Fort Belknap Hous. Dep't v. Office of Pub. & Indian Housing

• Decision Date: 08 August 2013
• Docket Number: No. 12–70221.,12–70221.
• Citation: 726 F.3d 1099
• Parties: FORT BELKNAP HOUSING DEPARTMENT; Fort Belknap Indian Community Council; Fort Belknap Indian Community, Petitioners, v. OFFICE OF PUBLIC AND INDIAN HOUSING; U.S. Department of Housing and Urban Development; United States of America, Respondents.
• Court: U.S. Court of Appeals — Ninth Circuit

726 F.3d 1099

FORT BELKNAP HOUSING DEPARTMENT; Fort Belknap Indian Community Council; Fort Belknap Indian Community, Petitioners,

v.OFFICE OF PUBLIC AND INDIAN HOUSING; U.S. Department of Housing and Urban Development; United States of America, Respondents.

No. 12–70221.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 7, 2013.

Filed Aug. 8, 2013.

James L. Vogel (argued), Hardin, Montana, for Petitioners.

Stuart F. Delery (argued), Acting Assistant Attorney General, Michael S. Raab, and Jonathan H. Levy, Attorneys, Civil Division, United States Department of Justice, Washington, D.C., for Respondents.

On Petition for Review of an Order of the Department of Housing and Urban Development.

Before: A. WALLACE TASHIMA, RICHARD R. CLIFTON, and CARLOS T. BEA, Circuit Judges.

OPINION

BEA, Circuit Judge:

Overview

This case involves a federal rent-subsidy program for Indian Tribes and Tribally Designated Housing Entities (“TDHE”) that lease housing to Indians. The program provides per-unit payments while the Tribe or TDHE is leasing housing units to Indians, with a view that each unit eventually be conveyed to the Indian lessees. When the Tribe or TDHE conveys a unit, or a unit becomes eligible to be conveyed, unless such a conveyance is impractical, the Tribe should no longer receive rent subsidy money for the unit.

What happened here? The Fort Belknap Housing Department (“Fort Belknap”), a TDHE which received funds through the program, claimed and received rent subsidy payments for units that were no longer leased, but had been conveyed, and for units that were eligible to be conveyed. There were no circumstances which made the conveyance of such units impractical. After investigation, the Department of Housing and Urban Development (“HUD”) demanded the return of the overpayments it had made.

Fort Belknap petitions this court for review of HUD's decision to withhold the amount of overpayments from future program payments. Fort Belknap argues this court has jurisdiction pursuant to 25 U.S.C. § 4161(d). On the merits, it claims HUD's actions in procuring repayment of the overpayments were “arbitrary and capricious” and based on a misinterpretation of various regulations. Section 4161(d), however, allows an appeal only when HUD takes action pursuant to § 4161(a). Because HUD has taken no action pursuant to § 4161(a), we lack jurisdiction to entertain this appeal and dismiss Fort Belknap's petition without reaching the merits.

I. Facts

A. Statutory and Regulatory Framework

Fort Belknap operates as a TDHE in Harlem, Montana, for the Gros Ventre and Assiniboine Tribes of the Fort Belknap Indian Reservation. Fort Belknap is eligible to receive funds under the Native American Housing Assistance and Self Determination Act of 1996 (“NAHASDA” or “the Act”), 25 U.S.C. §§ 4101–4212. The Act created the Indian Housing Block Grant Program (“IHBG Program”), the current mechanism for disbursing funds to eligible beneficiaries. The Secretary of HUD ¹ carries out NAHASDA's provisions, see id. § 4102, and allocates the funds Congress appropriates to implement the Act, see id. § 4152.

The IHBG Program utilizes a formula “to allocate equitably and fairly funds made available through NAHASDA among eligible Indian tribes.” 24 C.F.R. § 1000.301, subpart D.² This formula consists of two parts: “(a) Formula Current Assisted Housing Stock (‘FCAS'); and (b) Need.” 24 C.F.R. § 1000.310. The FCAS component, which is at issue in this case, reflects the number of low-income housing units owned or operated by the Tribe/TDHE, multiplied by a fixed subsidy amount. See24 C.F.R. § 1000.316. As relevant here, certain lease-to-own units (designated “Mutual Help” or “MH” units) are included in the FCAS calculation until (1) they have been conveyed by the Tribe/TDHE (i.e. transferred permanently to the lessees-turned-owners), or (2) they are eligible to be conveyed (i.e. have reached their “Date of Full Availability” (“DOFA”)), unless the Tribe/TDHE proves that, for reasons beyond its control, conveyance is impractical. See24 C.F.R. § 1000.318.

To ensure the accuracy of each year's FCAS calculation, HUD sends all eligible tribes/TDHEs a “Formula Response Form” and requires them to report any changes to their previously reported inventory of housing eligible for the IHBG Program. See24 C.F.R. § 1000.302 (defining “Formula Response Form”); id. § 1000.315(a) (“A recipient shall report changes to information related to the IHBG formula on the Formula Response Form, including corrections to the number of Formula Current Assisted Stock (FCAS), during the time period required by HUD.”). HUD uses the information gathered from these Formula Response Forms to calculate each tribe's/TDHE's grant allocation. See24 C.F.R. §§ 1000.312, 1000.314.

B. The 2001 Letter

On August 1, 2001, HUD sent Fort Belknap a letter (“the 2001 letter”) and stated that Fort Belknap “may have incorrectly received credit in ... 1998, 1999, 2000, and 2001 for 171 ... [MH] units under the [FCAS] ... component of the [IHBG] ... formula.” In the letter, HUD notified Fort Belknap that it “believe[d] [these 171 MH] Projects ha[d] been conveyed or were eligible for conveyance prior to October 1, 1997.” The letter stated that, if Fort Belknap received funds for ineligible units,³ HUD would recover those funds. It also invited Fort Belknap to “provide information regarding the status of [the disputed] units to show that they should be counted as FCAS.”

In response to the 2001 letter, Fort Belknap claimed several of the disputed units should remain in FCAS because they were occupied by “subsequent homebuyers” with new Mutual Help and Occupancy Agreements (“MHOA”) and different DOFAs than HUD had on record.⁴ HUD later agreed that these “units should be counted as FCAS, provided that the term of the MHOA has not expired and that the Tribe/TDHE continue[s] to operate, maintain and collect payments from the homebuyer for the units.” HUD stated that it would “continue to include units with subsequent homebuyers and/or DOFAs that continue to be within the 25–year term of the MHOA.”

However, HUD excluded those units for which Fort Belknap offered no explanation from the FCAS calculations for fiscal years 1998, 1999, 2000, and 2001 and found that Fort Belknap had been overpaid by $330,524 during that period. By November 26, 2002, HUD and Fort Belknap had agreed that this amount would be repaid in roughly equal amounts over a five-year period.⁵

C. The 2005 Letter

On March 2, 2005, HUD sent Fort Belknap a letter (“the 2005 letter”) very similar to the 2001 letter. Again, HUD challenged the eligibility for payment of designated units,⁶ again relying on 24 C.F.R. § 1000.318(a). This time, however, HUD asked for specific information with respect to the disputed units. In particular, HUD asked Fort Belknap to provide “(1) [t]he date each unit became conveyance eligible[, and] (2) [t]he date each unit conveyed.” It continued: “If units have not conveyed, please provide an explanation for the delay. If there are subsequent homebuyers, please provide a list of subsequent homebuyers, the date the new MHOA was signed and the term of the new MHOA.” HUD asked Fort Belknap to provide this information within 30 days. When Fort Belknap failed to respond within the initial 30–day period, HUD sent a follow-up letter and warned that it would assume Fort Belknap agreed it had been over-funded unless it received a response within a second 30–day period. When Fort Belknap again failed to respond, HUD sent a another letter, stated that it assumed Fort Belknap agreed with the substance of the 2005 letter, and subtracted $249,561 from Fort Belknap's 2006 allocation to recover the overpayment.

D. The 2007 Letter

On September 4, 2007, HUD sent Fort Belknap another letter (“the 2007 letter”) which again challenged the eligibility of designated MH units based on 24 C.F.R. § 1000.318(a).⁷ HUD asked for specific information with respect to these units (“the first inquiry”). HUD also stated that it had reviewed its files associated with the 2001 letter and realized it lacked certain information. In particular, for 93 of the MH units in 7 of the Projects ⁸ challenged in the 2001 letter, HUD requested (1) a list of subsequent homebuyers by unit number, (2) the date the new MHOA was signed, and (3) the term of the new MHOA (“the second inquiry”). HUD requested that Fort Belknap respond with respect to both inquiries within 30 days. When Fort Belknap failed to do so, HUD sent a follow-up letter, warned Fort Belknap that a failure to respond to the first inquiry would be taken as an agreement it had been over-funded, and reiterated the substance of the second inquiry for Projects challenged in the 2001 letter. Fort Belknap requested an extension, and when HUD granted Fort Belknap's request for an extension to respond to the first inquiry, it again repeated the substance of the second inquiry. Finally, when Fort Belknap failed to respond to the first inquiry before the deadline, HUD sent a fourth letter, stated its assumption that Fort Belknap agreed it had been overpaid in the amount of $310,330, proposed a repayment schedule, and repeated the substance of the second inquiry for a third time.

E. Final HUD Resolution

On September 30, 2010, Fort Belknap sent HUD information about its FCAS inventory. Specifically, the letter identified units in various Projects which had been paid off or conveyed. In addition to the seven Projects from the 2001 letter for which HUD had requested information in the 2007 letter, Fort Belknap included information on Projects MT10B010010 (challenged as part of the 2005 letter), MT10B010013 (challenged as part of the 2007 letter), and several Projects for which there was no previous challenge. The letter listed the DOFAs and conveyance dates for units in these Projects. Some of the information contradicted Fort Belknap's responses to the 2001 letter. Fort Belknap acknowledged that the...