A fresh appeals court ruling excludes Alaska Native corporations from tribal COVID-19 aid

The ruling overturns a June ruling that said the corporations could receive CARES Act funds.

By Yereth Rosen - September 28, 2020
The Anchorage headquarters of the Arctic Slope Regional Corporation, and Alaska Native Corporation with shareholders across the state’s North Slope. ASRC is one of the Alaska’s largest Alaska Native corporations, which are involved in a lawsuit to determine their eligibility for federal coronavirus relief funds designated for tribal governments. (Yereth Rosen)

A federal appeals court has ruled that Alaska Native corporations are not entitled to a share of coronavirus pandemic tribal aid money, reversing a lower court ruling issued three months ago.

The U.S. Appeals Court for the District of Columbia, in a ruling issued on Friday, said the for-profit Native-owned corporations created by the 1971 Alaska Native Claims Settlement Act (ANCSA)  fail to qualify as recipients of the $8 billion in federal aid set aside for Native tribes.

By definition, the corporations are excluded from Title V of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), said the opinion, written by Judge Gregory Katsas.

“Title V of the CARES Act makes funding available ‘to States, Tribal governments, and units of local government,’” Katsas wrote in his ruling. “Alaska Native Corporations are neither ‘States’ nor ‘units of local government’ in Alaska. ANCs thus are eligible to receive Title V funds only if they are ‘Tribal governments.’”

One of the three judges considering the case had a different take. While legally correct, the exclusion of Alaska Native corporations is an “unfortunate and unintended consequence of high-stakes, time-sensitive legislative drafting,” Judge Karen Henderson said in a concurring opinion.

“It is likely that Congress wanted Native corporations to be included in the tribal-aid funding, she said. “It is indisputable that the services ANCs provide to Alaska Native communities — including healthcare, elder care, educational support and housing assistance — have been made only more vital due to the pandemic,” she said in her opinion. “I can think of no reason that the Congress would exclude ANCs (and thus exclude many remote and vulnerable Alaska Natives) from receiving and expending much-needed Title V funds”

Friday’s decision overturns a June 26 ruling by U.S. District Court Amit Mehta that cleared Alaska Native corporations as qualified recipients of CARES Act tribal aid money.

Mehta had based his ruling on the Indian Self Determination and Education Act (ISDA) and Congress’ past interpretation of it. In the past, Congress has defined Alaska Native corporations as tribes eligible for federal contracts under that act.

But Katsas, in his ruling, said the ISDA explicitly requires entities to be formally recognized as tribes.

The ruling comes in a consolidated lawsuit filed in April against the Treasury Department by tribes in the Lower 48 states and some tribes in Alaska.

The case question hinges on the unique status of Alaska Native corporations and long-simmering disputes over tribal sovereignty in Alaska.

The corporations have economic missions and are separate from tribes; they are not governments and do not have governmental duties. But in practice, native corporations do provide many social and community services, including some health services, and their shareholders tend to be tribal members.

The tribal plaintiffs, including some of the nation’s largest tribal governments, have argued that Alaska Native corporations have the ability to get COVID aid elsewhere. Any diversion of tribal aid to the corporations would come at the expense of tribal governments, many of which lack the economic resources that the corporations have, the tribes have argued.

Tribal plaintiffs hailed Friday’s ruling.

In a statement released Friday, Navajo Nation President Jonathan Nez thanked the court for supporting the Navajo position that CARES Act tribal aid should be “allocated for federally-recognized tribes only and not for-profit Alaska Native Corporations that generate billions of dollars of revenues.”

The Navajo Nation is not unsympathetic to Alaska-specific needs, tribal Attorney General Doreen McPaul said in the statement. “While we recognize the unique status of Native entities in Alaska, the DC Circuit upheld the important distinctions between tribal governments and other entities, such as tribal organizations or corporations that may otherwise serve tribal members,” she said.

In contrast, the Alaska Congressional delegation has maintained that Alaska Native corporations — pillars of the state’s economy — were always intended to be recipients of CARES Act tribal aid.

The three Republican members issued a statement saying that they “strongly disagree” with the decision.

“The CARES Act Coronavirus Relief Fund tribal set-aside was created to provide pandemic relief for all American Indian and Alaska Native people, regardless of how they receive the relief,” said the statement, issued Friday. ”It is unconscionable that COVID-19 aid would be withheld from a subset of Alaska Native people simply because of the unique tribal system that exists in Alaska. Furthermore, this decision goes beyond the CARES Act, erasing more than 45 years of precedent and practice, with the potential to undo the tribal systems of health care, housing, education, workforce development, and more in our great state.”

In a joint statement, the ANCSA Regional Association and the Alaska Native Village Corporation Association said they “will continue to fight for the Federal assistance our
people need to survive this pandemic.”

“This ruling is a devastating blow to Alaska Native communities facing an alarming increase in COVID-19. Both CDC and Alaska data show that Alaska Native people suffer from a
disproportionate number of infections, hospitalizations and deaths. We fear this deeply flawed ruling will only make things worse by keeping critical health services and economic relief from reaching our remote communities and villages who are most at risk.”

Of the $8 billion allocated by Congress for tribes, about $500 million remains to be distributed to tribal governments, the Navajo Nation statement said.

This story has been updated to include comments from the organizations representing the Alaska Native corporations.