Cook Inlet Tribal Council v. Mandregan

• Citation: 348 F.Supp.3d 1
• Decision Date: 07 November 2018
• Docket Number: Case No. 14-cv-1835 (EGS)
• Parties: COOK INLET TRIBAL COUNCIL, Plaintiff, v. Christopher MANDREGAN, Jr., et al., Defendants.
• Court: U.S. District Court — District of Columbia

348 F.Supp.3d 1

COOK INLET TRIBAL COUNCIL, Plaintiff,
v.
Christopher MANDREGAN, Jr., et al., Defendants.

Case No. 14-cv-1835 (EGS)

United States District Court, District of Columbia.

Signed November 7, 2018

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Lloyd B. Miller, Rebecca Ann Patterson, Pro Hac Vice, Sonosky, Chambers, Sachse, Miller & Monkman, LLP, Anchorage, AK, for Plaintiff.

Benton Gregory Peterson, U.S. Attorney's Office for the District of Columbia, Washington, DC, for Defendants.

MEMORANDUM OPINION

Emmet G. Sullivan, United States District Judge

I. Introduction

Over twenty-five years ago, the Cook Inlet Tribal Council ("CITC") and the Indian Health Service ("IHS") entered into a self-determination contract pursuant to the Indian Self-Determination and Education Assistance Act ("ISDEAA"). Under this contract, CITC has operated substance abuse programs serving Alaskan Native patients, while IHS provides federal funding to CITC, allowing CITC to administer federal programs and services that IHS would have otherwise provided. In 2014, CITC proposed a contract amendment for additional "contract support costs" funding to account for increased facility support costs, among other costs. IHS declined CITC's proposed amendment in part, stating that CITC receives payment for facility support costs as part of its annual "Secretarial" funding. CITC now appeals IHS' declination decision, bringing suit against Christopher Mandregan, Jr., Alaska Area Director of IHS; Alex Azar,¹ Secretary of the Department of Health and Human Services ("HHS"); and the United States of America. At issue is whether the ISDEAA clearly requires that CITC's facility support costs be funded exclusively from the Secretarial amount, or whether CITC's facility support costs may also be funded as contract support costs.

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Pending before the Court are the parties' cross-motions for summary judgment. Having carefully reviewed the motions and the entire record herein, the Court concludes that CITC's interpretation of the ISDEAA's ambiguous funding provision is reasonable. Therefore, the Court GRANTS IN PART CITC's motion for summary judgment and DENIES the defendants' cross-motion for summary judgment. However, rather than "immediately" compel IHS to approve and fund CITC's proposed contract amendment, the Court VACATES IHS' declination decision and REMANDS the matter to IHS for a determination consistent with this Memorandum Opinion.

II. Background

This case arises out of a dispute regarding the ISDEAA's funding provisions. The ISDEAA authorizes the government and Indian tribes to enter into self-determination contracts, pursuant to which tribes receive federal funding to provide certain services that a federal agency would normally provide. See 25 U.S.C. §§ 5301, et. seq.² The ISDEAA was designed–in recognition of the country's "obligation" "to respond to the strong expression of the Indian people for self-determination"–to "permit an orderly transition from the Federal domination of programs for, and services to, Indians to effective and meaningful participation by the Indian people in the planning, conduct, and administration of those programs and services." Id. § 5302(a), (b). Consistent with these aims, the ISDEAA "direct[s]" the government to enter into and negotiate self-determination contracts with Indian tribes upon tribal request. Id. § 5321(a)(1). "Under a self-determination contract, the federal government supplies funding to a tribal organization, allowing [the tribe] to plan, conduct and administer a program or service that the federal government otherwise would have provided directly." Rancheria v. Hargan , 296 F.Supp.3d 256, 260 (D.D.C. 2017) (quoting FGS Constructors, Inc. v. Carlow , 64 F.3d 1230, 1234 (8th Cir. 1995) ) (quotation marks omitted).

CITC challenges IHS' decision to decline CITC's proposed contract amendment in part ("declination decision"). See Compl., ECF No. 1. IHS is an agency within HHS that provides primary health care for American Indians and Alaskan Natives throughout the United States. Defs.' MSJ, ECF No. 15 at 8.³ IHS provides health care by several means, including directly through its own facilities or by contracting with tribes and tribal organizations pursuant to the ISDEAA. Id. at 8-9.

CITC is a "private, non-profit corporation that delivers social, education, employment, training, alcohol treatment, child care, housing assistance, energy assistance and planning services to the Alaska Native people of the Cook Inlet Region." A.R.,⁴ ECF No. 17-1 at 3. The services it provides to Native Alaskans are funded by the federal government and the state of Alaska. Id. CITC operates under the authority

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of its Board of Directors, which is made up of representatives from eight federally-recognized tribes: (1) the Chickaloon Village Traditional Council; (2) the Native Village of Eklutna; (3) the Kenaitze Indian Tribe; (4) the Knik Tribal Council; (5) the Ninilchik Traditional Council; (6) the Salamatof Tribal Council; (7) the Seldovia Village Tribe; (8) and the Native Village of Tyonek. See id. ; Pl.'s Stmt., ECF No. 13-2 ¶ 1.

CITC has been a "tribal contractor" under the ISDEAA since 1992, Defs.' Stmt., ECF No. 15-1 ¶¶ 1, 2, when it submitted a proposal to IHS to enter into a self-determination contract to provide residential treatment and recovery services at the Alaska Native Alcohol Recovery Center, see A.R., ECF No. 17-2; Pl.'s Stmt., ECF No. 13-2 ¶ 2. IHS accepted the proposal. Pl.'s Stmt., ECF No. 13-2 ¶ 3. In the first year of the self-determination contract, CITC was provided approximately $150,000 in Secretarial funding, which included $11,838.50 for facility-related costs. Id. ¶¶ 3, 4; see also A.R., ECF No. 17-2. Since then, CITC's programs have "expanded substantially ... with most funding coming from increases in congressional appropriations." Pl.'s Stmt., ECF No. 13-2 ¶ 5. Accordingly, its funding increased from about $150,000 in 1992 to approximately $2,000,000 in 2014, including the $11,838.50 IHS has paid annually for facility support costs since 1992. See A.R., ECF No. 11-1 at 2 ($1,943,226 as of April 2014); Pl.'s Stmt, ECF No. 13-2 ¶ 6 ($2,518,559).

By 2013, CITC's facility support costs grew to $479,040, including the $11,838.50 IHS has paid annually since 1992. Pl.'s Stmt, ECF No. 13-2 ¶ 8. On April 11, 2014, CITC requested to amend of its 2014 self-determination contract to add $479,040 in "direct contract support costs associated with facility support." A.R., ECF No. 17-3. In its proposal, CITC argued that its request should be approved because facility support funds are "reasonable costs for activities which must be carried on by CITC as a contractor" pursuant to the ISDEAA. Id. (citing 25 U.S.C. § 5325(a)(2) ). On July 7, 2014, IHS denied CITC's proposal based on one of the five declination options permissible under the ISDEAA: the amount CITC requested was "in excess of the applicable funding level for the contract." A.R., ECF No. 11-1 at 2-3 (citing 25 U.S.C. § 5321(a)(2)(D) ).⁵ In its declination letter, IHS explained that facility support costs were already included as part of CITC's "program base," or the "Secretarial amount." Id. The Secretarial amount is the funding that "IHS would have spent for costs associated with its programs" had it run the program itself. Id. (citing 25 U.S.C. § 5325(a)(1) ). According to IHS, paying the requested $479,040 in "direct contract support costs" would cause it to pay CITC for facility support costs twice, in violation of the ISDEAA. See id. (citing 25 U.S.C. § 5325(a)(3)(A) (contract support costs funding "shall not duplicate any funding" otherwise provided) ).

CITC appealed this declination decision by filing a complaint on October 31, 2014. Compl., ECF No. 1. The parties filed cross-motions for summary judgment in 2015, which the Court denied without prejudice while the parties engaged in settlement negotiations. See Jan. 4, 2016 Minute Order. After the negotiations failed, the Court granted the parties' motions to reinstate the cross-motions for summary judgment. See June 8, 2016 Minute Order.

III. Standard of Review

Pursuant to Federal Rule of Civil Procedure 56, summary judgment should be

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granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; Waterhouse v. District of Columbia , 298 F.3d 989, 991 (D.C. Cir. 2002). CITC's claim arises under the ISDEAA, not the Administrative Procedure Act. As such, the Court's review of IHS' declination decision is de novo. Pyramid Lake Paiute Tribe v. Burwell , 70 F.Supp.3d 534, 542 (D.D.C. 2014) ; see also Defs.' MSJ, ECF No. 15 (not disputing that the Court's review is de novo ).

When a tribe appeals a government agency's declination decision under the ISDEAA, as here, the burden of proof rests with the government: "the Secretary shall have the burden of proof to establish by clearly demonstrating the validity of the grounds for declining the contract proposal (or portion thereof)." 25 U.S.C. § 5321(e)(1). Therefore, IHS must "clearly demonstrate" and make a...