Southern Ute Indian Tribe v. Leavitt

• Decision Date: 15 June 2007
• Docket Number: Civil No. 05-988 WJ/LAM.
• Citation: 497 F.Supp.2d 1245
• Parties: SOUTHERN UTE INDIAN TRIBE, Plaintiff, v. Michael O. LEAVITT, Secretary of the United States Department of Health and Human Services, et al., Defendants.
• Court: U.S. District Court — District of New Mexico

497 F.Supp.2d 1245

SOUTHERN UTE INDIAN TRIBE, Plaintiff, v. Michael O. LEAVITT, Secretary of the United States Department of Health and Human Services, et al., Defendants.

Civil No. 05-988 WJ/LAM.

United States District Court, D. New Mexico.

June 15, 2007.

COPYRIGHT MATERIAL OMITTED

Steven C. Boos, Maynes Bradford Shipps & Sheftel, Durango, CO, for Plaintiff.

MEMORANDUM OPINION. AND ORDER ON PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION AND DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

JOHNSON, District Judge.

THIS MATTER comes before the Court pursuant to Plaintiff's Motion for Preliminary Injunction (Doc. 3) and Defendants' Motion for Summary Judgment (Doc. 14). After reviewing the briefs in both parties' motions, I issued an Order to Show Cause why the preliminary injunction should not be consolidated with the merits of the case (Doc. 37). The parties agreed that consolidation was appropriate. Additionally, at a hearing on February 8, 2007, the parties agreed that the legal issues are fully briefed and may be decided without further argument. Accordingly, I decide here the purely legal issue whether the Defendants had discretion under the Indian Self-Determination and Education Assistance Act, 25 U.S.C. §§ 450 through 458bbb-2 ("ISDEA"), to decline to enter into a contract with the Plaintiff Tribe to assume control over and management of the programs, functions services and activities of the Southern Ute Health Center.

INTRODUCTION

Plaintiff, Southern Ute Indian Tribe, is a federally recognized Indian tribe organized pursuant to Section 16 of the Indian Reorganization Act of 1934 (codified at 25 U.S.C. § 476). Congress enacted the IDEA in recognition of "the Federal government's historical and special legal relationship with, and resulting responsibilities to, American Indian people ...." 25 U.S.C. § 450. Congress set forth a method within the ISDEA for Indian Tribes to assume control over certain federally provided programs. Relevant to the instant case, the ISDEA directs the Secretary of the United States Department of Health and Human Services ("HHS"), upon request of an Indian tribe, to enter into a contract by which the Tribe assumes direct operation of an HHS federal Indian Health care program. 25 U.S.C. § 450f(a)(1). Under the ISDEA, if an Indian tribe submits a proposal for a self-determination contract, "the Secretary shall, within 90 days after receipt of the proposal, approve the proposal and award the contract...." 25 U.S.C. § 450f(a)(2). The secretary has very little discretion to decline to award a contract proposed by an Indian tribe.

On or about January 25, 2005, Plaintiff submitted a proposal pursuant to 25 U.S.C. § 450f to contract for the administration of the Southern Ute Health Center ("Clinic"), a facility of the Indian Health Services ("IHS") that is the primary health care facility for the Plaintiff Tribe's members. By letter dated February 28, 2005, a Contract Proposal Liaison Officer ("CPLO") with IHS notified Plaintiff that some portions of the proposal required further clarification. Pl's. Ex. 2. The letter noted that IHS was continuing to review Plaintiff's proposal for contract support costs ("CSC"), but stated that Congress had not appropriated any new money for CSC and it was unlikely that any start-up costs would be paid.

On March 1, 2005, the United States Supreme Court decided Cherokee Nation of Okla. v. Leavitt, 543 U.S. 631, 125 S.Ct. 1172, 161 L.Ed.2d 66 (2005). In that case, the Government had not fully paid CSC to tribes that had existing ISDEA contracts that included an agreement to pay CSC. Id. at 635, 125 S.Ct. 1172. While the Government acknowledged its contractual promise to pay the CSC and its failure to fully pay, it argued that it was not legally bound by its promise because Congress had not appropriated sufficient funds to fully pay CSC to all tribes with ISDEA contracts. Id. The Supreme Court found that Congress had appropriated sufficient unrestricted funds to pay CSC for the particular contracts at issue for the Fiscal Years at issue. Id. at 637, 125 S.Ct. 1172. The Court held that the Government was bound by its promise to pay CSC. Id. at 647, 125 S.Ct. 1172.

For Fiscal Year 2005, Congress appropriated $263,638,000 to IHS to pay contract support costs and stated that money expended for contract support costs was not to exceed this amount. Medrano Dec. (attached to Defs. Mem. in Support of Summary Judgment). This amount does not represent sufficient money to pay contract support costs for any new or expanded program assumption under the ISDEA. Id.

On March 24, 2005, Plaintiff responded to the CPLO's letter with the requested clarifications. Pl's. Ex. 3. Under the IDEA, IHS had 90 days to approve the proposal or provide written notification of declination of the contract for one of five permissible reasons. However, the 90 day period may be extended with consent of the tribe. 25 U.S.C. § 450f(a)(2). Prior to the expiration of the 90 day period in this case, the IHS Acting Director of the Office of Tribal Support ("Acting Director") sent a letter to Plaintiff requesting a thirty day extension due to restructuring within IHS of the contract proposal review process. Pl's. Ex. 4. Plaintiff responded that it would like some indication that the tribe had adequately addressed the CPLO's concerns and would also like some details regarding any effect of the restructuring on Plaintiff's particular contract proposal. Pl's. Ex. 5. The Acting Director responded back with some additional detail with regard to portions of Plaintiff's proposal that were not sufficiently clarified. Pl's. Ex. 6. The letter also reiterated a request for Plaintiff's consent to the thirty day extension and stated that, in the absence of an extension, IHS would proceed to approve the contract to the extent the proposal was satisfactory, and provide Plaintiff with a timely partial declination letter to the extent the proposal was not sufficient as indicated. Id.

Plaintiff responded to this latest letter with its interpretation of the statutory requirements for a declination, i.e., that refusing to grant an extension was not a valid reason for declination, that IHS had never provided Plaintiff with a clear explanation of potential declination issues, and that IHS was required to inform Plaintiff within the 90 days of any potential declination issues and provide technical support which it had not done. Pl's. Ex. 7. Plaintiff expressed concern that IHS was not following these rules with respect to Plaintiff's proposal. Id. However, Plaintiff gave its consent to a thirty day extension. Id.

The Acting Director responded by letter agreeing with Plaintiff that refusal to consent to an extension was not grounds for declination. Pl's. Ex. 8. He then proceeded to outline specific areas of potential declination with regard to Plaintiff's proposal and made recommendations for modifications. Id. He stated that,

The Area¹ has made the decision to decline the tribe's request to contract for the CEO, the Health Center Director, the Clinical Director, the Chief Pharmacist, and the Administrative Officer positions based on 25 U.S.C. [§] 450f(a)(2)(A)-(E) Declination Criteria "The program, function, service or activity (or portion thereof) that is the subject of this proposal is beyond the scope of programs, functions, services or activities under section 102(a)(1) of the ISDEAA because the proposal includes activities that cannot lawfully be carried out by the contractor". More specifically, a Tribal employee cannot by law manage and obligate the services and funding of Federal Programs and Federal employees. By contracting only the decision making and administrative aspects of any service program and not including the p, f, s, a's² that go along with each of these positions the tribe is asking the Area to approve an unlawful act. If the Tribe were to modify the proposal to include the p,f,s,a's under the direction of each of these positions the Area would have a proposal that could more easily be approved.

Id. The Acting Director further stated that areas of recommended changes with regard to other concerns could be discussed during the first negotiation and should be easily resolved. The letter concluded with a statement that the dollar amount Plaintiff was requesting "exceeds the Tribal Shares the Tribe has available for the Southern Ute Health Center." Id.

The first negotiation occurred on May 27, 2005. Pl's. Ex. 9. Present were the Acting Director and several representatives for Plaintiff. Plaintiffs counsel explained the details of the Tribe's proposal and pointed out that the proposal did indicate that Plaintiff would be taking over the programs, functions, services and activities ("PFSAs") under the CEO, the Health Center Director, the Clinical Director, the Chief Pharmacist, and the Administrative Officer. Id. At the conclusion of this negotiation, the Acting Director stated that, as far as he could tea, no declination issues existed. Id. Following this negotiation, Plaintiff consented to an additional extension until June 3, 2005. PP s. Ex. 10. A second negotiation occurred on June 2, 2005. PP s. Ex. 11. After this negotiation, the Acting Director prepared a summary of the agreement between Plaintiff and IHS which indicated that CSC funding had been discussed as a problem during the negotiation. Id. With regard to CSC, the summary states that,

the new CSC language that generally states that there are no Start Up Costs or CSC available for contracting these PFSAs and the tribe will not be able to have the associated CSC dollar amount for this contract placed on the Que³ was discussed with the tribe. They have requested this decision in writing and will notify the Area of their position following a review. The tribe understands that refusal to include this language will result in a proposal declination.

Pl's. Ex. 11.

On June 3, Plaintiff consented to another extension of time requested...