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

Heading: Agency Decision to Award Minimum Funding to the UKB

Text: It is undisputed that the UKB received IHBG funding above the minimum amount for the fiscal years 1997-2005. United Keetoowah Band, No. CIV-06-533-RAW, slip. op. at 2. For each of these fiscal years, HUD determined that the UKB shared a Formula Area with the Cherokee Nation of Oklahoma (CNO) in the CNO's Tribal Jurisdictional Statistical Area/Oklahoma Tribal Statistical Area. However, this determination was called into question on June 14, 2004, when the CNO wrote a letter to HUD challenging the UKB's right to receive IHBG funding. In the letter, the CNO claimed jurisdiction over the Tribal Jurisdictional Statistical Area to the exclusion of the UKB. Accordingly, HUD interpreted the substance of the challenge to be that the UKB should not receive more than the minimum funding allocation because the tribe could not claim a Formula Area as defined in 24 C.F.R. § 1000.302. After reviewing the matter, HUD issued a memorandum on January 19, 2005, in which the agency concluded that the UKB had no jurisdiction or regulatory basis for being assigned a Formula Area because only the CNO could assert jurisdiction over the Oklahoma Tribal Statistical Area and the UKB had no Memorandum of Agreement with the CNO. HUD stated that the formula correction, which rendered the UKB ineligible for funding under the Need component of the IHBG formula, would become effective for fiscal year 2006. On February 11, 2005, the UKB requested that HUD reconsider its determination that the UKB had no jurisdiction over and therefore could not be assigned a share of the Oklahoma Tribal Statistical Area. After further inquiry into the matter, HUD reversed itself on April 26, 2005, finding that the UKB did in fact meet the regulatory basis under the IHBG program for being assigned a share of the Cherokee Oklahoma Tribal Statistical Area because the UKB could, in HUD's estimation, exercise court jurisdiction over the area. Accordingly, on the basis of the UKB's ability to claim the Oklahoma Tribal Statistical Area as its Formula Area, HUD granted the UKB $545,989 in funding for the fiscal year 2006. HUD also informed the CNO, on October 18, 2005, that it had the right to appeal this decision to assign the UKB a share of the Oklahoma Tribal Statistical Area. This prompted an administrative appeal by the CNO on November 16, 2005. The appeal contained a detailed legal argument designed to show that the CNO possessed exclusive jurisdiction over the Oklahoma Tribal Statistical Area. This argument was based in part on our decision in United Keetoowah Band of Cherokee Indians v. Mankiller, in which we reaffirmed that the Cherokee Nation is the only tribal entity with jurisdictional authority in Indian Country within the Cherokee Nation. [4] No. 93-5064, 1993 WL 307937,  (10th Cir. Aug.12, 1993) (unpublished). In response, HUD reversed itself again on February 7, 2006, concluding that the the UKB could not exercise court jurisdiction over land in the Cherokee former reservation area. The UKB, predictably, then challenged this new decision in a letter dated March 27, 2006. HUD denied this request for reconsideration on November 3, 2006, in a letter described as a final agency action. HUD based the denial on its conclusion that the UKB failed to show that it possesses a Formula Area, as that term is defined pursuant to 24 C.F.R. § 1000.302, because it has neither a geographic area over which it could exercise court jurisdiction nor an area in which it provides substantial housing services pursuant to a Memorandum of Agreement with the governing entity, the [CNO]. Accordingly, HUD awarded the UKB only the minimum funding allocation under 24 C.F.R. § 1000.328. The UKB then sought judicial review in federal district court under the Administrative Procedure Act (APA), 5 U.S.C. §§ 701-706. The UKB argued that Chevron deference should not apply to 24 C.F.R. § 1000.302 and asserted several bases to show that HUD had acted arbitrarily and capriciously. United Keetoowah Band, No. CIV-06-533-RAW, slip. op. at 5. However, the district court applied Chevron deference and found that HUD had not acted arbitrarily and capriciously. Id. at 5-10. The UKB now appeals this decision. The main issue before us is whether NAHASDA is clear and unambiguous such that we should not grant Chevron deference to the implementing regulations.