Tribes Take Battle Over Covid Emergency Funds to DC Circuit

WASHINGTON (CN) — Nearly six months after Congress earmarked $8 billion for Native tribes in the CARES Act, the Treasury Department argued to the D.C. Circuit on Friday that it can lawfully hand out portions of the coronavirus relief funds to Alaska Native corporations. 

Over a dozen tribes have challenged the plan by the Trump administration to send federal money to the so-called ANCs. They argue Congress intended for the pandemic relief to go only to the 574 tribes — many hard hit by the deadly outbreak and the economic fallout it triggered — that have a government-to-government relationship with the United States. 

“Corporations do not have sovereign governmental powers. They do not enjoy the government-to-government relationship with the United States,” attorney Riyaz Kanji, arguing for tribes from Alaska and the Lower 48, said Friday. 

U.S. District Judge Amit Mehta first granted a temporary block on the distribution of CARES Act funds to ANCs, but reversed course in his final ruling in June. 

“It stands to reason that Congress, in its effort to distribute emergency funds quickly to Indians under the CARES Act, intended to get those dollars in the hands of the same entities that deliver public services to Indians. In the lower 48 states, those entities are largely Tribal governments in the traditional sense, but in Alaska, those entities include Alaska Native village and regional corporations,” the Obama appointee wrote.

The tribes appealing the decision indicated Friday that they may request an extension of the stay currently set to expire on Sep. 15 while the D.C. Circuit considers the case. 

Formed in a 1971 agreement between the federal government, the state of Alaska and Alaskan Natives, ANCs argue they are eligible for CARES relief because they provide critical services to Alaskan Natives in remote areas of the state where no federally recognized tribe operates.  

U.S. Circuit Judge Patricia Millett questioned Friday if reversing the district court decision would leave individuals in the Last Frontier to suffer without federal relief during the pandemic. 

“Would it stay in Alaska in some form or another, or would it be dispersed across the United States?” the Obama appointee asked. 

“Treasury’s allocation formula is a black box for those of us on the outside,” Kanji said, admitting he did not know where the funding would ultimately land. 

Facing a question along the same lines from U.S. Circuit Judge Karen L. Henderson, a George H.W. Bush appointee, the attorney reassured the court that the state of Alaska is also providing emergency relief funding. 

“They certainly won’t be left out in the cold,” Kanji said of the Alaskan Native communities. 

The dispute comes down to whether ANCs fall under the definition of “Indian tribe.” In drafting the coronavirus relief bill, Congress pointed to language in the Indian Self-Determination and Education Assistance Act that has spurred divergent interpretations of the 1975 law during the months-long legal battle that ensued. 

The Trump administration has firmly argued that the uniquely situated corporations qualify as Indian tribes under the self-determination statute.

“It’s not like they were just kind of throwing the kitchen sink at anything that could possibly exist in Alaska,” Justice Department attorney Adam C. Jed said.

However, the tribes argued Friday that the district court ultimately failed to concede that the term “recognized” as it appears in the CARES Act is a legal term of art referring to federally recognized tribes. 

Turning to what other federal relief may be available to the ANCs, Henderson asked whether the corporations had sought money from the Paycheck Protection Program, which provided funds for businesses to make payroll and cover other operating expenses.  

Attorney Paul D. Clement, arguing for the ANCs, said the corporations had applied for relief under the program, but quickly followed up that it was not relevant to the arguments before the D.C. Circuit. 

He warned the three-judge panel that concluding the ANCs are ineligible for CARES relief would have serious repercussions for Alaskan Natives. 

He said because the Treasury Department had distributed the money to tribes based on population, the large number of Natives registered as employees for ANCs rather than with a particular Alaskan tribe would miss out. 

“Alaskan Natives will be systemically undercounted in the allocation of funds,” Clement said. 

But the tribes argued just the opposite, that including the ANC workforces would disadvantage Natives both in Alaska and the Lower 48. 

“Because it would bring all those large multinational corporation employees within that count . . . There would be a much more important overcount problem,” Kanji said. 

But Millet countered the warning by saying that problem does not arise under the Treasury Department view of the statute including ANCs as eligible for federal aid.

U.S. Circuit Judge Gregory Katsas, appointed by President Donald Trump, rounded out the panel.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit