Term: 2004
Docket: 02-1472
Cherokee Nation Of Oklahoma And Shoshone-paiute Tribes Of The Duck Valley Reservation v. Michael O. Leavitt, Secretary Of Health And Human Services, Et Al.
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02-1472 CHEROKEE NATION OF OKLAHOMA V. LEAVITT DECISION BELOW: 311 F3d 1054 CONSOLIDATED WITH 03-853 FOR ONE HOUR ORAL ARGUMENT. CERT. GRANTED 3/22/2004 QUESTION PRESENTED: 1. Whether the federal government can repudiate, without liability, express contractual commitments for which it has received valuable consideration, either by spending down discretionary agency appropriations otherwise available to pay its contracts, or simply by changing the law and the contracts retroactively. 2. Whether government contract payment rights that are contingent on "the availability of appropriations" vest when an agency receives a lump-sum appropriation that is legally available to pay the contracts--as is the law of the Federal Circuit under Blackhawk Heating and Plumbing Co. v. U.S., 622 F.2d 539 (Ct.Cl. 1980)]--or is the government's liability calculated only at the end of the year after the agency has spent its appropriations on other activities, as the Tenth Circuit ruled below. LOWER COURT CASE NUMBER: 01-7106
In the 2004 case Cherokee Nation of Oklahoma and Shoshone-Paiute Tribes of the Duck Valley Reservation v. Michael O. Leavitt, Secretary of Health and Human Services, et al., the U.S Supreme Court ruled in favor of two Native American tribes who argued that they were owed money by the federal government for contract support costs related to managing programs previously administered by federal agencies under the Indian Self-Determination and Education Assistance Act (ISDA). The court held that these contracts are legally binding and enforceable by law, rejecting arguments from Health & Human Services that appropriations laws or other legal restrictions prevented them from fully funding contract support costs. This ruling affirmed tribal sovereignty rights over self-governance activities while also ensuring financial resources necessary for effective administration.
In the dissenting opinion for Cherokee Nation of Oklahoma and Shoshone-Paiute Tribes of the Duck Valley Reservation v. Michael O. Leavitt, Secretary of Health and Human Services, et al., Justice Scalia argued that contract support costs should not be fully funded by Congress if they exceed available appropriations. He contended that while Indian Self-Determination and Education Assistance Act (ISDA) contracts are legally binding, they do not guarantee full funding beyond allocated amounts in a given fiscal year. In his view, ISDA contracts only require payment "subject to the availability of appropriations," meaning agencies are only obligated to pay what has been appropriated by Congress even if this falls short of total contract costs. Therefore, he disagreed with the majority's interpretation that these contracts entitle tribes to full funding regardless of congressional appropriations.
