Welcome

SCOTUS Considering Effect of Covid Funds Fight on Alaska Natives

April 19, 2021, 5:51 PM

U.S. Supreme Court justices signaled Monday that they are weighing the long-term impacts on Alaska Natives in a dispute over pandemic relief funds.

The for-profit, state-chartered corporations are challenging an appeals court ruling that they can’t get a portion of the $8 billion designated for tribal governments through the CARES Act (Public Law 116-136). Whether the corporations are eligible depends on whether they qualify as an “Indian tribe” under a previous law, the Indian Self-Determination and Education Assistance Act of 1975 (ISDA).

The U.S. Court of Appeals for the District of Columbia Circuit held in September that only federally recognized Indian tribes—as opposed to the corporations—meet that definition, rejecting the conclusions of a district court and the Treasury Department. The litigation has drawn attention to the complexity of tribal governance in Alaska, and raised questions about whether the corporations’ access to other federal programs and services may be in jeopardy.

Justice Sonia Sotomayor brought up those questions at arguments as she considered what it would mean to rule against the corporations.

“How do we rule in a narrow way that affects only the CARES Act and not the many other acts that are involved?” she asked.

Assistant to the Solicitor General Matthew Guarnieri, who argued on behalf of the government, said he thinks the corporations should win in both contexts. He argued that a ruling that the corporations can’t get the pandemic relief funds because of specific language in the CARES Act wouldn’t necessarily call into question their eligibility to be treated as Indian tribes for purposes of the 1975 law.

Justice Brett Kavanaugh referred to claims that many tens of thousands of Native Alaskans would be left out completely, not only from the CARES Act but also from many other social services statutes. Given that context, if it’s correct, he said, why doesn’t that influence the choice justices have to make about how to interpret the text?

Debate Over Text

A large portion of arguments centered on how to interpret the text of the CARES Act as well as the ISDA.

Justice Neil Gorsuch, for example, honed in on how the CARES Act specifically designates these funds for tribal governments, while hearing arguments from Paul D. Clement of Kirkland & Ellis LLP, who represents the corporations.

“To the extent we’re defining a ‘tribal government,’ isn’t that an odd fit for a corporate board?” Gorsuch asked.

“I’m sure there are lower 48 tribes that have some kind of incorporation and some kind of board,” Clement replied. “It’s not like you can’t have a native entity that is governed by a board of directors, which is a very common and ordinary way of referring to it.”

The Justices also questioned Congress’ choice to reference the 1975 law if what it really wanted to do was simply designate the funds for federally-recognized tribes.

“Why do you think the Congress did cross-reference ISDA rather than simply the list of recognized tribes?” Justice Clarence Thomas asked. Gorsuch later repeated that question.

Justice Elena Kagan pushed back on the government’s textual argument that the corporations don’t qualify as tribes under the 1975 law. She said it wasn’t a textual argument, but rather an argument that Congress made a mistake.

“There’s just no grammatical way to read the statue the way you want to read it, no grammatical way, which isn’t to say that’s not what Congress intended,” Kagan said.

While Alaska has more than 200 Alaska Native villages that are federally recognized tribes, a 1971 law abolished all but one of Alaska’s reservations and created the framework for Alaska Native corporations. That includes both village corporations that are meant to manage land, funds, and other rights and assets on behalf of Native villages and regional corporations that may provide health, education, and welfare benefits to Native shareholders and their families.

Jeffrey Scott Rasmussen of Patterson Earnhart Real Bird & Wilson LLP argued on behalf of the tribes.

The cases are Mnuchin v. Confederated Tribes of the Chehalis Reservation, U.S., No. 20-543, arguments 4/19/21 and Alaska Native Village Corp. Ass’n, Inc. v. Confederated Tribes of the Chehalis Reservation, U.S., No. 20-544, arguments 4/19/21.

To contact the reporter on this story: Aysha Bagchi in Washington at abagchi@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Kathy Larsen at klarsen@bloombergtax.com

To read more articles log in. To learn more about a subscription click here.