Cook Inlet Tribal Council v. Mandregan

          MEMORANDUM OPINION

          Emmet G. Sullivan United States District Judge

         Pursuant to the Indian Self-Determination and Education Assistance Act (“ISDEAA”), 25 U.S.C. §§ 5301, et seq., Plaintiff Cook Inlet Tribal Council (“CITC”), an Alaskan Native tribal organization, challenges a decision of the Indian Health Service (“IHS”), a component of the United States Department of Health and Human Services (“HHS”). On July 7, 2014, IHS declined CITC's 2014 proposed amendment to the funding agreement in its self-determination contract with the federal government (the “declination decision”). On November 7, 2018, this Court issued a Memorandum Opinion and a separate Order (“Remand Order”) that granted in part CITC's motion for summary judgment, vacated the declination decision, and remanded it to IHS for a determination consistent with the Opinion without issuing a final judgment. Cook Inlet Tribal Council v. Mandregan, 348 F.Supp.3d 1, 2-3, 17 (D.D.C. 2018) (“Cook I”).

         The parties move for reconsideration of the remedy the Court ordered in Cook I. CITC also moves for attorneys' fees and costs. Upon careful consideration of the parties' submissions, the applicable law, the entire record, and for the reasons stated below, the Court GRANTS IN PART and DENIES IN PART CITC's cross-motion for reconsideration, GRANTS IN PART and DENIES IN PART Defendants' motion for reconsideration, and HOLDS IN ABEYANCE CITC's motion for attorneys' fees and costs.

         I. Background

         The Court assumes the parties' familiarity with the factual background and procedural history, which are set forth in greater detail in the Court's prior Opinion. See Cook I, 348 F.Supp.3d at 2-4. Before addressing the parties' arguments, the Court provides an abbreviated overview of the relevant statutory scheme and the Court's previous rulings.

         The ISDEAA authorizes the Secretary of HHS or the Secretary of the United States Department of the Interior to enter into self-determination contracts with Indian tribes and tribal organizations. See 25 U.S.C. § 5321; see also Id. § 5304(i), (j). Under those contracts, the tribes promise to provide federally-funded services, such as tribal educational, social, and health services, that otherwise would have been provided by the federal government. Id. § 5321(a). The ISDEAA directs the Secretary to enter into a self-determination contract with an Indian tribe upon the request of the tribe under certain circumstances. Id.

         The Secretary can pay an Indian tribe or a tribal organization from two sources of funding: (1) the “Secretarial” amount, id. § 5325(a)(1); and (2) the “contract support costs” amount, id. § 5325(a)(2), (3). The Secretarial amount is the amount that the Secretary would have spent if the agency itself operated the programs. Cook I, 348 F.Supp.3d at 7. The Secretarial amount is committed to the agency's discretion. See 25 U.S.C. § 5325(a)(1). But the Secretary has limited discretion for the contract support costs funding. See § 5325(a)(2); see also Ramah Navajo Sch. Bd., Inc. v. Babbitt, 87 F.3d 1338, 1344 (D.C. Cir. 1996) (“Congress left the Secretary with as little discretion as feasible in the allocation of [contract support costs].”).

         Because “[i]t soon became apparent” that the Secretarial amount did not fully account for the total costs incurred by Indian tribes to provide the services under the self-determination contracts, Salazar v. Ramah Navajo Chapter, 567 U.S. 182, 186 (2012), the ISDEAA “mandates that the Secretary shall pay the full amount of ‘contract support costs' incurred by tribes in performing their contracts.” Id. at 185; see also 25 U.S.C. § 5325(a)(2). The ISDEAA defines “contract support costs” as “an amount for the reasonable costs for activities which must be carried on by a tribal organization as contractor to ensure compliance with the terms of the contract and prudent management[.]” Cook I, 348 F.Supp.3d at 7 (quoting 25 U.S.C. § 5325(a)(2)).^[1]

         At issue in this case is whether the Secretary must pay a tribal organization's “facility support costs” exclusively from the Secretarial amount, or whether facility support costs can be paid from the “contract support costs” amount. Cook I, 348 F.Supp.3d at 2. For tribal contractors, like CITC, the ISDEAA allows them to propose amendments to the funding agreements in self-determination contracts. Id. at 8 (citing 25 U.S.C. § 5321(a)(2)). Through annual funding agreements incorporated into the contracts, the Secretary pays the tribe's costs to administer the programs when the tribe submits a proposal. See 25 U.S.C. § 5321(a)(2). “[T]he Secretary shall, within ninety days after receipt of the proposal, approve the proposal and award the contract unless the Secretary provides written notification to the applicant that contains a specific finding that clearly demonstrates” one of the five conditions set forth in Section 5321(a)(2). Id.; see also Id. § 5321(a)(4). “[T]he Secretary may extend or otherwise alter the 90-day period . . . if before the expiration of such period, the Secretary obtains the voluntary and express written consent of the tribe or tribal organization to extend or otherwise alter such period.” Id. § 5321(a)(2); see also 25 C.F.R. § 900.18 (“A proposal that is not declined within 90 days (or within any agreed extension . . .) is deemed approved . . . .”).^[2]

         Since 1992, CITC has contracted with IHS to operate substance abuse programs serving Alaskan Natives living in the Cook Inlet region-programs that would otherwise have been federal programs. Cook I, 348 F.Supp.3d at 3-4. CITC operates these programs under the authority of a Board of Directors, which consists of representatives from eight federally-recognized Native American tribes. Id. at 4. CITC's first self-determination contract provided, among other costs, $11, 838.50 for facility-related costs. Id. CITC has received that same amount for those costs in subsequent years. Id. By 2013, CITC's facility support costs grew to $479, 040. Id. In April 2014, CITC proposed an amendment to the 2014 self-determination contract to add $479, 040 in “direct contract support costs associated with facility support.” Id.

         In rejecting CITC's proposal in July 2014, id., IHS based its declination decision on one of the five declination options permitted in the ISDEAA: “[T]he amount of funds proposed under the contract is in excess of the applicable funding level for the contract[.]” 25 U.S.C. § 5321(a)(2)(D). IHS interpreted the ISDEAA's funding provisions to mean that CITC already receives those costs through its annual “Secretarial” funding. Cook I, 348 F.Supp.3d at 4; see also 25 U.S.C. § 5325(a)(3)(A) (contract support costs funding “shall not duplicate any funding” otherwise provided). In other words, IHS argued that CITC's request for $479, 040 in facility support costs would result in duplicative funding as both Secretarial funding and contract support costs, in violation of the ISDEAA. Cook I, 348 F.Supp.3d at 4.

         Shortly thereafter, litigation ensued. Id. CITC appealed IHS' declination decision to this Court, bringing suit against Christopher Mandregan, Jr., Alaska Area Director of IHS; Alex M. Azar II, ^[3] Secretary of HHS; and the United States of America (collectively, the “Defendants”). Id. at 2, 4. Thereafter, the parties filed cross-motions for summary judgment. Id. at 4.

         In Cook I, the Court granted in part CITC's motion for summary judgment and vacated IHS' declination decision of CITC's 2014 proposal for additional “contract support costs” funding to account for the increased facility support costs because IHS improperly declined the proposal. Id. at 17. The Court found that IHS failed to meet its burden of demonstrating that CITC's proposal was in excess of the applicable funding level for the contract, id. at 14, and that the administrative record did not contain sufficient documentation for the Court to determine whether or not CITC's request duplicates any funding already provided by the agency, id. at 17. The Court held that Section 5325 of the ISDEAA, 25 U.S.C. § 5325, is ambiguous, id. at 8-12, and found that CITC's interpretation of IHS' guidance-suggesting that facility support costs may be funded as “contract support costs”-is reasonable, id. at 12-13, 16. In fashioning a remedy, the Court remanded CITC's 2014 contract proposal to IHS for a determination consistent with the Court's Opinion regarding the amount of facility support costs that should be funded as contract support costs beginning with the 2014 contract to present. Id. at 17. The Court directed the Clerk of Court to close the case without prejudice, granting either party with the option to file a motion to re-open the case following further IHS proceedings. Remand Order, ECF No. 38 at 2.^[4] The Court did not direct the Clerk to enter a final judgment. See id.; see also Cook I, 348 F.Supp.3d at 17.

         Cook I set in motion a flurry of activity, including: (1) cross-motions for reconsideration, see, e.g., Defs.' Mot. for Recons., ECF No. 43; Pl.'s Cross-Mot. for Recons. (“Pl.'s Mot. for Recons.”), ECF No. 52; (2) a motion for attorneys' fees, see Pl.'s Mot. for Att'ys' Fees & Costs, ECF No. 41; (3) a motion to stay agency proceedings, see Pl.'s Mot. to Stay, ECF No. 49; (4) a Bill of Costs, see Pl.'s Bill of Costs, ECF No. 40; and (5) an appeal to the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”), see Defs.' Notice of Appeal, ECF No. 47.^[5]

         The Court exercised its remedial discretion to stay its Remand Order, see Min. Order (Jan. 18. 2019) (citing Friends of Earth, Inc. v. EPA, 446 F.3d 140, 148 (D.C. Cir. 2006)). The Court retained jurisdiction over the case due to the pending cross-motions for reconsideration, see Min. Order (Jan. 18. 2019), and the D.C. Circuit held in abeyance the appeal pending the resolution of those motions, see Order, ECF No. 56 (D.C. Cir. Jan. 23, 2019). Finally, the Court granted the parties' proposed briefing schedule for the pending motions, Min. Order (Jan. 29, 2019).^[6] Those motions are ripe and ready for the Court's adjudication.

         II. Legal Standard

         Federal Rule of Civil Procedure 54(b) governs the parties' cross-motions for reconsideration because the Court has not entered a final judgment. Shapiro v. U.S. Dep't of Justice, No. CV 13-555 (RDM), 2016 WL 3023980, at *2 (D.D.C. May 25, 2016) (applying Rule 54(b) to a motion for reconsideration “[b]ecause the Court ha[d] not entered final judgment”).^[7] Under Rule 54(b), “the Court [may] revisit any order that adjudicates ‘fewer than all the claims or rights and liabilities of fewer than all the parties . . . at any time before' the entry of final judgment.” Id. (quoting Fed.R.Civ.P. 54(b)). The standard for determining whether or not to grant a motion for reconsideration brought under Rule 54(b) is the “as justice requires” standard. Judicial Watch v. Dep't of Army, 466 F.Supp.2d 112, 123 (D.D.C. 2006). Under this flexible standard, the Court considers “whether the court patently misunderstood the parties, made a decision beyond the adversarial issues presented, made an error in failing to consider controlling decisions or data, or whether a controlling or significant change in the law has occurred.” In Def. of Animals v. Nat'l Insts. of Health, 543 F.Supp.2d 70, 75 (D.D.C. 2008) (internal quotation marks omitted); see also Montgomery v. IRS, 356 F.Supp.3d 74, 79 (D.D.C. 2019) (“[T]here must be some ‘good reason' to reconsider an issue already litigated by the parties and decided by the court, such as new information, a misunderstanding, or a clear error.”).

         The moving party has the burden of demonstrating “that some harm, legal or at least tangible, would flow from a denial of reconsideration.” In Def. of Animals, 543 F.Supp.2d at 76 (quoting Cobell v. Norton, 355 F.Supp.2d 531, 540 (D.D.C. 2005)). “[E]ven if justice does not require reconsideration of an interlocutory ruling, a decision to reconsider is nonetheless within the court's discretion[.]” Id. (internal quotation marks omitted). However, this discretion is “limited by the law of the case doctrine and ‘subject to the caveat that where litigants have once battled for the court's decision, they should neither be required, nor without good reason permitted, to battle for it again.'” Id. (quoting Singh v. George Wash. Univ., 383 F.Supp.2d 99, 101 (D.D.C. 2005) (citation omitted)).

         III. Analysis

         In moving for reconsideration, Defendants seek clarification as to whether the Remand Order was a final judgment, and request that the Court limit the Remand Order to the 2014 contract proposal on the ground that the 2014 contract proposal is the only one at issue in this case. Defs.' Mot. for Recons., ECF No. 43 at 4. CITC moves for reconsideration on three grounds: (1) “controlling decisions indicate an [Administrative Procedure Act (“APA”)]-style remand is improper in ISDEAA litigation”; (2) CITC will suffer from “legal and tangible harm” as a result of the denial of reconsideration; and (3) the parties never “battle[d] over the question of [the appropriate] remedy” in their summary judgment briefing. Pl.'s Mot. for Recons., ECF No. 52 at 13 (internal quotation marks omitted). The Court considers each argument in turn, concluding that an award to CITC for the increased facility support costs is the appropriate remedy under 25 U.S.C. § 5331(a), and that the award must be limited to the 2014 contract proposal.^[8]

         A. The Remand Order Was Not a Final Judgment

         The parties agree that the Remand Order was not a final judgment. See, e.g., Defs.' Mot. for Recons., ECF No. 43 at 5 (“Defendants believe this [R]emand [O]rder is not a final judgment.”); Pl.'s Mot. for Recons., ECF No. 52 at 13 (requesting entry of a final judgment); Defs.' Opp'n, ECF No. 60 at 17. Nonetheless, Defendants seek clarification on that point. E.g., Defs.' Mot. for Recons., ECF No. 43 at 4-6. Defendants explain that they make this request for two reasons: (1) to ensure that “the parties retain the ability to appeal the [O]rder after the proceedings on remand[;]” and (2) in the event that “the case is re-opened, and the Court later issues a final judgment.” Defs.' Opp'n, ECF No. 60 at 17-18.

         A party may seek appellate review “from all final decisions of the district courts . . . .” 28 U.S.C. § 1291 (emphasis added). “It is black letter law that a district court's remand order is not normally ‘final' for purposes of appeal under 28 U.S.C. § 1291.” N.C. Fisheries Ass'n v. Gutierrez, 550 F.3d 16, 19 (D.C. Cir. 2008) (citations omitted). “[A]n exception to this general rule, however, where the agency to which the case is remanded seeks to appeal and it would have no opportunity to appeal after the proceedings on remand.” Occidental Petroleum Corp. v. SEC, 873 F.2d 325, 330 (D.C. Cir. 1989). Applying these principles, the D.C. Circuit held that this Court's Order granting summary judgment to a party and remanding the matter to the agency for further proceedings was “a non-final remand order[.]” Sierra Club v. U.S. Dep't of Agric., 716 F.3d 653, 655 (D.C. Cir. 2013).

         The same is true here. This Court granted in part CITC's motion for summary judgment, vacated IHS' declination decision, and remanded CITC's 2014 contract proposal to IHS for a decision consistent with the prior Opinion. Cook I, 348 F.Supp.3d at 16-17. The Court's Remand Order cannot be construed as “final” because the remand to IHS contemplated further proceedings due to insufficient information in the administrative record to support CITC's request for facility support costs. See Pueblo of Sandia v. Babbitt, 231 F.3d 878, 881 (D.C. Cir. 2000) (determining that district court's Remand Order “contemplate[d] more than the ministerial act of using a corrected survey”).

         Furthermore, Defendants fail to argue that they would not have had an opportunity to appeal the Court's decision after the completion of the agency proceedings on remand. See Defs.' Mot. for Recons., ECF No. 43 at 5-6. The Court therefore finds that its Remand Order is not a final one. See, e.g., Babbitt, 231 F.3d at 881 (holding that “[b]ecause the district court's order [came] within the category of a remand for significant further proceedings, ” the D.C. Circuit was “without jurisdiction to review it because . . . remand orders as a category are not final.”); cf. Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 744 (1976) (orders granting partial summary judgment but leaving the “award[ ] of other relief . . . to be resolved have never been considered . . . ‘final' within the meaning of 28 U.S.C. ...