The D.C. Circuit Court of Appeals in Navajo Nation v. Zinke, No. 16-5117 (April 4, 2017), has decided an important case regarding when a tribal proposal is “received” for purposes of starting the 90-day review period under § 102(a)(2) of the Indian Self-Determination and Education Act (ISDEAA), 25 U.S.C. § 5321(a)(2).
The case involved a multi-year self-determination contract between the Navajo Nation (Nation) and the Bureau of Indian Affairs (BIA) to fund the Nation’s judicial operations. The contract required the parties to enter into a separate funding agreement (FA) for each calendar year covered. On October 4, 2013, the Nation hand delivered a proposal for CY 2014 to an employee in the BIA Navajo Regional Office. The government was partially shut down at that time but the employee marked the proposal for intra-office mail delivery to the BIA official responsible for making award and declination decisions for the Nation’s contracts under the ISDEAA. The proposal for CY 2014 was in excess of $17 million, a major increase over the $1.3 million awarded to the Nation for CY 2013 FA.
Government operations resumed on October 17, and two days later, the BIA sent a letter to the Nation acknowledging receipt of the proposal and stating that the BIA considered the proposal to have been received on October 17 when government operations resumed. The letter asserted that the BIA had 90 days until January 15, 2014, to approve or decline the proposal. However, if the proposal was properly received on the date it was hand delivered (October 4), rather than on the date governmental operations resumed (October 17), then the 90-day review period would end on January 2, 2014.
The Nation did not respond to the BIA letter; nor did the Nation respond to a January 9 letter from the BIA requesting a 45-day extension. The BIA partially declined the proposal on January 15, 2014. ISDEAA regulations (25 C.F.R. § 900.18) require that if a proposal is not declined within 90 days of receipt, or within any agreed extension, the proposal is deemed approved. The Nation filed suit to enforce approval of the proposal under the regulation. The district court decided the case in favor of the BIA. The district court determined that because the Nation was silent in response to BIA’s letters announcing its position on the deadline for declining, the Nation was equitably estopped from asserting that the BIA received the proposal on October 4 and had to decline it within 90 days thereafter.
On appeal, the D. C. Circuit held that the proposal was “received” on October 4, 2013, when it was unconditionally accepted by the employee in the BIA’s regional office. The court determined that the ordinary meaning of “to receive” is to take possession or delivery of the proposal. The Court noted that the BIA had adopted this interpretation in its Internal Agency Procedure Handbook, even if the proposal was received by an office without the authority to process proposals. The Court also rejected the government’s argument that receipt of the proposal on October 4 would violate the Anti-Deficiency Act (ADA) because it would result in an obligation of funds in excess of appropriations. The court noted that the ADA does not cancel an agency’s obligations under its own regulation; nor does the ADA defeat the rights of other parties.
Importantly, the Court reversed the district court’s holding that the Navajo Nation was equitably estopped from disputing the timeliness of the declination. The Court noted that equitable doctrines are grounded in fairness and justice. Because the government itself has consistently taken the position that equitable estoppel does not apply to the sovereign United States, the government cannot in this case seek to impose equitable estoppel on another sovereign, especially one to which the government owes “a distinctive obligation of trust” citing Seminole Nation v. United States, 316 U.S. 286, 296 (1942). The Court cited with approval the passage in the Seminole decision that the government, in its dealings with the Indians, “has charged itself with moral obligations of the highest responsibility and trust. Its conduct, as disclosed in the acts of those who represent it in dealing with the Indians, should therefore be judged by the most exacting fiduciary standards.” Id. at 297.
This reliance on the federal trust responsibility of fair dealing to support the Court’s decision on application of equitable estoppel is an important holding for Indian tribes. The Court also determined that this case did not present the sort of “extraordinary circumstances” that justify equitable tolling. The Court noted that if the government believes it cannot “receive” documents during a stoppage, it should instruct its employees not to receive them, rather than expect its citizens and its courts to “equitably” pretend it has not done so. Further, the BIA lost only the first 13 days of the 90 days it had to act on the proposal.
Finally, the Court rejected the government’s argument that the Nation cannot be awarded funds in excess of the “Secretarial amount.” The Court noted that this argument would “transform a funding floor into a ceiling” because section 106(a)(1) of the ISDEAA requires that the funding amount “shall not be less” than the amount the Secretary would otherwise provide for operation of the programs for the period covered by the contract.
Please let us know if we may provide additional information about this decision.