53 F.4th 1236
9th Cir.2022Background:
- IHS runs health programs for tribes and bills third‑party insurers, retaining recoveries; ISDA (25 U.S.C. §§450 et seq.) lets tribes assume IHS programs and receive funding equal to what IHS would have spent.
- Congress created Contract Support Costs (CSC) to reimburse tribes for administrative/overhead costs of running those programs so tribes can provide at least the same services as IHS (25 U.S.C. §5325(a)).
- Congress later authorized tribes to bill outside insurers directly and to keep those receipts for healthcare so long as they are spent on services (25 U.S.C. §1641(d), §5325(m)).
- San Carlos Apache Tribe ran its own program, billed insurers, and used insurer revenue to expand services; it sued to recover CSC for the insurer‑funded portions of its program for 2011–2013 after IHS declined to pay.
- The Tribe’s funding agreement specified CSC amounts but incorporated ISDA and the IHS manual and allowed future adjustments; district court dismissed the Tribe’s claim; Ninth Circuit reversed and remanded.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Contract’s fixed CSC numbers bar the Tribe’s statutory claim | Contract allows adjustment and incorporates ISDA; if statute requires more CSC, contract defers to ISDA | Contract already specified CSC amounts, so Tribe received what it was due | Contract not dispositive; its adjustment clause and ISDA incorporation leave room for statutory entitlement |
| Whether 25 U.S.C. §5325(a) requires CSC for activities funded by third‑party insurer revenue | §5325(a)(2) covers costs of activities required to comply with the contract; §5325(a)(3)(A)(ii) covers costs “in connection with” the Federal program — insurer‑funded services are required by contract and thus qualify | CSC are limited to costs of complying with the contract narrowly defined; third‑party‑funded activities fall outside “the Federal program” or its reimbursable costs | §5325(a) is at least ambiguous and can be read to cover CSC for third‑party‑funded activities; Ninth Circuit sided with Tribe on ambiguity and inclusion |
| Whether §5325(m) or §5326 unambiguously forecloses CSC for insurer‑funded services | Those provisions do not address administrative costs or unambiguously rule out CSC; they can be read as nonexclusive | §5325(m) treating program income separately and §5326 limiting CSC to IHS contracts shows Congress did not intend CSC for third‑party spending | Neither provision unambiguously bars CSC for insurer‑funded services; ambiguity remains |
| Application of Indian‑law canons and Rule 12(b)(6) pleading standard | Ambiguity triggers Indian canon (construe for tribes); at pleading stage, Tribe need only plausibly allege statutory entitlement | Canon is not dispositive; statute is plain in defendants’ favor | Because statute is ambiguous, Indian canon resolves ambiguity for the Tribe; complaint survives 12(b)(6) — dismissal reversed and remanded |
Key Cases Cited:
- Community for Creative Non‑Violence v. Reid, 490 U.S. 730 (1989) (start statutory interpretation with text)
- King v. Burwell, 576 U.S. 473 (2015) (if statutory language is plain, enforce it)
- FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) (read words in statutory context)
- Montana v. Blackfeet Tribe of Indians, 471 U.S. 759 (1985) (Indian canon: ambiguous statutes construed for Indians)
- Chickasaw Nation v. United States, 534 U.S. 84 (2001) (Indian canon may guide but not always be conclusive)
- Swinomish Indian Tribal Cmty. v. Becerra, 993 F.3d 917 (D.C. Cir. 2021) (contrary circuit decision limiting CSC to tribe’s contract costs)
- Ramah Navajo Chapter v. Lujan, 112 F.3d 1455 (10th Cir. 1997) (precedent prompting statutory limitation in §5326)
- Navajo Health Found.‑Sage Mem’l Hosp., Inc. v. Burwell, 263 F. Supp. 3d 1083 (D.N.M. 2016) (legislative history on ISDA)