United States District Court, D. Columbia.
[Copyrighted Material Omitted]
For PYRAMID LAKE PAIUTE TRIBE, Plaintiff: Geoffrey D. Strommer, Starla K. Roels, LEAD ATTORNEYS, PRO HAC VICE, Caroline P. Mayhew, 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, DOROTHY A. DUPREE, in her official capacity as Area Director, Phoenix Area Indian Health Service, Defendants: Benton Gregory Peterson, LEAD ATTORNEY, U.S. ATTORNEY'S OFFICE, Washington, DC.
CHRISTOPHER R. COOPER, United States District Judge.
The Indian Self Determination and Education Assistance Act enables Indian tribes to assume responsibility for programs and services that federal agencies would otherwise provide to Indians. The Pyramid Lake Paiute Tribe submitted a contract proposal to the Secretary of Health and Human Services under the Act for funding to operate an emergency medical services (" EMS" ) program that the Indian Health Service (" IHS" ), a component of Health and Human Services, had been funding directly since 1993. After receiving the Tribe's proposal, the Secretary discontinued the EMS program, which IHS viewed as financially untenable, and denied the Tribe's request on the ground that the agency would not have funded the program going forward. The Tribe brought suit and has moved for summary judgment, arguing that the Secretary lacked authority to deny the proposal. The Court agrees. Once the Secretary receives a valid proposal to assume the operation an ongoing program, the Act requires her to accept the proposal unless one or more enumerated declination criteria are met. Because she did not rest her decision on any of those criteria, denying the Tribe's proposal violated the Act. The Court will therefore grant summary judgment in favor of the Tribe and direct the Secretary to negotiate with the Tribe to determine the appropriate funding level for the contract.
A. Statutory Background
Congress passed the Indian Self-Determination and Education Assistance Act
(" ISDEAA" ) to promote Indian tribes' rights to self-governance by enabling them to assume responsibility for certain federal programs. See 25 U.S.C. § 450a. To further that purpose, ISDEAA directs the Secretary of Health and Human Services and the Secretary of the Interior to " enter into a self-determination contract or contracts with a tribal organization to plan, conduct, and administer programs" that were created to benefit Indian tribes. 25 U.S.C. § 450f(a)(1). Upon authorization by a tribe, a " tribal organization" may submit a proposal for a self-determination contract to the relevant Secretary. Id. § 450f(a)(2). The Secretary must approve the proposal within 90 days unless she provides " written notification to the applicant that contains a specific finding that clearly demonstrates that or that is supported by a controlling legal authority" showing that one or more of five declination criteria exist. Id. One of the declination criteria is that " the amount of funds proposed under the contract is in excess of the applicable funding level for the contract[.]" Id. § 450f(a)(2)(D). The " applicable funding level for the contract," in turn, shall not be less than the amount the Secretary " would have otherwise provided for the operation of the programs or portions thereof for the period covered by the contract[.]" Id. § 450j-1(a)(1). Additional funding is available " for the reasonable costs for activities which must be carried on by a tribal organization as a contractor to ensure compliance with the terms of the contract and prudent management[,]" as well as the start-up costs of the program during its initial year. Id. § § 450j-1(a)(2), (5). But " the provision of funds . . . is subject to the availability of appropriations and the Secretary is not required to reduce funding for programs . . . serving a tribe to make funds available to another tribe or tribal organization[.]" Id. § 450j-1(b). District courts have original jurisdiction over claims arising under the ISDEAA and " may order appropriate relief including money damages, injunctive relief . . . , or mandamus" for violations of the Act. Id. § 450m-1(a).
B. Factual Background
The Fort McDermitt Paiute and Shoshone Tribes (" Fort McDermitt Tribe" ) reside on the Fort McDermitt Indian Reservation, a small, remote community on the border between Nevada and Oregon. Pl.'s Statement of Material Facts in Support of Mot. for Sum. J. (" Pl.'s SOF" ) ¶ 3; Compl. ¶ 23. IHS has operated a health clinic at Fort McDermitt for Indians living in the area since the 1970s. Def.'s Statement of Material Facts in Support of Mot. for Sum. J. (" Def.'s SOF" ) ¶ 1; Pl.'s Mot. for Summ. J. (" Pl.'s Mot." ) Ex. B (" Declination Letter" ) at 1. The Fort McDermitt clinic provides primary medical, dental, and mental health care to its patients, as well as alcohol and drug treatment programs. Def.'s SOF ¶ 2.
IHS had also operated an EMS program for the Fort McDermitt area since 1993. Declination Letter at 1. The cost of operating the EMS program increased unexpectedly beginning in 2010 as a result of an IRS determination that IHS must classify personnel working for the program under individual service contracts as employees, rather than independent contractors. Def.'s SOF ¶ ¶ 22-23. On March 21, 2013, the Fort McDermitt clinic held a governing board meeting and presentation for representatives of the Fort McDermitt Tribe. Id. ¶ 15. The presentation and accompanying budget analysis explained that the FY 2012 total operating costs for the EMS program were $502,611, while its revenues were only $102,711. Id. ¶ 18. The agency explained that it had been making up the difference with revenues from the clinic and IHS discretionary
funds. Id. ¶ ¶ 20-21; Declination Letter at 1.
The Pyramid Lake Paiute Tribe (" Tribe" or " Pyramid Lake Tribe" ) is a federally-recognized Indian tribe that provides a range of health care services in other areas of Nevada under an ISDEAA contract with IHS. Pl.'s SOF. ¶ ¶ 1-2. On January 13, 2013, the Fort McDermitt Tribe, by resolution of its governing body, designated the Pyramid Lake Tribe as its " tribal organization" under the ISDEAA to contract for an EMS program within the Fort McDermitt area. Id. ¶ 6. The Tribe submitted a contract proposal to IHS on June 21, 2013, which IHS received on July 8, 2013, seeking to incorporate the Fort McDermitt EMS program into the Pyramid Lake Tribe's existing health delivery services. Id. ¶ ¶ 8-13. The proposal requested $502,611 for operating costs--which was the actual cost to IHS of operating the program in FY 2012-- plus $196,739 for start-up costs and $136,139 for indirect contract support costs. Id. ¶ 12.
As required by Nevada law, the Fort McDermitt EMS program regularly contracted with an area hospital, Humboldt General Hospital, to act as the EMS program's " base" hospital. Def.'s SOF ¶ 30. In November 2012, however, Humboldt General established its own EMS station site in the Fort McDermitt area. Id. ¶ 9. As a result, on August 15, 2013, the hospital notified IHS that it would no longer serve as the base hospital for the Fort McDermitt EMS program. Id. ¶ 30. IHS suspended operations of the EMS program four days later. Id.
On September 30, 2013, IHS sent a letter to the Tribe notifying it that IHS had declined its ISDEAA proposal. Declination Letter at 1. The agency explained that IHS had " ceased operation of the Fort McDermitt EMS program" due to its large operating deficit. Id. at 3. Because IHS had discontinued the program, it reasoned that the base amount available for contracting under section 450j-1(a)(1) was zero. It therefore declined the Tribe's proposal under section 450f(a)(2)(D) as being " in excess of the applicable funding amount." Declination Letter at 4. As an alternative ground, IHS indicated that it had declined the proposal " to the extent that the Tribe funding request include[d] the third-party revenues generated by the Fort McDermitt Clinic used . . . to fund the EMS program." Id. IHS asserted that these third-party revenues were not generated by the EMS program, were speculative, and were " not in themselves a program, function, service or activity" under section 450f(a)(1). Id.
The Tribe brought suit under the ISDEAA against IHS and the Secretary of Health and Human Services, now Sylvia Burwell, seeking to require IHS to enter into a self-determination contract with the Tribe to operate the Fort McDermitt EMS program. Both sides have moved for summary judgment. The Secretary has also moved to dismiss for failure to join indispensable parties--namely, other area tribes whose funding may be affected by the outcome of the ...