By Andrew Westney

Law360 (April 20, 2020, 8:07 PM EDT ) A group of federally recognized tribes urged a D.C. federal judge Monday to block any of the $8 billion allocated for tribes combating the coronavirus from going to Alaska Native corporations, saying the Treasury Department is planning to illegally send "desperately needed funds" meant for tribal governments to the for-profit companies.

Three Alaska tribes and three tribes from the lower 48 states asked U.S. District Judge Amit P. Mehta for a preliminary injunction and temporary restraining order, after filing their suit Friday challenging Treasury Secretary Steven Mnuchin's plan to let the corporations, known as ANCs, share in $8 billion in direct tribal funding in the $2 trillion Coronavirus Aid, Relief and Economic Security, or CARES, Act.

The tribes in their motion Monday urged Judge Mehta to order that Mnuchin this week send the entire $8 billion to the 574 federally recognized tribes, saying rapid action is needed because Treasury is expected to distribute the money by Friday.

"Once those payments are made, it will likely be impossible for the tribes to recover any of the diverted funds and to use them, as Congress plainly directed, to meet the critical needs of their communities, which have been besieged by the coronavirus pandemic," the tribes said.

The $8 billion "tribal stabilization fund" in Section 601 of the CARES Act makes emergency funds available for costs incurred fighting the virus from the Treasury Department, in consultation with the Department of the Interior's Bureau of Indian Affairs.

In their complaint, the tribes said the corporations' share could cost each federally recognized tribe millions of dollars.

The controversy over the inclusion of ANCs in the funding centers on language in the CARES Act that identifies "Indian tribes" based on a definition from the Indian Self-Determination and Education Assistance Act that includes Alaska Native corporations, as well as a definition of "tribal governments" in the new law.

Specifically, the ISDEAA, the law that governs federal self-determination contracts with tribes, defines "Indian tribe" as any "tribe, band, nation or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians."

In their complaint Friday, the six tribes said the ANCs don't meet the last part of the definition because they are not "recognized as eligible" for those federal programs.

And the ANCs are not tribal governments, but companies that can seek funding through other parts of the CARES Act that the tribes can't, according to the complaint from the Confederated Tribes of the Chehalis Reservation and the Tulalip Tribes, located in Washington state; the Houlton Band of Maliseet Indians, in Maine; and the Akiak Native Community, Asa'carsarmiut Tribe and Aleut Community of St. Paul Island, in Alaska.

If the Treasury Department decides to divide the $8 billion equally among the 574 federally recognized tribes, they would receive nearly $14 million apiece, but would receive under $10 million each if the 12 Alaska Native regional corporations and 225 Alaska Native village corporations are included in that split, according to the complaint.

And if Treasury relies on information it has requested from applicants for the funding, including population, land base and employees of each tribe, the share of each federally recognized tribe "will be vastly reduced, given their more modest population, land base and economic size" relative to the ANCs, the plaintiff tribes said.

In their injunction bid Monday, the tribes said that the 12 Alaska Native regional corporations and 225 Alaska Native village corporations weren't intended to have access to the tribal funding when Congress passed the CARES Act.

"In responding to the havoc wrought by COVID-19 on every facet of American life, Congress made policy judgments regarding the most appropriate way to allocate the limited relief funding available," the tribes said. "Allowing the secretary to disburse relief funds to unauthorized entities contravenes Congress' plan by reducing the amount of funding available to tribal governments to respond to the severe health, safety and financial crises currently afflicting their communities."

The Treasury Department must send out the funds within 30 days of the March 27 signing of the bill into law, which is this coming Sunday, but the DOI has said all of the funds will be distributed by Friday.

The ANCs aren't governments but businesses with a corporate structure, with the regional corporations by themselves having over $10.5 billion in revenues in 2018, the tribes said.

The federally recognized tribes, meanwhile, "are expending vast unbudgeted resources on emergency COVID-19 response [at the same time] they must continue to provide existing essential government services, even as they have seen their tax base and other revenues with which they pay for such services vanish literally overnight," according to the motion.

The ANCs can't be considered "Indian tribes" under the ISDEAA or the CARES Act because they don't appear on the list of federally recognized tribes under the List Act of 1994, which identified tribal governments that have a government-to-government relationship with the United States, according to the motion.

The ISDEAA recognizes a difference between tribes and tribal governments compared to tribal organizations, a broader category that includes ANCs, which can agree to self-determination contracts but only when a tribe gives its approval, the tribes said.

In addition, ANCs "openly admit that they do not have recognized governing bodies and are not tribal governments," the tribes said, pointing to a filing by Arctic Slope Regional Corp. with the Treasury in which the company said it "does not exercise governmental functions."

"The statutory language here is unambiguous, and the secretary must carry out the intent of Congress by disbursing relief funds to federally recognized tribal governments exclusive of ANCs," the tribes said.

In a joint status report filed Monday afternoon, the Treasury Department said it "has not yet reached a final decision" about whether ANCs will receive funding under the bill, and doesn't plan to make any payments until Friday at the earliest.

Under an order issued by Judge Mehta on Wednesday, Treasury will file its opposition to the tribes' motion by Wednesday afternoon, with a hearing by video conference slated for Thursday at 2 p.m. Eastern time.

The tribes declined to comment Monday beyond their motion.

Representatives for the Treasury Department and the DOI did not immediately respond to requests for comment Monday.

The tribes are represented by Riyaz Kanji and Cory J. Albright of Kanji & Katzen PLLC, Harold Chesnin of the Confederated Tribes of the Chehalis Reservation, and Lisa Koop Gunn of the Tulalip Tribes.

Mnuchin is represented by Jason C. Lynch of the U.S. Department of Justice's Civil Division, Federal Programs Branch.

The case is Confederated Tribes of the Chehalis Reservation v. Mnuchin, case number 1:20-cv-01002, in the U.S. District Court for the District of Columbia.

--Additional reporting by Stephen Cooper and Andrew Kragie. Editing by Philip Shea.

For a reprint of this article, please contact reprints@law360.com.