Navajo Health Foundation-Sage Mem'l Hosp., Inc. v. Burwell, CIV 14–0958 JB/GBW.

• Decision Date: 17 June 2015
• Docket Number: No. CIV 14–0958 JB/GBW.,CIV 14–0958 JB/GBW.
• Parties: NAVAJO HEALTH FOUNDATION–SAGE MEMORIAL HOSPITAL, INC., Plaintiff, v. Sylvia Mathews BURWELL, Secretary of the United States Department of Health and Human Services; Robert McSwain, Acting Director of Indian Health Services; John Hubbard, Jr., Area Director, Navajo Area Indian Health Services ; and Frank Dayish, Contracting Officer, Navajo Area Indian Health Services, Defendants.
• Court: U.S. District Court — District of New Mexico

110 F.Supp.3d 1140

NAVAJO HEALTH FOUNDATION–SAGE MEMORIAL HOSPITAL, INC., Plaintiff,

v.Sylvia Mathews BURWELL, Secretary of the United States Department of Health and Human Services; Robert McSwain,¹ Acting Director of Indian Health Services; John Hubbard, Jr., Area Director, Navajo Area Indian Health Services ; and Frank Dayish, Contracting Officer, Navajo Area Indian Health Services, Defendants.

No. CIV 14–0958 JB/GBW.

United States District Court, D. New Mexico.

Filed June 17, 2015.

Paul E. Frye, Albuquerque, NM, for Plaintiff.

Paula R. Lee, Angela M. Belgrove, Office of the General Counsel, Region IX, United States Department of Health & Human Services, San Francisco, CA, Damon P. Martinez, United States Attorney Karen Grohman, Assistant United States Attorney, United States Attorney's Office, District of New Mexico Albuquerque, NM, for Defendants.

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on: (i) the Plaintiff's Motion for Summary Judgment on its Fourth Claim for Relief, with Memorandum of Supporting Points and Authorities, filed January 26, 2015 (Doc. 27)("MSJ"); (ii) the Motion to Vacate and Reschedule Hearing on Plaintiff's Motion for Summary Judgment, filed April 1, 2015 (Doc. 56)("Motion to Vacate"); and (iii) the Defendants' Motion for Leave to File Surreply, filed April 7, 2015 (Doc. 60) ("Motion to File Surreply"). The Court held a hearing on the Motion to Vacate and on the Motion to File Surreply on April 10, 2015, and a hearing on the MSJ on April 22, 2015. The primary issues are: (i) whether the Court should grant the Motion to File Surreply; (ii) whether the Court should grant the Motion to Vacate; (iii) whether to deem Plaintiff Navajo Health Foundation—Sage Memorial Hospital's Contract Disputes Act Claim for Unpaid Contract Support Costs² Due in FY 2009 through FY 2013 Under Indian Self–Determination and Education Assistance Act Contracts and Annual Funding Agreements, filed January 26, 2015 (Doc. 27–1)("Claim"), denied, because Defendant Frank Dayish has failed to provide a date certain by which he will decide the Claim; and (iv) whether, even if the Claim is not deemed denied, Dayish's proposed fourteen-month period to decide the Claim is reasonable under the Contract Disputes Act, 41 U.S.C. §§ 7101 –09 ("CDA"). The Court will grant the Motion to File Surreply, because Sage Hospital raises new arguments in the Reply to Defendants' Opposition to Plaintiff's Motion for Summary Judgment, filed March 19, 2015 (Doc. 53)("MSJ Reply"), to which Defendants Sylvia Matthews Burwell, Secretary of Health and Human Services ("HHS"), Robert McSwain, Acting Director of Indian Health Services, John Hubbard, Jr., Area Director of Navajo Area Indian Health Services, and Dayish (collectively, the "Defendants") should be allowed to respond. The Court will deny the Motion to Vacate, because vacating and continuing the April 22, 2015, hearing on the MSJ would prejudice Sage Hospital, and because the Defendants' sole reason for vacating and continuing the hearing—that Paula Lee, the Defendants' preferred attorney, will not be able to attend in person—ameliorated by allowing Ms. Lee to appear at the hearing via videoconference. Finally, the Court will grant the MSJ on two grounds. First, the Court will deem the Claim denied, because Dayish has not given Sage Hospital a "date certain" by which he will decide the Claim; rather, he conditioned his October 21, 2015, deadline upon Sage Hospital's cooperation. Second, even if Dayish had given Sage Hospital a date certain by which he will decide the Claim, his proposed fourteen-month period for deciding the Claim is unreasonably long under the CDA. Accordingly, even if the Court did not deem the Claim already denied, it would order Dayish to approve or deny the Claim by July 25, 2015.

FACTUAL BACKGROUND

"Sage is a health care facility in Ganado, Arizona, within the exterior boundaries of the Navajo Reservation." MSJ ¶ 1, at 2 (setting forth this fact). See Defendants' Opposition to Plaintiff's Motion for Summary Judgment ¶ 1, at 9, filed February 26, 2015 (Doc. 48) ("Response") (not disputing this fact); Declaration of Stenson Wauneka ¶ 3, at 1,³ filed December 22, 2014 (Doc. 17–1) ("Wauneka Decl."). "Sage is a Navajo tribal organization⁴ for the purpose[ ] of contracting with IHS under the [Indian Self–Determination Education Assistance Act]."⁵ MSJ ¶ 1, at 2 (setting forth this fact). See Response ¶ 1, at 9 (not disputing this fact); Wauneka Decl. ¶ 3, at 1. "IHS is an agency within the Department of Health and Human Services and is responsible for providing federal health services to American Indians and Alaska Natives." MSJ ¶ 2, at 2 (setting forth this fact). See Response ¶ 2, at 9 (not disputing this fact); About IHS, filed December 29, 2014 (Doc. 17–1).

"Since 2004, Sage has contracted with IHS under the ISDEAA to provide health services to a largely Navajo patient population." MSJ ¶ 3, at 2 (setting forth this fact). See Response ¶ 3, at 9 (not disputing this fact); Declaration of Christi El–Meligi ¶ 3, at 5, filed December 22, 2014 (Doc. 17–1) ("El–Meligi 1st Decl."). "Defendant [Frank] Dayish is the Contracting Officer [ ('CO') ] for the Navajo Area IHS." MSJ ¶ 4, at 3 (setting forth this fact). See Response ¶ 4, at 9 (not disputing this fact); Declaration of Christi El– Meligi ¶ 4, at 2, filed January 26, 2015 (Doc. 27–1) ("El–Meligi 2d Decl."). "Dayish is responsible for ISDEAA contracts and funding agreements for IHS programs, functions, services and activities undertaken by ISDEAA contractors within the Navajo Area of IHS, including Sage." MSJ ¶ 4, at 3 (setting forth this fact). See Response ¶ 4, at 9 (not disputing this fact); El–Meligi 2d Decl. ¶ 2, at 1. "Dayish has exercised the authority to sign ISDEAA contracts and funding agreements with Sage for such IHS programs and to award funds pursuant to those agreements." MSJ ¶ 4, at 3 (setting forth this fact). See Response ¶ 4, at 9 (not disputing this fact); El–Meligi 2d Decl. ¶ 2, at 1. "As Contracting Officer, Dayish has exercised the authority to decide initially disputes arising under ISDEAA contracts." MSJ ¶ 4, at 3 (setting forth this fact). See El–Meligi 2d Decl. ¶ 2, at 1.⁶

1. The IHS' Process for Resolving CSC Claims.

"Over 1,600 CSC CDA⁷ claims have been presented to IHS." Response at 13 (setting forth this fact).⁸ See Declaration of Susan Blair ¶ 4, at 3, filed February 26, 2015 (Doc. 48) ("Blair 1st Decl.").⁹

Upon receipt of a [CSC] claim, the IHS CO sends a letter acknowledging the claims, request[ing] additional documentation and explanation of the claims that are not available to IHS and are necessary to complete its analysis, and sets forth a date for responding to those claims.

Response ¶ 4, at 9 (setting forth this fact). See Blair 1st Decl. ¶ 13, at 5; id. ¶ 15, at 6; Declaration of Frank Dayish ¶¶ 17–19, at 4–5 (dated Feb. 26, 2015), filed February 26, 2015 (Doc. 48–1) ("Dayish Decl.").¹⁰ "Due to the complexity of the CSC claims, as well as IHS's goal to ensure consistency in the analysis of all claims, the claims are then analyzed by an IHS team that includes financial analysts and staff from the appropriate IHS Area Office, including the CO." Response ¶ 4, at 9 (setting forth this fact). See Blair 1st Decl. ¶ 13, at 5; Dayish Decl. ¶ 7, at 3.¹¹ "IHS hired an outside financial accounting firm, Cotton & Co., additional staff in its Office of Finance and Accounting (OFA), and new attorneys in the HHS Office of the General Counsel, to assist in handling the claims." Response at 13 (setting forth this fact). See Blair 1st Decl. ¶ 5, at 3.¹² "In addition, numerous staff in IHS's twelve Area Offices, thirty attorneys in the HHS Office of General Counsel, as well as numerous attorneys in the U.S. Attorney's Office, are assisting in tracking, evaluating, and resolving the CSC CDA claims." Response at 13 (setting forth this fact). See Blair 1st Decl. ¶¶ 6–7, at 3–4.¹³ "Extensive documentation is needed to evaluate the claims, and the analysis is complex." Response at 13 (setting forth this fact). See Blair 1st Decl. ¶¶ 13–15, at 5–6.¹⁴

"After IHS completes its analysis of the tribal contractor's claims, it notifies the tribal contractor of the results of the analysis or reaches out to the tribal contractor and typically its legal counsel and financial expert to discuss the claims." Response ¶ 4, at 9 (setting forth this fact). See Blair 1st Decl. ¶ 16, at 6–7.¹⁵ "The IHS's legal counsel, financial experts, and frequently IHS Area Office staff participate in these meetings." Response ¶ 4, at 9 (setting forth this fact). See Blair 1st Decl. ¶ 13, at 5–6; id. ¶ 16, at 6–7.¹⁶ "IHS is attempting to resolve the claims expeditiously and in cooperation with tribal contractors, without resorting to litigation." Response at 13 (setting forth this fact). See Blair 1st Decl. ¶¶ 8–10, at 4.¹⁷ "[I]nformation needed is not readily apparent from financial documents and, instead, requires in-depth conversations between the financial experts for both the tribe and IHS in order for the parties to reach an understanding." Response at 13 (setting forth this fact). See Blair 1st Decl. ¶¶ 14–16, at 6–7.¹⁸

Most of the time, IHS and the tribal contractor are able to reach an understanding about the eligible costs actually incurred by the tribal contractor but not paid by the IHS as CSC under the tribal contractor's ISDEAA contract and annual funding agreement, allowing the parties to quickly settle the claims at the next step of the CDA process.

Response ¶ 4, at 9–10 (setting forth this fact). See Blair 1st Decl. ¶ 16, at 6–7.¹⁹ "[I]t is the IHS's goal to work cooperatively with tribal contractors to exchange relevant documents and discuss the claims prior to issuing its final decision." Response ¶ 4, at 10 (setting forth this fact). See Blair 1st Decl. ¶ 17, at 7.²⁰ This process "is time consuming and resource intensive, and the time required to respond to each claim is...