Navajo Nation v. DOI ( 2023 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 18, 2022 Decided January 13, 2023
No. 22-5100
NAVAJO NATION,
APPELLANT
v.
UNITED STATES DEPARTMENT OF THE INTERIOR AND DEBRA
A. HAALAND, IN HER OFFICIAL CAPACITY AS SECRETARY,
UNITED STATES DEPARTMENT OF THE INTERIOR,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:16-cv-00011)
Steven D. Gordon argued the cause for appellant. With
him on the briefs was Philip Baker-Shenk.
John S. Koppel, Attorney, U.S. Department of Justice,
argued the cause for appellees. With him on the brief were
Brian M. Boynton, Principal Deputy Assistant Attorney
General, and Mark B. Stern, Attorney.
Before: HENDERSON and WALKER, Circuit Judges, and
SENTELLE, Senior Circuit Judge.
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Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: The
Department of the Interior (DOI) provides annual funding for
the judicial system of Navajo Nation, an Indian tribe, through
a series of self-determination contracts authorized by the Indian
Self-Determination and Education Assistance Act (ISDEAA),
25 U.S.C. § 5301 et seq. After its 2014 annual funding request
was “deemed approved,” see Navajo Nation v. U.S. Dep’t of
the Interior (Navajo Nation I), 852 F.3d 1124, 1130 (D.C. Cir.
2017), Navajo Nation filed six separate lawsuits in the U.S.
District Court for the District of Columbia to enforce similar
funding requests that it had submitted each year from 2015
through 2020. In evaluating the parties’ cross-motions for
summary judgment, the district court granted summary
judgment to Navajo Nation as to the 2015 and 2016 proposals
but granted summary judgment to the DOI as to the rest.
Navajo Nation appeals the adverse judgment and contends
that both the ISDEAA and its regulations prohibit the DOI from
declining its funding requests for 2017 through 2020. We
disagree with respect to the ISDEAA but agree with respect to
the regulations. Accordingly, we reverse the district court’s
grant of summary judgment to the DOI and remand as set forth
below.
I.
A.
“Congress enacted the [ISDEAA] to help Indian tribes
assume responsibility for programs or services that a federal
agency would otherwise provide to the tribes’ members.”
Navajo Nation I, 852 F.3d at 1126. The DOI Secretary must,
upon a tribe’s request, enter a self-determination contract under
which the tribe assumes control over federally funded
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programs formerly administered by the federal government.
See 25 U.S.C. § 5321(a)(1); Menominee Indian Tribe of Wis. v.
United States, 577 U.S. 250, 252 (2016). To form such a
contract, a tribe must propose terms to the Secretary and the
Secretary must “approve the proposal” within ninety days
unless he “clearly demonstrates”—or supports with
“controlling legal authority”—that at least one of five criteria
is met. 25 U.S.C. § 5321(a)(2). One ground for declination is if
the tribe has requested funds “in excess of the applicable
funding level for the contract.” Id. § 5321(a)(2)(D). Once
entered, a self-determination contract may be for a definite or
an indefinite term. See id. § 5324(c)(1). Upon the expiration of
a definite term self-determination contract, the tribe may
submit a proposed renewal contract to the DOI for approval.
See id. § 5321(a)(2). If the renewal contract proposes “no
material or substantial change to the scope or funding” of the
programs covered by the previous contract, the DOI must
approve the proposal and “will not review” it for the
declination criteria listed in section 5321(a)(2). 25 C.F.R.
§ 900.33.
The self-determination contract itself does not specify
applicable funding levels. Rather, funding is determined each
year through “annual funding agreements” (AFAs), which
“represent[] the negotiated agreement of the Secretary to fund,
on an annual basis, the programs, services, activities and
functions transferred to an Indian tribe . . . under the
[ISDEAA].” 25 C.F.R. § 900.6; see also 25 U.S.C.
§§ 5368(c)(1), 5363(b)(1). Each AFA is incorporated into the
self-determination contract then in effect. See 25 U.S.C.
§ 5329(c) (model self-determination contract subsec.
1(f)(2)(B)); Menominee Indian Tribe, 614 F.3d at 522 (AFAs
“become part of the contract”). The process for negotiating an
AFA looks much like the process for entering a self-
determination contract: it begins with a tribe’s proposal to the
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DOI, see 25 U.S.C. § 5321(a)(2), which the DOI may
ordinarily decline pursuant to the five section 5321(a)(2)
criteria only. See also 25 C.F.R. § 900.22 (repeating section
5321(a)(2)’s declination criteria). But when a proposed AFA is
“successor” to and “substantially the same as” an earlier AFA,
the DOI’s declination authority disappears; faced with such a
proposal, the DOI “shall approve and add to the contract the
full amount of funds to which the contractor is entitled,”
without evaluating the section 5321(a)(2) declination criteria.
25 C.F.R. § 900.32.
Each AFA supplies program funding based on the sum of
“direct program expenses” and “contract support costs.” See
25 U.S.C. § 5325(a)(3)(A). Funding for direct program
expenses, “which courts have also called the ‘secretarial
amount,’” Fort McDermitt Paiute & Shoshone Tribe v.
Becerra, 6 F.4th 6, 7 (D.C. Cir. 2021), may not be less than
what the Secretary “would have otherwise provided” if the
federal government still administered the programs covered by
the contract, 25 U.S.C. § 5325(a)(1). By contrast, contract
support costs reimburse the tribe for expenses “not
contemplated by the secretarial amount,” like “contract
compliance expenses” that are borne by the tribe but that the
federal government would not incur if it still ran the programs.
See Cook Inlet Tribal Council, Inc. v. Dotomain, 10 F.4th 892,
893 (D.C. Cir. 2021). Critical for our purposes, the ISDEAA
“sets a floor, not a ceiling, on the amount of money that a Tribe
can receive in a self-determination contract.” Navajo Nation I,
852 F.3d at 1130 (quoting Yurok Tribe v. U.S. Dep’t of the
Interior, 785 F.3d 1405, 1412 (Fed. Cir. 2015)). From there,
the tribe may negotiate funding increases with the DOI each
year and any such increase is memorialized in that year’s AFA.
See 25 U.S.C. §§ 5324(c)(2), 5325(a)(3)(C).
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When the DOI declines a tribe’s funding request or
proposed self-determination contract, the tribe may challenge
that declination in federal court. See id. § 5331(a).
B.
This dispute spans two self-determination contracts and
six AFAs between Navajo Nation and the DOI. In 2012,
Navajo Nation and the DOI, acting through the Bureau of
Indian Affairs (BIA), entered a five-year self-determination
contract under which the DOI agreed to fund Navajo Nation’s
judicial system. See Navajo Nation I, 852 F.3d at 1126. Then,
in its 2014 AFA proposal, Navajo Nation requested a
significantly higher reimbursement for direct program
expenses—about $17 million, up from $1.3 million in 2013. Id.
at 1127. When the Secretary untimely declined the proposal in
part, Navajo Nation sued to enforce it in federal court. On
appeal, we upheld the proposed amount, concluding that the
Secretary’s failure to timely decline it meant the proposal was
“deemed approved.” Id. at 1130; see also 25 U.S.C.
§ 5321(a)(2); 25 C.F.R. § 900.18. On remand, the district court
awarded Navajo Nation damages representing the difference
between the amount the DOI had awarded and the amount the
Nation had proposed. See Navajo Nation v. U.S. Dep’t of the
Interior (Navajo Nation I), No. 14-cv-1909, 2020 WL
13158302, at *4 (D.D.C. June 12, 2020).
Each year from 2015 through 2020, Navajo Nation
requested a level of funding for direct program expenses that
was substantially the same as the amount that was “deemed
approved” in 2014. The DOI declined all six AFA proposals in
large part, claiming that each requested funding “in excess of
the applicable funding level for the contract.” 25 U.S.C.
§ 5321(a)(2)(D); 25 C.F.R. § 900.22(d). Instead, the DOI
awarded lesser amounts close to what the Tribe had received in
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2012 and 2013. Also during this period, the parties’ 2012 self-
determination contract expired. So, with its 2017 proposed
AFA, Navajo Nation submitted a proposed renewal contract
covering the years 2017 through 2021, the terms of which
incorporated the 2017 proposed AFA and otherwise mirrored
those of the previous self-determination contract.
While Navajo Nation I was pending, Navajo Nation filed
six additional lawsuits challenging the DOI’s declination of its
annual funding requests in each of the six years, 2015 through
2020. The district court consolidated and stayed the suits
pending a final resolution of Navajo Nation I. After the district
court resolved Navajo Nation I on remand, the parties cross-
moved for summary judgment in the consolidated cases and the
court granted each motion in part. The court granted Navajo
Nation’s motion for summary judgment with respect to the
funding proposals in 2015 and 2016, finding that they were
“successor[s]” to and “substantially the same” as the 2014
AFA, which had been “deemed approved” by the DOI. See
25 C.F.R. §§ 900.18, 900.32. But the court granted the DOI’s
cross-motion for summary judgment with respect to the
funding proposals for 2017 through 2020, concluding that
those proposals were neither “successor[s]” to the 2014 AFA,
id. § 900.32, nor “renewal contracts” within the meaning of
25 C.F.R. § 900.33. Under that reasoning, the DOI could
permissibly consider the declination criteria and decline the
proposals on the ground that they all sought funding “in excess
of the applicable funding level for the contract,” 25 U.S.C.
§ 5321(a)(2)(D); 25 C.F.R. § 900.22(d), which, in the district
court’s view, was no more than the amount the DOI would have
provided had the Tribe not assumed control over the programs
covered by the contract, see 25 U.S.C. § 5325(a)(1).
Navajo Nation appeals the district court’s adverse ruling
covering the 2017 through 2020 AFAs. It contends that both
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the ISDEAA and applicable regulations compel the DOI to
approve Navajo Nation’s funding proposals for those years.
The DOI does not appeal the district court’s adverse ruling with
respect to Navajo Nation’s 2015 and 2016 funding proposals.
II.
The district court had subject matter jurisdiction pursuant
to 25 U.S.C. § 5331(a), which confers original jurisdiction to
adjudicate a tribe’s claim for damages against the DOI arising
out of a self-determination contract authorized by the ISDEAA.
Navajo Nation filed a timely notice of appeal of the district
court’s final order granting the parties’ respective summary
judgment motions, giving this court appellate jurisdiction
under 28 U.S.C. § 1291.
“We review de novo the district court’s grant of summary
judgment, applying the same standards that governed the
district court’s decision.” Elec. Priv. Info. Ctr. v. U.S. Dep’t of
Just., 18 F.4th 712, 717 (D.C. Cir. 2021) (citing Kimberlin v.
Dep’t of Just., 139 F.3d 944, 947 (D.C. Cir. 1998)). Summary
judgment is appropriate only “if the movant 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).
III.
We conclude that the ISDEAA does not require the DOI
to approve Navajo Nation’s funding requests for the years 2017
through 2020 but its regulations do. The 2017 proposal
requested “the renewal of a term contract” with “no material
[or] substantial change to the scope or funding” of the previous
contract, see 25 C.F.R. § 900.33, and the 2018 through 2020
proposals are “successor[s]” to and “substantially the same as”
8
the 2017 proposal, see id. § 900.32. The DOI therefore violated
25 C.F.R. §§ 900.32 and 900.33 when it considered the
section 5321(a)(2) declination criteria and partially declined
the Tribe’s proposed AFAs. Accordingly, we reverse the
district court.
A.
Navajo Nation first contends that the DOI violated the
ISDEAA when it declined the four funding proposals at issue
in this appeal. As always, our analysis begins with the statutory
text. Van Buren v. United States, 141 S. Ct. 1648, 1654 (2021).
The DOI claims authority to decline the proposals under
25 U.S.C. § 5321(a)(2)(D), which permits the Secretary to
decline a “proposal to amend or renew a self-determination
contract” if “the amount of funds proposed under the contract
is in excess of the applicable funding level for the contract, as
determined under [section] 5325(a).” See also 25 C.F.R.
§ 900.22(d). Section 5325(a), in turn, provides that “the
amount of funds” awarded as reimbursement for direct
program expenses pursuant to a self-determination contract—
also known as the secretarial amount—“shall not be less than”
the amount the DOI “would have otherwise provided for the
operation of the programs or portions thereof for the period
covered by the contract.” 25 U.S.C. § 5325(a)(1); see also Fort
McDermitt Paiute & Shoshone Tribe, 6 F.4th at 7;
Kingdomware Techs., Inc. v. United States, 579 U.S. 162, 171
(2016) (“[T]he word ‘shall’ usually connotes a requirement.”).
Therefore, when a tribe’s proposed reimbursement for direct
program expenses exceeds the funding that the DOI would
have otherwise provided, see 25 U.S.C. § 5325(a)(1), section
5321(a)(2)(D) does not require the DOI to award the excess
funding. Cf. Navajo Nation I, 852 F.3d at 1130 (section
5325(a)(1) “sets a floor, not a ceiling, on the amount of money
9
that a Tribe can receive in a self-determination contract”
(quoting Yurok Tribe, 785 F.3d at 1412)).
The record shows that the DOI “would [not] have
otherwise provided” the level of funding requested by Navajo
Nation had the government continued to operate the covered
programs itself. See 25 U.S.C. § 5325(a)(1). Rather, the DOI
would have provided only about $1.4 million in funding for
direct program expenses in each year from 2017 through 2020.
Because 25 U.S.C. § 5325(a)(1) requires the DOI to award
only the amount it would have otherwise provided had it
continued to operate the covered programs itself, the DOI did
not run afoul of the ISDEAA when it declined Navajo Nation’s
$17 million funding request to the extent it exceeded the
secretarial amount.
Navajo Nation disagrees, arguing that the amount
“deemed approved” in 2014 reset “the applicable funding level
for the contract,” see 25 U.S.C. § 5321(a)(2)(D), such that the
DOI could not reduce funding in “all subsequent years,”
including those years covered by the renewed contract, see
Appellant’s Br. 14. But the Tribe’s interpretation runs counter
to the ISDEAA’s statutory scheme, which provides for the
determination of contract funding “[o]n an annual basis.”
25 U.S.C. § 5325(a)(3)(C); see also id. § 5329(c) (model self-
determination contract subsec. (c)(2)) (providing that the
“amount of funds to be paid under” a self-determination
contract “shall be determined in an annual funding
agreement”); FDA v. Brown & Williamson Tobacco Corp.,
529 U.S. 120, 133 (2000) (“A court must . . . interpret the
statute as a symmetrical and coherent regulatory scheme . . .
and fit . . . all parts into a harmonious whole.” (cleaned up)).
The 2014 AFA was “deemed approved” because the Secretary
missed the statutory deadline for declining the proposal.
Navajo Nation I, 852 F.3d at 1129–30; see 25 U.S.C.
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§ 5321(a)(2). Although the DOI’s untimely declination
changed the government’s funding obligation for 2014, the
“applicable funding level for the contract,” as defined by
section 5325(a), did not change. 25 U.S.C. § 5321(a)(2)(D).
Thereafter, section 5325 supplies the only constraint on the
DOI’s authority to decline funding for direct program expenses
pursuant to section 5321(a)(2)(D): the DOI must provide, at a
minimum, the amount the “Secretary would have otherwise
provided for the operation of the programs” had the federal
government continued to operate them itself. Id. § 5325(a)(1).
In short, we reject Navajo Nation’s reading of the
ISDEAA. The DOI did not violate 25 U.S.C. § 5321(a)(2)
when it declined to award funding greater than the secretarial
amount.
B.
In addition and relying on the regulations, Navajo Nation
contends that 25 C.F.R. §§ 900.32 and 900.33, taken together,
require the DOI to grant the Tribe’s funding requests from 2017
through 2020. In accordance with statutory directive, tribal
representatives participated directly in the promulgation of
regulations administering the ISDEAA. See 25 U.S.C.
§ 5328(d)(1) (requiring relevant federal agencies to “confer
with, and allow for active participation by, representatives of
Indian tribes, tribal organizations, and individual tribal
members” in promulgating ISDEAA regulations); Indian Self-
Determination & Education Assistance Act Amendments,
61 Fed. Reg. 32,482, 32,483 (June 24, 1996) (summarizing
procedures for promulgation). The two regulations relevant
here prohibit the DOI from considering the declination criteria
listed in 25 U.S.C. § 5321(a)(2) when evaluating certain
proposals made by an Indian tribe. See 25 C.F.R. § 900.33(applying prohibition to “proposals to renew term contracts”);
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id. § 900.32 (applying prohibition to “proposed successor
annual funding agreement[s]”).
We begin with 25 C.F.R. § 900.33, which applies to
proposed renewal contracts. Navajo Nation insists that section
900.33 compels the DOI to grant the proposed 2017 AFA.
Section 900.33 provides that the DOI, when acting via the BIA,
“will not review the renewal of a term [self-determination]
contract for declination issues where no material and
substantial change to the scope or funding of a program,
functions, services, or activities has been proposed by the
Indian tribe.” 25 C.F.R. § 900.33. In rejecting Navajo Nation’s
argument, the district court determined that section 900.33
applies only to proposed renewal contracts, not to proposed
AFAs. But a proposed renewal contract incorporates the
proposed AFA so that the AFA “become[s] part of the
contract.” Menominee Indian Tribe, 614 F.3d at 522. And
interpreting section 900.33 to exclude an AFA would render
the provision’s reference to “funding” obsolete because a self-
determination contract does not itself provide for funding. See
25 U.S.C. § 5329(c) (model self-determination contract
subsec. 1(f)(2)(B)). The DOI’s authority to decline a proposed
renewal contract therefore subsumes its authority to decline a
proposed AFA, at least with respect to the first AFA in a
renewal contract’s term, which is submitted together with the
proposed renewal contract. See 25 C.F.R. § 900.12.
Perhaps recognizing the shortcomings of this position, the
DOI instead maintains that the 2017 AFA, which requested an
amount similar to the amount that was “deemed approved” in
2014, see id. § 900.18, proposed a “material and substantial
change” to the funding for Navajo Nation’s judicial operations,
see id. § 900.33. This change, the DOI contends, arose not by
virtue of the parties’ annual “renegotiation,” cf. 25 U.S.C.
§ 5324(c)(2), but by operation of the regulations, see 25 C.F.R.
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§ 900.18 (providing that proposals not declined by the
Secretary within ninety days are “deemed approved”), and thus
should not be considered part of the previous contract for the
purpose of evaluating the proposed renewal contract under
25 C.F.R. § 900.33.
The DOI, however, relies on a distinction that the
regulatory scheme does not draw. An amount that is “deemed
approved,” see id. § 900.18, “shall” be awarded by the
Secretary, see id. § 900.19, and “become[s] part of the
contract,” Menominee Indian Tribe, 614 F.3d at 522. As the
district court correctly recognized, the amount “deemed
approved” in 2014 extended to the “successor” 2015 and 2016
AFAs pursuant to 25 C.F.R. § 900.32. From there, Navajo
Nation requested a continuation of the same funding amount
when it proposed the 2017 renewal contract. Because there is
no “material and substantial change” between the proposed
renewal contract—including the proposed 2017 AFA—and the
previous contract, the DOI violated 25 C.F.R. § 900.33 when it
considered the section 5321(a)(2) declination criteria and
declined to award the funds Navajo Nation requested in 2017.
Having established that Navajo Nation is entitled to the
funding it requested in 2017, we turn to 25 C.F.R. § 900.32,
which applies to the 2018 through 2020 “successor” AFAs. A
“successor” AFA is one that follows an earlier AFA under the
same self-determination contract. See 25 C.F.R. § 1000.2(defining “[s]uccessor AFA” as “a funding agreement
negotiated after a [tribe’s] initial agreement with a bureau for
continuing to perform a particular program”). Section 900.32
provides that, when reviewing a proposed successor AFA, the
DOI “shall approve” and “may not decline[] any portion of”
the proposal that “is substantially the same as the prior funding
agreement.” Because the successor 2018 through 2020 AFA
proposals are substantially the same as the initial 2017 AFA—
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both in the programs covered and in the scope of funding—the
DOI may not consider the declination criteria when reviewing
the proposals and therefore its partial declination of Navajo
Nation’s funding requests ran afoul of section 900.32.
Although the regulations compel a substantial (and
potentially permanent) increase in funding due to the DOI’s
untimely 2014 declination, the regulations were promulgated
against the backdrop understanding that “each provision of [the
ISDEAA] and each provision of a contract or funding
agreement shall be liberally construed for the benefit of the
Indian Tribe.” 25 U.S.C. § 5321(g); accord 25 C.F.R.
§ 900.3(a)(5). So long as the DOI has tied its own hands with
regulations like sections 900.32 and 900.33, only the Congress,
not the DOI, wields the authority to reduce a self-determination
contract’s funding level without the tribe’s agreement. See
25 U.S.C. § 5368(g)(3)(B)(ii) (prohibiting the Secretary from
reducing “the amount of funds required under this subchapter”
“except as necessary as a result of,” inter alia, “a congressional
directive in legislation or an accompanying report”); S. REP.
NO. 100-247, at 17 (describing the Congress’s intent “to
prevent tribal contract funding amounts from being unilaterally
reduced by the Secretary”); Ramah Navajo Sch. Bd. v. Babbitt,
87 F.3d 1338, 1344 (D.C. Cir. 1996) (the ISDEAA
“circumscribe[s] as tightly as possible the discretion of the
Secretary”). The DOI’s failure to decline in a timely manner
the Tribe’s proposal in 2014 proved to be costly.
IV.
For the foregoing reasons, we reverse the district court’s
order granting summary judgment to the Department of the
Interior and remand to the district court for proceedings
consistent with this opinion.
So ordered.