United States: D.C. Circuit Awards Navajo Nation $15.7 Million In Additional Annual ISDEAA Funding

Steven Gordon is a Partner for Holland & Knight's Washington, D.C. office

Philip Baker-Shenk is a Partner for Holland & Knight's Washington, D.C. office

Court: Bureau of Indian Affairs Failed to Act in Timely Manner on Tribal Funding Proposal


  • The U.S. Court of Appeals for the District of Columbia Circuit has ruled that the Navajo Nation is entitled to $15.7 million in additional annual funding for its judicial system pursuant to its Indian self-determination contract with the Bureau of Indian Affairs (BIA).
  • The D.C. Circuit ruling is the first to recognize that tribes, as sovereigns, cannot be estopped except in the most extreme circumstances.
  • The ruling also underscores that the 90-day deadline for the BIA to act on tribal funding proposals for self-determination contracts will be firmly enforced.

The U.S. Court of Appeals for the District of Columbia Circuit on April 4, 2017, ruled that the Navajo Nation is entitled to $15.7 million in additional annual funding for its judicial system pursuant to its Indian self-determination contract with the Bureau of Indian Affairs (BIA). The D.C. Circuit reversed the decision of the U.S. District Court for the District of Columbia, which had concluded that the Nation was equitably estopped from pursuing its claim for additional funding.

Facts of the Case

The Nation had sought unsuccessfully for years to have the BIA fund, under an Indian Self-Determination and Education Assistance Act (ISDEAA) contract, a larger share of the cost of operating its judicial system. On Oct. 4, 2013, the Nation hand-delivered to the BIA a proposed funding agreement for calendar year 2014, which proposed to increase its annual contract funding from $1.3 million to $17 million. Under the ISDEAA, the BIA has 90 days after receipt of such a proposal to act on it, failing which, the proposal is deemed approved.

The federal government was partially shut down between Oct. 1 and Oct. 16, 2013, due to a lapse in congressional appropriations, and the employee that BIA had assigned to deal with the Nation's proposal was furloughed during this shutdown. The BIA advised the Nation that it considered the Nation's proposal to have been "received" on Oct. 17, 2013, when normal BIA operations resumed. The BIA waited to act on the proposal until 90 days after October 17, when it declined to provide any funding in excess of $1.3 million. The Nation contended that the BIA's declination was untimely and that its proposal had already been approved when the BIA failed to act on it within 90 days after Oct. 4. The Nation filed suit seeking the full $17 million in proposed funding.

D.C. Circuit's Reversal

The District Court ruled that the Nation was equitably estopped from pursuing its claim because the Nation had remained silent when the BIA indicated its position on the deadline. The D.C. Circuit reversed this decision, stating: "The government itself has consistently taken the position that estoppel does not apply against the sovereign United States. It thus ill-behooves the government to seek to impose such an uncommon action against another sovereign, especially one to which it owes a 'distinctive obligation of trust.'"

The D.C. Circuit ruling is significant because it is the first to recognize that tribes, as sovereigns, cannot be estopped except in the most extreme circumstances. The courts have found in other cases that the United States, for example, can be estopped only if it has engaged in affirmative misconduct.

The D.C. Circuit rejected several alternative arguments raised by the BIA in an effort to dispose of the Nation's suit. The court ruled that the Nation's proposal had been "received" on Oct. 4, 2013 – and had thereby commenced the 90-day clock – when the BIA employee on duty accepted the proposal hand-delivered to him. The court rejected the BIA's argument that the Anti-Deficiency Act made the employee legally incapable of accepting the proposal on behalf of the agency during the partial shutdown. The court ruled that, even if the employee should not have accepted the proposal (which it did not decide), the BIA was nonetheless bound because he did accept it.

The D.C. Circuit also rejected the BIA's argument that the 90-day deadline should be equitably tolled because of the partial government shutdown. The BIA conceded that it could have acted on the Nation's proposal within 90 days of its delivery on Oct. 4 but – the court commented –"inexplicably, it failed to do so." The court refused to "reward DOI's lack of diligence in the name of 'equity.'"

Finally, the court rejected the BIA's argument that even if the Nation's proposal was deemed approved after 90 days, the Nation could not be awarded funds in excess of the "Secretarial amount" – the $1.3 million – that had previously been provided to it. The court said this argument sought "to transform the [statutory] funding floor into a ceiling" and had been "oft rejected" by other courts.

What the Decision Means

Overall, the D.C. Circuit's decision underscores that the ISDEAA's 90-day deadline for the BIA to act on tribal funding proposals will be firmly enforced, and that courts will reject inventive arguments by the agency seeking to escape the consequences of its own inaction.

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