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The Chippewa Cree Tribe of Rocky Boy's Reservation v. U.S. Department of Interior

United States Court of Appeals, Ninth Circuit

August 21, 2018

The Chippewa Cree Tribe of Rocky Boy's Reservation, Montana, Petitioner,
v.
U.S. Department of the Interior; Ryan K. Zinke, in his official capacity as Secretary of the Interior; Ken St. Marks, Respondents.

          Argued and Submitted March 12, 2018

          On Petition for Review of an Order of the Department of the Interior

          Richard J. Zack (argued) and Jay A. Dubow, Pepper Hamilton LLP, Philadelphia, Pennsylvania, for Petitioner-Intervenor.

          Jeffrey S. Rasmussen (argued), Fredericks Peebles & Morgan LLP, Louisville, Colorado, for Respondent-Petitioner.

          Jaynie Lilley (argued) and Marleigh D. Dover, Appellate Staff; Chad M. Readler, Acting Assistant Attorney General; Civil Division, United States Department of Justice, Washington, D.C.; for Respondents.

          Before: Paul J. Watford and Michelle T. Friedland, Circuit Judges, and Gary Feinerman, [*] District Judge.

         SUMMARY [**]

         Tribal Issues / Whistleblower

         The panel denied a petition for review by the Chippewa Cree Tribe challenging a decision of the U.S. Department of the Interior that ordered the Tribe to provide relief to Ken St. Marks, who was removed from the Tribe's governing body - the Business Committee - in retaliation for his whistleblowing.

         St. Marks informed the Department of the Interior that members of the Business Committee were misusing federal stimulus funds awarded to the Tribe by the Department pursuant to the American Recovery and Reinvestment Act. The Act contains robust whistleblower protections.

         The panel rejected the Tribe's challenges to the Department of Interior's decision. First, the panel held that St. Marks was an "employee" and eligible for whistleblower protection under the Act because he provided services on behalf of his employer, the Tribe. Second, the panel held that the Department's order did not infringe on the Tribe's sovereignty and powers of self-governance, and moreover, the Tribe voluntarily agreed to federal oversight when it accepted the stimulus funds. Third, the panel held that the Tribe did not have a due process right to a hearing with cross-examination before the Department reached its conclusion where the Tribe consented to the procedures outlined in the Act, which do not include a hearing. The panel noted that the Department did commit a procedural error where the Tribe did not have access to the Inspector General's report until the Department issued its preliminary decision, but this was harmless error. Finally, the panel held that the Department did not err in finding that the removal of St. Marks was retaliatory.

         The panel held that the Tribe could not raise for the first time on appeal its argument that the Department incorrectly calculated St. Marks's monetary award.

         The panel addressed St. Marks's petition for review in a concurrently filed memorandum disposition.

          OPINION

          FRIEDLAND, CIRCUIT JUDGE

         Ken St. Marks, a member of the Chippewa Cree Tribe ("Tribe"), informed the Department of the Interior ("Department") that he believed members of the Tribe's governing body, known as the Business Committee ("Committee"), were misusing federal stimulus funds. Members of the Tribe subsequently elected St. Marks Chairman of the Committee, a position he held for five months before being removed by the other members of the Committee. St. Marks alleged that the Committee took this action in retaliation for his whistleblowing. After an investigation, the Department agreed and ordered the Tribe to provide relief, including back pay, to St. Marks. The Tribe now petitions for review, raising procedural and substantive challenges to the Department's decision. We deny the petition.[1]

         I.

         The stimulus funds at issue here were awarded to the Tribe by the Department pursuant to the American Recovery and Reinvestment Act ("ARRA" or "the Act"). Congress passed ARRA to mitigate the impact of the 2008 recession, in part by rapidly funding a variety of state, local, and tribal projects. See Pub. L. No. 111-5, § 3, 123 Stat. 115, 115-16 (2009). To safeguard these funds, Congress enacted robust whistleblower protections for employees of any non-federal entity receiving funds under the Act. ARRA § 1553(a), 123 Stat. at 297-302.[2] As relevant here, the Act provides that an employer may not discharge an employee in retaliation for the disclosure of "information that the employee reasonably believes is evidence of" the "gross mismanagement of an agency contract or grant relating to covered funds." § 1553(a)(1), 123 Stat. at 297.

         When an employee files a whistleblower complaint, the office of the inspector general ("IG") for the agency awarding the funds has 180 days to investigate the complaint and submit a report of its findings "to the person, the person's employer, [and] the head of the appropriate agency." § 1553(b)(1)-(2), 123 Stat. at 297-98. After the agency receives the IG's report, it must determine whether the complainant has been the victim of a reprisal prohibited by ARRA's whistleblower protections. § 1553(c)(2), 123 Stat. at 300. If the employee establishes that his or her disclosure "was a contributing factor in the reprisal," § 1553(c)(1)(A)(i), 123 Stat. at 299, the burden then shifts to the employer to show by "clear and convincing evidence" that it would have removed the employee "in the absence of the disclosure," § 1553(c)(1)(B), 123 Stat. at 299. If the agency concludes that a prohibited reprisal has occurred, it may order various forms of relief, including compensatory damages and reinstatement. § 1553(c)(2), 123 Stat. at 300.

         II.

         In 2009 and 2010, the Tribe received over $27 million in stimulus funds to complete construction of a water pipeline on its reservation. The Tribe had previously entered into funding agreements with the Department that authorized the Tribe to administer the federal funds it received in those years. See 25 U.S.C. § 5363. As a condition of receiving the water pipeline funding, the Tribe executed two modifications to those preexisting agreements. The modified agreements required the Tribe to comply with the Act's whistleblower protections, and specifically provided that those protections would be "enforceable pursuant to processes set up by ARRA."

         Ken St. Marks owns a construction company that was involved in building the pipeline paid for by the stimulus funds. In August 2012, St. Marks reported to the Department that he believed members of the Tribe, including individuals on the Tribe's governing Committee, were misusing ARRA funds. Three months later, members of the Tribe elected St. Marks to serve as Chairman of the Committee.[3]

         St. Marks contends that he informed members of the Tribe of the alleged fraud in an open letter on March 5, 2013, but the Committee disputes that the letter was ever sent. Later that same week, St. Marks filed a whistleblower complaint with the Department, alleging that he had "been threatened and retaliated against," and that there was a petition circulating to remove him as Chairman. The Committee subsequently removed St. Marks from his position on March 25, 2013, for "neglect of duty and gross misconduct."

         The IG began investigating St. Marks's whistleblower complaint that spring. After interviewing employees of the Tribe and other witnesses, the IG submitted its report to the Department about a year later. The report discussed the factual background of the investigation, but it offered no conclusion as to whether St. Marks was the ...


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