SCOTUS Issues a Contracts-Related Opinion on an Indian Law Issue

Living as I now do in Oklahoma, I have learned two very important things about Indian law: 1) I know next to nothing about Indian law; and 2) Indian law intersects with almost every substantive body of law.  If you teach in Oklahoma or other states with significant Indian populations, you should consider adding some cases on the interaction of Indian law and your doctrinal subject matter to each course. It will be enriching for all.

Artwork “Love” by Brent Learned, member of the Cheyenne/Arapaho Tribes

With the first of those lessons firmly in mind, it is with some trepidation that I approach SCOTUS's opinion in Becerra v. San Carlos Apache Tribe, issued last week, in advance of this week's Sovereignty Symposium, hosted by the Oklahoma City University School of Law! 

Following Chief Justice Roberts opinion for the 5-4 majority, we learn that the Indian Self-Determination and Education Assistance Act (ISDA), 25 U.S.C. §5301, et seq., enables Indian tribes to enter into contracts with the Indian Health Service (IHS) to assume responsibility for administering the healthcare programs that IHS would otherwise operate for the tribe.  IHS turns over to the tribes funds to cover such healthcare programs plus funds to cover administrative costs that the tribes take on. 

When tribes take on responsibility for providing health care through contracts with IHS, they incur overhead and administrative expenses that IHS would not incur were it providing healthcare services to the tribes. IHS, as a federal government agency, is exempt from some expenses; other federal agencies provide ancillary services to IHS that the tribes have to cover themselves.  The issue in the case was whether ISDA requires IHS to pay contract support costs to cover these costs that IHS would not have to pay.  

Two self-determination contracts were at issue in the case, one with the San Carlos Apache Tribe and the other with Northern Arapaho Tribe.  In 2019, the San Carlos Apache Tribe sued the Government for breach of contract, alleging that IHS had failed to pay roughly $3 million in contract support costs for the Tribe’s healthcare services over a three-year period.  A District Court dismissed the case, but the Ninth Circuit reversed and remanded.  It found the relevant statutory provisions, 25 U.S.C. § 5325, ambiguous on the question of whether the tribes had to shoulder the costs associated with third-party revenue funded aspects of the tribe's healthcare program.  Applying the Indian canon of construction, the Ninth Circuit resolved the issue in the Tribe's favor.

The Northern Arapaho Tribe entered into a self-determination contract with IHS in in 2016.  The Tribe sued IHS in 2021, alleging that IHS had failed to pay $1.5 million in contract support costs over a two year period.  A district court dismissed the claim, but the Tenth Circuit reversed, with each judge writing separately.  One judge found that the statute ambiguous and applied the Indian canon.  One judge found that the statute unambiguously supported the Tribe's interpretation.  A third judge dissented in part, focusing on 25 U.S.C. § 5326, which was passed in 1998 and thus superseded the earlier adoption of § 5325.

Northern Arapaho Flag

Chief Justice Roberts walked through the language of § 5325 and the ways in which the Tribes accounted for the healthcare spending under the contracts. He found the Tribes' account of their expenses incurred reasonable, entitling the Tribes to the reimbursement they sought.  Section 5326, it turns out, was passed in response to a 1997 case, Ramah Navajo Chapter v. Lujan, in which the Tenth Circuit allowed tribes to recover not only for costs associated with operations under contracts with the federal government but also under contracts with state governments.  Congress did not intend for costs incurred under separate contracts to be recoverable in that case. But the Majority concluded that § 5326 was not intended to cover the current situation as the federal government contracts with the Tribes specifically covered the Tribal healthcare expenditures at issue.  These were not expenses incurred under separate contracts but ancillary costs associated with the Tribes' contracts authorized under the ISDA.

The next section of the Majority opinion addresses the government's contentions and those of the Justice Kavanaugh's dissent.  According to the Majority, the government's arguments simply find no support in the statutory text.  To the extent that the government worries about the Tribes making expenditures beyond what the statute authorizes, the Majority has a straightforward response: such expenditures would not be covered by the statute, and so the government would not be obligated to reimburse them.  Justice Kavanaugh's complaints seem a variant on the government's arguments.  There are general concerns about controls on the natural of tribal healthcare expenditures. Chief Justice Roberts responds that the limitations on such expenditures are laid out in the statute.  Justice Kavanaugh seems to worry about the expense involved, but if Congress has taken on certain obligations, it is not for the Court to question such expenditures.

In a final section Chief Justice Roberts notes that the IHS's refusal to cover the costs at issue imposes a penalty on the tribes for opting for self-determination.  Such a penalty undermines Congress's purpose in enacting the ISDA. The Majority affirmed the decisions of the Ninth and Tenth Circuits.

Justice Kavanaugh begins his dissent by citing decades of executive branch precedent interpreting the statute to provide that the tribes have to cover the contract support costs.  Departing from that precedent will cost the government between $800 million and $2 billion, and most of that money will go to the well-off tribes that have the resources to enter into self-determination contracts.  Hmmm.  I don't associate either Justice Kavanaugh or the three other Justices who joined with adherence to precedent, especially not to precedents adopted by executive agencies.   When we're talking about billions of dollars of expenditures, that sound like a major question.  If only there were a doctrine that allowed courts, rather than executive agencies to decide Congress's intent when major questions were implicated.

The  next section of Justice Kavanaugh's opinion provides five textual arguments in support of the government's position, two based in § 5235, two based in § 5236, and one based in § 5388.  Finally, Justice Kavanaugh contends that Congress did not intend to fund these administrative costs and that doing so actually imposes limits on the tribes' self-determination, as it would allow the federal statutory scheme to cover all tribal choices as to healthcare expenditures.

I am in no position to judge whether the majority or the dissenters have the stronger textual arguments, and there is some evidence in the dissent that the not all Indian tribes have adopted the legal position that won the day here. Based on the response I have seen, it seems like experts in federal Indian law are applauding the decision.  Neither opinion recognizes the possibility that the statutory framework is ambiguous. If they did, we might see the Justices fighting over the continued viability of the Indian canon. That fight may lay ahead.