Court Opinion

ID: 2789471
Source: CourtListenerOpinion
Date Created: 2015-03-26 17:01:12.376955+00
Date Added: 2024-06-11T11:09:54.935709
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

CROW TRIBAL HOUSING AUTHORITY,             No. 13-35284
               Plaintiff-Appellee,
                                            D.C. No.
                 v.                      1:06-cv-00051-
                                              RFC
U.S. DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT,
             Defendant-Appellant.           OPINION

      Appeal from the United States District Court
              for the District of Montana
   Richard F. Cebull, Senior District Judge, Presiding

               Argued and Submitted
          October 9, 2014—Portland, Oregon

                 Filed March 26, 2015

     Before: Raymond C. Fisher, Morgan Christen,
      and Jacqueline H. Nguyen, Circuit Judges.

               Opinion by Judge Christen
2           CROW TRIBAL HOUSING AUTH. V. HUD

                           SUMMARY*

                   Tribal Matters / Housing

    The panel vacated the district court’s order remanding the
case to the Department of Housing and Urban Development
(“HUD”) for a hearing, reversed the judgment, and remanded
for judgment to be entered in favor of HUD in a case brought
by the Crow Tribal Housing Authority, arising from a dispute
involving Indian housing block grants made under the Native
American Housing Assistance and Self-Determination Act of
1996.

    The panel held that the district court erred in ruling that
HUD violated Crow Housing’s right to Native American
Housing Assistance and Self-Determination Act of 1996’s
notice and reporting requirements under 25 U.S.C. §§ 4161
and 4165.

    Specifically, the panel concluded that HUD did not act
under § 4161, and accordingly, could not have violated a
hearing requirement under that section. The panel further
concluded that HUD’s actions triggered the opportunity for
a hearing under § 4165 when it conducted an on-site review
of Crow Housing in August 2004. Finally, the panel held that
because Crow Housing did not request a hearing, HUD did
not violate its statutory obligation under § 4165 and did not
improperly deprive Crow Housing of a hearing under the
facts of the case.

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
           CROW TRIBAL HOUSING AUTH. V. HUD                         3

                           COUNSEL

Jonathan H. Levy (argued) and Michael S. Raab, Attorneys,
Appellate Staff; Stuart F. Delery, Assistant Attorney General;
Michael W. Cotter, United States Attorney, Civil Division,
Department of Justice, Washington, D.C.; and Victoria L.
Francis, Assistant United States Attorney, Office of the
United States Attorney, Billings, Montana, for Defendant-
Appellant.

Dennis M. Bear Don’t Walk (argued) and Roger J. Renville,
Office of Legal Counsel, Crow Nation Executive Branch,
Crow Agency, Montana, for Plaintiff-Appellee.

                            OPINION

CHRISTEN, Circuit Judge:

    This case arises from a dispute involving Indian housing
block grants made under the Native American Housing
Assistance and Self-Determination Act of 1996
(“NAHASDA”), 25 U.S.C. §§ 4101–4243. Since 1998, Crow
Tribal Housing Authority (“Crow Housing” or “the Tribe”),1
located in Montana, has received NAHASDA grant payments
from the Department of Housing and Urban Development
(“HUD”). In 2001, HUD realized that it had overpaid Crow
Housing and sought to recover the overage through
deductions from future grants. HUD did not provide Crow
Housing with a hearing at which these deductions could be
contested, and this appeal concerns whether that was

 1
   Crow Housing also refers to itself as the Apsaalooke Nation Housing
Authority.
4         CROW TRIBAL HOUSING AUTH. V. HUD

improper. The district court held that HUD acted under
25 U.S.C. § 4161 and § 4165, and that it violated the Tribe’s
right to notice and a hearing. This appeal followed.

    Because the record establishes that HUD’s actions
triggered 25 U.S.C. § 4165 but did not violate that section’s
hearing requirement, we reverse the district court’s judgment.

                     BACKGROUND

I. Statutory and Regulatory Framework

    NAHASDA was enacted primarily to “provid[e]
affordable homes in safe and healthy environments” for
members of Indian tribes, in a way that “recognizes the right
of Indian self-determination and tribal self-governance.”
25 U.S.C. §§ 4101(5), (7). It replaced several disparate
housing assistance programs with the Indian Housing Block
Grant Program. The Act authorizes HUD to allocate grants
among recipient tribes. Id. § 4152(a)(1). Because all tribes
receive grants from the same finite pool of funds, see
25 U.S.C. § 4151, overpayments to one tribe directly reduce
the funds available for other tribes.

    HUD uses an allocation formula that considers a tribe’s
Formula Current Assisted Stock (FCAS) and need. 24 C.F.R.
§ 1000.310. The FCAS is the product of multiplying a fixed
subsidy by the number of low-income housing units a tribe
owns or operates. Id. § 1000.316. FCAS accounts for certain
lease-to-own housing units until a tribe “no longer has the
legal right to own, operate, or maintain the unit[s], whether
such right is lost by conveyance, demolition, or otherwise.”
Id. § 1000.318(a). To ensure FCAS accuracy, HUD requires
recipient tribes to update the status of their housing units in
           CROW TRIBAL HOUSING AUTH. V. HUD                     5

an annual Formula Response Form, and to remove units no
longer eligible for inclusion in the formula. Id. §§ 1000.315,
1000.319. Because HUD uses these updates to calculate
annual grants, removal of units directly reduces a tribe’s
annual grant amount. See id. §§ 1000.312, 1000.314.

    If a tribe fails to comply with NAHASDA, the Act
provides for certain remedies. 25 U.S.C. § 4161. Subsection
4161(a) requires HUD to offer “reasonable notice and
opportunity for hearing” before finding that a tribe “has failed
to comply substantially” and before imposing those remedies.
Remedial action is mandatory upon a finding of substantial
noncompliance under this section. Id. § 4161(a)(1).

   Under 25 U.S.C. § 4165, HUD may also adjust a tribe’s
grant amount after an audit or review, but adjustments
imposed pursuant to § 4165 are not mandatory.

II. Factual Background and Administrative Proceedings

    a. 2001 Inspector General Audit

    In August 2001, HUD’s Office of the Inspector General
(“OIG”) issued a report indicating that it had “performed a
nationwide audit to evaluate [NAHASDA] program
implementation.”2 During the audit, OIG “performed on-site
visits at 17 Housing Entities within four of the six Office of
Native American Programs (ONAP) regions.” Though the
audit was described as “nationwide,” the map of the entities

   2
      OIG is responsible for auditing and evaluating all of HUD’s
operations. The Office of Native American Programs (“ONAP”) is the
HUD entity responsible for administering NAHASDA programs. OIG’s
report and recommendations were directed to ONAP.
6         CROW TRIBAL HOUSING AUTH. V. HUD

visited shows that OIG performed no on-site visits in the
Northern Plains region, which covers Montana and Crow
Housing. OIG’s “objective was not to audit the tribes but to
assess NAHASDA program performance as a whole.”
During the on-site visits, OIG “tested the accuracy of HUD’s
FCAS data to determine if the Housing Entities received
correct funding.” OIG discovered FCAS inaccuracies, and
determined that HUD had “over funded some Housing
Entities and under funded others.” The report references
recommendations OIG made to ONAP in May 2001, when it
suggested that the office “[a]udit the [FCAS] for all Housing
Entities,” “[r]ecover over funding,” and “reallocate the
recovery to recipients that were under funded.”

    ONAP responded to the recommendations within 60 days:

       The ONAP has taken several actions to ensure
       that tribes are reporting accurate information
       on Formula Current Assisted Stock
       (FCAS). . . . This includes guidances to both
       tribes and Area ONAP staff, the annual
       Formula Response Form and a letter to tribal
       leaders. We have incorporated the monitoring
       of FCAS in our on-site monitoring. However,
       resources are not adequate to provide on-site
       monitoring to each grantee.

    b. HUD’s Correspondence with Crow Housing

    The record contains no evidence that HUD performed on-
site monitoring of Crow Housing in 2001, or at any point
before 2004. But by some means, in 2001 HUD discovered
that from 1998 through 2001, it had overpaid Crow Housing
for lease-to-own units that were no longer eligible for FCAS
          CROW TRIBAL HOUSING AUTH. V. HUD                    7

consideration. In a September 2001 letter, HUD informed
Crow Housing it had been overpaid because several units had
“been conveyed or were eligible for conveyance.” The letter
gave notice to Crow Housing that HUD planned to recover
the overpayments, and that the Tribe should contact HUD
“within 30 days of the date of th[e] letter” if it disagreed.

    Crow Housing did not respond. In January 2002, HUD
sent a second letter indicating it had not heard from the Tribe,
and that it was writing “to confirm . . . agreement with
[HUD’s] information and to determine a repayment plan to
recover any over-allocated funds.” Because it needed to
finalize the matter, HUD informed Crow Housing that if it
did not respond within 30 days, HUD would assume it
acceded to repayment.

    Crow Housing’s silence persisted. In June 2002, HUD
sent a third letter enclosing copies of its two previous letters
and stating that the agency had updated the calculations and
determined the overpayment amount. HUD also set forth a
schedule to recoup that amount through adjustments to Crow
Housing’s grants over the course of five subsequent fiscal
years.

    More than a year passed. In November 2003, Crow
Housing provided its first response on the issue. It requested
copies of the first two HUD letters and indicated it would
“make the substantive argument against HUD’s position”
upon receipt of those letters. HUD supplied copies of its
earlier letters and informed Crow Housing that although it
had made deductions to the Tribe’s 2002 and 2003
allocations, the agency failed to remove the ineligible units
from its subsequent calculations, resulting in continued
overpayments. HUD added the additional overpayments to
8            CROW TRIBAL HOUSING AUTH. V. HUD

the balance—resulting in a total of $1,244,837—and invited
Crow Housing to establish a new repayment plan within 30
days.

       c. On-Site Review and Administrative Appeal

    Crow Housing met with HUD in April 2004 and asked the
agency to suspend the repayment schedule until HUD
performed an on-site review. HUD agreed. In August 2004
it conducted a three-day “on-site monitoring review” of the
Tribe’s FCAS, and determined a new outstanding balance of
$1,300,043 for Crow Housing’s overpayments. In October
2005, HUD informed Crow Housing of its decision and of the
Tribe’s right to appeal. Crow Housing asked HUD to
reconsider, claiming that the agency “unlawfully [sought] to
terminate, reduce and/or limit [the Tribe’s] federal funding.”
Crow Housing did not argue that HUD deprived it of a
hearing, nor did it request one.

       HUD denied Crow Housing’s request for reconsideration.

III.      District Court Proceedings

    Crow Housing filed a complaint in the District of
Montana, alleging that HUD violated NAHASDA by finding
the Tribe to be in “substantial noncompliance” with the Act’s
provisions without offering an opportunity for hearing. Both
parties agreed there had been no hearing, and in February
2013 the district court ruled on the parties’ cross-motions for
summary judgment.

    First, the district court granted partial summary judgment
to HUD, holding that the agency acted within its statutory
authority when it adjusted Crow Housing’s FCAS account.
           CROW TRIBAL HOUSING AUTH. V. HUD                       9

The court concluded HUD properly reduced the number of
FCAS-eligible units under 24 C.F.R. § 1000.318.3 Crow
Housing has not appealed that decision.

    Second, the district court granted partial summary
judgment to Crow Housing, ruling that HUD acted under
25 U.S.C. § 4161 and § 4165 when it sought to recover the
overpayments. The district court concluded that HUD’s
action was arbitrary and capricious because “it violated
[Crow Housing’s] right to NAHASDA’s Notice and Hearing
requirements for substantial noncompliance.” Notably, the
district court held that HUD violated the notice and hearing
requirements under both 25 U.S.C. § 4161(a) and § 4165 and
remanded the matter to HUD for a hearing.4

    HUD timely appealed the second portion of the district
court’s summary judgment ruling. HUD argues that it may
recover overpayments without a formal hearing if it does not
rely on a finding of “substantial noncompliance” under
§ 4161, and further argues that it did not act under 25 U.S.C.
§ 4161 or § 4165 because it exercised its “common law
authority” to recover payments made by mistake. In the
alternative, HUD asserts that even if it did act under § 4165,
Crow Housing was not entitled to a hearing.

   HUD’s recovery of the overpayments it made to Crow
Housing is on hold, pending the outcome of this litigation.

  3
    As discussed, 24 C.F.R. § 1000.318 defines when units no longer
qualify for FCAS consideration.
   4
      Section 4165’s hearing requirement appears in its interpreting
regulation, 24 C.F.R. § 1000.532(b) (2012).
10        CROW TRIBAL HOUSING AUTH. V. HUD

                STANDARD OF REVIEW

    We have jurisdiction under 28 U.S.C. § 1291, and review
de novo a district court’s ruling on summary judgment. CRM
Collateral II, Inc. v. TriCounty Metro. Transp. Dist. of Or.,
669 F.3d 963, 968 (9th Cir. 2012). “We view the evidence in
the light most favorable to the nonmoving party and
determine ‘whether there are any genuine issues of material
fact and whether the district court correctly applied the
relevant substantive law.’” Id. (quoting Trunk v. City of San
Diego, 629 F.3d 1099, 1105 (9th Cir. 2011)).

    We may set aside an agency action “only if it is ‘arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.’” Ranchers Cattlemen Action Legal
Fund United Stockgrowers of Am. v. U.S. Dep’t of Agric.,
499 F.3d 1108, 1115 (9th Cir. 2007) (quoting 5 U.S.C.
§ 706(2)(A)). The standard of review is “‘highly deferential,
presuming the agency action to be valid and affirming the
agency action if a reasonable basis exists.’” Id. (quoting
Indep. Acceptance Co. v. California, 204 F.3d 1247, 1251
(9th Cir. 2000)).

                       DISCUSSION

    This appeal poses a single question: was Crow Housing
entitled to a hearing before HUD took action to recover its
overpayments of NAHASDA funds? The answer to this
question depends on the authority HUD invoked when it
sought to recover the overpayments. HUD’s letters cited 24
C.F.R. § 1000.318(a)(1) and (a)(2) for the authority to adjust
FCAS counts, but they did not indicate the source of HUD’s
authority to recover the overpayments. The district court
concluded that HUD invoked its authority under § 4161 and
           CROW TRIBAL HOUSING AUTH. V. HUD                   11

§ 4165, and that it violated notice and hearing requirements
under both sections. The two sections are the only ones cited
by the parties in the district court and on appeal, and we know
of no other hearing provisions relevant to this case. We
assess the applicability of each section in turn.

I. HUD Did Not Act Under § 4161.

    On appeal, Crow Housing relies on the district court’s
determination that HUD acted under § 4161. When HUD
acts under that section, a grantee tribe is plainly entitled to a
hearing. Subsection 4161(a)(1) requires that HUD take
action if, after notice and an opportunity to be heard, it makes
a finding that a grant recipient is in “substantial
noncompliance”:

        [I]f the Secretary finds after reasonable
        notice and opportunity for hearing that a
        recipient of assistance under this chapter has
        failed to comply substantially with any
        provision of this chapter, the Secretary
        shall—

        (A) terminate payments under this chapter to
        the recipient;
        (B) reduce payments under this chapter to the
        recipient by an amount equal to the amount of
        such payments that were not expended in
        accordance with this chapter;
        (C) limit the availability of payments under
        this chapter to programs, projects, or activities
        not affected by such failure to comply; or
        (D) in the case of noncompliance described in
        section 4162(b) of this title, provide a
12        CROW TRIBAL HOUSING AUTH. V. HUD

       replacement tribally designated housing entity
       for the recipient, under section 4162 of this
       title.

(Emphasis added).

    In 2008, Congress added another subsection to § 4161(a):
“The failure of a recipient to comply with the requirements of
section 4152(b)(1) of this title regarding the reporting of low-
income dwelling units shall not, in itself, be considered to be
substantial noncompliance for purposes of this subchapter.”
Id. § 4161(a)(2) (emphasis added). The Senate Report makes
clear that the 2008 amendment was a clarification, not a
substantive change to the statute:

       Clarification on Availability of
       Administrative Hearing (Amends Section
       401(a) of current law): Under this
       amendment, if a grant recipient is required to
       relinquish overpaid funds due to the inclusion
       of housing units deemed ineligible under
       Section 301, the action does not constitute
       substantial non-compliance by the grantee
       and does not automatically trigger a formal
       administrative hearing process.           The
       amendment has been included due to the
       significant amount of time and resources
       involved in a hearing, which may not be
       necessary when a grant recipient is otherwise
       in compliance with the requirements of the
       Act.

S. Rep. No. 110-238, at 10 (2007) (emphasis added). “We
have long recognized that clarifying legislation is not subject
          CROW TRIBAL HOUSING AUTH. V. HUD                  13

to any presumption against retroactivity and is applied to all
cases pending as of the date of its enactment.” ABKCO
Music, Inc. v. LaVere, 217 F.3d 684, 689 (9th Cir. 2000). We
“honor Congress’[s] clarification label” and accept
§ 4161(a)(2) “as a statement of what the statute has meant all
along.” Id. at 690 (alterations omitted) (quoting Beverly
Cmty. Hosp. Ass’n v. Belshe, 132 F.3d 1259, 1266 (9th Cir.
1997)) (internal quotation marks omitted). We therefore
apply § 4161(a)(2) to HUD’s actions in this case, and analyze
§ 4161 with the understanding that failure to update FCAS
counts “shall not, in itself, be considered to be substantial
noncompliance.”

    The record contains no evidence that HUD found Crow
Housing to be in “substantial noncompliance.” See Fort
Belknap Hous. Dep’t v. Office of Pub. & Indian Hous.,
726 F.3d 1099, 1104–05 (9th Cir. 2013) (holding HUD did
not act under § 4161 where there was no evidence HUD
found substantial noncompliance). Instead, the agency’s
correspondence to Crow Housing repeatedly indicated that
the overpayments were the result of errors, without attributing
those errors to the Tribe. In correspondence dated September
2001, January 2002, and June 2002, HUD stated that the
Tribe “may have incorrectly received funding” for “units
under the Formula Current Assisted Stock (FCAS)
component of the Indian Housing Block Grant (IHBG)
formula.” Even after its 2004 on-site review, HUD continued
to indicate that the Tribe “incorrectly received credit,”
without attributing fault. HUD’s letters did not state that the
Tribe had failed to “substantially comply” with NAHASDA.
In fact, HUD’s February 2004 letter asserted that the agency
itself was partly at fault for the continuation of the
overpayments after a repayment schedule had been put in
place: “[W]e discovered that there was an error made in data
14         CROW TRIBAL HOUSING AUTH. V. HUD

entry and, as a result, the units were not removed from the FY
2002 and 2003 allocations.”

    All of HUD’s letters cited 24 C.F.R. § 1000.318, but that
regulation merely defines when units no longer qualify as
FCAS; none of HUD’s letters mention § 4161 or “substantial
noncompliance” with NAHASDA and none of them seek to
impose the remedies and sanctions listed in § 4161. The
record contains no evidence that HUD tried to terminate
payments, reduce payments in an amount equal to payments
not properly expended,5 limit the availability of payments for
other programs or projects, or provide a replacement housing
entity. See 25 U.S.C. § 4161; Fort Belknap, 726 F.3d at
1105–06 (holding HUD’s administrative offset does not
constitute a § 4161(a)(1) remedy). HUD only attempted to
recover the overpayments through a reduction to future grant
distributions—a remedy consistent with § 4165.

    We conclude that HUD did not act under § 4161, and,
accordingly, could not have violated a hearing requirement
under that section. We therefore turn to whether HUD’s
actions fell under its § 4165 authority.

II.     HUD’s Actions Were Consistent With § 4165.

    HUD disputes that it acted under § 4165, but the record in
this case compels the conclusion that HUD’s actions triggered
the opportunity for a hearing under this statutory provision.

  5
   HUD claimed only that the Tribe “incorrectly received credit,” and
made no determination on whether any NAHASDA funds had been
improperly expended.
         CROW TRIBAL HOUSING AUTH. V. HUD                 15

    Subsections 4165(b) and (d) permit HUD to adjust a
tribe’s grant amount after conducting a review or audit:

       (b) Additional reviews and audits

          (1) In general

          In addition to any audit or review under
          subsection (a) of this section, to the extent
          the Secretary determines such action to be
          appropriate, the Secretary may conduct an
          audit or review of a recipient in order to—

          (A) determine whether the recipient—

              (i) has carried out—

                  (I) eligible activities in a timely
                  manner; and

                  (II) eligible activities and
                  certification in accordance with
                  this chapter and other applicable
                  law;

              (ii) has a continuing capacity to carry
              out eligible activities in a timely
              manner; and

              (iii) is in compliance with the Indian
              housing plan of the recipient; and

          (B) verify the accuracy of information
          contained in any performance report
16         CROW TRIBAL HOUSING AUTH. V. HUD

            submitted by the recipient under section
            4164 of this title.

            (2) On-site visits

            To the extent practicable, the reviews and
            audits conducted under this subsection
            shall include on-site visits by the
            appropriate official of the Department of
            Housing and Urban Development.

        ....

        (d) Effect of reviews

        Subject to section 4161(a) of this title, after
        reviewing the reports and audits relating to a
        recipient that are submitted to the Secretary
        under this section, the Secretary may adjust
        the amount of a grant made to a recipient
        under this chapter in accordance with the
        findings of the Secretary with respect to those
        reports and audits.

    HUD’s 2004 on-site review of Crow Housing qualified as
a review of “whether the recipient . . . has carried out . . .
eligible activities and certification in accordance with this
chapter and other applicable law.”             See 25 U.S.C.
§ 4165(b)(1)(A)(i)(II) (emphasis added). Under 24 C.F.R.
§ 1000.315(a), tribes are required to use the Formula
Response Form to make “corrections to the number of
Formula Current Assisted Stock . . . not less than 60 days
from” when HUD mails the form each year. NAHASDA
does not define “eligible activities and certification,” and it is
             CROW TRIBAL HOUSING AUTH. V. HUD                            17

ambiguous whether the term encompasses the reporting
contemplated in § 1000.315(a). But “‘[s]tatutes are to be
construed liberally in favor of the Indians, with ambiguous
provisions interpreted to their benefit.’” Cnty. of Yakima v.
Confederated Tribes & Bands of Yakima Indian Nation,
502 U.S. 251, 269 (1992) (alteration omitted) (quoting
Montana v. Blackfeet Tribe, 471 U.S. 759, 766 (1985)).6
Construing this statutory provision to Crow Housing’s
benefit, we conclude HUD’s 2004 on-site FCAS review
constituted an audit within the meaning of § 4165 to
determine whether the Tribe had carried out “eligible
activities and certification in accordance with this chapter and
other applicable law.” HUD therefore acted consistently with
its authority under § 4165.

    We do not need to decide whether the letters HUD issued
in the wake of the OIG review triggered § 4165 because in
this case, the Tribe specifically requested an on-site review,

  6
    We have previously held that this canon of statutory interpretation, also
referred to as the Blackfeet presumption, gives way under Chevron,
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837
(1984), to the deference courts normally afford to an agency’s
interpretation of a statute it administers. See Artichoke Joe’s Cal. Grand
Casino v. Norton, 353 F.3d 712, 730 (9th Cir. 2003); Haynes v. United
States, 891 F.2d 235, 239 (9th Cir. 1989). However, where the agency’s
interpretation is not the result of its formal resolution of the question and
is merely a litigating position, as here, Chevron deference does not apply.
See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 212–13 (1988);
United States v. Able Time, Inc., 545 F.3d 824, 836 (9th Cir. 2008). Our
interpretation is therefore guided by the Blackfeet presumption and not by
Chevron deference. Even if HUD’s interpretation of its actions was
entitled to some deference under Skidmore v. Swift & Co., 323 U.S. 134
(1944), its “power to persuade” would be minimal due to the lack of any
formal or thorough interpretive process. See United States v. Mead Corp.,
533 U.S. 218, 227–31, 235 (2001).
18          CROW TRIBAL HOUSING AUTH. V. HUD

and HUD agreed to conduct one. Further, the record shows
that the “on-site monitoring of the Tribe’s [FCAS]” spanned
three days, during which HUD “examined projects on an
individual unit basis, looking at the status of occupancy,
payment, title, and related issues.” HUD’s review appears to
have been both substantive and detailed. Based on the results
of that review, HUD adjusted Crow Housing’s overpayment
balance. Significantly, instead of imposing § 4161 sanctions
(such as terminating payments, reducing payments by the
amounts not properly expended, or limiting availability of
payments to programs), HUD requested as a means of
repayment “adjust[ment of] the amount of a grant” based on
“the findings” from the review. See 25 U.S.C. § 4165(d). On
this record, we have no trouble concluding that HUD
triggered § 4165 when it conducted the on-site review of
Crow Housing in August 2004.7

    Our conclusion is entirely consistent with the decision of
the Court of Federal Claims in Lummi Tribe v. United States,
106 Fed. Cl. 623 (2012). Lummi involved a strikingly similar
factual pattern: after the 2001 OIG audit, HUD notified three
tribes that it had overpaid them due to inaccurate FCAS
counts. Id. at 624–25. Without conducting hearings, it
sought to recover the overpayments by deducting them from
future grant allocations. Id. at 625. After the tribes filed suit,

  7
    The district court reasoned that HUD acted pursuant to § 4165 because
HUD discovered Crow Housing’s FCAS inaccuracies as a result of the
2001 OIG audit. Although we agree that the OIG audit and HUD’s
actions in this case were temporally correlated, it is not clear from the
record that the actions here were a direct result of the 2001 audit. First,
the goal of the review conducted by OIG “was not to audit the tribes but
to assess NAHASDA program performance as a whole.” Second, the OIG
report expressly stated that it reviewed no entities in Montana, where
Crow Housing is located.
          CROW TRIBAL HOUSING AUTH. V. HUD                   19

HUD moved to dismiss, claiming it was not required to offer
a hearing before attempting to recapture the funds. Id. The
Court of Federal Claims concluded that when “HUD acted
pursuant to an audit conducted at the direction of HUD’s
Office of Inspector General,” its action fell within § 4165. Id.
at 630. Specifically, the court suggested that HUD’s actions
constituted a review of “whether the recipient has carried out
eligible activities . . . in accordance with this chapter and
other applicable law.” Id. And because § 4165’s
implementing regulations included an express hearing
requirement, see 24 C.F.R. § 1000.532 (2012), the court
denied HUD’s motion to dismiss. Id. at 634.

    As it does here, HUD claimed in Lummi that it acted
through its inherent, common law authority to recover
payments made by mistake. Id. at 629. The Court of Federal
Claims rejected that argument, as do we:

       Because we conclude that Section [4165]
       applies in the instant case, we further
       conclude that HUD was not free to disregard
       the requirements of that section in favor of a
       common law remedy with no apparent rules
       or limitations. Resort to federal common law
       is appropriate only when a statute does not
       speak to the issue. But where, as here,
       Congress has spoken to the question, HUD
       may not circumvent that statutory scheme.

Id. at 631–32 (footnote and citations omitted).

   In support of its common law claim in this appeal, HUD
points to Fort Belknap Housing Department v. Office of
Public and Indian Housing, 726 F.3d 1099 (9th Cir. 2013).
20          CROW TRIBAL HOUSING AUTH. V. HUD

Fort Belknap also involved a situation where HUD
discovered it had overpaid a tribe based on inaccurate FCAS
data, addressed the issue in several letters, and received no
response from the recipient tribe for an extended period. Id.
at 1101–03. When the tribe did respond, HUD decided to
recover overpayments through deductions from future
allocations and, in its final agency action, denied the tribe’s
request for an administrative appeal and reconsideration. Id.
at 1102–04. Unlike Crow Housing, the Fort Belknap tribe
appealed directly to this court, invoking NAHASDA’s special
jurisdiction provision under § 4161(d).8 Id. at 1104.

     The narrow issue resolved in Fort Belknap was whether
our court had jurisdiction to consider the tribe’s direct appeal.
Our court reasoned that HUD acts under § 4161(a) only when
it “finds ‘after reasonable notice and opportunity for hearing
that a recipient of assistance . . . has failed to comply
substantially’ with some provision of NAHASDA.” Id.
(emphasis added) (quoting 25 U.S.C. § 4161(a)(1)). Notably,
in Fort Belknap HUD did not attempt to impose any of the
remedies or sanctions allowed under § 4161; it only sought to
recover overpayments through an administrative offset. Id.
at 1104–06. Because HUD asserted it had overpaid the tribe
due to inaccurate FCAS counts and never made a finding of
“substantial noncompliance,” we concluded that it did not act
pursuant to § 4161(a) when it sought to recover
overpayments, and held that our court lacked jurisdiction to
hear Fort Belknap’s appeal. Id.

  8
     Subsection 4161(d)(1) provides that a recipient tribe may directly
appeal to a circuit court of appeals when it receives notice of agency
action under § 4161(a).
            CROW TRIBAL HOUSING AUTH. V. HUD                        21

    Here, HUD persuasively argues that it did not act under
§ 4161 because it never suggested that Crow Housing was in
substantial noncompliance, but we do not agree that Fort
Belknap precludes the possibility that HUD’s actions
triggered § 4165, as it argues on appeal. Fort Belknap’s
limited holding only addressed the source of this court’s
jurisdiction. It has no bearing on whether HUD’s actions
triggered § 4165 in this instance.9

III.    HUD Did Not Violate A Hearing Requirement
        Under § 4165.

    Having determined that HUD’s actions triggered § 4165
in this instance, we turn to whether it violated either of
§ 4165’s two hearing requirements. Subsection 4165(d)
provides for a hearing “[s]ubject to section 4161(a).” For the
reasons discussed above, we conclude this hearing
requirement was not triggered because HUD did not act
“[s]ubject to section 4161(a).” We agree with the Court of
Federal Claims that § 4165(d)’s introductory phrase
“indicat[es] that compliance issues must be addressed under
Section 401 and not under Section 405” and “excludes the

 9
   Fort Belknap suggested that HUD acted under common law authority.
Id. at 1105. HUD relies on that dicta in this appeal, but HUD does not
explain why a hearing would not be required under common law. Because
we conclude that HUD’s audit triggered § 4165, we do not reach the
question whether HUD could have acted pursuant to the common law, but
we again note Lummi’s persuasive rejection of that theory. See 106 Fed.
Cl. at 631–32.
22         CROW TRIBAL HOUSING AUTH. V. HUD

scope of Section 401 from Section 405.”10 Lummi, 106 Fed.
Cl. at 632.

    The second hearing requirement lies in § 4165’s enabling
regulation: 24 C.F.R. § 1000.532(b) (2012). See id. at 633
(observing that § 4165’s hearing requirement is in 24 C.F.R.
§ 1000.532 (2012)). Section 1000.532 (2012) was in effect
at the time of HUD’s actions in this case, and it was titled
“What are the adjustments HUD makes to a recipient’s future
year’s grant amount under section 405 of NAHASDA?” That
regulation provided:

        (a) HUD may, subject to the procedures in
        paragraph (b) below, make appropriate
        adjustments in the amount of the annual
        grants under NAHASDA in accordance with
        the findings of HUD pursuant to reviews and
        audits under section 405 of NAHASDA.
        HUD may adjust, reduce, or withdraw grant
        amounts, or take other action as appropriate in
        accordance with reviews and audits, except
        that grant amounts already expended on
        affordable housing activities may not be
        recaptured or deducted from future assistance
        provided on behalf of an Indian tribe.[11]

 10
    Section 405 of NAHASDA refers to 25 U.S.C. § 4165; Section 401
refers to 25 U.S.C. § 4161. See Native American Housing Assistance and
Self-Determination Act of 1996, Pub. L. No. 104-330, 110 Stat. 4016.
   11
      Crow Housing does not argue that it has already expended grant
funds.
          CROW TRIBAL HOUSING AUTH. V. HUD                23

       (b) Before undertaking any action in
       accordance with paragraphs (a) and (c) of this
       section, HUD will notify the recipient in
       writing of the actions it intends to take and
       provide the recipient an opportunity for an
       informal meeting to resolve the deficiency. In
       the event the deficiency is not resolved, HUD
       may take any of the actions available under
       paragraphs (a) and (c) of this section.
       However, the recipient may request, within 30
       days of notice of the action, a hearing in
       accordance with § 1000.540. The amount in
       question shall not be reallocated under the
       provisions of § 1000.536, until 15 days after
       the hearing has been held and HUD has
       rendered a final decision.

       (c) Absent circumstances beyond the
       recipient’s control, when a recipient is not
       complying significantly with a major activity
       of its [Indian Housing Plan], HUD shall make
       appropriate adjustment, reduction, or
       withdrawal of some or all of the recipient’s
       subsequent year grant in accordance with this
       section.

(Emphasis added).

    Subsection 1000.532(b) (2012) plainly provided for a
hearing only if the tribe “request[s one], within 30 days of
notice of the action.” HUD argues that even if it did act
under § 4165 and § 1000.532(b) (2012), it did not violate any
hearing requirements because Crow Housing did not request
a hearing. We agree. Crow Housing’s briefing points to no
24        CROW TRIBAL HOUSING AUTH. V. HUD

such request, it was unable to identify any request at oral
argument, and we could find none in the record. Because
Crow Housing did not request a hearing, we cannot say that
HUD violated its statutory obligation under § 4165, and we
hold that HUD did not improperly deprive Crow Housing of
a hearing under the facts of this case.

                     CONCLUSION

   The district court erred by ruling that HUD violated Crow
Housing’s right to NAHASDA’s notice and hearing
requirements under § 4161 and § 4165. We therefore
VACATE the district court’s order remanding the case to
HUD for a hearing, REVERSE the district court’s judgment,
and REMAND for judgment to be entered in favor of HUD.

     VACATED, REVERSED, AND REMANDED.