Petrella ex rel. N.P. v. United States Department of Housing & Urban Development
697 F.3d 1285
10th Cir.2012Background
- NAHASDA allows Indian housing block grants and authorizes investments by tribes in certain securities or obligations as approved by the Secretary.
- HUD regulation 24 C.F.R. § 1000.58(g) restricts investment periods to no longer than two years.
- HUD issued notices starting in 1999 and 2007 that likewise limit investments to two years and require a schedule showing maturities.
- Muscogee (Creek) Nation invested grant funds for periods longer than two years and was warned in 2009 that failure to return interest could trigger remedies under HUD regulations.
- The Nation sued seeking declaratory and injunctive relief, including recovery of approximately $1.315 million in interest already sent to HUD; the district court dismissed on sovereign immunity grounds and for failure to state a claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| APA waiver of sovereign immunity over regulation | Muscogee argues APA waives immunity for review of §1000.58(g). | HUD contends agency discretion bars review under Heckler v. Chaney. | Discretionary; district court lacked jurisdiction over regulation challenge. |
| Authority to demand remittance of interest | If §1000.58(g) is valid, HUD cannot demand interest remittance. | HUD may demand remittance for interest earned post-expiration as noncompliant program income. | HUD was authorized and required to demand remittance of interest earned after two years. |
| Character of the 2007/2009 notices | Notices impose new substantive obligations violating APA procedures. | Notices are interpretive guidance consistent with the statute/regulations. | Notices are interpretive and do not violate notice and comment; claim fails on the merits. |
| Jurisdiction to review; governing standard | AP A provides a broad waiver for review of challenged actions. | Agency discretion precludes review of the regulation; jurisdiction exists for the remittance issue. | Court has jurisdiction to review remittance issue; regulation upheld; notices interpretive. |
Key Cases Cited
- Heckler v. Chaney, 470 U.S. 821 (Supreme Court 1985) (agency discretion review limits under APA)
- Sierra Club v. Yeutter, 911 F.2d 1405 (10th Cir. 1990) (no meaningful standard for agency discretion review)
- Defenders of Wildlife v. EPA, 415 F.3d 1121 (10th Cir. 2005) (APA notice and comment considerations; interpretive rules)
- Ramah Navajo Chapter v. Salazar, 644 F.3d 1054 (10th Cir. 2011) (persuasive authority on agency discretion and EPA/NAHASDA considerations)