Supreme Court rules Alaska Native Corporations eligible for CARES Act payments

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The Supreme Court ruled 6–3 that for-profit Alaska Native Corporations (ANCs) are American Indian tribes, and as such are entitled to seek pandemic-related financial relief set aside for tribes in last year’s CARES Act.

Justice Sonia Sotomayor wrote the court’s opinion in Yellen v. Confederated Tribes of the Chehalis Reservation, court file 20-543, and the related case, Alaska Native Village Corporation Association Inc. v. Confederated Tribes of the Chehalis Reservation, court file 20-544, which was released June 25. Janet Yellen is the secretary of the Department of the Treasury.

ANCs are big business in Alaska, with a combined net revenue of $9.1 billion in fiscal 2017, according to a report by the Resource Development Council for Alaska Inc. They’re involved in oil and natural gas, mining, military contracting, real estate, construction, communications and media, engineering, plastics, timber, and aerospace manufacturing, among other things, according to a report by the U.S. Government Accountability Office (GAO).

In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Title V of the statute allocates $8 billion in monetary relief to “tribal governments” to compensate for unbudgeted expenditures made in response to the outbreak of the CCP virus, which causes the disease COVID-19.

The Department of the Treasury asked the Department of the Interior, the agency that administers the Indian Self-Determination and Education Assistance Act (ISDA), whether ANCs are considered to be tribal governments.

The Interior Department answered in the affirmative, so the Treasury Department then set aside about $500 million of CARES Act funding for the ANCs, a sum that was later reduced to about $450 million. If the money hadn’t been designated for ANCs, it would have gone into the larger pool of funds destined for tribes across the country.

“The question presented is whether ANCs are ‘Indian tribe[s]’ under ISDA, and are therefore eligible to receive the CARES Act relief set aside by the Treasury Department,” Sotomayor wrote for the majority.

The U.S. Court of Appeals for the District of Columbia Circuit held unanimously that ANCs are not “Tribal governments,” but the Supreme Court, Sotomayor wrote, “holds that they are.”

“ANCs are sui generis [i.e. unique] entities created by federal statute and granted an enormous amount of special federal benefits as part of a legislative experiment tailored to the unique circumstances of Alaska and recreated nowhere else,” she wrote.

Sotomayor explains how ANCs came about.

In 1867, when the United States purchased Alaska from Russia, Alaska Natives lived in communities widely dispersed across the territory’s 365 million acres, the opinion states. In the decades that followed, no attempt was made in Alaska to isolate American Indians on reservations, as had been done in the lower 48 states. This left any potential claims by Alaska Natives to Alaskan land largely unsettled even after Alaska became a U.S. state in 1959.

That changed in 1971 with the Alaska Native Claims Settlement Act (ANCSA), which officially did away with the idea of recreating in the 49th state the system of reservations that prevailed in the lower 48 states. The statute extinguished Alaska Natives’ claims to land and hunting rights and revoked all except one of Alaska’s existing reservations.

In exchange, Congress ordered the transfer of $962.5 million in state and federal funds and approximately 44 million acres of Alaska land to state-chartered private business corporations that were to be formed pursuant to ANCSA. Alaska was divided into 12 geographic regions, and Alaska Natives were instructed in the law to “incorporate under the laws of Alaska a Regional Corporation to conduct business for profit.”

For each Alaska Native village, ANCSA ordered the “Native residents” to create an accompanying village corporation to “hold, invest, manage and/or distribute lands, property, funds, and other rights and assets for and on behalf ” of the village. Alaska Natives then received shares in their respective ANCs.

Congress decided by way of ISDA that ANCs “are Indian tribes, regardless of whether they are also federally recognized tribes,” and “in so holding, the Court does not open the door to other Indian groups that have not been federally recognized becoming Indian tribes under ISDA,” the justice wrote.

Sotomayor’s opinion was joined in full by Chief Justice John Roberts and Justices Stephen Breyer, Brett Kavanaugh, and Amy Coney Barrett. Justice Samuel Alito joined parts of the opinion. Justice Neil Gorsuch wrote a dissenting opinion that was joined by Justices Clarence Thomas and Elena Kagan.

In his dissent, Gorsuch wrote that ANCs should not be eligible for the funding because “they do not govern any people or direct any government.”

Gorsuch expressed concern that “many other Indian groups might now suddenly qualify as tribes under the CARES Act, ISDA, and other federal statutes.”

A 2012 GAO study, he noted, identified about 400 non-federally recognized tribes in the lower 48 states, of which 26 had recently received direct funding from federal programs.

“This number does not include additional entities that may have received federal benefits in the form of loans, procurement contracts, tax expenditures, or amounts received by individual members. And still other groups may have federal rights secured by treaty, which may exist even if the tribe is no longer recognized,” Gorsuch wrote.

ANCSA Regional Association and Alaska Native Village Corporation Association, which represent tribal organizations, hailed the Supreme Court’s decision.

The ruling affirms “what the Federal Government has maintained for almost half a century: ANCs are Indian tribes under ISDA,” the groups said in a joint statement.

“We are pleased to see the Court affirm Alaska Native corporations’ eligibility for CARES Act funds to help our people and communities recover from the devastating effects of COVID-19. Alaska’s economy is only now starting to recover, and these funds are needed to help our communities get back on their feet.”

This article by Matthew Vadum appeared June 27, 2021, in The Epoch Times. It was updated June 29, 2021.