Lummi Tribe of the Lummi Reservation v. United States

• Decision Date: 12 September 2017
• Docket Number: 2016-2196.
• Citation: 870 F.3d 1313
• Parties: LUMMI TRIBE OF THE LUMMI RESERVATION, WASHINGTON, Lummi Nation Housing Authority, Hopi Tribal Housing Authority, Fort Berthold Housing Authority, Plaintiffs-Appellees Fort Peck Housing Authority, Plaintiff v. UNITED STATES, Defendant-Appellant
• Court: U.S. Court of Appeals — Federal Circuit

870 F.3d 1313

LUMMI TRIBE OF THE LUMMI RESERVATION, WASHINGTON, Lummi Nation Housing Authority, Hopi Tribal Housing Authority, Fort Berthold Housing Authority, Plaintiffs-AppelleesFort Peck Housing Authority, Plaintiff

v.UNITED STATES, Defendant-Appellant

2016-2196.

United States Court of Appeals, Federal Circuit.

Decided: September 12, 2017

John Fredericks , III, Fredericks Peebles & Morgan, LLP, Mandan, ND, argued for plaintiffs-appellees. Also represented by Jeffrey S. Rasmussen , Louisville, CO.

Steven J. Gillingham , Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellant. Also represented by David Alan Levitt, Robert E. Kirschman, Jr., Benjamin C. Mizer ; Gary Alan Nemec, David A. Sahli, Perrin Wright , United States Department of Housing and Urban Development, Washington, DC.

Before Prost, Chief Judge, O'Malley, and Chen, Circuit Judges.

O'Malley, Circuit Judge.

The government seeks review of a September 30, 2015 order of the Court of Federal Claims (the "Claims Court"). See Order, Lummi Tribe of the Lummi Reservation v. United States , No. 08-848C (Fed. Cl. Sept. 30, 2015), ECF No. 121. In that order, the Claims Court reaffirmed its prior ruling that the Native American Housing Assistance and Self-Determination Act of 1996 ("NAHASDA") is money mandating, giving the Claims Court jurisdiction over appellees' claims. Id. On June 9, 2016, this court granted the government's petition for interlocutory appeal to "ensure that the Court of Federal Claims is the court of proper jurisdiction before requiring it and the parties to undergo extensive unnecessary proceedings." Order at 3, Lummi Tribe of the Lummi Reservation v. United States , No. 2016-124 (Fed. Cir. June 9, 2016), ECF No. 1-2. For the following reasons, we vacate and instruct the Claims Court to dismiss this action for lack of subject-matter jurisdiction.

BACKGROUND

Congress enacted NAHASDA, 25 U.S.C. §§ 4101 – 4243, to fulfill the federal government's responsibility to Indian tribes and their members "to improve their housing conditions and socioeconomic status so that they are able to take greater responsibility for their own economic condition." Id. § 4101(4). In particular, NAHASDA established an annual block grant system, whereby Indian tribes receive direct funding in order to provide affordable housing to their members. The relevant sections of NAHASDA require HUD to make grants according to a regulatory formula based on several factors, including: (1) "[t]he number of low-income housing dwelling units ... owned or operated" by the tribes on NAHASDA's effective date; (2) the number of Indian families and extent of poverty and economic distress within a tribe's area; and (3) "[o]ther objectively measurable conditions as [HUD] and the Indian tribes may specify." Id. § 4152(b)(1)–(3).

The dwelling units described in factor (1) are called Formula Current Assisted Stock ("FCAS"). Each eligible dwelling unit in a tribe's FCAS is entitled to a sum certain amount of funding each year based upon a calculated operating subsidy and modernization allocation. HUD regulations establish which units initially count as FCAS in the formula, and when those units no longer qualify (e.g., when they have been or could have been conveyed to homebuyers). 24 C.F.R. §§ 1000.312, 1000.314, 1000.318. Once awarded these subsidies, grantee tribes are limited in how and when they may dispense the funds, which can be used only on statutorily specified activities in accordance with program requirements. See, e.g. , 25 U.S.C. § 4139 ; 2 C.F.R. § 200.313 – 314.

In the event of a grantee's failure to comply substantially with NAHASDA, HUD can recapture grant funds by: "(A) terminat[ing] payments under this [Act] to the recipient; (B) reduc[ing] payments [by the amount not expended in compliance with the Act]; (C) limit[ing] the availability of payments [to compliant activities]; or (D) ... provid[ing] a replacement tribally designated housing entity for the recipient." 25 U.S.C. § 4161(a)(1).

Appellees are an Indian tribe and three tribal housing entities (collectively, "the Tribes") who qualified for and received NAHASDA block grants. Lummi Tribe of the Lummi Reservation v. United States , 99 Fed.Cl. 584, 588 (2011) (" Lummi I "). In 2001, a HUD Inspector General report concluded that, since the enactment of NAHASDA, HUD had improperly allocated funds to the Tribes because the formula that HUD applied had included housing that did not qualify as FCAS. Id. HUD informed the Tribes of the amount overfunded, the regulations on which HUD based its decision, and the housing units that HUD found ineligible. Id. at 599. HUD also provided the Tribes with the opportunity to dispute HUD's findings regarding FCAS unit eligibility or appeal the determinations of overfunding. Id. Thereafter, HUD eliminated the ineligible units from the FCAS data and recouped the excess funding by deducting the amount overfunded from subsequent grant allocations—$863,236 from Lummi, $249,689 from Fort Berthold, and $964,699 from Hopi. Lummi Tribe of the Lummi Reservation v. United States , 106 Fed.Cl. 623, 625 (2011) (" Lummi II ").

The Tribes brought suit in the Claims Court under the Tucker Act and the Indian Tucker Act, 28 U.S.C. §§ 1491(a)(1) and 1505, respectively, alleging that HUD improperly deprived them of grant funds to which they were entitled. In relevant part, the Tribes alleged that: (1) HUD misapplied the NAHASDA formula by inappropriately removing housing units from the FCAS data, which led to decreased grant amounts; and (2) HUD was obligated by 25 U.S.C. § 4165 to provide the Tribes with a hearing during which they could respond to the HUD report, but HUD failed to do so. Lummi I , 99 Fed.Cl. at 591 ; see generally 25 U.S.C. § 4165 ("The Secretary shall provide each recipient that is the subject of a report made by the Secretary.... notice that the recipient may review and comment on the report during a period of not less than 30 days....").

The government moved to dismiss the claims for lack of jurisdiction, arguing in particular that NAHASDA's provision for block grants is not money mandating. Lummi I , 99 Fed.Cl. at 591. The Claims Court disagreed, noting that NAHASDA provides that the Secretary "shall ... make grants" and "shall allocate any amounts" among Indian tribes that comply with certain requirements. Id. at 594. The Claims Court concluded that "the Secretary is thus bound by the statute to pay a qualifying tribe the amount to which it is entitled under the formula," meaning that the statute "can fairly be interpreted as mandating the payment of compensation by the government." Id. (citing Greenlee Cty. v. United States , 487 F.3d 871, 877 (Fed. Cir. 2007) ).

Initially, the Claims Court dismissed the Tribes' procedural claims, finding that HUD had provided "full notice of the government's claims along with a meaningful opportunity to respond." Id. at 599. The Tribes moved for reconsideration on this point and, on September 29, 2011, the Claims Court vacated its decision. Lummi Tribe II , 106 Fed.Cl. 623, 624 n.1. The Tribes amended their complaint, re-alleged that HUD had violated the procedural requirements of NAHASDA, and argued for the first time that those violations rendered the change in grant funds an illegal exaction. Id. at 625.

The government thereafter filed another motion to dismiss, arguing that HUD had complied with all relevant NAHASDA provisions. Id. at 623–24. The Claims Court disagreed, holding that "[p]roviding [the Tribes] with the opportunity for a hearing in this case before adjusting their grant amounts was ... something HUD was required—but failed—to do." Id. at 633. The issue of whether HUD, on the merits, had properly determined the Tribes' FCAS units when applying NAHASDA formulae was reserved for trial. See Lummi Tribe of the Lummi Reservation v. United States , 112 Fed.Cl. 353, 355 n.2 (2013) (" Lummi III ").

The case was then transferred to Senior Judge Bruggink, who ordered supplemental briefing to address a number of questions, including whether NAHASDA is money mandating and whether NAHASDA's status as such affected the illegal exaction claim. See Order, Lummi , No. 08-848C (Fed. Cl. Sept. 30, 2015), ECF No. 121. The Claims Court reaffirmed its holding that NAHASDA is money mandating, but held that "the failure to give a hearing under § 4165 does not, on its own, support an illegal exaction claim." Id. at 5. The court explained that "the substantive provisions of NAHASDA [are money mandating], not its procedural elements," and "nothing in the statutory framework ... suggests that the remedy for failure to afford procedural rights is, without further proof of entitlement, the payment of money." Id.

Because the Claims Court's finding that NAHASDA itself is money mandating was therefore dispositive on the issue of jurisdiction, the government sought and obtained certification for interlocutory appeal. The Tribes, meanwhile, sought reconsideration of the Claims Court's illegal exaction holding, which the Claims Court denied. Order, Lummi , No. 08-848C (Fed. Cl. Apr. 20, 2016), ECF No. 138; Order, Lummi , No. 2016-124 (Fed. Cir. June 9, 2016), ECF No. 1-2.

STANDARD OF REVIEW

"Subject matter jurisdiction is a question of law that we review de novo." Litecubes, LLC v. N. Light Prods. , 523 F.3d 1353, 1360 (Fed. Cir. 2008). In particular, we "review[ ] without deference the trial court's statutory interpretation." Samish Indian Nation v. United States , 419 F.3d 1355, 1364 (Fed. Cir. 2005). The "plaintiff bears the burden of establishing subject-matter jurisdiction by a preponderance of the evidence." Hopi Tribe v. United States , 782 F.3d 662, 666 (Fed. Cir. 2015).

DISCUSSION

The Tucker Act itself does not create a substantive cause of action; in order to come within the jurisdictional reach and the waiver of sovereign immunity in the Tucker Act, a plaintiff must identify a separate...