UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
______________________________
CITIZEN POTAWATOMI NATION, )
)
Plaintiff, )
)
v. ) Civil Action No. 06-830 (GK)
)
)
KENNETH L. SALAZAR,1 )
Secretary of the )
Interior, et al., )
)
Defendants. )
______________________________)
MEMORANDUM OPINION
Plaintiff, a federally recognized Indian Tribe whose
jurisdictional area is located in Oklahoma, brings this action
against Kenneth L. Salazar in his official capacity as Secretary of
the Department of the Interior (“the Department” or “the agency”).
Plaintiff challenges the application of a formula that the
Department uses to distribute funds to certain tribes. This
challenge, along with other issues, was raised at the agency level;
Plaintiff now seeks review of a decision by the Department of
Interior Board of Contract Appeals (“IBIA” or “the Board”). This
matter is before the Court on Plaintiff’s Motion for Summary
Judgment [Dkt. No. 24] and Defendants’ Motion for Summary Judgment
[Dkt. No. 25]. Upon consideration of the Motions, Oppositions,
1
Pursuant to Fed. R. Civ. P. 25(d), Secretary of the Interior
Kenneth L. Salazar is automatically substituted as defendant for
former Secretary Dirk Kempthorne.
Replies, and the entire record herein, and for the reasons stated
below, Plaintiff’s Motion for Summary Judgment is denied and
Defendants’ Motion for Summary Judgment is granted.
I. BACKGROUND
A. Factual Background2
The current controversy began when Citizen Potawatomi Nation
(“CPN”) entered into an agreement with Defendants to establish a
formula for the distribution of federal funds. Eventually, this
formula would be used to calculate how funds were to be distributed
to tribes under the Indian Self-Determination Act (“ISDA”), 25
U.S.C. §§ 450 et seq.
In 1988, Defendants’ Bureau of Indian Affairs (“BIA”) reached
an agreement with the Shawnee Agency Tribes, composed of five
tribes one of which is the Plaintiff. In a Tribal Resolution, CPN
agreed along with the four other tribes on a funding formula by
which Defendants would distribute funds to the Shawnee Agency
Tribes. The formula contained four factors that would dictate how
the funds would be disbursed: (1) 25% equally divided; (2) 25% in
proportion to total tribal enrollment; (3) 25% in proportion to
resident tribal population within each tribe’s jurisdictional area;
(4) 25% in proportion to the amount of trust property in each
2
Unless otherwise noted, the facts set forth herein are
drawn from parties’ Statements of Material Facts Not in Dispute, as
well as the Administrative Record (“AR”) upon which the Board
relied.
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tribe’s jurisdiction. Pl.’s Statement of Material Facts at ¶ 3; AR
at Tab 60 (Ex. A, Attachment 1).
The Defendants decided to use data from 1988 to calculate the
funding formula. CPN objects to this static application of the
funding factors. The parties have litigated this matter in federal
court in the past, see infra, at pp. 6-8, and more recently before
the Interior Board of Indian Appeals. The crux of the dispute at
the agency level was whether parties intended this formula to be
calculated by using new data as it changed from year to year, or by
using data as it existed in 1988 at the time the resolution was
adopted. Compl. at ¶¶ 17-37; AR at Tab 66 (Citizen Potawatomi
Nation v. Director, Office of Self-Governance, 42 IBIA 160 (Jan.
25, 2006) (hereinafter cited as “IBIA Decision”)). CPN now seeks
a review of the Board’s decision.
The two-page Tribal Resolution, which is essentially a
contract, specifies the above formula, and includes language that
would later become central to this litigation. The Resolution
committed the tribes to “conform to all aspects of the CFR1
appropriate to the given program to be contracted by all five
tribes of the Shawnee Agency.” Before certifying the agreement,
CPN agreed “with the tribes served by the Shawnee Agency to
contract for all Bureau of Indian Affairs provided operation and
1
Parties were referring to the Code of Federal
Regulations.
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services in FY 89 and future years.” Pl.’s Statement of Material
Facts at 3; AR at Tab 60 (Ex. A, Attachment 1).
The difference between the self-determination contract and the
self-governance contract is described in the ISDA and its
regulations. Once a tribe has entered into a Compact, it may no
longer execute self-determination contracts. 25 U.S.C.
§ 458cc(b)(8)(A). Under the provisions governing self-
determination contracts, tribes may submit proposals to the
Department for such contracts which, if approved, would allow them
to oversee certain programs with the use of Department funds. See
25 U.S.C. § 450f; 25 C.F.R. §§ 900.8-.16 (2009). Under the ISDA,
a Compact of Self-Governance allows the tribe to assume more
comprehensive responsibility for programs otherwise overseen by the
Department. See 25 U.S.C. §§ 458aa-cc; 25 C.F.R. §§ 1000.91-.104.
Under the self-government arrangement, tribes negotiate AFAs each
year for the disbursement of program funds. See 25 U.S.C. §§
458aa-cc; 25 C.F.R. §§ 1000.91-.104.
During the period between 1988 and FY 1999, Plaintiff entered
into self-determination contracts with Defendants. Pl.’s Statement
of Material Facts at ¶ 7; 25 U.S.C. §§ 450f-450n. Although the
ISDA governed these contracts and funds were disbursed according to
the terms of the Tribal Resolution, see Pl.’s Statement of Material
Facts at ¶¶ 2-3, CPN had not yet formally entered the ISDA’s Tribal
Self-Governance Program, id. at ¶ 7. In 1998, it did so. Id. at
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¶ 9; AR at Tab 45. Under the ISDA, tribes may enter into a Compact
of Self-Governance and Annual Funding Agreements (“AFAs”) with the
Department. Pl.’s Statement of Material Facts at ¶ 1. Such
arrangements allow the tribes to assume responsibility for the
“planning and administration of programs and services previously
provided by the Department and the Department transfers the related
funds to the tribes to administer.” Id.
CPN alleges it did not learn that the Department was still
applying 1988 data in calculating disbursement of funds among the
Shawnee Agency Tribes for FY 1999 until it entered into the Compact
for FY 1999. Compl. at ¶¶ 17-18; Pl.’s Mot. for Summ. J. at 23
(“Pl.’s Mot.”).
B. Procedural Background
As noted above, the core of the dispute before the IBIA was
the Department’s use of 1988 data for application of the funding
formula agreed to in the Tribal Resolution. That issue has been
the subject of various administrative and federal court proceedings
over the past decade.
This case’s tangled procedural history begins with a qualified
victory for CPN. In Citizen Band Potawatomi Indian Tribe of
Oklahoma v. Collier, 142 F.3d 1325, 1327 (10th Cir. 1998), the
Tenth Circuit affirmed the district court’s ruling that another
member tribe of the Shawnee Agency, the Absentee Shawnee, had no
rights to land on the former CPN reservation. That litigation
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arose when the Absentee Shawnee applied for the Department to take
land into trust on its behalf -- land which fell within the
boundaries of the former CPN reservation. The BIA Area Director
disagreed with CPN’s argument that federal regulations required
CPN’s consent before the Department could put the land in trust for
the Absentee Shawnee.
The Director rejected CPN’s challenge because the he found
that the tribes shared a common former reservation. This finding
was upheld by the IBIA. Id. at 1330. When CPN challenged that
ruling in federal court, the administrative decisions were
reversed. The District Court held that the Absentee Shawnees had
no rights to the former CPN reservation. Id. at 1330-31 (“[T]he
[district court] viewed the Absentee Shawnees’ agreement to
relinquish any interest in the reservation as a quit claim deed.”).
On appeal, the Tenth Circuit upheld the decision. Id. at 1327.
In 1998, subsequent to the Tenth Circuit ruling, CPN
challenged the Department’s application of the Tribal Resolution
funding formula. Pl.’s Statement of Material Facts at ¶ 11. The
substantive issue was never considered by the district court
because CPN’s claims were dismissed for failure to join parties
under Rule 19 of the Federal Rules of Civil Procedure. See Citizen
Potawatomi Nation v. Norton, 248 F.3d 993, 996 (10th Cir. 2001),
modified on reh’g, 257 F.3d 1158 (10th Cir. 2001). The dismissal
was affirmed by the Tenth Circuit. Id. at 1001.
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In addition, subsequent to Collier, the Director proposed a
change in his position with respect to the application of factor
three of the funding formula to the CPN and Absentee Shawnee. See
AR at Tab 44 at 3-4. The Director concluded that the Collier
holding with respect to the Absentee Shawnee’s interest in CPN land
necessarily altered the calculation under factor three (25% in
proportion to resident tribal population in each tribe’s
jurisdictional area). Id. at 4-5. The Director proposed a
recalculation of the funding formula to decrease Absentee Shawnee’s
funding by $65,521 for 2000. Id. at 9.
The Absentee Shawnee challenged these changes before the
Interior Board of Contract Appeals (“IBCA”) in 2002. The IBCA
permitted CPN to intervene and file briefs, because the reduction
ordered in Absentee Shawnee funds was directed to be given to CPN.
AR at Tab 16 at 1-2. Absentee Shawnee won before the IBCA, which
held that the tribe was entitled to its pre-Collier funding
allocation, and that “Collier had nothing to do with funding
arrangements.” Id. at 14.
Facing denial of these funds, and unable to challenge the
application of the funding formula in Norton, the Plaintiff then
brought two key issues to the IBIA: first, Collier’s effect on
factor three of the funding formula, and, second, whether the 1988
data the Department had been using to calculate the formula should
be adjusted annually. IBIA Decision, at 166-67.
-7-
The IBIA held that CPN was collaterally estopped from
litigating the effect of Collier,2 id. at 167, and that the
Director did not abuse his discretion in finding that the parties
intended the 1988 formula to be applied in a static manner, i.e.,
without annual updating, id. at 173. CPN challenges that decision
in the case now before this Court.
II. STANDARD OF REVIEW
A. Standard of Review for the IBIA Decision
CPN states in its Complaint that “a claim for relief exists
under both the ISDA, 25 U.S.C. § 450m-1(a) and the Administrative
Procedures [sic] Act, 5 U.S.C. §§ 702-706.” Compl. at ¶ 5. The
ISDA provision reads as follows:
The United States district courts shall have original
jurisdiction over any civil action or claim against the
appropriate Secretary arising under this subchapter and,
subject to the provisions of subsection (d) of this
section and concurrent with the United States Court of
Claims, over any civil action or claim against the
Secretary for money damages arising under contracts
authorized by this subchapter. In an action brought under
this paragraph, the district courts may order appropriate
relief including money damages, injunctive relief against
any action by an officer of the United States or any
agency thereof contrary to this subchapter or regulations
promulgated thereunder, or mandamus to compel an officer
or employee of the United States, or any agency thereof,
to perform a duty provided under this subchapter or
regulations promulgated hereunder (including immediate
injunctive relief to reverse a declination finding under
section 450f(a)(2) of this title or to compel the
2
As an alternative holding, the IBIA concluded that “the
1988 formula does not apportion funding to the Citizen Potawatomi
and Absentee Shawnee based on legal determinations regarding the
extent of their territorial jurisdiction.” IBIA Decision, at 167.
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Secretary to award and fund an approved
self-determination contract).
25 U.S.C. § 450m-1(a). Under the Administrative Procedure Act
(“APA”), the reviewing court must determine whether the
administrative decision was “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” 5 U.S.C. §
706(2)(A).
Parties dispute the standard under which the Court should
review the IBIA decision. Plaintiff maintains that the Court
should engage in de novo review, Pl.’s Mot. at 4;3 Defendants
counter that the appropriate standard is “arbitrary and
capricious,” Def.’s Mot. for Summ. J. at 4-5 (“Def.’s Mot.”). The
issue appears to be one of first impression in this Circuit.4
Both the Supreme Court and our Court of Appeals have declared
that where a statute does not provide a standard of review, as is
3
CPN argues in the alternative that even if the standard
of review is arbitrary and capricious, it should still prevail on
its claims. Pl.’s Mot. at 5.
4
One Court of Appeals case from this Circuit deals with
judicial review under the ISDA, but does not resolve the standard
of review issue. In Ramah Navajo School Board, Inc. v. Babbitt, 87
F.3d 1338 (D.C. Cir. 1996), the Court of Appeals reversed a
district court’s denial of a preliminary injunction because the
court had inappropriately found that a decision to allocate funds
was an unreviewable act of agency discretion. The Court of Appeals
found that under the ISDA the decision was reviewable. Id. at
1343-44. While the case clearly states that some review is
necessary, it does not indicate what standard district courts
should apply when engaging in such review. Cf. Pl.’s Mot. at 4-6
(construing case to support its argument for de novo review).
-9-
true of the ISDA, courts must look to the APA standard.5 See
United States v. Carlo Bianchi & Co., 373 U.S. 709, 715 (1963)
(“Indeed, in cases where Congress has simply provided for review,
without setting forth the standards to be used or the procedures to
be followed, this Court has held that consideration is to be
confined to the administrative record and that no de novo
proceeding may be held.”); Al-Fayed v. CIA, 254 F.3d 300, 304 (D.C.
Cir. 2001) (noting that APA “provides a default standard of
judicial review . . . where a statute does not otherwise provide a
standard”) (quoting Dickson v. Sec’y of Def., 68 F.3d 1396, 1404
n.12 (D.C. Cir. 1995)).6
5
While district courts in other jurisdictions have
construed the standard of review under the ISDA, they have
disagreed on the appropriate standard to be applied. See Cheyenne
River Sioux Tribe v. Kempthorne, 496 F. Supp. 2d 1059 (D.S.D. 2007)
(finding de novo review to be appropriate); Cherokee Nation of
Okla. v. United States, 190 F. Supp. 2d 1248 (E.D. Okla. 2001),
rev’d on other grounds by Cherokee Nation of Okla. v. Leavitt, 543
U.S. 631 (2005) (same); Shoshone-Bannock Tribes of the Fort Hall
Reservation v. Shalala, 988 F. Supp. 1306 (D. Or. 1997) (same);
Suquamish Tribe v. Deer, No. 96-5468 (W.D. Wash. Sept. 2, 1997)
(unpublished) (finding APA standard to be appropriate); Cal. Rural
Indian Health Bd., Inc. v. Shalala, No. 96-3526 (N.D. Cal. Apr. 24,
1997) (unpublished) (same); Yukon-Kuskokwim Health Corp. v.
Shalala, No. 96-155 (D. Alaska Apr. 15, 1997) (unpublished) (same).
6
See also Tourus Records, Inc. v. Drug Enforcement Admin.,
259 F.3d 731, 736 (D.C. Cir. 2001); Workplace Health & Safety
Council v. Reich, 56 F.3d 1465, 1467 (D.C. Cir. 1995); Northwest
Resource Info. Ctr. v. Nat’l Marine Fisheries Serv., 56 F.3d 1060,
1066 (9th Cir. 1995); Franklin Sav. Ass’n v. Dir., Office of Thrift
Supervision, 934 F.2d 1127, 1137 (10th Cir. 1991); Avoyelles
Sportsmen’s League, Inc. v. Marsh, 715 F.2d 897, 904 (5th Cir.
1983); Cabinet Mountains Wilderness/Scotchman’s Peak Grizzly Bears
v. Peterson, 685 F.2d 678, 685 (D.C. Cir. 1982); Nat’l Mining Ass’n
v. Chao, 160 F. Supp. 2d 47, 56 (D.D.C. 2001), aff’d in part and
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As Al-Fayed indicates, there exists a strong presumption in
this Circuit that when a statute provides for judicial review but
does not specify any standard for that review, it should be
construed to include the APA standard. See 254 F.3d at 304; see
also Shoshone-Bannock, 988 F. Supp. at 1313 n.4 (citing cases from
three other appellate courts to support this proposition). This
general principle “stems from well ingrained characteristics of the
administrative process.” Doraiswamy v. Sec’y of Labor, 555 F.2d
832, 840 (D.C. Cir. 1976). In order to avoid “supplanting” the
agency’s role in the litigation, “the judicial function is
fundamentally and exclusively an inquiry into the legality and
reasonableness of the agency's action.” Id.
Therefore, litigants in this case are faced with a strong
presumption that judicial review will take place under an arbitrary
and capricious standard. The Court has considered the reasoning of
those district courts, which focused heavily on the text and
legislative history of the ISDA, and found de novo review to be
appropriate. However, this Court concludes that such analysis is
not sufficiently persuasive to overcome the strong presumption
enunciated by both the Supreme Court and our Court of Appeals in
favor of the APA standard.
rev’d in part on other grounds by Nat’l Mining Ass’n v. Dep’t of
Labor, 292 F.3d 849 (D.C. Cir. 2002) (“The D.C. Circuit recently
reaffirmed the principle of law that the APA provides a default
standard of review where a statute does not otherwise provide a
standard.”).
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The fact that CPN stated claims for relief under the ISDA as
well as the APA buttresses this finding, since Plaintiff itself has
chosen to bring a portion of its case under the APA. Compl. ¶ 5.
Finally, another consideration supporting APA review is the need to
defer to the Defendants’ expertise and experience in deciding many
of the issues presented by CPN. See Runs After v. United States,
766 F.2d 347, 352 (8th Cir. 1985) (noting BIA “special expertise
and extensive experience in dealing with Indian affairs”).
In conclusion, the Court finds that the APA standard is
appropriate for the particular set of procedural facts presented by
this case. “The arbitrary and capricious standard [of the APA] is
a narrow standard of review.” Citizens to Preserve Overton Park,
Inc. v. Volpe, 401 U.S. 402, 416 (1971). This Circuit has held
that “[t]his court’s review is . . . highly deferential” and “we
are ‘not to substitute [our] judgment for that of the agency’ but
must ‘consider whether the decision was based on a consideration of
the relevant factors and whether there has been a clear error of
judgment.’” Bloch v. Powell, 348 F.3d 1060, 1070 (D.C. Cir. 2003)
(citations and internal quotation marks omitted); see also United
States v. Paddack, 825 F.2d 504, 514 (D.C. Cir. 1987).
If the “agency’s reasons and policy choices . . . conform to
‘certain minimal standards of rationality’ . . . the [agency
decision] is reasonable and must be upheld.” Small Refiner Lead
Phase-Down Task Force v. EPA, 705 F.2d 506, 521 (D.C. Cir. 1983)
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(citation omitted); see Kisser v. Cisneros, 14 F.3d 615, 619 (D.C.
Cir. 1994).
Summary judgment will be granted when there is no genuine
issue as to any material fact. See Fed. R. Civ. P. 56(c). Since
this case involves a challenge to a final administrative decision,
the Court’s review on summary judgment is limited to the
administrative record. Holy Land Found. for Relief and Dev. v.
Ashcroft, 333 F.3d 156 (D.C. Cir. 2003) (citing Camp v. Pitts, 411
U.S. 138, 142 (1973)); Richards v. Immigration & Naturalization
Serv., 554 F.2d 1173, 1177 (D.C. Cir. 1977)) (“Summary judgment is
an appropriate procedure for resolving a challenge to a federal
agency’s administrative decision when review is based upon the
administrative record.”).
III. ANALYSIS
A. Joinder of Necessary Parties
In their Motion for Summary Judgment, Defendants argue that
all claims must be dismissed for failure to join necessary parties
-- the four other tribes of the Shawnee Agency -- under Rule 19(a)
of the Federal Rules of Civil Procedure. Def.’s Mot. at 30-40.
The Rule provides that even if it is not feasible to join
these necessary parties, courts may nonetheless elect to proceed
with the action in “equity and good conscience.” Fed. R. Civ. P.
at 19(b). To guide this equitable determination, Rule 19(b) lists
four factors to be considered: (1) the extent to which a judgment
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for existing parties would prejudice those parties and absent
parties; (2) the extent to which the court can craft relief to
lessen such prejudice; (3) whether the court can render an adequate
judgment for existing parties; and (4) whether “the plaintiff would
have an adequate remedy if the action were dismissed for
nonjoinder.” Id.; see also Ramah Navajo Sch. Bd., Inc. v. Babbitt,
87 F.3d 1338, 1350-51 (D.C. Cir. 1996) (outlining Rule 19
analysis); Wichita and Affiliated Tribes of Okla. v. Hodel, 788
F.2d 765, 774 (D.C. Cir. 1986) (“Wichita”).
This is not the first time that CPN has faced this issue. In
Norton, the district court dismissed CPN’s challenge to the funding
formula because necessary parties had not been joined. 248 F.3d at
996. The Absentee Shawnee as well as the remaining three Shawnee
Agency Tribes were found to be necessary to the resolution of the
issue, as the tribes stood to lose if the Norton Court reversed the
administrative decision on the merits of the claim. Due to the
fact that tribes enjoy sovereign immunity, the district court could
not order joinder. Id. As a result, the claims were dismissed.
The Tenth Circuit affirmed, ruling that the district court did not
abuse its discretion in dismissing the action. The Circuit based
its decision on two reasons: the non-party tribes claimed an
interest that was not “patently frivolous,” and the United States
could not represent the interests of all parties. Id. at 999.
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CPN argues that this case is different. In Norton, the
federal court was asked to make a decision on the merits of the
claims before it. Such a decision, CPN maintains, can indeed
prejudice a non-joined party because it can alter the substantive
outcome of the case. Pl.’s Opp’n to Def.’s Mot. (“Pl.’s Opp’n”) at
30-31. The distinction in this case, according to CPN, is that
this Court is being asked to only review the administrative
agency’s decision, and then remand so that a decision on a better
record can be developed. Id. Such an action, Plaintiff claims,
can hardly “impede or impair” the interests of a non-party tribe,
because the Court would not be altering the underlying merits of
the IBIA decision. Id. at 36.
Further, the Plaintiff observes that the IBIA is permitted,
under its own case law, to consider CPN’s claim even when other
potentially necessary parties have not been joined. According to
IBIA doctrine, adjudication at the agency level is not subject to
the same joinder rules applicable in federal court litigation. See
IBIA Decision, at 171; see also Pl.’s Mot. at 42. Thus, CPN
argues, mere review of the agency decision does no harm to non-
parties: the federal court is not changing the outcome on the
merits, and the agency to which the matter is remanded is
authorized, under its own procedures, to hear the case without
joining those parties which might be considered necessary under
Rule 19(a). Pl.’s Opp’n at 31.
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In essence, CPN requests that the Court rule either that
non-party tribes are not “necessary,” or that the equitable
standard contained in Rule 19(b) be applied so that the litigation
can proceed. Id. at 33-35. In CPN’s view, the parties before the
Court would have complete relief in the form of a remand, an issue
in which non-parties have no interest (though they may, as in
Norton, have an interest in the underlying merits).
Defendants object to this characterization of the issue. They
begin by correctly distinguishing two cases that CPN relies on.
Def.’s Mot. at 37-39 (arguing that Feezor v. Babbitt, 953 F. Supp.
1 (D.D.C. 1996) and Ransom v. Babbitt, 69 F. Supp. 2d 141 (D.D.C.
1999) are not applicable). The leading case on this issue,
Defendants demonstrate, is Wichita, which described a remand
judgment as only “a bit less prejudicial than a judgment” on the
merits. Wichita, 788 F.2d at 776. The critical question is
whether the Wichita analysis controls, given the unique set of
facts in this case.
1. The Wichita Decision
The Wichita case resembles the factual and procedural posture
presented in this case. First, like this case, it involves a
challenge to a formula used by the United States to apportion a
fund among three Indian tribes. Id. at 771. The Wichita tribe
brought suit in federal court to challenge the IBIA’s decision to
uphold the Department’s distribution of funds based on tribal
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population as of a fixed date. The district court and Court of
Appeals rejected this claim. Id. Second, the Caddos tribe (along
with a third tribe) then intervened to challenge the IBIA’s
decision denying it any retroactive payments. Id. at 771. The
district court rejected this claim. However, the Court of Appeals
vacated the judgment because the claim should have been dismissed
under Rule 19.7 Id. at 768.
The Wichita Court began by examining whether intervention by
two tribes (Caddos and Delaware) made them parties to the Wichita
tribe’s federal action. It concluded that by virtue of their
intervention and consent to be sued, the two tribes had waived
sovereign immunity and were therefore parties. Id. at 774.
Because the tribes were parties to the Wichita’s claims, the Court
of Appeals ruled it did not need to address the Rule 19(a) issue.
See id. at 772.
The Court also had to decide whether the Wichitas and
Delawares were parties to the Caddos’ cross-claim against them.
Id. at 773-74. Finding the two tribes to be non-parties to the
cross-claim, the Court then turned to whether these non-parties
were necessary under Rule 19(a). Id. at 774. Based upon the text
of the Rule, the Court concluded that there was “no doubt” that the
7
Rule 19 has changed since the Wichita decision was
issued. Compare Wichita, 788 F.2d at 774 (laying out Rule as it
existed), with Fed. R. Civ. P. 19. Nonetheless, the basic concept
of the joinder rule remains unchanged, and thus the reasoning in
the case is instructive.
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Wichitas and Delawares had an interest in the action. It reasoned
that, “[a]s beneficiaries of the trust who stand to lose if the
Caddos succeed in obtaining redistributions of future income to
compensate for the past, the Wichitas certainly have a vital
interest in being parties to the cross-claim, and especially in
retaining the ability to appeal any adverse judgment.” Id. The
Court of Appeals concluded that it was not feasible to add a tribe
as a party, because the tribes enjoy sovereign immunity, which they
cannot be forced to waive in these circumstances. See id. at 771
(citing cases to support proposition).
Having found the Wichitas and Delawares to be necessary
parties that could not be joined, the Court of Appeals went on to
address Rule 19(b), as to whether “equity and good conscience”
permitted the action to proceed without the non-parties.
The Court concluded that remand of the retroactive funding
issue was inappropriate because it would be based on a holding that
the “agency made a substantive mistake in finding that the Caddos
had agreed to the distribution scheme” up until a certain date.
Id. at 776. In this sense, a reviewing court did more than merely
assume a posture of review; rather, it made a decision that
affected the merits of the claim. Id. At the administrative
level, the agency’s authority would be bound by the federal court’s
decision. If the Wichitas and Delawares were not parties to the
action, their right to challenge this decision would not exist.
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See id. at 775 (analyzing extent of prejudice). For these reasons,
the Court of Appeals found that a remand to an agency for further
review of the merits would not eliminate prejudice to non-parties
under Rule 19(b)(2). Id. at 776. It also reasoned that the lack
of adequate relief, when weighed against the competing interest of
preserving tribal immunity, did not render absent parties
indispensable. Id. at 777. The Court of Appeals therefore
dismissed under Rule 19.
2. Application of Rule 19 to CPN’s Claims
The Court must analyze CPN’s claims to determine if the action
would involve proceeding without necessary parties, and, if so,
whether the Court should proceed with the actions in equity.8
In so doing, the Court is mindful that Rule 19 “calls for a
pragmatic decision based on practical considerations in the context
of particular litigation.” Kickapoo Tribe of Indians of Kickapoo
Reservation in Kan. v. Babbitt, 43 F.3d 1491, 1495 (D.C. Cir.
1995); see also Cloverleaf Standardbred Owners Ass’n. v. Nat’l Bank
of Wash., 699 F.2d 1274, 1276 (D.C. Cir. 1983)(acknowledging
district court’s “substantial discretion in considering which
factors to weigh and how heavily to emphasize certain
considerations in deciding whether the action should go forward.”).
a. Rule 19 Requires Dismissal of Count One.
8
Joinder of necessary parties is not feasible, as tribes
cannot be compelled to waive sovereign immunity. See Wichita, 788
F.2d at 771.
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Plaintiff challenges the IBIA’s decision to uphold a reduction
of its funding under the Tribal Resolution. In Count One, CPN
contends that the Board erroneously decided that the funding
agreement was ambiguous, and resolved that ambiguity by looking to
CPN conduct that was not supported by the record. CPN asks the
Court to remand the matter to the IBIA because its decision was
arbitrary or capricious, and to order the IBIA to “further develop
the administrative record and require that the IBIA issue a new
decision based on the further-developed administrative record.”
Pl.’s Mot. at 1.
The first issue is whether under Rule 19(a) non-parties are
required to be joined. A party is necessary if: (1) in the absence
of that party, the Court “cannot accord complete relief among
existing parties,” or (2) the absent party “claims an interest
relating to the subject of the action and is so situated that
disposing of the action in the person’s absence may . . . as a
practical matter impair or impede the person’s ability to protect
the interest.” Fed. R. Civ. P. 19(a)(1)(A)-(B). The Court of
Appeals has broadly characterized necessary parties as “those
‘affected by the judgment and against which in fact it will
operate. . . .’” W. Coast Exploration Co. v. McKay, 213 F.2d 582,
592 (D.C. Cir. 1954) (citing Minnesota v. Hitchcock, 185 U.S. 373,
387 (1902)).
-20-
Prong two of the necessity requirement asks courts to
determine whether the non-party tribes “have a legally protected
interest” in the subject matter of the action. Fed. R. Civ. P.
19(a)(1)(B); see also Ramah Navajo Sch. Bd., 87 F.3d at 1351;
Cherokee Nation of Okla. v. Babbitt, 944 F. Supp. 974, 979 (D.D.C.
1996), rev’d on other grounds. In Wichita, the Court of Appeals
found that non-parties were required to be joined. Other courts
have also found that the apportionment of common funding can be the
basis of a legally protected interest. See Norton, 248 F.3d at 996
(describing district court decision); Makah Indian Tribe v. Verity,
910 F.2d 555, 559 (9th Cir. 1990) (describing district court’s
ruling that absent tribes may have interest in suit where increased
shares of common tribal fund were at stake).
However, in Ramah Navajo School Board, this Circuit’s Court of
Appeals held that non-party tribes were not necessary to the
action, even though the court was faced with a question regarding
a common-funding scheme. 87 F.3d at 1351. The Court ruled that
non-parties had no protectable interest because the Government
declared that any funds ordered released would not be used to
increase tribal funding. Id. As has been emphasized in other
cases, see, e.g., Kickapoo, 43 F.3d at 1495, the Ramah decision
supports the proposition that courts must take a practical approach
to the joinder issue, and carefully assess what interests are at
stake for parties and non-parties.
-21-
In Norton, the Tenth Circuit clarified that the interest
claimed by non-parties need not be concrete or compelling. Rather,
the court found that for a party to be necessary under Rule
19(a)(2), it must claim an interest that is not “patently
frivolous.” Norton, 248 F.3d at 998. The absent party is not
required to actually possess that interest; merely claiming it is
sufficient Id.
i. Non-Party Tribes Must Be Joined.
In Count One, CPN claims an interest only in obtaining review
of the Board’s decision and claims to seek no decision on the
merits. Defendant counters that this Count involves the common-
funding scheme entered into by Shawnee Agency Tribes, and therefore
non-party tribes do have an interest. Def.’s Mot. at 37-38. For
this reason, the Department argues, this case cannot be
distinguished from Norton, where the Tenth Circuit upheld the
dismissal of a similar CPN lawsuit for failure to join necessary
tribes. Id.
If a remand were granted, the Board would be reopening the
record and reconsidering how to apply a funding formula that
impacts each tribe. CPN’s goal on remand is to achieve a more
flexible interpretation of the Tribal Resolution than the IBIA
initially gave, and one which would then change the funding
allotments made to each tribe. CPN seeks a decision from the
Board, buttressed by a more adequate administrative record, that
-22-
will give it more funds and the other tribes less. Thus, as in
Norton, the non-parties have a legitimate and non-frivolous
interest in the outcome of this litigation.
ii. Non-Party Tribes Are Indispensable.
Rule 19(b) lists four factors for courts to consider when
deciding whether to proceed without necessary parties that cannot
be joined. The Court must weigh the extent of prejudice to non-
parties, its ability to shape a remedy to lessen that prejudice,
whether a decision would be adequate without absent parties, and
whether the plaintiff would have an adequate remedy if the claims
were dismissed. Fed. R. Civ. P. 19(b).
It is clear that, under factor three of Rule 19(b), complete
relief can be provided to the parties. However, as in Wichita, a
remand to the Board for consideration of procedural defects in its
decision does not adequately eliminate potential prejudice to
absent parties. 788 F.2d at 776. Non-parties would not be able to
appeal the IBIA decision, although it may result in a ruling that
denies them funding. Thus, the first two factors of the Rule 19(b)
analysis support dismissal of Count One.
Finally, while the Court shares the Wichita Court’s concern
that there is no alternative forum for CPN, see Wichita, 788 F.2d
at 777, the weighty competing interest of preserving tribal
sovereign immunity is paramount. Id. Given the importance of this
latter policy, and the fact that the litigation should not proceed
-23-
simply because an adequate alternative remedy does not exist, see
id., the fourth factor of Rule 19(b) strongly favors dismissal.
See Kickapoo, 43 F.3d at 1496-97 (“[T]here is very little room for
balancing of other factors set out in Rule 19(b) where a necessary
party under Rule 19(a) is immune from suit because immunity may be
viewed as one of those interests compelling by themselves.”)
(quotation and citation omitted).
For all these reasons, the Court concludes that the non-party
tribes are indispensable.
b. Rule 19 Requires Dismissal of Count Two.
Count Two asks for remand to the Board for further review in
light of arbitrary and capricious decision-making. In its Motion
for Summary Judgment, Plaintiff addresses the merits of the
collateral estoppel claim, and argues that the IBIA holding was
erroneous as a matter of law. Additionally, its Complaint reflects
a thinly veiled effort to bring a substantive claim in the guise of
a request for review. CPN couches its objection in terms that
evoke arbitrary and capricious analysis (e.g., the IBIA “ignores”
certain facts), but is basically arguing that the IBIA made an
incorrect ruling on a purely legal question. Relief for such a
request would amount to a ruling that the agency made a
“substantive mistake” under Wichita. 788 F.2d at 776.
i. Non-Party Tribes Must Be Joined.
-24-
Plaintiff argues that the IBIA’s decision that it is
collaterally estopped from challenging the application of factor
three of the funding formula based on a 2002 IBCA decision is
wrong. Compl. at ¶¶ 52-58. Unlike Count One, where Plaintiff
argues that certain facts relied upon by the IBIA are not supported
by the record, in this Count CPN argues that the Board committed
legal error in its interpretation of the funding formula contained
in the Tribal Resolution. Pl.’s Mot. at 25-27. Thus, despite the
fact that, for strategic reasons, CPN is arguing that it does not
seek resolution of the merits of the Board’s ruling, it is in fact
attempting to relitigate an unfavorable ruling below. However, in
order to review that unfavorable decision, the Court must reach the
merits of the IBIA’s collateral estoppel holding, because that
claim presents a question of law. It is well established that de
novo review is the appropriate standard for such questions of law.
See Athridge v. Aetna Cas. & Sur. Co., 351 F.3d 1166, 1171 (D.C.
Cir. 2003).
Such review is fundamentally distinct from reviewing and
remanding due to a procedural defect in the agency’s decision-
making. Any decision in favor of CPN would be premised on a
finding by this Court that the Board made a substantive legal error
-- whether it was a finding that the Board erred in determining
that the IBCA had ruled on the same issue, or that CPN was a party
to the IBCA decision as a matter of law. Such a remand would very
-25-
closely resemble the remand contemplated in Wichita. In that case,
the Court of Appeals said that a “holding to that effect would be
binding on the agency, and it becomes quickly obvious that even if
we were to agree with the substantive premise of the remand
solution, it would not in fact mitigate the prejudice to the [non-
parties].” Wichita, 788 F.2d at 776.
Therefore, under Wichita, such a remand runs afoul of Rule 19.
The Absentee Shawnee and remaining Agency tribes have an interest
in the preclusive effects of decisions about the funding formula.
See Otherson v. Dep’t of Justice, I.N.S., 711 F.2d 267, 273 (D.C.
Cir. 1983) (“Along with the doctrine of claim preclusion or res
judicata, issue preclusion aims to avert needless relitigation and
disturbance of repose, without inadvertently inducing extra
litigation or unfairly sacrificing a person’s day in court.”).
Rule 19(a) requires that non-party Shawnee Agency tribes be joined.
As it is not feasible to do so because of tribal sovereign
immunity, the only way that this Count can survive is if it should
proceed "in equity and good conscience" under Rule 19(b).
ii. Non-Party Tribes Are Indispensable.
A ruling on Count Two would be adequate in non-parties’
absence, and so the third prong of Rule 19(b) is satisfied. On the
other hand, factor four strongly supports dismissal of the claims
in order to preserve non-parties’ sovereign immunity. See supra,
Part III.A.2.a.ii.
-26-
Looking to the first two factors of Rule 19(b), the Court
finds that decision on the collateral estoppel issue necessarily
would direct the agency to conduct its legal analysis in a certain
way. Because ordering a change to the IBIA’s collateral estoppel
ruling would have an effect on the interests of the non-parties,
and those parties are not represented at all in this litigation,
those interests would be prejudiced. Further, the Court cannot
craft relief to minimize such prejudice. CPN essentially asks the
Court to tell the IBIA how to evaluate and weigh precedent in the
course of its collateral estoppel review. This remedy would, as in
Wichita, range beyond a simple remand and would shape the
substantive issues before the IBIA.
In this scenario, courts must be practical in light of all the
circumstances. Kickapoo, 43 F.3d at 1495. Consideration of the
collateral estoppel issue will amount to determination of an
important substantive issue, and not merely a remand. The
practical result would be a decision on a matter in which
non-parties have a legitimate and substantial interest. Such a
decision would prejudice non-parties, and therefore Count Two must
be dismissed.
c. Count Three Must Be Dismissed As Moot.
The IBIA held that collateral estoppel prevents CPN from
bringing its claim regarding the misapplication of the funding
formula. As discussed above, CPN challenged this holding in Count
-27-
Two; that claim has been dismissed. The IBIA also explained as an
alternative holding that it rejected the merits of CPN’s claim
regarding the funding formula. CPN challenges this reasoning in
Count Three.
However, because the Board’s collateral estoppel decision is
upheld, the Court need not reach the Board’s alternative reasoning.
See United States v. Williams, 341 U.S. 70, 72 (1951) (“The
alternative grounds for the decision of the Court of Appeals need
not be considered, for we agree that [§] 241 . . . does not reach
the conduct laid as an offense in the prosecution here.”); see also
Burkhart v. Wash. Metro. Area Transit Auth., 112 F.3d 1207 (D.C.
Cir. 1997) (“The fact that the trial court alternatively rejected
WMATA’s motion on the merits in no way undermines the timeliness
ruling.”). The IBIA’s dismissal of CPN’s challenge is undisturbed.
Count Three is therefore dismissed as moot.
B. The IBIA Decision in Count One Was Not Arbitrary or
Capricious
Even though the rulings already made dispose of the case, the
Court will address the merits of Plaintiff’s arbitrary and
capricious arguments for the sake of judicial efficiency, so that
all issues will be before the Court of Appeals should the joinder
rulings be overturned.
CPN asks that the Court invalidate the IBIA’s decision because
of its failure to consider relevant evidence, and because it based
part of its decision on an insufficiently developed record. CPN
-28-
claims that the IBIA erroneously concluded that the funding formula
was ambiguous, and that even if it was ambiguous the IBIA erred in
finding that, based on its conduct, CPN ratified the Board’s
interpretation of the formula allowing use of 1988 data. Compl. at
§§ 38-51.
In view of the deference granted to administrative agencies,
and after full consideration of the record in this case, the Court
rejects Plaintiff’s arguments.
1. The IBIA Reasonably Concluded that the Funding
Formula Is Ambiguous.
First, Plaintiff alleges that the agency failed to consider
material evidence in the record. Pl.’s Mot. at 10-20. CPN argues
that two provisions of the formula -- that it would apply in “FY 89
and future years,” and that the five tribes “will conform to all
aspects of the CFR appropriate to the given program to be
contracted” -- were erroneously overlooked in the decision below.
Id. at 11. CPN goes on to explain why this language should have
been considered and what the effect of such failure is. Id. at 11-
20.
In its opinion, the IBIA begins its analysis by setting out
the rules for contract interpretation. IBIA Decision, at 172
(quoting Restatement (Second) of Contracts, § 202(1)). The Board
then considered CPN’s argument that the plain language of the
funding formula means that the formula should be calculated
annually. Id.
-29-
Acknowledging that the argument “has some force,” the IBIA
went on to list reasonable inferences that could be drawn from the
fact that the funding formula omitted clear language that it should
be applied on the basis of 1988 data. Id. The opinion then gave
consideration to the converse inference: the absence of clear
language directing the Department to recalculate the formula each
year meant that the language did not support CPN’s interpretation.
Id. These competing interpretations convinced the IBIA that “the
agreement’s language was ultimately ambiguous” regarding annual
recalculation of the formula.9 Id.
CPN argues that the IBIA should reconsider the language of the
agreement based on the inferences that it draws from the terms of
the contract. The “FY 89 and future years” clause, CPN asserts,
should be read to mean that funding is allotted “in any given
fiscal year” in proportion to data that will change from year to
year. Pl.’s Mot. at 11-12. Plaintiff maintains that the IBIA
“ignor[ed]” and “otherwise fail[ed] to explain or address” the
effect of the plain language of the funding formula because it did
not adopt CPN’s interpretation. Id.
The Court’s task is to ensure that the Board’s decision was
not arbitrary and was well reasoned, not to second-guess its
9
Based on the plain language of the resolution, it would
not have been unreasonable for the Board to conclude that the
agreement was not ambiguous, in that it clearly stated that 1988
data was to govern all future funding.
-30-
correctness. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 42 (1983) (“[A] court is not to
substitute its judgment for that of the agency.”); Nat’l Treasury
Employees Union v. Horner, 854 F.2d 490, 498 (D.C. Cir. 1988);
Olson v. Clinton, 2009 WL 635977, at *8 (Mar. 12, 2009 D.D.C.).
Plaintiff suggests one reading of the administrative record and
insists that its reading would remove any ambiguity. However,
CPN’s view relies on an interpretation of the language based on
terms that are not even included in the agreement. See Pl.’s Mot.
at 12 (adding “in any fiscal year”).
The Board acknowledged that arguments based on the plain
meaning of the agreement had some force, but ultimately decided
that the terms were ambiguous. IBIA Decision, at 172. In doing
so, the Board provided more than adequate reasons for its decision.
It considered factors relevant to whether the agreement was
ambiguous. See Bloch, 348 F.3d at 1070. The decision fully
“conform[ed] to ‘certain minimal standards of rationality,’” and
must be upheld. Small Refiner, 705 F.2d at 521 (citation omitted).
2. The IBIA’s Resolution of that Ambiguity Was Not
Arbitrary or Capricious.
CPN takes the position that even if the terms of the funding
formula are ambiguous, the IBIA also erred in construing it by
examining evidence that did not appear in the record.
Specifically, Plaintiff objects that the Board purported to rely on
-31-
parties’ past performance of the contract to discern its meaning,
but cited to conduct by CPN that was not supported in the record.
The IBIA relied on the Department’s use of 1988 data since
1988, CPN’s lack of objection to this procedure until 1998, and
other tribes’ decisions to not support CPN’s interpretation of the
agreement. IBIA Decision, at 173. Contrary to the Board’s
decision, CPN insists that there is no evidence in the record that
it had knowledge of how the formula was being applied nor an
opportunity to object to its application before it brought a
challenge in 1998. Pl.’s Mot. at 21. Plaintiff views this piece
of supporting evidence as the key to the IBIA’s conclusion
regarding parties’ acquiescence to the formula calculation used by
the Department. Id. at 23.
In its decision, the IBIA held that the BIA Director did not
abuse his discretion in finding that the performance of CPN and
other tribes demonstrated an intent to apply the formula based on
1988 data. IBIA Decision, at 173. The decision refers to the
record in saying that the agreement “has been implemented based on
a static application of the formula since its inception.” Id. It
goes on to note that other tribes who signed the agreement have not
come forward to support CPN’s interpretation of its terms. Id. It
also refers to the evidence that Plaintiff objects to: that the
funding formula had been consistently applied since 1988 on the
-32-
basis of 1988 data, that CPN knew of this and had an opportunity to
object, but did not do so until 1998. Id.
The IBIA decision is cursory on this point. However, that may
be a function of the fact the Board itself was reviewing the
Director’s decision for an abuse of discretion, rather than making
a de novo decision on the merits. The Board relies on two vital
pieces of evidence that CPN does not challenge (i.e., a history of
static application by the Department and lack of support for CPN
from other tribes). Id. at 173. CPN takes the position that the
IBIA’s reference to a factual matter not in the record means that
the record fails to support its conclusion in violation of the APA.
Pl.’s Opp’n at 16-17.
The Defendant reads the IBIA decision to mean that CPN’s
silence on the application of the funding formula amounted to its
consent to the agency’s calculations. Def.’s Opp’n at 17.
Defendant points out that the decision did advance other reasons
supported by the record for finding that the parties to the
agreement intended the formula to be applied in the manner
Defendants had used. Id. at 17-18. The Defendants maintain that
even if the Court discredits the IBIA’s finding with respect to
CPN’s silence on the matter, the other grounds for the Board’s
conclusion are sufficient to withstand Plaintiff’s challenge. Id.
Under arbitrary and capricious review, the Court is required
to uphold an agency decision if the agency has examined the
-33-
“relevant data” and based its conclusion on a “reasoned explanation
that is supported by the record.” America Tel., 974 at 135. The
IBIA was attempting to interpret ambiguous language based on
parties’ performance after executing the agreement. IBIA Decision,
at 172-73. In order to survive this Court’s arbitrary and
capricious review, it had to consider factors relevant to that
ultimate issue, and establish a rational connection between the
facts and the conclusion. State Farm, 463 U.S. at 43. The record
does show that there was a ten-year history of application of the
funding formula based on 1988 data and that other tribes refused to
affirmatively support CPN’s position in this litigation.10 AR at
Tab 60 at Ex. A (Decl. of Rhonda Butcher) at 2; Pl.’s Statement of
Material Facts at ¶ 4 (referencing IBIA decision).
Even if the inference based on CPN’s silence was unwarranted
by the record, the conclusion arrived at by the IBIA may be upheld
as rational given the support in the record for the other facts
referenced. The case law on arbitrary and capricious review does
not demand that the Court overturn an agency decision whenever the
agency makes an inappropriate inference. See Multimax, Inc. v.
10
Those tribes also did not object to CPN’s position. The
IBIA appears to have given more weight to their lack of support
than their lack of objection. The Court is not in a position to
substitute its judgment for that of the agency’s. State Farm, 463
U.S. at 43. The IBIA’s interpretation of this evidence supports
its decision regarding the relevant factor of parties’ performance,
and therefore passes muster as a satisfactory explanation of its
conclusion. See id.
-34-
Fed. Aviation Admin., 231 F.3d 882, 888 (D.C. Cir. 2000)
(concluding that mistaken inference by agency not reversible error
where other evidence supported agency decision). It focuses
instead on the rationality of the decision. See, e.g., Bowman
Transp. v. Arkansas-Best Freight Sys., 419 U.S. 281, 285 (1974)
(“The agency must articulate a rational connection between the
facts found and the choice made.”) (internal quotations and
citation omitted); Neighborhood TV Co. v. Fed. Commc’n Comm’n, 742
F.2d 629, 639 (D.C. Cir. 1984) (“[Courts] will uphold the
[agency’s] decision if, but only if, [they] can discern a reasoned
path from the facts and considerations before the [agency] to the
decision it reached.”).
The IBIA’s decision on the question of parties’ inaction finds
overall support in the record, although each and every link in its
chain of reasoning may not. The decision below is upheld because
it took into account the relevant data and made a rational decision
based on it.
C. The IBIA Did Not Erroneously Conclude that CPN Is
Precluded from Litigating the Effects of Collier.
CPN challenges the IBIA ruling that it is collaterally
estopped from litigating the effect of the Collier decision on the
funding formula. Pl.’s Mot. at 24. The Board analyzed an earlier
IBCA decision between Absentee Shawnee and the Department, in which
CPN intervened, and determined that the IBCA decided the question
of Collier’s effect on the formula. IBIA Decision, at 167-71
-35-
(discussing preclusive effects of Appeals of Absentee Shawnee Tribe
of Oklahoma, IBCA 4317-4318/2001, 35 IBCA 52 (Nov. 4, 2002) (“IBCA
I”)).
In challenging the IBIA’s conclusion on the preclusive effects
of an earlier judgment, CPN raises a question of law. See Athridge
v. Aetna Cas. & Sur. Co., 351 F.3d 1166, 1171 (D.C. Cir. 2003)
(“The issue of whether or not res judicata applies in a given
situation is a question of law.”). Therefore, the Court reviews
this issue de novo. Id.
To determine if CPN is precluded from re-litigating its claim
about Collier’s effect, the Court must determine if the same issue
now being raised was raised in the prior case, whether that issue
was “actually and necessarily determined” by that court, and
whether a finding of preclusion would “work a basic unfairness to
the party bound by the first determination.” Yamaha Corp. of
America v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992).
Before proceeding to the facts of this case, it is important
to note that the collateral estoppel analysis must focus on IBCA I.
The IBIA decision that discusses IBCA I is not the subject of the
Court’s review. Id. (“[I]t is the prior judgment that matters, not
the court’s opinion explicating the judgment.”) (emphasis in
original); see also American Iron & Steel Inst. v. EPA, 886 F.2d
390, 397 (D.C. Cir. 1989). Based on an analysis of IBCA I, the
-36-
Court concludes that CPN was collaterally estopped from challenging
the effect of Collier before the IBIA.
1. The Issue Raised by CPN Before the IBIA Was Raised
and Decided by the IBCA.
CPN asked the IBIA to rule on whether Collier required a
change in the application of factor three of the funding formula.
Pl.’s Mot. at 24. Parties disagree over whether this issue was
raised in Absentee Shawnee’s post-award appeal before the IBCA.
When inquiring into whether an issue has been raised, courts
must be mindful that “once an issue is raised and determined, it is
the entire issue that is precluded, not just the particular
arguments raised in support of it in the first case.” Yamaha, 961
F.2d at 254 (emphasis in original). If a party could have made an
argument based on the legal issue raised, but did not do so, the
party is not permitted to raise it in the new case. Securities
Indus. Ass’n v. Bd. of Governors, 900 F.2d 360, 364 (D.C. Cir.
1990).
IBCA I clearly raised the issue of Collier’s impact on the
Department’s application of the formula. That decision contained
an in-depth discussion of Collier, IBCA I, at 4-5, the Department’s
arguments in reliance on that case, id. at 7-8, and the IBCA’s
finding on how Collier affected the parties, id. at 13-14.
CPN casts the issue as a contractual dispute between Absentee
Shawnee and the Department. Pl.’s Mot. at 26-27. The litigation’s
procedural posture was indeed a contract dispute brought before the
-37-
IBCA, centering on whether the Department violated Absentee
Shawnee’s AFA by decreasing the funding allotted to the tribe.
IBCA I, at 1. However, the IBCA had to investigate the reasons for
the Department’s change in the funding level, which included the
issue of Collier’s effect on the funding formula. Id. at 2, 13-14.
CPN counters that because this was a contractual dispute
between Absentee Shawnee and the Department, the broader issue of
Collier’s future effect was not litigated. However, the existence
of a contractual dispute does not mean that the issue of Collier’s
effect was not raised. CPN had a chance to make its particular
argument about the Collier issue when it was raised before the
IBCA. Therefore, under Yamaha and Board of Governors, CPN is
precluded from raising those arguments now.
The Collier issue was actually decided by the IBCA. The
finding that “Norton . . . made it clear that Collier had nothing
to do with funding arrangements,” and that the Department was not
legally obliged under Collier to alter Absentee Shawnee’s AFA
indicates that the IBCA made a judgment on the issue. IBCA I, at
14. That judgment will bind CPN as long as it does not work a
fundamental unfairness on the tribe.
2. CPN Was a Party to the IBCA Litigation.
CPN maintains that the IBCA judgment should not, as a matter
of fundamental fairness, preclude it from bringing its claims
before the IBIA. Pl.’s Mot. at 28-29. Plaintiff argues that it
-38-
was not a party to the IBCA litigation, since CPN only participated
as a permissive intervenor. In this role, the tribe submitted
briefs related to the Absentee Shawnee’s post-award appeal to the
IBCA. Id. The IBCA decided the case approximately three months
after CPN intervened. Id. at 29. The IBCA then denied CPN’s
motion for reconsideration of its decision, concluding that CPN was
not a party to the original litigation, and therefore had no
standing to file the motion. Pl.’s Mot. at Ex. D (In re Appeals of
Absentee Shawnee Tribe of Okla., 2003 WL 133274 (IBCA Jan. 14,
2003) (“IBCA II”)).
For purposes of collateral estoppel, “‘parties’ does not refer
to formal or paper parties, but to parties in interest, that is,
that persons whose interests are properly placed before the court
by someone with standing to represent them are bound by the matters
determined in the proceeding.” 1B J. Moore, Moore’s Federal
Practice ¶ 0.411[1] at 390-91 (2d ed. 1983); see also Southmark
Props. v. Charles House Corp., 742 F.2d 862, 869 (5th Cir. 1984).
Courts have found litigants intervening on appeal to be “parties”
to the litigation who are bound by the outcome. See Local 322,
Allied Indus. Workers of America, AFL-CIO v. Johnson Controls,
Inc., Globe Battery Div., 921 F.2d 732, 734 (7th Cir. 1991)
(concluding res judicata applied to party who intervened on appeal
after being denied right to intervene in district court, where
intervenors’ “arguments were addressed by [appellate court’s]
-39-
decision”); N.A.A.C.P. v. A.A. Arms, Inc., 2003 WL 21242939, at *19
(E.D.N.Y. Apr. 1, 2003) (“As a general rule, a nonparty is not
bound by judgments entered in an action in which it did not
intervene.”); Deaktor v. Henner, 517 F.Supp. 26, 27 (N.D. Ill.
1980) (finding that plaintiff was party to administrative
litigation where plaintiff was granted leave to intervene in that
case).
Plaintiff mistakenly relies on case law that pertains to the
status of amici curiae, rather than intervenors. See Pl.’s Mot. at
30. CPN characterizes United States v. 111.2 Acres of Land, 293 F.
Supp. 1042 (E.D. Wash. 1968), as finding that the State of
Washington was not a party to litigation in which it had
“intervened.” Pl.’s Mot. at 30. In that case, the State of
Washington was joined as amicus curiae; there was no mention of
intervention in the decision. 111.2 Acres, 293 F. Supp. at 1049.
In the instant case, the IBCA permitted CPN to participate as
intervenors -- and not as amicus curiae -- in the post-award
appeal. See IBCA I, at 6.
CPN was, therefore, a party to the earlier litigation. The
tribe was allowed to submit its arguments to the IBCA in order to
represent its interests. Over a period of two months, CPN
developed these arguments for briefing; the IBCA considered them
and issued a decision that discussed them. Plaintiff’s interests
were represented in that litigation because they had an opportunity
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to be heard. Therefore, it would not be fundamentally unfair to
enforce the IBCA’s judgment against them in future proceedings.
Cf. Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 327 n. 7
(1979) (“It is a violation of due process for a judgment to be
binding on a litigant who was not a party or a privy and therefore
has never had an opportunity to be heard.”).
IV. CONCLUSION
For the foregoing reasons, Defendants’ Motion for Summary
Judgment is granted, and Plaintiff’s Motion for Summary Judgment is
denied. An order shall issue with this Memorandum Opinion.
/s/
June __, 2009 Gladys Kessler
United States District Judge
Copies to: attorneys on record via ECF
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Citizen Potawatomi Nation v. Scarlett
Combined Opinion