Citizen Potawatomi Nation v. Scarlett

• Court: District Court, District of Columbia
• Decided: June 12, 2009
• Docket: Civil Action No. 2006-0830
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ______________________________ CITIZEN POTAWATOMI NATION, ) ) Plaintiff, ) ) v. ) Civil Action No. 06-830 (GK) ) ) KENNETH L. SALAZAR,1 ) Secretary of the ) Interior, et al., ) ) Defendants. ) ______________________________)

MEMORANDUM OPINION

Plaintiff, a federally recognized Indian Tribe whose

jurisdictional area is located in Oklahoma, brings this action

against Kenneth L. Salazar in his official capacity as Secretary of

the Department of the Interior (“the Department” or “the agency”).

Plaintiff challenges the application of a formula that the

Department uses to distribute funds to certain tribes. This

challenge, along with other issues, was raised at the agency level;

Plaintiff now seeks review of a decision by the Department of

Interior Board of Contract Appeals (“IBIA” or “the Board”). This

matter is before the Court on Plaintiff’s Motion for Summary

Judgment [Dkt. No. 24] and Defendants’ Motion for Summary Judgment

[Dkt. No. 25]. Upon consideration of the Motions, Oppositions,

1 Pursuant to Fed. R. Civ. P. 25(d), Secretary of the Interior Kenneth L. Salazar is automatically substituted as defendant for former Secretary Dirk Kempthorne. Replies, and the entire record herein, and for the reasons stated

below, Plaintiff’s Motion for Summary Judgment is denied and

Defendants’ Motion for Summary Judgment is granted.

I. BACKGROUND

A. Factual Background2

The current controversy began when Citizen Potawatomi Nation

(“CPN”) entered into an agreement with Defendants to establish a

formula for the distribution of federal funds. Eventually, this

formula would be used to calculate how funds were to be distributed

to tribes under the Indian Self-Determination Act (“ISDA”), 25

U.S.C. §§ 450 et seq.

In 1988, Defendants’ Bureau of Indian Affairs (“BIA”) reached

an agreement with the Shawnee Agency Tribes, composed of five

tribes one of which is the Plaintiff. In a Tribal Resolution, CPN

agreed along with the four other tribes on a funding formula by

which Defendants would distribute funds to the Shawnee Agency

Tribes. The formula contained four factors that would dictate how

the funds would be disbursed: (1) 25% equally divided; (2) 25% in

proportion to total tribal enrollment; (3) 25% in proportion to

resident tribal population within each tribe’s jurisdictional area;

(4) 25% in proportion to the amount of trust property in each

2 Unless otherwise noted, the facts set forth herein are drawn from parties’ Statements of Material Facts Not in Dispute, as well as the Administrative Record (“AR”) upon which the Board relied.

-2- tribe’s jurisdiction. Pl.’s Statement of Material Facts at ¶ 3; AR

at Tab 60 (Ex. A, Attachment 1).

The Defendants decided to use data from 1988 to calculate the

funding formula. CPN objects to this static application of the

funding factors. The parties have litigated this matter in federal

court in the past, see infra, at pp. 6-8, and more recently before

the Interior Board of Indian Appeals. The crux of the dispute at

the agency level was whether parties intended this formula to be

calculated by using new data as it changed from year to year, or by

using data as it existed in 1988 at the time the resolution was

adopted. Compl. at ¶¶ 17-37; AR at Tab 66 (Citizen Potawatomi

Nation v. Director, Office of Self-Governance, 42 IBIA 160 (Jan.

25, 2006) (hereinafter cited as “IBIA Decision”)). CPN now seeks

a review of the Board’s decision.

The two-page Tribal Resolution, which is essentially a

contract, specifies the above formula, and includes language that

would later become central to this litigation. The Resolution

committed the tribes to “conform to all aspects of the CFR1

appropriate to the given program to be contracted by all five

tribes of the Shawnee Agency.” Before certifying the agreement,

CPN agreed “with the tribes served by the Shawnee Agency to

contract for all Bureau of Indian Affairs provided operation and

1 Parties were referring to the Code of Federal Regulations.

-3- services in FY 89 and future years.” Pl.’s Statement of Material

Facts at 3; AR at Tab 60 (Ex. A, Attachment 1).

The difference between the self-determination contract and the

self-governance contract is described in the ISDA and its

regulations. Once a tribe has entered into a Compact, it may no

longer execute self-determination contracts. 25 U.S.C.

§ 458cc(b)(8)(A). Under the provisions governing self-

determination contracts, tribes may submit proposals to the

Department for such contracts which, if approved, would allow them

to oversee certain programs with the use of Department funds. See

25 U.S.C. § 450f; 25 C.F.R. §§ 900.8-.16 (2009). Under the ISDA,

a Compact of Self-Governance allows the tribe to assume more

comprehensive responsibility for programs otherwise overseen by the

Department. See 25 U.S.C. §§ 458aa-cc; 25 C.F.R. §§ 1000.91-.104.

Under the self-government arrangement, tribes negotiate AFAs each

year for the disbursement of program funds. See 25 U.S.C. §§

458aa-cc; 25 C.F.R. §§ 1000.91-.104.

During the period between 1988 and FY 1999, Plaintiff entered

into self-determination contracts with Defendants. Pl.’s Statement

of Material Facts at ¶ 7; 25 U.S.C. §§ 450f-450n. Although the

ISDA governed these contracts and funds were disbursed according to

the terms of the Tribal Resolution, see Pl.’s Statement of Material

Facts at ¶¶ 2-3, CPN had not yet formally entered the ISDA’s Tribal

Self-Governance Program, id. at ¶ 7. In 1998, it did so. Id. at

-4- ¶ 9; AR at Tab 45. Under the ISDA, tribes may enter into a Compact

of Self-Governance and Annual Funding Agreements (“AFAs”) with the

Department. Pl.’s Statement of Material Facts at ¶ 1. Such

arrangements allow the tribes to assume responsibility for the

“planning and administration of programs and services previously

provided by the Department and the Department transfers the related

funds to the tribes to administer.” Id.

CPN alleges it did not learn that the Department was still

applying 1988 data in calculating disbursement of funds among the

Shawnee Agency Tribes for FY 1999 until it entered into the Compact

for FY 1999. Compl. at ¶¶ 17-18; Pl.’s Mot. for Summ. J. at 23

(“Pl.’s Mot.”).

B. Procedural Background

As noted above, the core of the dispute before the IBIA was

the Department’s use of 1988 data for application of the funding

formula agreed to in the Tribal Resolution. That issue has been

the subject of various administrative and federal court proceedings

over the past decade.

This case’s tangled procedural history begins with a qualified

victory for CPN. In Citizen Band Potawatomi Indian Tribe of

Oklahoma v. Collier, 142 F.3d 1325, 1327 (10th Cir. 1998), the

Tenth Circuit affirmed the district court’s ruling that another

member tribe of the Shawnee Agency, the Absentee Shawnee, had no

rights to land on the former CPN reservation. That litigation

-5- arose when the Absentee Shawnee applied for the Department to take

land into trust on its behalf -- land which fell within the

boundaries of the former CPN reservation. The BIA Area Director

disagreed with CPN’s argument that federal regulations required

CPN’s consent before the Department could put the land in trust for

the Absentee Shawnee.

The Director rejected CPN’s challenge because the he found

that the tribes shared a common former reservation. This finding

was upheld by the IBIA. Id. at 1330. When CPN challenged that

ruling in federal court, the administrative decisions were

reversed. The District Court held that the Absentee Shawnees had

no rights to the former CPN reservation. Id. at 1330-31 (“[T]he

[district court] viewed the Absentee Shawnees’ agreement to

relinquish any interest in the reservation as a quit claim deed.”).

On appeal, the Tenth Circuit upheld the decision. Id. at 1327.

In 1998, subsequent to the Tenth Circuit ruling, CPN

challenged the Department’s application of the Tribal Resolution

funding formula. Pl.’s Statement of Material Facts at ¶ 11. The

substantive issue was never considered by the district court

because CPN’s claims were dismissed for failure to join parties

under Rule 19 of the Federal Rules of Civil Procedure. See Citizen

Potawatomi Nation v. Norton, 248 F.3d 993, 996 (10th Cir. 2001),

modified on reh’g, 257 F.3d 1158 (10th Cir. 2001). The dismissal

was affirmed by the Tenth Circuit. Id. at 1001.

-6- In addition, subsequent to Collier, the Director proposed a

change in his position with respect to the application of factor

three of the funding formula to the CPN and Absentee Shawnee. See

AR at Tab 44 at 3-4. The Director concluded that the Collier

holding with respect to the Absentee Shawnee’s interest in CPN land

necessarily altered the calculation under factor three (25% in

proportion to resident tribal population in each tribe’s

jurisdictional area). Id. at 4-5. The Director proposed a

recalculation of the funding formula to decrease Absentee Shawnee’s

funding by $65,521 for 2000. Id. at 9.

The Absentee Shawnee challenged these changes before the

Interior Board of Contract Appeals (“IBCA”) in 2002. The IBCA

permitted CPN to intervene and file briefs, because the reduction

ordered in Absentee Shawnee funds was directed to be given to CPN.

AR at Tab 16 at 1-2. Absentee Shawnee won before the IBCA, which

held that the tribe was entitled to its pre-Collier funding

allocation, and that “Collier had nothing to do with funding

arrangements.” Id. at 14.

Facing denial of these funds, and unable to challenge the

application of the funding formula in Norton, the Plaintiff then

brought two key issues to the IBIA: first, Collier’s effect on

factor three of the funding formula, and, second, whether the 1988

data the Department had been using to calculate the formula should

be adjusted annually. IBIA Decision, at 166-67.

-7- The IBIA held that CPN was collaterally estopped from

litigating the effect of Collier,2 id. at 167, and that the

Director did not abuse his discretion in finding that the parties

intended the 1988 formula to be applied in a static manner, i.e.,

without annual updating, id. at 173. CPN challenges that decision

in the case now before this Court.

II. STANDARD OF REVIEW

A. Standard of Review for the IBIA Decision

CPN states in its Complaint that “a claim for relief exists

under both the ISDA, 25 U.S.C. § 450m-1(a) and the Administrative

Procedures [sic] Act, 5 U.S.C. §§ 702-706.” Compl. at ¶ 5. The

ISDA provision reads as follows:

The United States district courts shall have original jurisdiction over any civil action or claim against the appropriate Secretary arising under this subchapter and, subject to the provisions of subsection (d) of this section and concurrent with the United States Court of Claims, over any civil action or claim against the Secretary for money damages arising under contracts authorized by this subchapter. In an action brought under this paragraph, the district courts may order appropriate relief including money damages, injunctive relief against any action by an officer of the United States or any agency thereof contrary to this subchapter or regulations promulgated thereunder, or mandamus to compel an officer or employee of the United States, or any agency thereof, to perform a duty provided under this subchapter or regulations promulgated hereunder (including immediate injunctive relief to reverse a declination finding under section 450f(a)(2) of this title or to compel the

2 As an alternative holding, the IBIA concluded that “the 1988 formula does not apportion funding to the Citizen Potawatomi and Absentee Shawnee based on legal determinations regarding the extent of their territorial jurisdiction.” IBIA Decision, at 167.

-8- Secretary to award and fund an approved self-determination contract).

25 U.S.C. § 450m-1(a). Under the Administrative Procedure Act

(“APA”), the reviewing court must determine whether the

administrative decision was “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.” 5 U.S.C. §

706(2)(A).

Parties dispute the standard under which the Court should

review the IBIA decision. Plaintiff maintains that the Court

should engage in de novo review, Pl.’s Mot. at 4;3 Defendants

counter that the appropriate standard is “arbitrary and

capricious,” Def.’s Mot. for Summ. J. at 4-5 (“Def.’s Mot.”). The

issue appears to be one of first impression in this Circuit.4

Both the Supreme Court and our Court of Appeals have declared

that where a statute does not provide a standard of review, as is

3 CPN argues in the alternative that even if the standard of review is arbitrary and capricious, it should still prevail on its claims. Pl.’s Mot. at 5. 4 One Court of Appeals case from this Circuit deals with judicial review under the ISDA, but does not resolve the standard of review issue. In Ramah Navajo School Board, Inc. v. Babbitt, 87 F.3d 1338 (D.C. Cir. 1996), the Court of Appeals reversed a district court’s denial of a preliminary injunction because the court had inappropriately found that a decision to allocate funds was an unreviewable act of agency discretion. The Court of Appeals found that under the ISDA the decision was reviewable. Id. at 1343-44. While the case clearly states that some review is necessary, it does not indicate what standard district courts should apply when engaging in such review. Cf. Pl.’s Mot. at 4-6 (construing case to support its argument for de novo review).

-9- true of the ISDA, courts must look to the APA standard.5 See

United States v. Carlo Bianchi & Co., 373 U.S. 709, 715 (1963)

(“Indeed, in cases where Congress has simply provided for review,

without setting forth the standards to be used or the procedures to

be followed, this Court has held that consideration is to be

confined to the administrative record and that no de novo

proceeding may be held.”); Al-Fayed v. CIA, 254 F.3d 300, 304 (D.C.

Cir. 2001) (noting that APA “provides a default standard of

judicial review . . . where a statute does not otherwise provide a

standard”) (quoting Dickson v. Sec’y of Def., 68 F.3d 1396, 1404

n.12 (D.C. Cir. 1995)).6

5 While district courts in other jurisdictions have construed the standard of review under the ISDA, they have disagreed on the appropriate standard to be applied. See Cheyenne River Sioux Tribe v. Kempthorne, 496 F. Supp. 2d 1059 (D.S.D. 2007) (finding de novo review to be appropriate); Cherokee Nation of Okla. v. United States, 190 F. Supp. 2d 1248 (E.D. Okla. 2001), rev’d on other grounds by Cherokee Nation of Okla. v. Leavitt, 543 U.S. 631 (2005) (same); Shoshone-Bannock Tribes of the Fort Hall Reservation v. Shalala, 988 F. Supp. 1306 (D. Or. 1997) (same); Suquamish Tribe v. Deer, No. 96-5468 (W.D. Wash. Sept. 2, 1997) (unpublished) (finding APA standard to be appropriate); Cal. Rural Indian Health Bd., Inc. v. Shalala, No. 96-3526 (N.D. Cal. Apr. 24, 1997) (unpublished) (same); Yukon-Kuskokwim Health Corp. v. Shalala, No. 96-155 (D. Alaska Apr. 15, 1997) (unpublished) (same). 6 See also Tourus Records, Inc. v. Drug Enforcement Admin., 259 F.3d 731, 736 (D.C. Cir. 2001); Workplace Health & Safety Council v. Reich, 56 F.3d 1465, 1467 (D.C. Cir. 1995); Northwest Resource Info. Ctr. v. Nat’l Marine Fisheries Serv., 56 F.3d 1060, 1066 (9th Cir. 1995); Franklin Sav. Ass’n v. Dir., Office of Thrift Supervision, 934 F.2d 1127, 1137 (10th Cir. 1991); Avoyelles Sportsmen’s League, Inc. v. Marsh, 715 F.2d 897, 904 (5th Cir. 1983); Cabinet Mountains Wilderness/Scotchman’s Peak Grizzly Bears v. Peterson, 685 F.2d 678, 685 (D.C. Cir. 1982); Nat’l Mining Ass’n v. Chao, 160 F. Supp. 2d 47, 56 (D.D.C. 2001), aff’d in part and

-10- As Al-Fayed indicates, there exists a strong presumption in

this Circuit that when a statute provides for judicial review but

does not specify any standard for that review, it should be

construed to include the APA standard. See 254 F.3d at 304; see

also Shoshone-Bannock, 988 F. Supp. at 1313 n.4 (citing cases from

three other appellate courts to support this proposition). This

general principle “stems from well ingrained characteristics of the

administrative process.” Doraiswamy v. Sec’y of Labor, 555 F.2d

832, 840 (D.C. Cir. 1976). In order to avoid “supplanting” the

agency’s role in the litigation, “the judicial function is

fundamentally and exclusively an inquiry into the legality and

reasonableness of the agency's action.” Id.

Therefore, litigants in this case are faced with a strong

presumption that judicial review will take place under an arbitrary

and capricious standard. The Court has considered the reasoning of

those district courts, which focused heavily on the text and

legislative history of the ISDA, and found de novo review to be

appropriate. However, this Court concludes that such analysis is

not sufficiently persuasive to overcome the strong presumption

enunciated by both the Supreme Court and our Court of Appeals in

favor of the APA standard.

rev’d in part on other grounds by Nat’l Mining Ass’n v. Dep’t of Labor, 292 F.3d 849 (D.C. Cir. 2002) (“The D.C. Circuit recently reaffirmed the principle of law that the APA provides a default standard of review where a statute does not otherwise provide a standard.”).

-11- The fact that CPN stated claims for relief under the ISDA as

well as the APA buttresses this finding, since Plaintiff itself has

chosen to bring a portion of its case under the APA. Compl. ¶ 5.

Finally, another consideration supporting APA review is the need to

defer to the Defendants’ expertise and experience in deciding many

of the issues presented by CPN. See Runs After v. United States,

766 F.2d 347, 352 (8th Cir. 1985) (noting BIA “special expertise

and extensive experience in dealing with Indian affairs”).

In conclusion, the Court finds that the APA standard is

appropriate for the particular set of procedural facts presented by

this case. “The arbitrary and capricious standard [of the APA] is

a narrow standard of review.” Citizens to Preserve Overton Park,

Inc. v. Volpe, 401 U.S. 402, 416 (1971). This Circuit has held

that “[t]his court’s review is . . . highly deferential” and “we

are ‘not to substitute [our] judgment for that of the agency’ but

must ‘consider whether the decision was based on a consideration of

the relevant factors and whether there has been a clear error of

judgment.’” Bloch v. Powell, 348 F.3d 1060, 1070 (D.C. Cir. 2003)

(citations and internal quotation marks omitted); see also United

States v. Paddack, 825 F.2d 504, 514 (D.C. Cir. 1987).

If the “agency’s reasons and policy choices . . . conform to

‘certain minimal standards of rationality’ . . . the [agency

decision] is reasonable and must be upheld.” Small Refiner Lead

Phase-Down Task Force v. EPA, 705 F.2d 506, 521 (D.C. Cir. 1983)

-12- (citation omitted); see Kisser v. Cisneros, 14 F.3d 615, 619 (D.C.

Cir. 1994).

Summary judgment will be granted when there is no genuine

issue as to any material fact. See Fed. R. Civ. P. 56(c). Since

this case involves a challenge to a final administrative decision,

the Court’s review on summary judgment is limited to the

administrative record. Holy Land Found. for Relief and Dev. v.

Ashcroft, 333 F.3d 156 (D.C. Cir. 2003) (citing Camp v. Pitts, 411

U.S. 138, 142 (1973)); Richards v. Immigration & Naturalization

Serv., 554 F.2d 1173, 1177 (D.C. Cir. 1977)) (“Summary judgment is

an appropriate procedure for resolving a challenge to a federal

agency’s administrative decision when review is based upon the

administrative record.”).

III. ANALYSIS

A. Joinder of Necessary Parties

In their Motion for Summary Judgment, Defendants argue that

all claims must be dismissed for failure to join necessary parties

-- the four other tribes of the Shawnee Agency -- under Rule 19(a)

of the Federal Rules of Civil Procedure. Def.’s Mot. at 30-40.

The Rule provides that even if it is not feasible to join

these necessary parties, courts may nonetheless elect to proceed

with the action in “equity and good conscience.” Fed. R. Civ. P.

at 19(b). To guide this equitable determination, Rule 19(b) lists

four factors to be considered: (1) the extent to which a judgment

-13- for existing parties would prejudice those parties and absent

parties; (2) the extent to which the court can craft relief to

lessen such prejudice; (3) whether the court can render an adequate

judgment for existing parties; and (4) whether “the plaintiff would

have an adequate remedy if the action were dismissed for

nonjoinder.” Id.; see also Ramah Navajo Sch. Bd., Inc. v. Babbitt,

87 F.3d 1338, 1350-51 (D.C. Cir. 1996) (outlining Rule 19

analysis); Wichita and Affiliated Tribes of Okla. v. Hodel, 788

F.2d 765, 774 (D.C. Cir. 1986) (“Wichita”).

This is not the first time that CPN has faced this issue. In

Norton, the district court dismissed CPN’s challenge to the funding

formula because necessary parties had not been joined. 248 F.3d at

996. The Absentee Shawnee as well as the remaining three Shawnee

Agency Tribes were found to be necessary to the resolution of the

issue, as the tribes stood to lose if the Norton Court reversed the

administrative decision on the merits of the claim. Due to the

fact that tribes enjoy sovereign immunity, the district court could

not order joinder. Id. As a result, the claims were dismissed.

The Tenth Circuit affirmed, ruling that the district court did not

abuse its discretion in dismissing the action. The Circuit based

its decision on two reasons: the non-party tribes claimed an

interest that was not “patently frivolous,” and the United States

could not represent the interests of all parties. Id. at 999.

-14- CPN argues that this case is different. In Norton, the

federal court was asked to make a decision on the merits of the

claims before it. Such a decision, CPN maintains, can indeed

prejudice a non-joined party because it can alter the substantive

outcome of the case. Pl.’s Opp’n to Def.’s Mot. (“Pl.’s Opp’n”) at

30-31. The distinction in this case, according to CPN, is that

this Court is being asked to only review the administrative

agency’s decision, and then remand so that a decision on a better

record can be developed. Id. Such an action, Plaintiff claims,

can hardly “impede or impair” the interests of a non-party tribe,

because the Court would not be altering the underlying merits of

the IBIA decision. Id. at 36.

Further, the Plaintiff observes that the IBIA is permitted,

under its own case law, to consider CPN’s claim even when other

potentially necessary parties have not been joined. According to

IBIA doctrine, adjudication at the agency level is not subject to

the same joinder rules applicable in federal court litigation. See

IBIA Decision, at 171; see also Pl.’s Mot. at 42. Thus, CPN

argues, mere review of the agency decision does no harm to non-

parties: the federal court is not changing the outcome on the

merits, and the agency to which the matter is remanded is

authorized, under its own procedures, to hear the case without

joining those parties which might be considered necessary under

Rule 19(a). Pl.’s Opp’n at 31.

-15- In essence, CPN requests that the Court rule either that

non-party tribes are not “necessary,” or that the equitable

standard contained in Rule 19(b) be applied so that the litigation

can proceed. Id. at 33-35. In CPN’s view, the parties before the

Court would have complete relief in the form of a remand, an issue

in which non-parties have no interest (though they may, as in

Norton, have an interest in the underlying merits).

Defendants object to this characterization of the issue. They

begin by correctly distinguishing two cases that CPN relies on.

Def.’s Mot. at 37-39 (arguing that Feezor v. Babbitt, 953 F. Supp.

1 (D.D.C. 1996) and Ransom v. Babbitt, 69 F. Supp. 2d 141 (D.D.C.

1999) are not applicable). The leading case on this issue,

Defendants demonstrate, is Wichita, which described a remand

judgment as only “a bit less prejudicial than a judgment” on the

merits. Wichita, 788 F.2d at 776. The critical question is

whether the Wichita analysis controls, given the unique set of

facts in this case.

1. The Wichita Decision

The Wichita case resembles the factual and procedural posture

presented in this case. First, like this case, it involves a

challenge to a formula used by the United States to apportion a

fund among three Indian tribes. Id. at 771. The Wichita tribe

brought suit in federal court to challenge the IBIA’s decision to

uphold the Department’s distribution of funds based on tribal

-16- population as of a fixed date. The district court and Court of

Appeals rejected this claim. Id. Second, the Caddos tribe (along

with a third tribe) then intervened to challenge the IBIA’s

decision denying it any retroactive payments. Id. at 771. The

district court rejected this claim. However, the Court of Appeals

vacated the judgment because the claim should have been dismissed

under Rule 19.7 Id. at 768.

The Wichita Court began by examining whether intervention by

two tribes (Caddos and Delaware) made them parties to the Wichita

tribe’s federal action. It concluded that by virtue of their

intervention and consent to be sued, the two tribes had waived

sovereign immunity and were therefore parties. Id. at 774.

Because the tribes were parties to the Wichita’s claims, the Court

of Appeals ruled it did not need to address the Rule 19(a) issue.

See id. at 772.

The Court also had to decide whether the Wichitas and

Delawares were parties to the Caddos’ cross-claim against them.

Id. at 773-74. Finding the two tribes to be non-parties to the

cross-claim, the Court then turned to whether these non-parties

were necessary under Rule 19(a). Id. at 774. Based upon the text

of the Rule, the Court concluded that there was “no doubt” that the

7 Rule 19 has changed since the Wichita decision was issued. Compare Wichita, 788 F.2d at 774 (laying out Rule as it existed), with Fed. R. Civ. P. 19. Nonetheless, the basic concept of the joinder rule remains unchanged, and thus the reasoning in the case is instructive.

-17- Wichitas and Delawares had an interest in the action. It reasoned

that, “[a]s beneficiaries of the trust who stand to lose if the

Caddos succeed in obtaining redistributions of future income to

compensate for the past, the Wichitas certainly have a vital

interest in being parties to the cross-claim, and especially in

retaining the ability to appeal any adverse judgment.” Id. The

Court of Appeals concluded that it was not feasible to add a tribe

as a party, because the tribes enjoy sovereign immunity, which they

cannot be forced to waive in these circumstances. See id. at 771

(citing cases to support proposition).

Having found the Wichitas and Delawares to be necessary

parties that could not be joined, the Court of Appeals went on to

address Rule 19(b), as to whether “equity and good conscience”

permitted the action to proceed without the non-parties.

The Court concluded that remand of the retroactive funding

issue was inappropriate because it would be based on a holding that

the “agency made a substantive mistake in finding that the Caddos

had agreed to the distribution scheme” up until a certain date.

Id. at 776. In this sense, a reviewing court did more than merely

assume a posture of review; rather, it made a decision that

affected the merits of the claim. Id. At the administrative

level, the agency’s authority would be bound by the federal court’s

decision. If the Wichitas and Delawares were not parties to the

action, their right to challenge this decision would not exist.

-18- See id. at 775 (analyzing extent of prejudice). For these reasons,

the Court of Appeals found that a remand to an agency for further

review of the merits would not eliminate prejudice to non-parties

under Rule 19(b)(2). Id. at 776. It also reasoned that the lack

of adequate relief, when weighed against the competing interest of

preserving tribal immunity, did not render absent parties

indispensable. Id. at 777. The Court of Appeals therefore

dismissed under Rule 19.

2. Application of Rule 19 to CPN’s Claims

The Court must analyze CPN’s claims to determine if the action

would involve proceeding without necessary parties, and, if so,

whether the Court should proceed with the actions in equity.8

In so doing, the Court is mindful that Rule 19 “calls for a

pragmatic decision based on practical considerations in the context

of particular litigation.” Kickapoo Tribe of Indians of Kickapoo

Reservation in Kan. v. Babbitt, 43 F.3d 1491, 1495 (D.C. Cir.

1995); see also Cloverleaf Standardbred Owners Ass’n. v. Nat’l Bank

of Wash., 699 F.2d 1274, 1276 (D.C. Cir. 1983)(acknowledging

district court’s “substantial discretion in considering which

factors to weigh and how heavily to emphasize certain

considerations in deciding whether the action should go forward.”).

a. Rule 19 Requires Dismissal of Count One.

8 Joinder of necessary parties is not feasible, as tribes cannot be compelled to waive sovereign immunity. See Wichita, 788 F.2d at 771.

-19- Plaintiff challenges the IBIA’s decision to uphold a reduction

of its funding under the Tribal Resolution. In Count One, CPN

contends that the Board erroneously decided that the funding

agreement was ambiguous, and resolved that ambiguity by looking to

CPN conduct that was not supported by the record. CPN asks the

Court to remand the matter to the IBIA because its decision was

arbitrary or capricious, and to order the IBIA to “further develop

the administrative record and require that the IBIA issue a new

decision based on the further-developed administrative record.”

Pl.’s Mot. at 1.

The first issue is whether under Rule 19(a) non-parties are

required to be joined. A party is necessary if: (1) in the absence

of that party, the Court “cannot accord complete relief among

existing parties,” or (2) the absent party “claims an interest

relating to the subject of the action and is so situated that

disposing of the action in the person’s absence may . . . as a

practical matter impair or impede the person’s ability to protect

the interest.” Fed. R. Civ. P. 19(a)(1)(A)-(B). The Court of

Appeals has broadly characterized necessary parties as “those

‘affected by the judgment and against which in fact it will

operate. . . .’” W. Coast Exploration Co. v. McKay, 213 F.2d 582,

592 (D.C. Cir. 1954) (citing Minnesota v. Hitchcock, 185 U.S. 373,

387 (1902)).

-20- Prong two of the necessity requirement asks courts to

determine whether the non-party tribes “have a legally protected

interest” in the subject matter of the action. Fed. R. Civ. P.

19(a)(1)(B); see also Ramah Navajo Sch. Bd., 87 F.3d at 1351;

Cherokee Nation of Okla. v. Babbitt, 944 F. Supp. 974, 979 (D.D.C.

1996), rev’d on other grounds. In Wichita, the Court of Appeals

found that non-parties were required to be joined. Other courts

have also found that the apportionment of common funding can be the

basis of a legally protected interest. See Norton, 248 F.3d at 996

(describing district court decision); Makah Indian Tribe v. Verity,

910 F.2d 555, 559 (9th Cir. 1990) (describing district court’s

ruling that absent tribes may have interest in suit where increased

shares of common tribal fund were at stake).

However, in Ramah Navajo School Board, this Circuit’s Court of

Appeals held that non-party tribes were not necessary to the

action, even though the court was faced with a question regarding

a common-funding scheme. 87 F.3d at 1351. The Court ruled that

non-parties had no protectable interest because the Government

declared that any funds ordered released would not be used to

increase tribal funding. Id. As has been emphasized in other

cases, see, e.g., Kickapoo, 43 F.3d at 1495, the Ramah decision

supports the proposition that courts must take a practical approach

to the joinder issue, and carefully assess what interests are at

stake for parties and non-parties.

-21- In Norton, the Tenth Circuit clarified that the interest

claimed by non-parties need not be concrete or compelling. Rather,

the court found that for a party to be necessary under Rule

19(a)(2), it must claim an interest that is not “patently

frivolous.” Norton, 248 F.3d at 998. The absent party is not

required to actually possess that interest; merely claiming it is

sufficient Id.

i. Non-Party Tribes Must Be Joined.

In Count One, CPN claims an interest only in obtaining review

of the Board’s decision and claims to seek no decision on the

merits. Defendant counters that this Count involves the common-

funding scheme entered into by Shawnee Agency Tribes, and therefore

non-party tribes do have an interest. Def.’s Mot. at 37-38. For

this reason, the Department argues, this case cannot be

distinguished from Norton, where the Tenth Circuit upheld the

dismissal of a similar CPN lawsuit for failure to join necessary

tribes. Id.

If a remand were granted, the Board would be reopening the

record and reconsidering how to apply a funding formula that

impacts each tribe. CPN’s goal on remand is to achieve a more

flexible interpretation of the Tribal Resolution than the IBIA

initially gave, and one which would then change the funding

allotments made to each tribe. CPN seeks a decision from the

Board, buttressed by a more adequate administrative record, that

-22- will give it more funds and the other tribes less. Thus, as in

Norton, the non-parties have a legitimate and non-frivolous

interest in the outcome of this litigation.

ii. Non-Party Tribes Are Indispensable.

Rule 19(b) lists four factors for courts to consider when

deciding whether to proceed without necessary parties that cannot

be joined. The Court must weigh the extent of prejudice to non-

parties, its ability to shape a remedy to lessen that prejudice,

whether a decision would be adequate without absent parties, and

whether the plaintiff would have an adequate remedy if the claims

were dismissed. Fed. R. Civ. P. 19(b).

It is clear that, under factor three of Rule 19(b), complete

relief can be provided to the parties. However, as in Wichita, a

remand to the Board for consideration of procedural defects in its

decision does not adequately eliminate potential prejudice to

absent parties. 788 F.2d at 776. Non-parties would not be able to

appeal the IBIA decision, although it may result in a ruling that

denies them funding. Thus, the first two factors of the Rule 19(b)

analysis support dismissal of Count One.

Finally, while the Court shares the Wichita Court’s concern

that there is no alternative forum for CPN, see Wichita, 788 F.2d

at 777, the weighty competing interest of preserving tribal

sovereign immunity is paramount. Id. Given the importance of this

latter policy, and the fact that the litigation should not proceed

-23- simply because an adequate alternative remedy does not exist, see

id., the fourth factor of Rule 19(b) strongly favors dismissal.

See Kickapoo, 43 F.3d at 1496-97 (“[T]here is very little room for

balancing of other factors set out in Rule 19(b) where a necessary

party under Rule 19(a) is immune from suit because immunity may be

viewed as one of those interests compelling by themselves.”)

(quotation and citation omitted).

For all these reasons, the Court concludes that the non-party

tribes are indispensable.

b. Rule 19 Requires Dismissal of Count Two.

Count Two asks for remand to the Board for further review in

light of arbitrary and capricious decision-making. In its Motion

for Summary Judgment, Plaintiff addresses the merits of the

collateral estoppel claim, and argues that the IBIA holding was

erroneous as a matter of law. Additionally, its Complaint reflects

a thinly veiled effort to bring a substantive claim in the guise of

a request for review. CPN couches its objection in terms that

evoke arbitrary and capricious analysis (e.g., the IBIA “ignores”

certain facts), but is basically arguing that the IBIA made an

incorrect ruling on a purely legal question. Relief for such a

request would amount to a ruling that the agency made a

“substantive mistake” under Wichita. 788 F.2d at 776.

-24- Plaintiff argues that the IBIA’s decision that it is

collaterally estopped from challenging the application of factor

three of the funding formula based on a 2002 IBCA decision is

wrong. Compl. at ¶¶ 52-58. Unlike Count One, where Plaintiff

argues that certain facts relied upon by the IBIA are not supported

by the record, in this Count CPN argues that the Board committed

legal error in its interpretation of the funding formula contained

in the Tribal Resolution. Pl.’s Mot. at 25-27. Thus, despite the

fact that, for strategic reasons, CPN is arguing that it does not

seek resolution of the merits of the Board’s ruling, it is in fact

attempting to relitigate an unfavorable ruling below. However, in

order to review that unfavorable decision, the Court must reach the

merits of the IBIA’s collateral estoppel holding, because that

claim presents a question of law. It is well established that de

novo review is the appropriate standard for such questions of law.

See Athridge v. Aetna Cas. & Sur. Co., 351 F.3d 1166, 1171 (D.C.

Cir. 2003).

Such review is fundamentally distinct from reviewing and

remanding due to a procedural defect in the agency’s decision-

making. Any decision in favor of CPN would be premised on a

finding by this Court that the Board made a substantive legal error

-- whether it was a finding that the Board erred in determining

that the IBCA had ruled on the same issue, or that CPN was a party

to the IBCA decision as a matter of law. Such a remand would very

-25- closely resemble the remand contemplated in Wichita. In that case,

the Court of Appeals said that a “holding to that effect would be

binding on the agency, and it becomes quickly obvious that even if

we were to agree with the substantive premise of the remand

solution, it would not in fact mitigate the prejudice to the [non-

parties].” Wichita, 788 F.2d at 776.

Therefore, under Wichita, such a remand runs afoul of Rule 19.

The Absentee Shawnee and remaining Agency tribes have an interest

in the preclusive effects of decisions about the funding formula.

See Otherson v. Dep’t of Justice, I.N.S., 711 F.2d 267, 273 (D.C.

Cir. 1983) (“Along with the doctrine of claim preclusion or res

judicata, issue preclusion aims to avert needless relitigation and

disturbance of repose, without inadvertently inducing extra

litigation or unfairly sacrificing a person’s day in court.”).

Rule 19(a) requires that non-party Shawnee Agency tribes be joined.

As it is not feasible to do so because of tribal sovereign

immunity, the only way that this Count can survive is if it should

proceed "in equity and good conscience" under Rule 19(b).

A ruling on Count Two would be adequate in non-parties’

absence, and so the third prong of Rule 19(b) is satisfied. On the

other hand, factor four strongly supports dismissal of the claims

in order to preserve non-parties’ sovereign immunity. See supra,

Part III.A.2.a.ii.

-26- Looking to the first two factors of Rule 19(b), the Court

finds that decision on the collateral estoppel issue necessarily

would direct the agency to conduct its legal analysis in a certain

way. Because ordering a change to the IBIA’s collateral estoppel

ruling would have an effect on the interests of the non-parties,

and those parties are not represented at all in this litigation,

those interests would be prejudiced. Further, the Court cannot

craft relief to minimize such prejudice. CPN essentially asks the

Court to tell the IBIA how to evaluate and weigh precedent in the

course of its collateral estoppel review. This remedy would, as in

Wichita, range beyond a simple remand and would shape the

substantive issues before the IBIA.

In this scenario, courts must be practical in light of all the

circumstances. Kickapoo, 43 F.3d at 1495. Consideration of the

collateral estoppel issue will amount to determination of an

important substantive issue, and not merely a remand. The

practical result would be a decision on a matter in which

non-parties have a legitimate and substantial interest. Such a

decision would prejudice non-parties, and therefore Count Two must

be dismissed.

c. Count Three Must Be Dismissed As Moot.

The IBIA held that collateral estoppel prevents CPN from

bringing its claim regarding the misapplication of the funding

formula. As discussed above, CPN challenged this holding in Count

-27- Two; that claim has been dismissed. The IBIA also explained as an

alternative holding that it rejected the merits of CPN’s claim

regarding the funding formula. CPN challenges this reasoning in

Count Three.

However, because the Board’s collateral estoppel decision is

upheld, the Court need not reach the Board’s alternative reasoning.

See United States v. Williams, 341 U.S. 70, 72 (1951) (“The

alternative grounds for the decision of the Court of Appeals need

not be considered, for we agree that [§] 241 . . . does not reach

the conduct laid as an offense in the prosecution here.”); see also

Burkhart v. Wash. Metro. Area Transit Auth., 112 F.3d 1207 (D.C.

Cir. 1997) (“The fact that the trial court alternatively rejected

WMATA’s motion on the merits in no way undermines the timeliness

ruling.”). The IBIA’s dismissal of CPN’s challenge is undisturbed.

Count Three is therefore dismissed as moot.

B. The IBIA Decision in Count One Was Not Arbitrary or Capricious

Even though the rulings already made dispose of the case, the

Court will address the merits of Plaintiff’s arbitrary and

capricious arguments for the sake of judicial efficiency, so that

all issues will be before the Court of Appeals should the joinder

rulings be overturned.

CPN asks that the Court invalidate the IBIA’s decision because

of its failure to consider relevant evidence, and because it based

part of its decision on an insufficiently developed record. CPN

-28- claims that the IBIA erroneously concluded that the funding formula

was ambiguous, and that even if it was ambiguous the IBIA erred in

finding that, based on its conduct, CPN ratified the Board’s

interpretation of the formula allowing use of 1988 data. Compl. at

§§ 38-51.

In view of the deference granted to administrative agencies,

and after full consideration of the record in this case, the Court

rejects Plaintiff’s arguments.

1. The IBIA Reasonably Concluded that the Funding Formula Is Ambiguous.

First, Plaintiff alleges that the agency failed to consider

material evidence in the record. Pl.’s Mot. at 10-20. CPN argues

that two provisions of the formula -- that it would apply in “FY 89

and future years,” and that the five tribes “will conform to all

aspects of the CFR appropriate to the given program to be

contracted” -- were erroneously overlooked in the decision below.

Id. at 11. CPN goes on to explain why this language should have

been considered and what the effect of such failure is. Id. at 11-

20.

In its opinion, the IBIA begins its analysis by setting out

the rules for contract interpretation. IBIA Decision, at 172

(quoting Restatement (Second) of Contracts, § 202(1)). The Board

then considered CPN’s argument that the plain language of the

funding formula means that the formula should be calculated

annually. Id.

-29- Acknowledging that the argument “has some force,” the IBIA

went on to list reasonable inferences that could be drawn from the

fact that the funding formula omitted clear language that it should

be applied on the basis of 1988 data. Id. The opinion then gave

consideration to the converse inference: the absence of clear

language directing the Department to recalculate the formula each

year meant that the language did not support CPN’s interpretation.

Id. These competing interpretations convinced the IBIA that “the

agreement’s language was ultimately ambiguous” regarding annual

recalculation of the formula.9 Id.

CPN argues that the IBIA should reconsider the language of the

agreement based on the inferences that it draws from the terms of

the contract. The “FY 89 and future years” clause, CPN asserts,

should be read to mean that funding is allotted “in any given

fiscal year” in proportion to data that will change from year to

year. Pl.’s Mot. at 11-12. Plaintiff maintains that the IBIA

“ignor[ed]” and “otherwise fail[ed] to explain or address” the

effect of the plain language of the funding formula because it did

not adopt CPN’s interpretation. Id.

The Court’s task is to ensure that the Board’s decision was

not arbitrary and was well reasoned, not to second-guess its

9 Based on the plain language of the resolution, it would not have been unreasonable for the Board to conclude that the agreement was not ambiguous, in that it clearly stated that 1988 data was to govern all future funding.

-30- correctness. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29, 42 (1983) (“[A] court is not to

substitute its judgment for that of the agency.”); Nat’l Treasury

Employees Union v. Horner, 854 F.2d 490, 498 (D.C. Cir. 1988);

Olson v. Clinton, 2009 WL 635977, at *8 (Mar. 12, 2009 D.D.C.).

Plaintiff suggests one reading of the administrative record and

insists that its reading would remove any ambiguity. However,

CPN’s view relies on an interpretation of the language based on

terms that are not even included in the agreement. See Pl.’s Mot.

at 12 (adding “in any fiscal year”).

The Board acknowledged that arguments based on the plain

meaning of the agreement had some force, but ultimately decided

that the terms were ambiguous. IBIA Decision, at 172. In doing

so, the Board provided more than adequate reasons for its decision.

It considered factors relevant to whether the agreement was

ambiguous. See Bloch, 348 F.3d at 1070. The decision fully

“conform[ed] to ‘certain minimal standards of rationality,’” and

must be upheld. Small Refiner, 705 F.2d at 521 (citation omitted).

2. The IBIA’s Resolution of that Ambiguity Was Not Arbitrary or Capricious.

CPN takes the position that even if the terms of the funding

formula are ambiguous, the IBIA also erred in construing it by

examining evidence that did not appear in the record.

Specifically, Plaintiff objects that the Board purported to rely on

-31- parties’ past performance of the contract to discern its meaning,

but cited to conduct by CPN that was not supported in the record.

The IBIA relied on the Department’s use of 1988 data since

1988, CPN’s lack of objection to this procedure until 1998, and

other tribes’ decisions to not support CPN’s interpretation of the

agreement. IBIA Decision, at 173. Contrary to the Board’s

decision, CPN insists that there is no evidence in the record that

it had knowledge of how the formula was being applied nor an

opportunity to object to its application before it brought a

challenge in 1998. Pl.’s Mot. at 21. Plaintiff views this piece

of supporting evidence as the key to the IBIA’s conclusion

regarding parties’ acquiescence to the formula calculation used by

the Department. Id. at 23.

In its decision, the IBIA held that the BIA Director did not

abuse his discretion in finding that the performance of CPN and

other tribes demonstrated an intent to apply the formula based on

1988 data. IBIA Decision, at 173. The decision refers to the

record in saying that the agreement “has been implemented based on

a static application of the formula since its inception.” Id. It

goes on to note that other tribes who signed the agreement have not

come forward to support CPN’s interpretation of its terms. Id. It

also refers to the evidence that Plaintiff objects to: that the

funding formula had been consistently applied since 1988 on the

-32- basis of 1988 data, that CPN knew of this and had an opportunity to

object, but did not do so until 1998. Id.

The IBIA decision is cursory on this point. However, that may

be a function of the fact the Board itself was reviewing the

Director’s decision for an abuse of discretion, rather than making

a de novo decision on the merits. The Board relies on two vital

pieces of evidence that CPN does not challenge (i.e., a history of

static application by the Department and lack of support for CPN

from other tribes). Id. at 173. CPN takes the position that the

IBIA’s reference to a factual matter not in the record means that

the record fails to support its conclusion in violation of the APA.

Pl.’s Opp’n at 16-17.

The Defendant reads the IBIA decision to mean that CPN’s

silence on the application of the funding formula amounted to its

consent to the agency’s calculations. Def.’s Opp’n at 17.

Defendant points out that the decision did advance other reasons

supported by the record for finding that the parties to the

agreement intended the formula to be applied in the manner

Defendants had used. Id. at 17-18. The Defendants maintain that

even if the Court discredits the IBIA’s finding with respect to

CPN’s silence on the matter, the other grounds for the Board’s

conclusion are sufficient to withstand Plaintiff’s challenge. Id.

Under arbitrary and capricious review, the Court is required

to uphold an agency decision if the agency has examined the

-33- “relevant data” and based its conclusion on a “reasoned explanation

that is supported by the record.” America Tel., 974 at 135. The

IBIA was attempting to interpret ambiguous language based on

parties’ performance after executing the agreement. IBIA Decision,

at 172-73. In order to survive this Court’s arbitrary and

capricious review, it had to consider factors relevant to that

ultimate issue, and establish a rational connection between the

facts and the conclusion. State Farm, 463 U.S. at 43. The record

does show that there was a ten-year history of application of the

funding formula based on 1988 data and that other tribes refused to

affirmatively support CPN’s position in this litigation.10 AR at

Tab 60 at Ex. A (Decl. of Rhonda Butcher) at 2; Pl.’s Statement of

Material Facts at ¶ 4 (referencing IBIA decision).

Even if the inference based on CPN’s silence was unwarranted

by the record, the conclusion arrived at by the IBIA may be upheld

as rational given the support in the record for the other facts

referenced. The case law on arbitrary and capricious review does

not demand that the Court overturn an agency decision whenever the

agency makes an inappropriate inference. See Multimax, Inc. v.

10 Those tribes also did not object to CPN’s position. The IBIA appears to have given more weight to their lack of support than their lack of objection. The Court is not in a position to substitute its judgment for that of the agency’s. State Farm, 463 U.S. at 43. The IBIA’s interpretation of this evidence supports its decision regarding the relevant factor of parties’ performance, and therefore passes muster as a satisfactory explanation of its conclusion. See id.

-34- Fed. Aviation Admin., 231 F.3d 882, 888 (D.C. Cir. 2000)

(concluding that mistaken inference by agency not reversible error

where other evidence supported agency decision). It focuses

instead on the rationality of the decision. See, e.g., Bowman

Transp. v. Arkansas-Best Freight Sys., 419 U.S. 281, 285 (1974)

(“The agency must articulate a rational connection between the

facts found and the choice made.”) (internal quotations and

citation omitted); Neighborhood TV Co. v. Fed. Commc’n Comm’n, 742

F.2d 629, 639 (D.C. Cir. 1984) (“[Courts] will uphold the

[agency’s] decision if, but only if, [they] can discern a reasoned

path from the facts and considerations before the [agency] to the

decision it reached.”).

The IBIA’s decision on the question of parties’ inaction finds

overall support in the record, although each and every link in its

chain of reasoning may not. The decision below is upheld because

it took into account the relevant data and made a rational decision

based on it.

C. The IBIA Did Not Erroneously Conclude that CPN Is Precluded from Litigating the Effects of Collier.

CPN challenges the IBIA ruling that it is collaterally

estopped from litigating the effect of the Collier decision on the

funding formula. Pl.’s Mot. at 24. The Board analyzed an earlier

IBCA decision between Absentee Shawnee and the Department, in which

CPN intervened, and determined that the IBCA decided the question

of Collier’s effect on the formula. IBIA Decision, at 167-71

-35- (discussing preclusive effects of Appeals of Absentee Shawnee Tribe

of Oklahoma, IBCA 4317-4318/2001, 35 IBCA 52 (Nov. 4, 2002) (“IBCA

I”)).

In challenging the IBIA’s conclusion on the preclusive effects

of an earlier judgment, CPN raises a question of law. See Athridge

v. Aetna Cas. & Sur. Co., 351 F.3d 1166, 1171 (D.C. Cir. 2003)

(“The issue of whether or not res judicata applies in a given

situation is a question of law.”). Therefore, the Court reviews

this issue de novo. Id.

To determine if CPN is precluded from re-litigating its claim

about Collier’s effect, the Court must determine if the same issue

now being raised was raised in the prior case, whether that issue

was “actually and necessarily determined” by that court, and

whether a finding of preclusion would “work a basic unfairness to

the party bound by the first determination.” Yamaha Corp. of

America v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992).

Before proceeding to the facts of this case, it is important

to note that the collateral estoppel analysis must focus on IBCA I.

The IBIA decision that discusses IBCA I is not the subject of the

Court’s review. Id. (“[I]t is the prior judgment that matters, not

the court’s opinion explicating the judgment.”) (emphasis in

original); see also American Iron & Steel Inst. v. EPA, 886 F.2d

390, 397 (D.C. Cir. 1989). Based on an analysis of IBCA I, the

-36- Court concludes that CPN was collaterally estopped from challenging

the effect of Collier before the IBIA.

1. The Issue Raised by CPN Before the IBIA Was Raised and Decided by the IBCA.

CPN asked the IBIA to rule on whether Collier required a

change in the application of factor three of the funding formula.

Pl.’s Mot. at 24. Parties disagree over whether this issue was

raised in Absentee Shawnee’s post-award appeal before the IBCA.

When inquiring into whether an issue has been raised, courts

must be mindful that “once an issue is raised and determined, it is

the entire issue that is precluded, not just the particular

arguments raised in support of it in the first case.” Yamaha, 961

F.2d at 254 (emphasis in original). If a party could have made an

argument based on the legal issue raised, but did not do so, the

party is not permitted to raise it in the new case. Securities

Indus. Ass’n v. Bd. of Governors, 900 F.2d 360, 364 (D.C. Cir.

1990).

IBCA I clearly raised the issue of Collier’s impact on the

Department’s application of the formula. That decision contained

an in-depth discussion of Collier, IBCA I, at 4-5, the Department’s

arguments in reliance on that case, id. at 7-8, and the IBCA’s

finding on how Collier affected the parties, id. at 13-14.

CPN casts the issue as a contractual dispute between Absentee

Shawnee and the Department. Pl.’s Mot. at 26-27. The litigation’s

procedural posture was indeed a contract dispute brought before the

-37- IBCA, centering on whether the Department violated Absentee

Shawnee’s AFA by decreasing the funding allotted to the tribe.

IBCA I, at 1. However, the IBCA had to investigate the reasons for

the Department’s change in the funding level, which included the

issue of Collier’s effect on the funding formula. Id. at 2, 13-14.

CPN counters that because this was a contractual dispute

between Absentee Shawnee and the Department, the broader issue of

Collier’s future effect was not litigated. However, the existence

of a contractual dispute does not mean that the issue of Collier’s

effect was not raised. CPN had a chance to make its particular

argument about the Collier issue when it was raised before the

IBCA. Therefore, under Yamaha and Board of Governors, CPN is

precluded from raising those arguments now.

The Collier issue was actually decided by the IBCA. The

finding that “Norton . . . made it clear that Collier had nothing

to do with funding arrangements,” and that the Department was not

legally obliged under Collier to alter Absentee Shawnee’s AFA

indicates that the IBCA made a judgment on the issue. IBCA I, at

14. That judgment will bind CPN as long as it does not work a

fundamental unfairness on the tribe.

2. CPN Was a Party to the IBCA Litigation.

CPN maintains that the IBCA judgment should not, as a matter

of fundamental fairness, preclude it from bringing its claims

before the IBIA. Pl.’s Mot. at 28-29. Plaintiff argues that it

-38- was not a party to the IBCA litigation, since CPN only participated

as a permissive intervenor. In this role, the tribe submitted

briefs related to the Absentee Shawnee’s post-award appeal to the

IBCA. Id. The IBCA decided the case approximately three months

after CPN intervened. Id. at 29. The IBCA then denied CPN’s

motion for reconsideration of its decision, concluding that CPN was

not a party to the original litigation, and therefore had no

standing to file the motion. Pl.’s Mot. at Ex. D (In re Appeals of

Absentee Shawnee Tribe of Okla., 2003 WL 133274 (IBCA Jan. 14,

2003) (“IBCA II”)).

For purposes of collateral estoppel, “‘parties’ does not refer

to formal or paper parties, but to parties in interest, that is,

that persons whose interests are properly placed before the court

by someone with standing to represent them are bound by the matters

determined in the proceeding.” 1B J. Moore, Moore’s Federal

Practice ¶ 0.411[1] at 390-91 (2d ed. 1983); see also Southmark

Props. v. Charles House Corp., 742 F.2d 862, 869 (5th Cir. 1984).

Courts have found litigants intervening on appeal to be “parties”

to the litigation who are bound by the outcome. See Local 322,

Allied Indus. Workers of America, AFL-CIO v. Johnson Controls,

Inc., Globe Battery Div., 921 F.2d 732, 734 (7th Cir. 1991)

(concluding res judicata applied to party who intervened on appeal

after being denied right to intervene in district court, where

intervenors’ “arguments were addressed by [appellate court’s]

-39- decision”); N.A.A.C.P. v. A.A. Arms, Inc., 2003 WL 21242939, at *19

(E.D.N.Y. Apr. 1, 2003) (“As a general rule, a nonparty is not

bound by judgments entered in an action in which it did not

intervene.”); Deaktor v. Henner, 517 F.Supp. 26, 27 (N.D. Ill.

1980) (finding that plaintiff was party to administrative

litigation where plaintiff was granted leave to intervene in that

case).

Plaintiff mistakenly relies on case law that pertains to the

status of amici curiae, rather than intervenors. See Pl.’s Mot. at

30. CPN characterizes United States v. 111.2 Acres of Land, 293 F.

Supp. 1042 (E.D. Wash. 1968), as finding that the State of

Washington was not a party to litigation in which it had

“intervened.” Pl.’s Mot. at 30. In that case, the State of

Washington was joined as amicus curiae; there was no mention of

intervention in the decision. 111.2 Acres, 293 F. Supp. at 1049.

In the instant case, the IBCA permitted CPN to participate as

intervenors -- and not as amicus curiae -- in the post-award

appeal. See IBCA I, at 6.

CPN was, therefore, a party to the earlier litigation. The

tribe was allowed to submit its arguments to the IBCA in order to

represent its interests. Over a period of two months, CPN

developed these arguments for briefing; the IBCA considered them

and issued a decision that discussed them. Plaintiff’s interests

were represented in that litigation because they had an opportunity

-40- to be heard. Therefore, it would not be fundamentally unfair to

enforce the IBCA’s judgment against them in future proceedings.

Cf. Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 327 n. 7

(1979) (“It is a violation of due process for a judgment to be

binding on a litigant who was not a party or a privy and therefore

has never had an opportunity to be heard.”).

IV. CONCLUSION

For the foregoing reasons, Defendants’ Motion for Summary

Judgment is granted, and Plaintiff’s Motion for Summary Judgment is

denied. An order shall issue with this Memorandum Opinion.

/s/ June __, 2009 Gladys Kessler United States District Judge

Copies to: attorneys on record via ECF

-41-