Shawnee Tribe v. Yellen ( 2022 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_________________________________________
)
THE SHAWNEE TRIBE, )
)
Plaintiff, )
)
v. ) Case No. 20-cv-1999 (APM)
)
JANET L. YELLEN, 1 in her official capacity as )
Secretary of the Treasury, et al., )
)
Defendants. )
_________________________________________ )
)
THE MICCOSUKEE TRIBE OF )
INDIANS OF FLORIDA, )
)
Plaintiff, )
)
v. ) Case No. 20-cv-2792 (APM)
)
UNITED STATES DEPARTMENT )
OF THE TREASURY et al., )
)
Defendants. )
_________________________________________ )
)
PRAIRIE BAND POTAWATOMI NATION, )
)
Plaintiff, )
)
v. ) Case No. 21-cv-0012 (APM)
)
JANET L. YELLEN, in her official capacity as )
Secretary of the Treasury, )
)
Defendant. )
_________________________________________ )
1
Here and in Prairie Band Potawatomi Nation below, pursuant to Rule 25(d) of the Federal Rules of Civil Procedure,
the court substitutes the current Secretary of the Treasury as the defendant in this case.
MEMORANDUM OPINION
I. INTRODUCTION
In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act in response to the COVID-19 public health crisis. The Act created a Coronavirus
Relief Fund, which reserved $8 billion for payments to Tribal governments, leaving the precise
method of allocation to the Secretary of the Treasury. The Department of Treasury ultimately
selected an allocation method in May 2020 that undercounted—as Treasury itself now
acknowledges—the membership of certain Tribes. Three such Tribes brought suit challenging
that methodology. Although initially unsuccessful before this court, one of the Tribes prevailed
in the D.C. Circuit, which ruled that Treasury’s May 2020 allocation methodology was likely
arbitrary and capricious under the Administrative Procedure Act (“APA”) as to certain
undercounted Tribes. Following remand, on April 30, 2021, Treasury announced a new allocation
methodology as to certain undercounted Tribes, resulting in additional distributions of CARES
Act funds, including to the three Plaintiff Tribes.
Despite receiving these additional funds, two Plaintiff Tribes—the Miccosukee Tribe of
Indians of Florida (“Miccosukee”) and Prairie Band Potawatomi Nation (“Prairie Band
Potawatomi”)—continue to challenge Treasury’s allocation methodology. They maintain that not
only was Treasury’s May 2020 allocation arbitrary and capricious under the APA, but so too was
the agency’s April 2021 distribution of additional funds. The third Plaintiff Tribe—the Shawnee
Tribe (“Shawnee”)—is satisfied with its supplemental distribution and has abandoned its legal
challenges.
2
Now before the court are the amended motion for summary judgment brought by
Miccosukee and Prairie Band Potawatomi (“the Tribes” or “Plaintiffs”) and Defendants’ 2 cross-
motion for summary judgment. For the reasons that follow, the court denies Plaintiffs’ motion for
summary judgment and grants Defendants’ cross-motion.
II. BACKGROUND
The court sets forth below the long, complicated factual and procedural history of these
three cases. Some detail is left out in the interest of brevity.
A. 2020 Title V Funding Allocation
In March 2020, Congress passed the CARES Act in response to the developing COVID-
19 public health crisis. CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020). Title V of the
Act amends the Social Security Act and appropriates $150 billion for “payments to States, Tribal
governments, and units of local government,” of which $8 billion was set aside for payments to
Tribal governments. 42 U.S.C. § 801(a)(1), (2)(B). Such payments were to be allocated “based
on increased expenditures of each . . . Tribal government” due to COVID-19, to be “determined
in such manner as the Secretary [of the Treasury] determines appropriate,” “in consultation with
the Secretary of the Interior and Indian Tribes.” Id. § 801(c)(7).
On May 5, 2020, Treasury announced its methodology for allocating the $8 billion in
Title V funds set aside for Tribal governments. Pls.’ Mot. for Summ. J., ECF No. 70 [hereinafter
Pls.’ First MSJ], Ex. H, ECF No. 70-8 [hereinafter 2020 Allocation Methodology], at 2. 3 Tribal
2
Defendants in this consolidated action are Deb Haaland, in her official capacity as Secretary of the Interior; the
Department of the Interior; the Department of the Treasury; Janet Yellen, in her official capacity as Secretary of the
Department of the Treasury; and the United States.
3
Unless otherwise indicated, all references to the docket are in the consolidated action, Shawnee Tribe v. Yellen, 20-
cv-1999 (APM).
3
population would serve as a proxy for a portion of the allocation: “60[%] of the $8 billion reserved
for Tribal governments” would be distributed “immediately based on population”; the remaining
40% would be based on employment and expenditures data. Id. Treasury explained that it
expected “Tribal population . . . to correlate reasonably well with the amount of increased
expenditures of Tribal governments related directly to the public health emergency, such as
increased costs to address medical and public health needs.” Id. at 1. Treasury advised that it
would use “reliable and consistently prepared data” for Tribal population—namely, “Tribal
population data used by the Department of Housing and Urban Development (HUD) in connection
with the Indian Housing Block Grant (IHBG) Program.” Id. at 2. The IHBG data relies on Census
data tied to geographic “formula area[s]” developed by HUD. Id.; 24 C.F.R. § 1000.302. For any
Tribes not included in the IHBG data, Treasury obtained population figures from HUD. 2020
Allocation Methodology at 3. Tribal governments with an IHBG population below 37 were
assigned a “minimum payment of $100,000.” Id.The IHBG population data, however, severely undercounted the enrollment of certain
Tribes. See Pls.’ Am. Mot. for Summ. J, ECF No. 88 [hereinafter Pls.’ Second MSJ], Ex. B, ECF
No. 88-2 [hereinafter 2021 Reallocation Methodology], at 1. Indeed, “several Tribes . . . were
assigned a population of zero, or a low population that approaches zero, for their IHBG formula
areas despite having substantial enrollment.” Id.B. Litigation Arising from the May 2020 Allocation
Three Tribes whose populations were substantially undercounted based on the IHBG
data—all Plaintiffs in this consolidated action—brought suit to challenge Treasury’s reliance on
the IHBG data. See Compl., Prairie Band Potawatomi Nation v. Mnuchin, No. 20-cv-01491
4
(APM) (D.D.C.) [hereinafter Prairie Band Potawatomi I Docket], ECF No. 1 [hereinafter Prairie
Band Potawatomi’s 2020 Compl.]; Compl., ECF No. 2 [hereinafter Shawnee’s Compl.];
Miccosukee Tribe of Indians of Fla. v. U.S. Dep’t of the Treasury, No. 20-cv-02792 (APM)
(D.D.C.) [hereinafter Miccosukee Docket], ECF No. 1 [hereinafter Miccosukee’s Compl.]. The
relevant procedural aspects of their cases are discussed in greater detail below.
Prairie Band Potawatomi filed the first case that came before the court. It sought to enjoin
Treasury from disbursing the IHBG population–based portion of Title V funds to Tribal
governments because of flaws in the IHBG data that resulted in a substantial undercount (though
not a zero count) of its population. See Prairie Band Potawatomi Nation v. Mnuchin, No. 20-cv-
1491 (APM), 2020 WL 3402298, at *1 (D.D.C. June 11), appeal dismissed, No. 20-5171, 2020
WL 4931697 (D.C. Cir. July 16, 2020). The court declined to grant an injunction in part on the
ground that the Secretary’s allocation decision was “committed to agency discretion by law” under
the APA, 5 U.S.C. § 701(a)(2), and therefore not judicially reviewable. Prairie Band Potawatomi
Nation, 2020 WL 3402298, at *1–2. After initially appealing the court’s decision, Prairie Band
Potawatomi abandoned its appeal and voluntarily dismissed its action. See Prairie Band
Potawatomi Nation v. Mnuchin, No. 20-5171, 2020 WL 4931697, at *1 (D.C. Cir. July 16, 2020);
Notice of Voluntary Dismissal, Prairie Band Potawatomi I Docket, ECF No. 30.
Next came the action filed by Shawnee. Shawnee filed its suit in the Northern District of
Oklahoma, but the case was transferred to this District a month into the litigation. See Op. &
Order, ECF No. 27. Much like Prairie Band Potawatomi before it, Shawnee sought to enjoin the
disbursement of additional Title V funds on the ground that the IHBG population–based allocation
of Title V funds was arbitrary and capricious as applied to it. In Shawnee’s case, the IHBG data
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showed the Tribe as having a population of zero despite its 3,021 enrolled members (and despite
the fact that other, non-IHBG, HUD data reflected an enrollment number of 2,113 for the Tribe).
See Shawnee Tribe v. Mnuchin, 480 F. Supp. 3d 230, 232 (D.D.C. 2020), rev’d, 984 F.3d 94 (D.C.
Cir. 2021); Shawnee’s Compl. ¶¶ 26–27. Not deviating from its decision in Prairie Band
Potawatomi, the court denied injunctive relief in part on the ground that the Secretary’s use of
IHBG data as a proxy for allocation was not judicially reviewable. See Shawnee, 480 F. Supp. 3d
at 232. The court later dismissed Shawnee’s complaint on the same basis. See Shawnee Tribe v.
Mnuchin, No. 20-cv-1999 (APM), 2020 WL 5440552, at *1 (D.D.C. Sept. 10, 2020), rev’d, 984
F.3d 94.
Shawnee appealed these decisions, and on January 5, 2021, the D.C. Circuit reversed them
both. See Shawnee, 984 F.3d at 103. First, the D.C. Circuit held that, although Title V conferred
broad authority on the Secretary, his decision to use the IHBG data as a proxy for allocating Title
V funds was judicially reviewable and the statute provided a meaningful standard—“increased
expenditures”—against which to judge his decision. See id. at 99–101. The court also ruled on
the Tribe’s APA claim: it found, under the standard for preliminary injunctions, that Shawnee was
likely to succeed on the merits because “the IHBG formula area population data is, at least with
respect to some tribes, an unsuitable proxy” for “increased expenditures.” Id. at 102–03. The D.C.
Circuit went on to enjoin the Secretary from distributing $12 million in remaining Title V funds,
as Shawnee had requested, and it reversed the dismissal of the complaint. See id. at 103. On
remand, this court formally entered the same injunction pending the outcome of the case. Order,
ECF No. 55.
6
Meanwhile, Miccosukee had filed its own action in the Southern District of Florida and
likewise sought preliminary relief for Treasury’s treatment of it as a zero-population Tribe based
on the IHBG data. Miccosukee’s Compl; Expedited Mot. for Prelim. Inj., Miccosukee Docket,
ECF No. 5 [hereinafter Miccosukee’s Sept. 2020 Mot. for Prelim. Inj.]. That case eventually made
its way to this court. See Order Transferring Case, Miccosukee Docket, ECF No. 21. Thereafter,
likely sensing that the D.C. Circuit would reverse this court in Shawnee, Prairie Band Potawatomi
refiled suit and again sought preliminary injunctive relief. See Mot. for Prelim. Inj., Prairie Band
Potawatomi Nation v. Mnuchin, No. 21-cv-00012 (APM) (D.D.C.) [hereinafter Prairie Band
Potawatomi II Docket], ECF No. 4 [hereinafter Prairie Band Potawatomi’s Jan. 2021 Mot. for
Prelim. Inj.].
After the remand in Shawnee, this court consolidated all three Tribes’ cases under the
Shawnee docket. Minute Order, Miccosukee Docket, Jan. 14, 2021; Minute Order, Prairie Band
Potawatomi II Docket, Jan. 14, 2021.
C. 2021 Title V Funding Reallocation
By the time Shawnee returned to this court, limited Title V funds remained to compensate
Tribes underfunded based on IHBG data. That was so for two reasons: First, in June 2020, this
court had ordered Treasury to distribute all remaining Title V funds not encumbered by ongoing
litigation. See Agua Caliente Band of Cahuilla Indians v. Mnuchin, No. 20-cv-01136 (APM),
2020 WL 3250701, at *1 (D.D.C. June 15, 2020). Second, the funds that remained subject to
litigation were funds that Treasury had allocated to Alaska Native Corporations (“ANCs”). This
court had ordered over $500 million to be held back pending litigation over whether ANCs
qualified as “Tribal governments” for purposes of the CARES Act. See Confederated Tribes of
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Chehalis Rsrv. v. Mnuchin, No. 20-cv-01002 (APM), 2020 WL 3791874, at *1 (D.D.C. July 7,
2020). At the time of remand, litigation over ANC eligibility was pending before the Supreme
Court. See Yellen v. Confederated Tribes of Chehalis Rsrv., 141 S. Ct. 2434 (2021). The Supreme
Court eventually held that ANCs were indeed eligible to receive Title V funds, see id. at 2452,
thereby shrinking the available pot of Title V funds to distribute to undercompensated Tribes.
In response to the D.C. Circuit’s Shawnee ruling, Treasury decided to “reconsider its prior
decision” to rely on IHBG data as a population-based proxy for increased expenditures and
“reallocate a portion of the remaining, unpaid [Coronavirus Relief Fund] funds pursuant to a new
methodology.” 2021 Reallocation Methodology at 2; see also Status Report, ECF No. 60, at 1
(“[T]he Department of the Treasury will construct a revised methodology to determine how
Treasury will allocate any funds remaining . . . . In constructing this revised methodology,
Treasury intends to re-consider the formula and/or data used to allocate the funds to Plaintiffs, and
similarly-situated Tribes . . . .”). Treasury officially announced this “reallocation” of funds—and
its new methodology—on April 30, 2021. 2021 Reallocation Methodology at 1–3. The
“reallocation” assumed that ANCs would be eligible for Title V funding. See id. at 3.
In its announcement, Treasury explained that the “reallocation [would] provide additional
payments when there is a substantial disparity between the Tribe’s IHBG formula area population
count and its Tribal enrollment count,” because for those Tribes “formula area population is less
likely to be an accurate proxy for increased expenditures.” Id. at 2. Treasury explained its
reallocation methodology as follows: First, “to determine which Tribes may have received a
payment that significantly undercounted their potential expenditures,” the Department would
“compare the IHBG formula area population against enrollment data recently collected by the
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Bureau of Indian Affairs (BIA).” Id. at 3. If enrollment data for a particular Tribe was not
available from BIA, Treasury would instead rely on the enrollment data the Tribe had submitted
in response to the Department’s April 2020 solicitation of enrollment data or, as a third option, the
enrollment data “available in HUD’s IHBG data” (as distinct from the IHBG population data used
in the 2020 allocation). Id. With that data in hand, Treasury would calculate the ratio between
each Tribe’s IHBG population and its enrollment. Id. It would subtract each ratio from 1, yielding
each Tribe’s “population-to-enrollment ratio.” Id. Treasury stressed that “funds available for
reallocation are limited and therefore only the most substantial disparities can be addressed.” Id.
To that end, Treasury would rank the population-to-enrollment ratios and provide additional
payments only to the Tribes in the 85th percentile and above; stated differently, Treasury would
allocate the remaining funds to the 15% of Tribes with the greatest disparity between IHBG
population and actual enrollment. Id.
After identifying the most undercompensated Tribes, Treasury would then need to decide
how much to pay each of them. It made that allocation in two steps. Treasury would begin by
determining “the amount [each] Tribe would have received under an enrollment-based allocation”
by “calculating each Tribe’s pro rata share of the amount of the population-based allocation
available for Tribes in the aggregate.” Id. In other words, Treasury determined what each Tribe’s
share would have been if the 2020 allocation had been based on enrolled population for all Tribes.
Next, Treasury “linearly phased [the payments] out such that the Tribe with the highest population-
to-enrollment ratio [would] receive the largest percentage of the difference between the amount it
would have received under the enrollment-based allocation and the IHBG formula area population-
based allocation.” Id. That is, Treasury ran a calculation to ensure that the most underfunded
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Tribes would receive a higher percentage of the available funds than Tribes that were underfunded
to a lesser extent.
All three Plaintiff Tribes in this consolidated action were determined to be eligible for
reallocated funds based on their population-to-enrollment ratios. On May 3, 2021, Treasury
notified the three Plaintiff Tribes via email of the “supplemental amount each Plaintiff Tribe will
receive under the revised methodology.” Pls.’ Second MSJ, Ex. D, ECF No. 88-4, at 1. Shawnee
was to receive an additional $5,202,604; Miccosukee was to receive an additional $825,196; and
Prairie Band Potawatomi was to receive an additional $864,141. Id. Or, in different terms,
Shawnee received $1,712 per initially uncounted member under the reallocation methodology;
Miccosukee received $1,355 per uncounted member; and Prairie Band Potawatomi received $225
per uncounted member. See Mem. Op. & Order, ECF No. 90 [hereinafter Mem. Op. Denying PI
Modification], at 7; Pls.’ Reply in Supp. of Mot. for Summ. J. & Resp. to Def.’s Cross-Mot. for
Summ. J., ECF No. 93 [hereinafter Pls.’ Reply], at 1.
D. Litigation After Remand
At the time of the remand in Shawnee, both Prairie Band Potawatomi and Miccosukee had
pending motions for preliminary injunctions in their individual cases. Prairie Band Potawatomi’s
Jan. 2021 Mot. for Prelim. Inj.; Miccosukee’s Sept. 2020 Mot. for Prelim. Inj. After consolidation,
the three Plaintiff Tribes moved together for an additional preliminary injunction, asking the court
to order Treasury to immediately distribute Title V funds to them. Suppl. Mot. for Prelim. Inj.,
ECF No. 65. Plaintiffs then also filed their first motion for summary judgment. Pls.’ First MSJ.
With the summary judgment briefing schedule on its way, the court denied Plaintiffs’
request for an immediate release of funds but, based on the D.C. Circuit’s holding in Shawnee,
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granted Miccosukee’s and Prairie Band Potawatomi’s motions to “enjoin Treasury’s distribution
of [a] combined $9,647,063 in remaining Title V funds pending resolution of th[e] litigation.”
Shawnee Tribe v. Yellen, No. 20-cv-1999 (APM), 2021 WL 1634597, at *2 (D.D.C. Apr. 26,
2021). 4 That sum represented the combined sum the Plaintiff Tribes estimated that they were due
under a population-based allocation using enrollment data rather than IHBG population counts.
Treasury announced its reallocation and revised methodology four days later. 2021
Reallocation Methodology. The court stayed the summary judgment briefing schedule “[i]n light
of Treasury’s stated intent to imminently distribute Title V funds to the Plaintiff Tribes.” Minute
Order, May 4, 2021; see also Mot. to Stay Summ. J. Briefing Schedule, ECF No. 76. Unsatisfied
with the amounts they had received, Miccosukee and Prairie Band Potawatomi filed amended
complaints, which included claims challenging the 2021 reallocation. Miccosukee Tribe of
Indians of Florida’s Am. Compl., ECF No. 79; Prairie Band Potawatomi Nation’s Am. Compl.,
ECF No. 82.
Then, Prairie Band Potawatomi moved to modify the April 2021 preliminary injunction by
increasing the amount of undistributed Title V funds set aside for it from $7.6 million to
$11,680,105. See Pl.’s Mot., ECF No. 83, at 1. The court denied that motion, concluding that
Prairie Band Potawatomi had failed to explain how its challenge to the May 2020 allocation was
not now moot and that the court likely lacked the authority to direct Treasury to pay the Tribe a
sum certain. Mem. Op. Denying PI Modification at 5–6 (noting that “the text of the CARES Act
4
The court noted that “[i]n Shawnee Tribe, the D.C. Circuit made clear that the Miccosukee Tribe—also assessed by
Treasury as having zero population—is similarly situated to the Shawnee Tribe,” such that Miccosukee was entitled
to the same injunction as Shawnee. Shawnee, 2021 WL 1634597, at *4. And, in addition, “because Prairie Band
Potawatomi Nation claims that Treasury’s original methodology vastly undercounted its population, its legal claim is
substantially similar, and thus warrants the same injunctive relief.” Id. (citation omitted).
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does not support the ‘extraordinary circumstances’ that might justify a ‘detailed remedial order’”
(quoting Shawnee, 2021 WL 1634597, at *2)).
Days before the court ruled on Prairie Band Potawatomi’s motion to modify the
preliminary injunction, Prairie Band Potawatomi and Miccosukee filed their amended motion for
summary judgment, which “incorporates by reference the prior summary judgment motion.” Pls.’
Amended MSJ at 2. Defendants filed a cross-motion for summary judgment. Cross-Mot. for
Summ. J., ECF No. 92; Cross-Mot. for Summ. J. & Opp’n to Pls.’ Mot. for Summ. J., ECF No. 91
[hereinafter Defs.’ Cross-Mot.]. The court now considers these motions.
III. LEGAL STANDARD
When courts review agency action under the APA, “summary judgment is the mechanism
for deciding whether as a matter of law an agency action is supported by the administrative record
and is otherwise consistent with the APA standard of review.” Louisiana v. Salazar, 170 F. Supp.
3d 75, 83 (D.D.C. 2016). The district court “sits as an appellate tribunal,” reviewing the entire
case as a question of law. Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083–84 (D.C. Cir.
2001) (collecting cases). Accordingly, the court need not engage in lengthy factfinding, and as a
general rule, judicial review is limited to the administrative record. “It is black-letter
administrative law that in an [APA] case, a reviewing court should have before it neither more nor
less information than did the agency when it made its decision.” CTS Corp. v. EPA, 759 F.3d 52,
64 (D.C. Cir. 2014) (internal quotation marks omitted); see also 5 U.S.C. § 706 (“[T]he court shall
review the whole record or those parts of it cited by a party . . . .”).
The APA requires courts to “hold unlawful and set aside agency action, findings, and
conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
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with law.” 5 U.S.C. § 706(2)(A). “This is a ‘narrow’ standard of review as courts defer to the
agency’s expertise.” Ctr. for Food Safety v. Salazar, 898 F. Supp. 2d 130, 138 (D.D.C. 2012)
(quoting Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins., 463 U.S. 29, 43
(1983)). The court’s review, however, is not toothless. The court must satisfy itself that the agency
has “examine[d] the relevant data and articulate[d] a satisfactory explanation for its action
including a rational connection between the facts found and the choice made.” State Farm, 463
U.S. at 43 (internal quotation marks omitted). When an agency “has failed to provide a reasoned
explanation, or where the record belies the agency’s conclusion, [the court] must undo its
action.” County of Los Angeles v. Shalala, 192 F.3d 1005, 1021 (D.C. Cir. 1999). “Moreover, an
agency cannot fail to consider an important aspect of the problem or offer an explanation for its
decision that runs counter to the evidence before it.” Dist. Hosp. Partners, L.P. v. Burwell, 786
F.3d 46, 57 (D.C. Cir. 2015) (cleaned up). “Post hoc rationalizations advanced to remedy
inadequacies in the agency’s record” or in the agency’s explanation will not suffice. City of
Brookings Mun. Tel. Co. v. FCC, 822 F.2d 1153, 1165 (D.C. Cir. 1987).
IV. DISCUSSION
Plaintiffs seek summary judgment on the grounds that (1) the May 2020 allocation was
“arbitrary and capricious, not in accordance with law, and not fully remedied by the [April] 2021
allocation,” and (2) the April 2021 reallocation was arbitrary and capricious and not in accordance
with law. Pls.’ Second MSJ at 2; see 5 U.S.C. § 706(2)(A). The court considers Plaintiffs’
challenge to the May 2020 allocation before turning to the April 2021 allocation.
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A. Challenge to the May 2020 Allocation Methodology
Plaintiffs argue that the awards made pursuant to the 2020 allocation methodology were,
“at least with respect to Plaintiffs, arbitrary and capricious and not in accordance with law.” Pls.’
Second MSJ at 12 (internal quotation marks omitted). Specifically, they contend that IHBG data
was insufficient for “estimating a Tribal government’s increased expenditures, when, for example,
a tribe does not have a formula area or when the tribe provides COVID-related assistance to
enrolled members listed outside of Tribal lands.” Id. (internal quotation marks omitted). Plaintiffs
do not make this argument in any comprehensive fashion in their amended motion; rather, they
“refer to[,] . . . incorporate by reference,” and rest on their first motion. Id.; see also Pls.’ First
MSJ. For their part, Defendants argue that Plaintiffs’ claims against the original methodology are
moot. They say the court “cannot provide the Plaintiffs with any meaningful relief for their
original claim beyond ordering Treasury to do what it has already done,” and the court cannot
“require Treasury to adopt any particular methodology.” Defs.’ Cross-Mot. at 12–13. The court
agrees with Defendants.
“If events outrun the controversy [in any given litigation] such that the court can grant no
meaningful relief” on a claim, there is no longer an “actual, ongoing controvers[y]” for Article III
purposes, and so the claim “must be dismissed as moot.” Foretich v. United States, 351 F.3d 1198,
1210 (D.C. Cir. 2003) (internal quotation marks omitted). That is the case here.
“Under settled principles of administrative law, when a court reviewing agency action
determines that an agency made an error of law, the court’s inquiry is at an end: the case must be
remanded to the agency for further action consistent with the corrected legal standards.” PPG
Indus., Inc. v. United States, 52 F.3d 363, 365 (D.C. Cir. 1995). As this court stated in its June
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2021 Opinion and Order denying Prairie Band Potawatomi Nation’s motion to modify the
preliminary injunction already in place in this case, “[t]he Circuit in Shawnee held that IHBG
population data was an ‘unsuitable proxy’ for increased expenditures insofar as that data set
assessed a zero population for certain tribes. But Treasury has since abandoned that methodology
and announced a new approach that, presumably, seeks to rectify its error.” Mem. Op. Denying
PI Modification at 5. Defendants therefore are correct that the court can do no more than order
Treasury to do something it has already done: reevaluate its allocation methodology. Simply put,
“when an agency has rescinded and replaced a challenged regulation, litigation over the legality
of the original regulation becomes moot.” Akiachak Native Cmty. v. U.S. Dep’t of the Interior,
827 F.3d 100, 113 (D.C. Cir. 2016).
Plaintiffs point out that this is not precisely what has occurred here: at issue in this case
are funding awards, not a regulation, and Treasury did not rescind the funds it allocated pursuant
to the 2020 methodology. See Pls.’ Reply at 15. They are technically correct. But as a matter of
administrative law, the larger point remains: upon finding the 2020 allocation methodology
arbitrary and capricious, the court would be empowered to do no more than set Treasury’s action
aside and remand to the agency for reconsideration of the allocation methodology. See 5 U.S.C.
§ 706(2)(A); PPG Indus., 52 F.3d at 365. The agency did precisely that of its own accord.
Plaintiffs’ claims over awards pursuant to the 2020 allocation are moot.
It is true that under certain “extraordinary circumstances,” a court may enter a “detailed
remedial order[]” in a case involving a challenge to an agency action. N.C. Fisheries Ass’n, Inc.
v. Gutierrez, 550 F.3d 16, 20 (D.C. Cir. 2014). Plaintiffs appear to ask for such an order, see Pls.’
Reply at 15, although it is not entirely clear to the court what specific affirmative relief Plaintiffs
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seek. Defs.’ Cross-Mot. at 13 (describing Plaintiffs’ requested relief as an order requiring “a
different methodology that includes certain mandatory aspects that the Plaintiffs would prefer”);
Pls.’ Reply at 13 (arguing that Treasury could have distributed per–uncounted enrollee reallocation
awards only to Plaintiffs or to the 15% of Tribes most severely undercounted under the 2020
methodology). But for the reasons the court has previously explained, the requisite “extraordinary
circumstances” to justify a detailed remedial order are not present here. See Shawnee, 2021 WL
1634597, at *2. Those circumstances “exist only when courts are permitted to compel agency
action under section 706(1) of the APA.” Id. (internal quotation marks omitted). And the APA
authorizes courts to “compel agency action,” 5 U.S.C. § 701(1), only “under narrow
circumstances.” Elec. Priv. Info. Ctr. v. IRS, 910 F.3d 1232, 1244 (D.C. Cir. 2018). “[T]he court’s
authority to issue a detailed remedial order applies only to discrete action that is legally
required . . . about which an official had no discretion whatever.” Shawnee, 2021 WL 1634597,
at *2 (second alteration in original) (emphasis and internal quotation marks omitted). Plaintiffs
make no argument as to how that narrow circumstance is met here.
That is not surprising. When, as here, “the manner of [an agency’s] action is left to the
agency’s discretion, a court can compel the agency to act, but has no power to specify what the
action must be.” Norton v. S. Utah Wilderness All., 542 U.S. 55, 65 (2004). No one disputes that
the CARES Act “‘gives the Secretary some discretion’ in carrying out Congress’s directive.”
Shawnee, 2021 WL 1634597, at *2 (quoting Shawnee, 984 F.3d at 100). That “discretion
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forecloses the detailed order plaintiffs seek.” In re Long-Distance Tel. Serv., 751 F.3d 629, 634
(D.C. Cir. 2014). 5
For these reasons, to the extent that the Tribes maintain their claims pertaining to only the
2020 allocation methodology, their claims are moot. If, as Defendants suggest, Plaintiffs are really
arguing “only that they may pursue a claim ‘against the original methodology (as modified by the
revised methodology),’” Defs.’ Reply in Supp. of Cross-Mot. for Summ. J., ECF No. 95
[hereinafter Defs.’ Reply], at 20 (quoting Pls.’ Reply at 15), the court agrees that such claims are
not moot. However, such claims are best conceived of as 2021 reallocation–based claims, because
the second allocation of funds cannot be considered in isolation from the first allocation, and so
the court discusses those claims below.
B. Challenge to the 2021 Reallocation Methodology
There is no dispute that the 2021 reallocation methodology—and the 2020 methodology as
modified by the 2021 reallocation methodology—poses a live controversy. See Defs.’ Cross-Mot.
at 13. Plaintiffs argue that “the awards allocated as part of the 2021 Distribution were arbitrary
and capricious, and not in accordance with law.” Pls.’ Second MSJ at 2. Specifically, they contend
that the 2021 “allocation methodology . . . [(1)] has no coherent connection to the statute, [(2)] is
5
Plaintiffs face an additional potential hurdle: little, if any, Title V funds are left over to compensate Plaintiffs for an
amount greater than the enjoined sums. It is not clear to the court how many Tribes were awarded additional funds
through the 2021 reallocation, how much of the remaining Title V funds Treasury reserved for the 2021 reallocation,
and how much of that reserved amount it has distributed to this point. See Pls.’ Reply at 8 n.4 (“It bears mentioning
that Treasury has not disclosed the supplemental payments that were issued to other Tribes apart from the awards to
the three named Plaintiffs.”). It is also unclear whether any funds allocated to ANCs remain undistributed. “It is a
well-settled matter of constitutional law that when an appropriation has lapsed or has been fully obligated, federal
courts cannot order the expenditure of funds that were covered by that appropriation.” City of Houston v. HUD, 24
F.3d 1421, 1424 (D.C. Cir. 1994). “[O]nce the relevant funds have been obligated, a court cannot reach them in order
to award relief.” Id. at 1426. Thus, if what Plaintiffs seek is an award greater than the amounts enjoined, there may
be no money left to grant such relief.
17
undermined by the actual enrollment data Treasury has on hand, and [(3)] . . . treats similarly
situated parties differently.” Id. at 12.
The court first addresses the parties’ dispute as to the degree of deference the court owes
Treasury’s 2021 methodology, before turning to Plaintiffs’ specific APA arguments.
1. Degree of Deference Owed
Plaintiffs’ primary position is that “Treasury is not entitled to any deference” because “its
action is at odds with the plain language of the statute that it is implementing.” Pls.’ Reply at 10.
The court understands this to refer to Plaintiffs’ argument that the 2021 reallocation methodology
was not “based on” increased expenditures at all; the court discusses this argument in greater detail
below. See Pls.’ Second MSJ at 3 (“Treasury paid out the awards based on the percentage by
which a tribe’s enrollment was undercounted in the 2020 Distribution, a figure that has no
cognizable connection to actual increased expenditures or to Treasury’s previously announced
proxy for increased expenditures: Tribal population, or enrollment.”). Defendants, on the other
hand, argue that the court should grant the agency “an extreme degree of deference” under the
circumstances. Defs.’ Cross-Mot. at 14 (internal quotation marks omitted). In support of their
argument, Defendants point to cases involving “complex judgments,” “technical matters,” and
“data analysis,” where courts explained that “great deference” is appropriate. Defs.’ Cross-Mot.
at 14 (internal quotation marks omitted) (first citing Alaska Airlines, Inc. v. TSA, 588 F.3d 1116,
1120 (D.C. Cir. 2009); and then citing Appalachian Power Co. v. EPA, 249 F.3d 1032, 1051–52
(D.C. Cir. 2001)). Plaintiffs counter that, even if some deference is due, “the
allocation[s] [here] . . . [are] not the sort of agency action that [are] eligible for an extreme degree
of deference,” because the cases cited by Defendants involved far more complex judgments and
18
technical expertise than what the CARES Act required of the Secretary—and “courts cannot afford
agencies ‘extreme deference’ every time they do some math.” Pls.’ Reply at 3, 10 (internal
quotation marks omitted).
But whether the court owes Treasury an “extreme” level of deference or simply the normal
amount, the outcome is the same. It is manifest that the court owes some deference to the agency
in the present circumstances. That deference is embodied in both the APA and the CARES Act.
First, the arbitrary-and-capricious standard set forth in 5 U.S.C. § 706(2)(A) requires “that agency
action be reasonable and reasonably explained,” but no more. FCC v. Prometheus Radio Project,
141 S. Ct. 1150, 1158 (2021). Indeed, “[a] court may not substitute its own policy judgment for
that of the agency,” and so judicial review under the APA is necessarily “deferential.” Id. Second,
the procedure the CARES Act established for developing methodologies to allocate Title V funds
necessarily entails deference to the Secretary. The Act provides that “the amount paid . . . to a
Tribal government shall be the amount the Secretary shall determine, in consultation with the
Secretary of the Interior and Indian Tribes, that is based on increased expenditures of each such
Tribal Government”—“determined in such manner as the Secretary determines appropriate to
ensure that all amounts available . . . are distributed to Tribal governments.” 42 U.S.C. § 801(c)(7)
(emphases added). Congress gave the Secretary latitude to “exercise his discretion,” subject, of
course, to certain “restrictions.” Shawnee, 984 F.3d at 100. And when Congress delegates
discretion to an agency, courts must in turn grant the agency deference for the actions it takes
pursuant to that discretion. See Chevron, USA, Inc. v. NRDC, 467 U.S. 837, 844–45 (1984). It is
therefore plain that deference to the Secretary is warranted; whether that deference is “extreme”
or not does not, in this case, change the court’s analysis.
19
The court also notes that “the parameters of the ‘arbitrary and capricious’ standard of
review will vary with the context of the case.” WWHT, Inc. v. FCC, 656 F.2d 807, 817 (D.C. Cir.
1981). The parties agree that arbitrary-and-capricious review is “contextually tailored,” Maggard
v. O’Connell, 671 F.2d 568, 571 (D.C. Cir. 1982), but they disagree about how to characterize the
relevant context. See Defs.’ Reply at 7; Pls.’ Reply at 11–12. The “relevant context” for defining
the contours of the court’s arbitrary-and-capricious review in this case includes the following:
(1) the D.C. Circuit’s Shawnee decision and this court’s subsequent orders; (2) the status of Title V
funding allocated for ANCs and the Supreme Court’s Chehalis decision; (3) the process
undertaken by Treasury to develop its methodologies, including consultation with Tribal leaders;
and (4) critically, the limited remaining Title V funds available for distribution to underfunded
Tribes upon remand. The court considers each of these factors, as appropriate, in evaluating
whether the agency acted arbitrarily and capriciously.
2. “Based On” Expenditures
The CARES Act expressly provides that “the amount paid . . . to a Tribal government shall
be . . . based on increased expenditures of each such Tribal government.” 42 U.S.C. § 801(c)(7)
(emphasis added). Plaintiffs argue that the 2021 reallocation methodology “has no coherent
connection to increased expenditures due to COVID.” Pls.’ Second MSJ at 12. More specifically,
they contend that the new approach and the awards it generated “are disconnected from both the
statutory objective (increased expenditures) and the agency’s own original premise that a pro-rata
allocation per tribal member is the proper mechanism for meeting that objective.” Id. at 13.
Instead, the Tribes assert, “Treasury allocated the awards for the 2021 Distribution not according
to Tribal population, enrollment, or expenditures, but based on the percentage by which a tribe’s
20
enrollment was undercounted in the 2020 distribution.” Id. And “[t]he percentage by which a
tribe was undercounted does not correspond to its actual COVID expenditures.” Id. (emphasis
omitted). Therefore, in Plaintiffs’ view, Treasury did not “operate within the confines of the statute
it is implementing” as it is “bound” to do. Pls.’ Second MSJ at 14.
Defendants respond that the Tribes’ argument “isolates one variable—the IHBG-to-
enrollment ratio—in a broader formula,” and so misapprehends the ways in which the 2021
reallocation methodology is “based on” increased expenditures. Defs.’ Cross-Mot. at 18.
Defendants make two arguments as to why their reallocation methodology is “based on” increased
expenditures. First, they maintain that the IHBG-to-enrollment ratios “estimate the degree to
which IHBG data may have proven inadequate” in approximating increased expenditures for
certain Tribes, and so the ratios “help ensure that qualifying tribes would receive,” considering the
2020 and 2021 payments in combination, “payments ‘based on’ their expenditures.” Defs.’ Reply
at 10. Second, they assert that, “even assuming that the IHBG-to-enrollment ratios do not help
ensure that payments are issued ‘based on’ expenditures, the Revised Methodology did not
calculate the Tribes’ supplemental payments by referring only to their IHBG-to-enrollment ratios.”
Id. Rather, the reallocation methodology “also relied on the Tribes’ enrollment data—an
undeniable proxy for their expenditures—and so the Tribes’ supplemental payments were ‘based
on’ expenditures, even if they were not based solely on expenditures.” Id.
The court agrees that the 2021 reallocation methodology is “based on” increased
expenditures. The CARES Act does not require Title V awards to be precisely correlated to
increased expenditures—which would be nearly impossible to accomplish—and it does not require
them to be distributed pro rata based on population. The Act requires only that the allocation of
21
funds be “based on increased expenditures.” 42 U.S.C. § 801(c)(7). The D.C. Circuit has
explained that, when a statute directs an agency to make a decision “based on” a particular factor
or condition, that decision need “not necessarily . . . rest solely on” that factor. Sierra Club v. EPA,
356 F.3d 296, 306 (D.C. Cir.), amended, No. 03-1084, 2004 WL 877850 (D.C. Cir. Apr. 16, 2004).
In other words, the term “based on” does not restrict the agency’s consideration to the statutory
factor alone, but the agency may not “wholly abandon[]” it. Id.; see also Anna Jaques Hosp. v.
Sebelius, 583 F.3d 1, 5–6 (D.C. Cir. 2009) (construing the phrase “on the basis of” in a statute,
noting its similarity to the phrase “based on” because “both phrases use a variant of the word
‘base,’” and concluding that “‘[b]asis does not mean ‘entire’ or ‘only’”); Catawba County v. EPA,
571 F.3d 20, 37 (D.C. Cir. 2009) (“[W]e have repeatedly held that the words ‘based on’
are . . . ambiguous: they neither compel the agency to rest its decisions solely on the specified
factor nor indicate the extent to which the agency may rely on additional factors. . . . Instead, they
simply constrain the agency from abandoning or supplanting the specified factor altogether.”
(alterations and internal quotation marks omitted)). Thus, the CARES Act does not require
Treasury to consider only increased expenditures. It instead requires Treasury to consider
increased expenditures as a “starting point” or “primary basis.” Int’l Union v. Mine Safety &
Health Admin., 626 F.3d 84, 92 (D.C. Cir. 2010) (citing Sierra Club, 356 F.3d at 306).
Here, when Treasury first developed its 2020 allocation methodology, it selected what
Plaintiffs agree to be a reasonable proxy for increased expenditures: population. 2020 Allocation
Methodology at 2. It did so knowing that “any methodology, by necessity, must rely on a rough
estimate of any given tribe’s expenditures.” Defs.’ Reply at 9. That decision was made against a
backdrop in which Congress required the Secretary to distribute funds with exceptional speed—
22
within 30 days. See 42 U.S.C. § 801(b)(1) (“[N]ot later than 30 days after March 27, 2020, the
Secretary shall pay each . . . Tribal government . . . the amount determined . . . .”); CARES Act,
Pub. L. No. 116-136, 134 Stat. 281 (2020) (passed on March 27, 2020). Treasury made a misstep
in using IHBG data as the source of population counts for certain Tribes, including the two
Plaintiffs here, but its 2021 methodology sought to cure the shortfall created by that judgment.
The second time around, it again relied on population data: using both the IHBG population counts
and actual Tribal enrollment, Treasury sought to estimate the degree to which the IHBG
population–based count had underestimated increased expenditures for undercounted Tribes and
compensate those Tribes accordingly. That approach was not an arbitrary and capricious
approximation of the statutorily required benchmark of “increased expenditures.”
The Tribes appear to argue that Treasury could choose no reallocation methodology other
than a pro-rata methodology that simply replaced IHBG population with actual Tribal enrollment.
See Pls.’ Reply at 3. But the CARES Act does not require Treasury to adopt any particular
methodology, let alone the pro-rata approach preferred by Plaintiffs. Importantly, by the time
Treasury was developing its 2021 methodology, the landscape with respect to available CARES
Act funding had changed dramatically. Treasury had already distributed most of the $8 billion
that Congress appropriated to Tribal governments, and what remained was a pool of available
funds meant for ANCs, pending the outcome of litigation before the Supreme Court. See 2021
Reallocation Methodology at 3 (“The question of ANCs’ eligibility for [Coronavirus Relief Fund]
funding is currently before the Supreme Court.”). At that point, Treasury “[could] not pay each
Tribe what it would have received if Treasury had used enrollment data from the start. There
simply [were] not enough remaining funds to do so.” Defs.’ Cross-Mot. at 18. In view of that
23
impossibility, Treasury decided to pay the Tribes with the worst IHBG-to-enrollment ratios the
most, tracking the D.C. Circuit’s reasoning in Shawnee and the Plaintiffs’ complaints. Id. That
decision was consistent with the agency’s discretion to select a model that, in its estimation, was
faithful to the intent of Congress. See Appalachian Power Co., 249 F.3d at 1052 (“[Courts] must
defer to the agency’s decision on how to balance the cost and complexity of a more elaborate
model against the oversimplification of a simpler model.”); Kennecott Utah Copper Corp. v. U.S.
Dep’t of the Interior, 88 F.3d 1191, 1225 (D.C. Cir. 1996). The court therefore concludes that the
2021 methodology for allocating Title V funds was “based on” increased expenditures.
3. The Phase-Out
Plaintiffs next argue that “Treasury’s decision to allocate awards” pursuant to a “phase-out
method” that was “clearly contradicted by the actual enrollment data that it had available was
arbitrary and capricious.” Pls.’ Second MSJ at 15. The court understands Plaintiffs to be referring
to the fact that, once Treasury identified the 15% of Tribes with the highest population-to-
enrollment ratios, it awarded a percentage of a Tribe’s “enrollment allocation”—what the Tribe
“would have received [if] Treasury had used enrollment data, rather than IHBG data, from the
start”—on a descending scale. Defs.’ Reply at 7–8. “The qualifying tribes with the lowest ratios
received a significant portion of their enrollment-allocation, and conversely, the qualifying tribes
ranked toward the bottom of the ‘top 15%’ received less significant portions of their enrollment
allocations.” Id. at 8. Plaintiffs argue that Treasury did not have the authority to “pick new
‘winners’ from the top 15% of ‘losers’ from the 2020 Distribution,” instead of “allocat[ing] the
new awards based on an enrollment-based allocation,” especially since Tribal enrollment data was
available to it and Tribal leaders had previously communicated to Treasury “the wisdom and value
24
of using enrollment data.” Pls.’ Second MSJ at 14. Notably, Plaintiffs do not challenge Treasury’s
decision to “pick . . . the top 15% of ‘losers’ from the 2020 Distribution,” which benefited the
Plaintiff Tribes by reducing the number of Tribal governments eligible for what little funding
remained. Rather, their arguments attach to the descending percentage of awards of those Tribes
selected for further compensation. See id.; see also Pls.’ Reply at 13.
The thrust of Plaintiffs’ argument is that “Treasury’s ‘phase-out’ method led to absurd
results.” Pls.’ Second MSJ at 15. For example, Shawnee (which was assigned an IHBG population
count of zero) received an award of $5,200,000 pursuant to the 2021 reallocation and the minimum
award of $100,000 pursuant to the 2020 allocation—around $5.3 million in total for its 3,021
members. Id. By contrast, Prairie Band Potawatomi, which had been assigned an IHBG
population count of 747, received around $3.3 million in total funding for 4,561 enrolled members
across the two distributions. Id. All told, Shawnee received around $2 million more with around
1,500 fewer enrolled members: “40% more funds to Shawnee [than Prairie Band Potawatomi] for
an enrolled population that is 33% lower.” Id. These “absurd results,” Plaintiffs argue,
contradicted the “actual enrollment data that [Treasury] had available,” rendering Treasury’s
decision to use the phase-out method arbitrary and capricious. Id.
Defendants respond that Treasury could not pay each Tribe a “fixed, meaningful amount
per ‘uncounted enrollee’” while at the same time reserving adequate funds for ANCs, and that the
phase-out method was a reasonable alternative given the circumstances. Defs.’ Cross-Mot. at 16.
Because of the limited pool of funds available for the reallocation, “Treasury had to use its
judgment to decide not only which Tribes would receive supplemental payments, but also the
amount of each payment.” Id. Treasury decided that only the Tribes with the “most substantial
25
disparities” would be eligible for reallocation payments. 2021 Reallocation Methodology at 3.
From there, Defendants submit, the same reasoning that justified setting only the top 15% of Tribes
(by population-to-enrollment ratio) as eligible for payment justified phasing out the percentage of
the difference between population- and enrollment-based pro-rata awards. Defs.’ Reply at 15.
As noted, Plaintiffs agree that “Treasury was well within its rights to limit the supplemental
payments to the 15% of Tribes that had been severely undercounted by the IHBG population data,”
because “an agency is generally afforded discretion in line drawing.” Pls.’ Reply at 13. But they
nonetheless argue that it was unreasonable for Treasury to distribute funds within the 15% of
Tribes using a phase-out method and not a set per-enrollee amount. Pls.’ Second MSJ at 14–15.
This contention exposes the fundamental flaw in Plaintiffs’ reasoning. As Defendants point out,
“[i]f Treasury cannot treat tribes within the top 15% differently based on IHBG-to-enrollment
ratios, then it presumably cannot treat any tribes—top 15% or not—differently based on these
ratios.” Defs. Reply at 15. Plaintiffs do not offer a principled distinction between using the ratios
to set the 15% cut-off and using the ratios to implement a phase-out method between Tribes within
that group, and indeed their arguments against the phase-out method prove too much. Plaintiffs
accept that given the “relatively limited funding available,” Treasury had to focus on ameliorating
the starkest disparities among Tribes based on the 2020 allocation methodology and draw a line at
the 85th percentile of enrollment-to-population ratios. Pls.’ Reply at 13. Yet that is the same
rationale Treasury drew on to land on the phase-out method: Treasury could not afford to make all
undercounted Tribes whole at the per-member rate of the 2020 methodology, swapping enrollment
in for IHBG population. So it used the phase-out method to, again, focus on ameliorating the
starkest disparities. Not surprisingly, under that approach, a zero-count Tribe like Shawnee came
26
out better than undercounted Tribes like Prairie Band Potawatomi. It cannot be that the 15% cut-
off was not arbitrary and capricious but the phase-out violated the APA. 6
In sum, Treasury used the population-to-enrollment ratio to “identify the . . . tribes that
were likely most harmed by the IHBG data, and to what degree.” Defs.’ Reply at 15. Plaintiffs
would have this court hold that Treasury was within its discretion to use the ratios to figure out the
first part of the new methodology—which Tribes were likely most harmed by IHBG data (the top
15%)—but not the second part—“to what degree” the Tribes were harmed (the degree of disparity,
which the phase-out method targets by ameliorating the starkest disparities the most). Plaintiffs
have simply offered no real account for how both of those things can be true at the same time. The
court agrees with Defendants that “[i]f [the] ratios . . . justify drawing distinctions among tribes to
determine which ones should receive supplemental payments,” then “those same ratios should
justify drawing distinctions among the qualifying tribes to determine how much each should
receive.” Id. It may be true that Treasury “needlessly overcomplicated its methodology . . . by
phasing out payments,” Pls.’ Reply at 3, but it was within its discretion to do so, and that judgment
was not arbitrary and capricious.
4. Different Treatment of Similarly Situated Tribes
To some extent, Plaintiffs’ third argument overlaps with their second (regarding the phase-
out method), and indeed the parties treat the two interchangeably at times. As a matter of
6
Plaintiffs argue that Treasury could have granted supplemental awards to only the top 15% on a pro-rata basis,
distributing the same total amount of Title V funds in the reallocation phase. See Pls.’ Reply at 13–14. But the
question is not whether Treasury chose the best methodology; it is whether Treasury chose a methodology that was
not arbitrary and capricious. Treasury has explained that, in addition to seeking to prioritize Tribes facing the greatest
funding disparities, it chose the phase-out method in part to avoid a “sharp cliff” in which a Tribe “just below the 15%
cut-off would receive no supplemental payment, whereas the Tribe ranked just one spot higher . . . would receive the
same ‘per enrollee’ rate as the tribe at the top of the list.” Defs.’ Reply at 15.
27
administrative law, agencies “must treat similar cases in a similar manner unless [they] can provide
a legitimate reason for failing to do so.” Kreis v. Sec’y of the Air Force, 406 F.3d 684, 687 (D.C.
Cir. 2005); see also Westar Energy, Inc. v. FERC, 473 F.3d 1239, 1241 (D.C. Cir. 2007)
(describing the “fundamental norm of administrative procedure [that] requires an agency to treat
like cases alike”). Plaintiffs maintain that Treasury treated similarly situated Tribes differently,
and that there was “no legitimate basis” for doing so. Pls.’ Second MSJ at 15–16. They identify
two dimensions of differential treatment: First, they point to the way that Treasury distinguished
them from other Tribes that received more significant Title V funds per initially uncounted
member after the reallocation. Pls.’ Second MSJ at 16. Second, they point to the “disparities”
between their own Title V awards and those of the Tribes that “received no May 2021 Distribution
because they were not severely undercounted.” Id. This different treatment, they say, was
arbitrary and capricious. Pls.’ Second MSJ at 15.
Treasury counters that it has adequately explained any different treatment of similarly
situated parties. See Petroleum Commc’ns, Inc. v. FCC, 22 F.3d 1164, 1172 (D.C. Cir. 1994)
(noting that agencies may “treat[] similarly situated parties differently” when they “provide
adequate explanation” for doing so). “Treasury could not both pay each Tribe a fixed, meaningful
amount per uncounted enrollee, and also reserve a sufficient amount for ANCs,” and so it
“focus[ed] limited funds on the Tribes whose IHBG figures were especially low in comparison to
their enrollment figures, and who initially received the lowest population-based payments.” Defs.’
Cross-Mot. at 16–17 (internal quotation marks omitted). Plaintiffs respond that the administrative
record does not support this explanation and that it is demonstrably false. The court disagrees.
28
First, Plaintiffs argue that the administrative record does not support Treasury’s contention
that it endeavored to compensate based on degree of harm resulting from use of the IHBG data.
Rather, Plaintiffs contend, Treasury “repeatedly [drew] similarities between Tribes that were
assigned zeros and those other Tribes . . . that were significantly undercounted, never once
suggesting that one was more harmed than the other.” Pls.’ Reply at 7. In the 2021 reallocation
methodology announcement, for example, Treasury identified two scenarios in which IHBG
population data “may prove insufficient” as a proxy for increased expenditures: (1) where a Tribe
has a “formula area population of zero,” and (2) where it has a non-zero IHBG population that is
nonetheless not “sufficiently accurate.” 2021 Reallocation Methodology at 2. Plaintiffs observe
that such language does not explicitly state that the degree of harm to Tribes within these two
categories is any different, therefore justifying only “treating the severely undercounted Tribes the
same relative to one another.” Pls.’ Reply at 7. Treasury’s attempts to draw distinctions in the
degree of harm, they insist, are mere post-hoc rationalizations that cannot be credited. Id. (citing
Nat’l Black Media Coal. v. FCC, 775 F.2d 342, 354 (D.C. Cir. 1985)).
Plaintiffs fail to read the administrative record as a whole. The administrative record
recognizes, of course, that many Tribes facing a significant disparity between IHBG population
and enrollment were undercounted by the 2020 allocation methodology. Yet, at the same time, it
contains numerous references to the particular harm faced by Tribes initially counted as having a
population of zero. For example, the allocation methodology announcement states that it “is
particularly true” that IHBG counts are an insufficient proxy for increased expenditures of Tribes
with a zero-population count. 2021 Reallocation Methodology at 2 (emphasis added). The same
document explains that “[w]here there is an especially large disparity between formula area
29
population and enrollment figures”—as is more likely the case for zero-population Tribes—“the
difference suggests that the Tribal government has a need for [additional] funding,” and that the
reallocation would focus on these Tribes. Id. (emphasis added). Treasury also explained that the
“population-to-enrollment ratio” would be used to determine which Tribes were previously
“significantly undercounted” and had the “greatest need.” Id. at 3. This language implies the
comparison or ranking of Tribes’ respective disparities and makes clear that Treasury’s
explanation is not a mere post-hoc rationalization.
Nor does the administrative record belie Treasury’s purported reliance on Shawnee.
Plaintiffs charge that Treasury cannot rely on Shawnee to support its explanation because the
administrative record shows that Treasury was trying to “rectify a broader problem than the one
specifically addressed in Shawnee”—specifically, the harm to Tribes with non-zero counts. Pls.’
Reply at 7–9. But that argument ignores that post-Shawnee, Treasury was confronted with suits
from both zero-count Tribes (Shawnee and Miccosukee) and an undercounted Tribe (Prairie Band
Potawatomi), and it faced uncertainty as to whether other similar actions would follow. Thus,
there is no inconsistency between Treasury wanting to address the harm to all Tribes that were
undercompensated due to use of the IHBG data (both zero-count and undercounted Tribes), and
targeting its remaining resources to redress the starkest harms to the greatest extent (consistent
with the D.C. Circuit’s focus on zero-count Tribes). Nothing in the D.C. Circuit’s decision in
Shawnee is incompatible with such an approach.
Plaintiffs next argue that “Treasury’s argument that Tribes that were assigned IHBG
populations of zero were likely underpaid the most is demonstrably wrong based on [the
enrollment data] that Treasury had when it made its decision.” Pls.’ Reply at 8 (alteration omitted)
30
(internal citation and quotation marks omitted). In other words, because Treasury knew exactly
how much each Tribe was undercounted based on its own enrollment data, no guesswork was
required in identifying the Tribes most adversely impacted by the initial allocation. Treasury
therefore could easily have allocated funds on a pro-rata basis based on undercounted enrolled
members. This argument is flawed. The CARES Act itself requires no particular formula so long
as the formula selected is “based on” increased expenditures, see 42 U.S.C. § 801(c)(7), and, as
this court has already concluded, there was no requirement that Treasury distribute Title V funds
the second time around on a per–uncounted enrollee basis. In 2020, Treasury chose a pro-rata
distribution based on population as a proxy for expenditures, but it was not required to apply that
same formula in 2021 when circumstances had changed dramatically. The benchmark for the 2021
reallocation methodology was not its fidelity to the 2020 methodology but its relationship to
increased expenditures, and the court has already concluded that the 2021 reallocation
methodology was “based on” increased expenditures resulting from the COVID-19 pandemic.
Plaintiffs make much of the fact that the 2021 reallocation methodology overfunds some
Tribes relative to others, and they suggest that a per-enrollee reallocation methodology would have
avoided that result. But, as Defendants assert, “there is no indication that each tribe’s relative
expenditures correlated perfectly with its enrollment count,” and any methodology would
inevitably overfund some Tribes and underfund others relative to their actual increased
expenditures. Defs.’ Reply at 8–9; see id. at 9 (identifying variables that could “impact[] any given
tribe’s relative COVID-related expenditures, beyond simply its raw enrollment figure”). No
methodology could avoid that reality, particularly not within the short timeframe prescribed by
Congress for distributing the funds. Id. at 8–9. In 2021, Treasury targeted the harm Tribes faced
31
by being undercounted and underpaid in the first round of Title V funds; it was free to meet that
harm the way it did.
Plaintiffs cite in their briefs this court’s observation in an earlier opinion that the “yawning
disparity in per-uncounted-member funding [among the three Plaintiff Tribes] is puzzling to say
the least.” Pls.’ Reply at 1; Mem. Op. Denying PI Modification at 7. When the court made that
observation, however, Treasury had not offered any “defense or explanation for the seemingly
inequitable results.” Pls.’ Reply at 1. It has now become clear, however, that these “inequit[ies]”
are byproducts of the complex procedural history of this case and not intentional differential
treatment by Treasury. It remains true—and surprising in some sense—that Prairie Band
Potawatomi received, taking both awards together, around $3.3 million for its 4,561 members,
while Shawnee received $2 million more for around 1,500 fewer members. Pls.’ Second MSJ at
15. But Prairie Band Potawatomi, unlike Shawnee, received some funds over the minimum
amount in the initial allocation. See id. Shawnee was among the worst off after the IHBG-based
allocation; it is not unreasonable that it would receive the most significant catch-up payment during
the reallocation phase. This may seem inequitable at first blush, but such disparity is a function of
a disbursement methodology that, when viewed in light of all relevant circumstances, was entirely
reasonable.
* * *
In an ideal world, Treasury might have distributed Title V funds to all Tribal governments
pro rata based on the Tribes’ enrollment data, so that no Tribe could claim underpayment. But
that is not the world in which we find ourselves. Treasury was faced with the difficult challenge
of how to best mitigate the harm caused to some Tribes by its use of flawed IHBG data to distribute
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funds, as well as the passage of time and the dissipation of Title V funds. This court cannot say
that Treasury’s attempts in 2021 to identify the Tribes most harmed by the original methodology
and to grant them the greatest degree of relief is arbitrary and capricious, even if some Tribes
ended up worse off than if Treasury had simply used better data in 2020.
V. CONCLUSION
For the foregoing reasons, Plaintiffs’ motions for summary judgment, ECF No. 70; ECF
No. 88, are denied. Defendants’ cross-motion, ECF No. 92, is granted in full.
A final, appealable order accompanies this Memorandum Opinion.
Dated: January 28, 2022 Amit P. Mehta
United States District Court Judge
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