Ramah Navajo School Bd., Inc. v. Babbitt
| Citation | 87 F.3d 1338 |
| Decision Date | 06 August 1996 |
| Docket Number | Nos. 95-5334,95-5348,s. 95-5334 |
| Parties | , 35 Fed.R.Serv.3d 306, 110 Ed. Law Rep. 924 RAMAH NAVAJO SCHOOL BOARD, INC., et al., Appellants, v. Bruce BABBITT, Secretary of the United States Department of the Interior and Ada E. Deer, Assistant Secretary for Indian Affairs, United States Department of the Interior, Appellees. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Lloyd B. Miller, Anchorage, AK, argued the cause, for appellants, with whom James E. Glaze, Anchorage, AK, Reid P. Chambers, Washington, DC, and Richard A. Poulin, Anchorage, AK, were on the briefs.
Joan M. Pepin, Attorney, United States Department of Justice, argued the cause, for appellees, with whom Lois J. Schiffer, Assistant Attorney General, and Edward J. Shawaker, Attorney, were on the brief.
Before: EDWARDS, Chief Judge, WALD and SILBERMAN, Circuit Judges.
Opinion for the Court filed by Circuit Judge WALD.
Plaintiffs Ramah Navajo School Board, Inc. ("Ramah") and the Puyallup Tribe of Indians ("Puyallup") have challenged a plan initiated by the Secretary of the Interior for disbursing fiscal year 1995 contract support funds appropriated by Congress for distribution to Native American Tribes as required by the Indian Self-Determination Act, 25 U.S.C. § 450 et seq. ("ISDA" or "Act"). The appellants moved to enjoin the Secretary from distributing the funds in accordance with the new plan, arguing that the allocation would violate the ISDA.
On September 27, 1995, the district court denied Ramah's motion for a preliminary injunction, Ramah Navajo Sch. Bd., Inc. v. Babbitt, No. 95cv1770 (D.D.C. Sept. 27, 1995) ("Ramah"), Joint Appendix ("J.A.") 12, and two days later it denied a nearly-identical motion filed by Puyallup, Puyallup Tribe of Indians v. Babbitt, No. 95cv1848 (Sept. 29, 1995) ("Puyallup"), J.A. 21. In ruling against the Tribes, the district court found that the Secretary's allocation decision, which had been published as a Notice in the Federal Register, was judicially unreviewable, and that the plaintiffs had therefore failed to demonstrate a likelihood of success on the merits. Ramah, at 3-5, J.A. 14-16; Puyallup, at 2 (citing Ramah ), J.A. 22. We then granted the plaintiffs' emergency motions for an administrative stay to preserve approximately $410,000 in fiscal year 1995 funds which would otherwise have lapsed to the Treasury during pendency of this appeal. Ramah Navajo Sch. Bd., Inc. v. Babbitt, No. 95cv1770, Order (Sept. 29, 1995), J.A. 23A; Puyallup Tribe of Indians v. Babbitt, No. 95cv1848, Order (Oct. 4, 1995), J.A. 23B. Because we find that the ISDA provides sufficient law to apply in reviewing the Secretary's actions, and that the Secretary exceeded his authority under the statute, we hold that the district court erred in denying the Tribes' motions for a preliminary injunction. 1 Accordingly, we reverse the orders denying the injunction, and remand to the district court for further proceedings consistent with this opinion. 2
The ISDA directs the Secretary, upon the request of an Indian Tribe, to turn over to that Tribe the direct operation of its federal Indian Programs. ISDA § 450f (a)(1). Once a Tribe requests control of its programs, the Secretary and the Tribe enter into a "self-determination contract," which the statute specifies must incorporate the provisions of a mandatory "model contract" included in the text of the ISDA. Id. § 450l(a), (c). The Act requires the Secretary to provide to the Tribe the amount of funding that would have been appropriated for the federal government to operate the programs if they had not been turned over to the Tribe. Id. § 450j-1(a)(1). In addition, the Act requires the Secretary to allocate certain Contract Support Funds ("CSF") to cover the full administrative costs the Tribe will incur--and which, absent the self-determination contract, the federal government would incur--in connection with the operation of these programs. Id. § 450j-1(a)(2). This case involves the Secretary's distribution of these CSF, which the statute refers to as an entitlement of the contracting Tribes. See id. § 450j 1(g) .
The amount of CSF due to a particular Tribe for each fiscal year is determined through an annual negotiation process during which the Tribe and the Office of the Inspector General ("OIG") of the Department of the Interior determine the total amount of funding the Tribe will receive for the year (the Tribe's base funding) and the size of the contract support pool needed to support that base (the support pool). The ratio of the support pool to the total base provides the "indirect cost rate," which dictates the amount of CSF the Tribe is entitled to receive for the year from each funding agency that contributes to the program base. 3 In a year in which Congress appropriates sufficient money to cover the Secretary's CSF obligations, each Tribe is entitled to receive the full amount of its CSF funding.
Although Congress drafted the CSF funding provisions in mandatory terms and forbade the Secretary to reduce the amount of funding for virtually any reason except a reduction in appropriations or tribal authorization, see id. § 450j-1(b)(2), the Act also contains a proviso that reads:
Notwithstanding any other provision in [the Act], the provision of funds under [the Act] is subject to the availability of appropriations and the Secretary is not required to reduce funding for programs, projects, or activities serving a tribe to make funds available to another tribe or tribal organization under [the ISDA].
Id. § 450j-1(b). It is this last provision that formed the basis for the district court's determination that the Secretary's allocation decisions, in the event of an appropriations shortfall, were committed to agency discretion and not subject to judicial review.
In 1995, the Bureau of Indian Affairs ("BIA") identified a projected need of $105 million for the year to fund contract support needs for all eligible Tribes. In the Appropriations Act of 1995, however, Congress directed that the Secretary was not to exceed $95,639,978 for this purpose, thus creating the funding shortfall. Interior Appropriations Act of 1995, Pub.L. No. 103-332 (Title I), 108 Stat. 2499, 2511 (Sept. 30, 1994) ("1995 Act") .
Faced with the congressional cap on CSF appropriations, and therefore unable to provide all of the Tribes with their full CSF entitlement, the Secretary published a Notice in the Federal Register in November, 1994, announcing a new BIA policy for fund allocation. The announcement stated that any Tribe failing to submit a proposal for its 1995 indirect cost rate (the rate at which its program base should be funded for overhead costs) by June 30, 1995, would not be eligible for full funding. Rather, the Tribe would be "eligible for 50 percent of the required contract support," based on its 1994, rather than 1995, rate. 4 Any Tribe which submitted its proposal on time (by June 30) would receive full funding if, once the CSF had been reduced for all of the late Tribes, the appropriation proved sufficient to cover the full cost of the others. If the appropriation still proved insufficient, the money owed to the Tribes which filed timely proposals would be subject to a pro rata reduction. Distribution of Fiscal Year 1995 Contract Support Funds, 59 Fed.Reg. 55,318 (Nov. 4, 1994) ("Notice"), A.A. 1.
Ramah and Puyallup, along with forty-four other tribal contractors, missed the June 30 deadline and had their CSF reduced by 50% according to the Secretary's 1995 plan. The parties apparently agree that Ramah's 1995 base amount for BIA contracts eligible for CSF is $1,634,001, and Puyallup's base amount is $1,001,872. Brief for Appellants at 9, 11. In August, a month and a half after the deadline established by the Notice, Ramah submitted a proposal for a 1995 indirect cost rate of 25.1%, which would have translated into $410,134 in CSF (the contract base multiplied by the indirect cost rate). See Supp. Decl. of Daisy West, Indian Self-Determination Analyst for the BIA at 1-2 (Sept. 18, 1995), J.A. 80-81. Puyallup has yet to submit a 1995 indirect cost rate proposal, 5 but anticipates that its rate will be substantially the same as its 1994 rate of 35.9%, which would translate into $359,672 in CSF. See Aff. of Terry Westover at 2 (Sept. 26, 1995), J.A. 83.
In accordance with the new policy, however, the Secretary used Ramah's 1994 rate of 20.3% and ruled that the Tribe was eligible only for half of the funds based on that rate. The Secretary thus determined that Ramah was eligible for only $165,851 (the 1994 rate, multiplied by the base amount, and then reduced by 50%). Likewise for Puyallup, the Secretary reduced by 50% the amount to which the 1994 rate would have entitled the Tribe when multiplied by the 1995 contract base. Thus, the Secretary awarded Puyallup $179,836 instead of the $359,672 the Tribe believes it deserved.
Even after the forty-six tardy Tribes were penalized according to the formula established in the Notice, the congressional CSF allocation proved insufficient to meet the full needs of the remaining Tribes. As called for in the Notice, the Secretary then allocated the remaining CSF, at a prorated rate of 91.7413% of their statutory entitlement, to those Tribes which had complied with the deadline. Thus each...
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