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Law360 (April 23, 2020, 9:20 PM EDT ) Three South Dakota tribes are demanding that a D.C. federal judge enjoin U.S. Treasury Secretary Steven Mnuchin from distributing any of the $8 million in CARES Act funds earmarked for federally recognized tribes to tackle the COVID-19 pandemic to for-profit Alaska Native Corporations, according to a new lawsuit.
The Cheyenne River Sioux Tribe, Rosebud Sioux Tribe and Oglala Sioux Tribe said Mnuchin's treatment of the private corporations as tribal governments reduces the pool of money available to tribes in dire need of funds to battle the coronavirus.
The tribes' push for the court to preliminarily and permanently block the funds from going to the state-chartered business corporations, known as ANCs, is a race against the clock as Mnuchin is required to disburse all $8 billion in direct tribal funding from the $2 trillion Coronavirus Aid, Relief and Economic Security, or CARES, Act by April 26.
Mnuchin's actions "violate the plain language of the act and threaten the tribes with imminent injury," the tribes said. ANCs are not part of the 574 tribal governments eligible to receive the act's Title V relief funds, according to the complaint.
"Congress is clear that Title V relief funds are to supplement 'government' budgets, not corporate coffers," the tribes said.
The suit is assigned to U.S. District Judge Amit P. Mehta, who on Thursday consolidated the case with another filed April 17 by three Alaska tribes and three tribes from the Lower 48 states also fighting to exclude ANC funding from the relief act and urging the court to quickly prevent the disbursement.
Earlier this month, Cheyenne River Sioux Tribe Chairman Harold Frazier told Law360 that his tribe and others planned to challenge the funding to ANCs. The suit describes how the pandemic has put his tribe's growing season this year in "serious jeopardy."
The tribe, which relies heavily on its agricultural economy, said losses by individual growers affect the tribal government. Its general fund consists of millions of dollars derived from agricultural leases now at risk, according to the complaint.
The inclusion of for-profit ANCs in Title V of the CARES Act is "facially illegal," the tribe's counsel, Nicole E. Duchenaux, of Big Fire Law & Policy Group LLP, told Law360. Duchenaux is an enrolled member of the Cheyenne River Sioux Tribe.
"It's not just that's legally indefensible, though," she said. "It's morally indefensible. The ANCs' desire for a little federal windfall has forced tribes like my client, who are already on the brink of disaster, to engage in costly emergency litigation that calls into question settled principles of Indian law at a time when we are just trying to keep our people alive."
According to the complaint, ANCs, like other corporations, have access to funding under other sections of the CARES Act that tribal governments do not.
The Rosebud Sioux Tribe is among the many under stay-at-home orders and has placed roughly 600 of its 800 tribal employees on administrative leave, according to the complaint.
The tribe said it needs to build quarantine facilities, procure personal protective equipment, establish checkpoints on roads leading into its reservation and run its rural water system — efforts CARES Act funding would support, the tribe said. At last count, its Indian Health Service hospital had used almost a third of its 100 COVID-19 testing kits, according to the complaint.
"Quick action was required in order to prevent the Treasury Department from releasing that money sooner to more than 200 for-profit regional and village corporations which are state chartered and state-regulated entities in Alaska," Rosebud Sioux Tribe President Rodney Bordeaux said in a press release. "This was contrary to Congress' intent to assist tribal governments. We needed to take a stand and we needed to do it quickly."
Among its measures to curb the virus, the Oglala Sioux Tribe hired a tribal member-owned unarmed security company to assist law enforcement in setting up checkpoints into its reservation, along with a system of travel passes for essential movement amidst a lockdown, according to the complaint.
The federal funding is crucial to its increased law enforcement efforts to staff those checkpoints and respond to a rise in violence on the reservation since the pandemic began, according to the complaint.
Counsel for the tribe and a spokesperson for the Treasury Department did not immediately respond to requests for comment.
The Cheyenne River Sioux Tribe is represented by Nicole E. Ducheneaux of Big Fire Law & Policy Group LLP. The Rosebud Sioux Tribe is represented by Natalie A. Landreth, Wesley James Furlong, Erin C. Dougherty Lynch, Matthew N. Newman and Megan R. Condon of the Native American Rights Fund. The Oglala Sioux Tribe is represented by Jennifer Bear Eagle of the Oglala Sioux Tribe Legal Department.
Counsel information for Mnuchin was not immediately available Thursday.
The case is Cheyenne River Sioux Tribe et al. v. Mnuchin, case number 1:20-cv-01059, in the U.S. District Court for the District of Columbia.
--Additional reporting by Andrew Westney. Editing by Peter Rozovsky.
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