Shoshone-Bannock Tribes of the Fort Hall Reservation v. Secretary, Department of Health & Human Services
Docket: Nos. 98-36022, 99-35951
Court: Court of Appeals for the Ninth Circuit; February 3, 2002; Federal Appellate Court
An order amending the opinion filed on October 16, 2001, includes specific revisions to language regarding the application of legal rules favoring Indian tribes and the phrasing of certain sentences. It clarifies that the court does not need to determine the applicability of the canon of construction favoring Indians in this case. Additionally, it removes specific text and footnotes related to the interpretation of appropriations under the Indian Self-Determination and Education Assistance Act.
The court unanimously denied the petition for rehearing, with Judges Kozinski and Kleinfeld voting against rehearing en banc and Judge Schwarzer recommending denial. The opinion, authored by Judge Kleinfeld, addresses the agency’s interpretation of congressional appropriations for contract support costs related to health program administration by the Shoshone-Bannock Tribes on the Fort Hall Reservation.
Under the Act, tribes can take over federal program administration and are entitled to receive funding equivalent to what the government would have spent. The issue arises from the Indian Health Service’s allocation of limited contract support costs, which were claimed to be insufficient to cover all tribes. The Service prioritized funding on a first-come, first-served basis, resulting in the Shoshone-Bannock Tribes not receiving adequate funds. The tribes contend that the appropriation law mandates the provision of necessary funds, regardless of the limitations of the available budget.
The district court ruled in favor of the Tribes on summary judgment, leading to a government appeal. The agreed amount for the Tribes, should they prevail, is $374,936.05, which has been deposited in the court's registry. The court had jurisdiction under the Indian Self-Determination and Education Assistance Act. The final judgment was timely appealed. The Shoshone-Bannock contended it had a contractual right to contract support cost funding; however, the contract language limits this claim, stating the Secretary's obligation is "subject to the availability of appropriations." This limitation excludes the interpretation of contract support costs as an independent entitlement, making the core issue whether Congress appropriated the necessary funds.
Congress had appropriated approximately $1.7 billion to the Indian Health Service in 1996, with $7.5 million allocated for transitional costs related to tribal contracts. The government claims it is not obligated to exceed the $7.5 million appropriation for contract support costs, while the Tribes assert this amount is not a ceiling and that the Indian Health Service must cover additional costs from the broader $1.7 billion appropriation. Similar cases in the Federal and District of Columbia Circuits concluded that the smaller appropriation was the maximum available to the tribes. However, the current case involves different wording in the appropriation, which does not limit funds with a "not to exceed" clause, suggesting the entire $1.7 billion could be available. The district court's summary judgment indicated that the Indian Health Service must use the full appropriation unless it can demonstrate that funding the Tribes' costs would reduce the availability of funds for other tribes. An administrative policy, "Indian Self-Determination Memorandum No. 92-2," was established by the Indian Health Service to address the issue of tribal claims surpassing their appropriations.
Procedures are in place to address funding shortfalls for contract support costs, including prioritizing unfulfilled requests in subsequent years and allocating funds based on contractors' total needs. The total funding is designated as the Indian Self-Determination Fund, with $7.5 million allocated for the 1996 fiscal year. The appropriation language is ambiguous, as the phrase indicating that the $7.5 million "shall remain available until expended" does not clearly limit available funds, unlike prior language that explicitly capped amounts. The House Appropriations Committee expressed concern about controlling contract support costs and indicated that the $7.5 million was intended for new and expanded contracts, suggesting a limit on available funds. In 1998, Congress retroactively clarified the funding by stating that the amounts earmarked for the Bureau of Indian Affairs and Indian Health Service were the total funds available for contract support costs from fiscal years 1994 to 1998, thereby eliminating any ambiguity regarding the $1.7 billion remaining. The Tribes claim an entitlement to additional contract support costs based on statutory language, but this argument fails due to the clear limitation on appropriations. The Tribes also argue that the remaining funds are not explicitly restricted; however, the language from the fiscal year 1999 appropriation clearly defines the total available funds, reaffirming that the $7.5 million is the limit for contract support costs. Thus, any interpretation that could suggest additional funds are available is either plainly limited or remains at best ambiguous.
Ambiguity regarding the $7.5 million appropriation is clarified by the Appropriations Committee report and the 1999 statutory language stating it is the total available amount. The term "availability" does not have a fixed legal meaning, but its interpretation allows for consideration of the committee report and administrative interpretation. The Federal Circuit has deemed the phrase "subject to the availability of appropriations" clear and unambiguous. The Indian Health Service failed to provide evidence that paying the Tribes more for contract support costs would impact funding for other tribes. The core issue is whether the Indian Health Service can limit contract support costs to the exhausted $7.5 million or must utilize the full $1.7 billion appropriation. The Tribes argue that the 1999 appropriation language does not affect a liability incurred previously, but this position assumes the existence of such liability. The Tribes do not claim inverse condemnation. Congress can enact retroactive laws if clearly stated, and the 1998 appropriation, enacted post-district court ruling, does not alter its clarity regarding the 1996 appropriation. The Secretary's authority is restricted not just to unobligated balances but also affects the Tribes' right to recover damages. The absence of available funds from the $7.5 million undermines any contractual claim. The district court's comparison to United States v. Larionoff is rejected because the Tribes’ contract explicitly states it is "subject to the availability of appropriations," contrasting with the obligation in Larionoff.
The Court in Larionoff emphasized the "serious constitutional questions" posed by retroactively depriving service members of bonuses, stating that without a clear expression of congressional intent, such action should not be assumed. In the current case, the fiscal year 1999 appropriation serves as that clear expression, leading to a reversal of the prior decision. The statute 25 U.S.C. 450 does not define "contract support costs" but distinguishes between "direct program costs" and "indirect costs." Contract support costs include reasonable expenses necessary for tribal organizations to manage contracts effectively, which are not typically handled by the Secretary. Guidelines under 25 U.S.C. 450k(a)(1) dictate that funds for new contracts will be allocated monthly from the Indian Self-Determination (ISD) Fund, with provisions for unused funds to carry over to the next fiscal year. The self-determination contract signed by Shoshone-Bannock reflects mandatory language concerning availability of appropriations. This language is required in all such contracts, reiterating that funding is dependent on appropriations and cannot be reallocated from one tribe to another. Relevant case law and appropriations acts further clarify these funding mechanisms and constraints.
