By Andrew Westney

Law360 (September 25, 2020, 10:12 PM EDT ) The D.C. Circuit ruled Friday that Alaska Native corporations can't share in $8 billion in tribal government funding to deal with the COVID-19 pandemic, overturning a D.C. federal judge's ruling that ANCs were eligible for the CARES Act money.

In a published opinion Friday, a unanimous D.C. Circuit panel interpreted language Congress borrowed from a 1975 contracting law for the $2 trillion Coronavirus Aid, Relief and Economic Security Act as referring only to sovereign tribes that have been formally recognized by the federal government, and not to ANCs, which are state-chartered companies led by boards of directors.

The ruling reversed a D.C. federal judge's June decision that an "eligibility clause" taken from the 1975 Indian Self-Determination and Education Assistance Act — which targets tribes "recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians" — was not intended to apply to ANCs, and that they otherwise met the CARES Act's requirements to qualify for funding.

The D.C. Circuit panel agreed with the Confederated Tribes of the Chehalis Reservation and other federally recognized tribes that brought the suit that "recognition" is a term of art in Indian law indicating a formal, government-to-government relationship with a tribe.

"Because no ANC has been federally 'recognized' as an Indian tribe, as the recognition clause requires, no ANC satisfies the ISDA definition," U.S. Circuit Judge Gregory G. Katsas wrote in the opinion.

While ANCs that intervened in the case argued that they should receive the funding to help provide services during the pandemic to Alaska Natives, "we are confident that, if there are Alaska Natives uncared for because they are not enrolled in any recognized village, either the State of Alaska or the Department of Health and Human Services will be able to fill the void," Judge Katsas said.

But U.S. Circuit Judge Karen LeCraft Henderson took a less sanguine view in her concurrence, saying she thought Congress intended to let ANCs in on the funding in Title V of the CARES Act, and that the court's "harsh result" for the companies and Alaska Natives was "an unfortunate and unintended consequence of high-stakes, time-sensitive legislative drafting."

"Indian law's complexity and the pressure to provide swift relief may have proved too much in this case," Henderson said, adding that Congress "must have had reason to believe its definition would include ANCs but, by incorporating by reference ISDA's counter-intuitive definition, it did not, in fact, do so. As a result, many of our fellow citizens who depend on ANCs will not receive Title V aid."

Six tribes filed the original complaint in D.C. district court in April, arguing that the 12 for-profit Alaska Native regional corporations and 177 Alaska Native village corporations were not intended to receive any of the $8 billion "tribal stabilization fund" included in the CARES Act.

U.S. District Judge Amit P. Mehta in June lifted an injunction on ANCs receiving CARES Act funding that he had put in place when he thought the federally recognized tribes were likely to win their suit.

Judge Mehta ruled that Congress in the CARES Act "could not have intended the eligibility clause to apply [to] ANCs" since "none had done so since ISDEAA's inception" and Congress therefore "must have known that it had selected a definition of 'Indian tribe' that expressly encompasses ANCs, notwithstanding their falling outside the definition's eligibility clause."

In its opinion Friday, the D.C. Circuit panel said that the unclear status of ANCs when the ISDEAA was passed in 1975 resolved competing interpretations of the key clause that both ran into difficulty.

During Sept. 11 oral arguments, a government attorney representing Treasury Secretary Steven Mnuchin, whose department is in charge of distributing the relief funds, told the panel that "statutes are not self-defeating" and that the CARES Act "should not be read to include ANCs and then immediately take them away."

However, the federal government's reading of the law leads to "grammatical incoherence" by indicating that the eligibility clause refers to all the members of a list of entities except for the ANCs, the panel said Friday.

But there was no need to choose between those problematic interpretations, the panel said, instead backing the tribal plaintiffs' contention during oral arguments that whether the eligibility clause should apply to ANCs, which were created through the 1971 Alaska Native Claims Settlement Act, was an open question when the ISDEAA was enacted a few years later.

It was "highly unsettled" when the ISDEAA became law "whether Native villages or Native corporations would ultimately be recognized," the panel said.

And that meant that listing ANCs in the ISDEAA wasn't surplusage, but instead did "meaningful work by extending [the law's] definition of Indian tribes to whatever Native entities ultimately were recognized — even though, as things later turned out, no ANCs were recognized," while Alaska Native villages were, according to the opinion.

Riyaz Kanji of Kanji & Katzen PLLC, who represented the Confederated Tribes of the Chehalis Reservation and other tribes at oral arguments, said in a statement Friday that those tribes "appreciate the court's thorough, careful exposition of the statutory and historical factors making it clear that Alaska Native Corporations are not Indian Tribes, a term restricted to sovereign Tribes enjoying a government-to-government relationship with the United States."

Tulalip Tribes Chairwoman Teri Gobin said in a statement Friday that the decision is "a great win supporting what the Tulalip Tribes and other Indian tribes across the nation felt was always Congress' intent in setting aside the $8 billion relief funds for federally recognized Indian tribes."

"Indian tribes need these funds to address the devastating impacts of this pandemic on their governments, businesses, and members. We are hopeful that the funds that Treasury set aside for the ANCs will be distributed to Indian tribes soon," Gobin said.

Kim Reitmeier, executive director of the ANCSA Regional Association, said in a statement Friday that the decision is "a devastating blow to Alaska Native communities facing an alarming increase in COVID-19."

"Both CDC and Alaska data show that Alaska Native people suffer from a disproportionate number of infections, hospitalizations and deaths," Reitmeier said. "We fear this deeply flawed ruling will only make things worse by keeping critical health services and economic relief from reaching our remote communities and villages who are most at risk."

U.S. Circuit Judges Karen LeCraft Henderson, Patricia A. Millett and Gregory G. Katsas sat on the panel for the D.C. Circuit.

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 Quinault Indian Nation is represented by Lori Brunner of the Quinault Office of the Attorney General. The San Carlos Apache Tribe is represented by Alexander B. Ritchie. The Elk Valley Rancheria, California, is represented by Bradley G. Bledsoe Downes. The Pueblo of Picuris is represented by Eric Dahlstrom, April E. Olson, Richard W. Hughes, Donna M. Connolly and Reed C. Bienvenu of Rothstein Donatelli LLP.

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 Dougherty Lynch, Matthew N. Newman and Megan R. Condon of the Native American Rights Fund.

The Ute Indian Tribe of the Uintah and Ouray Reservation is represented by Rollie Wilson, Jeffrey S. Rasmussen, Frances C. Bassett and Jeremy J. Patterson of Patterson Earnhart Real Bird & Wilson LLP.

The federal government is represented by Adam C. Jed, Michael S. Raab and Daniel Tenny of the U.S. Department of Justice's Civil Division.

The intervening ANCs are represented by Ragan Naresh, Paul D. Clement, Erin E. Murphy and Matthew D. Rowen of Kirkland & Ellis LLP.

The Alaska lawmakers are represented by Christine V. Williams of Outlook Law LLC.

The Alaska Federation of Natives is represented by James H. Lister of Birch Horton Bittner & Cherot PC.

Cook Inlet Region Inc. is represented by Allon Kedem, Ethan G. Shenkman and Janine M. Lopez of Arnold & Porter.

The cases are the Confederated Tribes of the Chehalis Reservation et al. v. Steven Mnuchin et al., case number 20-5204, Cheyenne River Sioux Tribe et al. v. Mnuchin et al., case number 20-5205, and Ute Tribe of the Uintah and Ouray Reservation v. Mnuchin et al., case number 20-5209, in the U.S. Court of Appeals for the District of Columbia Circuit.

--Additional reporting by Adrian Cruz. Editing by Breda Lund.

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