Salazar v. Ramah Navajo Chapter

Background

A group of Indian tribes contracted with the Department of the Interior and the Bureau of Indian Affairs to run programs like law enforcement, education, and health under the Indian Self-Determination and Education Assistance Act (ISDA). ISDA promises the “full amount” of contract support costs but also says payments are “subject to the availability of appropriations.” From 1994 to 2001 Congress appropriated lump-sum funds large enough to cover any single tribe’s costs but not enough to cover all tribes together. When money ran short, the Secretary paid tribes on a uniform, pro rata basis and the tribes sued for breach of contract.

Reasoning

The Court addressed whether the Government must pay each tribe’s contracted costs in full when appropriations could cover any individual contract but not every contract in the aggregate. Relying on prior government-contracting decisions, the Court treated ISDA promises as ordinary contract obligations. It held that if Congress appropriated legally available lump-sum funds sufficient to pay an individual contractor, the Government cannot avoid payment merely because the agency later spent funds on other permissible purposes. Because each year’s appropriation left funds legally available to pay any single tribe, the Court found the Government’s promise binding and affirmed tribal entitlement to full payment and money damages.

Real world impact

The decision requires tribes to receive the full contract support costs they contracted for, even when the Bureau’s total appropriation is short. The Government and agencies must bear the fiscal consequences of aggregate shortfalls. The Court noted Congress can address the mismatch by changing funding methods—for example, by using line-item appropriations, amending ISDA, or increasing funding—but left those policy choices to Congress. The Court did not resolve employment or Anti-Deficiency Act consequences for agency officials.

Dissents or concurrances

Chief Justice Roberts, joined by three Justices, dissented. He argued the statute plainly conditions payments on appropriations, that yearly appropriations capped total contract support costs, and that the Secretary is not required to reduce one tribe’s funding to make funds available to another; under that reading, unpaid amounts were not “available” and tribes could not recover them.