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FRIDAY, OCTOBER 4, 2002

A federal appeals court on Wednesday agreed to rehear a contracting dispute that could change the way tribes throughout the nation receive federal dollars.

Without comment, the 9th Circuit Court of Appeals issued an order to reconsider an earlier ruling affecting the Navajo Nation. The tribe wants to administer federal welfare funds and programs on behalf of tribal members in New Mexico, Arizona and Utah.

But the Department of Health and Human Services (HHS) in 1997 refused to authorize the contract. Then-Secretary Donna Shalala said dollars from the Temporary Assistance for Needy Families (TANF) program can't be handed to the tribe.

After a long court battle, the appeals court this past April upheld the denial. "We are obligated to defer to agency interpretations of statutes," Circuit Judge Diarmuid F. O'Scannlain wrote in a 2-to-1 decision.

At issue is a landmark law that recognizes a tribe's inherent right to handle its own affairs. Under the the Indian Self-Determination and Education Assistance Act, first passed in 1975, tribes can take over federal programs through contracting.

The Navajo Nation applied for a TANF contract under the self-determination law even though the 1996 welfare reform act authorized grants to tribes. Doing so would allow the tribe to receive additional administrative costs from HHS.

In a dissent, Circuit Judge Betty B. Fletcher recognized the distinction. "Reduced to its simplest terms, the majority opinion defeats the purpose of the Indian Self-Determination Act by allowing Indians to administer federal programs but denying them the funds to do the job," she wrote.

A number of issues are at play in the case. One is whether TANF is program that exists "for the benefit of Indians because of their status as Indians." According to HHS policy, TANF doesn't qualify.

The second is whether courts should defer to agency decisions when they conflict with federal Indian policy. Ambiguous laws should be decided in favor of tribes, according to established court cases.

A rehearing before the entire 9th Circuit will address these and other issues. No date has been set for oral arguments.

The Navajo Nation has moved to contract all health programs from the Indian Health Services, an agency of the IHS. The estimated value of the contract is nearly $400 million.

Relevant Documents:
Order for Rehearing (10/2) | Navajo Nation v. HHS (April 2002)

Relevant Links:
Navajo Nation - http://www.navajo.org
Office of Family Assistance - http://www.acf.hhs.gov/programs/ofa
Department of Health and Human Services - http://www.hhs.gov