The US Supreme Court [official website] heard oral arguments [day call, PDF] Wednesday in Salazar v. Ramah Navajo Chapter [transcript; JURIST report] on whether the federal government must pay American Indian tribes all contract-related costs incurred under the Indian Self-Determination and Education Assistance Act [text], even when those costs exceed the funds that the government promised would be available to the fund. The Act grants several federal departments, including the Departments of Interior, Health, Education and Welfare, to contract directly with American Indian tribes and allow them funding to autonomously replicate that department's function on their reservation. The Act requires absolute acceptance of every contract proposed by American Indian tribes. However, there is a cap of funding for all the tribes' use and once that is exceeded—even in the scenario where one tribe takes the majority of the funding—the US government is arguing that it should not be forced to reimburse additional costs taken on by those tribal programs and that they can choose to disperse the funds as they choose. Thus far, this has included paying some contractors in total and others not at all, as the Departments involved see fit. The respondents, several American Indian tribes, argued that this is arbitrary and contrary to the Ferris doctrine: "But the reality is that from the Tribe's perspective, they recognize, because of Ferris, and because of the way the Comptroller General has interpreted Ferris, that they are under a duty to make sure that there is an appropriation that covers this contract, that the amount, purpose, time requirements are all satisfied with enough money to accomplish that. And then, of course, we have the obligation to perform, which, of course, that's the other half of the equation here."
The Ferris doctrine originates in Ferris v. United States, an 1892 Court of Claims opinion that sets forth "A contractor who is one of several persons to be paid out of an appropriation is not chargeable with knowledge of its administration, nor can his legal rights be affected or impaired by its maladministration or by its diversion, whether legal or illegal, to other objects." The ancient doctrine was reaffirmed by the Supreme Court in 2005 through Cherokee Nation v. Leavitt [JURIST report], which held the original presumption that under the Indian Self-Determination and Education Assistance Act, tribes may undertake and be reimbursed for programs that would otherwise be provided by the government.