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Maniilaq Association v. Burwell

United States District Court, D. Columbia.

August 22, 2014

SYLVIA BURWELL, Secretary of the Department of Health and Human Services, et al., Defendant

As Amended November 3, 2014.

Page 228

For MANIILAQ ASSOCIATION, Plaintiff: Caroline P. Mayhew, LEAD ATTORNEY, HOBBS STRAUS DEAN & WALKER, LLP, Washington, DC; Geoffrey D. Strommer, Stephen D. Osborne, PRO HAC VICE, HOBBS, STRAUS, DEAN & WALKER, LLP, Portland, OR.

For KATHLEEN SEBELIUS, in her official capacity as Secretary, U.S. Department of Health & Human Services, YVETTE ROUBIDEAUX, in her official capacity as Director, Indian Health Service, CHRISTOPHER MANDREGAN, JR., in his official capacity as Director, Alaska Area Native Health Service, Defendants: Andrea McBarnette, LEAD ATTORNEY, U.S. ATTORNEY'S OFFICE, Washington, DC.

Page 229


Thomas F. Hogan, Senior United States District Judge.

Plaintiff Maniilaq Association (" Maniilaq" or " plaintiff" ) administers healthcare systems through a self-determination compact and annual funding agreements under the Indian Self-Determination and Education Assistance Act (" ISDEAA" ), 25 U.S.C. § 458aaa, et seq. plaintiff is seeking a declaration that a lease with the Indian Health Service (" IHS" or " defendant" ) for one of the clinics Maniilaq operates under its self-determination compact is incorporated into Maniilaq's 2013 funding agreement as a matter of law. Pending before the Court are the parties' cross motions for summary judgment.[2] For the reasons stated below, the Court GRANTS Plaintiff's Motion for Summary Judgment and DENIES Defendant's Cross Motion for Summary Judgment. An appropriate Order accompanies this opinion.


The facts of this case are substantially undisputed. The controversy between the parties depends on the legal consequences of a letter and proposed lease agreement Maniilaq sent to the IHS concerning a clinic Maniilaq operates in the Village of Ambler, Alaska (" Ambler Clinic" ).

IHS is the agency within the Department of Health and Human Services (" HHS" ) responsible for providing federal health services to American Indians and Alaska Natives. Def.'s Mem. in Supp. of Mot. to Dismiss or, in the Alternative for Summ. J.3 [ECF No. 21] (" Def.'s Mem.). A critical component of those services is the Community Health Aide Program (" CHAP" ), which requires IHS to train community health aides to provide healthcare to individuals in remote areas of rural Alaska. See 25 U.S.C. § 1616 l. To facilitate CHAP, IHS leases Village Built Clinics (" VBCs" ) from Alaska villages in order to provide a suitable location to deliver services. Pl.'s Mem. of P. & A. in Supp. of Pl.'s Mot. for Summ. J. 4 [ECF No. 17] (" Pl.'s Mem. of P. & A." ).

Maniilaq is an Alaska Native Regional Non-Profit Corporation that operates a comprehensive health services delivery program for its twelve member Alaska Native village tribes, and other eligible American Indians and Alaska Natives, in the Northwest Arctic Borough. Id. at 10. Pursuant to the ISDEAA, the Indian Health Care Improvement Act, and its self-determination compact with IHS, Maniilaq takes responsibility for delivering CHAP and other health care related programs, functions, services, and activities (" PFSAs" ) which IHS would otherwise be required to provide. Id. at 1; see 25 U.S.C. § 450f(a)(1). The self-determination

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compact between IHS and Maniilaq is implemented through yearly funding agreements (" FAs" ). Def.'s Statement of Material Facts ¶ 2 [ECF No. 21]. These agreements cover a variety of programs and specify both parties' obligations with respect to each program. See generally Pl.'s Mem. of P. & A. Ex. G, FY 2009 FA between Maniilaq Assoc, and HHS [ECF No. 17-9]. In the 2009 fiscal year, Maniilaq received a total of $35,352,362 from IHS under its FA. Id. at 11.

From October 1985 until January 2003, IHS leased the Ambler Clinic from the village of Ambler, Alaska. Def.'s Mem. Ex. 1, Poncho Decl. ¶ ¶ 6-7 [ECF No. 21-1]. In January of 2003, Maniilaq asked IHS to cancel the VBC lease with the City of Ambler because Maniilaq was taking ownership of the clinic. Id. at ¶ 8. At the time Maniilaq took ownership of the clinic, the lease required IHS to pay the City of Ambler $28,932.16 for the Ambler Clinic and specified that the City of Ambler was responsible for the clinic's maintenance and utilities. Id. at ¶ ¶ 7-8. At Maniilaq's request, the remaining unspent lease funds for the Ambler Clinic were left in Maniilaq's 2003 FA. Id. at ¶ 8. In addition to providing upkeep and maintenance, Maniilaq is required to provide a wide array of patient care services and programs at the Ambler Clinic. See generally Pl.'s Mem. of P. & A. Ex. G 2-9 [ECF No. 17-9]. Funding for the Ambler Clinic remained part of each of Maniilaq's FAs until 2012, but the amount that Maniilaq received associated with that clinic has not increased beyond approximately $30,000 per year that IHS had been paying the City of Ambler under the VBC lease. Poncho Decl. ¶ ¶ 19-20 [ECF No. 21-1]; Pl.'s Reply 2. According to Maniilaq, this amount is insufficient to keep up with rising operational costs, and " Alaska Tribal Health Programs that compact with the IHS . . . have therefore been forced to supplement federal CHAP funding with millions of dollars annually." Pl.'s Mem. of P. & A. 4.

To address this perceived funding shortfall, in February of 2012, Maniilaq informed IHS that it was electing to retrocede the Ambler Clinic back to IHS, Pl.'s Mem. of P. & A. 11, and requested that IHS enter into a new lease under the mandatory leasing provisions of 25 U.S.C. § 450j( l )(1), see id. at Ex. C, Feb. 29, 2012 Memorandum to IHS from Maniilaq Assoc. [ECF No. 17-5]. Section 450j( l ) requires IHS to lease tribally-owned facilities " used by the Indian tribe or tribal organization for the administration and delivery of [healthcare] services" upon request of a tribal organization. 25 U.S.C. § 450j( l )(1). Maniilaq would continue to operate the clinic, with proceeds from the lease funding the PFSAs in Maniilaq's FA. See Pl.'s Mem. of P. & A. Ex. C [ECF No. 17-5].

In a May 2012 letter, IHS responded and agreed § 450j( l )(1) required it to enter into the lease. Pl.'s Mem. of P. & A. Ex. D, May 15, 2012 Letter to President/CEO of Maniilaq from Director of Tribal Programs, AANHS 2 [ECF No 17-6]. However, citing a lack of appropriated funds, IHS informed Maniilaq that it would pay only " non-monetary" compensation. Id. IHS also informed Maniilaq that it believed that " leases are not attached to funding agreements by reference or otherwise." Id. at 3. IHS took the position that in order to enter into the lease, Maniilaq would have to submit to the IHS's Lease Priority System (" LPS" ). Id. at 2. IHS and Maniilaq continued to discuss the Ambler lease but could not come to an agreement.

On November 28, 2012, Maniilaq sent IHS a letter describing the parties' negotiations and proposing that IHS enter into a § 450j( l )(1) lease for the Ambler Clinic.

Page 231

Pl.'s Mem. of P. & A. Ex. E, Nov. 28, 2012 Letter to Area Director, AANHS, from President/CEO of Maniilaq Assoc. 4 [ECF No. 17-7] (" November 28 letter" ). The letter was four pages long and attached a copy of the proposed lease. See id. In the final paragraph of the third page, Maniilaq wrote: " Enclosed please find a proposed lease for the Ambler Clinic, submitted in accordance with the final offer provisions of Section 507 of the ISDEAA, 25 U.S.C. § 458aaa-6." Id. at 3. Maniilaq proposed a lease totaling $172,536 per year with $66,086 based on " Depreciation," and $106,450 for " Operation and maintenance." Id. at 4.[3] The lease would be incorporated into Maniilaq's 2013 FA, and would be renewable at the option of either party. See id. at 5-6.

Fifty-eight days after Maniilaq sent the November 28 letter, IHS responded and took the position that it " does not agree that the lease proposal in your offer may be submitted as a final offer under" 25 U.S.C. § 458aaa-6. Pl.'s Mem. of P. & A. Ex. F, Jan. 25, 2013 Letter to President/CEO of Maniilaq Assoc, from Director Area Director, AANHS 1 [ECF No. 17-8]. IHS reiterated its position that a § 450j(l)(1) lease could not be included in a FA and that Maniilaq had to submit to the LPS. See id.[4]

Plaintiff filed suit on March 25, 2013. See Compl. [ECF No. 1]. In its motion for summary judgment, Maniilaq asks the Court to declare that the lease attached to its November 28 letter is incorporated into its FA as a matter of law. The defendant cross-moved for summary judgment, arguing that Maniilaq did not follow the proper procedures for submitting a final offer, and even if it had, a § 450j( l )(1) lease may not be included in a FA.


A. Jurisdiction

This Court has subject matter jurisdiction under 28 U.S.C. § 1331 and 25 U.S.C. § 450m--1(a) which states that " [t]he United States district courts shall have original jurisdiction over any civil action or claim against the appropriate Secretary arising under [the ISDEAA] and . . . over any civil action or claim against the Secretary for money damages arising under contracts authorized by [the ISDEAA]." The ISDEAA does not require plaintiffs to file an administrative appeal before bringing suit in district court. 25 U.S.C. § 458aaa-6(c)(1)(C) (stating that " in lieu of filing" an administrative appeal, a tribe may " directly proceed to initiate an action in a Federal district court" ).

B. Summary Judgment

Summary judgment is appropriate only if the pleadings, depositions, answers to interrogatories, ...

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