Cherokee Nation of Oklahoma & Shoshone-Paiute Tribes of the Duck Valley Reservation v. Leavitt - Opinion Announcement

Argument of Speaker

Mr. Speaker: Justice Breyer has an opinion to announce in two cases involving the Cherokee Nation of Oklahoma.

Argument of Justice Breyer

Mr. Breyer: Two Indian tribes, the Cherokee and the Shoshone-Paiute entered into contracts with the Federal Government.

The government promised to pay for a certain costs called contract-support costs that were related to some health services, and the government just did not pay in full.

The government's point was, well, Congress did not appropriate enough money to pay for all contracts like this that we have made with a whole lot of Indian Tribes, so what we are going to do is take all the available money and we will allocated it, and we will give each tribe their fair share.

Well, the tribes, these particular two, did not like that and they said we want all the money you promised not just some share of it, and they brought a lawsuit.

In fact, two of them, one in the Tenth Circuit and one in the Federal Circuit, and the tribes won the one in the Federal Circuit and they lost the one in the Tenth Circuit.

So, we took cert to iron out that difference.

Now, the tribes' basic argument was they said look at general contracting law.

Now, under general contracting law, the fact the Congress did not appropriate enough money for all the contracts like these, as beside the point.

They appropriated enough money unrestricted for our contract.

It is as if you had a contract with a pencil manufacturer for a million dollars worth of pencils.

The appropriation was $5 million.

That is enough to cover the one.

Now, maybe the government entered into ten for $10 million.

It is enough to cover all ten, that is true, but it covers ours.

And that, they said, is good enough to make the promise binding under ordinary law and the government has not contested that point.

Rather, the government says, these contracts are special.

So, we examined the statute to see what was special about it.

Now the government says, look at that statute; it is just about special services to Indians.

Well, we did look at the statute and it does say the government has to pay contract support costs, and it says nothing about the promise being special.

Indeed it puts the language about what the government has to promise in a section called model contract and it uses the word contract 426 times, but who is counting?

Anyway, that word, "contract", normally refers to "a promise for the breach of which the law gives a remedy".

So, we could not find anything special in that part of the contract.

Now, the contract, in that part of the statute, the statute also uses the word subject to the availability of appropriations.

They are on stronger ground, the government there, but not strong enough because when we looked into the meaning of that term, we found it has a special technical meaning which does not help the government here which is explained in the opinion.

Then the government points to some other language in the statute which says, that government need not "reduce funding for programs, projects, or activities serving a tribe to make funds available to another tribw."

And the government says, well, the Indian health service, almost all of our money goes to such purposes.

Some tribe or other, but it did not say all.

It said almost all.

And the almost is where the problem lies because when you look at that almost you see there is enough money left over to pay these contracts.

At least the government does not deny that.

But, says the government, we have to use that extra money to pay, for example, the salaries of our Washington office.

What are we supposed to do?

Pay these tribes and close down the office?

But this argument is just a variation on a theme.

Namely, that the government has better more important, indeed essential uses for money that is in and unrestricted appropriation.

And this kind of argument, even if it is true, and we assume it is here, is not ordinarily a sufficient reason for the government to disown an otherwise binding contractual promise.

What is the government to do?

Well, the law, as we understand it, expects the government to avoid placing itself in this kind of dilemma.

For example, by refraining from making less essential contractual commitments in the first place or by asking Congress in advance to protect funds needed for essential purposes with statutory restrictions or by seeking additional funding or, if necessary, by using those unrestricted funds for the more essential purpose while leaving the contractor free to pursue appropriate legal remedies which is just what happened here.

Finally, the government says that Congress passed a special statute later on that makes its promises made earlier non-binding.

That statute, however, admits of a different interpretation which does not help the government and we use that different interpretation because otherwise there will be a fairly serious constitutional problem.

Now, for these and other reasons which we set forth at greater length in today's opinion, we hold in favor of the Indian Tribes.

We reverse the Tenth Circuit.

We affirm the Federal Circuit.

Justice Scalia has filed an opinion concurring in part and concurring in the result;

The Chief Justice took no part in the decision of these cases.