By Andrew Westney

Law360 (July 6, 2020, 10:09 PM EDT ) Several federally recognized tribes have pressed a D.C. federal judge to block the Treasury Department from sending Alaska Native corporations part of $8 billion in COVID-19 relief, saying the court's recent decision in favor of the companies recognized that there are tough questions to be dealt with on appeal and that the language of the relief law backs the tribes.

Treasury Secretary Steven Mnuchin urged the court Wednesday to deny an injunction bid by the Confederated Tribes of the Chehalis Reservation and other tribes, arguing that the only legal support the tribes have to try to prevent the money being distributed to the ANCs is an April injunction the judge discarded when he found recently that the companies qualified as "Indian tribes" eligible for funding under the Coronavirus Aid, Relief and Economic Security, or CARES, Act.

The tribes countered in a brief Friday that Mnuchin "would disregard that injunction opinion as forged in haste," but "it instead evidences that this court understood plaintiffs' position to possess sufficient merit to warrant exercise of the court's equitable authority, a step that this court surely did not undertake lightly."

Mnuchin and the ANC associations that have intervened in the case "miss the mark badly in suggesting that no legal support exists for plaintiffs' position," as "not only does the Secretary overlook the court's own statements as to the difficulty of the questions presented, but he then takes the fact that he eked out a narrow victory on summary judgment as carte blanche to argue that those questions are in no way substantial," the tribes said.

In addition, "throughout this litigation, the plaintiffs have relied on the most probative authority there is in a statutory construction case — the text of the statute itself," the tribes said, again calling for U.S. District Judge Amit P. Mehta to issue an injunction while they appeal the case to the D.C. Circuit.

Six tribes filed the original complaint in the case on April 17, saying the 12 Alaska Native regional corporations and 225 Alaska Native village corporations — which have billions of dollars in revenue and are among the largest private landowners in Alaska — were not intended to receive any of the $8 billion "tribal stabilization fund" included in the $2 trillion CARES Act.

Judge Mehta granted the tribes an April 27 injunction to prevent Treasury from sending the ANCs any of the funds while he considered their contention that only federally recognized tribes should receive the money, but reversed course with his June 29 decision to lift the injunction to let the ANCs get a share.

The judge ruled that whether ANCs qualify as "Indian tribes" for the CARES Act hinges on an "eligibility clause" taken from the Indian Self-Determination and Education Assistance Act, a contracting law, that limits the definition by targeting only tribes "recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians."

"Although a close question, the court is now convinced that, in 2020 when Congress passed the CARES Act, it could not have intended the eligibility clause to apply [to] ANCs," the judge said, noting that Mnuchin and some of the plaintiff tribes agreed that ANCs could not satisfy that clause.

The tribes quickly filed for another injunction, but in his opposition last week Mnuchin said the judge's April injunction was issued very quickly and "since its dissolution, there is no longer any legal authority in support of plaintiffs' arguments."

Mnuchin added that "there is no 'serious legal question' sufficient to enter the extraordinary remedy of an injunction" because "the salient issues in this case have been settled administratively for more than 40 years, and judicially for more than 30 years."

Two ANC associations, Alaska Native Village Corporation Association Inc. and Association of ANCSA Regional Corporation Presidents/CEO's Inc., said in a separate opposition that "for ANCs, no less than other Indian tribes, every day the disbursement of CARES Act funds allocated for ANCs is delayed is another day that the Alaska Natives they serve are not fully equipped with the tools to combat the public health emergency."

The Confederated Tribes and other tribes responded Friday that "in arguing that no serious legal question exists here, the secretary misstates plaintiffs' position and ignores this court's own words."

"Nothing in the court's summary judgment opinion suggests that it subsequently concluded that it had gone badly awry in its initial decision, or that it had simply mailed that decision in given the exigencies of time," and instead the judge had said that whether ANCs qualified as "Indian tribes" under language the CARES Act borrowed from the ISDEAA was "a close question."

And the court erred by finding that including ANCs in the definition of "Indian tribes" when the government knew they could not meet the eligibility cause would have violated the so-called surplusage canon, the tribes said.

"Having invited the court to commit legal error by relying on the surplusage canon to privilege an unnatural reading of Title V [of the CARES Act] over its ordinary meaning, the Secretary now invites this court to compound that error by concluding that the surplusage canon is in a hallowed category all to itself — such that arguments based on the ordinary meaning of statutory text not only fail to carry the day, but do not even present a serious question, instead shriveling into nothingness when confronted with the Secretary's all-powerful rule," the tribes said.

And the meaning of the ISDEAA's definition of "Indian tribes" hasn't been resolved, since "the history the Secretary points to boils down to one judicial opinion and one memorandum from an Assistant Solicitor," the tribes said.

Mnuchin himself told the court on April 23 that he had not decided whether ANCs were eligible for CARES Act funding, and his "argument now that this answer is and has always been clear for the past forty years cannot be squared with his own indecision a mere two months ago," the tribes said.

In addition, since the tribes and the ANCs "equally have been denied access since the filing of this case … it is only appropriate that this status quo should be maintained until the dispute is finally resolved," the tribes said.

The ANCs are also better able than federally recognized tribes, including those in Alaska, to handle a delay in getting funds they might be entitled to, the tribes said.

Representatives for the parties were not immediately available for comment Monday.

The Confederated Tribes of the Chehalis Reservation and other tribes in the lead case 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.

The Cheyenne River Sioux Tribe is represented by Nicole E. Ducheneaux and Rose M. Weckenmann 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.

The Ute Indian Tribe of the Uintah and Ouray Reservation is represented by Frances C. Bassett, Jeffrey S. Rasmussen, Jeremy J. Patterson and Rollie Wilson of Native Law Group.

The federal government is represented by Joseph H. Hunt, Eric Womack and Jason C. Lynch of the U.S. Department of Justice's Civil Division.

Ahtna Inc. is represented by Michael J. O'Leary and Jonathan Katchen of Holland & Hart LLP. Calista Corp. et al. are represented by Ragan Naresh, Paul D. Clement, Erin E. Murphy and Matthew D. Rowen of Kirkland & Ellis LLP. The ANC associations are represented by Daniel W. Wolff, David Chung and Kirsten L. Nathanson of Crowell & Moring LLP and Christine V. Williams and J. Harrison Powell II of Outlook Law LLC.

The lead 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 Emma Whitford and Kelly Zegers. Editing by Peter Rozovsky.

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