Navajo Nation v. Department of Health & Human Services, Secretary

BETTY B. FLETCHER, Circuit Judge,

dissenting:

I dissent. Reduced to its simplest terms, the majority opinion defeats the purpose of the Indian Self Determination Act by allowing Indians to administer federal programs but denying them the funds to do the job. By pursuing a rationale that was advanced by neither party, the majority opinion bends over backwards to accord Chevron deference where none is due. In the process, the majority ignores congressional intent, as well as relevant Supreme Court authority, and creates a circuit split on an important question of administrative and Indian law.

We are the only circuit to hold that in the event of a conflict between the principles of administrative agency deference *876 under Chevron U.S.A, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 , 104 S.Ct. 2778 , 81 L.Ed.2d 694 (1984), and deference to Native American interests under Montana v. Blackfeet Tribe of Indians, 471 U.S. 759 , 105 S.Ct. 2399 , 85 L.Ed.2d 753 (1985), the latter must give way. See Williams v. Babbitt, 115 F.3d 657 , 663 n. 5 (9th Cir.1997); Seldovia Native Ass’n, Inc., v. Lujan, 904 F.2d 1335, 1342 (9th Cir.1990); Haynes v. United States, 891 F.2d 235, 239 (9th Cir.1989). No other circuit has since followed our lead, while two others have expressly gone the other way. See Ramah Navajo Chap. v. Lujan, 112 F.3d 1455 , 1461-62 (10th Cir.1997); Albuquerque Indian Rights v. Lujan, 930 F.2d 49, 59 (D.C.Cir.1991). Today, the majority widens that rift by holding that even when more than one governmental agency has been delegated interpretive authority over a statute, Chevron deference applies, and this deference once again outweighs any reasonable construction favoring Native American interests. This result not only runs contrary to the law of our sister circuits concerning the canon of construction for ambiguous statutes affecting Native American interests, but also contradicts the law of the Supreme Court and other circuits regarding the applicability of Chevron deference in situations where more than one agency possesses interpretive authority over a statute.

Under the Supreme Court’s reasoning in Bowen v. American Hospital Association, 476 U.S. 610 , 106 S.Ct. 2101 , 90 L.Ed.2d 584 (1986), the majority commits legal error by applying Chevron deference where multiple governmental agencies share interpretive authority over a statute. In American Hospital Association , the Court declined to apply Chevron deference to a Department of Health and Human Services (“HHS”) regulation interpreting § 504 of the Rehabilitation Act of 1973, in spite of the fact that Congress had expressly delegated such rulemaking authority to then-Secretary Bowen. Id. at 642-43, 106 S.Ct. 2101 . The Court reasoned that, because multiple agencies were authorized to promulgate regulations, “[tjhere is ... not the same basis for deference predicated on expertise as we found with respect to the Environmental Protection Agency’s interpretation of the 1977 Clean Air Act Amendments in Chevron.” Id. at 642 n. 30, 106 S.Ct. 2101 ; see also id. at 646 — 47, 106 S.Ct. 2101 (finding “irresistible the inference that the Department regards its mission as one principally concerned with the quality of medical care for handicapped infants rather than with the implementation of § 504”).

Similarly, in the present case, one wonders what, if any, special expertise the HHS Secretary possesses to define the role of eligible self-determination contracts. Indeed, the ISDEAA expressly cabins the Secretary’s discretion to reject such contract proposals. See, e.g., 25 U.S.C. § 450f(a)(l) (“The Secretary is directed, upon the request of any Indian tribe ... to enter into a self-determination contract....”) (emphasis added); 25 U.S.C. § 450f(a)(2) (“[T]he Secretary shall, within ninety days after receipt of the proposal, approve the proposal and award the contract ....”) (emphasis added); 25 U.S.C. § 450f(a)(4) (“The Secretary shall approve any severable portion of a contract proposal that does not support a declination ....”) (emphasis added). Hence, the statutory basis of the Secretary’s discretionary authority is even more limited in this case than was true in American Hospital Association .

The majority opinion seeks to reconcile its holding with American Hospital Association by declaring that “Congress did not delegate authority to administer § 504[] to any particular agency or agen *877 cies.” Maj. Op. 873. This explanation, however, is transparently false. The key question for Chevron deference is whether Congress either explicitly or implicitly delegated to an agency the authority to interpret the terms of a given statute, typically through the promulgation of regulations. See, e.g., AT & T Corp. v. Iowa Util. Bd., 525 U.S. 366, 377 , 119 S.Ct. 721 , 142 L.Ed.2d 835 (1999) (according Chevron deference to certain FCC regulations implementing the 1996 Telecommunications Act despite the lack of any express delegation of authority to the agency to administer the statute, on the ground that § 201(b) of the Communications Act of 1934, providing that “[t]he Commission may prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this Act,” constituted a sufficient grant of interpretive authority); see also Christensen v. Harris Cty., 529 U.S. 576, 596-97 , 120 S.Ct. 1655 , 146 L.Ed.2d 621 (2000) (Breyer, J., dissenting) (arguing that “to the extent there may be circumstances in which Chevron-type deference is inapplicable — e.g., where one has doubt that Congress actually intended to delegate interpretive authority to an agency” — reviewing courts should review agency interpretations with only as much deference as the thoroughness and persuasiveness of their reasons would require under Skidmore v. Swift & Co., 323 U.S. 134 , 65 S.Ct. 161 , 89 L.Ed. 124 (1944)) (emphasis added). In American Hospital Association , the Supreme Court noted that “[s]ection 504 authorizes any head of an Executive Branch agency ... to promulgate regulations prohibiting discrimination against the handicapped.” 476 U.S. at 642 , 106 S.Ct. 2101 . The delegation thus could not be clearer, and yet the Court refused to grant Chevron deference in part because more than one agency held interpretive authority over the statute. See id. at 642 n. 30, 106 S.Ct. 2101 .

The majority characterizes this aspect of the Court’s opinion as dicta. I disagree; under any reasonable reading, the above-quoted passages constituted an important part of the American Hospital Association Court’s rationale in deciding the outcome of that case. Furthermore, even if dicta, it is Supreme Court dicta, which we may not — indeed, must not — discard lightly. See United States v. Baird, 85 F.3d 450, 453 (9th Cir.1996) ("We treat Supreme Court dicta with due deference.”); Zal v. Steppe, 968 F.2d 924, 935 (9th Cir.1992) (Noonan, J., concurring in part and dissenting in part) (noting that, because Supreme Court dicta “have a weight that is greater than ordinary judicial dicta as prophecy of what that Court might hold,” we do “not blandly shrug them off because they were not a holding”). In the face of this obligation, the majority opinion fails to offer a single persuasive reason to ignore the rationale behind the Court’s holding in American Hospital Association , 1 To the contrary, the majority apparently prefers to invent ways to defer to the interpretations of an Executive Branch official, rath *878 er than to heed a direct pronouncement of the Supreme Court.

By contrast, the D.C. Circuit has properly followed the Supreme Court’s lead by refusing to accord Chevron deference where two or more agencies have been delegated authority to interpret a statute. In Proffitt v. FDIC, 200 F.3d 855 (D.C.Cir.2000), the court flatly stated that “[w]hen a statute is administered by more than one agency, a particular agency’s interpretation is not entitled to Chevron deference.” 2 200 F.3d at 860 (citing American Hosp. Ass’n, 476 U.S. at 643 n. 30, 106 S.Ct. 2101 ). Prior cases in the D.C. Circuit have consistently held this position. See, e.g, Rapaport v. United States Dep’t of Treasury, 59 F.3d 212, 216-17 (D.C.Cir.1995) (declining to accord Chevron deference to the Office of Thrift Supervision’s interpretation of a banking statute “because that agency shares responsibility for the administration of the statute with at least three other agencies.”); Benavides v. United States Bureau of Prisons, 995 F.2d 269 , 272 n. 2 (D.C.Cir.1993) (“Chevron does not apply to agency interpretations of statutes ... that are administered by multiple agencies.”); Wachtel v. OTS, 982 F.2d 581 , 585 (D.C.Cir.1993); Professional Reactor Operator Soc. v. United States Nuclear Reg. Comm’n, 939 F.2d 1047, 1051 (D.C.Cir.1991). By denying Chevron deference to agencies that jointly hold interpretive authority over the same statute, the D.C. Circuit has preserved the integrity of the rule that implicit delegations deserve deference, see Chevron, 467 U.S. at 844 , 104 S.Ct. 2778 (noting that when “the legislative delegation to an agency on a particular question is implicit rather than explicit .... a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency”), by foreclosing the peculiar and potentially disruptive result that multiple agencies could “implicitly” each be given controlling authority over a specific area of statutory interpretation with no corresponding duty to harmonize their interpretations. See Salleh v. Christopher, 85 F.3d 689, 692 (D.C.Cir.1996) (“[We] have declined to defer to an agency’s interpretation of a statute when more than one agency is granted authority to interpret the same statute .... [since i]n such cases, it cannot be said that Congress implicitly delegated to one agency authority to reconcile ambiguities or to fill gaps, because more than one agency will independently interpret the statute.”) (citations and footnote omitted) (emphasis added). “The alternative would lay the groundwork for a regulatory regime in which either the same statute is interpreted differently by the several agencies or the one agency that happens to reach the courthouse first is allowed to fix the meaning of the text for all.” Rapaport, 59 F.3d at 216-17 . Thus, the majority opinion’s attempt to avoid a circuit split by distinguishing Proffitt and supporting case law is patently unavailing.

In eschewing Supreme Court precedent, as well as the D.C. Circuit’s persuasive authority, the majority opinion opens itself up to a number of potentially insuperable difficulties. In particular, the majority opinion provides no indication as to how many agencies are too many to accord Chevron deference. Three? Four? Twen *879 ty-six? Moreover, in the event of a conflict between the reasonable statutory interpretations of two or more agencies, how is a court to decide? The majority concedes that in such an event, “we would be forced to employ some form of de novo review, either to choose among the most reasonable of the reasonable interpretations offered by the agencies or to fashion our own interpretation of the statute.” Maj. Op. 875. Ironically, this concession amounts to little more than an admission that" courts would eventually be forced to abandon the Chevron doctrine in favor of de novo review at some future date. Such a lame prospective solution is hardly a basis to ignore the powerful signal sent by the Supreme Court in American Hospital Association — viz., when more than one government agency has been granted the authority to interpret a statute, no deference should apply.

It is largely because of the inherent difficulties posed by the potential for inter-agency conflict that the D.C. Circuit, in Public Citizen Health Res. Group v. FDA, 704 F.2d 1280 (D.C.Cir.1988), first established the rule of non-deferential review in such situations. “Any other conclusion would produce an intolerable situation in which different agencies could adopt inconsistent interpretations of the [statute] and substantially complicate the administration of the Act.” Id. at 1287 ; see also Benavides, 995 F.2d at 272 n. 2 (citing Public Citizen). First, parties regulated by more than one agency’s interpretation will have difficulty conforming to multiple rules simultaneously to the extent that those rules conflict. This problem does not exist when a single agency granted interpretive authority merely recants or amends a particular iteration of an interpretive rule.

Second, a strong argument could be made that in the event of a future inter-agency conflict, courts would be bound by the first agency’s reasonable interpretation. The Supreme Court has recently stated that “[d]eference under Chevron to an agency’s construction of a statute that it administers is premised on the theory that a statute’s ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.” Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 123 , 120 S.Ct. 1291 , 146 L.Ed.2d 121 (2000); see also Chevron, 467 U.S. at 843 , 104 S.Ct. 2778 (“The power of an administrative agency to administer a eongressionally created ... program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.”) (internal quotation marks and citation omitted). Taken at face value, this means that an agency’s power to interpret statutory ambiguities, and to receive deference for its reasonable interpretations from reviewing courts, is consistent with a power to close statutory ambiguities. Thus, we should expect that the delegation of interpretive authority to more than one agency would mean that no agency’s interpretation should receive deference, because no agency would have the power to foreclose interpretations by other agencies. In addition, as a practical matter, the first-mover would likely wield considerable advantages that would make a court reluctant to reverse course upon subsequent review; for example, any subsequent actor might be required to justify deviation from the original rule. For both practical and legal purposes, then, it would appear that the “correct” statutory interpretation would depend upon which government agency got into court first — a patently absurd result. Cf. Rapaport, 59 F.3d at 217 (finding no “reason to believe that the congressional delegation of administrative authority contemplates such peculiar corollaries”).

*880 Instead of Chevron deference, which should be precluded for reasons discussed above, I believe the appropriate interpretive principle to apply here is that of construing statutory ambiguities in favor of Native American interests under Blackfeet Tribe. Cases involving Native American interests implicate special interpretive considerations. In Albuquerque Indian Rights v. Lujan, the D.C. Circuit decided that “the liberality rule applied in Blackfeet Indians and other cases involving native [sic] Americans derives from principles of equitable obligations and normative rules of behavior, rather than from ordinary statutory exegesis.” 930 F.2d at 59 . The D.C. Circuit based this decision upon its prior ruling in Muscogee (Creek) Nation v. Model, 851 F.2d 1439 (D.C.Cir.1988), in which it had agreed that “ ‘the canons of construction applicable in Indian law are rooted in the unique trust relationship’ ” between the United States government and Native Americans, id. at 1444-45 (quoting Blackfeet Tribe, 471 U.S. at 766 , 105 S.Ct. 2399 ), and “[biased on the special strength of this canon” the court “declined to defer to [the agency’s] interpretation of the governing statute, which had not followed the canon.” Albuquerque Indian Rights, 930 F.2d at 59 (citing Muscogee (Creek) Nation, 851 F.2d at 1445 n. 8).

Admittedly, our own precedent does not support such a broad conclusion. See, e.g., Haynes, supra (holding that Chevron deference should trump the canon of construction favoring Native American interests). Nevertheless, it also does not mandate that, where more than one agency possesses interpretive authority over a statute, reasonable interpretations by any agency can trump alternative interpretations that would benefit Native Americans. Such an approach extends abrogation of the deference owed to Native American interests under Blackfeet Tribe to areas where no countervailing deference to an agency interpretation is due, a result not required by Haynes and its progeny.

The majority opinion suggests that as a result of the holding in Cook Inlet Native Association v. Bowen, 810 F.2d 1471 (9th Cir.1987), we have already found that Chevron deference is appropriate in the ISDEAA context. However, the Cook Inlet court never addressed whether the Act’s statutory purpose precluded Chevron deference. In addition, there the precise question of whether Chevron deference applies when two or more government entities are charged with interpreting a particular statutory provision was not at issue. I would find that no Chevron deference (and, in fact, not even a Chevron inquiry) is appropriate here. However, I believe that an analysis of the legislative history of the ISDEAA is helpful.

Under the appropriate de novo review, the Secretary’s restrictive reading of the statute cannot be reconciled with the fundamental purpose underlying the Indian Self-Determination and Education Assistance Act (“ISDEAA”). While I agree with the majority that there is textual ambiguity in the statutory phrase “for the benefit of Indians because of their status as Indians,” 25 U.S.C. § 450f(a)(1)(E), I would resolve this ambiguity by first looking to the statute’s legislative history, which reflects Congress’s clear desire to expand Indian autonomy and self-government in administering federal programs. See Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. 2778 (“If a court, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect.”).

The 1974 House Report accompanying the passage of the Indian Self Determination Act (“Act”) described its fundamental *881 purpose as follows: “to promote maximum Indian participation in the government and education of the Indian people; [and] to provide for the full participation of Indian tribes in programs and services conducted by the Federal Government for Indians and to encourage the development of the human resources of the Indian people....” H.R.Rep. No. 93-1600, at 1 (1974), reprinted in 1974 U.S.S.C.A.N. 7775-76. Similarly, the Senate Report accompanying passage of the 1988 amendments to the Act described their purpose as follows: “The amendments ... are intended to increase tribal participation in the management of Federal Indian programs and to help ensure the long-term financial stability for tribally-run programs. The amendments are intended to remove many of the administrative and practical barriers that seem to persist under the Indian Self Determination Act.” S.Rep. No. 100-274, at 2 (1987), reprinted in 1988 U.S.S.C.A.N. 2620-21. The Senate Report quoted from President Nixon’s description of the original Act’s fundamental purpose as follows:

For years we have talked about encouraging Indians to exercise greater self-determination, but our progress has never been commensurate with our promises .... [W]hen a decision is made as to whether a Federal program will be turned over to Indian administration, it is the Federal authorities and not the Indian people who finally make that decision. This situation should be reversed. In my judgment, it should be up to the Indian tribe to determine whether it is willing to assume administrative responsibility for a service program which is presently administered by a Federal agency.

S.Rep. No. 100-274, at 2-3 (1987) (citation omitted) (emphasis added).

In Ramah Navajo Chapter, the Tenth Circuit followed Congress’s intended rationale in reversing summary judgment against the Chapter’s claims against the Secretary of the Interior for violation of the funding provisions of the Indian Self-Determination and Education Assistance Act (“ISDEAA”). The Tenth Circuit ruled that “the canon of construction favoring Native Americans controlled] over the more general rule of deference to agency interpretations of ambiguous statutes” because the court believed that “it would be entirely inconsistent with the purposes of the Act, as well as with the federal policy of Native American self-determination in general, to allow the canon favoring Native American self-determination in general, to allow the canon favoring Native Americans to be trumped.” 112 F.3d at 1462.

The majority opinion completely ignores the ISDEAA’s overarching purpose to bolster Native American self-determination by transferring control over the “planning, conduct and administration” of federal programs and services. 25 U.S.C. § 450a. In this light, the special provisions of the Temporary Assistance to Needy Families (“TANF”) program that treat Native Americans preferentially, see 42 U.S.C. § 612 (establishing a completely separate and comprehensive scheme for the funding and administration of TANF benefits for Indian tribes, including an exemption from the time limits and work participation requirements generally applicable to state recipients), leave no doubt about congressional intent in this case: that TANF satisfies the ISDEAA’s requirements for a self-determination contract, since it provides benefits to Indians “because of their status as Indians.”

Conversely, the limiting construction proposed by the Secretary plainly contravenes congressional intent. Given that the purpose of the ISDEAA is to promote *882 Native American self determination, the Secretary can offer no reasonable explanation why the universe of programs that are subject to self-determination contracts should be limited to only those that “particularly” or “exclusively” benefit Native Americans. The majority opinion likewise fails to address this point.

In striking down a similarly restrictive interpretation of the ISDEAA’s indirect cost funding provisions, see 25 U.S.C. § 450j-l, put forth by the Secretary of Interior, the Tenth Circuit found the government’s position “unreasonable” because it “d[id] nothing to assure maximum participation by Indian tribes in the planning and administration of federal services, programs and activities for Indian communities,” or to “[enhance] the development and perception of Indian tribes as self-government entities.” Ramah Navajo Nation, 112 F.3d at 1462 (quoting S.Rep. No. 100-274, at 1-2 (1987)). Like the Tenth Circuit, I find the HHS Secretary’s restrictive construction of the ISDEAA in this case to violate congressional intent. The Secretary’s refusal of ISDEAA coverage for TANF funding has effectively denied the Navajo Nation its self-determination rights under the Act, by preventing the Navajo from obtaining supplemental funding to administer TANF under their sovereign authority. I would hold that the Secretary’s interpretation should be overruled and that the TANF provisions at issue in this case satisfy the requirements of a self-determination contract under the ISDEAA.

. In trying to distinguish American Hospital Association , the majority opinion apparently seeks to create a distinction between an agency's "administrative” and "interpretive” authority. However, this distinction is a false one, since it is the delegation of authority to interpret a statute which triggers Chevron deference, and any agency that has been delegated interpretive authority can be said to "administer” the statute. See Chevron, 467 U.S. at 843-44 , 104 S.Ct. 2778 . Hence, the key distinction in American Hospital Association, 106 S.Ct. 2101 was not that Secretary Bowen had somehow been delegated only "rulemaking” as opposed to "administrative” authority. Rather, it was the fact that multiple agencies had been granted authority to promulgate rules interpreting the statute in question.

. Recently, in Scales v. INS, 232 F.3d 1159, 1165 (9th Cir.2000), we held that the Attorney General (and not the State Department) possessed the authority to make citizenship determinations for people inside the U.S. In so deciding, we cited the above quoted passage from Proffitt as support for refusing to accord Chevron deference to the U.S. State Department's definition of the requirements of American citizenship, even though the two governmental entities held joint authority to define the requirements of citizenship. Id.