United Keetoowah Band of Cherokee Indians of Oklahoma v. United States Department of Housing & Urban Development

FILED
United States Court of Appeals
Tenth Circuit

June 5, 2009
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED KEETOOWAH BAND OF
CHEROKEE INDIANS OF
OKLAHOMA,
No. 08-7025
Plaintiff - Appellant,

v.

UNITED STATES DEPARTMENT
OF HOUSING AND URBAN
DEVELOPMENT; ALPHONSO
JACKSON, Secretary of the United
States Department of Housing and
Urban Development; ORLANDO J.
CABRERA, Assistant Secretary for
Public and Indian Housing,

Defendants - Appellees,

----------------------------

CHEROKEE NATION,

Amicus Curiae.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF OKLAHOMA
(D.C. No. 06-CV-00533-RAW)

James C. McMillin (Michael D. McClintock, Tamara Schiffner Pullin of McAfee
& Taft, with him on the brief), Oklahoma City, Oklahoma, for Plaintiff -
Appellant.
Patricia Sharin Flagg, Senior Trial Attorney of U.S. Department of Housing and
Urban Development, (Sheldon J. Sperling, United States Attorney, Linda A.
Epperley, Assistant United States Attorney, Muskogee, Oklahoma, with her on the
brief), Washington, D.C., for Defendants - Appellees.
A. Diane Hammons, Attorney General of Cherokee Nation, Tahlequah, Oklahoma,
for Amicus Curiae.

Before KELLY, BRISCOE, and McCONNELL, Circuit Judges.

KELLY, Circuit Judge.

Plaintiff-Appellant, the United Keetoowah Band of Cherokee Indians of

Oklahoma (“UKB”), is challenging a final agency action by the United States

Department of Housing and Urban Development (“HUD”) which drastically

reduced the federal funding that the UKB received for housing under the Native

American Housing Assistance and Self-Determination Act of 1996 (NAHASDA),

25 U.S.C. §§ 4101-4243. The basis of the UKB’s claim, in essence, is that

HUD’s decision was arbitrary and capricious (1) as a substantive matter because

HUD’s regulations implementing NAHASDA were contrary to the clear language

of that statute, and (2) as a procedural matter because of various alleged defects

in the process leading up to HUD’s final agency action. The district court

rejected the UKB’s challenge, finding that HUD’s regulations survived scrutiny

under Chevron deference and concluding that the procedure employed by HUD

was not arbitrary or capricious. United Keetoowah Band of Cherokee Indians of

Okla. v. U.S. Dep’t of Hous. and Urban Dev., No. CIV-06-533-RAW, slip. op. at

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5-10 (E.D. Okla. Jan 9, 2008). The UKB now appeals the district court’s order.

Our jurisdiction arises under 28 U.S.C. § 1291, and we reverse.

Background

A. Funding Scheme under NAHASDA

This case involves HUD’s implementation of NAHASDA, a federal statute

enacted to provide funding to Native American tribes in order to “help[] tribes

and their members . . . improve their housing conditions and socioeconomic

status.” 25 U.S.C. § 4101(5). 1 Adopted in 1996, NAHASDA established a

housing-assistance program that was funded directly through Indian Housing

Block Grants (“IHBG”), id. § 4111, and disbursed to tribes on the basis of Indian

Housing Plans prepared by the tribes and submitted to HUD, id. § 4112. All

federally-recognized and state-recognized Indian tribes are eligible for IHBG

funding. 24 C.F.R. § 1000.202; see 25 U.S.C. § 4103(12). The amount of IHBG

funding each eligible tribe receives is determined in accordance with the

allocation formula established by HUD pursuant to a negotiated rulemaking

procedure and contained in the implementing regulations. 25 U.S.C. §§ 4116(b),

4151, 4152(a). While Congress delegated to HUD the authority to create the

1
Throughout this opinion, all citations to statutes are to those in effect at
the time. NAHASDA was amended in 2008 by the Native American Housing
Assistance and Self-Determination Reauthorization Act of 2008, Pub. L. No. 110-
411, 122 Stat. 4319 (2008).

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allocation formula, Congress also circumscribed HUD’s discretion by specifically

stating that the formula must be “based on factors that reflect the need of the

Indian tribes and the Indian areas of the tribes for assistance for affordable

housing activities.” Id. § 4152(b).

The formula HUD created has two components: (1) Formula Current

Assisted Housing Stock (“FCAS”), and (2) Need. 24 C.F.R. § 1000.310.

Generally, the amount of annual funding for an Indian tribe is the sum of the

FCAS component and the Need component. The Need component, the only

component at issue here, is based on seven criteria set forth in the

regulations—criteria such as the number of tribal households with income below a

median income level and the number of households without kitchens and

plumbing. 2 Id. § 1000.324. None of the criteria references court jurisdiction over

a geographic area. In addition to these seven criteria, HUD has also created a

“Formula Area” requirement. While the regulations do not say so explicitly,

HUD apparently only applies the seven § 1000.324 criteria to Indian households

within an applicant tribe’s Formula Area. Therefore, applicant tribes must show

2
The criteria, each weighted differently, include (1) American Indian and
Alaskan Native (AIAN) households with housing cost burden greater than 50% of
“formula area income,” (2) AIAN households that are overcrowded or without
kitchen or plumbing, (3) AIAN housing shortage, (4) AIAN households with
income less than or equal to 30% of “formula median income,” (5) AIAN
households with income between 30% and 50% of “formula median income,” (6)
AIAN households with income between 50% and 80% of “formula median
income,” and (7) AIAN persons. 24 C.F.R. § 1000.324.

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that they possess a Formula Area in order to receive need-based funding under

§ 1000.324. At the time, the regulations defined “Formula Area” as

the geographic area over which an Indian tribe could exercise court
jurisdiction or is providing substantial housing services and, where
applicable, the Indian tribe . . . has agreed to provide housing
services pursuant to a Memorandum of Agreement with the
governing entity or entities (including Indian tribes) of the area,
including but not limited to: . . .
...
(vi) Former Indian Reservation Areas in Oklahoma as defined by the
Census as Tribal Jurisdictional Statistical Area.

24 C.F.R. § 1000.302. 3 However, even though the Formula Area requirement acts

as a threshold for need-based funding under § 1000.324, tribes that do not possess

a designated Formula Area are still entitled to a minimum funding amount under

§ 1000.328. Id. § 1000.328. See generally Fort Peck Hous. Auth. v. U.S. Dep’t

of Hous. and Urban Dev., 435 F. Supp. 2d 1125, 1127-29 (D. Colo. 2006)

(describing NAHASDA’s funding mechanism).

B. Agency Decision to Award Minimum Funding to the UKB

It is undisputed that the UKB received IHBG funding above the minimum

amount for the fiscal years 1997-2005. United Keetoowah Band, No. CIV-06-

533-RAW, slip. op. at 2. For each of these fiscal years, HUD determined that the

UKB shared a Formula Area with the Cherokee Nation of Oklahoma (“CNO”) in

3
24 C.F.R. § 1000.302 has since been amended. However, it retains the
court jurisdiction requirement and appears to perform the same function as it did
at the time this dispute arose. The parties have not suggested that the amendment
substantively altered the regulation, at least insofar as our inquiry is concerned.

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the CNO’s “Tribal Jurisdictional Statistical Area/Oklahoma Tribal Statistical

Area.” However, this determination was called into question on June 14, 2004,

when the CNO wrote a letter to HUD challenging the UKB’s right to receive

IHBG funding. In the letter, the CNO claimed jurisdiction over the Tribal

Jurisdictional Statistical Area to the exclusion of the UKB. Accordingly, HUD

interpreted the substance of the challenge to be that the UKB should not receive

more than the minimum funding allocation because the tribe could not claim a

Formula Area as defined in 24 C.F.R. § 1000.302. After reviewing the matter,

HUD issued a memorandum on January 19, 2005, in which the agency concluded

that the UKB had “no jurisdiction or regulatory basis” for being assigned a

Formula Area because only the CNO could assert jurisdiction over the Oklahoma

Tribal Statistical Area and the UKB had no Memorandum of Agreement with the

CNO. HUD stated that the formula correction, which rendered the UKB

ineligible “for funding under the Need component of the IHBG formula,” would

become effective for fiscal year 2006.

On February 11, 2005, the UKB requested that HUD reconsider its

determination that the UKB had no jurisdiction over and therefore could not be

assigned a share of the Oklahoma Tribal Statistical Area. After further inquiry

into the matter, HUD reversed itself on April 26, 2005, finding that the UKB did

in fact “meet the regulatory basis under the IHBG program for being assigned a

share of the Cherokee Oklahoma Tribal Statistical Area” because the UKB could,

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in HUD’s estimation, “exercise court jurisdiction” over the area. Accordingly, on

the basis of the UKB’s ability to claim the Oklahoma Tribal Statistical Area as its

Formula Area, HUD granted the UKB $545,989 in funding for the fiscal year

2006. HUD also informed the CNO, on October 18, 2005, that it had the “right to

appeal this decision” to assign the UKB a share of the Oklahoma Tribal Statistical

Area.

This prompted an administrative appeal by the CNO on November 16,

2005. The appeal contained a detailed legal argument designed to show that the

CNO possessed exclusive jurisdiction over the Oklahoma Tribal Statistical Area.

This argument was based in part on our decision in United Keetoowah Band of

Cherokee Indians v. Mankiller, in which we reaffirmed that “the Cherokee Nation

is the only tribal entity with jurisdictional authority in Indian Country within the

Cherokee Nation.” 4 No. 93-5064, 1993 WL 307937, *4 (10th Cir. Aug. 12, 1993)

(unpublished). In response, HUD reversed itself again on February 7, 2006,

concluding that the “the UKB could not exercise court jurisdiction over land in

the Cherokee former reservation area.” The UKB, predictably, then challenged

this new decision in a letter dated March 27, 2006. HUD denied this request for

reconsideration on November 3, 2006, in a letter described as a “final agency

4
We have also adjudicated another case involving the UKB’s jurisdiction
in Buzzard v. Oklahoma Tax Comm’n, 992 F.2d 1073, 1077 (10th Cir. 1993)
(holding that the UKB could not claim land held in fee simple as “Indian country”
where the federal government had not set apart the land for the UKB’s use).

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action.” HUD based the denial on its conclusion that the UKB

failed to show that it possesses a Formula Area, as that term is
defined pursuant to 24 C.F.R. § 1000.302, because it has neither a
geographic area over which it could exercise court jurisdiction nor an
area in which it provides substantial housing services pursuant to a
Memorandum of Agreement with the governing entity, the [CNO].

Accordingly, HUD awarded the UKB only the minimum funding allocation under

24 C.F.R. § 1000.328.

The UKB then sought judicial review in federal district court under the

Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701-706. The UKB argued

that Chevron deference should not apply to 24 C.F.R. § 1000.302 and asserted

several bases to show that HUD had acted arbitrarily and capriciously. United

Keetoowah Band, No. CIV-06-533-RAW, slip. op. at 5. However, the district

court applied Chevron deference and found that HUD had not acted arbitrarily

and capriciously. Id. at 5-10. The UKB now appeals this decision. The main

issue before us is whether NAHASDA is clear and unambiguous such that we

should not grant Chevron deference to the implementing regulations.

Discussion

When reviewing a final agency action, an appellate court “take[s] an

independent review of the agency’s action and [is] not bound by the district

court’s factual findings or legal conclusions.” Utah Envtl. Cong. v. Russell, 518

F.3d 817, 823 (10th Cir. 2008) (internal quotation marks omitted); see N.M.

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Cattle Growers Ass’n v. U.S. Fish & Wildlife Serv., 248 F.3d 1277, 1281 (10th

Cir. 2001). Here, given that the challenge is brought under the APA, we will set

aside the final agency action if it is “arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); see Utah Envtl.

Cong., 518 F.3d at 823. Generally, we will find an agency’s action to be arbitrary

and capricious if the agency “entirely failed to consider an important aspect of the

problem, offered an explanation for its decision that runs counter to the evidence

before the agency, or is so implausible that it could not be ascribed to a difference

in view or the product of agency expertise.” Motor Vehicle Mfrs. Ass’n of U.S.,

Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983); see Qwest

Commc’ns Int’l, Inc. v. FCC, 398 F.3d 1222, 1229 (10th Cir. 2005).

Our standard of review under the arbitrary and capricious rubric is narrow,

and we may not substitute our own judgment for that of the agency. Mainstream

Mktg. Servs., Inc. v. FTC, 358 F.3d 1228, 1248 (10th Cir. 2004). However, as we

have previously recognized, the narrow nature of our review under the arbitrary

and capricious standard does not mean that the review is insubstantial; to the

contrary, we are required “to engage in a substantial inquiry” and to conduct a

“thorough, probing, in-depth review.” Citizens to Preserve Overton Park, Inc. v.

Volpe, 401 U.S. 402, 415 (1971), overruled on other grounds by Califano v.

Sanders, 430 U.S. 99 (1977); see Qwest Commc’ns Int’l, 398 F.3d at 1229.

I. Chevron Deference

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 The central issue presented by this appeal is the extent of deference that we

owe to the agency’s interpretation of NAHASDA, as embodied in HUD’s

implementing regulations. In determining how much deference is owed, we first

seek to determine “whether Congress has directly spoken to the precise question

at issue,” Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 842

(1984), by looking to, among other things, the statutory text, history, and purpose,

Gen. Dynamics Land Sys., Inc. v. Cline, 540 U.S. 581, 600 (2004). If Congress

has spoken directly to the issue, that is the end of the matter; the court, as well as

the agency, must give effect to Congress’s unambiguously expressed intent.

Chevron, 467 U.S. at 842-43. If the statute is silent or ambiguous, we proceed to

step two and ask “whether the agency’s answer is based on a permissible

construction of the statute.” Id. at 843. While we must not impose our own

construction of the statute under this inquiry, we will not defer to an agency’s

construction if it is “arbitrary, capricious, or manifestly contrary to the statute.”

Id. at 843-44; see Ctr. for Legal Advocacy v. Hammons, 323 F.3d 1262, 1267

(10th Cir. 2003). See generally Hackworth v. Progressive Cas. Ins. Co., 468 F.3d

722, 727 (10th Cir. 2006); Nutraceutical Corp. v. Von Eschenbach, 459 F.3d

1033, 1037-38 (10th Cir. 2006); Qwest Commc’ns Int’l, 398 F.3d at 1229-30.

In this case, the “precise question at issue” is whether Congress

unambiguously manifested its intent that HUD base its allocation formula solely

on need-based criteria and, if so, whether the Formula Area requirement in

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HUD’s implementing regulations comports with this unambiguous requirement.

The UKB argues that the Formula Area requirement of 24 C.F.R.

§ 1000.302—and, more specifically, the fact that possession of a Formula Area

requires an Indian tribe to (1) exercise court jurisdiction, or (2) provide

substantial housing services and, where applicable, possess a Memorandum of

Agreement with the governing entity 5—is contrary to Congress’s plainly

expressed intent because NAHASDA unambiguously states that the amount of

IHBG funding must be based on need. The UKB contends that possessing a

5
This opinion focuses on the court jurisdiction requirement because the
parties do not dispute that the UKB must have a Memorandum of Agreement with
the CNO if it is to claim a Formula Area under the second part of the definition.
We assume without deciding that such is the case, and note that the UKB has been
unable to secure such a Memorandum of Agreement.
However, it is worth observing that the record does not establish that the
housing the UKB subsidizes is in Indian country. While court jurisdiction is
complex, as a general matter, Indian tribes exercise court jurisdiction over Indian
country—reservations, dependent Indian communities, and Indian allotments. 18
U.S.C. § 1151; see California v. Cabazon Band of Mission Indians, 480 U.S. 202,
208 n.5 (1987) (stating that § 1151 applies to questions of civil jurisdiction). See
generally Cohen’s Handbook of Federal Indian Law §§ 3.04[2][c], 4.07[1][b] (5th
ed. 2005). It seems, then, that if the housing lies outside of Indian country, the
UKB would not need a Memorandum of Agreement with the CNO because the
CNO would not be the “governing entity.” 24 C.F.R. § 1000.302; see Kansas v.
United States, 249 F.3d 1213, 1228 (10th Cir. 2001) (stating that a sovereign must
have jurisdiction over land in order to “exercise governmental power over it”).
The dissent cites Kansas for the proposition, apparently, that the Indian tribe must
have court jurisdiction before it provides any housing assistance. Dissent at 9.
However, a tribe does not have to have court jurisdiction in order to provide such
assistance. See Narragansett Indian Tribe of Rhode Island v. Narragansett Elec.
Co., 89 F.3d 908, 910-11, 915-22 (1st Cir. 1996) (involving a situation where an
Indian tribe provided housing assistance on land that did not qualify as “Indian
country”).

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Formula Area does not reflect a tribe’s need for housing assistance because its

need-based funding was “zeroed out” in 2006 not because of any drop in needy

households, but merely because HUD concluded that the UKB had no Formula

Area. According to this argument, then, the imposition of the Formula Area

requirement (a non-need-based factor) is inconsistent with unambiguous language

in the statute and therefore should not receive Chevron deference.

As in all cases where we must construe a statute, our primary task is to

“determine congressional intent, using traditional tools of statutory construction.”

NLRB v. United Food & Commercial Workers Union, 484 U.S. 112, 123 (1987)

(internal quotation marks omitted). As we always do in “cases requiring statutory

construction, we begin with the plain language of the law.” St. Charles Inv. Co.

v. Comm’r of Internal Revenue, 232 F.3d 773, 776 (10th Cir. 2000) (internal

quotation marks omitted). We must assume that the ordinary meaning of the

words Congress uses conveys its intent. Id.; see Harbert v. Healthcare Servs.

Group, Inc., 391 F.3d 1140, 1148 (10th Cir. 2004). Furthermore, “[w]here the

language of the statute is plain, it is improper for this Court to consult legislative

history in determining congressional intent.” St. Charles Inv. Co., 232 F.3d at

776. Therefore, we turn first to the precise language of the statute and, finding

that language to be unambiguous, our inquiry will end there. See United States v.

Zamudio, 314 F.3d 517, 521 (10th Cir. 2002) (“If the statutory language is clear,

our analysis ordinarily ends.” (internal quotation marks omitted)).

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 A. The Unambiguous “Need” Requirement of Section 4152(b)

Section 4152(b) states that “[t]he formula shall be based on factors that

reflect the need of the Indian tribes and the Indian areas of the tribes for

assistance for affordable housing activities.” 6 25 U.S.C. § 4152(b) (emphasis

added). This language explicitly and unambiguously mandates that the factors in

HUD’s allocation formula reflect—in other words, have some connection or

nexus with—the need of Indian tribes and Indian areas of the tribes. The

language does not permit of any other reading. 7 Moreover, though HUD argues to

6
At the time, § 4152 provided in relevant part:

(a) Establishment
The Secretary shall, by regulations . . . . establish a formula to provide
for allocating amounts available for a fiscal year for block grants under
this chapter among Indian tribes in accordance with the requirements of
this section.
(b) Factors for determination of need
The formula shall be based on factors that reflect the need of the Indian
tribes and the Indian areas of the tribes for assistance for affordable
housing activities, including the following factors:
(1) The number of low-income housing dwelling units owned or
operated at the time pursuant to a contract between an Indian housing
authority for the tribe and the Secretary.
(2) The extent of poverty and economic distress and the number of
Indian families within Indian areas of the tribe.
(3) Other objectively measurable conditions as the Secretary and the
Indian tribes may specify.

25 U.S.C. § 4152. While § 4152 has since been amended, it retains the operative
language we analyze here.
7
HUD argues that NAHASDA is ambiguous because it “neither prohibit[s]
HUD from considering a tribe’s Formula Area . . . nor require[s] such
(continued...)

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the contrary, there is no other language in the statute creating ambiguity such that

we would have to apply deference under Chevron’s step two.

First, HUD contends that the language in the statute regarding “Indian

areas” permits HUD to introduce a geographic component to the allocation

formula. Aplee. Br. 18. NAHASDA does state that the formula must be based on

the need of the Indian tribes “and the Indian areas of the tribes.” 25 U.S.C. §

4152(b). This language, at first blush, suggests that Congress might have

contemplated a requirement that a tribe exercise court jurisdiction over a

geographic area. However, NAHASDA’s definition of “Indian area” makes it

clear that Congress did not open the door for a requirement of court jurisdiction

when it used the term “Indian area.” NAHASDA’s definitional section states that

“[t]he term ‘Indian area’ means the area within which an Indian tribe . . . provides

assistance under this Act for affordable housing.” Id. § 4103(10). According to

this definition, all that the use of the term “Indian area” in § 4152(b) indicates is

that HUD must take into consideration the need of the area in which the applicant

Indian tribe provides housing assistance—it does not indicate that HUD may

7
(...continued)
consideration.” Aplee. Br. 9. HUD contends that this “silence with respect
specifically to formula area” means that Congress’s intent is unclear. Id. This
misconstrues the inquiry, because NAHASDA does explicitly limit the kinds of
factors that HUD may employ in its formula: the factors must be based on need.
Given that HUD fails to make any showing that the Formula Area court
jurisdiction requirement complies with this limitation, it follows that NAHASDA
actually does expressly prohibit HUD from considering court jurisdiction.

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exclude an Indian tribe from receiving funding under 24 C.F.R. § 1000.324

simply because the tribe does not exercise court jurisdiction over that area.

Second, HUD claims that NAHASDA is ambiguous in that Congress

enumerated several factors that HUD could consider in creating the allocation

formula and included a catch-all factor arguably broad enough to permit the

jurisdictional requirement of 24 C.F.R. § 1000.302. NAHASDA does list as one

factor such “[o]ther objectively measurable conditions as the Secretary and the

Indian tribes may specify.” 25 U.S.C. § 4152(b)(3). However, the existence of

this catch-all factor does not create ambiguity in the statute, because even the

“other objectively measurable conditions” must be related to need. When

interpreting the meaning of this statutory language, we “must examine the . . .

language in context, not in isolation.” United States v. Nichols, 184 F.3d 1169,

1171 (10th Cir. 1999) (internal quotation marks omitted). Section 4152(b) states

that the formula must be based on “factors that reflect the need of the Indian

tribes and the Indian areas of the tribes for assistance for affordable housing

activities, including” three specific factors. 25 U.S.C. § 4152(b). Included in the

list of three factors is the “other objectively measurable conditions” factor. See

id. § 4152(b)(3). Thus, it is clear from looking at the structure and language of §

4152(b) in its entirety that Congress did not allow for non-need-based

considerations when it included subsection (b)(3). Rather, subsection (b)(3) is

simply one of the need-based factors that Congress explicitly specified; to the

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extent it functions as a catch-all factor, it is a catch-all for need-based

considerations only.

Finally, HUD argues that the fact Congress delegated to HUD the authority

to create an allocation formula means that we should defer to HUD’s construction

of that formula. While it is true that Congress delegated significant authority to

HUD, 25 U.S.C. § 4152(a) (“The Secretary shall . . . establish a formula to

provide for allocating amounts available for a fiscal year for block grants . . . .”),

that does not grant HUD license to ignore the parameters set forth by Congress.

The same section that delegates authority to HUD expressly states that when HUD

establishes an allocation formula, it must do so “in accordance with the

requirements of this section.” Id. As we have seen, one of those requirements is

that “[t]he formula shall be based on factors that reflect the need” of the tribes.

Id. § 4152(b). Accordingly, while HUD may create a funding formula and may

exercise significant discretion in doing so, the factors it adopts must reflect the

need of applicant tribes. Because the regulations do not meet this standard (for

the reasons discussed below), they violate the “intelligible principle” Congress set

forth to guide HUD. Our system of administrative law is premised on the rule

that when “Congress confers decisionmaking authority upon agencies Congress

must ‘lay down by legislative act an intelligible principle to which the person or

body authorized to [act] is directed to conform.’” Whitman v. Am. Trucking

Assoc., 531 U.S. 457, 473 (2001) (quoting J.W. Hampton, Jr., & Co. v. United

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States, 276 U.S. 394, 409 (1928)) (emphasis omitted). We would stand this

rule—and our system of administrative law—on its head if we were to simply

accept the delegation itself as the license for HUD to establish a non-need-based

factor, contrary to the guidelines established by Congress.

The dissent makes much of the fact that “jurisdiction” is referenced in 25

U.S.C. § 4112(c), the section setting forth statutory requirements for Indian

Housing Plans. 8 Dissent at 2-4. However, we are not convinced that the

reference renders § 4152 ambiguous. First, and most importantly, the reference to

jurisdiction in its generic sense does nothing to suggest that HUD was free to

impose a requirement of court jurisdiction. The dissent assumes that the terms

“jurisdiction” and “court jurisdiction” are automatically co-terminous, but they

are not necessarily so in this context. See, e.g., Narragansett Indian Tribe of

Rhode Island v. Narragansett Elec. Co., 89 F.3d 908, 910-11, 915-22 (1st Cir.

1996) (holding that an Indian housing project was not “Indian country” and that

8
While the dissent claims that we “ignore” the important canon of statutory
construction that we are to consider the statute as a whole, Dissent at 1-2, we do
not do so. Rather, viewing the statute as a whole, Sierra Club v. El Paso Gold
Mines, Inc., 421 F.3d 1133, 1143 (10th Cir. 2005), we see nothing that calls into
question the facially unambiguous language of 25 U.S.C. § 4152(c), including the
language in § 4112. “The language of the statute must be the primary source of
any interpretation and, when that language is not ambiguous, it is conclusive
‘absent a clearly expressed legislative intent to the contrary.’” Miller v. C.I.R.,
836 F.2d 1274, 1283 (10th Cir. 1988). Here, after “[l]ooking at the entire statute,
we fail to find a clearly expressed legislative intent that the words in the statute
do not mean what they say.” Id.

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the tribe did not have exclusive court jurisdiction over it even though it was

overseen by an Indian housing authority that exercised some degree of

control—or “jurisdiction”—over the project). In fact, HUD’s own regulations

make it clear that they are not synonymous, given that the regulations state that

“[w]henever the term ‘jurisdiction’ is used in NAHASDA it shall mean ‘Indian

Area’ except where specific reference is made to the jurisdiction of the court.” 24

C.F.R. § 1000.10. In turn, the regulations demonstrate that “Indian area” does not

have a court jurisdiction aspect, as “Indian area” simply “means the area within

which an Indian tribe operates affordable housing programs.” Id. Here, it is the

term “court jurisdiction” that the UKB objects to, given that it is the term used in

the challenged regulation. 24 C.F.R. § 1000.302. Accordingly, the use of the

term “jurisdiction” has no particular relevance to the inquiry as to whether

NAHASDA unambiguously prohibits a court jurisdiction requirement.

Furthermore—even indulging the unwarranted assumption that the two

terms are synonymous—rather than suggesting that § 4152 is ambiguous, the

inclusion of the “jurisdiction” language in § 4112(c) demonstrates that Congress

explicitly excluded court jurisdiction from the need-based formula under § 4152.9

9
The dissent argues that there is no formula under § 4152 because
Congress delegated to HUD the responsibility to create a formula. Dissent at 4-5.
This is mere wordplay. Of course, as this opinion acknowledges, HUD ultimately
created the formula. However, it must do so “under” the guidance set forth in §
4152—guidance that explicitly requires a nexus between the factors and need. It
(continued...)

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Because Congress demonstrated its awareness of a jurisdictional element in one

section of the statute, it is clear that it could have allowed for court jurisdiction in

another section of the statute if it had wished to do so. But it did not.

Accordingly, the reference to jurisdiction in § 4112(c) does nothing to undermine

our conclusion that § 4152 unambiguously excludes non-need-based factors such

as court jurisdiction.

B. The Formula Area Requirement Conflicts with NAHASDA’s Plain

Language

Having concluded that the language is unambiguous, we must next

determine whether HUD’s regulations conform to the clearly expressed intent of

Congress. The seven criteria set forth in 24 C.F.R. § 1000.324 plainly reflect the

need of Indian tribes and Indian areas. However, HUD has interposed § 1000.302

as a “precursor” or threshold requirement; if the tribe cannot show that it could

exercise court jurisdiction, then it cannot claim a Formula Area or, it follows,

qualify for a need-based funding allocation under the criteria of § 1000.324. As

we have already suggested, we can find no discernible nexus between the

requirement that the Indian tribes exercise court jurisdiction over some

geographic area and the “need” of the tribes, as that term is ordinarily construed.

The requisite connection to need does not come from the alleged difficulty

9
(...continued)
is in that sense that there is a formula under § 4152.

-19-
of considering the needs of an Indian tribe if the tribe does not exercise court

jurisdiction over a geographic area. The existence of such a difficulty is belied

by the fact that the regulations already permit tribes to get funding solely because

they provide substantial housing services, regardless of whether they exercise

court jurisdiction. In order to see this, we must engage in a hypothetical.

Assume that, while the applicant tribe (which we shall call Tribe A) can claim no

court jurisdiction of its own, it provides substantial housing services in an area

that falls outside the court jurisdiction of the nearest tribe (Tribe B). In that

situation, under the existing regulations, Tribe A could get federal funding

without having to show court jurisdiction at all. The regulations only require

court jurisdiction or provision of substantial housing services and, where

applicable, a Memorandum of Agreement with the governing tribe. 24 C.F.R. §

1000.302. If, as in our hypothetical, Tribe A’s housing is located outside the

court jurisdiction of Tribe B and that of any other nearby tribe (relieving it of the

need to secure a Memorandum of Agreement), it could secure IHBG funding

merely by showing that it provided substantial housing services. Court

jurisdiction would be irrelevant. Therefore, because the regulations themselves

allow for a situation where an Indian tribe can secure funding without exercising

court jurisdiction or having a Memorandum of Agreement with a tribe that does

have court jurisdiction, we cannot conclude that court jurisdiction has any real

-20-
connection with the determination of “need.” 10

The dissent dismisses this rationale, and argues that the court jurisdiction

requirement “supplies a necessary geographic boundary for NAHASDA funding.”

Dissent at 6. Again, however, the dissent assumes that “jurisdiction” is

necessarily synonymous with “court jurisdiction.” Because these two terms are

not synonymous, it is not far-fetched to think, as the dissent seems to say, that the

Indian tribe could provide housing assistance outside its own court jurisdiction

but within its purview such that it could be claimed in the Indian Housing Plan

submitted to HUD. For instance, a tribe might construct low-income housing on

land that it owns but that does not qualify as Indian country. See Narragansett

Indian Tribe, 89 F.3d at 910-11 (stating that the Narragansett Indian Tribe was

constructing a housing complex on land that did not qualify as Indian country).

In that situation, the housing would be within the tribe’s “Indian area” and could

be claimed even though it was not within its court jurisdiction. Again, this

10
For much the same reason, we conclude that the court jurisdiction
requirement is not saved by § 4152(c). Congress specified two other factors, in
addition to the “need-based” factors of § 4152(b), that HUD must consider. Id. §
4152(c). However, those factors are not applicable to this case. While one of the
factors refers to the “relative administrative capacities” of the recipient, we do not
see how the court jurisdiction requirement relates to a tribe’s administrative
capacity. The regulations themselves seem to suggest that court jurisdiction is
not a particularly important administrative consideration, given that they allow
for Indian tribes get federal funding without any court jurisdiction in the
circumstances outlined above. In any event, HUD made no real argument as to
the relation between “administrative capacity” and court jurisdiction.

-21-
demonstrates the absence of a nexus between court jurisdiction and need. 11

The absence of such a connection means that HUD’s imposition of the §

1000.302 Formula Area court jurisdiction requirement as a threshold for need-

based funding over the minimum allocation is contrary to Congress’s plainly

expressed intent because it leads to funding allocations based on factors that do

not reflect tribal housing needs. This conclusion finds no better illustration than

the case at hand: the UKB’s need for housing assistance did not abate when HUD

concluded that the UKB lacked the ability to claim court jurisdiction.

In sum, because NAHASDA is clear that the funding formula must be based

exclusively on factors reflecting tribal need for housing assistance, Chevron

deference does not apply to 24 C.F.R. § 1000.302—at least insofar as its court

jurisdiction requirement functions as a threshold that must be met before need-

based funding can be secured under § 1000.324. See Chevron, 467 U.S. at 842-43

(“If the intent of Congress is clear, that is the end of the matter; for the court, as

well as the agency, must give effect to the unambiguously expressed intent of

Congress.”). “[T]he principle that accords substantial weight to interpretation of

11
Moreover, we note that adopting the dissent’s position would do nothing
to create a usable geographic boundary for calculating need. The dissent asserts
that “at least part of an Indian tribe’s ‘Indian area’ . . . must include the tribe’s
jurisdiction.” Dissent at 8-9 (emphasis added). Having conceded that a tribe’s
“Indian area” might not be identical to its court jurisdiction, the dissent must also
concede that the court jurisdiction requirement does not “identify what
geographic boundaries would be used in determining where an Indian tribe can
provide housing assistance” as the dissent claims it does. Dissent at 6.

-22-
a statute by the department entrusted with its administration is inapplicable

insofar as those regulations are inconsistent with the [statute].” Townsend v.

Swank, 404 U.S. 282, 286 (1971). This is so because the “judiciary is the final

authority on issues of statutory construction and must reject administrative

constructions which are contrary to clear congressional intent.” Chevron, 467

U.S. at 843 n.9. Accordingly, because the use of § 1000.302 as a threshold

requirement conflicts with the plain language of 25 U.S.C. § 4152(b), we must

conclude that it is invalid under the APA and that its application in the final

agency action before us renders that action fatally flawed. 12 5 U.S.C. § 706(2)(A)

(stating that courts are to set aside agency actions that are “not in accordance with

law”). The fact that the regulatory scheme was developed through a negotiated

rulemaking procedure is of no relevance to this determination.

II. Procedural Issues

The UKB also contends that HUD acted arbitrarily and capriciously in its

handling of the CNO’s challenge to HUD’s decision to allocate funds to the UKB.

We have previously stated that “[w]e will . . . set aside an agency action if the

agency has failed to follow required procedures.” Citizens’ Comm. to Save Our

12
Having found NAHASDA to be unambiguous, we need not reach the
UKB’s argument that Chevron deference does not apply because of the rule of
statutory construction, set forth in Montana v. Blackfeet Tribe of Indians, 471
U.S. 759, 766 (1985), that federal statutes are to be construed liberally in favor of
Indians.

-23-
Canyons v. Krueger, 513 F.3d 1169, 1176 (10th Cir. 2008); see Olenhouse v.

Commodity Credit Corp., 42 F.3d 1560, 1574 (10th Cir. 1994). The UKB argues

that HUD failed to follow its own procedures by entertaining the CNO’s

challenge because it had established no procedures for hearing legal challenges by

third party tribes. The UKB also argues that even if HUD could hear the

challenge in the first instance, it could not then permit an appeal by the CNO in

the absence of a regulation granting a right to appeal.

We also have grave concerns with the fact that the CNO was permitted to

appeal when there was no regulation granting it the right to do so. The

regulations only permitted third-party Indian tribes to raise challenges to “data

contained in the U.S. Decennial Census” and bring appeals related to those

challenges—and this certainly was not a challenge to census data. See 24 C.F.R.

§ 1000.336. 13 However, having resolved the statutory interpretation issue in favor

of the UKB, and having determined that the use of 24 C.F.R. § 1000.302 as a

threshold requirement is invalid, we need not resolve the procedural issues.

Accordingly, we REVERSE and REMAND for further proceedings

consistent with this opinion. The motion to supplement the record on appeal and

the supplemental motion to supplement the record on appeal are DENIED.

13
Notably, 24 C.F.R. § 1000.336 was amended in 2007 so that tribes may
now challenge data used in determinations regarding the Formula Area. The
regulations that existed at the time only referred to census data challenges.

-24-
08-7025, United Keetoowah Band of Cherokee Indians of Okla. v. U.S. Dep’t of
Hous. & Urban Dev.

BRISCOE, J., Circuit Judge, dissenting.

I respectfully dissent. While I agree that the “main issue before us is

whether NAHASDA is clear and unambiguous such that we should not grant

Chevron deference to the implementing regulations,” Maj. Op. at 8, I read

NAHASDA as a whole to be ambiguous in its references to tribal jurisdiction

when addressing requirements a tribe must satisfy in order to receive funding.

Accordingly, I would apply Chevron deference and consider HUD’s regulations

and their present application. Based on this analysis, I would affirm.

I

The majority’s statutory construction analysis begins and ends with the

plain language of 25 U.S.C. § 4152(b). Maj. Op. at 13 (“Section 4152(b) states

that ‘the formula shall be based on factors that reflect the need of the Indian

tribes and the Indian areas of the tribes for assistance for affordable housing

activities.’ This language explicitly and unambiguously mandates that the factors

in HUD’s allocation formula reflect . . . the need of Indian tribes and Indian areas

of the tribes.”) (citation omitted). In my view, this approach ignores an important

canon of statutory construction. Following the guidance of the Supreme Court,

this Circuit has repeatedly noted the need to consider statutory language in the

“broader context of the statute as a whole.” E.g., In re Wise, 346 F.3d 1239,

1241 (10th Cir. 2003) (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 341
(1997) for the statement, “The plainness or ambiguity of statutory language is

determined by reference to the language itself, the specific context in which that

language is used, and the broader context of the statute as a whole.”); Sierra Club

v. El Paso Gold Mines, Inc., 421 F.3d 1133, 1143 (10th Cir. 2005) (citing United

States v. Nichols, 184 F.3d 1169, 1171 (10th Cir. 1999) for the assertion that

“appellate courts must examine the . . . language in context, not in isolation”);

Wyoming v. United States, 279 F.3d 1214, 1230 (10th Cir. 2002) (quoting Gade

v. Nat’l Solid Wastes Mgmt. Ass’n, 505 U.S. 88, 99 (1992) for the statement,

“We must not be guided by a single sentence or member of a sentence, but look to

the provisions of the whole law.”); Osborne v. Babbitt, 61 F.3d 810, 812 (10th

Cir. 1995) (“In determining the meaning of a statute, we look at not only the

statute itself but also at the larger statutory context.”). To examine § 4152(b)’s

need requirement in the broader context of NAHASDA as a whole, it is necessary

to review the NAHASDA framework.

Under the NAHASDA framework, Congress delegated to HUD authority to

make housing grants “on behalf of Indian tribes to carry out affordable housing

activities.” 25 U.S.C. § 4111(a). HUD may make a grant under NAHASDA only

if the Indian tribe submits a qualifying “Indian housing plan for such fiscal year.”

Id. § 4111(b)(1)(A)–(B). Every housing plan an Indian tribe submits to HUD

“shall contain” “a general statement of the mission of the Indian tribe to serve the

needs of the low-income families in the jurisdiction of the Indian tribe during the

-2-
period[,]” “a statement of the goals and objectives of the Indian tribe to enable

the tribe to serve the needs [of the low-income families in the jurisdiction of the

Indian tribe]” and “a statement of the housing needs of the low-income Indian

families residing in the jurisdiction of the Indian tribe and the means by which

such needs will be addressed during the period, including . . . a description of the

estimated housing needs and the need for assistance for the low-income Indian

families in the jurisdiction . . . and . . . a description of the estimated housing

needs for all Indian families in the jurisdiction.” 25 U.S.C. § 4112(b)(1)–(2),

(c)(2)(A)–(B) (emphasis added). 1 Upon receiving the plans, “[HUD] shall

conduct a limited review of each Indian housing plan submitted to [HUD] to

ensure that the plan complies with the requirements of section 4112 . . . . [HUD]

shall have the discretion to review a plan only to the extent that [HUD] considers

review is necessary.” 25 U.S.C. § 4113(a)(1). For “Indian tribes that comply

1
I note that the majority’s description of the NAHASDA framework and
the required housing plans states only, “NAHASDA established a housing-
assistance program that was funded directly through Indian Housing Block Grants
. . . and disbursed to tribes on the basis of Indian Housing Plans prepared by the
tribes and submitted to HUD.” Maj. Op. at 3 (citation omitted). The majority
also cites Fort Peck Hous. Auth. v. U.S. Dep’t of Hous. & Urban Dev., 435 F.
Supp. 2d 1125, 1127–29 (D. Colo. 2006) for a general description of
NAHASDA’s funding mechanism. The description in Fort Peck, however,
includes the requirement of a statement describing a tribe’s jurisdiction. 435 F.
Supp. 2d at 1128 (“NAHASDA provides that HUD shall make grants on behalf of
Indian tribes to carry out affordable housing activities for each fiscal year from an
appropriation for that year for tribes that have submitted an Indian housing plan,
meeting general statutory requirements, including a statement of needs of
low-income Indian families residing in the jurisdiction of the tribes.”).

-3-
with the requirements under [NAHASDA] for a grant under [NAHASDA],” HUD

allocates funding “in accordance with the formula established pursuant to section

4152 . . .” 25 U.S.C. § 4151.

Under this framework, before an Indian tribe can receive NAHASDA

funding, the tribe must submit a statement of the housing needs in the tribe’s

jurisdiction. This requirement ties a tribe’s receipt of NAHASDA funding to its

description of housing needs in the tribe’s jurisdiction. At minimum, it is

ambiguous whether a tribe must have jurisdiction over an area before it can

estimate and seek funding for its housing needs.

The majority disputes this ambiguity by reasoning that “rather than

suggesting that § 4152 is ambiguous, the inclusion of the ‘jurisdiction’ language

in § 4112(c) demonstrates that Congress explicitly left jurisdiction out of the

need-based formula under § 4152.” Maj. Op. at 18. To me, this logic is

unconvincing. 2 Simply put, Congress could not have “explicitly” left jurisdiction

2
The majority appears to concede that there is a jurisdictional element to
NAHASDA funding, but emphasizes the distinction of the “court jurisdiction”
language in the regulations. Thus, in addition to reading § 4152’s reference to
“need” to be unambiguous, the majority apparently also considers § 4112’s
reference to “jurisdiction” to unambiguously exclude “court jurisdiction.” E.g.,
Maj. Op. at 17 (“[T]he reference to jurisdiction in its generic sense does nothing
to suggest that HUD was free to impose a requirement of court jurisdiction.”). I
do not share the majority's certainty on this issue. See Black’s Law Dictionary
(8th ed. 2004) (defining jurisdiction as: “1. A government’s general power to
exercise authority over all persons and things within its territory . . . 2. A court’s
power to decide a case or issue a decree . . . .”); Maj. Op. at 12 (“We must assume
(continued...)

-4-
out of the “formula under § 4152” because Congress did not explicitly create a

formula under § 4152. Indeed, to state that there is a “formula under § 4152” is

itself a misnomer because there is no formula in § 4152. In § 4152, Congress

delegates to HUD the responsibility to “establish a formula . . . in accordance

with the requirements of this section.” 25 U.S.C. § 4152(a). “The requirements

of this section” identify that “[t]he formula shall be based on factors that reflect

the need of the Indian tribes and the Indian areas of the tribes for assistance for

affordable housing activities . . . .” Id. § 4152(b). Given this statutory language,

it strains reason to conclude that a delegation of authority to create a formula

based on “factors that reflect” need of the Indian areas implies that Congress

explicitly omitted a jurisdiction requirement from that formula.

Similarly, the majority’s rephrased conclusion—“Because Congress

demonstrated its awareness of the jurisdictional element in one section of the

statute, it is clear that it could have allowed for court jurisdiction in another

section of the statute if it had wished to do so,” Maj. Op. at 19—highlights

several contradictions in the majority’s analysis. First, this statement considers

2
(...continued)
that the ordinary meaning of the words Congress uses conveys its intent.”). I am
also unconvinced by the majority’s citation to 24 C.F.R. § 1000.10 for the
regulatory definitions of “Indian area” and “jurisdiction.” Because the majority
holds that NAHASDA is clear and unambiguous such that Chevron deference to
HUD’s regulations is inapplicable, it is contradictory to apply HUD’s regulations
to conclude that NAHASDA is unambiguous.

-5-
NAHASDA to be one statute, reinforcing the need to consider § 4152 in its

broader context. Second, the statement acknowledges there is a jurisdictional

element to NAHASDA. The holding of the majority, however, is that NAHASDA

unambiguously forecloses any jurisdictional requirements in the funding formula.

Third, this conclusion contradicts the language of the statute, which establishes a

jurisdictional element as a necessary precondition before any funding can be

allocated under § 4151, according to the formula established pursuant to § 4152.

Because the jurisdictional element is a necessary precondition to applying § 4152,

it arguably would be superfluous for Congress to again include the same

requirement in § 4152.

The ambiguous jurisdiction requirement in § 4112 also supplies a

necessary geographic boundary for NAHASDA funding. The majority does not

identify what geographic boundaries would be used in determining where an

Indian tribe can provide housing assistance. The majority only concedes that §

4152(b)’s need requirement relates to the “Indian areas of the tribes.” Maj. Op. at

14–15. After applying the statutory definition of “Indian area,” the majority

determines that “all that the use of the term ‘Indian area’ in § 4152(b) indicates is

that HUD must take into consideration the need of the area in which the applicant

Indian tribe provides housing assistance . . . .” Id. at 14. Under this construction,

HUD should provide housing assistance funding only for areas where Indian

tribes provide housing assistance and there is need for housing assistance funding.

-6-
This approach appears circular, if not meaningless; nothing would prevent an

Indian tribe from randomly expanding its “Indian area” to include areas in need

wherever located.

Additionally, the majority disregards the element of the “Indian area”

definition that requires the housing assistance to be provided under NAHASDA.

25 U.S.C. § 4103(10) (“The term ‘Indian area’ means the area within which an

Indian tribe . . . provides assistance under this Act for affordable housing.”)

(emphasis added). To receive funds to provide assistance under NAHASDA, the

tribe must comply with NAHASDA’s requirements. Id. § 4151. One of

NAHASDA’s requirements is to submit a housing plan describing the needs, and

goals to serve the needs, of the tribe’s jurisdiction. Id. § 4112. Neither the

majority, nor NAHASDA’s plain language, suggests how a tribe would receive

funding for an area outside its jurisdiction, and consequently not described in its

qualifying housing plan. If a tribe does not receive funding for an area outside of

its jurisdiction, then arguably it does not provide housing assistance under

NAHASDA for that area. If it does not provide housing assistance under

NAHASDA for that area, then that area is not within the tribe’s “Indian area.”

Consequently, for the majority’s holding—that NAHASDA’s use of “Indian area”

unambiguously does not include a jurisdictional element—to be tenable, one must

assume, without a statutory basis, that HUD provides funding for areas that are

not required to be described in a tribe’s qualifying housing plan.

-7-
 On the other hand, because § 4112 requires a tribe to describe its housing

needs in its jurisdiction and also requires a tribe to describe how it will address

those needs in its jurisdiction, it is reasonable to assume that the Indian tribe must

provide housing assistance in its jurisdiction. 3 Consequently, at least part of an

Indian tribe’s “Indian area”—defined to be “the area within which an Indian tribe

. . . provides assistance under [NAHASDA] for affordable housing,” 25 U.S.C. §

4103(10)—must include the tribe’s jurisdiction. 4 Because § 4152 requires the

allocation formula to be based on factors that reflect “the need . . . of the Indian

areas of the tribes,” the allocation formula is ambiguous about whether that need

must be within an Indian tribe’s jurisdiction. At a minimum, § 4112’s repeated

references to need within a tribe’s jurisdiction directly refutes the majority’s

assertion that “we can find no discernible nexus between the requirement that the

Indian tribes exercise court jurisdiction over some geographic area and the ‘need’

3
This statutory requirement also makes the majority’s hypothetical scenario
under the regulations irrelevant and likely impossible. See Maj.Op. at 20. The
majority postulates the existence of a “Tribe A” that “can claim no court
jurisdiction of its own” but “provides substantial housing services” and “could get
federal funding without having to show court jurisdiction at all.” Id. The
majority fails to explain how Tribe A can submit a qualifying Indian housing plan
under § 4112 that describes the low-income families and the housing needs of its
non-existent jurisdiction. If Tribe A cannot submit such a housing plan, it would
be ineligible for NAHASDA funding under 25 U.S.C. § 4111(b)(1)(A)–(B).
4
Under the plain language of the statute, it is conceivable that a tribe’s
Indian area and its jurisdiction would not be identical. If a tribe did not provide
housing assistance to a portion of its jurisdiction, then that portion of its
jurisdiction would not be within its Indian area.

-8-
of the tribes . . . .” Maj. Op. at 19.

Ultimately, NAHASDA’s plain language requires a description of the needs

of the tribes’ jurisdictions in their submitted housing plans and consideration of

factors reflecting the need of the Indian areas under its allocation formula. In my

view, this situation is similar to Kansas v. United States, 249 F.3d 1213 (10th Cir.

2001). In Kansas, we reviewed a statute that defined “Indian lands” as “any lands

. . . over which an Indian tribe exercises governmental power,” but separately

required the tribe to exercise jurisdiction. Kansas, 249 F.3d at 1228 (citing 25

U.S.C. § 2703(4)(B), 2710(b)(1)). When reviewing the agency’s decision in

Kansas, we addressed the distinction between governmental power over land and

jurisdiction over land. Id. at 1229. We stated, “We agree . . . that before a

sovereign may exercise governmental power over land, the sovereign, in its

sovereign capacity, must have jurisdiction over that land.” 5 Id. By requiring

jurisdiction in some parts of the statute, but not including jurisdiction as part of

the “Indian areas” definition, I similarly view NAHASDA as ambiguous

regarding whether its jurisdictional references require a tribe to exercise

jurisdiction over land before it can receive funding for housing assistance. See

5
I note that the majority also cites this statement, Maj. Op. at 11 n.5, but
still concludes there is no connection between jurisdiction and a tribe’s ability to
provide housing assistance in its Indian area. Apparently, the majority does not
consider providing housing assistance to be a governmental function requiring the
exercise of governmental power.

-9-
id. (noting that the statute at issue “shed[] little light on the question” and finding

that “Congress ha[d] not directly spoken to the precise question at issue”)

(quotation omitted). Because I consider NAHASDA to be ambiguous on this

issue, I would apply Chevron deference to HUD’s statutory interpretations. 6

II

A. HUD’s interpretation of NAHASDA

Having determined that NAHASDA is ambiguous regarding whether a

tribe’s jurisdiction is a consideration for IHBG funding, I next would consider

whether HUD’s interpretation is permissible. Wedelstedt v. Wiley, 477 F.3d

1160, 1165 (10th Cir. 2007) (“If the statutory scheme involves an ambiguity or

silence on the precise question at issue, however, we must next consider whether

6
I would also reject the UKB’s alternative argument that “[e]ven if
NAHASDA were ambiguous . . . [w]hen Indian interests are involved, Chevron
does not apply.” Aplt. Br. at 10. I agree that in cases reviewing statutes intended
to benefit Native Americans, “the canon of [statutory] construction favoring
Native Americans controls over the more general rule of deference to agency
interpretations of ambiguous statutes.” Ramah Navajo Chapter v. Lujan, 112 F.3d
1455, 1462 (10th Cir. 1997). I would not, however, apply this canon of statutory
construction in this context for two reasons. First, I do not concede the UKB’s
contention that requiring a tribe to exercise jurisdiction is detrimental to a tribe’s
interests in providing housing services. Second, the canon of statutory
construction favoring Native Americans is inapplicable when either reading of the
statute would benefit Native Americans. Utah v. Babbitt, 53 F.3d 1145, 1150
(10th Cir. 1995) (“We find this canon inapplicable here because the interests at
stake both involve Native Americans.”). Funding under NAHASDA is a finite
amount, fixed annually. Each eligible tribe receives its funding as a portion of
the available funding. Under this framework, there are Native American interests
on both sides of the question of whether the statute ambiguously requires a tribe
to exercise jurisdiction over land to be eligible for IHBG funding.

-10-
the agency’s interpretation is permissible.”). “If Congress has explicitly or

implicitly delegated authority to an agency, legislative regulations are given

controlling weight unless they are arbitrary, capricious, or manifestly contrary to

the statute.” Nutraceutical Corp. v. Von Eschenbach, 459 F.3d 1033, 1038 (10th

Cir. 2006) (quotation omitted); Newton v. F.A.A., 457 F.3d 1133, 1136 (10th Cir.

2006) (“[W]e ordinarily defer to an agency’s interpretation of an ambiguous

statute that it implements.”).

HUD’s application of the regulations at issue, 24 C.F.R. § 1000.302 and

1000.324, considers a tribe’s ability to exercise jurisdiction over an area as part of

the IHBG funding formula. As addressed above, I view NAHASDA’s inclusion

of references to tribal jurisdiction in the funding formula as ambiguous.

NAHASDA delegates to HUD to create other relevant factors for the IHBG

funding formula. 25 U.S.C. § 4152(b)(3) (“Other objectively measurable

conditions as the Secretary and the Indian tribes may specify.”). By identifying a

formula area as limited by a tribe’s jurisdiction, the formula area is objectively

measurable and is relevant to other portions of the statute that require “Indian

areas.” 25 U.S.C. § 4103(10). In my view, HUD’s regulation requiring the tribe

to have jurisdiction over an area is a permissible addition, if not a necessary

starting point, in identifying a tribe’s housing needs and meeting the statutory

requirement of providing housing assistance. Because HUD’s construction of the

statute is permissible, I would defer to its interpretation.

-11-
B. HUD’s Action

Because I would defer to HUD’s interpretation of NAHASDA, I also would

consider HUD’s actions under its regulations. Review of HUD’s final agency

action is controlled by the APA, which states in pertinent part:

To the extent necessary to decision and when presented, the
reviewing court shall decide all relevant questions of law, interpret
constitutional and statutory provisions, and determine the meaning or
applicability of the terms of an agency action. The reviewing court
shall . . . hold unlawful and set aside agency action, findings, and
conclusions found to be . . . (A) arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.

5 U.S.C. § 706(2)(A); see Via Christi Reg’l Med. Ctr., Inc. v. Leavitt, 509 F.3d

1259, 1271 (10th Cir. 2007) (applying this standard). Under the arbitrary and

capricious standard of review, “review is narrow and deferential; we must uphold

the agency’s action if it has articulated a rational basis for the decision and has

considered relevant factors.” Nutraceutical Corp., 459 F.3d at 1038 (quotation

omitted).

1. HUD’s interpretation of its regulations

The UKB argues that HUD acted arbitrarily and capriciously. First, the

UKB contends that HUD’s interpretation of its regulations to include a

jurisdictional requirement in the funding formula contradicts the clear language of

NAHASDA and HUD’s regulations. I disagree. Because Chevron is applicable

and I would defer to HUD’s permissible interpretation of NAHASDA, I also

would give substantial deference to HUD’s interpretation of its own regulations.

-12-
See Leavitt, 509 F.3d at 1272 (“[W]e must give substantial deference to an

agency’s interpretation of its own regulations.”) (quotation omitted).

The UKB contends that the “plain language of NAHASDA and its

implementing regulations do not require the designation of a formula area and the

exercise of jurisdiction over a geographic area . . . .” Aplt. Br. at 15 (emphasis

omitted). Because I would conclude that NAHASDA is ambiguous on this issue,

I would confine my present review to HUD’s regulations. Under 24 C.F.R. §

1000.310, “[t]he IHBG formula consists of two components: (a) Formula Current

Assisted Housing Stock (FCAS); and (b) Need.” Both parties agree that only the

need component is presently at issue. The need component consists of seven

criteria addressing households in need. 24 C.F.R. § 1000.324. Absent from these

criteria is a fixed boundary within which one could determine the number of

households that satisfy the need criteria. I consider HUD’s reference to the

“formula area” definition found in 24 C.F.R. § 1000.302 to be appropriate, and

likely necessary, to calculate the number of relevant households. I would defer to

HUD’s interpretation of its regulations to read “formula area” in 24 C.F.R. §

1000.302 as the area relevant for the formula tabulations.

2. Similarly-Situated Tribes

The UKB also contends that HUD’s action is arbitrary and capricious

because it treats similarly-situated tribes differently. To support this argument,

the UKB contends:

-13-
 In the same year that HUD denied IHBG funding to the [UKB] . . . ,
HUD granted funding to the Pamunkey Tribe, the Lumbee Tribe, the
Poospatuck Indians and the Waccamaw Siouan State Tribe. (Aplt.
App[’x] []229). These state tribal entities lack the legal capacity to
exercise jurisdiction over land and are not qualified to have lands
held in trust by the federal government.

Aplt. Br. at 18–19. The UKB also highlights HUD’s acknowledgment of the

possibility of similar tribes—“since there may be other landless tribes, we need to

understand the implications of any decision that is made in this case on other

tribes”—and contends that because the record does not otherwise consider the

implications of its decision on other tribes, HUD ignored this aspect of the

analysis. Id. at 19 (quoting Aplt. App’x at 72).

The record citation provided by the UKB to support the existence of

similarly-situated tribes refers only to a letter through counsel from the UKB to

HUD disputing UKB’s jurisdiction over a formula area. Assuming that this is

appropriate authority, I would read the letter to state that HUD provided IHBG

need funding to the referenced tribes because they met the formula area definition

under 24 C.F.R. § 1000.302(viii). Aplt. App’x at 229. To the extent the UKB did

not meet the formula area definition, the referenced tribes are not similarly

situated.

I also would reject the UKB’s contention that HUD failed to consider the

impact on other similar tribes. As the UKB noted, HUD acknowledged the

potential impact on other similar tribes as a consideration. HUD later indicated

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that the UKB was not the only tribe affected by the Cherokee Nation’s contention

that only it could exercise jurisdiction over the Cherokee Oklahoma Tribal

Statistical Area. Id. at 172. HUD identified the similarly-affected tribes as “the

Shawnee Tribe . . . and Delaware Tribe of Indians.” Id. According to HUD, the

Delaware Tribe lost its federal recognition and was no longer eligible for IHBG

funding, and the Shawnee Tribe did not appeal the decision. Id. at 172–73. In its

letter to HUD, the UKB acknowledged that “[t]his situation is unique to these two

tribes [the UKB and the Cherokee Nation] because they both are successors in

interest to the former Cherokee Nation.” Id. at 234. Based upon these

considerations, which HUD identified as a part of its decision-making process, I

cannot conclude that HUD ignored or disregarded the implications of its UKB

decision on other tribes.

3. HUD’s consideration of the Cherokee Nation’s Challenge

Under 24 C.F.R. § 1000.336(a), “An Indian tribe . . . may challenge data

used in the IHBG formula.” Because the regulations do not provide explicitly for

a third party to challenge a tribe’s IHBG funding, the UKB contends HUD acted

arbitrarily and capriciously by acting on the Cherokee Nation’s letter that

requested a review of the formula area for other tribes in the Cherokee Nation’s

jurisdictional area.

The majority expresses “grave concerns” that HUD permitted the Cherokee

Nation to appeal absent an explicit regulation. Maj. Op. at 24. I do not share

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these concerns. HUD considered the Cherokee Nation’s letter to be a challenge

under 24 C.F.R. § 1000.336. Aplt. App’x at 25. As before, I would give

substantial deference to HUD’s interpretation of its own regulations. Although

the regulation does not reference explicitly the ability of one tribe to challenge

the existence of another tribe’s formula area, this omission is similar to the

absence of a formula area factor in the need formula in 24 C.F.R. § 1000.324.

Just as the identification of the number of relevant households must necessarily

be bound by a geographic boundary, census data relevant to those same

households under the same need formula must also be confined by a geographic

boundary. Despite the majority’s view that “this certainly was not a challenge to

census data,” Maj. Op. at 24, I would consider a challenge to the location or

existence of such boundaries as a challenge to the number of people within those

boundaries. In this regard, the Cherokee Nation’s letter challenged data used in

the IHBG formula. Accordingly, I would defer to HUD’s application of 24 C.F.R.

§ 1000.336.

Relatedly, the UKB challenges HUD’s consideration of the Cherokee

Nation’s appeal of HUD’s decision that the UKB satisfied the formula area

requirement. The letter notifying the Cherokee Nation of this decision stated, “In

accordance with 24 C.F.R. § 1000.336(b)(1) and 1000.118, you have the right to

appeal this decision.” Aplt. App’x at 173. Section 1000.336(b)(1) provides in

pertinent part:

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 In the event HUD challenges the validity of the submitted data, the
Indian tribe . . . and HUD shall attempt in good faith to resolve any
discrepancies so that such data may be included in formula
allocation. Should the Indian tribe . . . and HUD be unable to resolve
any discrepancy by the date of formula allocation, the dispute shall
be carried forward to the next funding year and resolved in
accordance with the dispute resolution procedures set forth in this
part for model housing activities (§ 1000.118).

Section 1000.118 provides in pertinent part: “(a) Within thirty calendar days of

receiving HUD’s denial of a proposal to provide assistance to non low-income

Indian families or a model housing activity, the recipient may request

reconsideration of the denial in writing. The request shall set forth justification

for the reconsideration.”

The UKB contends that neither of these sections provides for “third party”

appeals. Aplt. Br. at 22. Moreover, the UKB asserts that the Cherokee Nation

did not file its appeal within the required thirty days. I would reject both

arguments. HUD instructed the Cherokee Nation of its right to appeal under the

cited regulations. Having concluded that HUD appropriately considered the

Cherokee Nation’s letter as a challenge under § 1000.336, it would be illogical to

conclude that the Cherokee Nation could not appeal an adverse determination

under the same regulation. Further, I note that no relevant language in §

1000.336 limits who may bring a challenge or appeal beyond “An Indian tribe.”

24 C.F.R. § 1000.336(a), (b)(1). This regulation does not exclude third-party

appeals or challenges by an Indian tribe, such as the Cherokee Nation. Regarding

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the thirty-day limit, HUD sent a letter notifying the Cherokee Nation of its right

to appeal on October 18, 2005. Aplt. App’x at 172. The Cherokee Nation filed

its appeal on November 16, 2005. Id. at 174. Consequently, I would conclude

that the Cherokee Nation appealed “[w]ithin thirty calendar days of receiving

HUD’s denial,” satisfying 24 C.F.R. § 1000.118(a).

4. Nine years of precedent

The UKB raises several arguments based on the premise that HUD

arbitrarily and capriciously disregarded nine years of precedent for providing the

UKB IHBG funding. In my view, the UKB’s arguments disregard the explicit

statutory language of NAHASDA. NAHASDA requires “an Indian tribe to submit

to the Secretary, for each fiscal year, a housing plan under this section.” 25

U.S.C. § 4112(a)(1)(A). NAHASDA requires HUD to “conduct a limited review

of each Indian housing plan.” 25 U.S.C. § 4113(a)(1). NAHASDA instructs

HUD to “establish a formula to provide for allocating amounts available for a

fiscal year for block grants.” 25 U.S.C. § 4152(a). By requiring annual

submission and review of housing plans before allocating funding, the terms of

NAHASDA necessarily reject the UKB’s reliance on nine years of prior funding

as precedent for continued funding.

5. The UKB’s jurisdiction over lands within the former Cherokee reservation

Alternatively, the UKB asserts that HUD acted arbitrarily and capriciously

by failing to consider that the UKB exercises jurisdiction over lands within the

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former Cherokee reservation. To support this argument, the UKB cites sources

outside of the administrative record. I cannot conclude that HUD acted arbitrarily

and capriciously because it failed to consider evidence that was not before it. 7

See Am. Mining Cong. v. Thomas, 772 F.2d 617, 626 (10th Cir. 1985) (“[T]he

agency’s action must be reviewed on the basis articulated by the agency and on

the evidence and proceedings before the agency at the time it acted.”).

6. Availability of Alternative Funding

The UKB argues that HUD acted arbitrarily and capriciously by failing to

consider whether the designation of additional formula areas would be fair and

equitable under 24 C.F.R. § 1000.302(2). The UKB’s entire argument on this

issue is as follows: “In the present case, the administrative record establishes that

HUD failed to consider IHBG funding in the [UKB]’s proposed Formula Area as

under 24 C.F.R. § 1000.302(2). Accordingly, HUD’s denial was arbitrary and

capricious.” Aplt. Br. at 28. The UKB fails to clarify what HUD failed to

consider in the UKB’s Formula Response Form. In the absence of that

clarification, I cannot conclude that HUD’s action was arbitrary and capricious.

7
The evidence that the UKB seeks to add to the administrative record is
the affidavit of George Wickliffe, who is currently the Chief of the UKB. Aplt.
App’x at 398. Mr. Wickliffe states that the UKB exercises exclusive jurisdiction
over specific addresses in Oklahoma. This assertion does not indicate a factor
that HUD failed to consider. To the contrary, HUD addressed whether the UKB
exercised jurisdiction over lands within the former Cherokee reservation and
relied on holdings from this court and letters from the BIA. Aplt. App’x at 25.

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 III

I would affirm.

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