United States District Court, D. Columbia
SENECA NATION OF INDIANS, Plaintiff: Steven D. Gordon, LEAD
ATTORNEY, HOLLAND & KNIGHT LLP, Washington, DC.
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, SYLVIA M.
BURWELL, Defendants: John G. Interrante, LEAD ATTORNEY, U.S.
ATTORNEY'S OFFICE FOR THE DISTRICT OF COLUMBIA,
OPINION & ORDER
BATES, United States District Judge.
case arises from a protracted contract dispute between the
Seneca Nation and the U.S. Department of Health and Human
Services. Under the contract in question, Seneca Nation
assumed responsibility for administering health programs
previously administered by the Indian Health Service. In
return, the Secretary provides federal funds in the amount
required by annual funding agreements (AFAs). Every year
between 2012 and 2015, Seneca Nation has proposed amending
its AFA to include additional funding. But every year, the
Secretary has refused. Seneca Nation has appealed the
Secretary's 2012 refusal to the Interior Board of Indian
Appeals; it has challenged the Secretary's 2013, 2014,
and 2015 refusals in this Court, seeking declaratory and
injunctive relief and damages for breach of contract. Now,
the Secretary has moved to dismiss all of Seneca Nation's
claims for lack of jurisdiction. Alternatively, it seeks a
stay of this action, pending resolution of the 2012 claim by
the Interior Board of Indian Appeals. For the reasons
explained below, the Court will enter a stay.
the Indian Self-Determination and Education Assistance Act,
tribal organizations may contract with the Department of
Health and Human Services to administer programs, functions,
services, or activities previously administered by that
agency for the benefit of Indians. See 25 U.S.C. § 450f.
Once a tribe contracts to administer a program, the amount of
funding due under the contract may be renegotiated annually.
Id. § 450j(c)(2). The resulting annual funding
agreement becomes part of the overarching contract, and the
Secretary must fund the program in the amount specified.
Id. § 450l(c)(b)(4).
contract negotiations are heavily structured by the statute
and implementing regulations. The Secretary may deny contract
amendments proposed by tribal organizations only under
limited circumstances--and if the Secretary does not act on a
proposed amendment within 90 days or obtain an extension, the
automatically becomes part of the contract. See id.
§ 450f(a)(2). Negotiated funding levels may never dip
below a statutory " base amount," equal to the
amount that the Secretary would allocate to the tribally
administered program if administering it herself, plus
support costs. See id. § 450j-1(a). And, of particular
importance here, the statutory scheme restricts the
Secretary's ability to reduce funding from one year to
the next. The Secretary may not decline " any portion of
a successor annual funding agreement," if " it is
substantially the same as the prior annual funding
agreement." 25 C.F.R. § 900.32; see also 25 U.S.C.
§ 450j-1(b) (Secretary may only reduce statutory base
amount under limited circumstances).
dispute arises, tribal organizations may seek damages,
injunctive relief, or mandamus against the Secretary in
federal court. See 25 U.S.C. § 450m-1(a). But not every
complaint can arrive in court by the same route. Complaints
seeking payment of a specific sum under a contract,
requesting adjustment or interpretation of a contract's
terms, or advancing " [a]ny other claim relating
to" a contract, must first be submitted to the
contracting officer for decision in accordance with the
Contract Disputes Act. 25 C.F.R. § 900.218(a); 25 U.S.C.
§ 450m-1(d) (the Contract Disputes Act " shall
apply to self-determination contracts" ). Complaints
challenging contract or amendment declinations, on the other
hand, may be brought directly to federal court. See 25 C.F.R.
§ § 900.150, 900.153. Alternatively, they may be
appealed administratively to the Interior Board of Indian
Appeals and, from there, to the Secretary. See id. §
§ 900.152, 900.165. If a tribal organization pursues the
latter path, it may ultimately obtain judicial review of the
Secretary's actions under the Administrative Procedure
dispute between Seneca Nation and the Secretary traces to
their 2010 and 2011 AFAs. In April 2011, well after those
agreements had been adopted, Seneca Nation wrote to the
Indian Health Service (IHS) to propose an amendment: the
addition of approximately $3.8 million in funding to each
agreement, in order to account for a " recently
discovered [and] substantial undercount of [Seneca
Nation's] active user population." Am. Compl. [ECF
No. 14] ¶ ¶ 14-15. IHS provided no response. After
waiting four months without an answer, Seneca Nation sent a
second letter, arguing that its proposed amendments had been
approved by operation of law when the Secretary failed to
respond within the statutory 90-day window. This second
letter drew a response from IHS, which took the position that
Seneca Nation's proposals were properly brought as claims
under the existing AFAs--not as amendments to them. Heeding
that position, Seneca Nation resubmitted its proposals as
claims under the Contract Disputes Act. See Defs.' Mot.
[ECF No. 20] at 9-10. When IHS denied those claims, Seneca
Nation sued. And it won. Judge Collyer concluded that Seneca
Nation's proposals, properly construed as amendments,
were approved by operation of law when the Secretary failed
to address them by the statutory deadline. Seneca Nation
of Indians v. United States HHS, 945 F.Supp.2d 135, 152
the parties continued negotiating AFAs. Not surprisingly,
their success was somewhat limited--each subsequent
negotiation has prompted litigation. After the
Secretary's 90-day window for dealing with the 2010 and
2011 amendments had closed, but before it had filed its suit,
Seneca Nation proposed adding the same $3.8 million to ...