High Court Rules in Two Indian Cases Affecting Education Aid

By Mark Walsh — June 19, 2012 4 min read
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The U.S. Supreme Court on Monday ruled in two cases involving American Indian affairs and money flowing to education.

In one, the justices said a Michigan man may sue the federal government over a land deal that led to an Indian casino that is now contributing significantly to the coffers of the local school district.

Meanwhile, the court ruled in the second case that the federal government must pay certain support costs in full when Indian tribes contract with the government to provide services for themselves such as education that would otherwise be provided by the Bureau of Indian Affairs.

In the casino case, the Wayland Union school district, in southwest Michigan, was so concerned about the potential closing of the casino that it joined a friend-of-the-court brief on the side of the U.S. Department of the Interior and the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians urging the rejection of the suit by casino neighbor David Patchak.

The school district and other local governments are reaping an unexpected windfall from their share of revenues from the Gun Lake Casino, which opened last year on a 147-acre parcel of land held in trust by the federal government for the Indian tribe.

Patchak, a neighbor of the casino, sued the federal government claiming the acquisition of the land parcel was unlawful because the Match-E-Nash-She-Wish Band was not recognized as a tribe at the time of a 1934 federal law on Indian trust lands. The Band won federal recognition in 1998.

A panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled last year that Patchak had standing to challenge the secretary of the Interior’s actions to acquire the land in trust for the Indian tribe because of the negative effects of the casino on him and his nearby property.

The Gun Lake Casino opened in February 2011, and has contributed more than $2 million to local governments and $8.2 million to the state of Michigan. The 2,800-student Wayland Union Schools has received payments allowing it to cut preschool tuition rates by one-third, and to subsidize “pay-to-play” athletic fees that had been $100 per student per sport, the district said in the court brief it joined.

Casino supporters fear that Patchak’s suit could result in the reversal of the government land trust for the Indian tribe, which could then mean the casino could no longer operate. That possibility has led one law professor to note that the area would be left with “the world’s most expensive bingo hall.”

The only questions before the Supreme Court in Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak (Case No. 11-246) were somewhat technical: whether the federal government had sovereign immunity from the suit, and whether Patchak had legal standing to bring the case.

In a decision for an 8-1 majority of the court, Justice Elena Kagan said the federal government was not immune under a statute known as the Quiet Title Act because Patchak’s suit was not asserting his own competing interest in the land tract at issue. And it said Patchak had standing to challenge the acquisition of the land for ultimate use as an Indian casino despite arguments that the federal law on which he based his suit involves only land acquisitions, not land use issues.

In a lone dissent, Justice Sonia Sotomayor said the court’s decision “exposes the government’s ownership of land to costly and prolonged challenges.”

In the other Indian case today, an unusual lineup of justices ruled 5-4 that the federal government must find some way to pay the full “contract support” costs when Indian tribes contract with the government to provide their own services under the Indian Self-Determination and Education Assistance Act of 1975.

The services include law enforcement, education, youth-support services, and agricultural assistance. The contract support costs include administrative overhead, audit costs, and liability insurance. The lawsuit by Indian tribes seeks to recover underpayment of contract support costs in the federal fiscal years from 1994 to 2001. Court papers suggest that the government typically covered about 75 percent of the contract support costs due the tribes because of a lack of appropriations sufficient to cover the total amount due every contracting tribe. The underpayments meant the tribes had to cut back on services they were contracting to perform.

Writing for the majority in Salazar v. Ramah Navajo Chapter, Justice Sotomayor said that “consistent with longstanding principles of government contracting law, we hold that the government must pay each tribe’s contract support costs in full.”

She noted that Congress obligated the secretary of the Interior to accept every qualifying contract from a tribe under the Indian statute, but lawmakers appropriated insufficient funds to pay in full each contractor.

“The government’s frustration is understandable, but the dilemma’s resolution is the responsibility of Congress,” Sotomayor said. Congress could remove the mandate that the government enter into self-determination contracts with tribes, or it could appropriate sufficient contract support costs, among other options, she said.

Her opinion was joined by Kagan as well as Justices Antonin Scalia, Anthony M. Kennedy, and Clarence Thomas.

Writing in dissent, Chief Justice John G. Roberts Jr. said, “Congress spoke clearly when it said that the provision of funds was ‘subject to the availability of appropriations,’ that spending on contract support costs was ‘not to exceed’ a specific amount, and that the [Interior] secretary was ‘not required’ to make funds allocated for one tribe’s costs ‘available’ to another. The unambiguous meaning of these provisions is that when the secretary has allocated the maximum amount of funds appropriated each fiscal year for contract support costs, there are no other appropriations ‘available’ to pay any remaining costs.”

His dissent was joined by Justices Ruth Bader Ginsburg, Stephen G. Breyer, and Samuel A. Alito Jr.

A version of this news article first appeared in The School Law Blog.