Cherokee Nation of Okla. v. Leavitt

Background

A federal agency and two Indian tribes entered into contracts under a law that lets tribes run programs, such as health services, that the government normally provides. The contracts included annual funding promises that the government would pay "contract support costs"—extra administrative and indirect costs tribes need to run the programs. For fiscal years 1994 through 1997 the government paid less than the contracts promised, saying Congress had not appropriated enough money. The tribes sought payment through administrative claims and lawsuits. Lower tribunals split: the Federal Circuit sided with the Cherokee Nation, while the Tenth Circuit sided with the government.

Reasoning

The central question was whether the government's payment promises were legally binding despite appropriations limits. The Court said yes. It treated the promises like ordinary government contracts, found that Congress had provided unrestricted appropriations adequate to cover the claims, and rejected the government's argument that special tribal-contract rules or later statutes barred recovery. The Court interpreted a 1999 appropriations provision not to retroactively cancel tribal contract claims.

Real world impact

The ruling means tribes can pursue money damages for unpaid contract support costs and makes it harder for agencies to avoid payment by reallocating lump-sum appropriations. The decision sends a clear signal that agencies must plan funding or seek congressional earmarks rather than relying on reallocations. The cases return to lower courts to determine exact amounts owed.

Dissents or concurrances

Justice Scalia joined most of the opinion but objected to the Court’s reliance on a Senate committee report to explain the statute’s meaning. The Chief Justice did not participate.