Opinion ID: 172239
Heading Depth: 3
Heading Rank: 2

Heading: HUD's Action

Text: Because I would defer to HUD's interpretation of NAHASDA, I also would consider HUD's actions under its regulations. Review of HUD's final agency action is controlled by the APA, which states in pertinent part: To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall ... hold unlawful and set aside agency action, findings, and conclusions found to be ... (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706(2)(A); see Via Christi Reg'l Med. Ctr., Inc. v. Leavitt, 509 F.3d 1259, 1271 (10th Cir.2007) (applying this standard). Under the arbitrary and capricious standard of review, review is narrow and deferential; we must uphold the agency's action if it has articulated a rational basis for the decision and has considered relevant factors. Nutraceutical Corp., 459 F.3d at 1038 (quotation omitted).
The UKB argues that HUD acted arbitrarily and capriciously. First, the UKB contends that HUD's interpretation of its regulations to include a jurisdictional requirement in the funding formula contradicts the clear language of NAHASDA and HUD's regulations. I disagree. Because Chevron is applicable and I would defer to HUD's permissible interpretation of NAHASDA, I also would give substantial deference to HUD's interpretation of its own regulations. See Leavitt, 509 F.3d at 1272 ([W]e must give substantial deference to an agency's interpretation of its own regulations.) (quotation omitted). The UKB contends that the plain language of NAHASDA and its implementing regulations do not require the designation of a formula area and the exercise of jurisdiction over a geographic area.... Aplt. Br. at 15 (emphasis omitted). Because I would conclude that NAHASDA is ambiguous on this issue, I would confine my present review to HUD's regulations. Under 24 C.F.R. § 1000.310, [t]he IHBG formula consists of two components: (a) Formula Current Assisted Housing Stock (FCAS); and (b) Need. Both parties agree that only the need component is presently at issue. The need component consists of seven criteria addressing households in need. 24 C.F.R. § 1000.324. Absent from these criteria is a fixed boundary within which one could determine the number of households that satisfy the need criteria. I consider HUD's reference to the formula area definition found in 24 C.F.R. § 1000.302 to be appropriate, and likely necessary, to calculate the number of relevant households. I would defer to HUD's interpretation of its regulations to read formula area in 24 C.F.R. § 1000.302 as the area relevant for the formula tabulations.
The UKB also contends that HUD's action is arbitrary and capricious because it treats similarly-situated tribes differently. To support this argument, the UKB contends: In the same year that HUD denied IHBG funding to the [UKB] ..., HUD granted funding to the Pamunkey Tribe, the Lumbee Tribe, the Poospatuck Indians and the Waccamaw Siouan State Tribe. (Aplt.App['x][ ]229). These state tribal entities lack the legal capacity to exercise jurisdiction over land and are not qualified to have lands held in trust by the federal government. Aplt. Br. at 18-19. The UKB also highlights HUD's acknowledgment of the possibility of similar tribes  since there may be other landless tribes, we need to understand the implications of any decision that is made in this case on other tribes  and contends that because the record does not otherwise consider the implications of its decision on other tribes, HUD ignored this aspect of the analysis. Id. at 19 (quoting Aplt. App'x at 72). The record citation provided by the UKB to support the existence of similarly-situated tribes refers only to a letter through counsel from the UKB to HUD disputing UKB's jurisdiction over a formula area. Assuming that this is appropriate authority, I would read the letter to state that HUD provided IHBG need funding to the referenced tribes because they met the formula area definition under 24 C.F.R. § 1000.302 (viii). Aplt. App'x at 229. To the extent the UKB did not meet the formula area definition, the referenced tribes are not similarly situated. I also would reject the UKB's contention that HUD failed to consider the impact on other similar tribes. As the UKB noted, HUD acknowledged the potential impact on other similar tribes as a consideration. HUD later indicated that the UKB was not the only tribe affected by the Cherokee Nation's contention that only it could exercise jurisdiction over the Cherokee Oklahoma Tribal Statistical Area. Id. at 172. HUD identified the similarly-affected tribes as the Shawnee Tribe ... and Delaware Tribe of Indians. Id. According to HUD, the Delaware Tribe lost its federal recognition and was no longer eligible for IHBG funding, and the Shawnee Tribe did not appeal the decision. Id. at 172-73. In its letter to HUD, the UKB acknowledged that [t]his situation is unique to these two tribes [the UKB and the Cherokee Nation] because they both are successors in interest to the former Cherokee Nation. Id. at 234. Based upon these considerations, which HUD identified as a part of its decision-making process, I cannot conclude that HUD ignored or disregarded the implications of its UKB decision on other tribes.
Under 24 C.F.R. § 1000.336(a), An Indian tribe ... may challenge data used in the IHBG formula. Because the regulations do not provide explicitly for a third party to challenge a tribe's IHBG funding, the UKB contends HUD acted arbitrarily and capriciously by acting on the Cherokee Nation's letter that requested a review of the formula area for other tribes in the Cherokee Nation's jurisdictional area. The majority expresses grave concerns that HUD permitted the Cherokee Nation to appeal absent an explicit regulation. Maj. Op. at 1246. I do not share these concerns. HUD considered the Cherokee Nation's letter to be a challenge under 24 C.F.R. § 1000.336. Aplt. App'x at 25. As before, I would give substantial deference to HUD's interpretation of its own regulations. Although the regulation does not reference explicitly the ability of one tribe to challenge the existence of another tribe's formula area, this omission is similar to the absence of a formula area factor in the need formula in 24 C.F.R. § 1000.324. Just as the identification of the number of relevant households must necessarily be bound by a geographic boundary, census data relevant to those same households under the same need formula must also be confined by a geographic boundary. Despite the majority's view that this certainly was not a challenge to census data, Maj. Op. at 1246, I would consider a challenge to the location or existence of such boundaries as a challenge to the number of people within those boundaries. In this regard, the Cherokee Nation's letter challenged data used in the IHBG formula. Accordingly, I would defer to HUD's application of 24 C.F.R. § 1000.336. Relatedly, the UKB challenges HUD's consideration of the Cherokee Nation's appeal of HUD's decision that the UKB satisfied the formula area requirement. The letter notifying the Cherokee Nation of this decision stated, In accordance with 24 C.F.R. § 1000.336(b)(1) and 1000.118, you have the right to appeal this decision. Aplt. App'x at 173. Section 1000.336(b)(1) provides in pertinent part: In the event HUD challenges the validity of the submitted data, the Indian tribe ... and HUD shall attempt in good faith to resolve any discrepancies so that such data may be included in formula allocation. Should the Indian tribe ... and HUD be unable to resolve any discrepancy by the date of formula allocation, the dispute shall be carried forward to the next funding year and resolved in accordance with the dispute resolution procedures set forth in this part for model housing activities (§ 1000.118). Section 1000.118 provides in pertinent part: (a) Within thirty calendar days of receiving HUD's denial of a proposal to provide assistance to non low-income Indian families or a model housing activity, the recipient may request reconsideration of the denial in writing. The request shall set forth justification for the reconsideration. The UKB contends that neither of these sections provides for third party appeals. Aplt. Br. at 22. Moreover, the UKB asserts that the Cherokee Nation did not file its appeal within the required thirty days. I would reject both arguments. HUD instructed the Cherokee Nation of its right to appeal under the cited regulations. Having concluded that HUD appropriately considered the Cherokee Nation's letter as a challenge under § 1000.336, it would be illogical to conclude that the Cherokee Nation could not appeal an adverse determination under the same regulation. Further, I note that no relevant language in § 1000.336 limits who may bring a challenge or appeal beyond An Indian tribe. 24 C.F.R. § 1000.336(a), (b)(1). This regulation does not exclude third-party appeals or challenges by an Indian tribe, such as the Cherokee Nation. Regarding the thirty-day limit, HUD sent a letter notifying the Cherokee Nation of its right to appeal on October 18, 2005. Aplt. App'x at 172. The Cherokee Nation filed its appeal on November 16, 2005. Id. at 174. Consequently, I would conclude that the Cherokee Nation appealed [w]ithin thirty calendar days of receiving HUD's denial, satisfying 24 C.F.R. § 1000.118(a).
The UKB raises several arguments based on the premise that HUD arbitrarily and capriciously disregarded nine years of precedent for providing the UKB IHBG funding. In my view, the UKB's arguments disregard the explicit statutory language of NAHASDA. NAHASDA requires an Indian tribe to submit to the Secretary, for each fiscal year, a housing plan under this section. 25 U.S.C. § 4112(a)(1)(A). NAHASDA requires HUD to conduct a limited review of each Indian housing plan. 25 U.S.C. § 4113(a)(1). NAHASDA instructs HUD to establish a formula to provide for allocating amounts available for a fiscal year for block grants. 25 U.S.C. § 4152(a). By requiring annual submission and review of housing plans before allocating funding, the terms of NAHASDA necessarily reject the UKB's reliance on nine years of prior funding as precedent for continued funding.
Alternatively, the UKB asserts that HUD acted arbitrarily and capriciously by failing to consider that the UKB exercises jurisdiction over lands within the former Cherokee reservation. To support this argument, the UKB cites sources outside of the administrative record. I cannot conclude that HUD acted arbitrarily and capriciously because it failed to consider evidence that was not before it. [7] See Am. Mining Cong. v. Thomas, 772 F.2d 617, 626 (10th Cir.1985) ([T]he agency's action must be reviewed on the basis articulated by the agency and on the evidence and proceedings before the agency at the time it acted.).
The UKB argues that HUD acted arbitrarily and capriciously by failing to consider whether the designation of additional formula areas would be fair and equitable under 24 C.F.R. § 1000.302(2). The UKB's entire argument on this issue is as follows: In the present case, the administrative record establishes that HUD failed to consider IHBG funding in the [UKB]'s proposed Formula Area as under 24 C.F.R. § 1000.302(2). Accordingly, HUD's denial was arbitrary and capricious. Aplt. Br. at 28. The UKB fails to clarify what HUD failed to consider in the UKB's Formula Response Form. In the absence of that clarification, I cannot conclude that HUD's action was arbitrary and capricious.