Redding Rancheria v. Burwell, Civil Action No. 2014-2035

Background

Redding Rancheria (a federally recognized tribe) entered a 2011 ISDEAA compact and funding agreement with IHS to operate Contract Health Services (CHS) and established a Tribal Self‑Insurance Program (TSIP) in 2012 to reduce costs.
TSIP pays provisional claims and contains an exclusionary clause: it excludes services eligible for Medicare‑like CHS rates or CHEF reimbursement; if CHS is primary, TSIP seeks reimbursement.
The Tribe submitted six CHEF (Catastrophic Health Emergency Fund) reimbursement applications for CHS‑eligible care; IHS refused, asserting CHEF cannot reimburse payments made to a tribal self‑insurance plan and invoking a payor‑of‑last‑resort rule.
The Tribe sought consultation, administrative waivers, a final offer amendment to the compact, and filed a CDA claim; IHS denied or refused to process relief on various procedural grounds.
The core legal dispute: whether the 2010 IHCIA payor‑of‑last‑resort provision (25 U.S.C. § 1623(b)) excludes tribal self‑insurance programs from being payors of last resort and whether the Tribe’s COB/exclusionary clause is permissible.
The District Court held IHS’s interpretation unlawful, granted summary judgment in part (as to denial of six CHEF applications), and remanded to IHS for reconsideration consistent with the opinion, retaining jurisdiction.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 1623(b)'s "payor of last resort" excludes tribal self‑insurance	§1623(b) includes "health programs operated by... Indian tribes"; TSIP is a tribal health program/insurance and may be payor of last resort	§1623(b) incorporates narrower defined terms ("Indian health program"/"tribal health program") and thus excludes tribally funded self‑insurance	Court: Statute's plain language covers health programs operated by tribes; TSIP can qualify as payor of last resort and IHS's narrow reading is incorrect
Whether Tribe's exclusionary/COB clause violates IHS policy and prevents CHEF reimbursement	Clause is written authorization allowing CHS recovery when appropriate; it preserves fiscal efficiency and Congress protected tribal self‑insurance from federal recovery absent written authorization	IHS: the conditional/exclusionary clause makes TSIP effectively always primary and fails IHS policy; only unqualified exclusions fit IHS's exception	Court: Clause is consistent with statutory scheme (including §1621e(f)); IHS's position is untenable and contradicts statutory structure
Whether CHEF benefits/administration are immune from ISDEAA contractual remedies (25 U.S.C. §1621a(c))	Tribe seeks IHS to follow law and properly consider CHEF claims under compact terms, not to contract CHEF administration	IHS: CHEF and its administration cannot be subject to ISDEAA contracts, so compact cannot obligate CHEF payouts	Court: Tribe seeks consideration/access to CHEF consistent with law, not to contract away CHEF; IHS's preclusion argument fails
Standard of review for ISDEAA claims	Tribe: de novo review appropriate given statute, legislative history, and presumption favoring tribes	IHS: APA arbitrary & capricious review should apply	Court: Applies de novo review (as parties agreed and consistent with precedent and canon favoring tribes)

Key Cases Cited

Carcieri v. Salazar, 555 U.S. 379 (interpret statutes according to plain meaning)
Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (read statutory provisions in context and avoid interpretations producing absurd results)
Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (agency interpretations of ambiguous statutes get deference when reasonable)
Thomas Jefferson Univ. v. Shalala, 512 U.S. 504 (agency interpretation of its own regulation is controlling unless plain language or other indications compel alternative reading)
Cobell v. Norton, 240 F.3d 1081 (apply canon construing statutes liberally in favor of Indian tribes; limit deference to agencies)
Muscogee (Creek) Nation v. Hodel, 851 F.2d 1439 (D.C. Cir. applying tribal‑favoring construction over agency interpretation)
Florida Power & Light Co. v. Lorion, 470 U.S. 729 (remand appropriate when agency record inadequately supports action)
Shoshone‑Bannock Tribes v. Shalala, 988 F. Supp. 1306 (ISDEAA grants district courts broad remedial authority and supports de novo review)