Cherokee Nation v. Thompson

311 F.3d 1054
CourtCourt of Appeals for the Tenth Circuit
DecidedNovember 26, 2002
DocketNo. 01-7106
StatusPublished
Cited by5 cases

This text of 311 F.3d 1054 (Cherokee Nation v. Thompson) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cherokee Nation v. Thompson, 311 F.3d 1054 (10th Cir. 2002).

Opinion

ANDERSON, Circuit Judge.

This case involves the adequacy of funding provided by the United States to plaintiffs, two Native American Tribes, for their performance of contracts operated under the Indian Self-Determination and Education Assistance Act. The Tribes appeal the grant of summary judgment to the United States. We affirm.

BACKGROUND

Under the Indian Self-Determination and Education Assistance Act (“ISDA”), 25 U.S.C. §§ 45(M50(n), as amended, the Secretary of Health and Human Services (“Secretary”) may enter into contracts or compacts with Indian tribes (self-determination contracts) to permit the tribes to administer various programs that the Secretary would otherwise administer. The Act further stipulates that the Secretary will provide funding for the administration of those programs. The basic idea behind the ISDA is to promote tribal autonomy and self-determination by permitting tribes to operate programs previously operated by the federal government, but to ensure that they do not suffer a reduction in funding for those programs simply because they assume direct operation of them.

The Indian Health Service (“IHS”) provides primary health care for Indians and Alaska natives throughout the United States. In fiscal year 1994, in accordance [1056]*1056with the ISDA, plaintiffs, the Shoshone-Paiute and the Cherokee Nation Tribes of the Duck Valley Reservation, entered into Compacts of Self-Governance and associated Annual Funding Agreements with the Secretary to operate certain IHS programs for their members.

Under § 450j-l(a) of the ISDA, the Secretary is obligated to provide funding for those self-determination contracts or compacts 1 in an amount equal to what he would have provided were IHS to continue to provide health care services itself directly. This is called the “Secretarial amount.” 25 U.S.C. § 450j — 1(a)(1). See Ramah Navajo Sch. Bd., Inc. v. Babbitt, 87 F.3d 1338, 1341 (D.C.Cir.1996) (describing the Secretarial amount as 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”).

In addition to the Secretarial amount, the ISDA directs the Secretary to provide contract support costs (“CSC”) to cover the direct and indirect expenses associated with operating the programs. The ISDA does not precisely define what CSC are.2 We have observed that “[r]eviewing ... the [ISDA] as a whole, ... ‘contract support costs’ encompasses ‘indirect costs’ incurred by a tribal organization in carrying out a self-determination contract.” Ramah Navajo Chapter v. Lujan, 112 F.3d 1455, 1461 (10th Cir.1997). “Indirect costs” are, in turn, defined as those “incurred for a common or joint purpose benefiting more than one .contract objective ...,” 25 U.S.C. § 450b(f), as contrasted with “direct program costs,” which are those “that can be identified specifically with a particular contract objective,” 25 U.S.C. § 450b(c). See Shoshone-Bannock Tribes v. Secretary, 279 F.3d 660, 663 n. 5 (9th Cir.2002); Ramah Navajo Chapter, 112 F.3d at 1457-58. As this case demonstrates, the adequacy of the funding provided for tribal indirect costs has proven to be a recurring and troublesome issue. See Ramah Navajo Chapter, 112 F.3d at 1462 (“The legislative history indicates one of the primary concerns of Congress in enacting the [1988] amendments [to the ISDA] was the chronic underfunding of tribal indirect costs.”) (citing S.Rep. No. 100-274 at 8-13 (1987), U.S. Code Cong. & Admin. News 2620, 2627-2632). See United States General Accounting Office, Indian Self-Determination Act: Shortfalls in Indian Contract Support Costs Need to Be Addressed at p. 3 (June 1999) (noting that while “Tribes’ allowable contract support costs have tripled from 1989 through 1998 — increasing from about $125 million to about $375 million.... Congress has not funded contract support to keep pace with these increases, resulting in funding shortfalls”).

The ISDA provides a further and, in this case, significant caveat to the funding obli[1057]*1057gations: “Notwithstanding any other provision in this subchapter, the provision of funds under this subchapter 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 this subchapter.” 25 U.S.C. § 450j-l(b); see also 25 U.S.C. § 450j(c) (“The amounts of [self-determination] contracts shall be subject to the availability of appropriations”). The first clause in § 450j-l(b) is called the “availability clause” and the second the “reduction clause.”

Additionally, every self-determination contract entered into under the ISDA must either contain or incorporate by reference the provisions of a model agreement prescribed by the ISDA. 25 U.S.C. § 4.501(a). The model agreement reiterates the availability clause, specifically providing that the amount funded by the Secretary is “[sjubject to the availability of appropriations.... ” 25 U.S.C. § 450l(c) (describing § 1(b)(4) of model agreement). Accordingly, the compact with the Shoshone-Paiute Tribe contained the following clause:

Funding Amount. Subject only to the appropriation of funds by the Congress of the United States and to adjustments pursuant to [25 U.S.C. § 450j-l] of the Indian Self-Determination and Education Assistance Act, as amended, the Secretary shall provide the total amounts specified in the Annual Funding Agreement.

Appellants’ App. at 302. The compact with the Cherokee Nation contained virtually identical language. See icL at 425.

Additionally, the Annual Funding Agreement between the Shoshone-Paiutes and the Secretary included the following provision:

Section 9 — Adjustments.

(a) Due to Congressional Actions. The parties to this Agreement recognize that the total amount of the funding in this Agreement is subject to adjustment due to Congressional action in appropriations Acts or other laws affecting availability of funds to the Indian Health Service and the Department of Health and Human Services. Upon enactment of any such Act or law, the amount of funding provided to the Tribes in this Agreement shall be adjusted as necessary, after the Tribes have been notified of such pending action and subject to any rights which the Tribes may have under this Agreement, the Compact, or the law.

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