United States District Court, District of Columbia
L. FRIEDRICH United States District Judge.
the Court is the Defendant's Motion to Dismiss or, in the
Alternative, for Summary Judgment, Dkt. 17, and the
Plaintiff's Motion for Summary Judgment, Dkt. 16. For the
following reasons, the Court will deny the defendant's
motion and grant the plaintiff's motion.
the Head Start Act, 42 U.S.C. § 9831 et seq.,
the U.S. Department of Health and Human Services
(“HHS”) provides grants to tribes that implement
Head Start and Early Head Start programs for young children
and their families. Qualified organizations can receive
grants for up to 80% of Head Start program costs. 42 U.S.C.
§ 9835(b). The grants are administered by a division of
HHS, the Administration of Children and Families' Office
of Head Start (“OHS”). Dkt. 19 at 13.
plaintiff, the Navajo Nation, is a federally recognized
Indian tribe whose reservation spans parts of Arizona, New
Mexico, and Utah. Compl. ¶ 11, Dkt.1. It runs Head Start
and Early Head Start programs to provide education services
to its young members and residents and their families. Dkt.
19 at 13. The programs are funded primarily by a federal
grant, No. 90C19889 (“the Grant”), which is at
the center of this case. Id. The Grant's
budgetary period, or fiscal year, starts on March 1 each year
and runs through February of the next year. Id. The
Navajo Nation must submit an annual renewal application for
the Grant, which is due on December 1 before the new fiscal
year starts. Compl. ¶ 18. In recent fiscal years, the
Navajo Nation has received $23, 075, 043 annually pursuant to
the Grant. Dkt. 19 at 13.
the Head Start Act, however, grants are not static from year
to year. Section 641a(h) of the Act provides specific
procedures for adjusting grants to Head Start programs that
suffer from “chronic underenrollment.” 42 U.S.C.
§ 9836a(h). Grantees must self-report enrollment each
month, id. § 9836a(h)(2), and HHS must conduct
a semiannual review to determine which grantees have been
under-enrolled for four consecutive months, id.
§ 9836a(h)(3). HHS and each under-enrolled grantee must
then develop a plan and timetable for remediating
under-enrollment, and the grantee “shall immediately
implement the plan.” Id. § 9836a(h)(3),
(4). If the grantee does not reach at least 97% enrollment
within twelve months, HHS may designate the grantee as
chronically under-enrolled and “recapture, withhold, or
reduce” the base grant by a percentage calculated as
the difference between funded and actual enrollment.
Id. § 9836a(h)(5)(A). Also, HHS may waive or
decrease the adjustment in certain circumstances.
Id. § 9836a(h)(5)(B). If HHS adjusts funding
for an Indian Head Start program, HHS must redistribute the
resulting funds to other Indian Head Start programs by the
end of the following fiscal year. Id. §
Navajo Head Start program failed to reach its funded
enrollment in many recent years in the 2000s and 2010s.
See Dkt. 11-1 at 2-3. Due to under-enrollment, HHS
decided to reduce the Navajo Nation's funding in 2011.
See Dkt. 18-1 at 4, 7; Unedited Hr'g Tr. at
At that time, the Nation filed an appeal before the HHS
Departmental Appeals Board (“DAB”), but the
Nation and HHS ultimately reached a settlement agreement
through a tribal consultation process, so they jointly moved
the Departmental Appeals to dismiss the appeal. See
Dkt. 18-1 at 1-7; Unedited Hr'g Tr. at 3. Even so,
under-enrollment continued to be a problem. For example, the
Navajo Nation did not meet Head Start funded enrollment in
every month from March 2015 to January 2018. During that time
period, funded Head Start enrollment was 2, 068 students, but
the Nation's self-reported student numbers generally
ranged from approximately 1, 000 to 1, 600 students.
See Dkt. 11-2 at 1.
the continuing under-enrollment problems, HHS and the Navajo
Nation began discussing remediation in 2015. Dkt. 11-1 at 4.
Then, throughout 2016 and 2017, they implemented a detailed
remediation plan, as required by Section 641a(h) of the Head
Start Act. Dkt. 11-2 at 2-3. The remediation plan involved
extensive coordination and communication between the Nation
and HHS, including meetings, calls, on-site visits, and
training. See Id. at 4- 10.
however, was unsuccessful. By letter on September 26, 2017,
HHS informed the Nation that HHS found Navajo Head Start to
be “chronically underenrolled” and HHS reduced
the Navajo Grant to $15, 766, 194 for fiscal year 2018, which
runs from March 1, 2018 to February 28, 2019. Dkt. 11-2 at
14-15. This reduction was based on an enrollment level of 1,
396 students in Navajo Head Start, not the previously funded
enrollment of 2, 068 Head Start students. Dkt. 11-2 at 12-15.
The 672-student change “represented the average number
of vacant slots over a 12 month period.” Dkt. 11-1 at
6; see also Dkt. 11-2 at 1 (listing enrollment
reported by the Navajo Nation for each month from March 2015
to January 2018). Despite notifying the Navajo Nation that
funding had been reduced, the HHS letter also provided the
Navajo Nation with the opportunity to present certain
countervailing considerations within 30 days. See
Dkt. 11-2 at 15 (“If there are significant causes of
underenrollment that OHS was not made aware of over the 12
month period, please inform your regional office within 30
days of the delivery of this notice.”).
additional letters on October 5, November 22, and December 4,
2017, HHS reiterated the reduced funding level. Dkt. 19 at
13-14. Even so, on January 12, 2018, the Navajo Nation
submitted a funding application for fiscal year 2018 seeking
$23, 075, 043. Id. at 14. By letter one week later,
HHS again advised the Navajo Nation that the Grant would be
the reduced amount for the reduced funded enrollment level.
Id. In the same letter, however, HHS committed to
restoring $2 million if the Nation meets certain conditions,
the most stringent of which appear to be (1) maintaining
enrollment levels of only 1, 396 Head Start students and (2)
creating a waitlist of children eligible to fill the
approximately 180 to 200 additional seats to be supported by
the restored funding. See Dkt. 11-2 at 32-33.
February 2, 2018, the Navajo Nation filed its complaint in
this action. Dkt. 1. On the same day, the Nation moved for a
preliminary injunction, Dkt. 2, and requested a decision
before the end of the month, see Dkt. 2-1 at
On February 28, 2018, the Court denied the motion for a
preliminary injunction and set an expedited schedule for
resolving the case on its merits. See Dkt. 13; Dkt.
moves for dismissal under Rules 12(b)(1) and 12(b)(6) of the
Federal Rules of Civil Procedure; in the alternative, HHS
moves for summary judgment under Rule 56. Dkt. 17. In turn,
the Navajo Nation moves for summary judgment, arguing that
HHS violated the Head Start Act and the Administrative
Procedure Act by reducing the Nation's funding without
providing an appeal and hearing required by the Head Start
Act. Dkt. 16 at 1.
Rule 12(b)(1), a party may move to dismiss a claim over which
the court lacks subject-matter jurisdiction. Fed.R.Civ.P.
12(b)(1). A motion for dismissal under Rule 12(b)(1)
“presents a threshold challenge to the court's
jurisdiction.” Haase v. Sessions, 835 F.2d
902, 906 (D.C. Cir. 1987). Federal district courts are courts
of limited jurisdiction, and it is “presumed that a
cause lies outside this limited jurisdiction.”
Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375,
377 (1994). Thus, the plaintiff bears the burden of
establishing jurisdiction by a preponderance of the evidence.
Lujan v. Defs. of Wildlife, 504 U.S. 555, 561
ruling on a Rule 12(b)(1) motion, the court must treat the
plaintiff's factual allegations as true and afford the
plaintiff the benefit of all inferences that can be derived
from the facts alleged.” Jeong Seon Han v.
Lynch, 223 F.Supp.3d 95, 103 (D.D.C. 2016) (quotation
marks and citation omitted). Those factual allegations,
however, receive “closer scrutiny” than they
would in the Rule 12(b)(6) context. Id. Also, unlike
when evaluating a Rule 12(b)(6) motion, a court may consider
documents outside the pleadings to evaluate whether it has
jurisdiction. See Jerome Stevens Pharm., Inc. v.
FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005). If the court
determines that it lacks jurisdiction, the court must dismiss
the claim or action. Fed.R.Civ.P. 12(b)(1), 12(h)(3).
Rule 12(b)(6), a party may move to dismiss for failure to
state a claim upon which relief can be granted. Fed.R.Civ.P.
12(b)(6). To survive a Rule 12(b)(6) motion, a complaint
“must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). To state a facially plausible
claim, the plaintiff must plead “factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Id. A complaint alleging “facts [that] are
‘merely consistent with' a defendant's
liability . . . ‘stops short of the line between
possibility and plausibility of entitlement to
relief.'” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 557).
evaluating a Rule 12(b)(6) motion, the court “must
construe the complaint in favor of the plaintiff, who must be
granted the benefit of all inferences that can be derived
from the facts alleged.” Hettinga v. United
States, 677 F.3d 471, 476 (D.C. Cir. 2012) (quotation
marks omitted). Conclusory allegations, however, are not
entitled to an assumption of truth, and even allegations
pleaded with factual support need only be accepted insofar as
“they plausibly give rise to an entitlement to
relief.” Iqbal, 556 U.S. at 679. Along with
the allegations within the four corners of the complaint, the
court can consider “any documents either attached to or
incorporated in the complaint and matters of which [it] may
take judicial notice.” EEOC v. St. Francis Xavier
Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997).
under Rule 56, a court grants summary judgment if the moving
party “shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56(a); see also
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48
(1986); Holcomb v. Powell, 433 F.3d 889, 895 (D.C.
Cir. 2006). A “material” fact is one with
potential to change the substantive outcome of the
litigation. See Liberty Lobby, 477 U.S. at 248;
Holcomb, 433 F.3d at 895. A dispute is
“genuine” if a reasonable jury could determine
that the evidence warrants a verdict for the nonmoving party.
See Scott v. Harris, 550 U.S. 372, 380 (2007);
Liberty Lobby, 477 U.S. at 248; Holcomb,
433 F.3d at 895.
Administrative Procedure Act case, summary judgment
“serves as the mechanism for deciding, as a matter of
law, whether the agency action is supported by the
administrative record and otherwise consistent with the APA
standard of review.” Sierra Club v. Mainella,
459 F.Supp.2d 76, 90 (D.D.C. 2006). In other words,
“the entire case . . . is a question of law” and
the district court “sits as an appellate
tribunal.” Am. Biosci., Inc. v. Thompson, 269
F.3d 1077, 1083 (D.C. Cir. 2001) (quotation marks and
footnote omitted). Where a plaintiff challenges an agency
action that interprets a statute the agency administers,
review is governed by the two-step Chevron doctrine.
At Step One, a court must determine “whether Congress
has directly spoken to the precise question at issue.”
Chevron, U.S.A., Inc. v. Nat'l Res. Def. Council,
Inc., 467 U.S. 837, 842, 843-44 (1984). “If the
intent of Congress is clear, that is the end of the matter;
for the court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress.”
Id. at 842-43. In other words, if the “search
for the plain meaning of the statute yields a clear result,
then Congress has expressed its intention as to the question,
and deference is not appropriate.” Eagle ...