Modoc Lassen Indian Hous. Auth. v. U.S. Dep't of Hous. & Urban Dev.

881 F.3d 1181

MODOC LASSEN INDIAN HOUSING AUTHORITY, the tribally designated housing entity for the Grindstone Indian Rancheria of Wintun-Wailaki Indians of California, Plaintiff–Appellee,

v.UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ; Ben Carson, Secretary of Housing and Urban Development;

Deborah A. Hernandez, General Deputy Assistant Secretary for Public and Indian Housing; Glenda Green, Director, Office of Grants Management, Office of Native American Programs, Defendants–Appellants.

Tlingit-Haida Regional Housing Authority, Plaintiff–Appellee,

v.United States Department of Housing and Urban Development ; Ben Carson, Secretary of Housing and Urban Development; Deborah A. Hernandez, General Deputy Assistant Secretary for Public and Indian Housing; Glenda Green, Director, Office of Grants Management, Office of Native American Programs, Defendants–Appellants.

Choctaw Nation of Oklahoma; Housing Authority of the Choctaw Nation of Oklahoma, Plaintiffs–Appellants,

v.United States Department of Housing and Urban Development ; Ben Carson, Secretary of Housing and Urban Development; Deborah A. Hernandez, General Deputy Assistant Secretary for Public and Indian Housing; Glenda Green, Director, Office of Grants Management, Office of Native American Programs, Defendants–Appellees.

Navajo Housing Authority, Plaintiff–Appellee,

v.United States Department of Housing and Urban Development ; Ben Carson, Secretary of Housing and Urban Development; Deborah A. Hernandez, General Deputy Assistant Secretary for Public and Indian Housing, Glenda Green, Director, Office of Grants Management, Office of Native American Programs. Defendants–Appellants.

Fort Peck Housing Authority, Plaintiff–Appellee,

v.United States Department of Housing and Urban Development ; Ben Carson, Secretary of Housing and Urban Development; Jemine A. Bryon, Acting Assistant Secretary for Public and Indian Housing, Defendants–Appellants.

Sicangu Wicoti Awanyakapi Corporation; Oglala Sioux (Lakota) Housing; Turtle Mountain Housing Authority; Winnebago Housing And Development Commission ; Lower Brule Housing Authority ; Spirit Lake Housing Corporation ; Trenton Indian Housing Authority, Plaintiffs–Appellees,

v.United States Department of Housing and Urban Development ; Ben Carson, Secretary of Housing and Urban Development; Deborah A. Hernandez, General Deputy Assistant Secretary for Public and Indian Housing; Glenda Green, Director, Office of Grants Management, Office of Native American Programs, Defendants–Appellants.

Blackfeet Housing; The Zuni Tribe; Isleta Pueblo Housing Authority ; Pueblo of Acoma Housing Authority; Association Of Village Council PresidentS Regional Housing Authority; Northwest Inupiat Housing Authority ; Bristol Bay Housing Authority; Aleutian Housing Authority; Chippewa Cree Housing Authority ; Big Pine Paiute Tribe, Plaintiffs–Appellees,

v.United States Department of Housing and Urban Development ; Ben Carson, Secretary of Housing and Urban Development; Deborah A. Hernandez, Assistant Secretary for Public and Indian Housing; Glenda Green, HUD's Office of Grants Management, National Office of Native American Programs, Department of Housing and Urban Development, Office of Public and Indian Housing, Defendants–Appellants.

No. 14-1313

No. 14-1331

No. 14-1338

No. 14-1340

No. 14-1343

No. 14-1407

No. 14-1484

No. 15-1060

United States Court of Appeals, Tenth Circuit.

FILED December 22, 2017

Gerard Sinzdak, Attorney, Appellate Staff, United States Department of Justice, Civil Division, Washington, D.C. (Benjamin C. Mizer, Principal Deputy Assistant Attorney General, John F. Walsh, United States Attorney, and Michael S. Raab, Attorney, Appellate Staff, United States Department of Justice, Civil Division, Washington, D.C., with him on the briefs), for Defendants-Appellants.

Craig H. Kaufman, Quarles & Brady, LLP, Tucson, Arizona, Jonathan K. Tillinghast, Simpson, Tillinghast, Sorensen & Sheehan, Juneau, Alaska, and John Fredericks, III, Fredericks Peebles & Morgan LLP, Mandan, North Dakota (David J. Rapport, Rapport and Marston Law Offices, Ukiah, California; Louis W. Bullock and Patricia Whittaker Bullock, Bullock Law Firm, Tulsa, Oklahoma; J. Frank Wolf, III, Rabon Wolf & Rabon, Hugo, Oklahoma; David V. Heisterkamp, II, Amber Leigh Hunter, and James F. Wagenlander, Wagenlander & Heisterkamp, Denver, Colorado; Blain David Myhre, Blain Myhre LLC, Englewood, Colorado; Peter J. Breuer, Fredericks Peebles & Morgan LLP, Louisville, Colorado, with them on the brief), for Plaintiffs-Appellees.

Before MATHESON, BACHARACH, and MORITZ, Circuit Judges.

ORDER

MORITZ, Circuit Judge.

These matters are before the court on the Petition for Rehearing or Rehearing En Banc filed by Appellees in numbers 14-1407 and 15-1060 and the Petition for Rehearing En Banc filed by Appellees in numbers 14-1313, 14-1331, 14-1338, 14-1340, and 14-1484.

Upon consideration and in light of the parties' post-opinion factual stipulation that HUD has already repaid the Tribes, the panel grants in part the request for panel rehearing in numbers 14-1407 and 15-1060, but only to the extent of the modifications contained in the attached revised Opinion. Judge Matheson would grant panel rehearing in full on the sovereign immunity issue in numbers 14-1407 and 15-1060. The Opinion and separate writings filed on July 25, 2017, are hereby withdrawn, and shall be replaced by the attached revised Opinion and separate writings. The Clerk is directed to file the revised Opinion and separate writings effective the date of this order.

The revised Opinion and separate writings, the Petition for Rehearing or Rehearing En Banc filed by Appellees in numbers 14-1407 and 15-1060, and the Petition for Rehearing En Banc filed by Appellees in numbers 14-1313, 14-1331, 14-1338, 14-1340, and 14-1484 were circulated to all of the judges of the court who are in regular active service. As no member of the panel and no judge in regular active service on the court requested that the court be polled, the requests for en banc rehearing are denied pursuant to Fed. R. App. P. 35.

These consolidated appeals arise from a government agency's decision to recapture, via administrative offset, funds that the agency allegedly overpaid to multiple grant recipients. The grant recipients brought suit in federal court, arguing in relevant part that the agency lacked authority to recapture the funds without first providing them with administrative hearings. The district court agreed and ordered the agency to repay the grant recipients. The agency now appeals that order.¹

If these underlying facts sound relatively straightforward, it's because they are. But they nevertheless give rise to three legal questions that are decidedly less so: (1) did the agency recapture the funds pursuant to a statute or regulation that imposed a hearing requirement, thus rendering the recaptures illegal; (2) if the agency didn't recapture the funds pursuant to such a statute or regulation, did it have authority to recapture the alleged overpayments at all; and (3) if not, could the district court order the agency to reimburse the grant recipients for the amounts it illegally collected?

In answering the first of these three questions, the panel unanimously agrees that the agency didn't recapture the funds pursuant to a statute or regulation that imposes a hearing requirement. Thus, we agree that the district court erred in ruling that the recipients were entitled to hearings before the agency could recapture the alleged overpayments.

But that's where our unanimous agreement ends; the remaining questions divide the panel. Ultimately, two members of the panel agree that the agency lacked authority to recapture the funds via administrative offset. Accordingly, we affirm the portion of the district court's order that characterizes the recaptures as illegal. Nevertheless, two other members of the panel agree that under the doctrine of sovereign immunity, the district court lacked authority to order the agency to repay the recipients to the extent the agency had already redistributed or otherwise expended the recaptured funds. Thus, we reverse that portion of the district court's order and remand for further factual findings.

I

Congress enacted the Native American Housing Assistance and Self–Determination Act (NAHASDA) of 1996, 25 U.S.C. §§ 4101 - 4243, to help Indian tribes provide affordable housing for their members, see 25 U.S.C. § 4101(5). To that end, the United States Department of Housing and Urban Development (HUD) allocates NAHASDA grant funds among recipient tribes each year.

In determining how to allocate those funds, HUD employs a regulatory formula that takes into account each tribe's Formula Current Assisted Stock (FCAS)—a figure calculated by multiplying the number of eligible low-rent housing units in that tribe's possession by a fixed dollar amount. See 25 U.S.C. § 4152(a)(1) ; 24 C.F.R. §§ 1000.310(a), 1000.316. Critically, HUD relies on each tribe to provide an accurate yearly count of its eligible housing units. See 24 C.F.R. §§ 1000.315(a), 1000.319(a). And because HUD allocates funds to all tribes from a finite yearly pool, see 25 U.S.C. § 4151, a tribe that erroneously reports an inflated number of eligible housing units will not only receive an overpayment, but will necessarily reduce the funds available to other eligible tribes. See Fort Belknap Hous. Dep't v. Office of Pub. & Indian Hous. , 726 F.3d 1099, 1100 n.2 (9th Cir. 2013) ("Because the total amount of money available to all tribes is fixed, [NAHASDA funding] is a zero-sum game: Any change in one tribe's allocation requires an offsetting change to other tribes' allocations.").

Appellees are various tribes (the Tribes) that allegedly inflated their eligible-unit counts—and therefore allegedly received overpayments—during various years.² When HUD discovered these alleged overpayments, it recouped the funds by deducting them from the Tribes' subsequent yearly NAHASDA allocations. The...