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Modoc Lassen Indian Housing Authority v. United States Department of Housing and Urban Development

United States Court of Appeals, Tenth Circuit

July 25, 2017

MODOC LASSEN INDIAN HOUSING AUTHORITY, the tribally designated housing entity for the Grindstone Indian Rancheria of Wintun-Wailaki Indians of California, Plaintiff-Appellee,
v.
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,
v.
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,
v.
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,
v.
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,
v.
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,
v.
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,
v.
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.

         Appeals 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)

          Gerard 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 Defendants-Appellants.

          Craig 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.

          Before MATHESON, BACHARACH, and MORITZ, Circuit Judges.

          MORITZ, Circuit Judge.

         These 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.[1]

         If 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?

         In 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.

         But 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.

         I

         Congress 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.

         In 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' allocations.").

         Appellees are various tribes (the Tribes) that allegedly inflated their eligible-unit counts-and therefore allegedly received overpayments-during various years.[2]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.

         In 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.

         II

         Because 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)).

         On 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. § 702.[3]

         A

         In 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 hearing requirements.

         i

         Under 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."[4] 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).

         The 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).

         Both 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 630.

         We 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 environmental certification).

         We see 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); § 4165(b)(1)(A)(i)(II) (2006).

         For 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).

         In 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]."[5] 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).

         ii

         Alternatively, 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.

         a

         In 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 the recipient;
(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 chapter;
(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).

         According 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 overpayments.

         Relying 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).

         In 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 misplaced.

         So too 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.

         But it 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.

         Instead, 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).

         b

         Alternatively, 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 overpayments.

         In 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 noncompliance).

         To 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.").

         In 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).

         By "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 statute).

         In 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 subchapter.").

         Because 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 noncompliance).

         B

         For the 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.").

         In 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.[6] None of them apply here.

         Of the 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.

         The 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");[7] 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.

         That 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).

         At 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.

         But in 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.

         Properly 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. ยง 4101(5). And Congress explicitly acknowledged in enacting that grant program that "the ...


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