1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 TIMOTHY CARR SEWARD Hobbs, Straus, Dean & Walker, LLP 400 Capitol Mall, 11 th Floor Sacramento, CA 95814 Phone: (916) 442-9444 California State Bar # 179904 GEOFFREY D. STROMMER (pro hac vice) Oregon State Bar #93110 EDMUND CLAY GOODMAN (pro hac vice) Oregon State Bar #89250 Hobbs, Straus, Dean & Walker, LLP 806 S.W. Broadway, Suite 900 Portland, OR 97205 Phone: (503) 242-1745 Attorneys for the Susanville Indian Rancheria UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA SUSANVILLE INDIAN RANCHERIA, ) Plaintiff ) ) vs. ) ) MIKE LEAVITT, et al., ) Defendants. ) ) ) ) ) ) ) CASE NO. 2:07-cv-259-GEB-DAD PLAINTIFF’S REPLY TO DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION Hearing time: 2:00 P.M. Hearing date: February 26, 2007 Courtroom: No. 10 (13 th Floor) Judge: Garland E. Burrell Cover Page Case 2:07-cv-00259-GEB-DAD Document 23 Filed 02/22/2007 Page 1 of 22
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TIMOTHY CARR SEWARD Hobbs, Straus, Dean & Walker, LLP 400 Capitol Mall, 11th Floor Sacramento, CA 95814 Phone: (916) 442-9444 California State Bar # 179904 GEOFFREY D. STROMMER (pro hac vice) Oregon State Bar #93110 EDMUND CLAY GOODMAN (pro hac vice) Oregon State Bar #89250 Hobbs, Straus, Dean & Walker, LLP 806 S.W. Broadway, Suite 900 Portland, OR 97205 Phone: (503) 242-1745 Attorneys for the Susanville Indian Rancheria
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF CALIFORNIA
SUSANVILLE INDIAN RANCHERIA, ) Plaintiff ) ) vs. ) ) MIKE LEAVITT, et al., ) Defendants. ) ) ) ) ) ) )
CASE NO. 2:07-cv-259-GEB-DAD PLAINTIFF’S REPLY TO DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION Hearing time: 2:00 P.M. Hearing date: February 26, 2007 Courtroom: No. 10 (13th Floor) Judge: Garland E. Burrell
Cover Page
Case 2:07-cv-00259-GEB-DAD Document 23 Filed 02/22/2007 Page 1 of 22
Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction i
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TABLE OF CONTENTS
Introduction…………………………………………………………………………………1 I. Tribe’s Right to “Immediate Injunctive Relief”………………………………………….1
II. The Tribe is Entitled to Injunctive Relief to Protect its Rights Under Title V………….3
a. Defendants’ Proposal Does Not Negate the Need for nor the Court’s Authority to Order Execution of the Tribe’s Title V Compact and FA………………………………………………………….3 b. The Tribe will be Harmed if Deprived of its Right to a Title V Compact and FA While Summary Judgment is Pending…………………………………………………………………………6
III. The Tribe is Likely to Succeed on the Merits………………………………………….8
a. Distinctions Between Title I and Title V of ISDEAA…………………………8
b. The Title V Compacting Process Provides Enhanced Protection for Tribes………………………………………………………………9 c. Defendants’ Reliance on Title V Rejection Criterion Fails to Meet Applicable Legal Standards………………………………………..10 d. ISDEAA Contains No Prohibition Against Tribes Charging Co-pays…………………………………………………………………13
Conclusion…………………………………………………………………………………..16
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Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction ii
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TABLE OF AUTHORITIES
Case Law Atchison, Topeka and Santa Fe Ry. v. Lennen, 640 F.2d 255, 259-61 (10th Cir.1981))……………………………………………………………………………...2 BedRoc Ltd., LLC v. U.S., 541 U.S. 176, 183 (2004)………………………………...14
Brown v. Gardner, 513 U.S. 115, 117-18 (1994)…………………………………….13, 14, 16
Burlington N. R.R. Co. v. Bair, 957 F.2d 599, 601 (8th Cir.1992)……………………2
Christensen v. Harris County, 529 U.S. 576,587 (2000)…………………………….15
Crownpoint Institution of Technology v. Gale Norton, Civ. No. 04-531 JP/DJS, Findings of Fact and Conclusions of Law (Appendix A to brief)...…………………..2 De la Fuente v. F.D.I.C., 332 F.3d 1208, 1219 (9th Cir. 2003).....................................8, 12
Fortis, Inc. v. U.S., 420 F.Supp.2d 166, 181 (S.D.N.Y., 2004)………………………13
Jarecki v. G.D. Searle & Co., 367 U.S. 303, 307-08 (1961)…………………………14
Lincoln v. Vigil, 508 U.S. 182, 198-199 (1993)...........................................................12
Lorillard v. Pons, 434 U.S. 575, 580-83 (1978)……………………………………..15, 16
Nizhoni Smiles v. IHS, DAB No. CR450, Docket No. C96-029 (Dec. 19, 1996)……15
Northwest Envt'l Defense Center v. Bonneville Power Admin., -- F.3d --, 2007 WL 163102, *14 (9th Cir. 2007)………………………………………………………8 Shoshone-Bannock Tribe of the Fort Hall Reservation v. Shalala, 988 F. Supp. 1306, 1313-1318 (D. Or. 1997)………………………………………………………10 Trailer Train Co. v. State Bd. of Equalization, 697 F.2d 860, 869 (9th Cir. 1983)…...2
U.S. v. LSL Biotechnologies, 379 F.3d 672, 679 (9 Cir. 2004)……………………..14 th
U.S. v. Estate Preservation Services, 38 F.Supp.2d 846, 850 (E.D. Cal. 1998)……...2
Zuber v. Allen, 396 U.S. 168, 185 (1969)……………………………………………15
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Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction iii
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Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction iv
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Legislative History
H.R. Rep. No. 106-477……………………………………………………………....8, 9 Sen. Rep. No. 106-221……………………………………………………………….9 Pub.L. No. 106-260, 114 Stat. 711, 731 (2000)……………………………………...9 Hearing on S. 979 Before the Senate Comm. on Indian Affairs, 106th Congress, 1st Sess. (prepared statement of Michael Lincoln, Deputy Director, Indian Health Service)…11 Other Federal Rule of Evidence 408 ………………………………………………………7 Felix S. Cohen, Cohen's Handbook of Federal Indian Law, §22.02[3], at 1349-50 (2005 ed.)…………………………………………………………………………………...9
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Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction 1
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Introduction
Defendants’ opposition avoids the fundamental issue in this case: that by requiring the
Tribe, as a condition of obtaining its proposed Compact and Funding Agreement (FA), to accept
restrictions on the manner in which it operates its pharmacy program, Defendants have deprived
and continue to deprive the Tribe of rights guaranteed by Title V of ISDEAA. Their argument is
based entirely on an expressed willingness to stipulate to a continued extension of the Tribe’s
Title I Contract and Annual Funding Agreement (AFA), which does not address the harm to the
Tribe and which would render a nullity the ISDEAA provision that authorizes the Tribe to obtain
“immediate injunctive relief” in these circumstances. Under ISDEAA and the applicable case
law, the Court is empowered to order Defendants to execute the Tribe’s Title V agreements
(whose language is silent on the billing issue), so as to prevent Defendants from continuing to
hold the Tribe’s Title V rights in abeyance. Defendants’ assertion that their proposal negates the
Court’s authority to issue such preliminary relief is contrary to the ISDEAA’s statutory
framework, blurs the distinctions between Title I and Title V, and, despite Defendants’ argument
to the contrary, requires evaluation of the likelihood of success on the merits.
I. Tribe’s Right to “Immediate Injunctive Relief”
ISDEAA authorizes this Court to “order appropriate relief . . . against any action by an
officer of the United States or any agency thereof contrary to this subchapter or regulations
promulgated thereunder,” and specifically includes mandamus and “immediate injunctive relief.”
25 U.S.C. § 450m-1(a) (emphasis added) (made applicable to Title V by 25 U.S.C. § 458aaa-
10(a)). Mandamus and immediate injunctive relief are appropriate where, as here, Defendants
unlawfully seek to impose conditions on the Tribe’s exercise of its rights under Title V.
Case 2:07-cv-00259-GEB-DAD Document 23 Filed 02/22/2007 Page 6 of 22
Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction 2
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As a matter of equity, when a statute expressly provides for such preliminary injunctive
relief, a plaintiff is entitled to such relief upon a showing that defendants seek to unlawfully
impose certain burdens in violation of the statute, with no further requirement to balance the
traditional equities. See, e.g., Trailer Train Co. v. State Bd. of Equalization, 697 F.2d 860, 869
(9 Cir. 1983) (issuing preliminary injunction against imposition of tax, and finding that “th [t]he
standard requirements for equitable relief need not be satisfied when an injunction is sought to
prevent the violation of a federal statute which specifically provides for injunctive relief”) (citing
Atchison, Topeka and Santa Fe Railway v. Lennen, 640 F.2d 255, 259-61 (10th Cir.1981)).
Accord U.S. v. Estate Preservation Services, 38 F.Supp.2d 846, 850 (E.D. Cal. 1998) (issuing
preliminary injunction without balancing harms “[b]ecause [the statute in question] expressly
authorizes the issuance of an injunction, the traditional requirements for equitable relief need not
be satisfied”); aff’d 202 F.3d 1093, 1098 (9 Cir. 2000). th In ISDEAA, Congress has already
balanced the equities and determined that an injunction should issue if Defendants are attempting
to impose restrictions contrary to the Tribe’s statutory rights. See, e.g., Burlington N. R.R. Co. v.
Bair, 957 F.2d 599, 601 (8th Cir.1992) (“[I]t is not the role of the courts to balance the equities
between the parties” where Congress has already done so in applicable statute).
In an ISDEAA case involving Title I, the U.S. District Court for New Mexico expressly
held that where a tribal organization sought an injunction pursuant to 25 U.S.C. § 450m-1(a),
“[t]he specific mandamus relief authorized by ISDA relieves [the plaintiff tribal organization] of
proving the usual equitable elements including irreparable injury and absence of an adequate
remedy at law.” Crownpoint Institution of Technology v. Gale Norton, Civ. No. 04-531 JP/DJS,
Findings of Fact and Conclusions of Law (attached as Appendix A) at 26, ¶ 30.
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Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction 3
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Thus, the Tribe is entitled to the immediate injunctive relief requested because it can
show a likelihood of prevailing on the merits. Defendants’ proposal, to the contrary, would
make ISDEAA’s “immediate injunctive relief” meaningless, since it would permit IHS to
continue its unlawful behavior – withholding the Title V rights and benefits to which the Tribe is
entitled for reasons not permitted under ISDEAA. Defendants seek to tip the balance of harms
analysis in their favor by incorrectly asserting that their proposal avoids any harm. However, in
this case, where the Tribe is likely to succeed in demonstrating that Defendants’ imposition of
conditions on the Tribe’s proposed language is contrary to ISDEAA, the statutory provision for
injunctive relief renders the irreparable harm analysis moot, and thus negates the foundation of
Defendants’ opposition.
II. The Tribe is Entitled to Injunctive Relief to Protect its Rights Under Title V
Defendants’ proposal to maintain the “status quo” is intertwined with their position on
the merits, which improperly blurs significant distinctions between ISDEAA’s Title I and Title
V. Under Title V, in the circumstances presented by this case, the Tribe is entitled to have the
Court order that the proposed Compact and FA go into effect. Defendants rely on what are
essentially ministerial provisions of Title V’s final offer process to delay providing the Tribe its
substantive right to a signed compact and FA containing the existing pharmacy services program
language, which is silent as to billing. Further, Defendants’ proposed interim relief will result in
ongoing harm by depriving the Tribe of rights and benefits under Title V that are not available
by merely continuing the Title I Contract and AFA.
a. Defendants’ Proposal Does Not Negate the Need for nor the Court’s Authority to Order Execution of the Tribe’s Title V Compact and FA
Defendants’ assertion that their “status quo” proposal negates the court’s authority to
issue the requested preliminary relief (as well as the need for such relief) is based on an
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Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction 4
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impermissibly narrow reading of the Title V “final offer” process, and cites to regulations that
are inapposite.1 Under 25 U.S.C. §458aaa-6(b), where there is a dispute, the Tribe may make a
“final offer” to the Secretary. Here, there was a dispute, but with respect to the pharmacy
language it was not over any specific, severable language in the proposed Compact and FA. The
language concerning pharmacy services in the Compact and FA was substantially the same as the
language previously agreed to for such services in the Title I Contract and AFA, and such
language is silent about billing beneficiaries. Declaration of Jim Mackay, Exh. A (Feb. 8, 2007).
The language simply includes a pharmacy services program as part of the programs the Tribe can
continue to operate. Id. at 5.
In such circumstances, the statute does not require, as Defendants assert, that the Tribe
submit as part of its final offer the “severable portions of the proposed compact and funding
agreement.” See Defendants’ P.I. Opp. at 6.2 Rather, §458aaa-6(c)(1)(D) imposes a duty on the
Secretary to offer an option to the Tribe, upon rejecting the Tribe’s final offer, of entering into
the severable portions of the proposed Compact and FA consistent with Title V. Here, the
Secretary did not offer a severable portion for execution, but rather offered the Tribe the option
of either (1) including an overt statement that the Tribe would not be charging for pharmacy
services, or (2) deletion of all of the language describing pharmacy services from the FA
1 Defendants assert that “Susanville’s confusion may stem from the Title V regulations that provide that if the Secretary fails to respond to a tribe’s final offer, then the final offer is accepted as a matter of law.” Defendants’ P.I. Opp. at 8. There is no “confusion” on the Tribe’s part – the Tribe’s position is based not on the regulation cited by Defendants (42 C.F.R. §137.136), but on the statutory framework itself and the Tribe’s rights thereunder. 2 Defendants’ reliance on purported longstanding agency practice asserted by Dennis Heffington in his Declaration is incorrect. As explained by the attorney for one of the tribes (“Riverside”) whose negotiation process Mr. Heffington discusses, the Riverside situation was very different from the circumstances here, and the “final offer” process is not necessarily the same in all circumstances. Declaration of Myra Munson, at ¶ 3 (February 22, 2007). Moreover, the Tribe did in fact use the process Mr. Heffington describes for one of the issues in dispute for which the process made sense. The Tribe did submit separately one of the issues that remained in dispute – Article II, Section 2 of the Compact relating to compact provisions superseding FA provisions. See Grim Letter, Exhibit D to Declaration of Jim Mackay (Feb. 8, 2007), at pp. 6-7.
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Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction 5
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altogether. Either option held hostage the signing of the Tribe’s Title V Compact and FA unless
the Tribe gave in to IHS’ unlawful demands that the Tribe not charge co-pays.3
The requirement imposed on the Secretary here must be read in pari materia with the
entire § 458aaa-6. This section, first, requires that the Secretary’s rejection of the final offer
must include “a timely written notification to the Indian tribe that contains a specific finding that
clearly demonstrates, or that is supported by a controlling legal authority” that one of the four
permissible rejection criteria is present. 25 U.S.C. §458aaa-6(c)(1)(A) (emphasis added). The
Secretary’s rejection, as discussed below, fails to meet this statutory requirement. The
purportedly “severable” portion offered by the IHS is in fact a requirement that the Tribe add
new language that would expressly prohibit the Tribe from charging beneficiaries for pharmacy
services, or to delete the pharmacy provision altogether. In fact, if the Tribe had accepted either
of the options that the IHS offered, all the negative consequences to its pharmacy program that
the Tribe sought to avoid would have followed. The options were, thus, in effect false choices
that violate the statute. Title V does not require the Tribe to choose either of these false options,
and its refusal to do so does not allow the Secretary to circumvent the other substantive
requirements of this section. See 25 U.S.C. § 458aaa-6(c)(2) (describing procedure that must be
followed if Tribe chooses the severance option).
The severance option is in fact one of three options that the Tribe has under § 458aaa-
6(c)(1). The Tribe may also request an administrative hearing on the record with full discovery
and appeal rights, or the Tribe, in lieu of filing such an appeal, may “directly proceed to initiate
3 Defendants’ proposal for interim relief (continuation of the Title I Contract in its entirety) is in fact is not consistent with its argument here. If indeed the pharmacy services portion were severable, and Defendants’ proposal sought to protect the status quo, their offer should have involved executing the Compact and FA for all provisions except the pharmacy program, and continuing the pharmacy program alone under the Title I Contract and AFA. In fact, the Tribe made exactly this offer to the IHS on several occasions after the January 29 rejection letter was sent but IHS rejected the offer.
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Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction 6
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an action in a Federal district court pursuant to section 450m-1(a) of this title.” 25 U.S.C.
§458aaa-6(c)(1)(C). §450m-1(a), of course, is the provision that permits the Tribe to obtain
“immediate injunctive relief.” What the Tribe’s request for injunctive relief seeks, and to which
it is entitled, is for this court to direct the IHS to sign the Compact and FA and, in doing so, to
prevent IHS from imposing a condition in the pharmacy program language (or requiring its
deletion in its entirety) for reasons contrary to law.
b. The Tribe will be Harmed if Deprived of its Right to a Title V Compact and FA While Summary Judgment is Pending
The Tribe will suffer more than monetary harm if forced to continue operating under an
amendment to the Title I Contract rather than under a Title V Compact, because Title V provides
a number of additional substantive legal rights and flexibility not available under Title I. Here
are some examples.
First, the Tribe would be deprived of its authority to redesign programs and reallocate
funds among programs without the administrative burden of Secretarial approval or review. See
Finally, Defendants’ proposal could put the Tribe in the position of having to re-open
those provisions of the Compact and FA that were already agreed to in a lengthy, drawn out,
costly (to the Tribe) and difficult negotiation process that took the better part of a year to
conclude.
In sum, defendants’ proposal to continue the Title I agreements does not mitigate the
potential harms to be suffered by the Tribe if the Compact and FA are not executed and
implemented.5 At the same time, the Defendants have demonstrated absolutely no prejudice or
harm that would occur to them if the Compact and FA are signed and made effective. In fact, the
Defendants’ proposal to continue the Title I agreements has the exact same affect for
Defendants, as both the Title I agreements and the proposed Title V Compact and FA are silent
as to whether the Tribe may bill beneficiaries. More to the point, however, is that the traditional
equities are not relevant where, as here, the Tribe is likely to succeed on the merits in
demonstrating that Defendants’ rejection violates the ISDEAA.
4 In this respect, Defendants incorrectly assert that “Susanville has the option of seeking the recovery of lost interest as an element of damages.” Defendants’ P.I. Opp. at 5. Presumably Defendants are referring to the Tribe’s right to collect lost interest pursuant to the Prompt Payment Act (“PPA”), 31 U.S.C. § 3901 et seq. However, the Tribe’s rights under the PPA would not accrue until the date the Compact and FA go into effect, because until that date the Tribe will not have the right to be paid 100% of its available funds. 5 We note that Defendants’ brief, in relaying statements made in compromise negotiations on the preliminary injunction motion (in apparent violation of Federal Rule of Evidence 408), misrepresented those negotiations. The Tribe did not flatly reject Defendants’ proposal to extend the entire Title I Contract and AFA as the Defendants state; rather, the Tribe’s attorney made a counterproposal that Defendants recognize and affirm the completed Title V Compact and FA, explaining in the process the various benefits and safeguards that this would provide to the Tribe and the lack of prejudice and harm that the Defendants would bear. Defendants’ rejection of the Tribe’s counterproposal indicated, as the Tribe’s attorneys feared, that IHS continues to entertain the possibility of reopening negotiations on the entire Compact and FA.
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Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction 8
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III. The Tribe is Likely to Succeed on the Merits
Defendants’ proposed method for preserving the status quo begs the question of
likelihood of success on the merits, and that question is now squarely before the Court.
Defendants’ position on the merits has already been set forth in IHS’ response to the Tribe’s final
offer (attached as Exhibit D to Declaration of Jim Mackay, Feb. 8, 2007, hereafter “Grim
Letter”). It is appropriate for the Court to look at the Grim Letter for the description of
Defendants’ position on the merits, since the Court “can uphold an agency's decision only on the
basis of the reasoning in that decision.” De la Fuente v. F.D.I.C., 332 F.3d 1208, 1219 (9th Cir.
2003); accord Northwest Envt'l Defense Center v. Bonneville Power Admin., -- F.3d --, 2007 WL
163102, *14 (9th Cir. 2007) (agency is bound by reasoning in its administrative decision and may
not marshal “other reasons for its decision” before the court). The Grim Letter, as with
Defendants’ proposal for interim relief, inappropriately conflates the distinct provisions of Title I
and Title V of ISDEAA.
a. Distinctions Between Title I and Title V of ISDEAA
ISDEAA was originally enacted in 1974 to provide tribes a means by which to govern
themselves without overly burdensome federal oversight. Title I allows tribes to contract with
Interior and HHS to operate certain of those agencies' programs. However, years of practice
revealed that Title I lacked the flexibility needed for tribes to fully break away from the
cumbersome federal bureaucracy. See H.R. Rep. No. 106-477, at 63-64 (November 17, 1999),
reprinted in 4 U.S.C.A.A.N. 573, 596-597. Self-governance compacting (under Titles IV and V)
was therefore enacted to permit tribes to take direct control over federal programs and enable
them to "more efficiently and more innovatively" run those programs than they would be run
under federal control. H.R. Rep. No. 106-477, at 66 (November 17, 1999), reprinted in 2000
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Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction 9
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U.S.C.A.A.N. 573, 600. Moreover, Congress intended for Title V to bolster the Congressional
policy of strengthening and promoting tribal governments because they will benefit from the
"flexibility inherent in the program that enables [tribes] to tailor the programs to local needs" and
thus provide direct accountability to their members. Sen. Rep. No. 106-221, at 3 (November 9,
1999). Congress’ intentions in Title V were summarized by Representative George Miller:
[Under Title I], [a]ll Indian tribes have a enjoyed similar but lesser right to contract and operate individual IHS programs and functions . . . [Title V] give[s] Indian tribes who meet certain criteria the right to take over the operation of IHS functions [thereby] remov[ing] needless and sometimes harmful layers of federal bureaucracy that dictate Indian affairs.
H.R. Rep. No. 106-477, at 65-66 (November 17, 1999), reprinted in 2000 U.S.C.A.A.N. 573,
599-600 (emphasis added). By amending ISDEAA to create the self-governance program under
Title V, Congress sought to allow participating tribes the maximum flexibility possible to
conduct programs and services once provided by the IHS and to maximize tribal administration
and control of programs.
b. The Title V Compacting Process Provides Enhanced Protection for Tribes
A critical part of the new approach under Title V was the compacting process,
including a significant narrowing of the grounds that the Secretary could rely on to refuse to
compact with tribes. The criteria for rejecting a final offer under Title V at § 458aaa-6(c)(A) are
far different than the criteria for declining a contract proposal under Title I at § 450f(a)(2). Nor
are they interchangeable, as the Grim Letter suggests by its heavy reliance on an ALJ decision
that involved a Title I declination. Central to Title V is the requirement that the Secretary, when
he decides to reject a final offer, clearly demonstrate or otherwise provide “controlling legal
authority” that his decision is based on one of the four criteria set out in 25 U.S.C. § 458aaa-
6(c)(1)(A); accord 42 C.F.R. § 137.140. A decision based on any other criterion is not lawful
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Plaintiff’s Reply to Defendants’ Opposition To Plaintiff’s Motion for Preliminary Injunction 10
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under the statute. Further, when defending his decision in court, the Secretary bears the burden
of proof by “clear and convincing evidence” to establish the validity of asserting the specific
criterion asserted for rejecting the Tribe’s final offer, 25 U.S.C. § 458aaa-6(d), and his decision
is not entitled to any judicial deference. Shoshone-Bannock Tribe of the Fort Hall Reservation v.
Shalala, 988 F. Supp. 1306, 1313-1318(D. Or. 1997).
c. Defendants’ Reliance on Title V Rejection Criterion Fails to Meet Applicable Legal Standards
In the present case, Defendant Grim asserted the third enumerated criterion to reject the
Tribe’s proposed pharmacy services language: “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.” 25 U.S.C. 458aaa-6(c)(1)(A)(iii). This is the only criterion
that allows the IHS to reject a final offer due to the “manner” in which a tribe will conduct the
program, which is the basis of the IHS’ objection to the Tribe’s pharmacy program. Defendants
thus have the burden of proving by clear and convincing evidence that permitting the Tribe to
charge a co-pay would “result in significant danger or risk to the public health.” Defendants
make no attempt to demonstrate such danger or risk. Rather, they point to other, inapplicable
statutory provisions to make the argument – unsupported by ISDEAA – that IHS may reject a
tribal program involving co-pays because the IHS cannot charge such co-pays.
The Grim Letter, for example, asserts (at p. 2) that §§ 458aaa-4(b)(1) and (2) require a
tribe to administer a program in the same manner that the IHS is authorized to administer the
program. Defendants’ reliance on these provisions is misplaced. Section 458aaa-4(b)(1)
authorizes tribes to plan, conduct, consolidate, administer and receive full tribal share funding for
programs operated by the IHS, “without regard to the agency or office of [IHS]” where such
programs are performed. This provision makes no reference to the manner in which the program
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is operated. Similarly, the words “administered by the DHHS through the IHS and all local . . .
functions so administered” in § 458aaa-4(b)(2) do not address the manner in which a program is
carried out by IHS, but are used to distinguish between (1) IHS programs and (2) programs of
other DHHS agencies “with respect to which Indian tribes or Indians are primary or significant
beneficiaries” but which Congress did not intend to include in Title V. Congress’ intent is
evident on this point because it simultaneously enacted a Title VI of the ISDEAA, along with
Title V, in the Tribal Self-Governance Amendments of 2000 (set out at 25 U.S.C. § 450f note).
See Pub.L. No. 106-260, 114 Stat. 711, 731 (2000); discussed in Felix S. Cohen, Cohen's
Handbook of Federal Indian Law, §22.02[3], at 1349-50 (2005 ed.). Title VI authorizes the
Department of Health and Human Services (DHHS) to conduct a study to determine the
feasibility of including programs administered by other DHHS agencies within the scope of the
tribal self-governance authority.6 The testimony from IHS witnesses before the Senate Indian
Affairs Committee corroborates that the intent of § 458aaa-4(b)(2) was to limit the programs that
tribes could compact to IHS programs, not the manner in which those programs were
administered.7 This section does not provide any authority for IHS to reject a tribal program
based on the manner in which the tribe plans to carry out the program.
In their Opposition to the Tribe’s Motion for Temporary Restraining Order (and at
oral argument on the TRO), Defendants also suggested that the language in 25 U.S.C. §
6 Title VI requires the Secretary to “conduct a study to determine the feasibility of a tribal self-governance demonstration project for appropriate programs, services, functions, and activities (or portions thereof) of the agency,” Pub. L. No. 106-260, § 602(a), 114 Stat. 711, 731 (2000), and defines the term “agency” to mean “any agency or other organizational unit of the Department of Health and Human Services, other than the Indian Health Service.” Id. at § 601(b)(1). 7 See Hearing on S. 979 Before the Senate Comm. on Indian Affairs, 106th Congress, 1st Sess., at 93-96 (prepared statement of Michael Lincoln, Deputy Director, Indian Health Service) (“Last year, Title VI was added to H.R. 1833 to address the Administration’s concerns about moving too quickly to include non-IHS PFSAs without first determining whether other Department of Health and Human Services (HHS) programs should be brought within the scope of this self-governance legislation”).
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458aaa-5(e) supports their rejection. This section, which is the broad authorization for
tribes to redesign and consolidate compacted programs, states that a tribe’s redesign or
consolidation may not “have the effect of denying eligibility for services to population
groups otherwise eligible to be served under applicable Federal law.” Defendants
suggest that the Tribe’s co-pay policy in some manner is a denial of eligibility.
This argument should be rejected outright, because it was not part of the
reasoning included in the agency’s decision in the Grim Letter. De la Fuente, 332 F.3d at
1219. But Defendants’ reliance on this language fails on substantive grounds as well. A
co-pay policy is not an eligibility criterion. IHS suggests that the co-pay policy might
deny otherwise eligible individuals access (without providing any proof of such an
assertion); even if this were so, which it is not, the IHS’ own regulations make clear that
access is distinct from eligibility. See 42 C.F.R. §§136.11, 12; accord Lincoln v. Vigil,
508 U.S. 182, 198-199 (1993) (distinguishing between denial of access and of eligibility).
But most damning to IHS’ reliance on this language are the facts associated with
the program at issue here. The IHS provides the Tribe with no funds for this pharmacy
program and provides no pharmacy service in the Susanville area which eligible Indian
beneficiaries could access. As IHS’ counsel conceded during the TRO hearing, if the
Tribe did not provide this program, beneficiaries would have to purchase drugs elsewhere
at higher costs. IHS' argument is thus based on an illusion, since there is neither
infrastructure nor funding to provide such services in the manner that the Tribe has been
able to – in a full service, lower-cost, continuum of care health services environment. See