operation of the program in question. The ISDA requires that funding under the contract "shall not be less than the appropriate Secretary would have otherwise provided for the operation of the programs ..." (25 U.S.C. § 450j-1(a)(1)). This amount, known as the "secretarial amount", is the "amount of funding that would have been appropriated for the federal government to operate the programs if they had not been turned over to the Tribe." Ramah Navajo School Board, Inc. v. Babbitt, 87 F.3d 1338, 1341 (D.C.Cir.1996).
In addition to the secretarial amount, the tribes are also paid contract support costs. However, in the beginning these payments were inadequate to meet the needs of the tribal contractors. In 1988, Congress responded by amending the ISDA to make payment of contract support costs mandatory. (Senate Report 103-374, dated September 26, 1994, presented by Senator Inouye from the Committee on Indian Affairs, attached to Plaintiffs' Motions for Summary Judgment as Exhibit "3" and Report to Congressional Committees, entitled "Shortfalls in Indian Contract Support Costs Need to be Addressed," dated June 1999 and prepared by the Governmental Accounting Office, attached to Plaintiffs' Motions for Summary Judgment as Exhibit "2"). The ISDA specifically enumerates which items can be characterized as contract support costs. The ISDA states contract support costs include all "reasonable costs for activities which must be carried on by a tribal organization as a contractor to ensure compliance with the terms of the contract and prudent management," and which are not already included in the secretarial amount specified in 25 U.S.C. § 450j-1(a)(2). (25 U.S.C. § 450j-1(a)(2)). Contract support costs fall into two categories: direct and indirect. The ISDA defines the term indirect contract support cost as those "costs incurred for a common or joint purpose benefiting more than one contract objective or which are not readily assignable to the contract objectives specifically benefited without effort disproportionate to the results achieved;" 25 U.S.C. § 450b(f). Direct contract support costs are all those allowable costs that strictly benefit the IHS programs only and that are not otherwise included in either the indirect costs or in the secretarial amount. 25 U.S.C. § 450b(f). On an annual basis, the IHS calculates the "full" contract support cost needs of each tribal contractor using a variety of information. (Department of Health and Human Services Indian Self-Determination Memorandum No. 92-2 entitled "Contract Support Cost Policy" at 5-9 attached to Plaintiffs' Motions for Summary Judgment as Exhibit "4"). The IHS issues a shortfall report which reflects the deficiency in contract support costs. In this shortfall report, the IHS summarizes each tribes "full" contract support cost needs from the prior year, how much IHS paid against the need, and the resulting shortfall, if any. (Declaration of Carl L. Fitzpatrick attached to Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment as Exhibit "E").
IHS finances Self-Determination Contracts and Compacts under the ISDA, as well as all of its direct health service programs, through funds derived from an annual lump-sum appropriation from Congress designated for "Indian Health Services." IHS' total appropriations from Congress in fiscal years 1996 and 1997 was $1,747,842,000 and $1,806,269,000 respectively. (Omnibus Consolidated Appropriations Act, 1997, Pub.L. No. 104-208, 110 Stat. 3009, 3009-212 (1997) attached to Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment as Exhibit "C", Omnibus Consolidated Appropriations Act, 1996, Pub.L. No. 104-134, 110 Stat. 1321, 1321-189 (1996) attached to Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment as Exhibit "B" and Declaration of Carl L. Fitzpatrick attached to Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment as Exhibit "E"). Most of IHS' annual appropriations are distributed to area offices for the payment of recurring costs. (Declaration of Carl L. Fitzpatrick attached to Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment as Exhibit "E"). Recurring costs occur automatically from year to year and must be funded without reduction. In fiscal years 1996 and 1997 respectively, IHS allocated $1,313,990,083 and $1,368,893,059 in recurring costs to area offices. (Declaration of Carl L. Fitzpatrick attached to Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment as Exhibit "E").
The remainder of the total annual lump-sum appropriated to IHS is retained each year by headquarters for activities that it manages. All of the money reserved for fiscal years 1996 and 1997 was spent, leaving a zero balance at the end of those fiscal years. (Declaration of Carl L. Fitzpatrick attached to Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment as Exhibit "E").
For fiscal years 1996 and 1997, Congress earmarked in appropriation committee reports, $153,040,000 in 1996 and $160,660,000 in 1997, to be spent on existing contract support costs. These contract support funds were allocated to the area offices for tribal Contracts and Compacts for fiscal years 1996 and 1997. Any diversion of funds for additional contract support costs would have required the IHS to use money otherwise dedicated for other purposes. (Declaration of Carl L. Fitzpatrick attached to Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment as Exhibit "E"). To fully pay the contract support costs as requested by plaintiffs would cause a reduction in funding which could severely cripple or even eradicate many health programs serving other tribes or individual Indians. (Declaration of Carl L. Fitzpatrick attached to Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment as Exhibit "E").
The defendants allege that they failed to pay the plaintiffs the full amount of contract support costs they were requesting because plaintiffs were not the proper recipients based on the queue list system. (Declaration of Carl L. Fitzpatrick attached to Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment as Exhibit "E"). The funds allocated to the IHS for the execution of self-determination contracts were consistently insufficient to meet the obligation. The queue list system was developed to address the shortfall IHS was encountering with payment of contract support costs. IHS determined that it would place all requests on a queue list or priority list, based on the date of receipt of the request. Approved requests for contract support costs would be 100% funded on a first-come, first-serve basis. Once these funds were exhausted, tribes awaiting new contract support cost funding would be provided new funds in the order they made their request when additional appropriations were available. In the year a tribe reached the top of the queue, it would be paid its new contract support costs for that year and would continue to be paid at least that amount of contract support costs for the newly funded program every year thereafter. This procedure has been used since 1992 for self-determination contracts and was subsequently applied to...
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