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Picayune Rancheria of Chukchansi Indians v. Henriquez

United States District Court, Ninth Circuit

December 30, 2013

Picayune Rancheria of Chukchansi Indians, et al., Plaintiffs,
Sandra B Henriquez, et al., Defendants.


DAVID G. CAMPBELL, District Judge.

Defendants have filed a motion to dismiss Plaintiffs' claims. Doc. 26. The motion is fully briefed, and neither party has requested oral argument. Docs. 28, 29. For the reasons stated below, the Court will dismiss this action.

I. Background.

The Picayune Tribe of Chukchansi Indians (the "Tribe") is a federally recognized Indian tribe. Doc. 1 at 5. The Chukchansi Indian Housing Authority ("CIHA") is the housing entity established by tribal ordinance to operate the tribe's federally assisted housing programs. Id. at 7. CIHA operates as a non-profit tribal corporation, governed by a Board of Commissioners appointed by the Tribal Council. Id. CIHA's purpose is to provide affordable housing to low income tribal members through lease-to-own houses, low income rentals, housing and utility assistance grants, and housing repairs. Id. at 8.

To fulfill its mission, CIHA administers annual block grants from the Southwest Office of Native American Programs ("SWONAP") of the United States Department of Housing and Urban Development ("HUD"). Id. at 2. These grants allow CIHA to provide affordable housing to low income tribal members. Id. The block grants are provided through the Native American Housing Assistance and Self-Determination Act of 1996 ("NAHASDA"), 25 U.S.C. § 4101 et seq., which requires that grants be paid by HUD "directly to the recipient for the tribe." 25 U.S.C. § 4111(a)(2). Individuals authorized to receive the funds are given access to an automated Line of Credit Control System ("LOCCS"), and can access and withdraw NAHASDA funds through that system. The Tribe received block grant funding for 2013 in the amount of $954, 966. Doc. 1 at 7; Doc 26-1 at 4. Because unexpended funds from previous years do not expire, the Tribe currently has unexpended funds in LOCCS totaling $2, 956, 212.88.

On January 24, 2013, a leadership dispute arose among the duly elected members of the Tribal Council, and various members of the Tribal Council attempted to suspend other members. Doc. 1 at 6. At the time, members of the Tribal Council included Nancy Ayala, Reggie Lewis, Tracey Brechbuehl, Karen Wynn, Charles Sargosa, Chance Alberta, and Carl Bushman. Id. Specific Tribal and CIHA officials had access to LOCCS to administer the HUD funds, including Nancy Ayala, Helen Flores, Michael Wynn, and Don Ctibor. Id. at 9.

Three separate factions emerged from the leadership dispute, each claiming to represent the government of the Tribe. The factions were led respectively by Nancy Ayala ("Ayala faction"), Reggie Lewis ("Lewis faction"), and Morris Reid ("Reid faction"). The different factions each appointed different tribal councils and attempted to operate as the legitimate government of the Tribe. As a result of requests from different factions for recognition, the Bureau if Indian Affairs ("BIA") issued a letter on May 16, 2013, recognizing the tribal council that was elected on December 1, 2012, which included Nancy Ayala, Reggie Lewis, Tracy Brechbuehl, Karen Wynn, Chance Alberta, Charles Sargosa and Carl Buzz Bushman. Doc. 26-3 at 54. That determination by the BIA was subsequently appealed to the Interior Board of Indian Appeals ("IBIA"). IBIA No. 13-045. No final decision has been issued by IBIA. See Doc. 26-4 at 5.

In May 2013, HUD was contacted by the three factions separately. Each claimed to represent the Tribe and submitted documentation, including Tribal resolutions, in support of its claim. Doc. 1-1 at 1. To identify the faction with which it should deal, HUD contacted the BIA, the federal entity statutorily tasked with "management of all Indian affairs and of all matters arising out of Indian relations." 25 U.S.C. § 2. The BIA advised HUD that the intra-tribal dispute was currently the subject of an appeal and that, pursuant to 25 C.F.R. § 2.6, there was no final BIA determination regarding the appropriate tribal government. Doc. 26-4 at 5.

As a result, HUD informed CIHA, with copy to the heads of all three factions, that "all current LOCCS users are hereby prohibited from accessing LOCCS, " and that it was "revoking its approval of all previously approved HUD-27054 forms submitted on behalf of CIHA" and denying "Nancy Ayala, Helen Flores, Michael Wynn, and any other member of CIHA's Board of Commissioners or staff... continued access to LOCCS." Doc. 1-1. HUD emphasized in the letter that it was not suspending the Tribe's funds, but rather revoking access to the LOCCS system, and that access by new users would be allowed if HUD became "satisfied that CIHA's Board of Commissioners is in fact authorized and designated by a recognized Tribal government." Id.

Upon receiving the August 22, 2013 letter, David Rapport, an attorney purporting to represent CIHA, contacted HUD concerning CIHA's access to LOCCS. Doc. 1-2. In an email dated August 29, 2012, Rapport argued that Helen Flores, Michael Wynn, and Orianna Walker were appointed to the CIHA Board of Commissioners for two year terms, from March 15, 2012 to February 24, 2014, and that "[t]he efforts by the Lewis Faction to remove them and appoint replacements" should be disregarded. Id. The email also argued that the tribal council, as it existed at the last undisputed election, had taken no action to remove those appointed Commissioners and had also appointed Cheryl Alemann and David Jiminez to CIHA's Board. Id. The letter asked HUD to "continue to recognize the CIHA officials who were authorized to access LOCCS before August 22, 2013, " and to provide CIHA with notice and opportunity for a hearing prior to revoking such access. Id. Rapport also asked whether there was "an administrative remedy that would afford CIHA an opportunity for a hearing before its access to LOCCS [was revoked]." Id. Rapport contacted HUD again on September 9, 2013, arguing that Helen Flores, Nancy Ayala, and Michael Wynn had approved access to LOCCS before August 22, 2013, and that their access should be restored. Doc. 1-3.

After these communications with HUD failed to resolve the situation, CIHA, represented by Rapport and Lee Marston, initiated this suit against HUD, SWONAP, and their respective representatives on behalf of itself and the Tribe. Doc. 1. The suit asserts the following claims: (1) HUD suspended funds in violation of NAHASDA because it has not shown that CIHA failed to "comply substantially" with statutory requirements; (2) HUD's suspension of funding violated the Administrative Procedures Act because it was arbitrary, capricious and contrary to applicable law; (3) HUD violated Plaintiff's due process rights under the Fifth Amendment by failing to provide proper notice or a hearing prior to revoking CIHA's access to LOCCS; (4) HUD violated federal common law by failing to acknowledge the tribal council elected at the last undisputed election; (5) Plaintiffs are entitled to declaratory relief regarding the recognition of tribal court orders which recognize the Ayala faction as the lawful governing body of the Tribe; and (6) the government breached its fiduciary duty to the Tribe under NAHASDA.

On September 27, 2013, Plaintiff filed a motion for temporary restraining order and preliminary injunction, seeking to have access to LOCCS restored "for the CIHA officials who had that access on and before August 22, 2013." Doc. 13-1. The individuals to be granted LOCCS access under the motion are Nancy Ayala, Helen Flores, Michael Wynn, and Don Ctibor, CIHA's Executive Director. Id. at 9. Plaintiffs thus seek to have the Ayala faction granted exclusive access to the HUD funds.

II. Jurisdiction.

Federal courts lack jurisdiction to decide intra-tribal disputes. Sac & Fox Tribe of the Mississippi in Iowa, Election Bd. v. Bureau of Indian Affairs, 439 F.3d 832, 835 (8th Cir. 2006) (holding that jurisdiction to resolve internal tribal disputes lies with Indian tribes and not district courts); see also Santa Clara Pueblo v. Martinez, 436 U.S. 49, 55 (1978) (explaining that Indian tribes remain a separate people with power to regulate their internal and social relations); Lewis v. Norton, 424 F.3d 959, 960 (9th Cir. 2005) (recognizing that Indian tribes are distinct, independent political communities that retain their natural rights in matters of local self-government). Defendants claim that Plaintiffs lack standing, and this Court lacks subject matter jurisdiction, "because redressing Plaintiffs' alleged injury would require ...

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