By Andrew Westney

Law360 (July 8, 2020, 7:17 PM EDT ) A D.C. federal judge has blocked the Treasury Department from sending Alaska Native corporations a share of $8 billion in COVID-19 relief for tribal governments, saying the D.C. Circuit should first be given the chance to weigh his recent decision to let the companies have the funds.

U.S. District Judge Amit P. Mehta in an order Tuesday granted an injunction to the Confederated Tribes of the Chehalis Reservation and other federally recognized tribes that stays his June 29 ruling that the Alaska Native corporations, known as ANCs, qualify as "Indian tribes" eligible for funding under the Coronavirus Aid, Relief, and Economic Security, or CARES, Act.

While the Treasury Department argued that the only legal support the tribes had to try to prevent the money being distributed to the ANCs is an April injunction the judge dissolved in his more recent ruling, Judge Mehta essentially agreed with the tribes Tuesday that there were "serious legal questions" for the D.C. Circuit to consider on appeal.

In particular, the circuit court will have to grapple with questions Judge Mehta himself struggled with, especially how to construe definitions the CARES Act borrowed from the Indian Self-Determination and Education Assistance Act, a federal law governing tribal contracting, according to the opinion.

"Because the question of statutory interpretation presented in this case is as complicated as it is consequential, it deserves an audience before a higher court while maintaining the status quo," according to the opinion.

And while the ANCs and "more importantly, the constituencies they serve will suffer some injury from additional delay in receiving" the CARES Act funding, "the public interest also rests in carrying out Congress's will, and that interest is not served if ANCs receive and spend tens of millions of dollars of emergency relief to which they are not entitled."

"Although this court has concluded that ANCs are eligible for those funds, the public interest rests with the D.C. Circuit deciding whether this court got it right," the judge said.

The tribes must appeal and file a motion for expedited review with the D.C. Circuit by July 14, the judge said. The case will then be stayed until Sept. 15 or the case is decided by the D.C. Circuit, whichever comes first, the judge said.

If the circuit court doesn't decide the case by Sept. 15, the stay order may be extended, the judge said. But a motion seeking an extension from the lower court will have to tackle the question of whether the funding would expire by the end of fiscal year 2020 on Sept. 30, as the CARES Act requires payment of the tribal funding for that fiscal year, he said.

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 the Treasury Department 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 Treasury Secretary Steven 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."

The Confederated Tribes of the Chehalis Reservation and other tribes responded Friday that Judge Mehta's June 29 ruling in favor of the ANCs recognized that there are tough questions to be dealt with on appeal and contended that the language of the relief law supported the tribes.

In his opinion Tuesday, Judge Mehta said that "given the complexity and significance of the questions presented, this court should not have the last say on this matter."

The judge noted that "hundreds of millions of dollars" are still "in dispute," and "although not all of those funds would go to these plaintiffs if they were to prevail, the lesser amount at stake would not make the lost chance at appellate review sting any less."

The ANCSA Regional Association and Alaska Native Village Corporation Association, which intervened in the case alongside the Treasury Department, said in a joint statement Wednesday that they were "disappointed to see the distribution of the CARES Act funds our communities badly need and rightfully deserve delayed yet again."

"These funds are intended to help ANCs bear the heavy costs of combatting the COVID-19 pandemic for Alaska Native people, and they are no less urgently needed than the funds allocated to tribes across the nation," the groups said.

Representatives for the other parties were not immediately available for comment Wednesday.

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 Bruce Goldman.

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