Shawnee Tribe v. Yellen

• Court: District Court, District of Columbia
• Decided: January 28, 2022
• Docket: Civil Action No. 2020-1999
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA _________________________________________ ) THE SHAWNEE TRIBE, ) ) Plaintiff, ) ) v. ) Case No. 20-cv-1999 (APM) ) JANET L. YELLEN, 1 in her official capacity as ) Secretary of the Treasury, et al., ) ) Defendants. ) _________________________________________ ) ) THE MICCOSUKEE TRIBE OF ) INDIANS OF FLORIDA, ) ) Plaintiff, ) ) v. ) Case No. 20-cv-2792 (APM) ) UNITED STATES DEPARTMENT ) OF THE TREASURY et al., ) ) Defendants. ) _________________________________________ ) ) PRAIRIE BAND POTAWATOMI NATION, ) ) Plaintiff, ) ) v. ) Case No. 21-cv-0012 (APM) ) JANET L. YELLEN, in her official capacity as ) Secretary of the Treasury, ) ) Defendant. ) _________________________________________ )

1 Here and in Prairie Band Potawatomi Nation below, pursuant to Rule 25(d) of the Federal Rules of Civil Procedure, the court substitutes the current Secretary of the Treasury as the defendant in this case. MEMORANDUM OPINION

I. INTRODUCTION

In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security

(“CARES”) Act in response to the COVID-19 public health crisis. The Act created a Coronavirus

Relief Fund, which reserved $8 billion for payments to Tribal governments, leaving the precise

method of allocation to the Secretary of the Treasury. The Department of Treasury ultimately

selected an allocation method in May 2020 that undercounted—as Treasury itself now

acknowledges—the membership of certain Tribes. Three such Tribes brought suit challenging

that methodology. Although initially unsuccessful before this court, one of the Tribes prevailed

in the D.C. Circuit, which ruled that Treasury’s May 2020 allocation methodology was likely

arbitrary and capricious under the Administrative Procedure Act (“APA”) as to certain

undercounted Tribes. Following remand, on April 30, 2021, Treasury announced a new allocation

methodology as to certain undercounted Tribes, resulting in additional distributions of CARES

Act funds, including to the three Plaintiff Tribes.

Despite receiving these additional funds, two Plaintiff Tribes—the Miccosukee Tribe of

Indians of Florida (“Miccosukee”) and Prairie Band Potawatomi Nation (“Prairie Band

Potawatomi”)—continue to challenge Treasury’s allocation methodology. They maintain that not

only was Treasury’s May 2020 allocation arbitrary and capricious under the APA, but so too was

the agency’s April 2021 distribution of additional funds. The third Plaintiff Tribe—the Shawnee

Tribe (“Shawnee”)—is satisfied with its supplemental distribution and has abandoned its legal

challenges.

2 Now before the court are the amended motion for summary judgment brought by

Miccosukee and Prairie Band Potawatomi (“the Tribes” or “Plaintiffs”) and Defendants’ 2 cross-

motion for summary judgment. For the reasons that follow, the court denies Plaintiffs’ motion for

summary judgment and grants Defendants’ cross-motion.

II. BACKGROUND

The court sets forth below the long, complicated factual and procedural history of these

three cases. Some detail is left out in the interest of brevity.

A. 2020 Title V Funding Allocation

In March 2020, Congress passed the CARES Act in response to the developing COVID-

19 public health crisis. CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020). Title V of the

Act amends the Social Security Act and appropriates $150 billion for “payments to States, Tribal

governments, and units of local government,” of which $8 billion was set aside for payments to

Tribal governments. 42 U.S.C. § 801(a)(1), (2)(B). Such payments were to be allocated “based

on increased expenditures of each . . . Tribal government” due to COVID-19, to be “determined

in such manner as the Secretary [of the Treasury] determines appropriate,” “in consultation with

the Secretary of the Interior and Indian Tribes.” Id. § 801(c)(7).

On May 5, 2020, Treasury announced its methodology for allocating the $8 billion in

Title V funds set aside for Tribal governments. Pls.’ Mot. for Summ. J., ECF No. 70 [hereinafter

Pls.’ First MSJ], Ex. H, ECF No. 70-8 [hereinafter 2020 Allocation Methodology], at 2. 3 Tribal

2 Defendants in this consolidated action are Deb Haaland, in her official capacity as Secretary of the Interior; the Department of the Interior; the Department of the Treasury; Janet Yellen, in her official capacity as Secretary of the Department of the Treasury; and the United States. 3 Unless otherwise indicated, all references to the docket are in the consolidated action, Shawnee Tribe v. Yellen, 20- cv-1999 (APM). 3 population would serve as a proxy for a portion of the allocation: “60[%] of the $8 billion reserved

for Tribal governments” would be distributed “immediately based on population”; the remaining

40% would be based on employment and expenditures data. Id. Treasury explained that it

expected “Tribal population . . . to correlate reasonably well with the amount of increased

expenditures of Tribal governments related directly to the public health emergency, such as

increased costs to address medical and public health needs.” Id. at 1. Treasury advised that it

would use “reliable and consistently prepared data” for Tribal population—namely, “Tribal

population data used by the Department of Housing and Urban Development (HUD) in connection

with the Indian Housing Block Grant (IHBG) Program.” Id. at 2. The IHBG data relies on Census

data tied to geographic “formula area[s]” developed by HUD. Id.; 24 C.F.R. § 1000.302. For any

Tribes not included in the IHBG data, Treasury obtained population figures from HUD. 2020

Allocation Methodology at 3. Tribal governments with an IHBG population below 37 were

assigned a “minimum payment of $100,000.” Id.

The IHBG population data, however, severely undercounted the enrollment of certain

Tribes. See Pls.’ Am. Mot. for Summ. J, ECF No. 88 [hereinafter Pls.’ Second MSJ], Ex. B, ECF

No. 88-2 [hereinafter 2021 Reallocation Methodology], at 1. Indeed, “several Tribes . . . were

assigned a population of zero, or a low population that approaches zero, for their IHBG formula

areas despite having substantial enrollment.” Id.

B. Litigation Arising from the May 2020 Allocation

Three Tribes whose populations were substantially undercounted based on the IHBG

data—all Plaintiffs in this consolidated action—brought suit to challenge Treasury’s reliance on

the IHBG data. See Compl., Prairie Band Potawatomi Nation v. Mnuchin, No. 20-cv-01491

4 (APM) (D.D.C.) [hereinafter Prairie Band Potawatomi I Docket], ECF No. 1 [hereinafter Prairie

Band Potawatomi’s 2020 Compl.]; Compl., ECF No. 2 [hereinafter Shawnee’s Compl.];

Miccosukee Tribe of Indians of Fla. v. U.S. Dep’t of the Treasury, No. 20-cv-02792 (APM)

(D.D.C.) [hereinafter Miccosukee Docket], ECF No. 1 [hereinafter Miccosukee’s Compl.]. The

relevant procedural aspects of their cases are discussed in greater detail below.

Prairie Band Potawatomi filed the first case that came before the court. It sought to enjoin

Treasury from disbursing the IHBG population–based portion of Title V funds to Tribal

governments because of flaws in the IHBG data that resulted in a substantial undercount (though

not a zero count) of its population. See Prairie Band Potawatomi Nation v. Mnuchin, No. 20-cv-

1491 (APM), 2020 WL 3402298, at *1 (D.D.C. June 11), appeal dismissed, No. 20-5171, 2020

WL 4931697 (D.C. Cir. July 16, 2020). The court declined to grant an injunction in part on the

ground that the Secretary’s allocation decision was “committed to agency discretion by law” under

the APA, 5 U.S.C. § 701(a)(2), and therefore not judicially reviewable. Prairie Band Potawatomi

Nation, 2020 WL 3402298, at *1–2. After initially appealing the court’s decision, Prairie Band

Potawatomi abandoned its appeal and voluntarily dismissed its action. See Prairie Band

Potawatomi Nation v. Mnuchin, No. 20-5171, 2020 WL 4931697, at *1 (D.C. Cir. July 16, 2020);

Notice of Voluntary Dismissal, Prairie Band Potawatomi I Docket, ECF No. 30.

Next came the action filed by Shawnee. Shawnee filed its suit in the Northern District of

Oklahoma, but the case was transferred to this District a month into the litigation. See Op. &

Order, ECF No. 27. Much like Prairie Band Potawatomi before it, Shawnee sought to enjoin the

disbursement of additional Title V funds on the ground that the IHBG population–based allocation

of Title V funds was arbitrary and capricious as applied to it. In Shawnee’s case, the IHBG data

5 showed the Tribe as having a population of zero despite its 3,021 enrolled members (and despite

the fact that other, non-IHBG, HUD data reflected an enrollment number of 2,113 for the Tribe).

See Shawnee Tribe v. Mnuchin, 480 F. Supp. 3d 230, 232 (D.D.C. 2020), rev’d, 984 F.3d 94 (D.C.

Cir. 2021); Shawnee’s Compl. ¶¶ 26–27. Not deviating from its decision in Prairie Band

Potawatomi, the court denied injunctive relief in part on the ground that the Secretary’s use of

IHBG data as a proxy for allocation was not judicially reviewable. See Shawnee, 480 F. Supp. 3d

at 232. The court later dismissed Shawnee’s complaint on the same basis. See Shawnee Tribe v.

Mnuchin, No. 20-cv-1999 (APM), 2020 WL 5440552, at *1 (D.D.C. Sept. 10, 2020), rev’d, 984

F.3d 94.

Shawnee appealed these decisions, and on January 5, 2021, the D.C. Circuit reversed them

both. See Shawnee, 984 F.3d at 103. First, the D.C. Circuit held that, although Title V conferred

broad authority on the Secretary, his decision to use the IHBG data as a proxy for allocating Title

V funds was judicially reviewable and the statute provided a meaningful standard—“increased

expenditures”—against which to judge his decision. See id. at 99–101. The court also ruled on

the Tribe’s APA claim: it found, under the standard for preliminary injunctions, that Shawnee was

likely to succeed on the merits because “the IHBG formula area population data is, at least with

respect to some tribes, an unsuitable proxy” for “increased expenditures.” Id. at 102–03. The D.C.

Circuit went on to enjoin the Secretary from distributing $12 million in remaining Title V funds,

as Shawnee had requested, and it reversed the dismissal of the complaint. See id. at 103. On

remand, this court formally entered the same injunction pending the outcome of the case. Order,

ECF No. 55.

6 Meanwhile, Miccosukee had filed its own action in the Southern District of Florida and

likewise sought preliminary relief for Treasury’s treatment of it as a zero-population Tribe based

on the IHBG data. Miccosukee’s Compl; Expedited Mot. for Prelim. Inj., Miccosukee Docket,

ECF No. 5 [hereinafter Miccosukee’s Sept. 2020 Mot. for Prelim. Inj.]. That case eventually made

its way to this court. See Order Transferring Case, Miccosukee Docket, ECF No. 21. Thereafter,

likely sensing that the D.C. Circuit would reverse this court in Shawnee, Prairie Band Potawatomi

refiled suit and again sought preliminary injunctive relief. See Mot. for Prelim. Inj., Prairie Band

Potawatomi Nation v. Mnuchin, No. 21-cv-00012 (APM) (D.D.C.) [hereinafter Prairie Band

Potawatomi II Docket], ECF No. 4 [hereinafter Prairie Band Potawatomi’s Jan. 2021 Mot. for

Prelim. Inj.].

After the remand in Shawnee, this court consolidated all three Tribes’ cases under the

Shawnee docket. Minute Order, Miccosukee Docket, Jan. 14, 2021; Minute Order, Prairie Band

Potawatomi II Docket, Jan. 14, 2021.

C. 2021 Title V Funding Reallocation

By the time Shawnee returned to this court, limited Title V funds remained to compensate

Tribes underfunded based on IHBG data. That was so for two reasons: First, in June 2020, this

court had ordered Treasury to distribute all remaining Title V funds not encumbered by ongoing

litigation. See Agua Caliente Band of Cahuilla Indians v. Mnuchin, No. 20-cv-01136 (APM),

2020 WL 3250701, at *1 (D.D.C. June 15, 2020). Second, the funds that remained subject to

litigation were funds that Treasury had allocated to Alaska Native Corporations (“ANCs”). This

court had ordered over $500 million to be held back pending litigation over whether ANCs

qualified as “Tribal governments” for purposes of the CARES Act. See Confederated Tribes of

7 Chehalis Rsrv. v. Mnuchin, No. 20-cv-01002 (APM), 2020 WL 3791874, at *1 (D.D.C. July 7,

2020). At the time of remand, litigation over ANC eligibility was pending before the Supreme

Court. See Yellen v. Confederated Tribes of Chehalis Rsrv., 141 S. Ct. 2434 (2021). The Supreme

Court eventually held that ANCs were indeed eligible to receive Title V funds, see id. at 2452,

thereby shrinking the available pot of Title V funds to distribute to undercompensated Tribes.

In response to the D.C. Circuit’s Shawnee ruling, Treasury decided to “reconsider its prior

decision” to rely on IHBG data as a population-based proxy for increased expenditures and

“reallocate a portion of the remaining, unpaid [Coronavirus Relief Fund] funds pursuant to a new

methodology.” 2021 Reallocation Methodology at 2; see also Status Report, ECF No. 60, at 1

(“[T]he Department of the Treasury will construct a revised methodology to determine how

Treasury will allocate any funds remaining . . . . In constructing this revised methodology,

Treasury intends to re-consider the formula and/or data used to allocate the funds to Plaintiffs, and

similarly-situated Tribes . . . .”). Treasury officially announced this “reallocation” of funds—and

its new methodology—on April 30, 2021. 2021 Reallocation Methodology at 1–3. The

“reallocation” assumed that ANCs would be eligible for Title V funding. See id. at 3.

In its announcement, Treasury explained that the “reallocation [would] provide additional

payments when there is a substantial disparity between the Tribe’s IHBG formula area population

count and its Tribal enrollment count,” because for those Tribes “formula area population is less

likely to be an accurate proxy for increased expenditures.” Id. at 2. Treasury explained its

reallocation methodology as follows: First, “to determine which Tribes may have received a

payment that significantly undercounted their potential expenditures,” the Department would

“compare the IHBG formula area population against enrollment data recently collected by the

8 Bureau of Indian Affairs (BIA).” Id. at 3. If enrollment data for a particular Tribe was not

available from BIA, Treasury would instead rely on the enrollment data the Tribe had submitted

in response to the Department’s April 2020 solicitation of enrollment data or, as a third option, the

enrollment data “available in HUD’s IHBG data” (as distinct from the IHBG population data used

in the 2020 allocation). Id. With that data in hand, Treasury would calculate the ratio between

each Tribe’s IHBG population and its enrollment. Id. It would subtract each ratio from 1, yielding

each Tribe’s “population-to-enrollment ratio.” Id. Treasury stressed that “funds available for

reallocation are limited and therefore only the most substantial disparities can be addressed.” Id.

To that end, Treasury would rank the population-to-enrollment ratios and provide additional

payments only to the Tribes in the 85th percentile and above; stated differently, Treasury would

allocate the remaining funds to the 15% of Tribes with the greatest disparity between IHBG

population and actual enrollment. Id.

After identifying the most undercompensated Tribes, Treasury would then need to decide

how much to pay each of them. It made that allocation in two steps. Treasury would begin by

determining “the amount [each] Tribe would have received under an enrollment-based allocation”

by “calculating each Tribe’s pro rata share of the amount of the population-based allocation

available for Tribes in the aggregate.” Id. In other words, Treasury determined what each Tribe’s

share would have been if the 2020 allocation had been based on enrolled population for all Tribes.

Next, Treasury “linearly phased [the payments] out such that the Tribe with the highest population-

to-enrollment ratio [would] receive the largest percentage of the difference between the amount it

would have received under the enrollment-based allocation and the IHBG formula area population-

based allocation.” Id. That is, Treasury ran a calculation to ensure that the most underfunded

9 Tribes would receive a higher percentage of the available funds than Tribes that were underfunded

to a lesser extent.

All three Plaintiff Tribes in this consolidated action were determined to be eligible for

reallocated funds based on their population-to-enrollment ratios. On May 3, 2021, Treasury

notified the three Plaintiff Tribes via email of the “supplemental amount each Plaintiff Tribe will

receive under the revised methodology.” Pls.’ Second MSJ, Ex. D, ECF No. 88-4, at 1. Shawnee

was to receive an additional $5,202,604; Miccosukee was to receive an additional $825,196; and

Prairie Band Potawatomi was to receive an additional $864,141. Id. Or, in different terms,

Shawnee received $1,712 per initially uncounted member under the reallocation methodology;

Miccosukee received $1,355 per uncounted member; and Prairie Band Potawatomi received $225

per uncounted member. See Mem. Op. & Order, ECF No. 90 [hereinafter Mem. Op. Denying PI

Modification], at 7; Pls.’ Reply in Supp. of Mot. for Summ. J. & Resp. to Def.’s Cross-Mot. for

Summ. J., ECF No. 93 [hereinafter Pls.’ Reply], at 1.

D. Litigation After Remand

At the time of the remand in Shawnee, both Prairie Band Potawatomi and Miccosukee had

pending motions for preliminary injunctions in their individual cases. Prairie Band Potawatomi’s

Jan. 2021 Mot. for Prelim. Inj.; Miccosukee’s Sept. 2020 Mot. for Prelim. Inj. After consolidation,

the three Plaintiff Tribes moved together for an additional preliminary injunction, asking the court

to order Treasury to immediately distribute Title V funds to them. Suppl. Mot. for Prelim. Inj.,

ECF No. 65. Plaintiffs then also filed their first motion for summary judgment. Pls.’ First MSJ.

With the summary judgment briefing schedule on its way, the court denied Plaintiffs’

request for an immediate release of funds but, based on the D.C. Circuit’s holding in Shawnee,

10 granted Miccosukee’s and Prairie Band Potawatomi’s motions to “enjoin Treasury’s distribution

of [a] combined $9,647,063 in remaining Title V funds pending resolution of th[e] litigation.”

Shawnee Tribe v. Yellen, No. 20-cv-1999 (APM), 2021 WL 1634597, at *2 (D.D.C. Apr. 26,

2021). 4 That sum represented the combined sum the Plaintiff Tribes estimated that they were due

under a population-based allocation using enrollment data rather than IHBG population counts.

Treasury announced its reallocation and revised methodology four days later. 2021

Reallocation Methodology. The court stayed the summary judgment briefing schedule “[i]n light

of Treasury’s stated intent to imminently distribute Title V funds to the Plaintiff Tribes.” Minute

Order, May 4, 2021; see also Mot. to Stay Summ. J. Briefing Schedule, ECF No. 76. Unsatisfied

with the amounts they had received, Miccosukee and Prairie Band Potawatomi filed amended

complaints, which included claims challenging the 2021 reallocation. Miccosukee Tribe of

Indians of Florida’s Am. Compl., ECF No. 79; Prairie Band Potawatomi Nation’s Am. Compl.,

ECF No. 82.

Then, Prairie Band Potawatomi moved to modify the April 2021 preliminary injunction by

increasing the amount of undistributed Title V funds set aside for it from $7.6 million to

$11,680,105. See Pl.’s Mot., ECF No. 83, at 1. The court denied that motion, concluding that

Prairie Band Potawatomi had failed to explain how its challenge to the May 2020 allocation was

not now moot and that the court likely lacked the authority to direct Treasury to pay the Tribe a

sum certain. Mem. Op. Denying PI Modification at 5–6 (noting that “the text of the CARES Act

4 The court noted that “[i]n Shawnee Tribe, the D.C. Circuit made clear that the Miccosukee Tribe—also assessed by Treasury as having zero population—is similarly situated to the Shawnee Tribe,” such that Miccosukee was entitled to the same injunction as Shawnee. Shawnee, 2021 WL 1634597, at *4. And, in addition, “because Prairie Band Potawatomi Nation claims that Treasury’s original methodology vastly undercounted its population, its legal claim is substantially similar, and thus warrants the same injunctive relief.” Id. (citation omitted). 11 does not support the ‘extraordinary circumstances’ that might justify a ‘detailed remedial order’”

(quoting Shawnee, 2021 WL 1634597, at *2)).

Days before the court ruled on Prairie Band Potawatomi’s motion to modify the

preliminary injunction, Prairie Band Potawatomi and Miccosukee filed their amended motion for

summary judgment, which “incorporates by reference the prior summary judgment motion.” Pls.’

Amended MSJ at 2. Defendants filed a cross-motion for summary judgment. Cross-Mot. for

Summ. J., ECF No. 92; Cross-Mot. for Summ. J. & Opp’n to Pls.’ Mot. for Summ. J., ECF No. 91

[hereinafter Defs.’ Cross-Mot.]. The court now considers these motions.

III. LEGAL STANDARD

When courts review agency action under the APA, “summary judgment is the mechanism

for deciding whether as a matter of law an agency action is supported by the administrative record

and is otherwise consistent with the APA standard of review.” Louisiana v. Salazar, 170 F. Supp.

3d 75, 83 (D.D.C. 2016). The district court “sits as an appellate tribunal,” reviewing the entire

case as a question of law. Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083–84 (D.C. Cir.

2001) (collecting cases). Accordingly, the court need not engage in lengthy factfinding, and as a

general rule, judicial review is limited to the administrative record. “It is black-letter

administrative law that in an [APA] case, a reviewing court should have before it neither more nor

less information than did the agency when it made its decision.” CTS Corp. v. EPA, 759 F.3d 52,

64 (D.C. Cir. 2014) (internal quotation marks omitted); see also 5 U.S.C. § 706 (“[T]he court shall

review the whole record or those parts of it cited by a party . . . .”).

The APA requires courts to “hold unlawful and set aside agency action, findings, and

conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance

12 with law.” 5 U.S.C. § 706(2)(A). “This is a ‘narrow’ standard of review as courts defer to the

agency’s expertise.” Ctr. for Food Safety v. Salazar, 898 F. Supp. 2d 130, 138 (D.D.C. 2012)

(quoting Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins., 463 U.S. 29, 43

(1983)). The court’s review, however, is not toothless. The court must satisfy itself that the agency

has “examine[d] the relevant data and articulate[d] a satisfactory explanation for its action

including a rational connection between the facts found and the choice made.” State Farm, 463

U.S. at 43 (internal quotation marks omitted). When an agency “has failed to provide a reasoned

explanation, or where the record belies the agency’s conclusion, [the court] must undo its

action.” County of Los Angeles v. Shalala, 192 F.3d 1005, 1021 (D.C. Cir. 1999). “Moreover, an

agency cannot fail to consider an important aspect of the problem or offer an explanation for its

decision that runs counter to the evidence before it.” Dist. Hosp. Partners, L.P. v. Burwell, 786

F.3d 46, 57 (D.C. Cir. 2015) (cleaned up). “Post hoc rationalizations advanced to remedy

inadequacies in the agency’s record” or in the agency’s explanation will not suffice. City of

Brookings Mun. Tel. Co. v. FCC, 822 F.2d 1153, 1165 (D.C. Cir. 1987).

IV. DISCUSSION

Plaintiffs seek summary judgment on the grounds that (1) the May 2020 allocation was

“arbitrary and capricious, not in accordance with law, and not fully remedied by the [April] 2021

allocation,” and (2) the April 2021 reallocation was arbitrary and capricious and not in accordance

with law. Pls.’ Second MSJ at 2; see 5 U.S.C. § 706(2)(A). The court considers Plaintiffs’

challenge to the May 2020 allocation before turning to the April 2021 allocation.

13 A. Challenge to the May 2020 Allocation Methodology

Plaintiffs argue that the awards made pursuant to the 2020 allocation methodology were,

“at least with respect to Plaintiffs, arbitrary and capricious and not in accordance with law.” Pls.’

Second MSJ at 12 (internal quotation marks omitted). Specifically, they contend that IHBG data

was insufficient for “estimating a Tribal government’s increased expenditures, when, for example,

a tribe does not have a formula area or when the tribe provides COVID-related assistance to

enrolled members listed outside of Tribal lands.” Id. (internal quotation marks omitted). Plaintiffs

do not make this argument in any comprehensive fashion in their amended motion; rather, they

“refer to[,] . . . incorporate by reference,” and rest on their first motion. Id.; see also Pls.’ First

MSJ. For their part, Defendants argue that Plaintiffs’ claims against the original methodology are

moot. They say the court “cannot provide the Plaintiffs with any meaningful relief for their

original claim beyond ordering Treasury to do what it has already done,” and the court cannot

“require Treasury to adopt any particular methodology.” Defs.’ Cross-Mot. at 12–13. The court

agrees with Defendants.

“If events outrun the controversy [in any given litigation] such that the court can grant no

meaningful relief” on a claim, there is no longer an “actual, ongoing controvers[y]” for Article III

purposes, and so the claim “must be dismissed as moot.” Foretich v. United States, 351 F.3d 1198,

1210 (D.C. Cir. 2003) (internal quotation marks omitted). That is the case here.

“Under settled principles of administrative law, when a court reviewing agency action

determines that an agency made an error of law, the court’s inquiry is at an end: the case must be

remanded to the agency for further action consistent with the corrected legal standards.” PPG

Indus., Inc. v. United States, 52 F.3d 363, 365 (D.C. Cir. 1995). As this court stated in its June

14 2021 Opinion and Order denying Prairie Band Potawatomi Nation’s motion to modify the

preliminary injunction already in place in this case, “[t]he Circuit in Shawnee held that IHBG

population data was an ‘unsuitable proxy’ for increased expenditures insofar as that data set

assessed a zero population for certain tribes. But Treasury has since abandoned that methodology

and announced a new approach that, presumably, seeks to rectify its error.” Mem. Op. Denying

PI Modification at 5. Defendants therefore are correct that the court can do no more than order

Treasury to do something it has already done: reevaluate its allocation methodology. Simply put,

“when an agency has rescinded and replaced a challenged regulation, litigation over the legality

of the original regulation becomes moot.” Akiachak Native Cmty. v. U.S. Dep’t of the Interior,

827 F.3d 100, 113 (D.C. Cir. 2016).

Plaintiffs point out that this is not precisely what has occurred here: at issue in this case

are funding awards, not a regulation, and Treasury did not rescind the funds it allocated pursuant

to the 2020 methodology. See Pls.’ Reply at 15. They are technically correct. But as a matter of

administrative law, the larger point remains: upon finding the 2020 allocation methodology

arbitrary and capricious, the court would be empowered to do no more than set Treasury’s action

aside and remand to the agency for reconsideration of the allocation methodology. See 5 U.S.C.

§ 706(2)(A); PPG Indus., 52 F.3d at 365. The agency did precisely that of its own accord.

Plaintiffs’ claims over awards pursuant to the 2020 allocation are moot.

It is true that under certain “extraordinary circumstances,” a court may enter a “detailed

remedial order[]” in a case involving a challenge to an agency action. N.C. Fisheries Ass’n, Inc.

v. Gutierrez, 550 F.3d 16, 20 (D.C. Cir. 2014). Plaintiffs appear to ask for such an order, see Pls.’

Reply at 15, although it is not entirely clear to the court what specific affirmative relief Plaintiffs

15 seek. Defs.’ Cross-Mot. at 13 (describing Plaintiffs’ requested relief as an order requiring “a

different methodology that includes certain mandatory aspects that the Plaintiffs would prefer”);

Pls.’ Reply at 13 (arguing that Treasury could have distributed per–uncounted enrollee reallocation

awards only to Plaintiffs or to the 15% of Tribes most severely undercounted under the 2020

methodology). But for the reasons the court has previously explained, the requisite “extraordinary

circumstances” to justify a detailed remedial order are not present here. See Shawnee, 2021 WL

1634597, at *2. Those circumstances “exist only when courts are permitted to compel agency

action under section 706(1) of the APA.” Id. (internal quotation marks omitted). And the APA

authorizes courts to “compel agency action,” 5 U.S.C. § 701(1), only “under narrow

circumstances.” Elec. Priv. Info. Ctr. v. IRS, 910 F.3d 1232, 1244 (D.C. Cir. 2018). “[T]he court’s

authority to issue a detailed remedial order applies only to discrete action that is legally

required . . . about which an official had no discretion whatever.” Shawnee, 2021 WL 1634597,

at *2 (second alteration in original) (emphasis and internal quotation marks omitted). Plaintiffs

make no argument as to how that narrow circumstance is met here.

That is not surprising. When, as here, “the manner of [an agency’s] action is left to the

agency’s discretion, a court can compel the agency to act, but has no power to specify what the

action must be.” Norton v. S. Utah Wilderness All., 542 U.S. 55, 65 (2004). No one disputes that

the CARES Act “‘gives the Secretary some discretion’ in carrying out Congress’s directive.”

Shawnee, 2021 WL 1634597, at *2 (quoting Shawnee, 984 F.3d at 100). That “discretion

16 forecloses the detailed order plaintiffs seek.” In re Long-Distance Tel. Serv., 751 F.3d 629, 634

(D.C. Cir. 2014). 5

For these reasons, to the extent that the Tribes maintain their claims pertaining to only the

2020 allocation methodology, their claims are moot. If, as Defendants suggest, Plaintiffs are really

arguing “only that they may pursue a claim ‘against the original methodology (as modified by the

revised methodology),’” Defs.’ Reply in Supp. of Cross-Mot. for Summ. J., ECF No. 95

[hereinafter Defs.’ Reply], at 20 (quoting Pls.’ Reply at 15), the court agrees that such claims are

not moot. However, such claims are best conceived of as 2021 reallocation–based claims, because

the second allocation of funds cannot be considered in isolation from the first allocation, and so

the court discusses those claims below.

B. Challenge to the 2021 Reallocation Methodology

There is no dispute that the 2021 reallocation methodology—and the 2020 methodology as

modified by the 2021 reallocation methodology—poses a live controversy. See Defs.’ Cross-Mot.

at 13. Plaintiffs argue that “the awards allocated as part of the 2021 Distribution were arbitrary

and capricious, and not in accordance with law.” Pls.’ Second MSJ at 2. Specifically, they contend

that the 2021 “allocation methodology . . . [(1)] has no coherent connection to the statute, [(2)] is

5 Plaintiffs face an additional potential hurdle: little, if any, Title V funds are left over to compensate Plaintiffs for an amount greater than the enjoined sums. It is not clear to the court how many Tribes were awarded additional funds through the 2021 reallocation, how much of the remaining Title V funds Treasury reserved for the 2021 reallocation, and how much of that reserved amount it has distributed to this point. See Pls.’ Reply at 8 n.4 (“It bears mentioning that Treasury has not disclosed the supplemental payments that were issued to other Tribes apart from the awards to the three named Plaintiffs.”). It is also unclear whether any funds allocated to ANCs remain undistributed. “It is a well-settled matter of constitutional law that when an appropriation has lapsed or has been fully obligated, federal courts cannot order the expenditure of funds that were covered by that appropriation.” City of Houston v. HUD, 24 F.3d 1421, 1424 (D.C. Cir. 1994). “[O]nce the relevant funds have been obligated, a court cannot reach them in order to award relief.” Id. at 1426. Thus, if what Plaintiffs seek is an award greater than the amounts enjoined, there may be no money left to grant such relief. 17 undermined by the actual enrollment data Treasury has on hand, and [(3)] . . . treats similarly

situated parties differently.” Id. at 12.

The court first addresses the parties’ dispute as to the degree of deference the court owes

Treasury’s 2021 methodology, before turning to Plaintiffs’ specific APA arguments.

1. Degree of Deference Owed

Plaintiffs’ primary position is that “Treasury is not entitled to any deference” because “its

action is at odds with the plain language of the statute that it is implementing.” Pls.’ Reply at 10.

The court understands this to refer to Plaintiffs’ argument that the 2021 reallocation methodology

was not “based on” increased expenditures at all; the court discusses this argument in greater detail

below. See Pls.’ Second MSJ at 3 (“Treasury paid out the awards based on the percentage by

which a tribe’s enrollment was undercounted in the 2020 Distribution, a figure that has no

cognizable connection to actual increased expenditures or to Treasury’s previously announced

proxy for increased expenditures: Tribal population, or enrollment.”). Defendants, on the other

hand, argue that the court should grant the agency “an extreme degree of deference” under the

circumstances. Defs.’ Cross-Mot. at 14 (internal quotation marks omitted). In support of their

argument, Defendants point to cases involving “complex judgments,” “technical matters,” and

“data analysis,” where courts explained that “great deference” is appropriate. Defs.’ Cross-Mot.

at 14 (internal quotation marks omitted) (first citing Alaska Airlines, Inc. v. TSA, 588 F.3d 1116,

1120 (D.C. Cir. 2009); and then citing Appalachian Power Co. v. EPA, 249 F.3d 1032, 1051–52

(D.C. Cir. 2001)). Plaintiffs counter that, even if some deference is due, “the

allocation[s] [here] . . . [are] not the sort of agency action that [are] eligible for an extreme degree

of deference,” because the cases cited by Defendants involved far more complex judgments and

18 technical expertise than what the CARES Act required of the Secretary—and “courts cannot afford

agencies ‘extreme deference’ every time they do some math.” Pls.’ Reply at 3, 10 (internal

quotation marks omitted).

But whether the court owes Treasury an “extreme” level of deference or simply the normal

amount, the outcome is the same. It is manifest that the court owes some deference to the agency

in the present circumstances. That deference is embodied in both the APA and the CARES Act.

First, the arbitrary-and-capricious standard set forth in 5 U.S.C. § 706(2)(A) requires “that agency

action be reasonable and reasonably explained,” but no more. FCC v. Prometheus Radio Project,

141 S. Ct. 1150, 1158 (2021). Indeed, “[a] court may not substitute its own policy judgment for

that of the agency,” and so judicial review under the APA is necessarily “deferential.” Id. Second,

the procedure the CARES Act established for developing methodologies to allocate Title V funds

necessarily entails deference to the Secretary. The Act provides that “the amount paid . . . to a

Tribal government shall be the amount the Secretary shall determine, in consultation with the

Secretary of the Interior and Indian Tribes, that is based on increased expenditures of each such

Tribal Government”—“determined in such manner as the Secretary determines appropriate to

ensure that all amounts available . . . are distributed to Tribal governments.” 42 U.S.C. § 801(c)(7)

(emphases added). Congress gave the Secretary latitude to “exercise his discretion,” subject, of

course, to certain “restrictions.” Shawnee, 984 F.3d at 100. And when Congress delegates

discretion to an agency, courts must in turn grant the agency deference for the actions it takes

pursuant to that discretion. See Chevron, USA, Inc. v. NRDC, 467 U.S. 837, 844–45 (1984). It is

therefore plain that deference to the Secretary is warranted; whether that deference is “extreme”

or not does not, in this case, change the court’s analysis.

19 The court also notes that “the parameters of the ‘arbitrary and capricious’ standard of

review will vary with the context of the case.” WWHT, Inc. v. FCC, 656 F.2d 807, 817 (D.C. Cir.

1981). The parties agree that arbitrary-and-capricious review is “contextually tailored,” Maggard

v. O’Connell, 671 F.2d 568, 571 (D.C. Cir. 1982), but they disagree about how to characterize the

relevant context. See Defs.’ Reply at 7; Pls.’ Reply at 11–12. The “relevant context” for defining

the contours of the court’s arbitrary-and-capricious review in this case includes the following:

(1) the D.C. Circuit’s Shawnee decision and this court’s subsequent orders; (2) the status of Title V

funding allocated for ANCs and the Supreme Court’s Chehalis decision; (3) the process

undertaken by Treasury to develop its methodologies, including consultation with Tribal leaders;

and (4) critically, the limited remaining Title V funds available for distribution to underfunded

Tribes upon remand. The court considers each of these factors, as appropriate, in evaluating

whether the agency acted arbitrarily and capriciously.

2. “Based On” Expenditures

The CARES Act expressly provides that “the amount paid . . . to a Tribal government shall

be . . . based on increased expenditures of each such Tribal government.” 42 U.S.C. § 801(c)(7)

(emphasis added). Plaintiffs argue that the 2021 reallocation methodology “has no coherent

connection to increased expenditures due to COVID.” Pls.’ Second MSJ at 12. More specifically,

they contend that the new approach and the awards it generated “are disconnected from both the

statutory objective (increased expenditures) and the agency’s own original premise that a pro-rata

allocation per tribal member is the proper mechanism for meeting that objective.” Id. at 13.

Instead, the Tribes assert, “Treasury allocated the awards for the 2021 Distribution not according

to Tribal population, enrollment, or expenditures, but based on the percentage by which a tribe’s

20 enrollment was undercounted in the 2020 distribution.” Id. And “[t]he percentage by which a

tribe was undercounted does not correspond to its actual COVID expenditures.” Id. (emphasis

omitted). Therefore, in Plaintiffs’ view, Treasury did not “operate within the confines of the statute

it is implementing” as it is “bound” to do. Pls.’ Second MSJ at 14.

Defendants respond that the Tribes’ argument “isolates one variable—the IHBG-to-

enrollment ratio—in a broader formula,” and so misapprehends the ways in which the 2021

reallocation methodology is “based on” increased expenditures. Defs.’ Cross-Mot. at 18.

Defendants make two arguments as to why their reallocation methodology is “based on” increased

expenditures. First, they maintain that the IHBG-to-enrollment ratios “estimate the degree to

which IHBG data may have proven inadequate” in approximating increased expenditures for

certain Tribes, and so the ratios “help ensure that qualifying tribes would receive,” considering the

2020 and 2021 payments in combination, “payments ‘based on’ their expenditures.” Defs.’ Reply

at 10. Second, they assert that, “even assuming that the IHBG-to-enrollment ratios do not help

ensure that payments are issued ‘based on’ expenditures, the Revised Methodology did not

calculate the Tribes’ supplemental payments by referring only to their IHBG-to-enrollment ratios.”

Id. Rather, the reallocation methodology “also relied on the Tribes’ enrollment data—an

undeniable proxy for their expenditures—and so the Tribes’ supplemental payments were ‘based

on’ expenditures, even if they were not based solely on expenditures.” Id.

The court agrees that the 2021 reallocation methodology is “based on” increased

expenditures. The CARES Act does not require Title V awards to be precisely correlated to

increased expenditures—which would be nearly impossible to accomplish—and it does not require

them to be distributed pro rata based on population. The Act requires only that the allocation of

21 funds be “based on increased expenditures.” 42 U.S.C. § 801(c)(7). The D.C. Circuit has

explained that, when a statute directs an agency to make a decision “based on” a particular factor

or condition, that decision need “not necessarily . . . rest solely on” that factor. Sierra Club v. EPA,

356 F.3d 296, 306 (D.C. Cir.), amended, No. 03-1084, 2004 WL 877850 (D.C. Cir. Apr. 16, 2004).

In other words, the term “based on” does not restrict the agency’s consideration to the statutory

factor alone, but the agency may not “wholly abandon[]” it. Id.; see also Anna Jaques Hosp. v.

Sebelius, 583 F.3d 1, 5–6 (D.C. Cir. 2009) (construing the phrase “on the basis of” in a statute,

noting its similarity to the phrase “based on” because “both phrases use a variant of the word

‘base,’” and concluding that “‘[b]asis does not mean ‘entire’ or ‘only’”); Catawba County v. EPA,

571 F.3d 20, 37 (D.C. Cir. 2009) (“[W]e have repeatedly held that the words ‘based on’

are . . . ambiguous: they neither compel the agency to rest its decisions solely on the specified

factor nor indicate the extent to which the agency may rely on additional factors. . . . Instead, they

simply constrain the agency from abandoning or supplanting the specified factor altogether.”

(alterations and internal quotation marks omitted)). Thus, the CARES Act does not require

Treasury to consider only increased expenditures. It instead requires Treasury to consider

increased expenditures as a “starting point” or “primary basis.” Int’l Union v. Mine Safety &

Health Admin., 626 F.3d 84, 92 (D.C. Cir. 2010) (citing Sierra Club, 356 F.3d at 306).

Here, when Treasury first developed its 2020 allocation methodology, it selected what

Plaintiffs agree to be a reasonable proxy for increased expenditures: population. 2020 Allocation

Methodology at 2. It did so knowing that “any methodology, by necessity, must rely on a rough

estimate of any given tribe’s expenditures.” Defs.’ Reply at 9. That decision was made against a

backdrop in which Congress required the Secretary to distribute funds with exceptional speed—

22 within 30 days. See 42 U.S.C. § 801(b)(1) (“[N]ot later than 30 days after March 27, 2020, the

Secretary shall pay each . . . Tribal government . . . the amount determined . . . .”); CARES Act,

Pub. L. No. 116-136, 134 Stat. 281 (2020) (passed on March 27, 2020). Treasury made a misstep

in using IHBG data as the source of population counts for certain Tribes, including the two

Plaintiffs here, but its 2021 methodology sought to cure the shortfall created by that judgment.

The second time around, it again relied on population data: using both the IHBG population counts

and actual Tribal enrollment, Treasury sought to estimate the degree to which the IHBG

population–based count had underestimated increased expenditures for undercounted Tribes and

compensate those Tribes accordingly. That approach was not an arbitrary and capricious

approximation of the statutorily required benchmark of “increased expenditures.”

The Tribes appear to argue that Treasury could choose no reallocation methodology other

than a pro-rata methodology that simply replaced IHBG population with actual Tribal enrollment.

See Pls.’ Reply at 3. But the CARES Act does not require Treasury to adopt any particular

methodology, let alone the pro-rata approach preferred by Plaintiffs. Importantly, by the time

Treasury was developing its 2021 methodology, the landscape with respect to available CARES

Act funding had changed dramatically. Treasury had already distributed most of the $8 billion

that Congress appropriated to Tribal governments, and what remained was a pool of available

funds meant for ANCs, pending the outcome of litigation before the Supreme Court. See 2021

Reallocation Methodology at 3 (“The question of ANCs’ eligibility for [Coronavirus Relief Fund]

funding is currently before the Supreme Court.”). At that point, Treasury “[could] not pay each

Tribe what it would have received if Treasury had used enrollment data from the start. There

simply [were] not enough remaining funds to do so.” Defs.’ Cross-Mot. at 18. In view of that

23 impossibility, Treasury decided to pay the Tribes with the worst IHBG-to-enrollment ratios the

most, tracking the D.C. Circuit’s reasoning in Shawnee and the Plaintiffs’ complaints. Id. That

decision was consistent with the agency’s discretion to select a model that, in its estimation, was

faithful to the intent of Congress. See Appalachian Power Co., 249 F.3d at 1052 (“[Courts] must

defer to the agency’s decision on how to balance the cost and complexity of a more elaborate

model against the oversimplification of a simpler model.”); Kennecott Utah Copper Corp. v. U.S.

Dep’t of the Interior, 88 F.3d 1191, 1225 (D.C. Cir. 1996). The court therefore concludes that the

2021 methodology for allocating Title V funds was “based on” increased expenditures.

3. The Phase-Out

Plaintiffs next argue that “Treasury’s decision to allocate awards” pursuant to a “phase-out

method” that was “clearly contradicted by the actual enrollment data that it had available was

arbitrary and capricious.” Pls.’ Second MSJ at 15. The court understands Plaintiffs to be referring

to the fact that, once Treasury identified the 15% of Tribes with the highest population-to-

enrollment ratios, it awarded a percentage of a Tribe’s “enrollment allocation”—what the Tribe

“would have received [if] Treasury had used enrollment data, rather than IHBG data, from the

start”—on a descending scale. Defs.’ Reply at 7–8. “The qualifying tribes with the lowest ratios

received a significant portion of their enrollment-allocation, and conversely, the qualifying tribes

ranked toward the bottom of the ‘top 15%’ received less significant portions of their enrollment

allocations.” Id. at 8. Plaintiffs argue that Treasury did not have the authority to “pick new

‘winners’ from the top 15% of ‘losers’ from the 2020 Distribution,” instead of “allocat[ing] the

new awards based on an enrollment-based allocation,” especially since Tribal enrollment data was

available to it and Tribal leaders had previously communicated to Treasury “the wisdom and value

24 of using enrollment data.” Pls.’ Second MSJ at 14. Notably, Plaintiffs do not challenge Treasury’s

decision to “pick . . . the top 15% of ‘losers’ from the 2020 Distribution,” which benefited the

Plaintiff Tribes by reducing the number of Tribal governments eligible for what little funding

remained. Rather, their arguments attach to the descending percentage of awards of those Tribes

selected for further compensation. See id.; see also Pls.’ Reply at 13.

The thrust of Plaintiffs’ argument is that “Treasury’s ‘phase-out’ method led to absurd

results.” Pls.’ Second MSJ at 15. For example, Shawnee (which was assigned an IHBG population

count of zero) received an award of $5,200,000 pursuant to the 2021 reallocation and the minimum

award of $100,000 pursuant to the 2020 allocation—around $5.3 million in total for its 3,021

members. Id. By contrast, Prairie Band Potawatomi, which had been assigned an IHBG

population count of 747, received around $3.3 million in total funding for 4,561 enrolled members

across the two distributions. Id. All told, Shawnee received around $2 million more with around

1,500 fewer enrolled members: “40% more funds to Shawnee [than Prairie Band Potawatomi] for

an enrolled population that is 33% lower.” Id. These “absurd results,” Plaintiffs argue,

contradicted the “actual enrollment data that [Treasury] had available,” rendering Treasury’s

decision to use the phase-out method arbitrary and capricious. Id.

Defendants respond that Treasury could not pay each Tribe a “fixed, meaningful amount

per ‘uncounted enrollee’” while at the same time reserving adequate funds for ANCs, and that the

phase-out method was a reasonable alternative given the circumstances. Defs.’ Cross-Mot. at 16.

Because of the limited pool of funds available for the reallocation, “Treasury had to use its

judgment to decide not only which Tribes would receive supplemental payments, but also the

amount of each payment.” Id. Treasury decided that only the Tribes with the “most substantial

25 disparities” would be eligible for reallocation payments. 2021 Reallocation Methodology at 3.

From there, Defendants submit, the same reasoning that justified setting only the top 15% of Tribes

(by population-to-enrollment ratio) as eligible for payment justified phasing out the percentage of

the difference between population- and enrollment-based pro-rata awards. Defs.’ Reply at 15.

As noted, Plaintiffs agree that “Treasury was well within its rights to limit the supplemental

payments to the 15% of Tribes that had been severely undercounted by the IHBG population data,”

because “an agency is generally afforded discretion in line drawing.” Pls.’ Reply at 13. But they

nonetheless argue that it was unreasonable for Treasury to distribute funds within the 15% of

Tribes using a phase-out method and not a set per-enrollee amount. Pls.’ Second MSJ at 14–15.

This contention exposes the fundamental flaw in Plaintiffs’ reasoning. As Defendants point out,

“[i]f Treasury cannot treat tribes within the top 15% differently based on IHBG-to-enrollment

ratios, then it presumably cannot treat any tribes—top 15% or not—differently based on these

ratios.” Defs. Reply at 15. Plaintiffs do not offer a principled distinction between using the ratios

to set the 15% cut-off and using the ratios to implement a phase-out method between Tribes within

that group, and indeed their arguments against the phase-out method prove too much. Plaintiffs

accept that given the “relatively limited funding available,” Treasury had to focus on ameliorating

the starkest disparities among Tribes based on the 2020 allocation methodology and draw a line at

the 85th percentile of enrollment-to-population ratios. Pls.’ Reply at 13. Yet that is the same

rationale Treasury drew on to land on the phase-out method: Treasury could not afford to make all

undercounted Tribes whole at the per-member rate of the 2020 methodology, swapping enrollment

in for IHBG population. So it used the phase-out method to, again, focus on ameliorating the

starkest disparities. Not surprisingly, under that approach, a zero-count Tribe like Shawnee came

26 out better than undercounted Tribes like Prairie Band Potawatomi. It cannot be that the 15% cut-

off was not arbitrary and capricious but the phase-out violated the APA. 6

In sum, Treasury used the population-to-enrollment ratio to “identify the . . . tribes that

were likely most harmed by the IHBG data, and to what degree.” Defs.’ Reply at 15. Plaintiffs

would have this court hold that Treasury was within its discretion to use the ratios to figure out the

first part of the new methodology—which Tribes were likely most harmed by IHBG data (the top

15%)—but not the second part—“to what degree” the Tribes were harmed (the degree of disparity,

which the phase-out method targets by ameliorating the starkest disparities the most). Plaintiffs

have simply offered no real account for how both of those things can be true at the same time. The

court agrees with Defendants that “[i]f [the] ratios . . . justify drawing distinctions among tribes to

determine which ones should receive supplemental payments,” then “those same ratios should

justify drawing distinctions among the qualifying tribes to determine how much each should

receive.” Id. It may be true that Treasury “needlessly overcomplicated its methodology . . . by

phasing out payments,” Pls.’ Reply at 3, but it was within its discretion to do so, and that judgment

was not arbitrary and capricious.

4. Different Treatment of Similarly Situated Tribes

To some extent, Plaintiffs’ third argument overlaps with their second (regarding the phase-

out method), and indeed the parties treat the two interchangeably at times. As a matter of

6 Plaintiffs argue that Treasury could have granted supplemental awards to only the top 15% on a pro-rata basis, distributing the same total amount of Title V funds in the reallocation phase. See Pls.’ Reply at 13–14. But the question is not whether Treasury chose the best methodology; it is whether Treasury chose a methodology that was not arbitrary and capricious. Treasury has explained that, in addition to seeking to prioritize Tribes facing the greatest funding disparities, it chose the phase-out method in part to avoid a “sharp cliff” in which a Tribe “just below the 15% cut-off would receive no supplemental payment, whereas the Tribe ranked just one spot higher . . . would receive the same ‘per enrollee’ rate as the tribe at the top of the list.” Defs.’ Reply at 15. 27 administrative law, agencies “must treat similar cases in a similar manner unless [they] can provide

a legitimate reason for failing to do so.” Kreis v. Sec’y of the Air Force, 406 F.3d 684, 687 (D.C.

Cir. 2005); see also Westar Energy, Inc. v. FERC, 473 F.3d 1239, 1241 (D.C. Cir. 2007)

(describing the “fundamental norm of administrative procedure [that] requires an agency to treat

like cases alike”). Plaintiffs maintain that Treasury treated similarly situated Tribes differently,

and that there was “no legitimate basis” for doing so. Pls.’ Second MSJ at 15–16. They identify

two dimensions of differential treatment: First, they point to the way that Treasury distinguished

them from other Tribes that received more significant Title V funds per initially uncounted

member after the reallocation. Pls.’ Second MSJ at 16. Second, they point to the “disparities”

between their own Title V awards and those of the Tribes that “received no May 2021 Distribution

because they were not severely undercounted.” Id. This different treatment, they say, was

arbitrary and capricious. Pls.’ Second MSJ at 15.

Treasury counters that it has adequately explained any different treatment of similarly

situated parties. See Petroleum Commc’ns, Inc. v. FCC, 22 F.3d 1164, 1172 (D.C. Cir. 1994)

(noting that agencies may “treat[] similarly situated parties differently” when they “provide

adequate explanation” for doing so). “Treasury could not both pay each Tribe a fixed, meaningful

amount per uncounted enrollee, and also reserve a sufficient amount for ANCs,” and so it

“focus[ed] limited funds on the Tribes whose IHBG figures were especially low in comparison to

their enrollment figures, and who initially received the lowest population-based payments.” Defs.’

Cross-Mot. at 16–17 (internal quotation marks omitted). Plaintiffs respond that the administrative

record does not support this explanation and that it is demonstrably false. The court disagrees.

28 First, Plaintiffs argue that the administrative record does not support Treasury’s contention

that it endeavored to compensate based on degree of harm resulting from use of the IHBG data.

Rather, Plaintiffs contend, Treasury “repeatedly [drew] similarities between Tribes that were

assigned zeros and those other Tribes . . . that were significantly undercounted, never once

suggesting that one was more harmed than the other.” Pls.’ Reply at 7. In the 2021 reallocation

methodology announcement, for example, Treasury identified two scenarios in which IHBG

population data “may prove insufficient” as a proxy for increased expenditures: (1) where a Tribe

has a “formula area population of zero,” and (2) where it has a non-zero IHBG population that is

nonetheless not “sufficiently accurate.” 2021 Reallocation Methodology at 2. Plaintiffs observe

that such language does not explicitly state that the degree of harm to Tribes within these two

categories is any different, therefore justifying only “treating the severely undercounted Tribes the

same relative to one another.” Pls.’ Reply at 7. Treasury’s attempts to draw distinctions in the

degree of harm, they insist, are mere post-hoc rationalizations that cannot be credited. Id. (citing

Nat’l Black Media Coal. v. FCC, 775 F.2d 342, 354 (D.C. Cir. 1985)).

Plaintiffs fail to read the administrative record as a whole. The administrative record

recognizes, of course, that many Tribes facing a significant disparity between IHBG population

and enrollment were undercounted by the 2020 allocation methodology. Yet, at the same time, it

contains numerous references to the particular harm faced by Tribes initially counted as having a

population of zero. For example, the allocation methodology announcement states that it “is

particularly true” that IHBG counts are an insufficient proxy for increased expenditures of Tribes

with a zero-population count. 2021 Reallocation Methodology at 2 (emphasis added). The same

document explains that “[w]here there is an especially large disparity between formula area

29 population and enrollment figures”—as is more likely the case for zero-population Tribes—“the

difference suggests that the Tribal government has a need for [additional] funding,” and that the

reallocation would focus on these Tribes. Id. (emphasis added). Treasury also explained that the

“population-to-enrollment ratio” would be used to determine which Tribes were previously

“significantly undercounted” and had the “greatest need.” Id. at 3. This language implies the

comparison or ranking of Tribes’ respective disparities and makes clear that Treasury’s

explanation is not a mere post-hoc rationalization.

Nor does the administrative record belie Treasury’s purported reliance on Shawnee.

Plaintiffs charge that Treasury cannot rely on Shawnee to support its explanation because the

administrative record shows that Treasury was trying to “rectify a broader problem than the one

specifically addressed in Shawnee”—specifically, the harm to Tribes with non-zero counts. Pls.’

Reply at 7–9. But that argument ignores that post-Shawnee, Treasury was confronted with suits

from both zero-count Tribes (Shawnee and Miccosukee) and an undercounted Tribe (Prairie Band

Potawatomi), and it faced uncertainty as to whether other similar actions would follow. Thus,

there is no inconsistency between Treasury wanting to address the harm to all Tribes that were

undercompensated due to use of the IHBG data (both zero-count and undercounted Tribes), and

targeting its remaining resources to redress the starkest harms to the greatest extent (consistent

with the D.C. Circuit’s focus on zero-count Tribes). Nothing in the D.C. Circuit’s decision in

Shawnee is incompatible with such an approach.

Plaintiffs next argue that “Treasury’s argument that Tribes that were assigned IHBG

populations of zero were likely underpaid the most is demonstrably wrong based on [the

enrollment data] that Treasury had when it made its decision.” Pls.’ Reply at 8 (alteration omitted)

30 (internal citation and quotation marks omitted). In other words, because Treasury knew exactly

how much each Tribe was undercounted based on its own enrollment data, no guesswork was

required in identifying the Tribes most adversely impacted by the initial allocation. Treasury

therefore could easily have allocated funds on a pro-rata basis based on undercounted enrolled

members. This argument is flawed. The CARES Act itself requires no particular formula so long

as the formula selected is “based on” increased expenditures, see 42 U.S.C. § 801(c)(7), and, as

this court has already concluded, there was no requirement that Treasury distribute Title V funds

the second time around on a per–uncounted enrollee basis. In 2020, Treasury chose a pro-rata

distribution based on population as a proxy for expenditures, but it was not required to apply that

same formula in 2021 when circumstances had changed dramatically. The benchmark for the 2021

reallocation methodology was not its fidelity to the 2020 methodology but its relationship to

increased expenditures, and the court has already concluded that the 2021 reallocation

methodology was “based on” increased expenditures resulting from the COVID-19 pandemic.

Plaintiffs make much of the fact that the 2021 reallocation methodology overfunds some

Tribes relative to others, and they suggest that a per-enrollee reallocation methodology would have

avoided that result. But, as Defendants assert, “there is no indication that each tribe’s relative

expenditures correlated perfectly with its enrollment count,” and any methodology would

inevitably overfund some Tribes and underfund others relative to their actual increased

expenditures. Defs.’ Reply at 8–9; see id. at 9 (identifying variables that could “impact[] any given

tribe’s relative COVID-related expenditures, beyond simply its raw enrollment figure”). No

methodology could avoid that reality, particularly not within the short timeframe prescribed by

Congress for distributing the funds. Id. at 8–9. In 2021, Treasury targeted the harm Tribes faced

31 by being undercounted and underpaid in the first round of Title V funds; it was free to meet that

harm the way it did.

Plaintiffs cite in their briefs this court’s observation in an earlier opinion that the “yawning

disparity in per-uncounted-member funding [among the three Plaintiff Tribes] is puzzling to say

the least.” Pls.’ Reply at 1; Mem. Op. Denying PI Modification at 7. When the court made that

observation, however, Treasury had not offered any “defense or explanation for the seemingly

inequitable results.” Pls.’ Reply at 1. It has now become clear, however, that these “inequit[ies]”

are byproducts of the complex procedural history of this case and not intentional differential

treatment by Treasury. It remains true—and surprising in some sense—that Prairie Band

Potawatomi received, taking both awards together, around $3.3 million for its 4,561 members,

while Shawnee received $2 million more for around 1,500 fewer members. Pls.’ Second MSJ at

15. But Prairie Band Potawatomi, unlike Shawnee, received some funds over the minimum

amount in the initial allocation. See id. Shawnee was among the worst off after the IHBG-based

allocation; it is not unreasonable that it would receive the most significant catch-up payment during

the reallocation phase. This may seem inequitable at first blush, but such disparity is a function of

a disbursement methodology that, when viewed in light of all relevant circumstances, was entirely

reasonable.

* * *

In an ideal world, Treasury might have distributed Title V funds to all Tribal governments

pro rata based on the Tribes’ enrollment data, so that no Tribe could claim underpayment. But

that is not the world in which we find ourselves. Treasury was faced with the difficult challenge

of how to best mitigate the harm caused to some Tribes by its use of flawed IHBG data to distribute

32 funds, as well as the passage of time and the dissipation of Title V funds. This court cannot say

that Treasury’s attempts in 2021 to identify the Tribes most harmed by the original methodology

and to grant them the greatest degree of relief is arbitrary and capricious, even if some Tribes

ended up worse off than if Treasury had simply used better data in 2020.

V. CONCLUSION

For the foregoing reasons, Plaintiffs’ motions for summary judgment, ECF No. 70; ECF

No. 88, are denied. Defendants’ cross-motion, ECF No. 92, is granted in full.

A final, appealable order accompanies this Memorandum Opinion.

Dated: January 28, 2022 Amit P. Mehta United States District Court Judge