Colorado tribe wins contract support cost dispute

Friday, June 22, 2007  

Even after the U.S. Supreme Court told the Indian Health Service to live up to its promises, the agency has continued to tell tribes there isn't enough money to pay them.

But that policy is unlawful, the Southern Ute Tribe of Colorado argued. Its proposal to take control of an IHS clinic on the reservation was rejected by the agency, whose officials claimed they didn't have enough money to fulfill the agreement.

Last week, Judge William P. Johnson stepped in to resolve the dispute. He said IHS can't deny self-determination contracts based on inadequate appropriations in a 20-page ruling that was hailed by the tribe as a victory for Indian Country.

"Now we can move forward and focus on the best healthcare for our members and the local community," Southern Ute Chairman Clement J. Frost said yesterday.

Frost said the decision will help other tribes who want to take over IHS hospitals and clinics but have been told there isn't enough money to do so. Judge Johnson made it clear that IHS "can no longer stand in the way of tribal self-determination," the chairman said.

The dispute stems from the Indian Self-Determination and Education Assistance Act of 1975. The landmark law authorizes tribes to assume programs -- ranging from health care to social services -- that were previously managed by federal agencies.

The self-determination policy has been a success, with hundreds of tribes entering into contracts and compacts to take control of their destinies. But IHS has never completely fulfilled its promise to pay for the costs of the programs along with additional contract support costs.

In 2005, the Supreme Court ruled that the failure to pay was unlawful. "The government does not deny that it promised to pay the relevant contract support costs. Nor does it deny that it failed to pay," Justice Stephen G. Breyer wrote in the 8-0 decision.

"Its sole defense consists of the argument that it is legally bound by its promises if, and only if, Congress appropriated sufficient funds, and that, in this instance, Congress failed to do so," he continued.

Relying on the decision, Judge Johnson said IHS was wrong to reject the Southern Ute Tribe's contract based on the availability of appropriations. The government's mandates under the self-determination law aren't affected by money, he concluded.

"The mere failure of Congress to appropriate funds, without further words modifying or repealing, expressly or by clear implication, the substantive law, does not in and of itself defeat a government obligation created by statute," Johnson wrote, quoting another precedent.

He also said the agency can't force the tribe to accept an agreement in which the tribe releases the IHS from paying contract support costs. Such a contract would have essentially relinquished the IHS from future lawsuits or damages claims.

At one point, the director for the Southwest area of the IHS emailed the tribe and said the contract "must include language that IHS will not pay CSC, does not promise to pay CSC, that the tribes cannot rely on any promise to pay, and tribes cannot report a failure to receive CSC as a shortfall," Johnson recounted in his June 15 ruling.

At the same time, Johnson noted that the IHS sits "between a rock and a hard place" because its discretion to reject contracts is limited by the self-determination law. But he said the agency has other options to meet its obligations, such as asking Congress for specific earmarks.

Since the Supreme Court ruling, IHS has asked for more contract support funds in its annual budget proposals. So has the Bureau of Indian Affairs, the other main agency for self-determination contracts and compacts. IHS also issued a new contract support policy in April [Indian Health Manual]

But tribes say both agencies are still failing to meet the need. A recent bill in Congress that failed to win enactment sought more than $600 million to address contract support cost shortfalls.

With victory in hand, lawyers for the Southern Ute Tribe hope to draft an order that requires IHS to approve a contract to take over the clinic. The next step in the case will assess damages, if any, to be awarded to the tribe.

Court Decision:
Southern Ute Tribe v. Leavitt (June 15, 2007)

Supreme Court Decision in Cherokee Nation v. Leavitt:
Syllabus | Opinion [Breyer] | Concurrence [Scalia]

Relevant Links:
Southern Ute Tribe - http://www.southern-ute.nsn.us
Indian Health Service - http://www.ihs.gov
Contract Support Cost Litigation - http://www.cscclass.net
Contract Support Costs, NCAI - http://www.ncai.org/Contract_Support.36.0.html