Lummi Tribe of the Lummi Reservation v. United States, No. 08-848C

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtJohn P. Wiese
Decision Date04 August 2011
Docket NumberNo. 08-848C

AUTHORITY, Plaintiffs,

No. 08-848C

United States Court of Federal Claims

Filed: August 4, 2011

Claims for recovery of grant funds under the Native American Housing
Assistance and Self-Determination Act, 25 U.S.C. §§ 4101-4212:
(1) effect of pendency of claims in another court under 28 U.S.C. § 1500;
(2) jurisdiction of the Court of Federal Claims under a money-mandating source of law;
(3) authority to declare a regulation invalid;
(4) application of 25 U.S.C. § 4161;
(5) application of the Anti-Deficiency Act, 31 U.S.C. § 1341;
(6) operation of the statute of limitations under 28 U.S.C. § 2501.

John Fredericks, III, Fredericks Peebles & Morgan LLP, Mandan, ND, counsel for plaintiffs.

Michael N. O'Connell, with whom were Assistant Attorney General Tony West, Director Jeanne E. Davidson, and Assistant Director Donald E. Kinner, U.S. Department of Justice, Civil Division, Commercial Litigation Branch, Washington, DC, counsel for defendant.


WIESE, Judge.

This action is one of a dozen or more law suits currently pending before both this court and the United States District Court for the District of Colorado brought by various Indian tribes and tribal housing authorities to challenge actions by the United States Department of Housing and Urban Development ("HUD") in calculating and seeking the repayment of grant funds paid to the tribes pursuant to the Native American Housing Assistance and Self-Determination Act of 1996 ("NAHASDA"), as amended, 25 U.S.C. §§ 4101-4212 (2006). In particular,

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plaintiffs in this case contend that HUD improperly determined that certain of plaintiffs' housing units could not be included in their grant calculations, thereby depriving plaintiffs of funding to which they allegedly were entitled both under the payment mandates of NAHASDA and under their annual funding agreements.

Defendant has moved to dismiss the complaint for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. The parties have fully briefed the issues and the court heard oral argument on May 19, 2011.1 For the reasons set forth below, defendant's motion to dismiss is granted in part and denied in part.


Since the late 1930s, the United States has provided housing assistance to Indian tribes and their members through the United States Housing Act of 1937, 42 U.S.C. §§ 1437-1437x (1994), a statute authorizing various housing programs on Indian lands to meet the home-ownership needs of low-income Indian families. In 1996, however, Congress enacted NAHASDA in an effort to consolidate low-income housing assistance for the tribes and to simplify the distribution of funds. Beginning on September 30, 1997, NAHASDA terminated the Indian housing assistance established under the 1937 Housing Act and provided in its place a system of annual block grants. 25 U.S.C. §§ 4181, 4182. The program anticipated that Congress would make an annual appropriation of grant funds, which the Secretary of HUD, acting through HUD's Office of Native American Programs, was in turn directed to divide among qualifying tribes and tribal housing authorities based on yearly housing plans submitted by the tribes. 25 U.S.C. § 4111. Funds not disbursed in the year they were appropriated were to be rolled over for distribution in the following year.

Pursuant to NAHASDA, HUD was charged with establishing a grant-allocation formula through the agency's negotiated rule-making procedure. 25 U.S.C. §§ 4151, 4152, 4116. Congress specified, however, that the allocation formula should reflect the needs of the Indian tribes, including: "(1) The number of low-income housing dwelling units owned or operated at the time pursuant to a contract between an Indian housing authority for the tribe and the Secretary. (2) The extent of poverty and economic distress and the number of Indian families within Indian areas of the tribe. (3) Other objectively measurable conditions as the Secretary and the Indian tribes may specify." 25 U.S.C. § 4152(b).

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Pursuant to this statutory directive, a committee made up of HUD employees and representatives from 48 Indian tribes developed guidelines for implementing NAHASDA. See "Implementation of the Native American Housing Assistance and Self-Determination Act of 1996; Final Rule," 63 Fed. Reg. 12,334 (Mar. 12, 1998). The resulting regulations, found at 24 C.F.R. §§ 1000.301-1000.340, identified two components for calculating the grant amount each tribe would receive. The first component, referred to as Formula Current Assisted Stock ("FCAS"), measured the inventory of rental units and lease-to-own units owned by each tribe as of September 30, 1997 (the effective date of NAHASDA).2 Grant funds not distributed under this first component were then allocated on the basis of the second component: the tribe's need.3 As a result, the greater the number of FCAS units reported, the fewer the funds that would be distributed based on need.

Plaintiffs received NAHASDA housing grants annually from 1998 through 2009. In 2001, however, HUD's Office of Inspector General ("OIG") performed a nationwide audit of the NAHASDA program. The OIG audit report concluded that the program's funds had not been properly allocated in previous years because the grant allocations were based on "housing units that do not qualify as FCAS." Fort Peck Housing Auth. v. United States Dep't of Housing and Urban Dev., 435 F. Supp. 2d 1125, 1130 (D. Colo. 2006) (Fort Peck I). In particular, the report criticized HUD for failing to enforce 24 C.F.R. § 1000.318, a regulation specifying that housing units would no longer be considered FCAS "when the Indian tribe . . . no longer has the legal right to own, operate, or maintain the unit" so long as such units are conveyed "as soon as practicable after a unit becomes eligible for conveyance."4 As the OIG

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explained in its report, "[s]ince Mutual Help and Turnkey III programs generally do not exceed 25-years, one can reasonably expect that some of these units should be paid-off, and the Housing Entities would no longer have the legal right to own, operate, or maintain these units." Id. The OIG recommended that HUD's Office of Native American Programs "audit all Housing Entities' FCAS, remove ineligible units from FCAS, recover funding from Housing Entities that had inflated FCAS and reallocate the recovery to recipients that were under funded" and "institute control procedures to insure FCAS accuracy for future years." Id.

Consistent with the OIG's conclusions, HUD notified various tribes and tribal housing authorities of its intention to recapture overpaid grant funds. By letter dated September 14, 2000, for instance, HUD informed the Lummi Tribe that the tribe had "incorrectly received credit in Fiscal Years (FY) 1998, 1999, and 2000" for Mutual Help units under the FCAS component of the grant formula and had consequently been given $1,279,748 more in grant funds than it should have received. The letter indicated that HUD would account for the overfunding by adjusting the tribe's fiscal year 2001 grant. A second letter from HUD to the Lummi Tribe, dated June 21, 2001, confirmed that the tribe and the agency had reached an agreement requiring the Lummi Tribe to return $1,279,748 in overpaid grant funds.

Fort Peck Housing Authority received a similar letter from HUD on September 21, 2001, indicating that the housing authority may have received overfunding for fiscal years 1998 through 2001. The letter informed Fort Peck that

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HUD would "need to recover these funds if it is determined that the Fort Peck Assiniboine and Sioux Tribe received funding for ineligible units in past years." Following the receipt of additional information from Fort Peck, HUD notified the housing authority on December 20, 2001, that it had received $1,298,354 in overfunding for fiscal years 1998 through 2000. In a second letter dated May 30, 2002, HUD further informed Fort Peck that the housing authority owed an additional $468,922. The record indicates that by July 1, 2002, Fort Peck had repaid $513,354 of that amount.5

On January 6, 2005, Fort Peck filed an action in the United States District Court for the District of Colorado pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq Fort Peck I, 435 F. Supp. 2d 1125. Fort Peck sought a declaration that HUD had acted unlawfully in reducing the FCAS component of its grant funding for the years 1999 through 2002 and an injunction prohibiting HUD from recovering those grant amounts. In a decision dated May 25, 2006, the district court found in Fort Peck's favor and ruled that the regulation setting out the allocation formula, 24 C.F.R. § 1000.318, conflicted with the plain language of NAHASDA. Id. at 1135. In particular, the court observed that the statute required HUD to include in the allocation formula "[t]he number of low-income housing dwelling units owned or operated" by a tribe as of September 30, 1997, creating what the court described as a baseline, or floor, for funding at the level of 1997 housing units. That mandate, in the court's view, was not incorporated into section 1000.318, thus rendering the regulation invalid. Id. at 1132. The court thus ordered that all applicable units owned by...

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