Red Lake Band of Chippewa Indians, Afederally Recognized Indian Tribe v. United States Department of Health

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 27, 2025 Decided August 1, 2025
No. 24-5098
RED LAKE BAND OF CHIPPEWA INDIANS, A FEDERALLY
RECOGNIZED INDIAN TRIBE,
APPELLANT
v.
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN
SERVICES AND ROBERT F. KENNEDY, JR., IN HIS OFFICIAL
CAPACITY AS SECRETARY, U.S. DEPARTMENT OF HEALTH AND
HUMAN SERVICES,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:23-cv-00063)
Steven D. Gordon argued the cause for appellant. With
him on the briefs was Philip Baker-Shenk.
McKaye L. Neumeister, Attorney, U.S. Department of
Justice, argued the cause for appellees. With her on the brief
were Brian M. Boynton, Principal Deputy Assistant Attorney
General, at the time the brief was filed, Matthew M. Graves,
U.S. Attorney, at the time the brief was filed, and Daniel Tenny,
Attorney.

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Before: HENDERSON, MILLETT, and WALKER, Circuit
Judges.
Opinion for the Court filed by Circuit Judge WALKER.
WALKER, Circuit Judge: Federal law allows an Indian
tribe to administer federally funded health programs. If those
programs require a facility, the government “shall compensate”
the tribe for using those facilities. 25 U.S.C. § 5324(l)(2).
A tribe may procure a facility in different ways. For
example:
• Option 1: A tribe may rent a facility. It can then
demand reimbursement from the government for the
rent payment. It can do this indefinitely.
• Option 2: A tribe may use a facility that it owns.
Under this option, the tribe can demand
reimbursement from the government for the
building’s depreciation. Using those funds, it could
pay for a new facility when the existing facility is no
longer usable. So like Option 1, Option 2 provides the
tribe with a facility indefinitely.
• Option 3: A tribe may borrow money to build a new
facility. Under this option, the tribe can demand that
the government reimburse the tribe for its loan
payments. The tribe can use the facility until the end
of its useful life, then borrow money to build a new
facility, and then demand reimbursement for the new
loan payments for the new facility. So like Options 1

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and 2, Option 3 provides the tribe with a facility
indefinitely.1
Each option “compensate[s]” the tribe once, not twice, for
its costs. Id. If the government paid the tribe’s costs twice, it
would do more than “compensate” the tribe. Id.
In this appeal, a tribe named the Red Lake Band of
Chippewa Indians wants the Government to pay for its costs
twice. In particular, the Tribe wants the Government to pay for
a healthcare facility’s depreciation (recall Option 2) and for the
Tribe’s loan obligations on that facility (recall Option 3). So if
the Tribe prevails, then at the end of the facility’s useful life,
the Government will have paid for the cost of the facility
through depreciation, and the Government will have paid for
the cost of the facility through loan payments. (At that point,
the Tribe could build a new facility — which under the Tribe’s
theory, the Government would again pay for twice, through
more depreciation and more loan payments.)
The Government agreed to compensate the Tribe for
depreciation in 2020 and 2021, and for loan payments in 2022.
But the Government declined to compensate the Tribe for both
costs each year. The Government cited 25 C.F.R. § 900.70,
which interprets the relevant statute to prohibit duplicative
compensation.
We agree with the Government. In this context,
depreciation and loan payments compensate for duplicative
costs. And § 900.70 does not permit duplicative compensation.
1 This list is not exhaustive.

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I
A
The federal government funds health care, education, and
policing on Indian reservations. For many years, the federal
government provided those services directly. Then, in 1975,
Congress passed the Indian Self-Determination and Education
Assistance Act, Pub. L. No. 93-638, 88 Stat. 2203 (1975)
(codified as amended at 25 U.S.C. § 5301 et seq.).
The Act gives tribes a choice. Tribes can continue to
receive services provided directly by the government. See 25
U.S.C. §§ 5302(b), 5321(a)(1). Or the government can pay
tribes to “assume responsibility for aid programs that benefit
their members.” Menominee Indian Tribe of Wisconsin v.
United States, 577 U.S. 250, 252 (2016).
When a tribe elects to assume responsibility for a
healthcare program, § 105(l) of the Act requires the
government to “compensate” the tribe for any facility it uses to
administer that program:
(1) Upon the request of an Indian tribe . . . , the
Secretary shall enter into a lease with the Indian
tribe . . . that holds title to . . . a facility used by the
Indian tribe . . . for the administration and delivery of
services . . . .
(2) The Secretary shall compensate each Indian
tribe . . . that enters into a lease . . . .
25 U.S.C. § 5324(l) (emphases added). That arrangement
is known as a § 105(l) lease.

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The Act specifies expenses eligible for “compensation” in
a § 105(l) lease:
Such compensation may include rent, depreciation
based on the useful life of the facility, principal and
interest paid or accrued, operation and
maintenance expenses, and such other reasonable
expenses that the Secretary determines, by regulation,
to be allowable.
Id. § 5324(l)(2) (emphases added).
The agencies responsible for administering the Act
promulgated regulations that supplement Congress’s list and
prohibit duplicative compensation:
To the extent that no element is duplicative, the
following elements may be included in the lease
compensation:
(a) Rent (sublease);
(b) Depreciation and use allowance based on
the useful life of the facility based on
acquisition costs not financed with Federal
funds;
(c) Contributions to a reserve for replacement of
facilities;
(d) Principal and interest paid or accrued;
(e) Operation and maintenance expenses
[including a list of examples];
(f) Repairs to buildings and equipment;
(g) Alterations needed to meet contract
requirements;

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(h) Other reasonable expenses; and
(i) The fair market rental for buildings or
portions of buildings and land, exclusive of the
Federal share of building construction or
acquisition costs, or the fair market rental for
buildings constructed with Federal funds
exclusive of fee or profit, and for land.
25 C.F.R. § 900.70 (emphases added).
A second, related regulation gives a tribe three
compensation options: The tribe may be compensated based on
(1) the facility’s “fair market rental”; (2) the § 900.70 elements;
or (3) a combination of both, “provided that no [§ 900.70]
element of expense is duplicated in fair market rental.” 25
C.F.R. § 900.74 (emphasis added).
B
Several hundred years ago, the Ojibwe and the Dakota
fought for an area around Red Lake in Northwest Minnesota.
The Ojibwe prevailed. Over time, the Red Lake Band of
Ojibwe aligned with the Pembina Band of Chippewa Indians.
They became the Red Lake Band of Chippewa Indians. Today,
they are a federally recognized tribe whose members own and
operate the Red Lake Reservation. See Tribal History &
Historical Photos, Red Lake Nation, https://perma.cc/FGD8-
7WQR.
On that reservation, the Tribe operates several substance-
abuse health programs funded by the federal government under
self-determination contracts. To carry out some of those
programs, the Tribe built the Obaashiing Chemical Health
Treatment Center. It cost $5.8 million.

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The Tribe paid for about $850,000 of that cost. It financed
the rest with a $4.95 million, 40-year loan from the Department
of Agriculture. Under that loan, the Tribe annually owes about
$200,000 in principal and interest.
1
Before the Treatment Center opened in December 2020,
the Tribe submitted a lease proposal to the Indian Health
Service, a subdivision of the Department of Health and Human
Services. For simplicity’s sake, we’ll refer to the Indian Health
Service as the Government. The Tribe and the Government
attempted to negotiate a one-month lease for December 2020
and a year-long lease for 2021.
During those negotiations, the Tribe requested nearly
$1 million in total annual lease compensation. The
Government agreed to most of the Tribe’s demands, but it
refused to compensate the Tribe for both (1) a depreciation
expense and (2) principal-and-interest payments on the Tribe’s
loan. The Government informed the Tribe that those elements
were “impermissibly duplicative.” JA 121.
Later, the Government’s final-decision letter for 2020 and
2021 concluded that it lacked the authority to “repay a
construction loan furnished by another federal
agency” — here, the Department of Agriculture. JA 48
(capitalization altered). So the final-decision letter did not
mention the Government’s concern about duplicative
compensation. Rather, because the Government believed it
could not compensate the Tribe for its loan payments, the
Government compensated the Tribe for depreciation only.

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2
For 2022, the Government changed its position. It
conceded that payments on the Tribe’s loan may be a
component of a § 105(l) lease. But it reiterated its duplication
concern.2 This time, the Government had to choose which
element to compensate. It compensated the Tribe for the more
valuable element: the loan payments.
Recognizing that the Tribe would have received more
compensation in 2020 and 2021 under its revised rationale, the
Government offered to swap depreciation with principal and
interest for 2020 and 2021. That modification would have
raised the Tribe’s overall compensation by about $57,000.
Rather than accept that offer, the Tribe sued. It sought
compensation for depreciation expense and principal-and-
interest payments for 2020, 2021, 2022. It alleged that the
Government had provided only partial compensation and
sought the difference of more than $270,000 in damages.
After cross-motions for summary judgment, the district
court ruled for the Government. It concluded that, with respect
to the portion of the building financed by the $4.95 million
loan, depreciation and principal-and-interest payments were
duplicative. So the court upheld the Government’s decision to
decline the Tribe’s depreciation request for 2022.3
2 That duplication, of course, affected only the portion of the building
financed by the loan, so the Government did compensate the Tribe
for depreciation as to the portion of the facility it financed with its
own funds.
3 The district court declined to answer a separate legal question
regarding depreciation: whether 25 C.F.R. § 900.70(b)’s instruction

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The district court also upheld the Government’s 2020 and
2021 decision, rejecting the Tribe’s assertion that the
Government forfeited reliance on the anti-duplication rationale
for those years when the Government omitted that rationale
from its final decision letter.
The Tribe appeals.4
II
The Government’s 2022 decision was correct.
A
Duplicative compensation is prohibited by 25 C.F.R.
§ 900.70. Compensation for depreciation and principal-and-
interest payments is duplicative because each independently
makes the Tribe whole. So the Government correctly declined
to compensate the Tribe for both.
To see why, start with the terms’ meanings.
that depreciation can be considered only for “acquisition costs not
financed with Federal funds” is consistent with the Indian Self-
Determination and Education Assistance Act. Red Lake Band of
Chippewa Indians v. Department of Health & Human Services, 718
F. Supp. 3d 50, 60 n.2 (D.D.C. 2024) (quoting 25 C.F.R.
§ 900.70(b)). We similarly decline to reach this question.
4 To obtain summary judgment, the movant must show “that there is
no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” FED. R. CIV. P. 56(a). “We review
de novo the district court’s grant of summary judgment, applying the
same standards that governed the district court’s decision.” Navajo
Nation v. Department of Interior, 57 F.4th 285, 291 (D.C. Cir. 2023)
(quoting Electronic Privacy Information Center v. Department of
Justice, 18 F.4th 712, 717 (D.C. Cir. 2021)).

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Depreciation is the “decline in an asset’s value because of
use, wear, obsolescence, or age.” Depreciation, Black’s Law
Dictionary (12th ed. 2024). Although accountants consider this
a “cost” that must be “spread over the expected useful life of
the facility,” depreciation does not result in a cash outflow. See
Financial Accounting Standards Board, Accounting Standards
Codification, § 360-10-35-4 (2025).
Principal, on the other hand, is the sum of money borrowed
under a loan. The borrower must repay it, usually with interest.
Generally, a repayment plan combines principal and interest
into uniform periodic payments based on an amortization
schedule.5
These definitions show that depreciation and principal can
be economically duplicative: Both account for the cost of
building a facility. Depreciation expresses that cost in terms of
its lost value over time, while principal expresses it in terms of
the debt incurred to build the facility.
The Tribe insists that depreciation and principal are not
“duplicative” because depreciation and principal are
conceptually distinct. True, but § 900.70 uses “duplicative” in
an economic sense. In that regulation, “compensation”
describes the cost incurred by the Tribe to acquire and
maintain the facility — in other words, the amount of money
that places the Tribe in the same position it would be in if it did
not use the facility. 25 C.F.R. § 900.70. Depreciation and
5 With each payment, the principal component increases and the
interest component decreases. For example, under the Tribe’s loan,
the first payment included $69,437 of principal and $136,186 of
interest, while the Tribe’s final payment will include $200,117 of
principal and $5,506 of interest. JA 105.

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principal are both proxies for that amount.
Id. § 900.70(b) & (d).
Context confirms this conclusion. The Act requires the
Government to “compensate” a tribe for a facility’s use. 25
U.S.C. § 5324(l)(2). To “compensate” means to make
whole — or, to put a perhaps unnecessarily finer point on it, to
make whole once. See Compensation (def. 2), Black’s Law
Dictionary (12th ed. 2024) (“In theory, compensation makes
the injured person whole.”). For the purposes of a regulation
that requires “compensation,” it does not matter whether you
conceptualize that make-whole payment as principal or as
depreciation. See 25 C.F.R. § 900.69. Once the Tribe has been
made whole (once), it has been “compensate[d]” for the cost of
using its facility to deliver health services. 25 U.S.C.
§ 5324(l)(2).6
In short, compensation for depreciation and principal is
economically duplicative. And § 900.70 prohibits
economically duplicative compensation. So the Government
6 See Tri-State Business Machines, Inc. v. Lanier Worldwide, Inc.,
221 F.3d 1015, 1018 (7th Cir. 2000) (“It is a fundamental tenet of the
law of contract remedies that . . . an injured party should not be put
in a better position than had the contract been performed.” (quoting
E. Allan Farnsworth, Contracts § 12.8, at 874-75 (2d ed. 1990)));
Duran v. Town of Cicero, 653 F.3d 632, 639 (7th Cir. 2011) (“a
plaintiff may receive only one full compensation for his or her
injuries, and double recovery for the same injury is not allowed”
(cleaned up)); McDermott v. Middle East Carpet Co., 811 F.2d 1422,
1429 (11th Cir. 1987) (“Double recoveries for one injury are not
permitted . . . .”); cf. Restatement (Third) of Torts: Remedies § 3(a)
(A.L.I., Tentative Draft No. 1, 2022) (“a plaintiff cannot recover an
amount of compensatory damages that exceeds one full
compensation for each harm that plaintiff suffered”).

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did not err in declining to pay the Tribe for both depreciation
and principal-and-interest payments.7
B
To escape that conclusion, the Tribe offers several
arguments. None persuades.
First, the Tribe says the Indian Health Service — what we
have been calling the Government as shorthand — must
compensate the Tribe for both depreciation and loan payments
to align with the practice of a different agency, the Bureau of
Indian Affairs. But the Tribe has not shown that the Bureau of
Indian Affairs considered the key legal question in this case. In
any event, one agency’s incorrect legal interpretation does not
bind other agencies, even if those agencies prefer to “uniformly
interpret[ ] ” jointly promulgated rules. Appellant Br. 24-25
(quoting 61 Fed. Reg. 32482, 32496 (June 24, 1996)).
Second, according to the Tribe, analogous statutory
provisions require compensation for both depreciation and loan
payments. But the Tribe’s examples — a repealed provision
regarding the Postal Service and a statute about airport
fees — don’t do what the Tribe says they do. Neither law uses
the term “compensation.” The postal law addressed the Postal
Service’s revenue streams. See Postal Reorganization Act,
Pub. L. No. 91-375, sec. 2, § 3621, 84 Stat. 719, 760 (1970)
(repealed by Pub. L. No. 109-435, § 201, 120 Stat. 3198, 3200
(2006)). And the airport-fees law contains an illustrative list
of potential elements for landing fees. See 49 U.S.C.
§ 49104(a)(9).
7 This assumes the Government’s compensation methodology
remains the same throughout the 40-year loan period (and by
consequence, the 39-year depreciation period).

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Third, the Tribe says that no private lessor would accept
the amount offered by the Government. But the Tribe could
have asked the Government to compensate it for the facility’s
“fair market rental” value. 25 C.F.R. § 900.74(a). Tellingly, it
did not.
Fourth, the Tribe insists that without depreciation, it will
lose money on the approximately $856,000 it invested from its
own funds because it could have invested those funds at a 5%
interest rate. But this dispute is about lease compensation
relating to the Tribe’s $4.95 million loan. In the future, the
Tribe is free to ask the Government for a return on its $856,000
investment as a compensation element. We express no opinion
about the merits of that hypothetical request.
Finally, the Tribe suggests that the regulation is
inconsistent with the statute by emphasizing that § 5324(l)(2)
lists both “depreciation” and “principal and interest.” It
contends that the Government must compensate it for each
enumerated element, even if the elements cover the same
expense. But the statute’s language is permissive, not
mandatory — “compensation may include” the enumerated
elements. 25 U.S.C. § 5324(l)(2) (emphasis added). These
“listed examples” are merely “intended to provide ‘reasonable’
compensation benchmarks.” Jamestown S’Klallam Tribe v.
Azar, 486 F. Supp. 3d 83, 92 (D.D.C. 2020). It’s a menu, not
a checklist.
Moreover, there is a good reason “depreciation” and
“principal and interest” are listed separately. It’s not that the
Government must always pay for both; it’s that each may or
may not be relevant, depending on the situation. For example,
if the Tribe had purchased the entire facility with cash, there
would be no loan payment. In that case, depreciation would be
an available method to determine adequate compensation.

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In short, the Tribe’s position is inconsistent with the Act
and its implementing regulations.8
III
For the reasons above, the Government correctly declined
to compensate the Tribe for both its payments on the Tribe’s
loan and the depreciation associated with that amount of the
loan. This resolves the Tribe’s challenge to the Government’s
2022 decision. There is, however, a wrinkle regarding the
Government’s decision for 2020 and 2021.
As described above, the Government’s decision for 2020
and 2021 rested on the legal theory that the Government cannot
reimburse the Tribe for principal-and-interest payments paid to
another federal agency. The Government has since abandoned
that theory, so that decision must be vacated and remanded. On
remand, the Government can do what it has represented that it
would do even without vacatur and remand — apply its anti-
duplication rationale and revise its decision for 2020 and 2021
to match its decision for 2022.9
8 The Tribe’s briefing refers to the Act’s codification of “the
interpretive canon that statutes must be construed liberally in favor
of the Indians.” Fort McDermitt Paiute & Shoshone Tribe v.
Becerra, 6 F.4th 6, 14 (D.C. Cir. 2021) (cleaned up); see 25 U.S.C.
§ 5321(g). But this codified canon, like its uncodified cousin,
“applies only when a statute is ambiguous.” Fort McDermitt, 6 F.4th
at 14. And here, there is no ambiguity.
9 The Tribe mistakenly believes that if the decision about 2020 and
2021 is invalid, then the agency must accept its original proposal
because the statutory 90-day window for a decision is now closed.
But the statutory timeline resets when a challenger prevails in
partially invalidating an agency’s decision. See, e.g., Ethyl Corp. v.
Browner, 989 F.2d 522, 524 (D.C. Cir. 1993) (“given the tradition of

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* * *
We affirm the district court’s judgment as to 2022. We
reverse the district court’s judgment as to 2020 and 2021, with
instructions to vacate the Government’s decision and remand
the matter to the agency for further proceedings.
So ordered.
allowing agencies to reconsider their actions where events pending
appeal draw their decision in question, we see no basis to extend
Congress’s remedy for delay into a similarly radical remedy for
error”). This principle has previously been applied to § 105(l) leases,
and we apply it again today. Maniilaq Association v. Burwell, 170
F. Supp. 3d 243, 256 (D.D.C. 2016) (“the Court thinks it appropriate
to compel the parties to discuss, in a manner consistent with this
opinion, the proper amount of compensation for the [§ 105(l)]
lease”); Pyramid Lake Paiute Tribe v. Burwell, 70 F. Supp. 3d 534,
545 (D.D.C. 2014) (“[W]hile the Court will issue an order declaring
that the Secretary violated the [Act] by denying the Tribe’s proposal
outright, it will not direct her to enter into the Tribe’s contract at the
2012 amount. Rather, it will direct the Secretary to negotiate with
the Tribe . . . .”).

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