Michael O. Leavitt, Secretary of Health and Human Services v. Cherokee Nation of Oklahoma

Questions presented

SCOTUS records, cert granted 22 Mar 2004

1. The Indian Self-Determination and Education Assistance Act (ISDA), 25 U.S.C. 450- 450n, authorizes the Secretary of Health and Human Services (the Secretary) to enter into contracts with Indian Tribes for the administration of programs the Secretary otherwise would administer himself. The ISDA also provides that the Secretary shall pay "contract support costs" to cover certain direct and indirect expenses incurred by the Tribes in administering those contracts. The ISDA, however, makes payment "subject to the availability of appropriations," and declares that the Secretary "is not required to reduce funding for programs, projects or activities serving a tribe to make funds available" for contract support and other self-determination contract costs. 25 U.S.C. 450j-l(b). The questions presented are:
2. Whether the ISDA requires the Secretary to pay contract support costs associated with carrying out self-determination contracts with the Indian Health Service, where appropriations were otherwise insufficient to fully fund those costs and would require reprogramming funds needed for non-contractable, inherently federal functions such as having an Indian Health Service.
3. Whether Section 314 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, Pub. L. No.105-277, 112 Stat. 2681-288, bars respondent from recovering its contract support costs.

Opinion summary

Etalia.ai summary of the majority opinion

The case involved a dispute between the Cherokee Nation of Oklahoma and the Secretary of Health and Human Services, Michael O. Leavitt, regarding unpaid contract support costs under the Indian Self-Determination and Education Assistance Act (ISDA). The ISDA allows tribes to enter contracts with the federal government to manage programs that would otherwise be handled by federal agencies. The Cherokee Nation argued that they were entitled to full reimbursement for indirect costs incurred while administering these programs. However, due to insufficient appropriations from Congress, not all claims could be paid in full. The Supreme Court ruled unanimously in favor of the Cherokee Nation, holding that when an agency enters into a binding agreement with a tribe under ISDA terms similar to standard procurement contracts, it must pay those agreed-upon amounts even if congressional appropriations are inadequate unless Congress has explicitly limited such payments.