The U.S. Justice Department today announced the settlement of a large class-action lawsuit brought by 640 tribes and tribal groups against the Bureau of Indian Affairs over payment of contract support costs. The contracts between tribes and the federal government are for numerous services including education and in some states, tribal law enforcement.
The case was first filed in 1990. The total payout amount is $940 million, although court and attorney fees will have to be deducted first. Alaska’s tribes will see close to $125 million of those dollars coming to numerous tribes here.
Individual tribes will receive some of the funds and regional non-profits such as Tanana Chiefs Conference, Tlingit and Haida Central Council and the Association of Village Council Presidents will also benefit.
Lloyd Miller is one of the plaintiff attorneys in the case. He says the federal government erred when it treated the contracts as program costs rather than legal, binding contracts.
“Had they understood at the time what they do now, they would’ve redesigned their budgets to fully pay these contracts first, and then requested funding for the other discretionary programs that they had based on whatever priority system they use,” Miller says. “So the root problem was a failure to appreciate that these were binding legal agreements with the tribes that had to be paid.”
The case is reminiscent of a similar settlement in recent years with the Indian Health Service over costs related to contracting between tribes and the federal government. Miller says beyond the monetary settlement, the way forward for tribal contracts is clearer after congress in 2013 fixed the problem by fully funding contract support costs with tribes starting in 2014.
Miller says even if there are further sequestration cuts, tribal contracts could be exempted from those sequestration cuts.
“And that to me is one of the legacies of these litigations. They were about contracts and contracts being honored. But they’re also more deeply about the way in which the United States of America and the Congress and the Executive Branch deals with governments, tribal governments.”
The New Mexico judge in the case will have to approve the settlement. If approved, payments are likely to start going out as soon as next spring.