Fort Defiance Indian Hosp. Bd., Inc. v. Becerra
| Decision Date | 26 May 2022 |
| Docket Number | CIV 22-0098 JB/CG |
| Citation | 604 F.Supp.3d 1187 |
| Parties | FORT DEFIANCE INDIAN HOSPITAL BOARD, INC., Plaintiff, v. Xavier BECERRA; Roselyn Tso; Elizabeth Fowler; Marquis Yazzie; Navajo Area Indian Health Service and the United States of America, Defendants. |
| Court | U.S. District Court — District of New Mexico |
David C. Mielke, Sonosky, Chambers, Sachse, Miller & Brownell, LLP, Albuquerque, New Mexico -- and -- Lloyd B. Miller, Rebecca Ann Patterson, Sonosky, Chambers, Sachse, Miller & Monkman, LLP, Anchorage, Alaska -- and -- Steven C. Boos, Law Office of Steven Boos, LLC, Bayfield, Colorado, Attorneys for the Plaintiff.
Fred J. Federici, United States Attorney, Kimberly N. Bell, Assistant United States Attorney, United States Attorney's Office, Albuquerque, New Mexico, Attorneys for the Defendants.
James O. Browning, UNITED STATES DISTRICT JUDGE THIS MATTER comes before the Court on Plaintiff Fort Defiance Indian Hospital Board, Inc.’s Motion for Immediate Injunctive Relief or in the Alternative a Preliminary Injunction with Supporting Memorandum, filed April 1, 2022 (Doc. 29)("PI Motion"). The Court held a hearing on April 26, 2022. See Clerk's Minutes, filed April 26, 2022 (Doc. 47). The primary issues are: (i) whether the Court should award immediate injunctive relief to Plaintiff Fort Defiance Indian Hospital Board, Inc. under 25 U.S.C. § 5331(a) and require Defendants Xavier Becerra, Roselyn Tso, Elizabeth Fowler, Marquis Yazzie, Navajo Area Indian Health Service ("IHS"), and the United States of America to fund fully Fort Defiance in compliance with the parties' renewal contract; (ii) whether the Court should award a preliminary injunction ("PI") to Fort Defiance and require the Defendants to fund fully Fort Defiance in compliance with the parties' renewal contract; and (iii) whether the Court should impose a bond on Fort Defiance. The Court concludes that: (i) Fort Defiance is not currently entitled to a permanent injunction under 25 U.S.C. § 5331 ; (ii) Fort Defiance is entitled to a PI requiring the United States to fund fully Fort Defiance in compliance with the parties' renewal contract; and (iii) Fort Defiance does not need to secure a bond. Accordingly, the Court will grant the Motion in part and deny the Motion in part.
The Court must make findings of fact to order a PI. See Herrera v. Santa Fe Pub. Sch., 792 F. Supp. 2d 1174, 1179 (D.N.M. 2011) (Browning, J.). " ‘[T]he findings of fact and conclusions of law made by a court granting a preliminary injunction are not binding at trial on the merits.’ " Herrera v. Santa Fe Pub. Sch., 792 F. Supp. 2d at 1179 (quoting Attorney Gen. of Okla. v. Tyson Foods, Inc., 565 F.3d 769, 776 (10th Cir. 2009) )(alteration in Herrera v. Santa Fe Public Schools only). See Univ. of Tex. v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981) (); Firebird Structures, LCC v. United Bhd. of Carpenters and Joiners of Am., Local Union No. 1505, 252 F. Supp. 3d 1132, 1140 (D.N.M. 2017) (Browning, J.). The United States Court of Appeals for the Tenth Circuit notes that "when a district court holds a hearing on a motion for preliminary injunction it is not conducting a trial on the merits." Heideman v. S. Salt Lake City, 348 F.3d 1182, 1188 (10th Cir. 2003). Moreover, "[t]he Federal Rules of Evidence do not apply to preliminary injunction hearings." Heideman v. S. Salt Lake City, 348 F.3d at 1188. Accordingly, the Court makes these findings from the existing, limited record. These facts bind neither the Court nor the parties at trial.
1. This case arises from a dispute between Fort Defiance and the IHS over IHS' partial declination of a renewal contract that Fort Defiance has with IHS under the Indian Self-Determination and Educational Assistance Act, 25 U.S.C. §§ 5301 - 5423 ("ISDEAA"). First Amended Complaint ¶¶ 1-2, at 1-2, filed March 31, 2022 (Doc. 27)("Complaint").1
2. Fort Defiance is a "tribally chartered, 501(c)(3) nonprofit healthcare organization that owns and operates a hospital campus in Fort Defiance, Arizona, on the Arizona/New Mexico border, and a health clinic in Sanders, Arizona." Complaint ¶ 6, at 2, filed February 11, 2022 (Doc. 1)("Original Complaint").
3. Fort Defiance serves approximately 47,000 people, "most of whom are members of the Navajo Nation and reside within the 16 Navajo communities in the Fort Defiance service area," which is formerly known as the Fort Defiance Service Unit. Original Complaint ¶ 6, at 3.
4. The Navajo Nation is a federally recognized Indian Tribe and has designated Fort Defiance as a "tribal organization," under 25 U.S.C. § 5304(l) for purposes of contracting with IHS under the ISDEAA. Original Complaint ¶ 6, at 3.
5. "Since 2010, FDIHB has provided healthcare services to members of the Navajo Nation pursuant to a contract with IHS under Title I" of the ISDEAA. Original Complaint ¶ 6, at 3.
6. Becerra is the Secretary of the United States Department of Health and Human Services ("HHS"). Original Complaint ¶ 7, at 3.
7. Fowler is the Acting Deputy Secretary of the IHS. See Original Complaint ¶ 8 at 3.
8. Tso is the Area Director of the Navajo Area Indian Health Service ("NAIHS"), and lives in Albuquerque, New Mexico. Original Complaint ¶ 9, at 4.
9. Yazzie is the Agency Lead Negotiator and Director of the Office of Indian Self-Determination within the NAIHS, and lives in Gallup, New Mexico. See Original Complaint ¶ 10, at 4.
10. On August 3, 2009, the Intergovernmental Relationship Committee of the Navajo Nation Council "sanctioned and approved FDIHB as a tribal organization, empowered by" ISDEAA, and "recognized by the Internal Revenue Service as a 501(c)(3) non-profit organization." Complaint ¶ 24, at 9.
11. The Navajo Nation Council continues to support and approve Fort Defiance as a tribal organization "at all times since" Fort Defiance entered its first ISDEAA contract. Complaint ¶ 24, at 9.
12. Pursuant to its authority under the Navajo Nation Council and the ISDEAA, Fort Defiance entered a three-year contract with IHS to "manage and operate health services to eligible beneficiaries within the former IHS Fort Defiance Unit," to begin in 2010. Complaint ¶ 26, at 7.
13. Under the FY 2010 contract, IHS awarded Fort Defiance $6.8 million in indirect contract support costs and $1.2 million in direct contract support costs.2 See Transcript of Hearing at 8:6-13, taken April 26, 2022 ("Tr.")(Miller).3
14. For the FY 2010 contract, the parties "looked carefully at every item of indirect costs sought by the Fort Defiance Indian Health Board, and made a judgment about what was duplicated or not duplicated." Tr. at 8:15-18 (Miller).
15. Since 2010, Fort Defiance has continued to manage and operate health services for eligible beneficiaries under "successive three-year" ISDEAA contracts with IHS. Complaint ¶ 26, at 7.
16. For each successive ISDEAA contract, Fort Defiance "periodically submits contract renewal proposals to IHS," in accordance with IHS regulations "and standard practice," along with an Annual Funding Agreement ("AFA"), which specifies both parties' funding obligations for the first year of the proposed contract term. Complaint ¶ 27, at 8.
17. "Ideally, the funding agreement and the contracts are in place before each fiscal year begins." Tr. at 9:7-9 (Miller).
18. IHS' funding determination is "driven by a formula," but applying the formula from year to year "may lead to a slightly different amount," because, "[u]sually, the magnitude is unchanged, but the amounts change slightly." Tr. at 11:7-11 (Miller).
19. Each funding agreement is "done in a collaborative way," Tr. at 12:1 (Miller), because it "starts with what the tribal contractor believes is going to be its indirect costs, and what the agency believes," Tr. at 11:23-25 (Miller).
20. To determine the exact funding amount, the parties "look at the funding tables that are issued with the original funding agreement for the preceding years," including modifications that occur "from time to time." Tr. at 7:3-7 (Miller).
21. Not all of the funding fits into this model, because IHS adds money to the contract over the course of a year, although "some of these dollars ... cannot be awarded on day one of the next year" and "the tribal contractor must wait to get that money till later in the year." Tr. at 11:1-3 (Miller).
22. If the contract negotiations do not work out, one of two things can happen: (i) the parties extend the existing contract or funding agreement; or (ii) the negotiation happens later, "but the parties agree that the new agreement will be for a full 12 months." Tr. at 9:20-22 (Miller).
23. "The funding provided via the AFA includes both direct and indirect contract support costs." Declaration of Dr. Sandra Adkins ¶ 6, at 2, filed April 1, 2022 (Doc. 30)("Adkins Decl.").
24. After Fort Defiance submits a contract renewal proposal, IHS determines whether to approve or decline the contract renewal proposal. See Complaint ¶ 27, at 8.
25. "In addition to submitting an AFA with each contract renewal proposal, FDIHB and IHS jointly propose and develop AFAs annually during the term of an" ISDEAA contract. Complaint ¶ 28, at 8.
26. Once IHS and Fort Defiance finalize an AFA, "the AFA is signed by HIS" and IHS transmits to Fort Defiance. Complaint ¶ 28, at 8. 27. ISDEAA requires Tribal organizations that submit contract renewal proposals to estimate the "indirect contract support costs" that are associated with each proposal. Complaint ¶ 29, at 8.
28. IHS provides Tribal organizations two options to estimate indirect contract support costs: (i) the Tribal organization can start with the most recent indirect contract support cost ("IDC rate") agreement that the Tribal organization and its "cognizant agency" had negotiated...
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