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Citizen Potawatomi Nation v. Salazar

June 12, 2009


The opinion of the court was delivered by: Gladys Kessler United States District Judge


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, 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.


A. Factual Background*fn2

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 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 CFR*fn3 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 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 ¶ 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 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.

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.

The IBIA held that CPN was collaterally estopped from litigating the effect of Collier,*fn4 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.


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 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;*fn5 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.*fn6

Both the Supreme Court and our Court of Appeals have declared that where a statute does not provide a standard of review, as is true of the ISDA, courts must look to the APA standard.*fn7 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)).*fn8

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.

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) (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.").


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 ...

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