Court Opinion

ID: 4442019
Source: CourtListenerOpinion
Date Created: 2019-09-26 20:00:55.191302+00
Date Added: 2024-06-11T08:48:06.255381
License: Public Domain

UNITED STATES DISTRICT COURT
                             FOR THE DISTRICT OF COLUMBIA

FORT MCDERMITT PAIUTE AND
SHOSHONE TRIBE,

               Plaintiff,
       v.                                             Civil Action No. 17-837 (TJK)

ALEX M. AZAR et al.,

               Defendants.

                                 MEMORANDUM OPINION

       The Indian Self-Determination and Education Assistance Act provides eligible Indian

tribes with the option to contract with federal agencies to directly assume operations of services

and programs that those agencies ordinarily provide. This action concerns just such an

arrangement. The Fort McDermitt Paiute and Shoshone Tribe negotiated with the Indian Health

Service to take over operations of two health programs that that agency had been providing. But

the parties reached an impasse on several issues, including, as relevant here, the appropriate

amount of federal funding. The Tribe, as the statute provides, submitted a “final offer,” which

the agency rejected in full. The Tribe now sues.

       Before the Court are the parties’ cross-motions for summary judgment. For the reasons

that follow, the Court will grant the Tribe’s motion and deny the agency’s motion. 1

1
 In ruling on these motions, the Court considers all relevant parts of the record, including: ECF
No. 1 (“Compl.”); ECF No. 26 (“Joint SOF”); ECF No. 29-1 (“Tso Decl.”); ECF No. 31 (“Pl.’s
MSJ”); ECF No. 33-1 (“Defs.’ MSJ”); ECF No. 33-3 (“Ward Decl.”); ECF No. 36 (“Pl.’s
Opp’n”); ECF No. 37 (“Defs.’ Opp’n”); and ECF Nos. 11–12 (Joint Appendix, with citations
designated as “AR__”).
         Background

         A.      Statutory Framework

         Congress passed the Indian Self-Determination and Education Assistance Act of 1975

(ISDEAA or “the Act”), 25 U.S.C § 5301 et seq., “to help Indian tribes assume responsibility for

programs or services that a federal agency would otherwise provide to the tribes’ members.”

Navajo Nation v. U.S. Dep’t of the Interior, 852 F.3d 1124, 1126 (D.C. Cir. 2017). Title V of the

Act authorizes a tribe to enter into “self-governance compacts” with the Indian Health Service

(IHS), an agency of the Department of Health and Human Services (HHS), to shift responsibility

to the tribe to operate health services ordinarily provided by IHS. See 25 U.S.C. §§ 5381–99.

         As part of that arrangement, IHS must negotiate and enter into a written funding

agreement with the contracting tribe for the continued provision of federal funds for the

transferred services and programs. See id. § 5385. Relevant to the dispute here, Title V entitles

a contracting tribe to a recurring award not less than the amount “the Secretary [of HHS] would

have otherwise provided for the operation of the programs or portions thereof for the period

covered by the contract.” 25 U.S.C. § 5325(a)(1); see also id. §§ 5385(g), 5388(c); Defs.’ MSJ at

4.2 That amount is often called a tribe’s “Secretarial amount” or “base amount,” and it is

generally not subject to reduction in future years. See Seneca Nation of Indians v. U.S. Dep’t of

Health & Human Servs., 945 F. Supp. 2d 135, 143 (D.D.C. 2013); Defs.’ MSJ at 4. Indeed, the

Act specifically states that that amount “shall not be reduced by the Secretary in subsequent

years except pursuant to” a limited set of reasons. 25 U.S.C. § 5325(b)(2). The statute

nevertheless provides that, “[n]otwithstanding any other provision in [the Act], the provision of

funds under [the Act] is subject to the availability of appropriations and the Secretary is not

2
    The IHS is vested with the Secretary’s authority under 25 U.S.C. § 1661.

                                                  2
required to reduce funding for programs, projects, or activities serving a tribe to make funds

available to another tribe or tribal organization under [the Act].” Id. § 5325(b).

       ISDEAA directs IHS to negotiate in good faith with a contracting tribe. See id.

§§ 5385(a), 5387(e). But if IHS and a tribe cannot agree on the terms of a self-governance

compact or a funding agreement, including funding amounts, the tribe may submit a “final offer”

to IHS presenting its position on the issues in dispute. Id. § 5387(b). Within 45 days, IHS “shall

review and make a determination with respect to such offer.” Id. If IHS determines to reject a

final offer in whole or in part, it must provide timely written notice to the tribe. Id. § 5387(c).

But a rejection may be based only on the four grounds enumerated in the statute:

       (i) the amount of funds proposed in the final offer exceeds the applicable funding level to
       which the Indian tribe is entitled under this subchapter;

       (ii) the program, function, service, or activity (or portion thereof) that is the subject of the
       final offer is an inherent Federal function that cannot legally be delegated to an Indian
       tribe;

       (iii) the Indian tribe cannot carry out the program, function, service, or activity (or
       portion thereof) in a manner that would not result in significant danger or risk to the
       public health; or

       (iv) the Indian tribe is not eligible to participate in self-governance under section 5383 of
       [Title V].

Id. § 5387(c)(1)(A). And the written notice must “contain[] a specific finding that clearly

demonstrates” the ground(s) relied on or “is supported by a controlling legal authority.” Id. “In

the absence of a timely rejection of the offer, in whole or in part, made in compliance with

subsection (c) of this section, the offer shall be deemed agreed to by [IHS].” Id. § 5387(b).

       The ISDEAA provides federal district courts with original jurisdiction over claims

against the Secretary arising under Title V, including a tribe’s claim that IHS improperly rejected

its final offer. See 25 U.S.C. § 5331(a); see also id. § 5387(c)(1)(C) (providing that a tribe may

                                                  3
forgo an administrative appeal and “directly proceed to initiate an action in a Federal district

court pursuant to section 5331(a)”); id. § 5391(a) (confirming that section 5331(a) applies to

compacts and funding agreements under Title V). For purposes of a civil action challenging

IHS’s rejection of a final offer, the Act expressly provides that IHS “shall have the burden of

demonstrating by clear and convincing evidence the validity of the grounds for rejecting the offer

(or a provision thereof) made under subsection (b) of [§ 5387].” Id. § 5387(d); see also id.

§ 5398 (providing generally that the Secretary has the burden in any civil action to show by clear

and convincing evidence “(1) the validity of the grounds for the decision made; and (2) that the

decision is fully consistent with provisions and policies of [Title V]”). And the Act further

authorizes the reviewing court to “order appropriate relief including money damages, injunctive

relief . . . , or mandamus . . . (including immediate injunctive relief to reverse a declination

finding . . . ).” Id. § 5331(a).

        B.      Factual Background

        The Fort McDermitt Paiute and Shoshone Tribe (“the Tribe”) is a federally-recognized

Indian Tribe composed of Northern Paiute and Western Shoshone peoples. Joint SOF ¶ 1. The

Tribe is located on a reservation encompassing lands in Nevada and Oregon. Id.

        IHS provides health services to the Tribe through the Schurz Service Unit, a division of

IHS operating out of the Phoenix, Arizona area “serving multiple tribes through a combination of

contracted and direct [health] programs.” Defs.’ MSJ at 6; see also AR 124 (table showing

Indian tribes served by the Schurz Service United). 3 Since the 1970s, IHS has operated a health

clinic in McDermitt, Nevada, (“the Clinic”) through the Schurz Service Unit for the benefit of

3
 A “Service unit” is “an administrative entity of the [IHS] or a tribal health program through
which services are provided, directly or by contract, to eligible Indians within a defined
geographic area.” 25 U.S.C. § 1603(20).

                                                   4
the Tribe’s members. AR 143. The Clinic provides primary outpatient care, substance abuse

treatment, diabetes prevention and treatment services, and other community wellness programs.

Joint SOF ¶ 4; AR 147. While beneficiaries of the Clinic are mainly members of the Tribe, the

Clinic also serves other IHS beneficiaries, including members of the nearby Winnemucca Indian

Colony of Nevada (“Winnemucca”). See AR 144; Defs.’ MSJ at 7.

       Since 1993, IHS has also operated the Fort McDermitt Emergency Medical Services

(“EMS”) program, again mainly for the benefit of the Tribe. See AR 144. In January 2013, the

Tribe designated a separate tribe, the nearby Pyramid Lake Paiute Tribe (“Pyramid Lake”) as its

“tribal organization” for purposes of contracting with IHS to undertake operations of the EMS

program. Joint SOF ¶ 2.4 Around that time, IHS had raised concerns with stakeholder tribes that

the EMS program “had been exceeding the planned budget for the program for some time,”

requiring IHS to supplement the program with other resources from the Schurz Service Unit,

including revenues collected through operation of the Clinic. AR 144. In July of that year,

however, Pyramid Lake submitted a contract proposal to assume operation of the EMS program

and requested $502,611 in annual funding—the amount that IHS had expended on the program

the prior year. See Joint SOF ¶ 3; AR 144–45. About a month later, IHS suspended the EMS

program, before formally closing it on September 30, 2013. AR 144–45. IHS then rejected

Pyramid Lake’s proposal that same day. AR 145.

       Pyramid Lake promptly filed an action in this district challenging IHS’s rejection. See

Pyramid Lake Paiute Tribe v. Burwell, 70 F. Supp. 3d 534 (D.D.C. 2014). In its declination

letter, IHS had argued that the applicable funding level for the EMS program was zero dollars, as

4
 A “tribal organization” is the “recognized governing body of any Indian tribe.” 25 U.S.C.
§ 5304(l). A tribe may, by tribal resolution, authorize a tribal organization to contract with IHS
on the tribe’s behalf. See id. § 5321(a)(1).

                                                 5
IHS had at that point decided to cease operating the program. See id. at 539. In the alternative,

IHS declined to award Pyramid Lake any funding based on expenditures made using revenues

collected from the Clinic, as opposed to the amount actually budgeted for the program by the

agency. See id. The court rejected those justifications, explaining that the applicable funding

level should be determined at the time the contracting tribe submits the proposal and that that

amount constitutes what IHS would have spent on the program, even if that includes revenue

from other sources. See id. at 543–44. Accordingly, and after an unsuccessful attempt at further

negotiations, the Court ordered IHS to award Pyramid Lake the full $502,611 requested. See

Pyramid Lake Paiute Tribe v. Burwell, Case No. 1:13-cv-01771 (CRC), 2015 WL 13691433

(D.D.C. Jan. 16, 2015).

       About a year later, in February 2016, the Tribe notified IHS that it intended to contract to

assume operation of the Clinic. Joint SOF ¶ 5. The following month, IHS sent a notice to

Congress indicating that it planned to close the Clinic, explaining that it determined “it [was] not

in the best interests of the Indian beneficiaries served by the Schurz Service Unit to fund the

EMS program” as ordered by the court in Pyramid Lake and also “maintain direct services at the

Fort McDermitt Clinic.” AR 145. Several months later, the Tribe rescinded its authorization for

Pyramid Lake to contract the EMS program on its behalf and notified IHS that it intended to

directly operate that program as well. Joint SOF ¶ 7.

       In July 2016, the Tribe submitted its draft compact and funding agreement to IHS for

assumption of the EMS program and the Clinic and the parties entered into negotiations. Id. ¶ 8;

see also AR 135. By October, the parties had reached an impasse on several issues, including

the appropriate level of recurring funding for “hospitals and clinics” (“H&C”) that the Tribe

intended to operate—that is, the EMS program and the Clinic. Id. ¶¶ 8–11; AR 111–13. The

                                                 6
Tribe thus submitted a final offer to IHS, under § 5387(b), addressing each of the issues still in

dispute. See AR 108–29.

       IHS rejected each of the Tribe’s proposals about the issues in dispute. See AR 130–41.

Only one of those issues—the level of recurring funding for H&C—remains in dispute. Joint

SOF ¶¶ 10–11. In its final offer, the Tribe proposed a recurring amount of $1,106,453 to cover

operations of both the EMS program and the Clinic. Id. ¶ 12; AR 113. The Tribe arrived at that

amount by combining the $502,611 award mandated by the court in Pyramid Lake with a

projected expenditure of $603,842 for the Clinic, based on a funding table provided by IHS. See

Joint SOF ¶ 12; AR 112–13. In response, IHS asserted that the Tribe miscalculated the amount

of H&C funds available to it. See AR 137. According to IHS, the amount requested by the Tribe

exceeded the “total H&C budget” for all the programs at issue, and further that it reflected

“shares allocable to Winnemucca.” AR 138. IHS therefore awarded the Tribe a total of

$555,275 in H&C funds for operation of both the EMS program and the Clinic, Joint SOF ¶ 13;

AR 52, an amount that, according to IHS, reflects the appropriate funding allocable to the Tribe

from the Schurz Service Unit’s budgeted resources, see Joint SOF ¶ 14; AR 149.

       C.      This Case

       The Tribe commenced this action in May 2017, challenging IHS’s rejection of its final

offer under the ISDEAA. See Compl. The complaint brings two separate counts alleging that

IHS unlawfully rejected the Tribe’s proposals: Count I concerns the Tribe’s inclusion of

employee housing services as part of the funding agreement, see id. ¶¶ 39–45, while Count II

concerns the level of recurring H&C funds, see id. ¶¶ 46–49. The parties cross-moved for

summary judgment. See ECF No. 14; ECF No. 16.

       Following a hearing on those motions, the Court granted the Tribe’s motion as to Count I.

See ECF No. 24. But it denied both parties’ motions without prejudice as to the recurring

                                                 7
funding issue, explaining that the record lacked sufficient context or supporting affidavits for the

Court to make any sense of the parties’ competing arguments. See id. at 3–6. The Court thus

ordered the parties to submit a joint statement of the remaining disputed legal issues and a joint

stipulation or statement of undisputed facts, followed by the renewed motions for summary

judgment currently before the Court. See id. at 8–9; ECF No. 31; ECF No. 33. Those renewed

motions are now fully briefed.

       Standard of Review

       A court must grant summary judgment “if the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.

R. Civ. P. 56(a). “A fact is ‘material’ if a dispute over it might affect the outcome of a suit under

governing law,” and a dispute “is ‘genuine’ if ‘the evidence is such that a reasonable jury could

return a verdict for the nonmoving party.’” Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir.

2006) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

       Ordinarily when a plaintiff challenges an agency action, review is governed by the

parameters set forth in the Administrative Procedure Act (APA), 5 U.S.C. § 500 et seq. But the

ISDEAA provides a distinct framework for claims brought under it, displacing the familiar

standards set forth in the APA. As noted, the Act instructs that in any “civil action conducted

pursuant to [§ 5387], the Secretary shall have the burden of demonstrating by clear and

convincing evidence the validity of the grounds for rejecting the offer (or a provision thereof)

made under subsection (b).” 25 U.S.C. § 5387. And the Court has already concluded that the

Act requires that it review IHS’s decision to reject the Tribe’s final offer de novo. See ECF No.

24 at 2–3.

       Nor does the ordinary deference accorded to an agency’s interpretation of the statute it

administers apply here. Rather, ISDEAA instructs that “[e]ach provision of [Title V] and each

                                                  8
provision of a compact or funding agreement shall be liberally construed for the benefit of the

Indian tribe participating in self-governance and any ambiguity shall be resolved in favor of the

Indian tribe.” 25 U.S.C. § 5392(f); see also AR 17 (the Tribe’s compact incorporating this

provision). Under that standard, when faced with an ambiguity, while a court should “give the

agency’s interpretation ‘careful consideration,’” it should not defer to it. Cobell v. Norton, 240
F.3d 1081, 1101 (D.C. Cir. 2001) (quoting Muscogee (Creek) Nation v. Hodel, 851 F.2d 1439,

1445 n.8 (D.C. Cir. 1988)); see also Salazar v. Ramah Navajo Chapter, 567 U.S. 182, 194

(2012) (noting that Title I’s model contract requires that the agency “demonstrate that its reading

is clearly required by the statutory language” (citing 25 U.S.C. § 5329(c))).

       Analysis

       IHS rejected the Tribe’s final-offer proposal for recurring H&C funding because “the

amount of funds proposed in the final offer exceeds the applicable funding level to which the

[T]ribe is entitled under [Title V of the ISDEAA].” AR 138 (second alteration in original)

(quoting 25 U.S.C. § 5387(c)(1)(A)(i)). To justify that finding, IHS makes two principal

arguments. First, IHS claims that the Tribe improperly requests funds from the Schurz Service

Unit that were allocated to another tribe—namely, Winnemucca. See Defs.’ MSJ at 21–23.

Second, IHS argues that the Tribe seeks funding based on expenditures made from third-party

revenue from the EMS program and the Clinic, funds that the Tribe, rather than IHS, will now

collect and that IHS therefore cannot be required to award to the Tribe. See id. at 24–27.

       A.      Winnemucca Share

       IHS claims that the Tribe should not receive any funds from the Schurz Service Unit

allocated to Winnemucaa. It explains that the Schurz Service Unit has long apportioned funding

amounts by each tribe served, even when those funds are then collectively used to support a

particular program or service. Accordingly, even though IHS has used both the Tribe’s and

                                                 9
Winnemucca’s shares to fund the Clinic and EMS program in the past, because Winnemucca has

not authorized the Tribe to contract on its behalf, the Tribe cannot receive the portion of funding

used for the Clinic and the EMS program allocable to Winnemucca. See Defs.’ MSJ at 17, 22–

23; see also AR 138 (section of declination letter explaining that the Tribe is not entitled to the

Winnemucca allocation).5 The Court is unpersuaded.

       In short, IHS’s conception of the appropriate funding amount is foreclosed by the

language of the Act. Title V provides that IHS “shall provide funds under a funding

agreement . . . in an amount equal to the amount that the Indian tribe would have been entitled to

receive under self-determination contracts” under Title I. 25 U.S.C. § 5388(c). And the

provision governing funding in Title I states that “[t]he amount of funds . . . shall not be less than

the appropriate Secretary would have otherwise provided for the operation of the programs or

portions thereof for the period covered by the contract.” Id. § 5325(a)(1) (emphasis added). As

the highlighted language makes clear, the minimum level of funding is determined by the

program covered by the contract, not by the identity of the tribe seeking to operate that program.

Put into context, if the Secretary were to retain control of the Clinic, it would provide funding to

operate the Clinic, as it has been, with funds that it has internally allocated to Winnemucca. See

Defs.’ MSJ at 21 (noting that a portion of the funds IHS had been using to operate the Clinic

5
  When IHS issued its declination letter, Winnemucca had “no functioning governing body from
which to obtain views.” AR 146. IHS was, however, able to communicate with Winnemucca
Chairperson Judy Rojos, who, according to IHS, “expressed no interest in providing a tribal
resolution from Winnemucca permitting the Fort McDermitt Tribe to contract for Winnemucca’s
shares of the Clinic.” ECF No. 33-2 ¶ 4. IHS thus presumed that Winnemucca had not
authorized the Tribe to contract to operate programs and services on its behalf. See AR 138.
Because the Court concludes that the appropriate level of funding does not turn on
Winnemucca’s authorization, the appropriateness of that presumption is immaterial.

                                                 10
were “allocated to the Winnemucca Tribe”). Under the statute, IHS cannot now withhold those

funds for operation of the very same program because the Tribe seeks to run the Clinic itself.

       Indeed, the court in Pyramid Lake rejected an almost identical argument to the one IHS

relies on here. In that case, the Secretary argued that she could limit the funding award for

operation of the EMS program based on “the tribal share IHS determined the Fort McDermitt

tribe was entitled to receive.” Pyramid Lake, 70 F. Supp. 3d at 544. But the Court disagreed,

concluding that “[t]he clearest meaning of [the] term ‘would have otherwise provided’ in the

context of the Act is what the IHS would have otherwise spent on the program.” Id. That

amount, the Court reasoned, is not limited to a particular tribe’s “budgeted tribal share.” Id.

       Still, IHS points to § 5324(i), arguing that that provision endorses its approach to

allocating funding awards under ISDEAA funding agreements. See Defs.’ MSJ at 22; Defs.’

Opp’n at 9. Section 5324(i)(1) states:

       If a self-determination contract requires the Secretary to divide the administration
       of a program that has previously been administered for the benefit of a greater
       number of tribes than are represented by the tribal organization that is a party to
       the contract, the Secretary shall take such action as may be necessary to ensure
       that services are provided to the tribes not served by a self-determination contract,
       including program redesign in consultation with the tribal organization and all
       affected tribes.

25 U.S.C. § 5324(i)(1). IHS would have that provision do too much. To be sure, it clearly

obligates IHS to “take such action as may be necessary” to ensure that a tribe that had previously

benefitted from a program will not be stripped of its access to those services as a result of any

self-determination contract. Yet here there is no need to take such action because the Clinic

continues to serve the same population it served prior to the Tribe’s assumption. See AR 144.

The Tribe has not contracted for a “portion[]” of the Clinic. See Defs.’ MSJ at 22 (quoting 25

U.S.C. § 5324(a)(1)). There has been no “divi[sion] [of] the administration of [the] program.”

25 U.S.C. § 5324(i)(1). Rather, the Tribe has assumed operation of same Clinic, with the same

                                                 11
regional service, and it is entitled under § 5325(a)(1) to no less than the amount of funds that IHS

would have otherwise provided for its operation.

       For these reasons, the Court finds that the Tribe is not limited to only those funds

allocated to it by IHS, and thus that IHS cannot rely on that justification to reject the Tribe’s

recurring funding proposal.

       B.      Third-Party Revenue

       IHS’s second justification for rejecting the Tribe’s proposal poses the more difficult

question. According to IHS, the expenditure figure that the Tribe relied on for the Clinic—the

$603,842 amount that it added to the existing $502,611 obligation for the EMS program—was

only partially comprised of funding from the H&C budget. See Defs.’ MSJ at 24–27; Defs.’

Opp’n at 6–8. IHS supplemented the rest of the Clinic’s operating costs with what it deems

“third-party revenue,” largely Medicaid reimbursements for services provided by the Clinic and

EMS program and a separate grant for diabetes treatment services. See Defs.’ MSJ at 24; Ward

Decl. ¶¶ 8–9; Tso Decl. ¶¶ 7–8. Those resources, IHS points out, are no longer available to IHS

because the Tribe undertook clinic billing once it assumed operation of the Clinic and the EMS

program, and the Tribe therefore receives any income from the programs moving forward. See

Defs.’ MSJ at 24. And IHS insists that it cannot transfer funds to the Tribe that it no longer has.

Indeed, because those funds flow directly to the Tribe, IHS argues that accounting for them in

the recurring finding amount would lead to “double-dipping” by the Tribe. Defs.’ MSJ at 27.

       The Tribe insists that this justification must fail at the outset because IHS did not rely on

it in the declination letter. See Pl.’s MSJ at 21. And what few references IHS made in that letter

to third-party revenue, the Tribe claims, cannot constitute a “‘specific finding’ clearly

demonstrating” that the Tribe’s proposal exceeded the amount to which it is entitled because it

included expenditures from third-party revenue sources. Pl.’s Opp’n at 16 (quoting 25 U.S.C.

                                                  12
§ 5387(c)(1)(A)). But even if IHS made an adequate finding under the ISDEAA, the Tribe

contends that its justification fails as a matter of law because the recurring funding award is tied

to the level of expenditures, not the source of funding for those expenditures. See Pl.’s MSJ at

22–23.

         The Tribe’s procedural arguments are well-taken. But the Court need not address them.

For even if IHS made a sufficient finding about third-party revenues in the declination letter for

purposes of § 5387(c)(1)(A), the Court agrees that that justification fails as a matter of law.

         Stepping back from IHS’s narrower claim about third-party revenues, its approach to the

recurring funding amount rests on a fundamental misunderstanding of the minimum level of

funding it must provide to the Tribe under § 5325(a)(1). IHS assumes that the figure should be

dictated by the amount it allocated for H&C in its budget, and it spends much of its briefing

making the broader point that its internal budgeting figures show that in recent years it spent

“nowhere near the $1.1 million amount claimed by Plaintiff.” Defs.’ MSJ at 21; see also id. at

19 (explaining that no document indicates that IHS “spent th[at] much in Service Unit H&C on

the clinic and EMS programs” (emphasis added)); Defs.’ Opp’n at 5 (confirming that IHS based

its award on the “appropriated H&C funding that IHS would have otherwise spent” (emphasis

added)). Indeed, all the evidence IHS musters to support its contention that it would have only

provided $555,275 to operate the EMS program and the Clinic—and not the $1.1 million in

funding requested by the Tribe—shows that IHS had only budgeted that amount or a comparable

figure in its H&C line item for the Schurz Service Unit. See AR 148 (projected H&C

expenditures table for the Clinic attached to declination letter); AR 149 (table showing portion of

H&C funding set aside for the Tribe attached to declination letter); AR 125 (table showing a

                                                 13
“[b]udgeted [a]llowance” of only $181,778 in H&C for the Clinic in 2016); Tso Decl. ¶ 6 and

Ex. 1 at 2 (showing H&C budgeted expenditures on the Clinic in 2016 of $221,211).

       But as the Court made clear in rejecting IHS’s tribal-share argument, § 5325(a)(1)

dictates that the recurring funding amount be determined by the funds provided to operate a

program. The provision does not further cabin that amount based on how and from which

sources IHS had been cobbling together those funds. Indeed, if the Court were to accept IHS’s

position that contracting tribes are limited to only that amount budgeted for a program, IHS

could dictate the minimum funding amount for any particular tribe by strategically reorganizing

its appropriated funds. The Court struggles to square that reading with Congress’s “intent to

circumscribe as tightly as possible the discretion of the Secretary” in enacting the ISDEAA,

Ramah Navajo Sch. Bd., Inc. v. Babbitt, 87 F.3d 1338, 1344 (D.C. Cir. 1996), let alone the

Court’s obligation to “liberally construe[] [Title V] for the benefit of the Indian tribe,” 25 U.S.C.

§ 5392(f). Thus, IHS’s insistence that the level of H&C funding budgeted for the Clinic and the

EMS program is the definitive benchmark is misguided. 6

6
  To be sure, demonstrating the amount that IHS “would have otherwise provided” for the
operation of a particular program in a particular year is ultimately an evidentiary burden put to
the government. See 25 U.S.C. § 5387(d). And the amount of funding that IHS sets aside as
designated H&C funding to be spent on a particular program could certainly show what IHS
would have otherwise spent on that program. It is not entirely clear from IHS’s briefing whether
it relies on that approach. But even if so, IHS would need to show, by “clear and convincing
evidence,” that it planned to limit its expenditures on the Clinic to that designated amount. Id.
And while the record includes some indications that IHS had intentions to limit its spending on
the Clinic (or close it altogether), see, e.g., AR 144–45, 148, it also contains evidence that IHS
had nevertheless been reaching far beyond its H&C budget and covering expenditures for both
the Clinic and the EMS program using supplementary funds in prior years, see Defs.’ Opp’n at 6;
ECF No. 37-2 at 2, and that it had intentions to do so in 2016, see AR 125; see also Tso Decl.
¶¶ 6–8 (explaining that IHS did in fact use program income to fund the Clinic). That record
cannot satisfy the heavy burden IHS must meet to show that IHS would have only provided the
designated H&C funding for operation of both the EMS program and the Clinic for 2017.

                                                 14
       Nevertheless, IHS argues that even if it would have spent third-party revenue to keep

operating the Clinic had it retained control of the Clinic and the EMS program, use of that

funding should not be considered when calculating the recurring amount under § 5325(a)(1)

because IHS no longer collects it once it cedes operation of those programs—the Tribe does. See

AR 36 (section of compact transferring clinic billing to the Tribe). That argument has substantial

intuitive and practical appeal. If the Tribe stands to collect those revenues directly, why should

IHS also have to match those funds, from some other source, in the recurring funding amount?

       But IHS once again runs headlong into the language of the statute. Section 5325(a)(1)

instructs that the Tribe is entitled to no less than the amount that IHS “would have otherwise

provided for the operation of” the EMS program and the Clinic. The clear and unavoidable

meaning of that provision is that IHS must provide in funding to the Tribe an amount that is at

least equal to what it otherwise would have spent operating the EMS program and the Clinic

itself. Nowhere does the statute provide exceptions based on the source of that funding, even if

the particular source IHS had been using, upon transfer of operations to the contracting tribe,

dematerializes. Rather, the provision focuses on the continued operation of the assumed

programs at the same level of service, and it does so by ensuring that IHS provides the same

amount in funding, as a recurring base amount, for that continued operation. It does not permit

IHS to limit the award on the assumption, no matter how reasonable, that the Tribe will make up

the difference elsewhere.7

7
  The Tribe also claims the weight of caselaw reached the same conclusion, though none of the
cases it cites are particularly on point. First, the Tribe insists that this question was directly
addressed by the court in Pyramid Lake, but that decision did not reach so far. In that case, IHS
had been using third-party revenues from the Clinic to fund the EMS program. See 70
F. Supp. 3d at 544. IHS retained control of the Clinic, and thus would continue to collect those
revenues even after the Tribe assumed control of the EMS program. See id. In other words,

                                                15
       Though IHS never refers to it, the Court notes that Title V does directly address

Medicare, Medicaid, and other “program income earned by an Indian tribe.” 25 U.S.C.

§ 5388(j). The relevant provision states that IHS, in transferring funding pursuant to a Title V

funding agreement, shall treat that program income as “supplemental funding to that negotiated

in the funding agreement” and that those funds “shall not result in any offset or reduction in the

amount of funds the Indian tribe is authorized to receive under its funding agreement.” Id. One

might read that provision to imply that those third-party revenues should be considered entirely

separate and apart from the recurring funding award. But § 5388(j) is forward-looking; it

dictates how funds should be transferred after the parties have entered into the funding

agreement and specified a particular recurring funding amount. Cf. Swinomish Indian Tribal

Cmty. v. Azar, No. 18-cv-1156 (DLF), 2019 WL 4261368, *7–8 (D.D.C. Sept. 9, 2019)

(concluding that third-party revenues expended by a tribe in addition to the recurring funding

amount already agreed upon should not be considered for purposes of calculating contract-

support costs). Subsection 5388(j) says nothing about whether, in determining that amount,

previous expenditures should be discounted simply because the source of those expenditures was

unlike here, those resources were still available to IHS. The Tribe also relies on Navajo Health
Found.—Sage Mem’l Hosp., Inc. v. Burwell, 263 F. Supp. 3d 1083 (D.N.M. 2016), in which the
court found that expenditures on ISDEAA programs from third-party revenues should be
considered funds “spent on the federal program.” Id. at 1178. But the court in that case was
examining the appropriate amount for purposes of calculating the contract-support costs after the
fact, not the Secretarial amount under § 5325(a)(1). See id. at 1164. Finally, contrary to the
Tribe’s claim, the D.C. Circuit did not foreclose IHS’s particular argument here in Navajo
Nation. In that case, the Circuit rejected IHS’s claim that it could not be required to accept the
tribe’s final offer, even though it failed to timely respond to it, if that offer exceeded the amount
to which the tribe would have been entitled to under the Act. See 852 F.3d at 1130. That is, the
Circuit merely held that because the Act does prohibit IHS from awarding more than the
minimum amount prescribed in § 5325(a)(1), it was not contrary to the statute to order IHS to
pay such an amount for failing to timely reject the offer. See id. In sum, none of those cases
squarely presented the issue raised here.

                                                 16
third-party revenue. The dictate of § 5325(a)(1) is not simply that IHS must transfer the various

pots of funding that it had been using to operate the programs at issue, but rather that IHS must

agree to provide an amount, as recurring funding, not less than what it would have otherwise

provided to operate the programs. Upon agreeing to that sum, IHS can meet that obligation

however it sees fit.

       The Court recognizes that this application of § 5325(a)(1)’s language to this situation

leads to what may appear an illogical result, in that it seems to lead to double-recovery by the

Tribe. But the Court must construe the Act “liberally . . . for the benefit of the Indian tribe

participating in self-governance and [resolve] any ambiguity . . . in favor of the Indian tribe.” 25

U.S.C. § 5392(f). Moreover, although not invoked by IHS, the general rule that statutes should

not be construed to produce absurd results does not require a contrary outcome. See, e.g., Mova

Pharm. Corp. v. Shalala, 140 F.3d 1060, 1068 (D.C. Cir. 1998). The ISDEAA, first and

foremost, is aimed at ensuring that Indian tribes can assume control of their own health services

at levels necessary to meet their needs. See 25 U.S.C. § 5302(a), (c). The result here—which

ensures that the Tribe will receive the necessary funds to provide, at a minimum, the same

services that IHS had already been providing—is not contrary to that aim, nor is it so absurd that

it warrants disregarding the Act’s clear text.

       For these reasons, the Court finds that under the Act, IHS cannot deduct from the

Secretarial amount expenditures that it would have otherwise made had it retained control of the

programs at issue simply because it made those expenditures using funds from revenue streams

that will, upon assumption of the program, flow directly to the Tribe. Given that conclusion, and

the Court’s conclusion as to the Winnemucca share, the Court finds that IHS has failed to show

that the Tribe’s final offer exceeded the amount to which it was entitled under the Act.

                                                 17
         C.      Remedy

         With the merits resolved, the Court is left to determine an appropriate remedy. As IHS

points out, the ISDEAA does not mandate injunctive relief when IHS fails to meet its burden to

show that it properly rejected a tribe’s final offer. Rather, § 5331(a) provides that a court “may

order appropriate relief . . . including immediate injunctive relief to reverse a declination

finding . . . .” 25 U.S.C. § 5331(a)(1) (emphasis added). And IHS argues that, “[d]epending on

this Court’s decision, remand to negotiate the proper amount of H&C funding in accordance with

the Court’s holding may be appropriate.” Defs.’ Opp’n at 13. But the Court’s conclusions lead

to no suitable remedy other than the injunctive relief the Tribe requests—namely, an order

requiring IHS to accept the recurring funding amount proposed in the Tribe’s final offer. The

Court has rejected, as a matter of law, the justifications relied on by IHS for declining the Tribe’s

proposed amount. And to the extent IHS has tried to muster sufficient evidence to otherwise

show that it would not have spent the amount proposed by the Tribe on the EMS program and

Clinic, it has failed to do so after being afforded multiple opportunities. 8

         As a result, because IHS has failed to carry its burden to show that it properly rejected the

Tribe’s proposal, and because remand for further negotiations would serve little purpose, the

Court finds that an injunction requiring IHS to accept the recurring funding amount proposed by

the Tribe and to amend the funding agreement accordingly is the appropriate remedy See

Pyramid Lake, 70 F. Supp. 3d at 545 (noting that because the ISDEAA specifically provides for

both injunctive and mandamus relief to remedy violations of the Act, a tribe “need not

demonstrate the traditional equitable grounds for obtaining” that relief).

8
    See supra note 7.

                                                  18
       Conclusion

       For all the above reasons, the Court will grant Plaintiff’s Second Motion for Summary

Judgment, ECF No. 31, deny Defendants’ Second Cross-Motion for Summary Judgment, ECF

No. 33, and enter injunctive relief for Plaintiff. A separate order will issue.

                                                               /s/ Timothy J. Kelly
                                                               TIMOTHY J. KELLY
                                                               United States District Judge

Date: September 26, 2019

                                                 19