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Supreme Court Backs Alaska Native Entities on Pandemic Funds (2)

June 25, 2021, 2:35 PMUpdated: June 25, 2021, 10:21 PM

Alaska Native corporations are eligible for a share of $8 billion in pandemic relief funding allocated to tribal governments because they qualify as Indian tribes when it comes to the funding, the U.S. Supreme Court ruled.

Several federally-recognized tribes challenged the Treasury Department’s announcement that the Alaskan for-profit, state-chartered corporations would be eligible for the funds prescribed under the March 2020 pandemic aid law known as the CARES Act (Public Law 116-136). The U.S. Supreme Court’s Friday ruling reverses a decision from the U.S. Court of Appeals for the District of Columbia Circuit, which rejected conclusions from both Treasury and a federal district court.

The question for the court was whether the corporations qualify as an “Indian tribe” under the Indian Self-Determination and Education Assistance Act of 1975 (ISDA), which was incorporated into the CARES Act. The law defined Indian tribes as organized groups or communities, including Alaska Native villages, or regional or village corporations, that are “recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.”

Justice Sonia Sotomayor, who wrote the court’s majority opinion, analogized the question to the idea of a restaurant discount designated for all food, including ceviche, that is cooked.

“Like applying a ‘cooked’ requirement to ceviche, applying a ‘federally recognized’ requirement to ANCs is implausible in context,” Sotomayor wrote.

Sotomayor reasoned that, because no Alaska Native village or corporation had been recognized when Congress enacted the ISDA in 1975, reading the law to exclude corporations would mean the clause referring to the corporations “originally had no effect.” That, she said, is a “highly counterintuitive result.”

The framework for Alaska Native corporations was set out through a 1971 law that abolished all but one of the state’s reservations. The corporations are separate from more than 200 Alaska Native villages that are federally-recognized tribes. Village corporations are meant to manage land, funds, and other rights on behalf of Native villages, while regional corporations may provide health, education, and welfare benefits to both Native shareholders and their families.

The corporations had argued not only that they are “Indian tribes” under that statute, but also that they would lose access to other federal programs and services if the high court found otherwise. Tribes said the corporations would need to be federally recognized to qualify under the clear meaning of the text.

Sotomayor’s majority opinion was joined in full by Chief Justice John Roberts and Justices Stephen Breyer, Brett Kavanaugh, and Amy Coney Barrett, and joined in part by Justice Samuel Alito.

Potential Impact

The ANCSA Regional Association and the Alaska Native Village Corporation Association said the ruling is crucial for rebuilding after the Covid-19 pandemic, according to a statement Friday.

“Alaska’s economy is only now starting to recover, and these funds are needed to help our communities get back on their feet,” they said.

Navajo Nation President Jonathan Nez said the case was never about the funds.

The ruling “undermines federally-recognized tribes and will have consequences far beyond the allocation of CARES Act dollars, but we as federally-recognized tribes will continue to stand strong and advocate for our tribal nations,” Nez said in a statement Friday.

The ruling could cause concern over tribal groups getting additional money through their Alaska Native corporations, said Robert Miller, a professor of federal Indian law at Arizona State University. He said the corporations could start applying for federal programs that were typically seen as just for tribal governments.

But in practice the impact may be limited because only one big Alaska Native regional corporation—the Cook Inlet regional corporation—actually engages in ISDA contracting or providing federal government services, according to Matthew L.M. Fletcher, a law professor and director of the Indigenous Law & Policy Center at Michigan State University.

Fletcher said that after a federal appeals court found in Cook Inlet Native Assn. v. Bowen in 1987 that Alaska Native corporations qualify under the ISDA—a decision upheld in the Supreme Court’s Friday ruling—Alaska Native corporations didn’t do much to seek federal dollars under the ISDA that would have caused lots of litigation.

“But if those ANCs decide to enter the field of the provision of tribal governmental services, that might cause a pretty significant change in how Alaska Indian country is governed,” he said.

Erin Dougherty Lynch of the Native American Rights Fund, who represented multiple tribes, said they were “heartened by the fact that” Congress explicitly said federally-recognized tribes were the intended targets in later pandemic relief legislation.

Dissent

Justice Neil Gorsuch took issue with the majority’s reading of the ISDA in a dissent joined by Justices Clarence Thomas and Elena Kagan.

Gorsuch said there was confusion at the time the law was drafted as to whether and which Alaskan entities might ultimately be recognized as tribes. The statute therefore mentioned the Alaskan entities not to include them regardless of whether they were recognized, but rather to account for the possibility that they one day might be, he said.

“It is perfectly plausible to think Congress chose to account for uncertainty in this way; Congress often adopts statutes whose application depends on future contingencies,” he wrote.

Gorsuch noted that over time, most Alaska Native villages went on to win formal federal recognition as Indian tribes, further supporting his reading of the 1975 law.

Among the outside parties who wrote to the Supreme Court about the case were Alaska Republican lawmakers, who said excluding the corporations would hurt indigenous Alaskans.

Sens. Lisa Murkowski and Dan Sullivan and Rep. Don Young together issued a statement on Friday saying the decision “ensures Alaska Natives will continue to benefit from the unique but effective delivery of health care, housing, and many other public services authorized under numerous statutes using ISDA’s definition of an Indian tribe, which the D.C. Circuit ruling threatened to destabilize.”

Gabe Galanda, a partner at indigenous rights law firm Galanda Broadman, said the ruling is specific to the construction of the CARES Act but ignores the indigenous people groups that make up the parties and could potentially further erode indigenous kinship, converting indigenous experiences into commercial entities and transactional bodies.

“There’s no discussion in either the majority opinion or the dissent that we’re talking about indigenous people and populations, there’s no discussion of culture or spirituality,” said Galanda. “It treats them as transactional in nature, not as kinship groups.”

Jeffrey S. Rasmussen of Patterson Earnhart Real Bird & Wilson LLP, who argued on behalf of the tribes, didn’t immediately return a request for comment. Paul D. Clement of Kirkland & Ellis LLP, who argued on behalf of the corporations, also didn’t immediately return a request for comment. The Justice Department declined to comment.

The case is Yellen v. Confederated Tribes of the Chehalis Reservation, U.S., No. 20-543, 6/25/21.

—With assistance from Kaustuv Basu.

(Updated with additional details starting in 12th paragraph. An earlier update added details starting in third paragraph.)

To contact the reporters on this story: Aysha Bagchi in Washington at abagchi@bloombergtax.com; Jeffery Leon in Washington at jleon@bloombergindustry.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Colleen Murphy at cmurphy@bloombergtax.com