Cherokee Nation of Okla. v. Leavitt
2005 U.S. LEXIS 2199, 161 L. Ed. 2d 66, 125 S. Ct. 1172 (2005)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
When the government enters into a self-determination contract with an Indian Tribe and promises to pay contract support costs, that promise is legally binding if Congress makes a general, unrestricted lump-sum appropriation to the relevant agency sufficient to cover the contract. An agency cannot render appropriated funds 'unavailable' simply by allocating them to other purposes.
Facts:
- The Shoshone-Paiute and Cherokee Nation Tribes entered into self-determination contracts with the U.S. government for fiscal years 1994 through 1997.
- Under these contracts, the Tribes agreed to provide health services that a government agency, the Indian Health Service, would otherwise have provided.
- Each contract included an 'Annual Funding Agreement' in which the government explicitly promised to pay the Tribes' 'contract support costs,' which are the administrative and overhead expenses necessary to perform the contract.
- For each of the years in question, Congress appropriated a large, unrestricted lump-sum amount of funds to the Indian Health Service for carrying out the Indian Self-Determination Act.
- The total lump-sum appropriation each year was more than sufficient to pay the full contract support costs promised to these specific Tribes.
- The government subsequently refused to pay the full amount of the contract support costs it had promised, arguing that the total appropriation was insufficient to pay all such contracts with all tribes nationwide.
Procedural Posture:
- The Shoshone-Paiute and Cherokee Nation Tribes submitted administrative claims for payment to the Department of the Interior, which were denied.
- The Tribes filed a breach-of-contract lawsuit against the United States in the U.S. District Court for the Eastern District of Oklahoma.
- The District Court, a court of first instance, ruled in favor of the government.
- The Tribes appealed to the U.S. Court of Appeals for the Tenth Circuit, an intermediate appellate court, which affirmed the district court's decision for the government.
- In a separate but related case, the Cherokee Nation's administrative claim was denied by a contracting officer, but the Interior Department's Board of Contract Appeals reversed and ordered payment.
- The government sought review of the Board's decision in the U.S. Court of Appeals for the Federal Circuit, which affirmed the decision in favor of the Cherokee Nation.
- The U.S. Supreme Court granted certiorari to resolve the conflict between the Tenth Circuit's and the Federal Circuit's rulings on the same legal issue.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the government's promise to pay contract support costs to Indian Tribes under the Indian Self-Determination and Education Assistance Act create a legally binding obligation when Congress has made a general lump-sum appropriation to the relevant agency that is sufficient to cover those costs?
Opinions:
Majority - Justice Breyer
Yes, the government's promise to pay contract support costs creates a legally binding obligation. These self-determination contracts are binding promises, analogous to ordinary government procurement contracts. The statutory phrase 'subject to the availability of appropriations' does not grant the government discretion to cancel its obligation once funds are appropriated; it merely establishes that a contract is not binding until Congress appropriates adequate funds. When Congress appropriates a sufficient, unrestricted lump-sum, the government cannot render those funds unavailable by choosing to allocate them for other purposes. A later-enacted statute that could be read to retroactively cancel this obligation must be interpreted narrowly to avoid the serious constitutional problem of the government repudiating its own binding promises.
Concurring - Justice Scalia
Agrees with the majority's conclusion that the government's promises are binding. However, he objects to the majority's reliance on a Senate Committee Report to interpret the meaning of a statute. Justice Scalia argues that legislative history like committee reports is not law and is an unreliable indicator of what Congress as a whole intended; courts should rely only on the text of the statute that was actually enacted.
Analysis:
This decision solidifies the principle that the government is bound by its contractual promises to Indian Tribes under self-determination contracts, affording these agreements the same legal weight as standard procurement contracts. It prevents executive agencies from effectively nullifying contracts by reallocating unrestricted funds to other priorities and then claiming a lack of appropriations. The ruling reinforces the canon of constitutional avoidance by narrowly interpreting a subsequent statute to prevent a retroactive repudiation of government debt, thereby upholding the government's reliability as a contractual partner.
