                            UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

                              )
SENECA NATION OF INDIANS,     )
                              )
          Plaintiff,          )
                              )
     v.                       )                       Civil Action No. 12-1494 (RMC)
                              )
                              )
UNITED STATES DEPARTMENT OF )
HEALTH AND HUMAN SERVICES, et )
al.,                          )
                              )
          Defendants.         )
                              )

                                            OPINION

               The Seneca Nation of Indians administers its own healthcare system through a

self-determination contract with the Indian Health Service under the Indian Self-Determination

and Education Assistance Act. The Nation submitted a contract amendment to the Indian Health

Service to adjust the number of persons to be serviced under the contract and, as a result, to

increase the funding provided to the Nation for fiscal years 2010 and 2011. IHS did not respond

to the proposal within the 90 days as required by statute, and the Nation contends that its

proposed amendment automatically became part of its contract with IHS upon the lack of a

timely response. The Secretary of the Department of Health and Human Services, of which IHS

is a constituent part, disagrees. The parties have briefed cross-motions for summary judgment,

and the matter is ripe for decision. For the reasons set forth below, the Nation’s motion for

summary judgment will be granted.

                                            I. FACTS

               The facts here are substantially undisputed, and the parties’ dispute focuses

almost exclusively on the legal effect to be ascribed to a single letter sent by the Nation to IHS.
                                                  1
The Nation, which is based in Salamanca, New York, is an Indian tribal government recognized

by the federal government. The Defendants are the Department of Health and Human Services

(“HHS”) and its Secretary, Kathleen Sebelius, sued in her official capacity; they are referred to

in this Opinion collectively as “the Secretary.” The Indian Health Service (“IHS”) is an “HHS

component whose principal mission is to provide primary health care for American Indians and

Alaska Natives throughout the United States.” Defs.’ Cross-Mot. Summ. J. (“Defs. MSJ”) [Dkt.

15] at 1 (citations omitted).

               Under the Indian Self-Determination and Education Assistance Act (“ISDEAA”),

Pub. L. 63-638, 88 Stat. 2203 (1975), codified as amended at 25 U.S.C. § 450 et seq., the Nation

entered into a self-determination contract with IHS in 2000 so that the Nation could administer

its own healthcare programs. See Self-Determination Contract (“Contract”) & 2010 Annual

Funding Agreement (“2010 AFA”), Pl. MSJ, Ex. A [Dkt. 14-4]. The Contract was executed on

September 20, 1999 by Duane James Ray on behalf of the Nation and on January 3, 2000 by

Ralph W. Ketcher, Jr., on behalf of IHS; it went into effect on January 1, 2000. Contract at 13.

The Contract has an “indefinite” term, “subject to the annual appropriation of funds by the

Congress,” with a “funding period . . . [to] be determined on the basis of a calendar year” or

other period as the parties agree. Id. at 2. It provides that “[t]he total amount of funds to be paid

under this Contract, pursuant to Section 106(a) of the Act [25 U.S.C. § 450j-1(a)], shall be

determined in an Annual Funding Agreement [“AFA”] entered into between the Secretary and

the Contractor, which shall be incorporated into this Contract.” Contract at 7. For every fiscal

year since the Contract was signed, the Nation and IHS have signed a new AFA. 1




1
  The parties agreed to funding periods based on calendar year (i.e., January 1 to December 31)
for 2000, 2001, 2002, and 2003. Beginning on October 1, 2004, the parties switched to a fiscal
                                                  2
                 Two provisions of the Contract are worth emphasizing. First, the Contract

provides:

                 It is the intent of the Tribe to establish this Contract with the
                 Secretary as a “mature contract” . . . . Each provision of the
                 [ISDEAA] and each provision of this Contract shall be liberally
                 construed for the benefit of the Contractor to transfer the funding
                 and the following related functions, services, activities and
                 programs (or portions thereof), that are otherwise contractible
                 under Section 102(a) of the Act, including all related
                 administrative functions, from the Federal Government to the
                 Contractor . . . .

Contract at 1. As to “Modifications and Amendments,” the Contract states in Article V, Section

2:

                 (A) IN GENERAL-Except as provided in Article V, Section 2(B)
                 of this Contract, no modification to this Contract shall take effect
                 unless such modification is made in the form of a written
                 amendment to this Contract, and the Contractor and the Secretary
                 provide written consent for modification.

                 (B) EXCEPTION-The addition of supplemental funds for
                 programs, services, functions and activities (or portions thereof)
                 already included in the Annual Funding Agreement under Article
                 VII, Section 2 of this Contract, or the reduction of funds pursuant
                 to Section 106(b)(2) of the Act, shall not be subject to Article V,
                 Section 2(A) above.

Contract at 9.

                 On October 26, 2009, the Nation’s representative signed Modification # 71 and

the 2010 AFA for the Contract, and Mr. Ketcher countersigned for IHS on November 12, 2009.

See Modification # 71 and 2010 AFA [Dkt. 14-4] at 48–61. 2 Modification # 71 provides that it

is “executed to incorporate the FY 2010 Annual Funding Agreement” for the Contract. For the



year (i.e., October 1 to September 30) funding period. See Modification # 71 and 2010 AFA
[Dkt. 14-4] at 50.
2
    The page numbers for Modification # 71 and the 2010 AFA refer to the ECF page numbers.

                                                  3
funding period October 1, 2009 through September 30, 2010, the Contract Amount was

$8,686,927.00. Modification # 71 at 50. That amount, comprised of $7,803,211 for direct

program funds and $883,716 for indirect contract support costs, was to be paid to the Nation in a

lump sum. 2010 AFA at 53. On March 7, 2011, IHS sent the Nation an executed copy of

Modification #82, which “extend[ed] the current FY 2010 Annual Funding Agreement until

9/30/2011.” Modification # 82, Pl. MSJ, Ex. B [Dkt. 14-5].

               On April 29, 2011, the President of the Nation, Mr. Robert Odawi Porter, sent to

IHS a letter (“April 29, 2011 Letter”) with the subject “User Population Undercounts and

Proposed Amendments,” stating:

               I write on behalf of the Seneca Nation of Indians (the “Nation”)
               with some urgency to appeal a recently discovered, substantial
               undercount of the Nation’s active user population count and
               registrants by the Indian Health Service (the “IHS”). This
               undercount, in tum, has had a dramatic, negative impact on the
               Nation’s allocation of federal funding. As you may know, over the
               past several years, staff of the Nation’s Health Department have
               consistently submitted user population numbers that were much
               larger than what the IHS staff would ultimately conclude were our
               user population numbers for each year.

               The recent IHS report . . . reveals that more than 12,150 patient
               visits of Indians with mailing addresses from towns within our
               IHS-approved Contract Health Service Delivery Area (“CHSDA”)
               in western New York state were not counted as visits to our
               Nation’s health facilities because they were assigned instead to
               towns with the same names in Arizona, California, Colorado,
               Connecticut, Iowa, Louisiana, Maine, Massachusetts, Michigan,
               Minnesota, Montana, Nebraska, New Mexico, Pennsylvania, and
               South Carolina and thus not credited to active users within our
               CHDSA.

               Consequently, IHS mis-allocated more than a third of the 34,365
               patient visits to the Nation’s two facilities, Cattaraugus Health
               Center and Allegany Health Center, from October 1, 2009 to
               September 30, 2010. . . .




                                                4
As a result of this error, IHS has substantially undercounted the
Nation’s Active User Population. This had a measurable and costly
effect on the IHS funds allocated to the Nation on the basis of Area
and Headquarters tribal shares, as well as the funds otherwise
allocated to the Nation on the basis of patient population share
(e.g., diabetes; base funding). We estimate that a correction will
require a proportional adjustment of our FY 2010 Active User
Population total from 4,122 to 6,156, our FY 2010 Active Indian
Registrants from 4,365 to 5,971, and our FY 2010 Total Indian
Registrants from 4,365 to 7,713. In other words, our FY 2010
Active User Population was undercounted by 33% (4,122/6,156 =
66.95% or 2,034 patients).

We ask you to give your immediate attention to correcting these
errors and that you please provide the Nation with the following
information:

   •   Identify each of the years in which these errors resulted in
       an undercount, and by how much in each year.
   •   Identify each of the years in which the Nation’s suggested
       numbers differed substantially from the IHS’s final
       determination, and the steps taken by the IHS to determine
       the root cause of the discrepancies.
   •   Identify each of the years in which these errors resulted in
       lower funding allocations to Seneca Nation, and by how
       much funding by program and year.
   •   A date within the next month by which we can renegotiate
       the current FY 2011 funding allocations, based on the
       corrected Active User Population.
   •   Your proposal on how to locate and transfer funds to
       Seneca Nation in order to make Seneca Nation whole for
       the prior years in which this undercount was relied upon in
       fund allocations.

In the meantime, we ask that you agree to preserve any and all
rights that the Nation has to appeal all funding allocations which
were made in reliance upon the erroneously undercounted Active
User Population and Registrants reports. By our initial calculation,
we estimate that our claim for the FY 2010 agreement alone ranges
from $2,866,686 (33% of budgeted amount of $8,686,927) to
$6,801,696 (2,034 patients not counted times the IHS per capita
funding per the IHS National Benchmark provided by Cliff
Wiggins used in preparation for budget formulation a per patient
IHS cost figure of $3,344), plus interest. This range is based upon
the fact that our FY 2010 funding allocation was premised upon an
Active User Population figure that was undercounted by

                                 5
               approximately 33% or 2,034 patients. Within this range is a claim
               for $3,774,392 (2,034 un-counted patients times $1,855.65) based
               on the per patient cost of $1,855.65 determined by IHS last Fall
               when IHS proposed to withdraw $380,000 from the Nation in
               response to the Nation’s proposal to remove certain individuals
               from eligibility for services ($380,000 divided by 205 patients). 3

               Accordingly, pursuant to Pub. L. 93-638, as amended, we hereby
               propose an amendment to Seneca Nation’s Contract # 285-00-
               0002, for FY 2010 to increase Modification #71 by $3,774,392,
               plus interest, and request that this amendment proposal be handled
               pursuant to 25 CFR 900, Subpart D.

               Likewise, pursuant to Pub. L. 93-638, as amended, we hereby
               propose an amendment to Seneca Nation’s Contract # 285-00-
               0002, extended for FY 2011 to increase Modification #81 by
               $3,774,392, plus interest, and request that this amendment proposal
               be handled pursuant to 25 CFR 900, Subpart D. Both claims in
               both amendment proposals are reasonable. . . .

April 29, 2011 Letter, Pl. MSJ, Ex. D [Dkt. 14-7]; see also Porter Aff., Pl. MSJ, Ex. C [Dkt. 14-

6] ¶¶ 1, 7–8 (explaining undercount and methodology for requested amount).

               The April 29, 2011 Letter was sent to Martha Ketcher, Area Director of the

Nashville Area Office of the Indian Health Service, which is responsible for the Nation’s IHS

dealings, on May 3, 2011. See E-mail Chain, Pl. MSJ, Ex. D [Dkt. 14-7] at 6. Ms. Ketcher

responded on May 4, 2011, writing: “We are in receipt of your letter and have made assignments

to provide you with a response as soon as possible.” Id.

3
  This is a reference to a dispute between the Nation and IHS in 2010, during which the Nation’s
Tribal Council adopted a resolution “directing [its] Health Department to follow an eligibility
policy that would limit healthcare services to certain eligible IHS beneficiaries in violation of the
Nation’s ISEAA contract and AFA.” IHS representatives informed the Nation of the potential
violation, including the fact that “if the Nation intended to implement [the] resolution,” the
Nation would need to retrocede—that is, return to IHS—a portion of its funding. When the
Nation asked IHS how it would calculate the reduced funding, Martha Ketcher, IHS’s Area
Director for the Nation, “shared five potential formulas, which relied on various commercial
formulas, that could be used to calculate a per person value for healthcare.” Among those
formulas was one producing a per-patient cost of $1,855.65. Eventually, the Nation decided
against implementing its resolution, so no retrocession occurred. See M. Ketcher Decl., Defs.
MSJ Ex. [Dkt. 15-3] ¶¶ 10–17.

                                                  6
               Radio silence then ensued. IHS did not respond to the April 29, 2011 Letter, and

the Secretary makes no claim that it did. On August 30, 2011, counsel for the Nation sent Ms.

Ketcher an additional letter, stating that “[t]he [ISDEAA] and the regulations require that any

proposal to amend an existing contract be deemed approved by the Secretary if it is not lawfully

declined within 90 days of its receipt or within an extension of that period consented to by the

Nation. The 90-day period has expired without lawful declination by the Secretary and the

Nation has not consented to any extension of the 90-day period.” Aug. 30, 2011 Letter, Defs.

MSJ, Ex. 2 [Dkt. 15-3] at 17–18. The letter thus requested that IHS give effect to the proposals

as amendments and increase the funding for the Nation. Id.

               IHS replied by letter dated September 27, 2011, stating, in relevant part:

               The FY 2010 and FY 2011 Contracts have already been awarded
               to the Nation. The Nation, however, disputes the amount of funds
               paid under the contracts. The proper method by which to dispute
               the amount paid under an awarded contract is by submitting a
               claim pursuant to the Contract Disputes Act (CDA). (See 25 C.F.R.
               §§ 900.215- 900.230.) The CDA and its implementing regulations
               govern “[a]ll HHS and DOI Self-Determination Contracts.” 25
               C.F.R. § 900.215(a)(l). Claims submitted pursuant to the CDA
               include those post-award demands for “(1) Payment of a specific
               sum of money under the contract; (2) Adjustment or interpretation
               of contract terms; or (3) Any other claim relating to the contract.”
               25 C.F.R. § 900.218(a). Because the Nation requests post-award
               payments of specific additional sums under the contracts, the
               claims described in the April 2011 Letter clearly fall within the
               scope of those post-award contract claims that must be submitted
               under the CDA. IHS hereby determines that neither the April 2011
               Letter nor the August 2011 Letter constitutes a proper claim under
               the CDA.

Sept. 27, 2011 Letter, Defs. MSJ, Ex. 3 [Dkt. 15-3] at 20–21. Further, IHS wrote, because the

Nation claimed an amount greater than $100,000 and had not certified the claim, its request was

not a “proper claim” under the CDA, and would not be considered. Id. at 21.




                                                 7
                The Nation responded by letter dated November 30, 2011, reiterating the

substance of its April 29, 2011 Letter and reasserting that the “ninety (90) day period expired

without lawful declination by the Secretary.” Nov. 30, 2011 Letter, Pl. MSJ, Ex. D [Dkt. 14-8]

at 2–6. The Nation also re-styled its request for additional funds as a CDA claim and asked for

IHS to treat it as such. Id.

                On December 21, 2011, IHS sent the Nation two identical letters—one for each

fiscal year—acknowledging receipt of the November 30, 2011 Letter. See Dec. 21, 2011 Letters,

Pl. MSJ, Exs. F & G [Dkts. 14-9 &14-10]. Each letter stated: “The CDA requires that, within

sixty days of receiving a claim for more than $100,000, IHS must either issue a decision on the

claim or notify the contractor when it will issue the decision. . . . At this time, IHS has not had an

opportunity to adequately review and make a final decision on your claim . . . IHS anticipates

that it will issue a final contracting officer’s decision by April 13, 2012.” Id.

                By nearly identical letters dated April 5, 2012—again, one for each fiscal year at

issue—IHS denied the Nation’s claims. See FY 2010 Claim Denial Letter, Pl. MSJ, Ex. H [Dkt.

14-11]; FY 2011 Claim Denial Letter, Pl. MSJ, Ex. I [Dkt. 14-12]. As to the FY 2010 claim,

IHS reasoned:

                [T]he amount requested in the Nation’s April 29 Letter was not
                added to its FY 2010 contract as a matter of law; IHS met its
                contractual responsibilities to the Nation in FY 2010; the Nation’s
                user population miscount in FY 2010 was caused by the Tribe’s
                own error; and the ISDEAA does not require that IHS pay the
                additional amount claimed[, and, e]ven if the user population
                figure had been corrected in FY 2010, the Nation would not have
                received any additional funds in FY 2010 considering the fact that
                2010 user population was not a factor in any allocations made in
                FY 2010.

FY 2010 Claim Denial Letter at 4–8.

                Similarly, as to the FY 2011 claim, IHS wrote:


                                                  8
               The amount requested in the Nation’s April 29 Letter was not
               added to its FY 2011 contract as a matter of law; IHS met its
               contractual responsibilities to the Nation in FY 2011; the Nation’s
               user population miscount in FY 2010 was caused by the Tribe’s
               own error and was rectified during the course of FY 2011; 4 and the
               ISDEAA does not require that IHS pay the additional amount
               claimed[, and] even if the user population figure had been
               corrected in FY 2010, the Nation would not have received any
               additional funds in FY 2011.

FY 2011 Claim Denial Letter at 4–7.

               On September 10, 2012, the Nation filed its lawsuit in this Court, challenging

IHS’s refusal to award the amendment and add funding to the FY 2010 and FY 2011

Agreements. See Compl. [Dkt. 1].

                                   II. LEGAL STANDARDS

               A. Summary Judgment

                 Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment shall

be granted “if the movant shows that there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); accord Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Moreover, summary judgment is properly

granted against a party who “after adequate time for discovery and upon motion . . . fails to make

a showing sufficient to establish the existence of an element essential to that party’s case, and on

which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317,

322 (1986).




4
  The FY 2011 Claim Denial Letter states that IHS, working with the Nation, “ultimately
resolved” the technical error referenced in the April 29, 2011 Letter “in December 2011,”
resulting in a “final FY 2011 user population number” of “6,512,” which was “more than the
figure claimed by the [Nation]” in its April 29, 2011 Letter—i.e., 6,156 for FY 2010. FY 2011
Claim Denial Letter at 5.

                                                 9
               In ruling on a motion for summary judgment, the court must draw all justifiable

inferences in the nonmoving party’s favor and accept the nonmoving party’s evidence as true.

Anderson, 477 U.S. at 255. A nonmoving party, however, must establish more than “the mere

existence of a scintilla of evidence” in support of its position. Id. at 252. In addition, the

nonmoving party may not rely solely on allegations or conclusory statements. Greene v. Dalton,

164 F.3d 671, 675 (D.C. Cir. 1999). Rather, the nonmoving party must present specific facts that

would enable a reasonable jury to find in its favor. Id. at 675. If the evidence “is merely

colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 477

U.S. at 249–50 (citations omitted).

               B. ISDEAA

               The Secretary has “the burden of proof to establish by clearly demonstrating the

validity of the grounds for declining [a] contract proposal (or portion thereof).” 25 U.S.C.

§ 450f(e)(1). The parties agree, see Defs. MSJ at 9, Pl. MSJ at 7–8, that this Court’s review is de

novo. See Cheyenne River Sioux Tribe v. Kempthorne, 496 F. Supp. 2d 1059, 1066–67 (D.S.D.

2007) (citing, inter alia, Cherokee Nation of Okla. v. United States, 190 F. Supp. 2d 1248, 1258

(E.D. Okla. 2001), rev’d on other grounds by Cherokee Nation of Okla. v. Leavitt, 543 U.S. 631

(2005)); see also Shoshone-Bannock Tribes of the Fort Hall Reservation v. Shalala, 988 F. Supp.

1306, 1318 (D. Or. 1997) (concluding that the ISDEAA’s text and legislative history and the

presumption favoring Indian rights favor de novo review). 5



5
  Another court in this District applied the “arbitrary and capricious” standard of the APA to an
ISDEAA claim. See Citizen Potawatomi Nation v. Salazar, 624 F. Supp. 2d 103, 107–09
(D.D.C. 2009). That court, observing that district courts “have disagreed on the appropriate
standard to be applied,” rejected the reasoning of Cheyenne River and followed three older,
unpublished cases in applying the APA standard. Id. at 108 n.5. However, Citizen Potawatomi
Nation is distinguishable from the instant matter on at least two bases. First, the Nation brings
claims under only the ISDEAA, as opposed to both the ISDEAA and APA as in Citizen
                                                  10
                C. Statutory Interpretation and Indian Law

                In interpreting a statute, the general rule is that a court “must first determine

whether the statutory text is plain and unambiguous.” See Carcieri v. Salazar, 555 U.S. 379, 387

(2009) (interpreting the Indian Reorganization Act, 25 U.S.C § 465) (citations omitted). “In

expounding a statute, we must not be guided by a single sentence or member of a sentence, but

look to the provisions of the whole law, and to its object and policy.” U.S. Nat’l Bank of Or. v.

Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 455 (1993) (quoting United States v. Heirs of

Boisdore, 49 U.S. (8 How.) 113, 122 (1849)). The Supreme Court has clarified that canons of

statutory construction are slightly different when courts consider laws governing relations

between the United States and Indian nations. “‘[T]he canons of construction applicable in

Indian law are rooted in the unique trust relationship between the United States and the Indians.

. . . [S]tatutes are to be construed liberally in favor of the Indians, with ambiguous provisions

interpreted to their benefit.” Muscogee (Creek) Nation v. Hodel, 851 F.2d 1439, 1444–45 (D.C.

Cir. 1988) (quoting Montana v. Blackfeet Tribe, 471 U.S. 759, 766 (1985)); see also Tunica-

Biloxi Tribe of La. v. United States, 577 F. Supp. 2d 382, 421 (D.D.C. 2008) (“The result, then,

is that if the [statutory text] can reasonably be construed as the [t]ribe [or tribal organization]

would have it construed, it must be construed that way.” (quoting Muscogee, 851 F.2d at 1445;

alterations in original)).

                In seeking to give effect to the provisions of the ISDEAA, as with any statute, the

Court must treat the “object and policy” of that statute as its polestar. See BlackLight Power,

Inc. v. Rogan, 295 F.3d 1269, 1273 (Fed. Cir. 2002) (internal quotation marks and citation

omitted). The Supreme Court has explicitly found that the ISDEAA “seeks greater tribal self-

Potawatomi Nation. Id. at 109. Second, the Secretary concedes that de novo review is
appropriate. See Defs. MSJ at 9.

                                                  11
reliance brought about through more ‘effective and meaningful participation by the Indian

people’ in, and less ‘Federal domination’ of, ‘programs for, and services to, Indians.’” Cherokee

Nation, 543 U.S. at 639 (citations omitted).

               This Court has subject matter jurisdiction under 28 U.S.C. § 1331 and 25 U.S.C.

§ 450m-1(a) (“The United States district courts shall have original jurisdiction over any civil

action or claim against the appropriate Secretary arising under this subchapter and . . . over any

civil action or claim against the Secretary for money damages arising under contracts authorized

by this subchapter.”). Venue is proper under 28 U.S.C. § 1391(e)(1).

                                         III. ANALYSIS

               A. Self-Determination Contracts Under the ISDEAA

               In passing the ISDEAA in 1975, Congress found that “the prolonged Federal

domination of Indian service programs ha[d] served to retard rather than enhance the progress of

Indian people and their communities by depriving Indians of the full opportunity to develop

leadership skills crucial to the realization of self-government, and ha[d] denied to the Indian

people an effective voice in the planning and implementation of programs for the benefit of

Indians which are responsive to the true needs of Indian communities.” 25 U.S.C. § 450(a)(1).

Those concerns remain today. See Presidential Mem. on Tribal Consultation, 74 Fed. Reg.

57881, 57881 (Nov. 5, 2009) (“[F]ailure to include the voices of tribal officials in formulating

policy affecting their communities has all too often led to undesirable and, at times, devastating

and tragic results[, but] meaningful dialogue between Federal officials and tribal officials has

greatly improved Federal policy toward Indian tribes.”).

               The ISDEAA provides that the “[t]he Secretary is directed, upon the request of

any Indian tribe by tribal resolution, to enter into a self-determination contract or contracts with a

tribal organization to plan, conduct, and administer programs or portions thereof,” including

                                                 12
health services programs. 25 U.S.C. § 450f(a)(1). All self-determination contracts must

“contain, or incorporate by reference, the provisions of the model agreement” set forth in 25

U.S.C. § 450l(c) and must “contain such other provisions as are agreed to by the parties.” 25

U.S.C. § 450l(a). The model agreement included in the statute envisions, inter alia, a contract

with a term of a specified number of years, with funding for specific years to be enacted through

annual funding agreements. See id. § 450l(c).

                  Because self-determination contracts essentially allow Indian tribes to step into

the shoes of certain United States government agencies in providing certain services to their

members, “[t]he amount of funds provided under the terms of self-determination contracts

entered into pursuant to [the ISDEAA] shall not be less than the appropriate Secretary would

have otherwise provided for the operation of the programs or portions thereof for the period

covered by the contract.” Id. § 450j-1(a)(1). This amount is called the “Secretarial amount” or

“106(a) amount.” Cherokee Nation, 190 F. Supp. 2d at 149. The ISDEAA sets the Secretarial

amount as a floor; tribes are able to negotiate for higher levels of funding. “On an annual basis,

during such period as a tribe or tribal organization operates a Federal program, function, service,

or activity pursuant to a contract entered into under this subchapter, the tribe or tribal

organization shall have the option to negotiate with the Secretary the amount of funds that the

tribe or tribal organization is entitled to receive under such contract pursuant to this paragraph.”

25 U.S.C. § 450j-1(a)(3)(B). While the Secretary may only reduce the amount of funds under

§ 450j-1(a) in the specific situations listed in § 450j-1(b), those funds “may, at the request of the

tribal organization, be increased by the Secretary if necessary to carry out [the ISDEAA].” Id.

§ 450j-1(b)(5).




                                                   13
               The Secretary is not permitted to “revise or amend a self-determination contract

with a tribal organization without the tribal organization’s consent.” Id. § 450m-1(b). “[A] tribal

organization may submit a . . . proposal to amend or renew a self-determination contract[ ] to the

Secretary for review.” Id. § 450f(a)(1). The ISDEAA further provides:

               Subject to the provisions of [25 U.S.C § 450f(a)(4), governing
               severable portions of contract proposals], the Secretary shall,
               within ninety days after receipt of the proposal, approve the
               proposal and award the contract unless the Secretary provides
               written notification to the applicant that contains a specific finding
               that clearly demonstrates that, or that is supported by a controlling
               legal authority that—

               (A) the service to be rendered to the Indian beneficiaries of the
               particular program or function to be contracted will not be
               satisfactory;

               (B) adequate protection of trust resources is not assured;

               (C) the proposed project or function to be contracted for cannot be
               properly completed or maintained by the proposed contract;

               (D) the amount of funds proposed under the contract is in excess of
               the applicable funding level for the contract, as determined under
               [25 U.S.C.] § 450j-1(a); or

               (E) the program, function, service, or activity (or portion thereof)
               that is the subject of the proposal is beyond the scope of programs,
               functions, services, or activities covered under paragraph (1)
               because the proposal includes activities that cannot lawfully be
               carried out by the contractor.

Id. § 450f(a)(2). The 90-day period is subject to extension “if before the expiration of such

period, the Secretary obtains the voluntary and express written consent of the tribe or tribal

organization to extend or otherwise alter such period.” Id. If the Secretary declines to enter into

a contract proposal, she is required to, inter alia, provide written objections and assist the tribal

organization in remedying deficiencies in the proposal. Id. § 450f(b).




                                                  14
               The ISDEAA is implemented by regulations promulgated by the Secretary,

collected in 25 C.F.R. Part 900. Those regulations are automatically made part of all ISDEAA

contracts. 25 C.F.R. § 900.2(c) (“Each contract, including grants and cooperative agreements in

lieu of contracts awarded under section 9 of the Act, shall include by reference the provisions of

this part, and any amendment thereto, and they are binding on the Secretary and the contractor

except as otherwise specifically authorized by a waiver under section 107(e) of the Act.”).

               Directly relevant here is Subpart D of the implementing regulations, 25 C.F.R.

§ 900.14–.19, which governs, inter alia, “any proposal . . . to amend an existing self-

determination contract.” Id. § 900.14. Consistent with 25 U.S.C. § 450f, 25 C.F.R. § 900.16

provides:

               How long does the Secretary have to review and approve the
               proposal and award the contract, or decline a proposal?

               The Secretary has 90 days after receipt of a proposal to review and
               approve the proposal and award the contract or decline the
               proposal in compliance with section 102 of the Act and subpart E.
               At any time during the review period the Secretary may approve
               the proposal and award the requested contract.

               The regulations, like the statute, permit the Secretary to obtain an extension to the

90-day deadline “with written consent of the Indian tribe or tribal organization. If consent is not

given, the 90–day deadline applies.” Id. § 900.17. Moreover, “[a] proposal that is not declined

within 90 days (or within any agreed extension under § 900.17) is deemed approved and the

Secretary shall award the contract or any amendment or renewal within that 90–day period and

add to the contract the full amount of funds pursuant to section 106(a) of the Act.” Id. § 900.18

(emphases added); see also id. § 900.21 (“When can a proposal be declined? As explained in

§§ 900.16 and 900.17, a proposal can only be declined within 90 days after the Secretary




                                                15
receives the proposal, unless that period is extended with the voluntary and express written

consent of the Indian tribe or tribal organization.”).

               B. The Effect of the Nation’s Proposed Amendments

               The Nation’s argument is forceful in its simplicity, in its support in the undisputed

evidence, and in its grounding in the unambiguous terms of the Contract, the statute, and the

regulations. “In the April 29 Proposal Letter, the Nation proposed in plain terms to amend the

Nation’s FY 2010 Agreement to increase funding by $3,774,392, plus interest . . . [and i]n the

same letter, the Nation . . . proposed an identical amendment to the Nation’s FY 2011

Agreement.” Pl. MSJ 9–10. “The IHS Nashville Office received the April 29 Proposal Letter

. . . on May 2, 2011 . . . [but t]he ninety (90) day period expired before August 3, 2011, without

any response during that time by the Secretary or any other officer of the Department to the

Nation’s proposed amendments other than a May 4, 2011 e-mail acknowledging that ‘[w]e are in

receipt of your [April 29 Proposal Letter] and have made assignments to provide you with a

response as soon as possible.’” Id. at 10 (quoting E-mail Chain at 6). According to the Nation,

its proposals thus automatically became part of the Contract under 25 U.S.C. § 450f(a)(2) and 25

C.F.R. § 900.18. The ISDEAA states: “Subject to the provisions of [25 U.S.C § 450f(a)(4),

governing severable portions of contract proposals], the Secretary shall, within ninety days after

receipt of the proposal, approve the proposal and award the contract unless the Secretary

provides written notification to the applicant” that one of five reasons for declination applies. 25

U.S.C. § 450f(a)(2) (emphases added); see also 25 C.F.R. § 900.16. The regulatory text is

equally unequivocal: “A proposal that is not declined within 90 days (or within any agreed

extension under § 900.17) is deemed approved and the Secretary shall award . . . any amendment

. . . and add to the contract the full amount of funds pursuant to section 106(a) of the Act.” 25

C.F.R. § 900.18 (emphases added). As noted above, the regulatory text automatically became
                                                  16
part of the Contract. See 25 C.F.R. § 900.2(c). 6 Because the Contract and all of these provisions

are clear, the Court finds that the Nation’s April 29, 2011 Letter proposed amendments to the

Contract for FY 2010 and FY 2011 that became effective when the Secretary failed to respond

within 90 days.

               Seeking to avoid the consequences of IHS’s failure to respond to the Nation, the

Secretary advances four arguments. First, she asserts, “the April 29 Letter was not a proper

proposal to amend” because “the FY 2010 AFA had been fully performed well before the April

29 [L]etter was submitted.” Defs. MSJ at 10–12. Second, according to the Secretary, the Letter

“was in substance a contract claim for additional funds,” not an amendment proposal. Defs. MSJ

at 10, 12–14. Third, “even if the April 29 Letter were a proper proposal to amend, the Secretary

has met the requirements of the statute and regulations, which only require that [IHS] add the full

[Secretarial] amount to the agreements.” Id. at 10, 14–19. Lastly, the Secretary argues that the

Nation “has failed to show that it is entitled to its claimed per-patient amount” because there is

“no evidentiary basis” for the amounts requested. Id. at 10, 19–20. Each argument misses the

mark.

                       1. Whether the Amendment Proposal Was Not Proper Because the
                          Time for Performance Had Lapsed

               First, the Secretary argues, the April 29, 2011 Letter was not a proper proposal to

amend the Contract because “by the time the Nation sent the April 29 Letter to IHS, the FY 2010

contract and AFA had been fully paid and performed” because FY 2010 “ended on September


6
 The Court notes that the IHS “Internal Agency Procedures Handbook” states, in the section for
“Contract Amendment Proposals,” that “[f]ailure of agency personnel to act within the 90-day
period precludes the agency from asserting a declination issue and results in the award of a
contract amendment, consistent with 25 C.F.R. § 900.18.” DOI/IHS Internal Agency Procedures
Workgroup, Handbook at 5-20, July 28, 1999, available at
http://www.bia.gov/cs/groups/xois/documents/collection/idc013271.pdf.

                                                 17
30, 2010.” Defs. MSJ at 11–12 (citing, inter alia, Restatement (Second) of Contracts § 235); see

also Defs. Reply [Dkt. 21] at 2–3 (“[T]he FY 2010 and FY 2011 contracts are clearly separate

and distinct, with each having a limited performance period.”). The Nation responds that the

parties “could not have fully performed the [Nation’s] underlying self-determination [C]ontract

before the April 29 Proposal Letter because the [C]ontract is for an indefinite term.” Pls. Reply

[Dkt. 18] at 3 (citing Contract, Art. II § 1). Rather than being discrete annual contracts, in the

Nation’s view the AFAs are merely “successor amendments” to the Contract—i.e., side

agreements as to how much money the Nation will receive to reimburse it for the health services

it provides to its members in a given year, each of which becomes part of the larger, indefinite-

term Contract. Id. at 3–5. The Nation also notes that the Secretary pays each year’s funding in a

lump sum, in advance, and that the funds become “no year” appropriations with no deadline for

use once transferred. Id. at 4–5.

               The Secretary’s argument depends on two premises: first, that the AFAs are

separate agreements that exist distinct from the Contract and, second, that the parties’ time for

mutual performance under the separate agreement (i.e., the FY 2010 AFA) had lapsed once she

transferred the originally negotiated lump sum for FY 2010. 7 The first premise is fallacious

because it runs contrary to the text and purpose of the parties’ self-determination Contract. Like

all self-determination contracts following the model agreement set forth in 25 U.S.C. § 450l(c),

the Contract here is designed as an overarching document that defines the parties’ relationship,

while they negotiate annually the amount to be paid. The Contract states plainly that its term is

“indefinite,” with a “funding period . . . [to] be determined on the basis of a calendar year” or


7
  The Secretary fails to elucidate how her argument extends to FY 2011 given that, by her own
definition, the FY 2011 AFA was not fully performed when the Nation proposed the amendment
in April 2011. FY 2011 Claim Denial Letter at 5.

                                                 18
other agreed-upon period. 8 Contract at 2. “The total amount of funds to be paid under this

Contract, pursuant to Section 106(a) of the Act” is to be “determined in an Annual Funding

Agreement [AFA] entered into between the Secretary and the Contractor, which shall be

incorporated into this Contract.” Contract at 7. Thus, the Nation and the Secretary entered into

the Contract in 2000 and agreed upon a procedure to negotiate payments for ensuing fiscal years.

This procedure is in keeping with the ISDEAA’s directive that “[o]n an annual basis . . . the tribe

or tribal organization shall have the option to negotiate with the Secretary the amount of funds

that the tribe or tribal organization is entitled to receive under such contract pursuant to this

paragraph.” Id. § 450j-1(a)(3)(B). Thus, under the Contract as agreed upon and performed by

the parties, the AFAs are not standalone agreements; they form part of the original Contract as

anticipated by the Parties and are subject to its terms.

               The Secretary’s second premise—that the parties’ time for mutual performance

lapsed once she transferred the originally negotiated lump sum for FY 2010—is also flawed.

The Secretary agrees that its Contract with the Nation is “indefinite,” Contract at 2; by its term,

the time for performance had not lapsed. Moreover, the Secretary’s argument conflicts with the

reality of the contracting process. The parties enter into AFAs before the fiscal year in question

concludes—for example, the FY 2010 AFA was countersigned on November 12, 2009, for a

fiscal year that began on October 1, 2009. Thus, they enter into funding agreements by making

predictions about future costs. It is completely logical to imagine a scenario like the one

presented here, in which one of the parties learns belatedly that one of its key presumptions at the

time of negotiation was materially flawed. In order to have sufficient funding to cover all

healthcare costs actually incurred, that party asks the other to reform the contract. While FY
8
 As stated above, the parties have agreed to new funding levels annually, originally using a
calendar year before switching to a fiscal-year system in 2004.

                                                  19
2010 had concluded when the Nation realized its error and proposed the amendment, that fact

does not mean that the Nation had paid for all of its FY 2010 costs. Indeed, as the United

States’s Medicare system shows, it is common in the healthcare field for institutions to receive

prepayments and then process adjustments for years afterward. Presumably, in the ordinary

course of business, a less gross differential between predicted and actual costs for annual

healthcare under the ISDEAA is absorbed by one party or the other, informing negotiations for

future years. But nothing in the contract precludes the Nation from doing what it did here, which

was to propose that it receive more funding because there had been an error of substantial

magnitude. The Secretary had the contractual right to say “no” for 90 days; she cannot now

complain about the consequences of failing to do so.

                       2. Whether the April 29, 2011 Letter Was a “Claim” Instead of an
                          “Amendment”

               Second, the Secretary contends that the April 29, 2011 Letter was not a valid

proposed amendment because it was merely a “claim” for additional funds deriving from the

Nation’s own erroneous user population count. Defs. MSJ at 12–14; Defs. Reply at 4–5.

According to the Secretary, “the proper inquiry is ascertaining the substance of what the Nation

proposed in its April 29 Letter,” which she claims is “an attempt to make a post-award claim for

additional funds to which it was not entitled under the ISDEAA.” Defs. Reply at 4. She asserts

that the ISDEAA distinguishes between a “true ‘amendment’”—which must include a proposal

to take on new programs or services—and a “mere supplement of funds to existing programs,”

which must be treated as a claim. Id. at 4 (citing 25 U.S.C. § 450l(c)(e)(2)). If the Secretary

were correct, then the grievance raised by the Nation in this case would be properly considered a

“claim” subject to the procedures of the Contract Disputes Act of 1978 (“CDA”), Pub. L. 95-

563, 92 Stat. 2383, codified at 41 U.S.C. § 7101 et seq. If the April 29, 2011 Letter were a


                                                20
“claim” and not a proposed amendment, it would not be subject to 25 U.S.C. § 450f(a)(2) and 25

C.F.R. § 900.18, which make proposed “amendments” automatically effective after 90 days

without response.

               The first part of the Secretary’s argument—that the April 29, 2011 Letter by its

plain text was a “claim” and not an “amendment”— is unfounded. While the word “claim” does

appear in the document several times, the Nation’s intent is unmistakable:

               Accordingly, pursuant to Pub. L. 93-638, as amended, we hereby
               propose an amendment to Seneca Nation’s Contract # 285-00-
               0002, for FY 2010 to increase Modification #71 by $3,774,392,
               plus interest, and request that this amendment proposal be handled
               pursuant to 25 CFR 900, Subpart D.

               Likewise, pursuant to Pub. L. 93-638, as amended, we hereby
               propose an amendment to Seneca Nation’s Contract # 285-00-
               0002, extended for FY 2011 to increase Modification #81 by
               $3,774,392, plus interest, and request that this amendment
               proposal be handled pursuant to 25 CFR 900, Subpart D. Both
               claims in both amendment proposals . . . .

April 29, 2011 Letter at 2–3 (emphases added). This letter put IHS on notice that the Nation

intended to propose an amendment and believed that it was doing so; ordinary principles of good

faith dealing in contracts behooved the Secretary to notify the Nation in a timely manner that it

disagreed, rather than simply wait for the 90-day period to expire.

               The Secretary’s argument thus becomes that, contrary to the Nation’s intent, the

April 29, 2011 Letter must be treated as a “claim.” The Secretary cites 25 U.S.C. § 450m-1(d)

and Subpart N of the ISDEAA implementing regulations, 25 C.F.R. §§ 900.215–.230, to support

her argument. The statutory provision, 25 U.S.C. § 450m-1(d), provides simply that “Chapter 71

of Title 41 [i.e., the CDA] shall apply to self-determination contracts.” Subpart N, governing

“Post-Award Contract Disputes,” “covers [a]ll HHS and DOI self-determination contracts,

including construction contracts; and [a]ll disputes regarding an awarding official’s decision


                                                21
relating to a self-determination contract.” 25 C.F.R. § 900.215. The CDA and Subpart N require

government contractors to submit claims to a contracting officer for a ruling and to follow

special requirements on claims greater than $100,000, including submitting a special

certification. See 41 U.S.C. § 7103(b), 25 C.F.R. §§ 900.219–.220. The Secretary also notes the

definition in 25 C.F.R. § 900.218: “A claim is a written demand by one of the contracting parties,

asking for . . . [a]djustment or interpretation of contract terms.” 25 C.F.R. § 900.218.

               The regulatory provisions and the Contract contravene the Secretary’s argument.

The “Modifications and Amendments” section of the Contract, Article V Section 2—which

again parrots the model agreement set forth in the text of the ISDEAA—states:

               (A) IN GENERAL-Except as provided in Article V, Section 2(B)
               of this Contract, no modification to this Contract shall take effect
               unless such modification is made in the form of a written
               amendment to this Contract, and the Contractor and the Secretary
               provide written consent for modification.

               (B) EXCEPTION-The addition of supplemental funds for
               programs, services, functions and activities (or portions thereof)
               already included in the Annual Funding Agreement under Article
               VII, Section 2 of this Contract, or the reduction of funds pursuant
               to Section 106(b)(2) of the Act, shall not be subject to Article V,
               Section 2(A) above.

Contract at 9. This provision is even more permissive in its treatment of requests for additions of

supplemental funds—such proposed modifications may take the form of a written amendment,

but they need not do so. The language indicates and carries out the intent of Congress in

enacting the ISDEAA, which states that funds “may, at the request of the tribal organization, be

increased by the Secretary if necessary to carry out [the ISDEAA],” 25 U.S.C. § 450j-1(b)(5),

and that the Secretary is not permitted to “revise or amend a self-determination contract with a

tribal organization without the tribal organization’s consent,” id. § 450m-1(b).




                                                22
               While the Secretary correctly quotes the text of 25 C.F.R. § 900.218, which

defines a “claim” as a request for “[a]djustment or interpretation of contract terms,” that

provision cannot trump the direct provisions in the Contract and the ISDEAA that specifically

contemplate proposed amendments for an increase in funding. 9 Moreover, the Secretary’s

reading contravenes the common understanding of the terms “amendment” and “claim.” The

former reflects a change to the terms of the parties’ agreement, while a “claim” refers to a

demand to something that rightfully belongs to a party pursuant to an existing agreement. See

Black’s Law Dictionary (9th ed. 2009) (defining “amendment” as “[a] formal revision or

addition proposed or made to . . . [an] instrument; specif., a change made by addition, deletion,

or correction; esp., an alteration in wording” and defining “claim” as “[t]he assertion of an

existing right; any right to payment or to an equitable remedy, even if contingent or provisional”

or “[a] demand for money, property, or a legal remedy to which one asserts a right”). The

Nation’s April 29, 2011 Letter cannot be fairly characterized as a claim as opposed to an

amendment; the Nation acknowledged at that time, and acknowledges now, that the agreement it

originally struck as to FY 2010 and FY 2011 was different, to the tune of $7.4 million, from the

agreement it asked the Secretary to consider on April 29, 2011. If the Secretary wished to take

the position that the April 29, 2011 Letter was a “claim” and not a proper amendment proposal to


9
  Moreover, the regulatory text implies that a “claim” does not encompass proposed amendments
implicating additional funding for self-determination contracts. Subpart N of the regulations,
which incorporates the CDA language and requires special procedures for submission of a claim,
states that it “does not cover the decisions of an awarding official that are covered under subpart
L.” 25 C.F.R. § 900.215(b). The first part of Subpart L, which governs “appeals other than
emergency reassumption and suspension, withholding, or delay in payment,” specifically
provides for appeal of “[a] decision to decline a proposed amendment to a self-determination
contract, or a portion thereof, under section 102 of the ISDEAA.” 25 C.F.R. § 900.150(c).
These provisions, read in tandem, further suggest that the ISDEAA and its regulations draw a
distinction between a “claim” for a benefit not received under a contract and an “amendment”
seeking to change the terms of that contract.

                                                 23
be treated “pursuant to 25 CFR 900, Subpart D” as requested in the April 29, 2011 Letter, she

should have done so within the statutorily provided 90 days.

                       3. Whether the ISDEAA Prohibits the Secretary from Increasing the
                          Nation’s Funding

               The Secretary’s third argument is that IHS “fulfilled its statutory duty by paying

the Nation the total amount required under section 106(a) of the ISDEAA [25 U.S.C. § 450j-

1(a)] and 25 C.F.R. § 900.18” by using her “discretion to establish the amount of funds spent on

the programs it is operating before the programs are transferred under the contract.” Defs. MSJ

at 14, Defs. Reply at 5. She claims that “[t]he ISDEAA and regulations require nothing more,

regardless of whether the April 29 Letter could be construed as a deemed-approved amendment.”

Defs. Reply at 5. In advancing this argument—which can be charitably characterized as

tentative and opaque—the Secretary vacillates between suggesting that she is promulgating an

interpretation of § 900.18 in her summary judgment brief that is deserving of Chevron deference,

Defs. MSJ at 15–17, and arguing that the Nation is unfairly trying to garner a “windfall” at the

expense of other tribes due to a “procedural technicality,” id. at 18.

               The essence of the Secretary’s third argument is stated most clearly on page 18 of

her summary judgment brief: “[O]nce IHS has defined the Secretarial amount [under 25 U.S.C.

§ 450j-1(a)] available to a tribe, applying the same methodology for each tribe, and contracted

with that tribe based on that premise, it is not authorized to provide some other category and alter

that contractual promise, absent limited circumstances prescribed by statute.” Defs. MSJ at 18.

The Nation rejoins that it “does not assert that it is entitled to an amount in excess of the Section

106(a) Secretarial amount[; r]ather, [the Nation] submitted requests for additional funding to the

Secretary in the form of proposed amendments to its contract to increase the Section 106(a)

Secretarial amount to which it is entitled.” Pls. Reply at 9.


                                                 24
               The ISDEAA firmly supports the Nation’s position. The Nation’s proposed

amendment sought the Secretary’s agreement to increase the amount of funds it received under

25 U.S.C. § 450j-1(a)—that is, its “Section 106(a)” or “Secretarial” amount. See April 29, 2011

Letter at 2–3. As noted above, the ISDEAA does not state that the Secretarial amount becomes

immutable once agreed upon for a given year; instead, it explicitly contemplates that self-

determination contract funds “may, at the request of the tribal organization, be increased by the

Secretary if necessary to carry out [the ISDEAA].” 25 U.S.C. § 450j-1(b)(5). Moreover, the

very reason put forth by the Secretary now—that “the amount of funds proposed under the

contract [amendment] is in excess of the applicable funding level for the contract, as determined

under [25 U.S.C. § 450j-1(a)]”—is one of the five reasons listed in the ISDEAA that can justify

the Secretary’s refusal to agree to “a proposal to amend . . . a self-determination contract.” Id.

§ 450f(a)(2)(D). The Secretary’s argument that she was not obligated to give a timely response

of the precise type of response articulated by the statute is unpersuasive.

               The next position advocated by the Secretary—that, even if the amendment were

effective, she is statutorily prohibited from adding these funds once the Secretarial amount is

set—fails for several reasons. First, as discussed above, 25 U.S.C. § 450j-1(b)(5) explicitly

contemplates that the Secretary may increase the Secretarial amount. Second, her suggestion

that she has exhausted her statutory responsibilities by using her “discretion to establish the

amount of funds spent on the programs it is operating before the programs [were] transferred” to

the Nation’s control, Defs. Reply at 5, ignores the contractual nature of the relationship between

the Nation and IHS, who agreed to the Contract and to negotiate funding levels for each fiscal

year. The Secretary and the Nation’s relationship is governed by the Contract and by the

provisions of the ISDEAA, the latter of which specifies that proposed amendments automatically



                                                 25
become part of the Contract if the Secretary fails to respond in a timely manner. The Contract

and the statute do not preserve any place for the Secretary’s discretionary authority to determine

funding levels post facto of her failure to carry out a non-discretionary obligation to respond

within 90 days or face the consequences of not doing so.

               To the extent that the Secretary argues that the payment of approximately $7.4

million to the Nation is a financial impossibility and would permit the Nation to gain a financial

windfall at the expense of other Indian tribes, the Secretary impermissibly invites the Court to

meddle with her contracts and “render [her] promises nonbinding.” Cherokee Nation, 543 U.S.

at 641. A very similar argument was rejected by the Supreme Court in Cherokee Nation, in

which the government argued that 25 U.S.C. § 450j-(a)(1) was “an affirmative grant of authority

to the Secretary to adjust funding levels based on appropriations.” Id. at 643–44 (citation to

government brief omitted). The Supreme Court held that when a federal agency promises to

make payment to a tribe under a self-determination contract, the agency is obligated to make the

payment even if doing so would require diversion of funds from other tribes if sufficient

unrestricted appropriations remain, notwithstanding the language in 25 U.S.C. § 450j-1(b) that

“the Secretary is not required to reduce funding for programs, projects, or activities serving a

tribe to make funds available to another tribe or tribal organization.” See 543 U.S. at 642

(“[A]gencies may sometimes find that they must spend unrestricted appropriated funds to satisfy

needs they believe more important than fulfilling a contractual obligation. But the law normally

expects the Government to avoid such situations . . . .”). While not precisely on point, Cherokee

Nation at least stands for the proposition that, subject to sufficient unrestricted appropriations,

the Secretary may not use § 450j-1(b) as a shield to avoid her contractual obligations. 543 U.S.

at 643–44.



                                                  26
                         4. Whether the Nation’s Per-Patient Amount Is Appropriate

                Finally, the Secretary argues that the Nation “has not demonstrated that it is

entitled to a per-patient amount of $1,855.65” because the Nation “cites an arbitrary per-person

cost of providing healthcare and applies it to the patients it alleges were undercounted.” Defs.

Reply at 10. Because “IHS does not fund ISDEAA contracts on a per-person basis” and because

“the Nation has not provided evidence that this precise figure was ever proposed by IHS in any

scenario” and has not “shown that IHS ever conclusively determined a per-patient cost of

healthcare for the Nation,” the Secretary argues that the Nation is not entitled to the proposed

payments. Defs. Reply at 11. The Secretary relies on the Declaration of Cliff N. Wiggins,

Senior Operations Research Analyst for IHS in its Rockville, MD Headquarters. Mr. Wiggins

states that “[e]ven if IHS reinstated 2,034 persons erroneously omitted by the Seneca Nation of

Indians (Nation or Tribe) in its FY 2010 user population count, HQ would not increase base

funding levels because they do not fluctuate with user population counts and were not reduced

when the users were omitted.” Wiggins Decl., Defs. MSJ Ex. [Dkt. 15-3] at 11–15, ¶ 12.

                First, the Secretary fundamentally misunderstands the burden placed on her by the

statute. The Secretary bears the burden of “clearly demonstrating the validity of the grounds for

declining [a] contract proposal (or portion thereof),” 25 U.S.C. § 450f(e)(1); it is not the Nation’s

burden to justify the validity of its position. As set forth above, IHS failed to respond to the

proposed amendments within the required time, and the Secretary has not shown that it was

justified in doing so.

                Moreover, questioning the validity of the Nation’s per-person amount is not a

proper task for the Court at this juncture. The Secretary invites the Court to evaluate the bargain

the parties have struck through their Contract and operation of law, but that is a matter properly

addressed through contract negotiations or through declination of the proposed amendment
                                                 27
pursuant to 25 U.S.C. § 450f(a)(2) if the Secretary truly believed the amount was unsupported.

The Court also notes that the amount proposed by the Nation appears facially reasonable because

even if IHS does not traditionally calculate funding on a per-person basis, the Nation has

explained that it selected a formula to remedy its perceived funding gap by picking a

comparatively low per-capita figure from the five formulas given to it as examples by IHS

representatives, including Mr. Wiggins. See April 29, 2011 Letter at 2–3 (explaining that the

Nation used $1,855.65 per person times 2,034 persons, although the highest formula rate was

$3,344 per person).

               The Court finds that the relevant provisions of the ISDEAA and its implementing

regulations are clear and that none of the arguments offered by the Secretary is sufficient to

muddy the waters. When the Secretary fails to respond to an amendment proposal to a self-

determination contract within the allotted 90 days, the proposal automatically becomes part of

the parties’ Contract. See 25 U.S.C. § 450f(a)(2), 25 C.F.R. § 900.18. While this system may

seem imbalanced, Congress designed self-determination contracts to work in this manner for a

specific remedial purpose, and the ISDEAA, its regulations, and the resulting contracts between

Indian tribes and the United States must be read with that remedial intent in mind. By ignoring

her deadline, the Secretary became bound to the proposed Contract amendments.

                                       IV. CONCLUSION

               For the foregoing reasons, Plaintiff’s Motion for Summary Judgment on Counts I,

II, and III, Dkt. 14, will be granted, and Defendants’ Cross-Motion for Summary Judgment, Dkt.

15, will be denied. A memorializing Order accompanies this Opinion.

DATE: May 23, 2013

                                                                    /s/
                                                     ROSEMARY M. COLLYER
                                                     United States District Judge

                                                28
