Salazar v. Ramah Navajo Chapter
The Supreme Court ruled that the federal government must pay Native American tribes the full amount of contract support costs it promised them under a federal law, even though Congress had not appropriated enough money to pay every tribe in full.
The decision means the government, not the tribes, bears the financial risk when Congress funds a program generously enough to cover any one contractor but not all of them combined, reinforcing long-standing rules that protect government contractors' expectations.
How it got here: Tribes sued for breach of contract; a federal trial court ruled for the government, but the Tenth Circuit reversed, and the government asked the Supreme Court to review.
The Case in Depth
What happened
Under a federal law, tribes can take over running federal services like law enforcement and agriculture assistance, and the government promises to pay tribes' "contract support costs" in full. From 1994 to 2001, several tribes contracted to provide such services and fully performed their obligations, but Congress appropriated enough money to pay any single tribe in full while falling short of what was needed to pay all tribes together. The government paid tribes only a percentage of what it owed, on a uniform basis.
The question before the Court
When the government promises tribes full payment of contract costs but Congress doesn't appropriate enough to pay every tribe, must it still pay each tribe in full?
The Court's answer
Yes — the government must pay each tribe's contract support costs in full, even though Congress didn't appropriate enough money to pay every tribe collectively. The Court held that as long as Congress appropriated enough unrestricted funds to cover any single tribe's contract, the government's promise to that tribe is legally binding, regardless of how the agency chose to divide limited funds among many tribes.
The Court rejected the government's argument that a cap specifically limiting total contract-support-cost funding, plus a provision letting the Secretary favor one tribe's funding over another's, changed this result. It found those provisions simply gave the Secretary discretion over how to allocate money, not a legal excuse to underpay tribes once the funds were exhausted. The government, not the tribes, must bear the financial fallout of that funding shortfall.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Tribes that contracted with the government to run federal programs like law enforcement and environmental protection can recover the full costs they were promised, even when the government has run out of money because it spread limited funds across many tribes. This could mean significant unpaid claims coming due, and it pressures Congress to either fund the program fully or change the law.
What changes now
The ruling is final on the merits and affirms the Tenth Circuit's judgment that the government owes the tribes their full contract support costs, payable through the Judgment Fund used to satisfy federal judgments. The Court noted Congress could still change the underlying law going forward — for example, by limiting the government's obligation or fully funding the program — but until then, other tribes with similar underpayment claims can rely on this ruling.
What this does not decide
The Court did not decide whether the outcome would differ if Congress had capped funding in a way that included both contract support costs and other expenses together, as in the earlier case. It also left it to Congress, not the courts, to resolve the underlying tension between requiring full payment and appropriating insufficient money.
Concurrences and dissents
Dissent — Justice Roberts
Chief Justice Roberts argued that Congress had clearly restricted the funds available to pay contract support costs in two ways: a 'not to exceed' cap on total contract support cost funding, and a provision saying the Secretary need not reduce one tribe's funding to make money available to another. He argued that once the Secretary allocated the capped funds to some tribes, the remainder was not legally 'available' to pay other tribes, so the government's promise was not binding beyond what was actually appropriated and allocated. He would have reversed the Tenth Circuit.
How the Court got there
The legal reasoning, step by step
- The Court applied a longstanding rule of government contracting law: when a contractor is one of several people to be paid from a single appropriation big enough to cover that contractor, the government owes the contractor in full even if the agency spends the rest of the money on other permitted purposes.
- The Court had already applied this rule to this same law in a prior case, holding that the phrase 'subject to the availability of appropriations' is satisfied whenever Congress appropriates enough unrestricted money to pay the individual contract at issue, regardless of whether the total appropriation covers every contractor.
- The Court rejected the government's argument that a 'not to exceed' cap on total funding for contract support costs made this case different, reasoning that such caps have the same legal effect as the lump-sum appropriations in the earlier case: they still leave the agency free to divide the money among contractors as it sees fit.
- The Court read a provision saying the Secretary need not reduce one tribe's funding to pay another as simply confirming the Secretary's discretion in allocating funds, not as changing which funds counted as legally available to pay any given tribe.
- The Court concluded that because Congress had appropriated enough money to pay any individual tribal contractor in full, the government's promise to pay was legally binding, and it was not excused by an overall shortfall across all tribes.
Doctrinal impact
Cases affected by this decision
Reaffirms Cherokee Nation of Okla. v. Leavitt (543 U. S. 631)
The Court relied on and extended this earlier ruling that unrestricted appropriations bind the government to pay contract costs in full.
Distinguishes Sutton v. United States (256 U. S. 575)
The Court said this case involving a specific line-item appropriation for one contractor doesn't apply to many tribes sharing a lump sum.