Reply on Expedited Motion for Preliminary Injunction — Miccosukee Tribe v. Treasury (S.D. Fla., Doc. 18)
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Plaintiff's reply to Defendants' opposition (Dkt. # 17) to the Plaintiff's Expedited Motion for Preliminary Injunction (Dkt. # 5), filed by the Miccosukee Tribe of Indians of Florida in Case No. 1:20-cv-23182-KMW, U.S. District Court for the Southern District of Florida, Document 18, entered on the docket 09/28/2020. The Tribe argues that Treasury fails to respond to its claim that the decision to distribute only $100,000 of CARES Act funds, based on a determination that the Tribe had zero members, was arbitrary and capricious. It also argues that Treasury's assertion that the funding decision is not subject to judicial review ignores the statutory mandate to distribute funds based on increased expenditures. The reply cites the D.C. Circuit slip opinion of Sept. 25, 2020 as Exhibit 1.
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“Reply on Expedited Motion for Preliminary Injunction — Miccosukee Tribe v. Treasury (S.D. Fla., Doc. 18).”
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Case 1:20-cv-23182-KMW Document 18 Entered on FLSD Docket 09/28/2020 Page 1 of 11
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF FLORIDA
THE MICCOSUKEE TRIBE
OF INDIANS OF FLORIDA,
Plaintiff,
v. Case No. 1:20-cv-23182-KMW
UNITED STATES DEPARTMENT OF THE
TREASURY and UNITED STATES OF
AMERICA,
Defendants.
PLAINTIFF’S REPLY TO DEFENDANTS’ OPPOSITION
TO PLAINTIFF’S EXPEDITED MOTION FOR PRELIMINARY INJUNCTION
Plaintiff, the Miccosukee Tribe of Indians of Florida (“Miccosukee Tribe” or “Tribe”),
hereby replies to Defendants’ Response in Opposition (Dkt. # 17) to the Tribe’s Expedited Motion
for Preliminary Injunction (Dkt. # 5).
SUMMARY
Primarily for the following reasons, Defendants’ Response is without merit:
A. Treasury fails to respond to the Tribe’s claim that its decision to distribute only
$100,000 of CARES Act funds to the Tribe, based on its determination that the Tribe had zero
members, was arbitrary and capricious. Instead, Treasury responds to different claims that the
Tribe has not asserted. Treasury’s failure to address the Tribe’s specific challenge to its zero-
population funding decision constitutes a tacit admission that the Tribe’s claim is likely to succeed
on the merits.
B. Treasury’s assertion that its funding decision is not subject to judicial review hinges
upon ignoring the CARES Act statutory mandate that Treasury must distribute funds “based on
increased [relative] expenditures” of each Tribal government. That mandate, which cannot be
Case 1:20-cv-23182-KMW Document 18 Entered on FLSD Docket 09/28/2020 Page 2 of 11
ignored, provides a clear measuring stick by which this Court can evaluate Treasury’s funding
decision. Furthermore, the D.C. Circuit Court of Appeals recently rejected one of Treasury’s
assertions that CARES Act funding decisions are not subject to judicial review. See Confederated
Tribes of the Chehalis Reservation, et al., v. Mnuchin, Case # 20-5204 (D.C. Cir.), slip opinion
(Sept. 25, 2020) (copy included as Exhibit 1).
3. Defendants fail to allege any harm caused by the timing of the Tribe’s complaint
and expedited motion for preliminary injunction. And the timing is not suspect because: (1) the
Tribe responsibly sought to resolve this dispute by means other than litigation; and, (2) the
exigency regarding the remaining CARES Act funds arose only recently, thus necessitating the
Tribe’s Expedited Motion.
ARGUMENT AND AUTHORITIES
A. Defendants Fail to Respond to the Tribe’ Claim that its “Zero-Population”
Determination was Arbitrary and Capricious.
In its Expedited Motion the Tribe established that that it is likely to prove that Treasury’s
specific funding determination for the Tribe was arbitrary and capricious for at least five reasons:
1. Treasury knew at the time that it made the determination that the population listing
of zero was not correct;
2. It was irrational for Treasury to conclude that a Tribe could have zero members yet
still be a Tribe entitled to a distribution;
3. Treasury failed to explore or resolve the conflicts among the various sources of
population data for the Miccosukee Tribe;
4. Treasury did not give a rational explanation for how it chose a population number of
zero in the face of conflicting evidence; and
5. Treasury relied on an incorrect assumption that the Tribe’s IHBG/AIAN population
of zero was a reliable and consistently-prepared metric in the face of concrete
evidence that it was not.
Pl. Br. at 10-12. Treasury does not respond to any of these arguments.
2
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Instead, Treasury attempts to change the subject to a different agency decision: the general
decision to rely upon the IHBG/AIAN dataset, instead of other datasets, for all Tribal funding
determinations. Treasury suggests that the Miccosukee Tribe is challenging the wrong agency
decision. Defs’ Br. at 17 (accusing the Tribe of “misconstru[ing] the relevant agency decision”
and of having a “myopic focus on its own datum”). Treasury does not, however, refute the
arbitrary and capricious nature of its specific funding determination for the Miccosukee Tribe.
Treasury cannot rewrite the Tribe’s complaint or otherwise dictate the parameters of the
Tribe’s challenge. The Tribe’s motion and complaint both target the particular Miccosukee
funding decision at issue here. Pl. Br. at 9 (challenging Treasury’s “zero-population” funding
determination for the Tribe); Complaint ¶ 57 (“The Treasury Secretary’s Population Distribution
of $100,000 to the Miccosukee Tribe was a final agency action within the meaning of, and subject
to judicial review under, the Administrative Procedure Act, 5 U.S.C. § 706.”).
Both the CARES Act and the Administrative Procedure Act (APA) establish that
Treasury’s specific funding determination for the Miccosukee Tribe is a proper target for judicial
review. In the text of the CARES Act, Congress expressly referred to such individualized
determinations as decisions that Treasury must make, within specific statutory constraints, for each
Tribe: the “amount paid . . . to a Tribal government” must be based on increased expenditures of
“each such Tribal government” relative to 2019 expenditures by “the Tribal government.” 42
U.S.C. § 801(c)(7) (emphasis added). And the APA defines such individualized funding
determinations as agency actions subject to judicial review. The APA expressly authorizes judicial
review of five specific categories of “discrete agency actions.” Norton v. S. Utah Wilderness
Alliance, 542 U.S. 55, 62 (2004). One of those categories is an agency action “withhold[ing]” a
“grant of money.” 5 U.S.C. §§ 10(B), 11(A); see also Norton, 542 U.S. at 62. The Tribe’s
3
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expedited motion challenges Treasury’s decision to withhold a grant of CARES Act funds due to
its irrational decision-making process. 1
Finally, Treasury argues—unpersuasively—that under the CARES Act it has unfettered
discretion to make an across-the-board decision to use IHBG/AIAN data for all Tribal funding
determinations regardless of whether specific applications of such data are irrational. See Defs’
Br. at 18. That broad-brush approach would effectively nullify the specific statutory command
that each Tribal government is entitled to a distribution based on its own increased expenditures.
See 42 U.S.C. § 801(c)(7). Absolute precision may not be required. Contrary to its assertions,
however, Treasury still has a fundamental obligation to establish “a rational connection between
the facts found and the choice made” in executing the statutory command to decide the amount
distributed to each Tribe. See, e.g., Mozilla Corp. v. FCC, 940 F.3d 1, 49 (D.C. Cir. 2019).
Treasury cannot escape that obligation by asserting that its decision-making would be more
efficient if it were free to ignore irrational results arising from the application of IHBG/AIAN data
in particular funding decisions. “The APA’s presumption of judicial review is a repudiation of the
principle that efficiency of regulation conquers all.” Sackett v. EPA, 566 U.S. 120, 130 (2012).
If Treasury were correct, and it could rely exclusively on the IHBG/AIAN data no matter
how irrational an individual funding decision may be, the agency could have (1) refused to
distribute any funds to Indian Tribes not listed in the IHBG/AIAN data, or (2) distributed funds to
1
Because the Tribe’s motion challenges the specific funding determination for the
Miccosukee, not the agency’s choice of one dataset over another, the Tribe does not claim here
that Treasury could never use IHBG/AIAN data in determining distributions to other tribes.
Treasury misconstrues the Tribe’s argument in suggesting otherwise. See Defs’ Br. at 18 n.15.
The Tribe’s argument is that Treasury could not rationally rely on a population figure of zero when
the agency had ample evidence that the Miccosukee Tribe has hundreds of members. The remedy
flowing from a final judgment on the Tribe’s claim would be a remand to the agency to resolve
the conflicting Miccosukee population figures through a rational decision-making process, not a
judicial directive to use one dataset instead of another.
4
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state-recognized Indian Tribes that receive HUD funds but are not recognized by the Federal
government. Doing so would plainly violate the statutory command that each Tribal government
is entitled to a distribution based upon its own increase in relative expenditures, and that only
Federally recognized tribes are entitled to funding.
At the time it made its population distributions Treasury publicly acknowledged the
limitations of the IHBG/AIAN data. Specifically, Treasury announced that some Tribes that were
eligible to receive CARES Act funds were not included in the IHBG/AIAN data and that it had
separately gathered individualized population data for those Tribes. Treasury also announced that
the IHBG/AIAN data included Tribes that received HUD funds but were otherwise not eligible to
receive CARES Act funds. Specifically, in its May 5, 2020, announcement regarding its
population-based distributions, Treasury stated:
For Indian Tribes not included in the IHBG date, HUD provided population figures
at Treasury’s request. Treasury will not include state-recognized Tribes that
participate in the IHBG program but that are not Indian Tribes as defined by Title
V of the CARES Act.
See Exhibit 2, p. 3 (also included as Exhibit 4 to the Tribe’s Expedited Motion).
Thus, contrary to its portrayal of its decision-making process, Treasury did not merely
decide which population dataset was the most reliable and then immediately make funding
decisions based solely on its chosen dataset. Rather, Treasury picked a dataset, scrutinized it for
some errors, and then took steps to correct those errors. Yet when faced with an undisputed zero-
population error for the Miccosukee Tribe, however, Treasury did nothing. The zero-population
error is essentially the equivalent of not being included in the IHBG/AIAN data at all. Treasury
had an obligation to address this error and resolve internal inconsistencies through a rational
process that resolved conflicting evidence regarding the Miccosukee Tribe’s population, just as it
5
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did for Indian Tribes not listed in the IHBG/AIAN data, and just as it did for non-federally
recognized Indian Tribes listed in the data. There is no dispute that Treasury failed to do so.
In sum, Treasury’s response addresses an agency decision—the choice of one dataset over
another—that the Tribe has not challenged. Whatever the merits of Treasury’s arguments may be
with respect to that decision, they are irrelevant here. Accordingly, the Court should hold that the
Tribe is likely to succeed on the merits of its claim. 2
B. Treasury’s argument that CARES Act distribution decisions are not subject to
judicial review ignores the CARES Act’s statutory mandate and was recently
rejected, in part, by the D.C. Circuit Court of Appeals.
There is “a ‘strong presumption’ favoring judicial review of administrative action.” Mach
Mining, LLC v. EEOC, 575 U.S. 480, 486 (2015) (citation omitted). A narrow exception to that
rule applies only in the rare circumstances in which judicial review is simply not feasible because
there is no statutory standard against which the Court can evaluate the agency’s action. As the
Tribe’s opening brief explained, there is such a standard here: the requirement that the funding
determination for each Tribal government must be “based on increased expenditures of each such
Tribal government . . . relative to aggregate expenditures in fiscal year 2019 by the Tribal
government . . . .” 42 U.S.C. § 801(c)(7). Pl. Br. at 15–17.
2
There is a substantial question whether Treasury even has adequately defended its
decision to choose one dataset over another. Attempting to explain why its choice of the
IHBG/AIAN dataset was rational, Treasury relies almost entirely upon arguments of counsel and
a Declaration by an agency official (Daniel Kowalski) drafted for purposes of this litigation. Defs’
Br. at 15-16. Yet the arbitrariness and capriciousness of an agency decision turns on the rationale
stated contemporaneously in the decisional document itself, not in later litigation submissions. It
is a “foundational principle of administrative law that a court may uphold agency action only on
the grounds that the agency invoked when it took the action.” Michigan v. EPA, 576 U.S. 743,
758 (2015). In determining whether an agency decision is arbitrary and capricious under the APA,
courts must base their judicial review on the “reasons stated in the [decision] under review.” ANR
Storage Co. v. FERC, 904 F.3d 1020, 1024 (D.C. Cir. 2018). The courts must not “consider the
agency’s post-hoc rationalizations.” Id. (citing Nat’l Petrochemical & Refiners Ass’n v. EPA, 630
F.3d 145, 164 (D.C. Cir. 2010)).
6
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Treasury does not even respond to the Tribe’s argument that the CARES Act’s “increased
expenditures” provision empowers the Court to review Treasury’s zero-population funding
decision. Accordingly, Treasury also does not address the critical point that because it chose to
use population as the measure for increased expenditures, an irrational decision regarding
population also constitutes an irrational decision regarding increased expenditures. This point
wholly undermines Treasury’s assertion that it has complete and unfettered discretion to determine
population and that the Court is powerless to step in—even where Treasury relies on population
data it knows is false. The logical extension of Treasury’s argument is that Treasury can determine
relative expenditures through a wholly irrational process without being reversed by a court. That
obviously cannot be the case, given Congress’s express directive that the distributions to Tribes
“shall be . . . based on” increased relative expenditures. 42 U.S.C. § 801(c)(7).
As the Tribe has acknowledged, the CARES Act provides discretion to Treasury to
determine that population can be used to determine increased expenditures. But that certainly does
not mean that Treasury’s irrational decision regarding the Miccosukee Tribe’s population is
completely beyond the scope of judicial review. See, e.g., Sierra Club v. EPA, 356 F.3d 296, 307
(D.C. Cir. 2004) (conducting judicial review of agency decision under statutory requirement that
decision must be “based on” defined analytical method); see also Citizens for Responsibility and
Ethics in Washington v. FEC, 892 F.3d 434, 440-41 (D.C. Cir. 2018) (addressing discretionary
agency decisions that are subject to judicial review for “abuse of discretion” under 5 U.S.C.
§ 706(2)(A)).
Instead of addressing the foregoing analysis on its merits, Treasury simply repeats the
bottom-line conclusions of two decisions of the U.S. District Court for the District of Columbia—
Shawnee Tribe v. Mnuchin, 2020 WL 5440552, and Prairie Band Potawatomi Nation v. Mnuchin,
7
Case 1:20-cv-23182-KMW Document 18 Entered on FLSD Docket 09/28/2020 Page 8 of 11
2020 WL 3402298. (Def. Brief, at 11–12). The Tribe addressed the Shawnee Tribe decision in its
Expedited Motion. (Expedited Motion at 15–17). In sum, the Tribe contends that both the
Shawnee Tribe decision and the Prairie Band decision were decided incorrectly because they both
rely on an incorrect application of the U.S. Supreme Court’s decision in Lincoln v. Virgil, 508 U.S.
182 (1993). Lincoln stands for the proposition that courts cannot review certain agency funding
decisions from so-called “lump-sum” appropriations which provide no guidance or restrictions on
spending. The appropriation at issue in Lincoln provided no guidance to the administering agency,
Indian Health Services (“IHS”), other than the requirement that the funds be used “for the benefit,
care, and assistance of the Indians,” for the “relief of distress and conservation of health,” and,
“therapeutic and residential treatment centers” for Indian mental-health care. See id. at 185. The
plaintiffs in Lincoln did not assert that IHS failed to meet these broad statutory goals. Rather, they
challenged IHS’s decision to end a specific health services program and reassign funds and
personnel to a different health services program designed to address the same needs. Id. at 187-
88. Congress had never specifically authorized either program and had never specifically
appropriated funds to either program. Id. In that context, the U.S. Supreme Court held that it had
no ability to review IHS’s decision because Congress provided no restrictions on IHS’s specific
spending decisions so long as those decisions met the broad goals of the applicable statutes. See
id. at 194–95.
Lincoln has no application to this dispute. In contrast to the statutes at issue in Lincoln, the
CARES Act did not provide Treasury with broad discretion to distribute funds based solely on
general criteria such as “the benefit, care, and assistance of the Indians.” Rather, the CARES Act
specifically states that the “amount paid . . . to a Tribal government” must be “based on increased
expenditures” of “each such Tribal government” relative to 2019 expenditures by “the Tribal
8
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government.” These specific criteria distinguish this dispute from Lincoln and provide the
necessary measuring stick against which this Court can review Treasury’s actions. 3
Finally, Treasury asserts that three structural or contextual considerations in the statute
preclude judicial review: the short deadline for disbursing funds, the urgency of providing funds
quickly, and the lack of any requirement for advance notice of funding decisions. Defs’ Br. at 12–
14. On Friday, September 25, 2020, in a different case addressing the distribution of CARES Act
funds to Tribal governments, the U.S. Court of Appeals for the D.C. Circuit decisively rejected
Treasury’s argument, ruling that “[w]e are unpersuaded.” See Confederated Tribes of the Chehalis
Reservation, et al., v. Mnuchin, Case # 20-5204 (D.C. Cir.), slip opinion, p. 10 (Sept. 25, 2020)
(copy included as Exhibit 1). The D.C. Circuit properly held that Treasury had not proved that
short statutory deadlines preclude judicial review by implication, that the agency’s “urgency”
argument was simply a variation on the same theme, and that advance notice occurred. This Court
should reach the same conclusions and hold that the Tribe is likely to prove that Treasury’s “zero-
population” decision is judicially reviewable.
C. Defendants fail to allege any harm suffered by the timing of the Tribe’s Complaint
and its Expedited Motion for Preliminary Injunction
Treasury devotes significant time to what it perceives as the Miccosukee Tribe’s delays in
filing its Complaint and its Expedited Motion. But at no point in its response does Treasury allege
3
Furthermore, Prairie Band did not involve a zero-population determination. Rather, the
“gravamen of Plaintiff’s complaint” was Treasury’s use of “a different methodology than proposed
during consultation with the Tribes and one not based on tribal enrollment.” See Prairie Band, *
2020 U.S. Dist. LEXIS 108155, at *5–6. And although Shawnee did involve a zero-population
determination, the D.C. District Court construed the plaintiff’s challenge primarily as a challenge
to Treasury’s decision to use population as a proxy for increased expenditures. See Shawnee, 2020
U.S. Dist. LEXIS 149434, at *3–5. In neither case did the D.C. Circuit Court address the specific
claim raised by the Miccosukee Tribe—that Treasury’s specific decision to distribute funds to the
Tribe based on an obviously false zero-populatio n determination was arbitrary and capricious.
9
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any harm caused by the alleged delay. And it does not assert that the Tribe missed any specific
deadlines in requesting its relief. Furthermore, the Miccosukee Tribe responsibly sought to resolve
this dispute through discussions and negotiations with Treasury, and other administration officials,
as well as Congressional representatives. Only after those efforts failed did the Tribe resort to
litigation. The Tribe cannot be faulted for its responsible approach to seeking a resolution of this
dispute.
Lastly, the timing of the Tribe’s Expedited Motion was dictated by the speed at which the
D.C. Circuit Court of Appeals was considering the expedited appeal in Confederated Tribes of the
Chehalis Reservation, et al., v. Mnuchin, Case # 20-5204 (D.C. Cir.). As described in the Tribe’s
Expedited Motion, on July 7, 2020, in the Confederated Tribes matter the D.C. District Court
enjoined Treasury from distributing the remaining CARES Act funds pending the resolution of the
appeal to the D.C. Circuit Court. See Confederated Tribes of the Chehalis Reservation, et. at., v.
Mnuchin, Case # 20-cv-01002 (APM), Dkt. # 107) (D.C. Dist.). Thus, when the Tribe filed its
Complaint on July 31, 2020, Treasury was already enjoined from distributing the remaining
CARES Act funds. Thus, there was no need, at that time, for the Tribe to seek a temporary
restraining order or preliminary injunction. Only after the D.C. District Court scheduled oral
arguments in the expedited appeal of the Confederated Tribes matter did the Tribe believe it was
appropriate to seek a preliminary injunction from this Court. Oral arguments in the Confederated
Tribes appeal were held on September 11, 2020. The Tribe filed its Expedited motion one week
later, on September 18, 2020. Just as the Tribe acted responsibly in seeking to resolve this dispute
without litigation, the Tribe also acted responsibly by refrain from seeking injunctive relief until
an exigency arose: the impending decision in the Confederated Tribes appeal.
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Respectfully submitted, this 28th day of September, 2020.
/s/ George B. Abney
George B. Abney
Daniel F. Diffley (admitted pro hac vice)
ALSTON & BIRD LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
(404) 881-7000 (telephone)
(404) 881-4777 (facsimile)
E-mail: George.Abney@alston.com
Daniel G. Jarcho (admitted pro hac vice)
ALSTON & BIRD LLP
950 F Street, N.W.
Washington, DC 20004-1404
(202) 239-3300 (telephone)
(202) 239-3333 (facsimile)
E-mail: Daniel.Jarcho@alston.com
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