FEDERAL TORT

CLAIMS ACT

Claims History and

Issues Affecting

Coverage for Tribal

Self-Determination

Contracts

Statement of Barry T. Hill, Associate Director,

Energy, Resources, and Science Issues,

Resources, Community, and Economic

Development Division

United States General Accounting Office

GAO Testimony

Before the Committee on Indian Affairs,

U.S. Senate

For Release on Delivery

2:30 p.m. EDT

Wednesday

July 12, 2000

GAO/T-RCED-00-234
1

Mr. Chairman and Members of the Committee:

The Indian Self-Determination and Education Assistance Act was passed in 1975 to

encourage tribes to participate in and manage programs that for years had been

administered on their behalf by the departments of the Interior and of Health and Human

Services. The act authorizes tribes to take over the administration of such programs

through contractual arrangements with the agencies that previously administered them:

Interior’s Bureau of Indian Affairs and Health and Human Services’ Indian Health

Service.1For the Bureau, the programs that can be contracted by tribes include law

enforcement, education, social services, road maintenance, and forestry, and for the

Health Service, the programs include mental health, dental care, hospitals, and clinics.

Under the first 15 years of the Self-Determination Act, tribal contractors generally

assumed liability for accidents or torts (civil wrongdoings) caused by their employees.

However, in 1990, the federal government permanently assumed this liability when the

Congress extended Federal Tort Claims Act (FTCA) coverage to tribal contractors under

the Self-Determination Act. Originally enacted in 1946, FTCA established a process by

which individuals injured by federal employees could seek compensation from the

federal government. As a result of extending this coverage to tribal contractors,

individuals injured by tribal employees may, under certain circumstances, seek

compensation from the federal government. For example, if while responding to a call

for assistance, a tribal police officer is involved in an automobile accident, the injured

parties may be able to seek compensation from the federal government for their personal

injuries and property damage.

1

Throughout this report, the term “tribes” will refer both to tribes and tribal organizations eligible to

contract programs under the Indian Self-Determination and Education Assistance Act. Also, the term

“contracts” will refer to contracts, grants, self-governance agreements, cooperative agreements, or annual

funding agreements entered into pursuant to the Indian Self-Determination and Education Assistance Act,

as amended.
2

To gain a better understanding of how this coverage works, you asked us to review and

report on various aspects of it. We provided this Committee with our report on July 5,

2000.2

Our testimony today will focus on the FTCA claims history for tribal selfdetermination contracts and FTCA coverage issues that are unique to tribal contractors.

In summary:

• Data on FTCA claims involving tribal contractors are not readily available because

neither Interior nor Health and Human Services is required to track these claims

separately from FTCA claims involving federal employees. However, in response to

our request for claims data, these departments identified 342 claims, filed from fiscal

years 1997 through 1999, that arose from programs contracted from Interior’s Bureau

of Indian Affairs and Health and Human Services’ Indian Health Service. Total

damages claimed were about $700 million. About two-thirds of these claims involved

Bureau programs, most notably law enforcement. The remaining one-third involved

Health Service programs, of which about one-half involved patient care. At both

agencies, these claims involved a small number of tribes. Although some of these

claims remain open, about 70 percent (involving about $333 million in claimed

damages) have been brought to closure at a cost of more than $2 million (84 percent

paid by the federal government, 16 percent paid by private insurers). Of the claims

brought to closure, 127 resulted in settlement payments and 108 were denied.

• Our review identified a number of issues unique to FTCA coverage for tribal

contractors:

• On the administrative side, the federal government may be paying more than

necessary to resolve claims involving tribal contractors. To the extent that tribes

use federal funds to purchase private liability insurance that duplicates their

FTCA coverage, it is possible that the federal government is paying twice—once

2

Federal Tort Claims Act: Issues Affecting Coverage for Tribal Self-Determination Contracts (GAO/RCED00-169, July 5, 2000).
3

for tribes’ insurance premiums and once to settle tribes’ FTCA claims. The

potential for duplicative liability coverage exists for tribal contractors because of

tribes’ long-standing practice of carrying private insurance to cover a wide range

of activities, including those now covered under FTCA. Neither Interior nor

Health and Human Services routinely checks to determine whether tribal

contractors have private liability insurance that could cover these claims. To

protect against having the government pay more than necessary to resolve these

claims, our July 2000 report recommended that the departments routinely check

for duplicative liability insurance. The Department of Health and Human Services

agreed with our recommendation and the Department of the Interior

acknowledged that such duplication might occur.

• On the legal side, several issues have emerged from recent lawsuits that illustrate

areas for which FTCA coverage is not a perfect fit for tribal contractors. For

example, under FTCA, federal courts have exclusive jurisdiction to resolve claims

brought under the act, and the act provides for the removal of such claims from

state courts. However, there is no similar removal authority for such claims filed

in tribal courts. Therefore, cases filed in tribal court can be problematic because

FTCA does not provide the necessary authority to remove such cases from tribal

court to federal court, where jurisdiction resides.

Background

The Federal Tort Claims Act was enacted in 1946 and provides a limited waiver of the

federal government’s sovereign immunity. It specifies the instances in which individuals

injured by the wrongful or negligent acts or omissions of federal employees can seek

restitution and receive compensation from the federal government through an

administrative process and, ultimately, through the federal courts. The Department of

Justice handles lawsuits arising from FTCA claims.
4

The Indian Self-Determination and Education Assistance Act of 1975 allowed Indian

tribes to contract to administer certain federal Indian programs. As originally enacted,

tribal contractors assumed liability for torts caused by tribal employees performing

official duties. The act authorized the Secretaries of the Interior and of Health and

Human Services to require that tribal contractors obtain private liability insurance.

People injured by the actions of tribal contractors could file claims against tribal

employees or their tribes.

By the late 1980s, the Congress recognized that some tribes were using program funds to

purchase private liability insurance, which reduced the funds available to provide direct

program services. Thus, the Congress amended the act in 1988 and required that

beginning in 1990 the Secretaries of the Interior and of Health and Human Services

obtain or provide liability insurance or equivalent coverage for the tribes. Also in the late

1980s, the Congress began to enact statutes extending FTCA coverage to tribal selfdetermination contracts. In 1990, this coverage was extended permanently, thus giving

injured parties the right to file tort claims against and recover monetary damages from

the federal government for injuries or losses resulting from the negligent actions of tribal

employees.

Federal Indian programs that tribes can contract under the Self-Determination Act fall

under the jurisdiction of the departments of the Interior and of Health and Human

Services. Within these departments, the primary agencies responsible for administering

Indian programs are the Bureau of Indian Affairs and the Indian Health Service, which

have a combined annual appropriation exceeding $4 billion. Indian tribes administer

about one-half of these programs, or about $2 billion annually. As of March 2000, there

were 556 federally recognized tribes. Agency officials estimate that nearly all of the

federally recognized tribes administer at least one contract from the Bureau or the

Health Service, either directly or as a member of a tribal consortium.
5

The Bureau and Health Service programs administered by a tribe under the SelfDetermination Act may represent only a portion of that tribe’s total activities. The other

programs tribes operate outside of the Self-Determination Act may include other federal

programs, such as federal housing assistance for Native Americans under the

Department of Housing and Urban Development, early childhood educational and care

programs under the departments of Education and of Health and Human Services, and

tribal enterprises, such as gaming operations and smokeshops or convenience stores.

These programs have generally not been extended FTCA coverage. The tribes

themselves are liable for any injuries or damages caused by these programs, and they

may choose to protect themselves against this liability by purchasing private liability

insurance.

Several Hundred Claims Have Been Filed

Involving Tribal Self-Determination Contracts

Data on FTCA claims involving tribal contractors are not readily available because

neither Interior nor Health and Human Services is required to track these claims

separately from FTCA claims involving federal employees. However, in response to our

request for claims data, these departments identified 342 claims filed from fiscal years

1997 through 1999 for programs contracted by tribes from the Bureau and the Health

Service. Total damages claimed were $706 million (see table 1).

Table 1: Claims Arising From Tribally Contracted Programs From the Bureau of Indian Affairs and the Indian

Health Service, Fiscal Years 1997-99

Dollars in millions

Program agency

Number of claims for

tribally contracted

programs

Percentage

of total

claims Amount claimed

Percentage

of total

amount

Bureau of Indian Affairs 228 67 $219 31

Indian Health Service 114 33 487 69

Total 342 100 $706 100

About two-thirds of the claims involved Bureau programs, most notably law enforcement

(see fig. 1).
6

Figure 1: Claims Arising from Tribally Contracted Programs From the Bureau of Indian Affairs, by Program

Type, Fiscal Years 1997-99

‚

2%

Social services

•

•

6%

Roads

• 6%

Education

• 9%

Other/unidentified

77%

• Law enforcement

The remaining one-third of the claims involved Health Service programs, of which 45

percent involved patient care (see fig. 2).

Figure 2: Claims Arising from Tribally Contracted Programs From the Indian Health Service, by Type of

Claim, Fiscal Years 1997-99

3%

Property damage/loss

17%•

•

Personal injury

35% • Vehicle accident

45%

•

Patient care
7

Although two-thirds of the claims involved Bureau programs, they accounted for only

about one-third of the total dollar amount claimed. The 228 claims involving Bureau

programs ranged from a low of $39 to a high of $50 million, with a median claim amount

of about $71,000. The 114 claims involving Health Service programs ranged from a low

of $75 to a high of $100 million, with a median claim amount of $1 million.

The claims involved tribally contracted programs for 76 contractors (60 of the 556

federally recognized tribes and 16 organizations). The claims for the Bureau programs

involved 46 contractors (45 tribes and 1 organization). The claims for the Health Service

programs involved 40 contractors (25 tribes and 15 organizations), 10 of which also were

involved in claims for Bureau programs. The Navajo Nation, the largest tribe, was the

tribal contractor involved in the largest number of claims at 89—26 percent of the total

number of claims. About two-thirds of the contractors were involved in only one or two

claims. Seven contractors, each with 10 or more claims, accounted for over half the total

number of claims (see fig. 3).

Figure 3: The Seven Contractors Involved in the Most Claims, Fiscal Years 1997-99

Number of claims

Navajo

Nation

Oglala Sioux Gila River Rosebud

Sioux

Salt River YukonKuskokwim

Health Corp.

Cheyenne

River Sioux

Claims involving Indian Health Service programs

Claims involving Bureau of Indian Affairs programs

0

10

20

30

40

50

60

70

80

90
8

A number of reasons were provided to explain why so few tribes had claims involving

their self-determination programs. According to agency officials, even though FTCA

coverage was extended about 10 years ago, it is still not well-known or understood by

attorneys, tribes, or potential claimants. Also, to the extent that tribes continue to carry

private liability insurance that duplicates their FTCA coverage, claimants may be

referred to private insurers rather than to the federal government for compensation.

By the time of our review, the departments of the Interior and of Health and Human

Services had denied 172 of the 342 claims and had awarded damages on 103; 67 claims

were still pending.3 Lawsuits were filed for 84 of the claims that had been denied or were

still pending. Of these lawsuits, 13 had been dismissed, 24 resulted in damage awards,

and 47 are still pending. Although some of the claims and lawsuits remain open, about

70 percent of claims have been brought to closure at a cost of about $2 million—$1.7

million paid by the federal government and $327,500 paid by private insurers—out of the

$333 million claimed in these cases. Of the claims brought to closure, either

administratively or through litigation, 127 resulted in settlement payments and 108 were

denied. According to agency officials, the small, simple claims for minor incidents, such

as a “fender bender,” are generally resolved quickly, while the large, complex claims may

take longer to resolve. Although only $2 million has been paid to date to resolve tribal

claims filed from fiscal years 1997 through 1999, this figure will likely increase as the

remaining claims are resolved. In aggregate, the percentage of tribal claims approved

and the amount awarded are comparable with the resolution of other FTCA claims at

Health and Human Services.4

3

The status of the claims filed changes frequently as new administrative determinations are made, lawsuits

are filed, or settlement agreements are reached. The data presented in this report were collected at

various offices between November 1999 and May 2000.

4

A similar comparison was not possible for Interior because of the lack of agencywide data on tort claims

disposition.
9

FTCA Coverage for Tribal Self-Determination

Contracts Presents Some Unique Issues

Our review identified a number of issues unique to FTCA coverage for tribal contractors.

The federal government may be paying more than necessary to resolve claims involving

tribal contractors because, during the administrative review of these claims, neither

Interior nor Health and Human Services routinely checks to determine whether tribal

contractors have private liability insurance that could cover these claims. Although this

check is required by the Department of Justice for claims that are litigated, and in fact

has been done for some claims at the administrative level, most claims have been

resolved without a check for duplicative insurance. To protect against having the

government pay more than necessary to resolve these claims, our July 2000 report

recommended that the departments routinely check for duplicative liability insurance.

Several unique legal issues have also emerged from recent litigation. These issues

illustrate areas for which FTCA coverage is not a perfect fit for tribal contractors. For

example, under FTCA, federal courts have exclusive jurisdiction to resolve claims

brought under the act, and the act provides for the removal of such claims from state

courts. However, there is no similar removal authority for such claims filed in tribal

courts. In addition, other legal issues have arisen about whether state law or tribal law

should be used to adjudicate claims, whether tribal law enforcement officers should be

considered federal law enforcement officers, and whether FTCA coverage has been

extended to senior tribal officials, such as tribal council members.

The Federal Government May Be Paying More Than

Necessary to Resolve Claims Involving Tribal Contractors

The federal government may be paying more than necessary to resolve claims involving

tribal contractors because, during the administrative review of these claims, neither

Interior nor Health and Human Services routinely checks to determine whether tribal

contractors have private liability insurance that could cover these claims. In 1975, when
10

tribes began contracting to operate federal programs, they also assumed liability for

those programs. Accordingly, many tribes acquired private insurance as one means to

protect themselves against tort claims. The extension of FTCA coverage to tribal

contractors in 1990, however, did not prohibit tribes from continuing to acquire private

insurance and thus created the potential for duplicative liability coverage. Subsequent

amendments to the Self-Determination Act in 1994 reiterated tribes’ right to obtain

private insurance, thereby perpetuating the risk of duplication. Although comprehensive

liability insurance is no longer needed for tribal self-determination programs, tribes still

need some private insurance as protection against claims not covered under FTCA.5

Unless tribes have taken steps to modify their insurance policies to specifically exclude

acts covered under FTCA, they most likely have liability coverage that duplicates their

FTCA coverage. An analysis of 20 private insurance policies, published in February 1998

by the George Washington University, found that none of these policies specifically

excluded activities covered under FTCA.6To the extent that tribes use federal funds to

purchase private liability insurance that duplicates their FTCA coverage, it is possible

that the federal government is paying twice—once for tribes’ insurance premiums and

once to settle tribal FTCA claims.

For claims that go to litigation, Justice’s practice is to ascertain whether the affected

tribe has private insurance covering the claim. If so, Justice will look to private insurers

to resolve these claims when it is in the best interests of the United States to do so. For

claims at the administrative level, neither Interior nor Health and Human Services has

policies or procedures in place that require personnel handling FTCA claims to routinely

check for duplicative insurance. Although staff at Interior’s headquarters told us that

5

Examples of claims not covered under FTCA include those arising from activities outside of a tribal

contractor’s scope of employment, non-self-determination activities, violations of constitutional rights,

subcontractor activities, breaches of contract, and workers’ compensation. In 1998, the Congress directed

the Secretary of the Interior to conduct a study of tribes’ insurance (P.L. 105-277, title VII, Oct. 21, 1998).

At the time of our review, the Secretary had not released the results of that study.

6

Assessment of Access to Private Liability Insurance for Tribes and Tribal Organizations With SelfDetermination Contracts/Compacts, The George Washington University Medical Center, Center for Health

Policy Research (Feb. 1998).
11

they follow Justice’s practice of checking for duplicative insurance, we found that only

two solicitor offices routinely do so.7 At these two locations, administrative and/or legal

responsibilities for several claims were turned over to private insurers. Three of these

claims have been resolved and resulted in payments from private insurance companies

totaling about $327,500, or about 30 percent of the payments made by these two offices

(3.5 percent at one office and 100 percent at the other). This amount also represents

about 16 percent of all payments made to date for claims involving tribal contractors

from fiscal years 1997 through 1999. Similarly, at Health and Human Services, the Claims

Branch and the Office of General Counsel do not routinely check for duplicative

insurance.

The departments of the Interior and of Health and Human Services agreed that

duplication might occur. We believe that as long as federal funds continue to be used by

tribes to purchase private liability insurance that duplicates their FTCA coverage, the

government should receive the benefits of those policies. As a result, we recommended

that the Secretaries of the Interior and of Health and Human Services direct their claims

processing personnel to determine if duplicative private liability insurance exists and

tender the claims to the private insurers when it is in the best interest of the United

States to do so.

Unique Legal Issues Have Arisen Since

FTCA Coverage Was Extended to Tribes

Four unique legal issues have emerged from recent litigation of tribal FTCA claims.

These issues illustrate areas for which FTCA coverage is not a perfect fit for tribal

contractors. Two of these issues are currently being litigated in federal courts around

the country. The four legal issues are discussed briefly below.

7

For the remaining seven solicitor offices, four had made payments on claims involving tribal contractors

without routinely checking for duplicative private insurance. However, one of these four offices handles

claims primarily from the Navajo Nation, which is self-insured. The other three solicitor offices, which

received a total of eight claims involving tribal contractors during fiscal years 1997 through 1999, had not

made any payments on those claims at the time of our review.
12

• FTCA does not provide statutory authority for the removal of FTCA cases filed in

tribal courts. Under the act, federal courts have exclusive jurisdiction to hear cases

arising from FTCA claims, and the act provides statutory authority for the removal of

such cases filed in state courts, yet no similar removal authority exists for such cases

filed in tribal courts. Cases filed in tribal court can be problematic because FTCA

does not provide the necessary authority to remove such cases from tribal court to

federal court, where they belong.

• Legal questions have been raised about whether tribal FTCA claims should be

adjudicated on the basis of tribal law or state law. Under FTCA, the federal

government is liable for the negligent acts of its employees to the extent that a private

person would be liable “in accordance with the law of the place where the act or

omission occurred.”8Recent court decisions have differed on whether the law of the

place should be tribal law for those incidents occurring on Indian land or state law as

the phrase has historically been interpreted.

• Legal arguments have been made recently that tribal law enforcement officers

enforcing tribal laws should not be considered federal law enforcement officers.

Under FTCA, claims for intentional torts, such as assault, battery, false

imprisonment, false arrest, abuse of process, or malicious prosecution, are barred

except for claims against “investigative or law enforcement officers of the United

States Government.” If tribal law enforcement officers are not considered federal law

enforcement officers, then claims for intentional torts involving those officers would

be barred under FTCA.

8

28 U.S.C. 1346(b) and 2672.
13

• A recent decision by the Department of Justice not to provide FTCA coverage for

tribal council members involved in litigation arising from the tribe’s law enforcement

contract with the Bureau has raised legal questions about the coverage for indirect

tribal employees. Since representation decisions are made by the Department of

Justice on a case-by-case basis, tribes do not always know which tribal employees are

covered and when. This makes it difficult for them to fully utilize their FTCA

coverage.

----

Mr. Chairman, this concludes my statement. We would be pleased to respond to any

questions that you or other Members of the Committee may have at this time.

Contacts and Acknowledgments

For information about this testimony, please contact Chet Janik or Jeff Malcolm at (202)

512-3841.

(141465)