MODOC LASSEN INDIAN HOUSING AUTHORITY, the tribally designated housing entity for the Grindstone Indian Rancheria of Wintun-Wailaki Indians of California, Plaintiff-Appellee,
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; BEN CARSON, Secretary of Housing and Urban Development;[*] DEBORAH A. HERNANDEZ, General Deputy Assistant Secretary for Public and Indian Housing; GLENDA GREEN, Director, Office of Grants Management, Office of Native American Programs, Defendants-Appellants. TLINGIT-HAIDA REGIONAL HOUSING AUTHORITY, Plaintiff-Appellee,
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; BEN CARSON, Secretary of Housing and Urban Development; DEBORAH A. HERNANDEZ, General Deputy Assistant Secretary for Public and Indian Housing; GLENDA GREEN, Director, Office of Grants Management, Office of Native American Programs, Defendants-Appellants. CHOCTAW NATION OF OKLAHOMA; HOUSING AUTHORITY OF THE CHOCTAW NATION OF OKLAHOMA, Plaintiffs - Appellees/Cross-Appellants,
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; BEN CARSON, Secretary of Housing and Urban Development; DEBORAH A. HERNANDEZ, General Deputy Assistant Secretary for Public and Indian Housing; GLENDA GREEN, Director, Office of Grants Management, Office of Native American Programs, Defendants-Appellants/Cross-Appellees. NAVAJO HOUSING AUTHORITY, Plaintiff-Appellee,
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; BEN CARSON, Secretary of Housing and Urban Development; DEBORAH A. HERNANDEZ, General Deputy Assistant Secretary for Public and Indian Housing, GLENDA GREEN, Director, Office of Grants Management, Office of Native American Programs. Defendants-Appellants. FORT PECK HOUSING AUTHORITY, Plaintiff-Appellee,
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; BEN CARSON, Secretary of Housing and Urban Development; JEMINE A. BRYON, Acting Assistant Secretary for Public and Indian Housing, Defendants-Appellants. SICANGU WICOTI AWANYAKAPI CORPORATION; OGLALA SIOUX (LAKOTA) HOUSING; TURTLE MOUNTAIN HOUSING AUTHORITY; WINNEBAGO HOUSING AND DEVELOPMENT COMMISSION; LOWER BRULE HOUSING AUTHORITY; SPIRIT LAKE HOUSING CORPORATION; TRENTON INDIAN HOUSING AUTHORITY, Plaintiffs-Appellees,
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; BEN CARSON, Secretary of Housing and Urban Development; DEBORAH A. HERNANDEZ, General Deputy Assistant Secretary for Public and Indian Housing; GLENDA GREEN, Director, Office of Grants Management, Office of Native American Programs, Defendants-Appellants. BLACKFEET HOUSING; THE ZUNI TRIBE; ISLETA PUEBLO HOUSING AUTHORITY; PUEBLO OF ACOMA HOUSING AUTHORITY; ASSOCIATION OF VILLAGE COUNCIL PRESIDENTS REGIONAL HOUSING AUTHORITY; NORTHWEST INUPIAT HOUSING AUTHORITY; BRISTOL BAY HOUSING AUTHORITY; ALEUTIAN HOUSING AUTHORITY; CHIPPEWA CREE HOUSING AUTHORITY; BIG PINE PAIUTE TRIBE, Plaintiffs-Appellees,
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; BEN CARSON, Secretary of Housing and Urban Development; DEBORAH A. HERNANDEZ, Assistant Secretary for Public and Indian Housing; GLENDA GREEN, HUD's Office of Grants Management, National Office of Native American Programs, Department of Housing and Urban Development, Office of Public and Indian Housing, Defendants-Appellants.
from the United States District Court for the District of
Colorado (D.C. Nos. 1:05-CV-00018-RPM, 1:08-CV-00451-RPM,
1:08-CV-00826-RPM, 1:08-CV-02573-RPM, 1:08-CV-02577-RPM,
1:08-CV-02584-RPM, and 1:07-CV-01343-RPM)
Sinzdak, Attorney, Appellate Staff, United States Department
of Justice, Civil Division, Washington, D.C. (Benjamin C.
Mizer, Principal Deputy Assistant Attorney General, John F.
Walsh, United States Attorney, and Michael S. Raab, Attorney,
Appellate Staff, United States Department of Justice, Civil
Division, Washington, D.C., with him on the briefs), for
H. Kaufman, Quarles & Brady, LLP, Tucson, Arizona,
Jonathan K. Tillinghast, Simpson, Tillinghast, Sorensen &
Sheehan, Juneau, Alaska, and John Fredericks, III, Fredericks
Peebles & Morgan LLP, Mandan, North Dakota (David J.
Rapport, Rapport and Marston Law Offices, Ukiah, California;
Louis W. Bullock and Patricia Whittaker Bullock, Bullock Law
Firm, Tulsa, Oklahoma; J. Frank Wolf, III, Rabon Wolf &
Rabon, Hugo, Oklahoma; David V. Heisterkamp, II, Amber Leigh
Hunter, and James F. Wagenlander, Wagenlander &
Heisterkamp, Denver, Colorado; Blain David Myhre, Blain Myhre
LLC, Englewood, Colorado; Peter J. Breuer, Fredericks Peebles
& Morgan LLP, Louisville, Colorado, with them on the
brief), for Plaintiffs-Appellees.
MATHESON, BACHARACH, and MORITZ, Circuit Judges.
MORITZ, Circuit Judge.
consolidated appeals arise from a government agency's
decision to recapture, via administrative offset, funds that
the agency allegedly overpaid to multiple grant recipients.
The grant recipients brought suit in federal court, arguing
in relevant part that the agency lacked authority to
recapture the funds without first providing them with
administrative hearings. The district court agreed and
ordered the agency to repay the grant recipients. The agency
now appeals that order.
these underlying facts sound relatively straightforward,
it's because they are. But they nevertheless give rise to
three legal questions that are decidedly less so: (1) did the
agency recapture the funds pursuant to a statute or
regulation that imposed a hearing requirement, thus rendering
the recaptures illegal; (2) if the agency didn't
recapture the funds pursuant to such a statute or regulation,
did it have authority to recapture the alleged overpayments
at all; and (3) if not, must the agency reimburse the grant
recipients for the amounts it illegally collected?
answering the first of these three questions, the panel
unanimously agrees that the agency didn't recapture the
funds pursuant to a statute or regulation that imposes a
hearing requirement. Thus, we agree that the district court
erred in ruling that the recipients were entitled to hearings
before the agency could recapture the alleged overpayments.
that's where our unanimous agreement ends; the remaining
questions divide the panel. Ultimately, two members of the
panel agree that the agency lacked authority to recapture the
funds via administrative offset. Accordingly, we affirm the
portion of the district court's order that characterizes
the recaptures as illegal. Nevertheless, two other members of
the panel agree that if the agency no longer has the
recaptured funds in its possession, then the district court
lacked authority to order the agency to repay the recipients.
Thus, we reverse that portion of the district court's
order and remand for further factual findings.
enacted the Native American Housing Assistance and Self-
Determination Act (NAHASDA) of 1996, 25 U.S.C. §§
4101-4243, to help Indian tribes provide affordable housing
for their members, see 25 U.S.C. § 4101(5). To
that end, the United States Department of Housing and Urban
Development (HUD) allocates NAHASDA grant funds among
recipient tribes each year.
determining how to allocate those funds, HUD employs a
regulatory formula that takes into account each tribe's
Formula Current Assisted Stock (FCAS)-a figure calculated by
multiplying the number of eligible low-rent housing units in
that tribe's possession by a fixed dollar amount.
See 25 U.S.C. § 4152(a)(1); 24 C.F.R.
§§ 1000.310(a), 1000.316. Critically, HUD relies on
each tribe to provide an accurate yearly count of its
eligible housing units. See 24 C.F.R. §§
1000.315(a), 1000.319(a). And because HUD allocates funds to
all tribes from a finite yearly pool, see 25 U.S.C.
§ 4151, a tribe that erroneously reports an inflated
number of eligible housing units will not only receive an
overpayment, but will necessarily reduce the funds available
to other eligible tribes. See Fort Belknap Hous.
Dep't v. Office of Pub. & Indian Hous., 726 F.3d
1099, 1100 n.2 (9th Cir. 2013) ("Because the total
amount of money available to all tribes is fixed, [NAHASDA
funding] is a zero-sum game: Any change in one tribe's
allocation requires an offsetting change to other tribes'
are various tribes (the Tribes) that allegedly inflated their
eligible-unit counts-and therefore allegedly received
overpayments-during various years.When HUD discovered these
alleged overpayments, it recouped the funds by deducting them
from the Tribes' subsequent yearly NAHASDA allocations.
The Tribes then sued for the return of those funds.
relevant part, the Tribes argued that HUD lacked authority to
recapture the funds without first providing the Tribes with
administrative hearings. The district court agreed. As a
result, the court ordered HUD to restore the recaptured funds
to the Tribes. HUD now appeals.
these appeals arise under the Administrative Procedure Act
(APA), 5 U.S.C. §§ 701-706, "[w]e take 'an
independent review of [HUD's] action' and are not
bound by the district court's factual findings or legal
conclusions." Utah Envtl. Cong. v. Bosworth,
439 F.3d 1184, 1188 (10th Cir. 2006) (quoting Olenhouse
v. Commodity Credit Corp., 42 F.3d 1560, 1569 n.16 (10th
Cir. 1994)). We will "set aside agency action if it is
'arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.'" Id.
(quoting 5 U.S.C. § 706(2)(A)).
appeal, HUD advances three challenges to the district
court's ruling that HUD acted illegally by recapturing
the funds without conducting administrative hearings. First,
HUD asserts that it wasn't required to hold hearings
before it recaptured the funds because the only statutes and
regulations that might require hearings don't apply here.
Second, HUD insists that in the absence of an applicable
statute or regulation, it was instead empowered to recapture
the alleged overpayments via administrative offset under the
common-law doctrine of payment by mistake. Third, HUD states
that even if it lacked common-law authority to recapture the
alleged overpayments via administrative offset, the district
court nevertheless erred in ordering HUD to return the
alleged overpayments to the Tribes because-with one
exception-such an order amounts to an award of "money
damages" and therefore runs afoul of 5 U.S.C. §
concluding that the Tribes were entitled to hearings before
HUD could recapture the alleged overpayments, the district
court relied on the relevant versions of 24 C.F.R. §
1000.532 and 25 U.S.C. § 4161(a)(1). HUD doesn't
dispute that these provisions required it to provide
administrative hearings under certain circumstances. Instead,
HUD argues that those circumstances simply aren't present
here. For the reasons discussed below, we agree. And because
these provisions therefore don't apply to HUD's
recapture of the alleged overpayments, neither do their
24 C.F.R. § 1000.532 (1998), HUD had authority to
"make appropriate adjustments in the amount of the
annual grants under NAHASDA in accordance with . . .
findings" that HUD made "pursuant to reviews and
audits under [25 U.S.C. § 4165]." 24 C.F.R. §
1000.532(a) (1998). But before doing so, HUD had to first
provide "a hearing in accordance with [24 C.F.R.] §
1000.540." 24 C.F.R. § 1000.532(b) (1998). Thus,
the threshold question before us is whether HUD recaptured
the alleged overpayments based on findings it made
"pursuant to reviews and audits under [§
4165]"; if so, then the Tribes were entitled to "a
hearing in accordance with [24 C.F.R.] § 1000.540."
24 C.F.R. § 1000.532(a), (b) (1998).
relevant versions of § 4165 required HUD to undertake
"such reviews and audits as may be necessary or
appropriate" to make three specific determinations: (1)
whether each tribe "carried out its eligible activities
in a timely manner, . . . carried out its eligible activities
and certifications in accordance with the requirements and
the primary objectives of this chapter and with other
applicable laws, and has a continuing capacity to carry out
those activities in a timely manner"; (2) whether each
tribe "complied with [its] Indian housing plan";
and (3) whether each tribe's "performance reports .
. . [were] accurate." § 4165(a) (1998);
see § 4165(b) (2006).
the Ninth Circuit and the Court of Federal Claims have held
that when HUD reviews a tribe's report of its eligible
housing stock, that review falls within the scope of the
first of these three categories, i.e., within HUD's
authority to review a tribe's activities and
certifications. See Crow Tribal Hous. Auth. v. Dep't
of Hous. & Urban Dev., 781 F.3d 1095, 1103 (9th Cir.
2015) ("[W]e conclude HUD's . . . FCAS review
constituted an audit within the meaning of § 4165 to
determine whether the Tribe had carried out 'eligible
activities and certification in accordance with this chapter
and other applicable law.'" (quoting §
4165(b)(1)(A)(i)(II))); Lummi Tribe of Lummi Reservation
v. United States, 106 Fed.Cl. 623, 630 (2012)
("Such a review, we believe, comes within [§
4165's] broad mandate to ensure that the grant program is
being conducted in accordance with NAHASDA." (citing
§ 4165(b)(1)(A)(i)(II))). But as HUD points out,
Crow doesn't acknowledge that "eligible
activities" and "certifications" are defined
terms-let alone discuss whether, as defined, those terms
encompass a tribe's report of its eligible housing stock.
Instead, in concluding that HUD's review of a tribe's
reported eligible housing units constitutes a review or audit
for purposes of § 4165, Crow explicitly states
that (1) "NAHASDA does not define 'eligible
activities and certification, '" and (2) "it is
ambiguous whether the term encompasses" such reviews.
781 F.3d at 1103 (quoting § 4165(b)(1)(A)(i)(II)).
Crow then resolves this alleged ambiguity by
applying the Indian canon, which states that "[s]tatutes
are to be construed liberally in favor of the Indians, with
ambiguous provisions interpreted to their benefit."
Id. (alteration in original) (quoting Cty. of
Yakima v. Confederated Tribes & Bands of Yakima Indian
Nation, 502 U.S. 251, 269 (1992)). Likewise,
Lummi concludes that HUD's review of a
tribe's eligible housing units falls within HUD's
authority to determine whether that tribe has carried out
eligible activities without ever addressing what those
eligible activities might be. See 106 Fed.Cl. at
decline to take this approach. Instead, we agree with HUD
that the applicable statutes unambiguously establish that the
terms "eligible activities" and
"certifications" don't encompass a tribe's
report on its eligible housing units. See 25 U.S.C.
§ 4132 (1998) (explaining that eligible housing
activities include housing assistance, development, housing
services, housing management services, crime prevention,
safety activities, and model activities); id. §
4112(c)(5) (listing certifications); id. §
4114(b)(1) (requiring certification regarding labor
standards); id. § 4115(c) (requiring
nothing in these statutes pertaining to a tribe's report
of its eligible housing units. And because these statutes
therefore unambiguously resolve this issue, we see no need to
apply the Indian canon. Accordingly, we part ways with both
the Ninth Circuit and the Court of Federal Claims to the
extent those courts have held that when HUD reviews a
tribe's report of its eligible housing stock, that review
falls within the scope of HUD's authority to review or
audit a tribe's activities and certifications.
See § 4165(a)(1) (1998); §
similar reasons, we reject the Court of Federal Claims'
conclusion that HUD's review of a tribe's report on
its eligible housing units falls within the second and third
categories of HUD's § 4165 authority, i.e., within
HUD's authority to review or audit a tribe's Indian
housing plan or its performance reports. See §
4165(a)(2), (3) (1998); § 4165(b)(1)(A)(iii), (B)
(2006); see also Lummi, 106 Fed.Cl. at 630 (reading
§ 4165 "as conferring broad authority on the
Secretary to review a grant recipient's performance under
NAHASDA, including monitoring a grant recipient's
compliance with its Indian housing plan and verifying the
accuracy of the recipient's performance reports").
Again, nothing in the relevant statutes suggests that either
a tribe's Indian housing plan or its performance reports
must (or even may) include information about the number of
eligible housing units in that tribe's possession.
See § 4112 (1998) (discussing Indian housing
plans); 25 U.S.C. § 4164 (1998) (discussing performance
reports). Instead, "[t]he Formula Response Form is the
only mechanism that a recipient shall use to report changes
to the number of FCAS." 24 C.F.R. § 1000.315(b).
short, reviewing a tribe's report on its eligible housing
units doesn't fall within any of § 4165's three
defined categories of audit-and-review authority.
Accordingly, HUD didn't recapture the alleged
overpayments at issue here based on findings HUD made
"pursuant to reviews and audits under [§
4165]." 24 C.F.R. § 1000.532(a) (1998). And
that means HUD was under no obligation to afford any of the
Tribes "a hearing in accordance with [24 C.F.R.] §
1000.540" under 24 C.F.R. § 1000.532(b) (1998).
the Tribes argue that even if they weren't entitled to
hearings under 24 C.F.R. § 1000.532(b) (1998), they were
nevertheless entitled to hearings under § 4161 (1998).
For two reasons, we again disagree.
relevant part, § 4161 (1998) provides,
[I]f the Secretary finds after reasonable notice and
opportunity for hearing that a recipient of assistance under
this chapter has failed to comply substantially with any
provision of this chapter, the Secretary shall-
(1) terminate payments under this chapter to
(2) reduce payments under this chapter to
the recipient by an amount equal to the amount of such
payments that were not expended in accordance with this
(3) limit the availability of payments under
this chapter to programs, projects, or activities not
affected by such failure to comply; or
(4) in the case of noncompliance described
in section 4162(b) of this title, provide a replacement
tribally designated housing entity for the recipient, under
section 4162 of this title.
§ 4161(a) (1998).
to the Tribes, § 4161(a) (1998)'s hearing
requirement applies here because HUD "reduce[d]"
the Tribes' NAHASDA payments under § 4161(a)(2)
(1998). But § 4161(a)(2) (1998) only applies when HUD
"reduce[s] payments" to a tribe "by an amount
equal to the amount of such payments that were not
expended in accordance with" NAHASDA. §
4161(a)(2) (1998) (emphasis added). And as HUD notes, it has
never suggested or alleged that the Tribes
"expended" the alleged overpayments in such a
manner. Id. Instead, HUD alleged only that the
Tribes' wrongly received the alleged
on City of Boston v. Department of Housing and Urban
Development, 898 F.2d 828 (1st Cir. 1990), the Tribes
characterize HUD's emphasis on § 4161(a)(2)
(1998)'s use of the term "expended" as
"hyper-technical, " Aplee. Br. 31 (quoting
Boston, 898 F.2d at 832).
Boston, the statute at issue required HUD to provide
a hearing before it "terminate[d] . . . payments"
to the grant recipient. 898 F.2d at 831. And HUD argued that
because the grant recipient hadn't yet "received any
funds . . . there was no 'termination' of
'payments.'" Id. The First Circuit
rejected this "hyper-technical" interpretation of
the statute. Id. at 832. But in doing so, it relied
on other language in the statute at issue-language that
suggested Congress was concerned with "withhold[ing]
relevant funding whenever a recipient . . . failed to comply
with the controlling law, " regardless of
"[w]hether the promised payments ha[d] or ha[d] not
begun." Id. Here, the Tribes point to no
similar language that suggests Congress, in drafting §
4161, was concerned with money that the Tribes wrongfully
received, as opposed to money they wrongfully expended.
Accordingly, the Tribes' reliance on Boston is
is their reliance on Kansas City v. Department of Housing
and Urban Development, 861 F.2d 739 (D.C. Cir. 1988).
The Tribes assert that, in Kansas City, the court
treated as applicable a statute that allowed HUD to
"reduce [grant] payments to the recipient . . . by an
amount equal to the amount of such payments which were not
expended" properly, 861 F.2d at 740 (emphasis
added) (quoting 42 U.S.C. § 5311 (1982))-even though
"[t]here was no allegation of unlawful expenditure[s],
" Aplee. Br. 31.
doesn't appear that either the parties or the court in
Kansas City addressed any possible distinction
between expending funds and receiving them. In fact, the
Tribes acknowledge as much in arguing that Kansas
City "implicitly" resolves this issue. Aplee.
Br. 30. "Questions which merely lurk in the record,
neither brought to the attention of the court nor ruled upon,
are not to be considered as having been so decided as to
constitute precedents." Webster v. Fall, 266
U.S. 507, 511 (1925). Thus, we decline to rely on Kansas
City's "implicit" answer to the question
of § 4161's applicability. Aplee. Br. 30.
we adopt the Ninth Circuit's explicit answer to this
precise question. When HUD alleges only that a tribe
incorrectly received funding-but makes "no
determination on whether any NAHASDA funds [were] improperly
expended"- HUD doesn't "act under
§ 4161, and, accordingly, " isn't subject to
§ 4161's hearing requirement. Crow Tribal Hous.
Auth., 781 F.3d at 1102 & n.5 (emphasis added);
cf. Fort Belknap Hous. Dep't, 726 F.3d at 1106
(holding that § 4161 wasn't implicated where HUD
alleged only that tribe wrongly received funding for
ineligible housing units, not that tribe expended those funds
in manner that wasn't "in accordance with"
NAHASDA (quoting § 4161(a)(1)(B))). And because HUD has
never challenged the Tribes expenditures of the alleged
overpayments, we agree with HUD that the Tribes weren't
entitled to hearings under § 4161 (1998).
even if we agreed with the Tribes that there exists no
meaningful distinction between receiving funds and expending
them, we would nevertheless conclude that § 4161 (1998)
doesn't apply to HUD's recapture of the alleged
relevant part, § 4161 (1998) provides, "[I]f the
Secretary finds after reasonable notice and opportunity for
hearing that a recipient of assistance under this chapter has
failed to comply substantially with any provision of
this chapter, the Secretary shall, " e.g., "reduce
payments . . . to the recipient." § 4161(a)(2)
(1998) (emphasis added). According to HUD, it has never
suggested that the Tribes' alleged inflation of their
eligible housing units constitutes substantial noncompliance.
Thus, HUD concludes, § 4161 doesn't apply. Cf.
Fort Belknap Hous. Dep't, 726 F.3d at 1104 (holding
that applicable version of § 4161 didn't apply where
"HUD neither alleged nor found" substantial
support this argument, HUD points out that Congress amended
§ 4161 in 2008 to clarify that a recipient's failure
"to comply with the requirements . . . regarding the
reporting of low-income dwelling units shall not, in itself,
be considered to be substantial noncompliance." Pub. L.
No. 110-411, § 4161(2), 122 Stat 4319. HUD asserts that
this amendment amounts to a clarification rather than a
substantive change. Thus, HUD concludes, the amendment
applies retrospectively to HUD's pre-2008 recaptures of
the alleged overpayments. See Dobbs v. Anthem Blue
Cross & Blue Shield (Dobbs II), 600
F.3d 1275, 1282 (10th Cir. 2010) ("[A] true
clarification applies retrospectively.").
determining whether the 2008 amendment applies
retrospectively, we begin by asking whether "Congress
has expressly prescribed the proper reach" of that
amendment. Id. To that end, HUD points out that a
Senate Report subtitle explicitly refers to the 2008
amendment as a "[c]larification." S. Rep. No.
110-238, at 10 (2007).
"us[ing] . . . the term 'clarification'" in
the 2008 amendment's legislative history, Congress
unambiguously expressed "an intent that the amendment
apply retrospectively." Dobbs II, 600 F.3d at
1282; see Dobbs v. Anthem Blue Cross & Blue
Shield (Dobbs I), 475 F.3d 1176, 1178 (10th
Cir. 2007) (remanding to district court to apply amended
statutory language where "amendment's legislative
history suggest[ed] that Congress expanded [relevant]
definition to clarify . . . legal ambiguity"); cf.
Andrus v. Allard, 444 U.S. 51, 59 n.10 (1979) (accepting
Senate Report's indication that amendment constituted
"a clarification rather than a substantive change in the
reach of the law"); Danielson v. Flores (In
re Flores), 735 F.3d 855, 860-61 (9th Cir. 2013)
(relying on title of House Report to interpret ambiguous
fact, as HUD points out, the Ninth Circuit has already relied
on the language of this same Senate Report to conclude that
(1) "the 2008 amendment was a clarification, not a
substantive change to" § 4161, and (2) the
amendment therefore applies retrospectively. Crow,
781 F.3d at 1101. We agree with the Ninth Circuit on this
point, and we conclude that the Tribes' failure to
accurately report their eligible housing units, standing
alone, doesn't constitute substantial noncompliance.
See § 4161(a)(2) (2009) ("The failure of a
recipient to comply with the requirements of [25 U.S.C.
§ 4152(b)(1)] regarding the reporting of low-income
dwelling units shall not, in itself, be considered to be
substantial noncompliance for purposes of this
we see no indication that HUD ever suspected or alleged
substantial noncompliance on the part of the Tribes, we
conclude that HUD didn't act pursuant to § 4161
(1998)-and therefore wasn't subject to § 4161
(1998)'s hearing requirement-when it recouped the alleged
overpayments. See Crow, 781 F.3d at 1101-02 (holding
that HUD didn't "act under § 4161, and,
accordingly, could not have violated a hearing requirement
under that section, " when HUD never alleged substantial
reasons discussed above, we agree with HUD that it didn't
act under § 4161 (1998) or 24 C.F.R. § 1000.532
(1998) when it recaptured the funds. But this conclusion is a
double-edged sword. True, it resolves one question in
HUD's favor: it means the district court erred in ruling
that HUD was required to provide hearings before recouping
the funds. But it raises a second, more fundamental question:
in the absence of an applicable statute or regulation, what
gave HUD the authority to recoup the funds at all? See
Killip v. Office of Pers. Mgmt., 991 F.2d 1564, 1569
(Fed. Cir. 1993) (explaining that federal agencies are
"creature[s] of statute"); see also
Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)
("[I]f there is no statute conferring authority, a
federal agency has none.").
attempting to answer that question, HUD asserts that rather
than proceeding under a statute, it recaptured the funds by
using "its longstanding, common-law authority to recover
payments made by mistake." Aplt. Br. 27. As support for
this argument, HUD cites six cases. None of them apply here.
six cases that HUD cites, only the Ninth Circuit's
decision in Fort Belknap even arguably addresses
whether a government agency administering a grant program can
rely on this common-law right to unilaterally recover
overpayments from a beneficiary. And the Ninth Circuit itself
has since characterized this portion of Fort Belknap
as dicta. See Crow Tribal Hous. Auth., 781 F.3d at
1105 n. 9. We agree. The question in Fort Belknap
wasn't whether HUD had common-law authority to recoup
NAHASDA overpayments. Instead, the "narrow issue
resolved in Fort Belknap was whether [the Ninth
Circuit] had jurisdiction to consider the tribe's direct
appeal." Id. at 1104. And that question turned
solely on whether HUD acted under § 4161(a)-not on
whether HUD had authority to act pursuant to some common-law
right. See Fort Belknap, 726 F.3d at 1100.
next three cases that HUD cites are likewise unhelpful. They
stand only for the limited proposition that the government
has a right, even in the absence of express statutory
authority, to sue to collect overpayments. See
United States v. Wurts, 303 U.S. 414, 416 (1938) (citing
"[g]overnment's long-established right to sue for
money wrongfully or erroneously paid from the public
treasury"); United States v. Lahey Clinic Hosp.,
Inc., 399 F.3d 1, 15-16 (1st Cir. 2005) (noting
"government's right to sue" to "recover
monies wrongly paid from the Treasury, even absent any
express statutory authorization"); LTV Educ. Sys.,
Inc. v. Bell, 862 F.2d 1168, 1169-70, 1175 (5th Cir.
1989) (citing government's authority to "recover
money it mistakenly, erroneously, or illegally paid"
where Department of Education sued based on alleged violation
of federal regulation). Because HUD opted instead to
unilaterally recoup the overpayments, rather than to sue for
their return, these cases are inapposite.
leaves only United States v. Munsey Trust Co., 332
U.S. 234, 236 (1947), and Grand Trunk Western Railway Co.
v. United States, 252 U.S. 112, 117 (1920).
first glance, Grand Trunk appears to support
HUD's assertion that it enjoys common-law authority to
recover overpayments via administrative offset. There, the
Court held that the Postmaster General "was under no
obligation to establish the [alleged overpayment] by
suit." 252 U.S. at 120-21. Instead, "[h]aving
satisfied himself" of the alleged overpayment, "he
was at liberty to deduct the amount of the overpayment from
the moneys otherwise payable to the company to which the
overpayment had been made." Id.
Grand Trunk, the government didn't mistakenly
overpay the beneficiary of a grant and then withhold the
amount of the overpayment from that beneficiary's
future-year grant funds, as HUD did here. Instead, the
overpayments in Grand Trunk arose in the context of
a contractual relationship between the government and the
plaintiff: the government entered into a series of
"successive quadrennial contracts" under which
"the mails were carried over" a certain stretch of
the plaintiff's railroad. Id. at 117, 121. And
when the Postmaster General realized that the government had
previously overpaid the plaintiff for its use of that stretch
of its track, he simply "deduct[ed] the amount of the
overpayment" from the amount the government owed
"under the current contract." Id. The
plaintiff sued, the Court of Claims dismissed, and the
Supreme Court affirmed. Id. at 117.
limited to its facts, Grand Trunk establishes that
when the government enters into a series of contracts with a
private party, it can deduct any amount it erroneously
overpays that private party "by means of a later
debit" to the parties' "running accounts."
Id. at 121. But this appeal doesn't arise from a
contractual relationship. Instead, it arises from a grant
program designed to help the Tribes and their members
"improve their housing conditions and socioeconomic
status." 25 U.S.C. § 4101(5). And Congress
explicitly acknowledged in enacting that grant program that