By Julia Arciga

Law360 (August 3, 2020, 3:10 PM EDT) -- A D.C. federal judge has raised concerns about claims that the government owes the Shawnee Tribe more coronavirus relief funds, stating in a Monday status conference that the only funds left for allocation are a contested pot of money originally allocated for the Alaska Native corporations.

U.S. District Judge Amit P. Mehta recognized that the tribe was seeking some of the ANCs' COVID-19 relief funds because it believed the U.S. Treasury and Interior departments "used a false" population data point when calculating how much money to give to the tribe.

However, he said all the coronavirus relief funds were given out, and the ANCs' allocation — which is being challenged in the D.C. Circuit — is all that is left. If the appeals court rules that the ANCs are entitled to the entirety of the pot of funds, the judge questioned whether the Shawnee Tribe can lay claim to a portion of the money.

"It's a zero-sum game, it always has been," Judge Mehta said. "If the circuit affirms ... that the ANCs are entitled to its funds, it's not clear to me if a payout can happen."

Pilar Thomas of Quarles & Brady LLP, counsel to the Shawnee Tribe, argued that the departments' false calculation — that the tribe had a population of zero when it actually had 3,000 members — led to a decreased relief payment to the tribe and an inflated allocation to the ANCs.

"The math is simple, the ANCs would be entitled to less," Thomas said, reiterating her earlier point that the ANCs "should not be allowed to benefit and get more money because the Shawnee Tribe didn't get funds it was entitled to."

Judge Mehta said Thomas' point may have been useful had the tribe "prevailed in a timely manner" and before all the funds were given away, but said that isn't "the world [they] live in." He said that if the D.C. Circuit remanded the ANCs' pot of funds to the government for re-allocation, then the tribe could have an opportunity to get its so-called "fair share."

"If the case is reversed by the D.C. Circuit, that amount would have to be re-apportioned to the non-ANCs tribes," he said. "In that scenario, this remains a live controversy. It's not clear to me what the Treasury [Department] would do, but the bottom line is that this would still be a live controversy if its remanded."

Kuntal Cholera, counsel for the government, said he agreed with the judge's analysis of the situation, but raised concerns about the potential for more litigation if the D.C. Circuit remands the funds.

"That raises the issue of every tribe claiming they were underpaid. I don't know what's going to happen, but we're not looking at a good outcome," he said, claiming the government likely couldn't use it's existing allocation formula and they'd be "back to square one."

Cholera also mentioned the likelihood of the ANCs' funds being chipped away by the possible turn of events he presented, and how the timing of the Shawnee Tribe's case meant the ANCs had to take the financial blow.

"It just so happens that the only money that is left is due to them," he said. "Is there even a fair way to pay the tribes out even if they won?"

Given everything discussed, the judge ordered both parties to submit a brief on the judiciability of the case by the end of the week and scheduled a hearing for next week. He also told attorneys to inform the ANCs' counsel in the D.C. Circuit case about what was discussed during the status conference.

The dispute over the ANCs' funds stems from an April complaint from six other tribes claiming the 12 for-profit Alaska Native regional corporations and 225 Alaska Native village corporations — which have billions of dollars in revenue and are among the largest private landowners in Alaska — were not intended to receive any of the $8 billion "tribal stabilization fund" included in the $2 trillion Coronavirus Aid, Relief and Economic Security Act.

In late June, Judge Mehta ruled that the for-profit ANCs qualified as "Indian tribes" eligible for funding under the CARES Act. He heard arguments from the government to let the ANCs have their funds early last month, but he ended up blocking the Treasury Department from sending the funds while the tribes appealed his June ruling to the D.C. Circuit.

The Shawnee Tribe filed its own complaint against the government for more COVID-19 relief funds in mid-June in Oklahoma federal court. The case was later transferred to D.C. federal court.

The Shawnee Tribe is represented by Pilar Thomas of Quarles & Brady LLP.

The government is represented by Kuntal Cholera of the U.S. Department of Justice.

The case is Shawnee Tribe v. Mnuchin et al., case number 1:20-cv-01999, in the U.S. District Court for the District of Columbia. The D.C. Circuit case is Confederated Tribes Of The Chehalis Reservation et al. v. Mnuchin, case number 1:20-cv-01002, in the U.S. District Court for the District of Columbia.

--Additional reporting by Andrew Westney. Editing by Kelly Duncan.

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