Litigation

U.S. Supreme Court Hears Dispute Over Tolling For Tribe’s Funding Claims

 

WASHINGTON, D.C. — (Mealey’s) A Native American tribe on Dec. 1 urged the U.S. Supreme Court to undo a September 2014 decision by the District of Columbia Circuit U.S. Court of Appeals that the tribe failed to establish any extraordinary circumstance that prevented them from timely filing Indian Self-Determination Act (ISDA) claims under the Contract Disputes Act (CDA) of 1978 (Menominee Indian Tribe of Wisconsin v. United States, et al., No. 14-510, U.S. Sup.). 

(Transcript available.  Document #96-151211-014T.) 

According to Geoffrey D. Strommer, an attorney representing petitioner Menominee Indian Tribe of Wisconsin, the D.C. Circuit misapplied Holland v. Florida (560 U.S. 631, 649 [2010]) and should have instead deemed the tribe entitled to equitable tolling of the six-year limitations period under the CDA.  Strommer opened oral arguments by noting that in Irwin v. Department of Veterans Affairs (498 U.S. 89 [1990]), the Supreme Court “cross-referenced” the class action tolling case of American Pipe & Constr. Co. v. Utah (414 U.S. 538 [1974]) as “an example of a defective pleading that could satisfy equitable tolling.”

“We read that cross-reference as a suggestion that, under the right circumstances, if somebody reasonably relies on class action tolling facts that ultimately prove to be ineffective, that that individual has the ability to ask the Court to find that equitable tolling should apply.  If there is such a case, the facts of this case really should satisfy this test.  The test is set forth in the Holland case.  Due diligence and extraordinary circumstances are the two prongs that have to be satisfied.  Both of them are well satisfied in this case,” Strommer asserted. 

Judicial Review

From 1996 through 1998, the tribe entered into contracts with the Indian Health Service (IHS), an agency of the Department of Health and Human Services (HHS), pursuant to the ISDA, to provide federally funded health care services to members of the tribe.  The tribe filed claims pursuant to the CDA for additional contract-support costs funding in 2005.  Although conceding that the claims were untimely, the tribe said it had reasonably relied on two federal lawsuits that challenged certain aspects of the payment of contract-support costs funding to tribes:  a nationwide class action filed by the Ramah Navajo Chapter (Ramah Navajo Chapter v. Babbitt, 50 F. Supp. 2d 1091 [D.N.M. 1999]) (Ramah) and a lawsuit filed by the Cherokee Nation and Shoshone Paiute tribes (Cherokee Nation of Oklahoma v. United States, 199 F.R.D. 357, 362 [E.D. Okla. 2001]) (Cherokee Nation). 

The tribe’s claims were rejected by an IHS contracting officer in 2006, leading them to seek judicial review in the U.S. District Court for the District of Columbia.  The District Court deemed the six-year limitations period jurisdictional.  Accordingly, the District Court found, tolling was not permitted and dismissal was instead warranted.  The D.C. Circuit later reversed after finding that the limitations period was nonjurisdictional and therefore not preclusive of tolling.  The tribe’s equitable tolling argument was then remanded to the District Court. 

Petition Granted

The government prevailed a second time, however.  Citing Holland, the District Court found that the tribe failed to establish a diligent pursuit of its rights or that an extraordinary circumstance prevented it from pursuing its rights sooner.  The tribe again appealed, and the D.C. Circuit affirmed in a September 2014 ruling.  Specifically, the D.C. Circuit held that to “count as sufficiently ‘extraordinary’ to support equitable tolling, the circumstances that caused a litigant’s delay must have been beyond its control” and “cannot be a product of that litigant’s own misunderstanding of the law or tactical mistakes in litigation.”  The court said the “Tribe faced no extraordinary circumstances” because “the obstacles the Tribe confronted were ultimately of its own making.” 

The tribe filed a petition for writ of certiorari with the Supreme Court, which was granted in June 2015.  The court limited its review to the following question:  “Whether the D.C. Circuit misapplied this Court’s Holland decision when it ruled that the Tribe was not entitled to equitable tolling of the statute of limitations for filing of Indian Self-Determination Act claims under the Contract Disputes Act?” 

Remarkable Proposition

Justice Ruth Bader Ginsburg began by questioning whether the tribe was diligent in relying on Ramah.  Although the class in Ramah remains certified and the tribe remains a class member, Justice Ginsburg noted that the case has produced just one unpublished ruling that has not yet “gone through the crucible of appellate review.”  Justice Antonin Scalia then asked whether the petitioners could cite a single case in which legal advice has qualified for equitable tolling, but Strommer could not. 

“So you’re really arguing a remarkable proposition, that if you get bad legal advice, that justifies equitable tolling.  You mentioned extraordinary circumstances, but our cases refer to extraordinary circumstances that stood in the way and prevented timely filing.  I would not qualify erroneous legal advice as preventing timely filing.  I don’t care how reasonable it was.  It didn’t prevent it,” Justice Scalia replied. 

Noting that 707 days passed between the denial of a class in Cherokee Nation and the deadline for a timely CDA claim by the tribe, Justice Ginsburg asked “how was that due diligence?” 

“So at that point you know you’re on your own.  You can’t piggyback on the class.  You know you're on your own, and yet you let two years go by.  I don't understand that,” Justice Ginsburg added. 

Unprecedented Idea

Assistant to the Solicitor General Ilana Eisenstein, representing the United States, called the underlying failure to file timely CDA claims a “strategic calculation” by the tribe, which instead “wanted to monitor the litigation by other tribes, rather than file and pursue its own action.” 

“The miscalculation that it made about whether the clear deadline could be extended by class action tolling, that was a routine litigation mistake, the kind that is far from the sort of extraordinary circumstance that could warrant equitable relief.  Nor did that miscalculation prevent the Tribe from filing earlier.  To the extent that there was uncertainty as to whether it was a member of the Cherokee Nation class, and whether presentment was a jurisdictional bar to that class membership, the prudent course, and any reasonably diligent litigant would have filed under the clear deadline, rather than wait for the uncertain application of tolling and the potential forfeiture of its claims,” Eisenstein added. 

Moreover, Eisenstein warned that “the idea that a Tribe, or any litigant, who could have acted earlier [but] chooses to delay for strategic reasons, and then could get tolling when it finds out that it miscalculated the deadline would be unprecedented.”  Justice Samuel Alito then pressed Eisenstein on whether legal advice could ever form the basis of an equitable tolling claim, leading Eisenstein to draw a distinction between erroneous legal advice and the “abandonment by counsel” that took place in Holland. 

Counsel

The respondents are represented by Solicitor General Donald B. Verrilli Jr., Principal Deputy Assistant Attorney General Benjamin C. Mizer, Deputy Solicitor General Edwin S. Kneedler, Eisenstein, Robert E. Kirschman Jr. and Donald E. Kinner of the Department of Justice in Washington, D.C., and William B. Schultz, Alan S. Dorn, Douglas Ferguson, Marian Nealon, Julia B. Pierce and Melissa Jamison of the Department of Health and Human Services in Washington. 

The tribe is represented by Strommer, Jerry C. Straus, Stephen D. Osborne, Caroline P. Mayhew and Adam P. Bailey of Hobbs, Straus, Dean & Walker in Portland, Ore., and Paul D. Clement of Bancroft in Washington.

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