Federal Tort Claims Act: Issues Affecting Coverage for Tribal
Self-Determination Contracts (Letter Report, 07/05/2000,
GAO/RCED-00-169).
Pursuant to a congressional request, GAO reviewed the Federal Tort
Claims Act (FTCA) coverage to tribal contractors under the Indian
Self-Determination and Education Assistance Act, focusing on: (1) the
process for implementing FTCA coverage for tribal self-determination
contracts; (2) the FTCA claims history for tribal self-determination
contracts for fiscal years (FY) 1997 through 1999; and (3) FTCA coverage
issues that are unique to tribal contractors.
GAO noted that: (1) federal regulations implementing FTCA prescribe the
process that federal agencies must follow in resolving claims arising
from the negligent or wrongful acts of federal employees; (2) with the
extension of FTCA coverage to tribal contractors, tribal employees under
a self-determination contract are considered federal employees for the
purpose of FTCA coverage; (3) according to FTCA regulations, claims are
subject first to an administrative review and determination by the
federal agency whose actions gave rise to the claim; (4) at the
administrative level, the Departments of the Interior and of Health and
Human Services (HHS) handle these claims; (5) if a claim is not resolved
administratively, a lawsuit may be filed in federal court, where the
Department of Justice would defend it; (6) in response to GAO's request
for claims data, Interior and HHS identified 342 claims, filed from FY
1997 through FY 1999, that arose from programs contracted from the
Bureau of Indian Affairs and the Indian Health Service; (7) at both
agencies, these claims involved a small number of tribes, and the
damages claimed totalled about $700 million; (8) about two-thirds of
these claims involved Bureau programs, most notably law enforcement; (9)
the remaining one-third of these claims involved Health Service
programs, of which about one-half involved patient care activities; (10)
although some of these claims remain open, about 70 percent of the
claims have been brought to closure at a cost of more than $2 million;
(11) GAO's review identified a number of issues unique to FTCA coverage
for tribal contractors; (12) on the administrative side, the U.S.
government may be paying more than necessary to resolve claims involving
tribal contractors; (13) to the extent that tribes use federal funds to
purchase private liability insurance, it is possible that the federal
government is paying twice--once for tribes' insurance premiums and once
to settle tribal FTCA claims; (14) the potential for duplicative
liability coverage exists for tribal contractors because of tribes'
long-standing practice of carrying private insurance to cover a wide
range of activities, including those subsequently covered under FTCA;
(15) neither Interior nor HHS routinely checks to determine whether
tribal contractors have private liability insurance that could cover
these claims; and (16) on the legal side, lawsuits involving FTCA claims
have been filed in tribal courts, although federal courts have exclusive
jurisdiction to hear such cases.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-00-169
TITLE: Federal Tort Claims Act: Issues Affecting Coverage for
Tribal Self-Determination Contracts
DATE: 07/05/2000
SUBJECT: Minority contractors
Native Americans
Torts
Liability insurance
Federal regulations
Government liability (legal)
Claims processing
Litigation
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Testimony. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO/RCED-00-169
Appendix I: Three Provisions Extended FTCA Coverage to
Tribal Contractors
24
Appendix II: The FTCA Claims Process
29
Appendix III: Legal Issues That Have Arisen With the Extension
of FTCA Coverage to Tribal Contractors
30
Appendix IV: Comments From the Department of the Interior
36
Appendix V: Comments From the Department of Health and Human Services
39
Table 1: Claims Arising From Tribally Contracted Programs
From the Bureau of Indian Affairs and the Indian Health
Service, Fiscal Years 1997-99 9
Figure 1: Claims Arising from Tribally Contracted Programs
From the Bureau of Indian Affairs, by Program Type,
Fiscal Years 1997-99 10
Figure 2: The Five Tribes With the Most Claims for
Bureau-Contracted Programs, Fiscal Years 1997-99 11
Figure 3: Claims Arising from Tribally Contracted Programs
From the Indian Health Service, by Type of Claim,
Fiscal Years 1997-99 12
Figure 4: The Five Indian Health Service Area Offices With the
Most Claims Involving Tribally Contracted Programs,
Fiscal Years 1997-99 13
Figure 5: Chronology of the Three Provisions That Extended FTCA Coverage to
Tribal Contractors. 25
Figure 6: FTCA Coverage Is Not a Perfect Fit for Tribal Contractors 31
FTCA Federal Tort Claims Act
Resources, Community, and
Economic Development Division
B-285425
July 5, 2000
The Honorable Ben Nighthorse Campbell
Chairman, Committee on Indian Affairs
United States Senate
Dear Mr. Chairman:
The Indian Self-Determination and Education Assistance Act was passed in
1975 to encourage tribes to participate in and manage programs that for
years had been administered on their behalf by the departments of the
Interior and of Health and Human Services. The act authorizes tribes to take
over the administration of such programs through contractual arrangements
with the agencies that previously administered them: Interior's Bureau of
Indian Affairs and Health and Human Services' Indian Health Service.1 For
the Bureau, the programs that can be contracted by tribes include law
enforcement, education, social services, road maintenance, and forestry, and
for the Health Service, the programs include mental health, dental care,
hospitals, and clinics.
Under the first 15 years of the Self-Determination Act, tribal contractors
generally assumed liability for accidents or torts (civil wrongdoings)
caused by their employees. However, in 1990, the federal government
permanently assumed this liability when the Congress extended Federal Tort
Claims Act (FTCA) coverage to tribal contractors under the
Self-Determination Act. Originally enacted in 1946, FTCA established a
process by which individuals injured by federal employees could seek
compensation from the federal government. As a result of extending this
coverage to tribal contractors, individuals injured by tribal employees may,
under certain circumstances, seek compensation from the federal government.
For example, if while responding to a call for assistance, a tribal police
officer is involved in an automobile accident, the injured parties may be
able to seek compensation from the federal government for their personal
injuries and property damage.
To gain an understanding of how this coverage works, you asked us to (1)
describe the process for implementing FTCA coverage for tribal
self-determination contracts, (2) determine the FTCA claims history for
tribal self-determination contracts for fiscal years 1997 through 1999, and
(3) discuss FTCA coverage issues that are unique to tribal contractors.
Federal regulations implementing FTCA prescribe the process that federal
agencies must follow in resolving claims arising from the negligent or
wrongful acts of federal employees. With the extension of FTCA coverage to
tribal contractors, tribal employees under a self-determination contract are
considered federal employees for the purpose of FTCA coverage. According to
FTCA regulations, claims are subject first to an administrative review and
determination by the federal agency whose actions gave rise to the claim. At
the administrative level, the departments of the Interior and of Health and
Human Services handle these claims. If a claim is not resolved
administratively, a lawsuit may be filed in federal court, where the
Department of Justice would defend it. Administrative and legal settlements
may be paid from agency funds, the U.S. Treasury, or tribes' private
liability insurance if duplicative coverage exists.
Data on FTCA claims involving tribal contractors are not readily available
because neither Interior nor Health and Human Services is required to track
these claims separately from FTCA claims involving federal employees.
However, in response to our request for claims data, these departments
identified 342 claims, filed from fiscal years 1997 through 1999, that arose
from programs contracted from the Bureau of Indian Affairs and the Indian
Health Service. At both agencies, these claims involved a small number of
tribes, and the damages claimed totaled about $700 million. About two-thirds
of these claims involved Bureau programs, most notably law enforcement. The
remaining one-third of these claims involved Health Service programs, of
which about one-half involved patient care activities. Although some of
these claims remain open, about 70 percent of the claims (involving about
$333 million in claimed damages) have been brought to closure at a cost of
more than $2 million (84 percent paid by the federal government, 16 percent
paid by private insurers). Of the claims brought to closure, 127 resulted in
settlement payments and 108 were denied.
Our review identified a number of issues unique to FTCA coverage for tribal
contractors. On the administrative side, the U.S. government may be paying
more than necessary to resolve claims involving tribal contractors. To the
extent that tribes use federal funds to purchase private liability
insurance, it is possible that the federal government is paying twice--once
for tribes' insurance premiums and once to settle tribal FTCA claims. The
potential for duplicative liability coverage exists for tribal contractors
because of tribes' long-standing practice of carrying private insurance to
cover a wide range of activities, including those subsequently covered under
FTCA. Neither Interior nor Health and Human Services routinely checks to
determine whether tribal contractors have private liability insurance that
could cover these claims. To protect against the government paying more than
necessary to resolve these claims, this report recommends that the
departments routinely check for duplicative liability insurance. On the
legal side, several issues have emerged from recent lawsuits that illustrate
areas for which FTCA coverage is not a perfect fit for tribal contractors.
For example, in some cases, lawsuits involving FTCA claims have been filed
in tribal courts, although federal courts have exclusive jurisdiction to
hear such cases. Cases filed in tribal court can be problematic because FTCA
does not provide the necessary authority to remove such cases from tribal
court to federal court, where they belong.
We provided a draft of this report to the departments of the Interior,
Health and Human Services, and Justice for their review and comment. The
Department of the Interior agreed with our finding that the U.S. government
could potentially pay both for the claims and the liability insurance to
cover them. The Department also highlighted its two main concerns regarding
FTCA coverage for tribal contractors. First, the incentives to reduce the
number of claims are not present for tribal contractors, and second, from
time to time, a tribe, or its employees, has not cooperated with the
Department in resolving a claim. The Department of Health and Human Services
agreed with the facts presented in the report and with its recommendation.
The departments of the Interior and Justice provided technical
clarifications, which we incorporated as appropriate.
The Federal Tort Claims Act was enacted in 1946 and provides a limited
waiver of the U.S. government's sovereign immunity. It specifies the
instances in which individuals injured by the wrongful or negligent acts or
omissions of federal employees can seek restitution and receive compensation
from the federal government through an administrative process and,
ultimately, through the federal courts.
The Indian Self-Determination and Education Assistance Act of 1975 allowed
Indian tribes to contract to administer certain federal Indian programs. As
originally enacted, tribal contractors assumed liability for torts caused by
tribal employees performing official duties. The act authorized the
Secretaries of the Interior and of Health and Human Services to require that
tribal contractors obtain private liability insurance. People injured by the
actions of tribal contractors could file claims against tribal employees or
their tribes.
By the late 1980s, the Congress recognized that some tribes were using
program funds to purchase insurance, which reduced the funds available to
provide direct program services. Thus, the Congress amended the
Self-Determination Act in 1988 and required that beginning in 1990, the
Secretaries of the Interior and of Health and Human Services obtain or
provide liability insurance or equivalent coverage for the tribes. Also in
the late 1980s, the Congress began to enact statutes extending FTCA coverage
to tribal self-determination contracts. In 1990, this coverage was extended
permanently, thus giving injured parties the right to file tort claims
against and recover monetary damages from the U.S. government for injuries
or losses resulting from the negligent actions of tribal employees. See
appendix I for more detail on the three statutory provisions that extended
FTCA coverage to tribal contractors.
Federal Indian programs that tribes can contract under the
Self-Determination Act fall under the jurisdiction of the departments of the
Interior and of Health and Human Services. Within these departments, the
primary agencies responsible for administering Indian programs are the
Bureau of Indian Affairs and the Indian Health Service, which have a
combined annual appropriation that now exceeds $4 billion. Indian tribes
administer about one-half of these programs, or about $2 billion annually.
As of March 2000, there were 556 federally recognized tribes. Agency
officials estimate that nearly all of the federally recognized tribes
administer at least one contract from the Bureau or the Health Service
either directly or as a member of a tribal consortium.
The Bureau and Health Service programs administered by a tribe under the
Self-Determination Act may represent only a portion of that tribe's total
activities. The other programs tribes operate outside of the
Self-Determination Act may include other federal programs, such as federal
housing assistance for Native Americans under the Department of Housing and
Urban Development, early childhood educational and care programs under the
departments of Education and of Health and Human Services, and tribal
enterprises, such as gaming operations and smokeshops or convenience stores.
These programs have generally not been extended FTCA coverage. The tribes
themselves are liable for any injuries or damages caused by these programs,
and they may choose to protect themselves against this liability by
purchasing private liability insurance.
Claims
The federal regulations implementing FTCA prescribe the process that federal
agencies must follow in resolving claims arising from the negligent or
wrongful acts of federal employees. With the extension of FTCA coverage to
tribal contractors, tribal employees under a self-determination contract are
considered federal employees for the purpose of FTCA coverage. According to
FTCA regulations, claims are subject first to administrative review and
determination by the federal agency whose actions gave rise to the claim.
Claims must include evidence and information about the actions giving rise
to the injury and the injury sustained, and must be presented in writing to
the responsible agency within 2 years. The claim must also request a
specific amount of compensation. Once a claim has been filed, the agency has
6 months in which to review the claim before the claimant may file suit in
federal court. The administrative review can result in a claim's being
denied, settled, or undecided. For a complete diagram of the FTCA claims
process, see appendix II.
Claims arising from Bureau programs are filed with Interior's Office of the
Solicitor, and claims arising from Indian Health Service programs are filed
with Health and Human Services' Claims Branch. At Interior, nine solicitor
field offices have been delegated responsibility for handling FTCA claims
for Bureau programs. Although regulations implementing the
Self-Determination Act require that claims be filed with the solicitor's
headquarters in Washington, D.C., in practice claims are forwarded to the
cognizant solicitor field office. The office responsible for reviewing a
claim depends on the location where the incident occurred. Recently, two
solicitor offices have delegated authority to process certain claims of
$2,500 or less to the local Bureau regional office.
At Health and Human Services, claims are handled centrally at agency
headquarters. All claims must be filed with the Claims Branch in Rockville,
Maryland. The Claims Branch reviews all claims for completeness and requests
additional documentation as necessary. For nonmedical claims of $10,000 or
less, the Claims Branch can issue the initial administrative determination;
those claims over $10,000 are forwarded to the Office of General Counsel for
a determination. A more rigorous review process exists for medical claims.
Each medical claim must undergo three reviews: (1) a site review at the
facility where the incident occurred; (2) an independent medical review from
an off-site provider(s) in the pertinent field; and (3) a review by the
Public Health Service's Quality Review Panel. The recommendations of the
Quality Review Panel on the medical merits of the claim are then returned to
the Claims Branch. The Claims Branch can issue the initial administrative
determination for medical claims of $10,000 or less, while claims over this
amount are forwarded to the Office of General Counsel.
The claimant must go through the administrative claims process before filing
suit in federal court. Interior and Health and Human Services can approve
settlements of less than $25,000. The Department of Justice must approve
larger settlements. Settlements of $2,500 or less are paid directly from
agency funds, and larger settlements are paid from the Judgment Fund in the
U.S. Treasury.2 Ultimately, if the claimant is dissatisfied with the
administrative determination, the claimant may file suit in federal court.
The Department of Justice handles lawsuits arising from FTCA claims. FTCA
claims involving tribal contractors may be turned over, or "tendered," to
private insurers when tribes have private liability insurance policies that
provide coverage for the same incidents covered under FTCA.
Self-Determination Contracts
Data on FTCA claims involving tribal contractors are not readily available
because neither Interior nor Health and Human Services is required to track
these claims separately from FTCA claims involving federal employees.
However, in response to our request for claims data, these departments
identified 342 claims filed from fiscal years 1997 through 1999 for programs
contracted by tribes from the Bureau and the Health Service. These claims
involved tribally contracted programs for 76 contractors (60 of the 556
federally recognized tribes and 16 organizations). Total damages claimed
were $706 million (see table 1).
Dollars in
millions
Program Number of claims for Percentage of Amount Percentage of
agency tribally contracted total claims claimed total amount
programs
Bureau of
Indian 228 67 $219 31
Affairs
Indian Health
Service 114 33 487 69
Total 342 100 $706 100
About two-thirds of the claims involved Bureau programs, most notably law
enforcement. The claims for the Bureau programs involved 46 contractors, and
the median claim amount was about $71,000. The remaining one-third of the
claims involved Health Service programs, of which about one-half involved
patient care activities. The claims for the Health Service programs involved
40 contractors, 10 of which were also involved with claims at the Bureau,
and the median claim amount was $1 million. Although some of these claims
remain open, about 70 percent have been brought to closure, at a cost of
about $2 million out of the $333 million claimed in these cases. Of the
claims brought to closure, 127 resulted in settlement payments and 108 were
denied.
Programs of a Few Tribes
At the Bureau, law enforcement programs accounted for the largest category
of claims involving tribal contractors (77 percent) filed during this
period. Bureau and Solicitor officials attribute this statistic to the fact
that law enforcement is a high-risk program. Of the law enforcement claims,
the largest percentage (about 40 percent) involved vehicle accidents,
followed by negligence, excessive force, and false arrests. The next two
largest categories of claims arose from education and roads programs. See
figure 1 for a breakdown of tribal claims by the type of Bureau program
contracted.
The claims for Bureau programs involved 46 contractors (45 federally
recognized tribes and 1 organization). The largest tribe, and the largest
contractor of Bureau programs--the Navajo Nation--accounted for the largest
percentage (33 percent) of claims arising from tribally contracted Bureau
programs. The Oglala Sioux Tribe of the Pine Ridge Reservation accounted for
about 18 percent of the claims for Bureau-contracted programs and is the
fifth largest tribe, according to the Bureau's most recent labor force
report. Five tribes accounted for 64 percent of the claims for Bureau
programs, while an additional 41 tribes accounted for the remainder. See
figure 2 for the five tribes with the most claims for Bureau-contracted
programs.
At the Bureau, tribal claims ranged from a low of $39 to a high of $50
million, with a median claim amount of about $71,000. Both the low and high
claims involved torts that occurred while a claimant was in custody at a
tribally contracted law enforcement facility. The $39 claim stemmed from the
loss of personal cash while the claimant was in police custody. A partial
award of $23 was paid on this claim, which reflected the official record of
property that was placed in custody. The $50 million claim involved the
wrongful death of an individual while in tribal police custody. This claim
was denied at the administrative level because the Office of the Solicitor
did not have a complete administrative record on which to base a decision.
The tribe refused to provide the necessary information for the
administrative decision. After being denied at the administrative level, the
claimant filed suit in federal court. No court decision has been rendered.
Care and Vehicle Accidents at a Few Tribes
Health and Human Service's Claims Branch tracks claims by the type of claim
and not by program. At the Health Service, patient care claims accounted for
nearly 45 percent of all claims involving tribal contractors (51 out of 114
claims) filed during this period. Claims involving vehicle accidents
constituted about 35 percent of the total, and personal injuries, about 17
percent (see fig. 3).
The claims for Health Service programs involved 40 contractors (25 federally
recognized tribes and 15 organizations), 10 of which also were involved in
claims for Bureau programs. The 114 Health Service claims were more evenly
distributed among the contractors than the Bureau claims. The Health Service
contractor with the most claims--the Navajo Nation--had 14 claims, about 12
percent of the total. However, the Health Service claims data are more
meaningful when grouped together by Health Service area office. Claims
involving tribally contracted programs originating within the jurisdiction
of the Health Services' Alaska Area Office accounted for about 33 percent of
the claims, while claims within the Phoenix Area Office accounted for over
16 percent (see fig. 4).
At the Health Service, claims from contracted programs ranged from a low of
$75 to a high of $100 million, with a median claim amount of $1 million. The
$75 claim involved damages to a car that was parked adjacent to a tribally
contracted facility. A tribal contract employee was treating a wooden fence
with water sealant when some of the overspray damaged the finish on the
claimant's car. The $75 claim to remove the spray and to wax the car was
paid in full. The $100 million claim involved an alleged misdiagnosis that
resulted in delayed treatment for breast cancer. This claim was denied
because the evidence failed to establish that the claimant's condition was
due to an act or omission of the tribal physician.
By the time of our review, the departments of the Interior and of Health and
Human Services had denied 172 of the 342 claims and had awarded damages on
103; 67 claims were still pending.3 Lawsuits were filed for 84 of the claims
that had been denied or were still pending. Of these lawsuits, 13 had been
dismissed, 24 resulted in damage awards, and 47 are still pending. Although
some of the claims and lawsuits remain open, about 70 percent of claims have
been brought to closure at a cost of about $2 million--$1.7 million paid by
the federal government and $327,500 paid by private insurers. According to
agency officials, the small, simple claims for minor incidents, such as a
"fender bender," are generally resolved quickly, while the large, complex
claims may take longer to resolve. Although only $2 million has been paid to
date to resolve tribal claims filed from fiscal years 1997 through 1999,
this figure will likely increase as the remaining claims are resolved. In
aggregate, the percentage of tribal claims approved and the amount awarded
are comparable with the resolution of other FTCA claims at Health and Human
Services.4
At both agencies combined, only about 10 percent of all federally recognized
tribes (60 out of 556) were involved in FTCA claims from fiscal years 1997
through 1999. A number of reasons were provided to explain why so few tribes
had claims involving their self-determination programs. According to agency
officials, even though FTCA coverage was extended about 10 years ago, it is
still not well-known or understood by attorneys, tribes, or potential
claimants. Also, to the extent that tribes continue to carry duplicative
private liability insurance, claimants may be referred to private insurers
rather than to the federal government for compensation.
Contracts Presents Some Unique Issues
Our review identified a number of issues unique to FTCA coverage for tribal
contractors. The U.S. government may be paying more than necessary to
resolve claims involving tribal contractors because, during the
administrative review of these claims, neither Interior nor Health and Human
Services routinely checks to determine whether tribal contractors have
duplicative private liability insurance that could cover these claims.
Although this check is required by the Department of Justice for claims that
go to litigation, and in fact has been done for some claims at the
administrative level, most claims have been resolved without a check for
duplicative insurance. The potential for duplicative liability coverage
exists for tribal contractors because of tribes' long-standing practice of
carrying private insurance to cover a wide range of activities, including
those subsequently covered under FTCA.
Several unique legal issues have also emerged from recent litigation that
illustrate areas for which FTCA coverage is not a perfect fit for tribal
contractors. For example, under FTCA, federal courts have exclusive
jurisdiction to resolve claims brought under the act, and the act provides
for the removal of such claims from state courts. However, there is no
similar removal authority for such claims filed in tribal courts. In
addition, other legal issues have arisen about whether state law or tribal
law should be used to adjudicate claims, whether tribal law enforcement
officers should be considered federal law enforcement officers, and whether
FTCA coverage has been extended to senior tribal officials, such as tribal
council members.
Necessary to Resolve Claims Involving Tribal Contractors
The U.S. government may be paying more than necessary to resolve claims
involving tribal contractors because, during the administrative review of
these claims, neither Interior nor Health and Human Services routinely
checks to determine whether tribal contractors have duplicative private
liability insurance that could cover these claims. In 1975, when tribes
began contracting to operate federal programs, they also assumed liability
for those programs. Accordingly, many tribes acquired private insurance as
one means to protect themselves against tort claims. The extension of FTCA
coverage to tribal contractors in 1990, however, did not prohibit tribes
from continuing to acquire private insurance and thus created the potential
for duplicative liability coverage. Subsequent amendments to the
Self-Determination Act in 1994 reiterated tribes' right to obtain private
insurance, thereby perpetuating the risk of duplication. Although
comprehensive liability insurance is no longer needed for tribal
self-determination programs, tribes still need some private insurance as
protection against claims not covered under FTCA.5
Unless tribes have taken steps to modify their insurance policies to
specifically exclude acts covered under FTCA, they most likely have
liability coverage that duplicates their FTCA coverage. An analysis of 20
private insurance policies, published in February 1998 by the George
Washington University, found that none of these policies specifically
excluded activities covered under FTCA.6 To the extent that tribes use
federal funds to purchase private liability insurance, it is possible that
the federal government is paying twice--for tribes' insurance premiums and
to settle tribal FTCA claims.
For claims that go to litigation, Justice's practice is to ascertain whether
the affected tribe has private insurance covering the claim. If so, Justice
will look to private insurers to resolve these claims when it is in the best
interests of the United States. For claims at the administrative level,
neither Interior nor Health and Human Services has policies or procedures in
place that require personnel handling FTCA claims to routinely check for
duplicative insurance. Although staff at Interior's headquarters told us
that they follow Justice's practice of checking for duplicative insurance,
we found that only two solicitor offices routinely do so.7 At these two
locations, administrative and/or legal responsibilities for several claims
were turned over to private insurers. Three of these claims have been
resolved and resulted in payments from private insurance companies totaling
about $327,500, or about 30 percent of payments made by these two offices
(3.5 percent at one office and 100 percent at the other). This amount also
represents about 16 percent of all payments made to date for claims
involving tribal contractors from fiscal years 1997 through 1999. At Health
and Human Services, the Claims Branch and the Office of General Counsel also
do not routinely check for duplicative insurance. Some of the reasons given
by Interior and Health and Human Services officials for not doing
cross-checks include the absence of departmental policy, belief that this
responsibility belongs to Justice, and the lack of statutory authority to
pursue private insurers.
Tribes
Four unique legal issues have emerged from recent litigation of tribal FTCA
claims. These issues illustrate areas for which FTCA coverage is not a
perfect fit for tribal contractors. Two of these issues are currently being
litigated in federal courts around the country. The four legal issues are
discussed briefly below.
� FTCA does not provide statutory authority for removing FTCA cases filed in
tribal courts. Under the act, federal courts have exclusive jurisdiction to
hear cases arising from FTCA claims, and the act provides statutory
authority for removing such cases filed in state courts, yet no similar
removal authority exists for such cases filed in tribal courts. Cases filed
in tribal court can be problematic because FTCA does not provide the
necessary authority to remove such cases from tribal court to federal court,
where they belong.
� Legal questions have been raised about whether tribal FTCA claims should
be adjudicated on the basis of tribal law or state law. Under FTCA, the
federal government is liable for the negligent acts of its employees to the
extent that a private person would be liable "in accordance with the law of
the place where the act or omission occurred."8 Recent court decisions have
differed on whether the law of the place should be tribal law for those
incidents occurring on Indian land or state law, as the phrase has
historically been interpreted.
� Legal arguments have been made recently that tribal law enforcement
officers enforcing tribal laws should not be considered federal law
enforcement officers. Under FTCA, claims for intentional torts, such as
assault, battery, false imprisonment, false arrest, abuse of process, or
malicious prosecution, are barred except for claims against "investigative
or law enforcement officers of the United States Government." If tribal law
enforcement officers are not considered federal law enforcement officers,
then claims for intentional torts involving those officers would be barred
under FTCA.
� A recent decision by the Department of Justice not to provide FTCA
coverage for tribal council members involved in litigation arising from the
tribe's law enforcement contract with the Bureau has raised legal questions
about the coverage for indirect tribal employees.
For more details on these four unique legal issues affecting FTCA coverage
for tribal contractors, see appendix III.
Given tribes' historical liability for self-determination programs prior to
1990, their current liability for their non-self-determination programs, and
the complexity and uncertainty of FTCA coverage, it is understandable why
some tribes may choose to have comprehensive private liability insurance
that covers all their programs. The Self-Determination Act allows tribes to
use federal funds to purchase insurance. Even though tribes are allowed to
purchase private insurance that may duplicate their FTCA coverage, neither
the Department of the Interior nor the Department of Health and Human
Services routinely checks to see if this has happened before paying claims
involving tribal contractors. Ideally, the possibility of duplicative
insurance will decrease in the future as tribes become more familiar with
how FTCA coverage works and take steps to amend their private insurance
policies accordingly. However, as long as federal funds continue to be used
by tribes to purchase duplicative insurance, the government should receive
the benefits of those policies.
To ensure that the federal government is not paying more than is necessary
to resolve FTCA claims involving tribal contractors, we recommend that the
Secretaries of the Interior and of Health and Human Services direct their
claims processing personnel to determine if duplicative private liability
insurance exists and tender the claims to the private insurers when it is in
the best interests of the United States to do so.
We provided a draft of this report to the departments of the Interior,
Health and Human Services, and Justice for their review and comment. The
Department of the Interior agreed with our report that the U.S. government
could potentially pay both for the claims and the liability insurance to
cover them. The Department also stated that the report should identify two
anomalies created by the fact that the federal government, not the tribes,
is ultimately liable for these claims. First, the incentives to reduce the
number of claims are not present for tribal contractors, and second, from
time to time, a tribe, or its employees, has not cooperated in resolving a
claim. With respect to the first concern, our analysis of the claims arising
from Bureau-contracted programs showed that over 75 percent of the tribal
contractors had three claims or fewer over the 3-year period from fiscal
year 1997 through 1999. Only five tribal contractors had more than eight
claims over this period (see fig. 2). Some risk management programs could be
targeted to a handful of tribes, but the majority of tribal contractors had
only been involved with one or two claims. With respect to the second
concern, Solicitor and Bureau officials provided us with isolated examples
during our review of situations in which tribal contractors had not
cooperated with the Department in resolving a claim. However, since the
Department does not track these claims, or compile any agencywide
information on problems in resolving these claims, we were unable to
determine the extent of this problem. We agree with the Department that more
analysis of these problems and possible solutions to address them are
necessary. The Department of the Interior also provided technical comments,
which we incorporated as appropriate. The Department's comments are in
appendix IV.
The Department of Health and Human Services agreed with the facts presented
in the report and with its recommendation. The Department also provided more
specific details on the Indian Health Service's involvement in the FTCA
claims process. The Department's comments are in appendix V.
The Department of Justice provided technical clarifications, which we
incorporated as appropriate.
To assess how the departments of the Interior and of Health and Human
Services have implemented FTCA coverage for tribal contractors, we
interviewed officials from Interior, Health and Human Services, and Justice
and reviewed pertinent legislation, regulations, and departmental guidance
to identify procedures for handling FTCA claims involving tribal
contractors.
For this review, we sought to determine the FTCA tribal claims history for
the Bureau of Indian Affairs and the Indian Health Service for fiscal years
1997 through 1999. Since neither Interior nor Health and Human Services
uniformly tracks FTCA claims involving tribal contractors separately from
FTCA claims involving federal employees, our ability to develop a tribal
claims history required the cooperation of individual agencies and offices
to identify tribal claims processed at those locations. We established
parameters for our claims history and planned our fieldwork on the basis of
preliminary estimates of claims volume and information about the claims
process provided by these agencies and offices.
For the Bureau, we obtained tribal claims data from each of the nine
Interior solicitor offices that handle Bureau claims. These offices operate
autonomously, and the claims data they track and the claims files they
maintain can vary by office. Although we relied on these offices to identify
all tribal claims received between fiscal years 1997 and 1999, we visited
five of these offices to assist with their data collection efforts and to
verify the data. The offices selected for site visits were those whose
estimated claim volumes were the highest.
Two solicitor offices began in 1996 to track tribal and nontribal claims
separately. Since these two offices handle high claim volumes, we focused
our data collection efforts on fiscal years 1997 through 1999. Tribal claim
histories for the other seven offices, whose claim volumes are substantially
lower, were determined by reviewing individual FTCA claims files to
determine whether the claims arose from tribally contracted or federally run
programs.
For the Health Service, we obtained claims data from Health and Human
Service's Claims Branch, headquartered in Rockville, Maryland, and its
Office of General Counsel, headquartered in Washington, D.C. The Claims
Branch and the Office of General Counsel maintain separate systems for
tracking tort claims. Although neither office formally tracks claims
involving tribal contractors, they use informal methods to identify such
claims. We used this information to compile a list of claims involving
tribal contractors received from fiscal years 1997 through 1999. Because of
the lack of available files for the older resolved claims, we did not review
the entire universe of 565 Health Service claims for fiscal years 1997
through 1999 to determine whether all the claims involving tribal
contractors had been identified.
To identify FTCA issues unique to tribal FTCA claims, we interviewed
personnel involved in processing administrative claims and attorneys
involved in defending lawsuits arising from such claims. We asked claims
personnel from the departments of the Interior and of Health and Human
Services whether they routinely check for duplicative private insurance when
processing claims involving tribal contractors. Given the unique legal
issues identified by agency officials, we also reviewed relevant FTCA claims
files, related litigation files, and court decisions.
We conducted our review from October 1999 through June 2000 in accordance
with generally accepted government auditing standards.
We are providing copies of this report to interested congressional
committees, the Honorable Bruce Babbitt, Secretary of the Interior; the
Honorable Donna E. Shalala, Secretary of Health and Human Services; the
Honorable Janet Reno, Attorney General of the United States; and other
interested parties. We will also make copies available to others on request.
If you or your staff have any questions about this report, please call me at
(202) 512-3841. Key contributors to this report were Linda Chu, Chet Janik,
and Jeff Malcolm.
Sincerely yours,
Jim Wells
Director, Energy, Resources,
and Science Issues
Three Provisions Extended FTCA Coverage to Tribal Contractors
Since the late 1980s, three separate provisions have been enacted that
extend FTCA coverage to tribal contractors. See figure 5 for a chronology of
the enactment of the three provisions and subsequent amendments.
Tribal Contractors.
The following text presents the current language of the three provisions.
The FTCA Claims Process
Source: The George Washington University Medical Center, Center for Health
Services Research and Policy.
Legal Issues That Have Arisen With the Extension of FTCA Coverage to Tribal
Contractors
Originally enacted in 1946, the Federal Tort Claims Act (FTCA) was not
designed with the coverage of tribal contractors in mind. The act was
designed to provide coverage for federal employees. The act itself and the
provisions that extended the coverage to tribal contractors do not address a
number of important legal issues specific to tribal contractors. For
example, under FTCA, federal courts have exclusive jurisdiction to resolve
claims brought under the act, and the act provides for removing such claims
from state courts. However, there is no similar removal authority for such
claims filed in tribal courts. In addition, other legal issues have arisen
about whether state law or tribal law should be used as the "law of the
place" to adjudicate claims, whether tribal law enforcement officers should
be considered federal law enforcement officers, and whether FTCA coverage
has been extended to senior tribal officials, such as tribal council
members.
These four legal issues are areas for which FTCA coverage is not a perfect
fit for tribal contractors (see fig. 6).
Two of the four issues--the state law versus tribal law and the
classification of tribal law enforcement officers issues--are currently
being litigated in federal courts around the country. The four legal issues
are discussed in detail below.
FTCA is the exclusive remedy for the public to pursue claims against the
federal government for the negligent acts of its employees, and federal
courts are the only courts with jurisdiction to hear cases on FTCA claims.
Since federal courts have exclusive jurisdiction to hear FTCA claims
involving federal employees, the act provides statutory authority for
removing any such claims filed in state courts. However, no similar
statutory authority exists for FTCA cases filed in tribal courts. Federal
employees and tribal contract employees have had FTCA cases brought against
them in tribal courts. Cases filed in tribal court can be problematic
because FTCA does not provide the necessary authority to remove such cases
from tribal court to federal court, where they belong.
Officials from Interior's Office of the Solicitor and the Department of
Justice stated that having statutory removal authority would make it easier
to deal with these cases when they are filed in tribal courts. Currently,
the federal government has three ways to try to deal with such cases if it
chooses to do so. The first two options are available if the government
learns of the case before a verdict has been entered. First, a letter can be
written to the tribal court asking it to voluntarily dismiss the case.
However, tribal courts are under no obligation to do so. Second, the
government can file a motion in federal court seeking an injunction against
the tribal court ordering it to stop hearing the case. Third, if the
government chooses not to pursue the first two options, or it is
unsuccessful, it may file a motion in federal court seeking to have the
tribal court verdict set aside on the grounds that the tribal court lacked
jurisdiction to hear the case.
Under FTCA, the federal government is liable for the negligent acts of its
employees to the extent that a private person would be liable "in accordance
with the law of the place where the act or omission occurred."9
Historically, the law of the place has been interpreted to mean the law of
the state where the incident occurred. Legal questions are now being raised
about whether the "law of the place" should be tribal law for incidents that
occur on Indian land.
In June 1999, a judge for the federal district court in New Mexico ruled
that the law of the Pueblo of Acoma should be the controlling "law of the
place" and not New Mexico state law. This case involved a medical
malpractice claim involving an Indian Health Service hospital located within
the bounds of Acoma tribal land. At issue was the medical malpractice cap of
$600,000 under New Mexico state law. In ruling that the law of the Pueblo of
Acoma should be the controlling "law of the place," the judge ruled that the
plaintiff was not bound by New Mexico's medical malpractice cap of $600,000.
The courts have been split on their interpretations of the law of the place.
Other federal judges in New Mexico and Arizona have ruled that "law of the
place" should continue to be interpreted to mean state law. The Department
of Justice's position is that the law of the place should be state law.
Agency officials are concerned that any movement towards using tribal law as
the controlling law of the place could seriously complicate the resolution
of these claims.
Claims for intentional torts, such as assault, battery, false imprisonment,
false arrest, abuse of process, or malicious prosecution, are barred under
FTCA, except for claims against "investigative or law enforcement officers
of the United States Government." An investigative or law enforcement
officer is defined in the statute as "any officer of the United States who
is empowered by law to execute searches, to seize evidence, or to make
arrests for violations of Federal law."10 Legal arguments have been made
recently that tribal law enforcement officers enforcing tribal laws should
not be considered federal law enforcement officers. If tribal law
enforcement officers are not considered federal law enforcement officers,
then claims for intentional torts involving those officers would be barred
under FTCA.
In September 1998, a federal district judge for the Western District of
Washington ruled that tribal police officers for the Suquamish Indian Tribe
were not federal law enforcement officers and dismissed all of the
intentional tort claims against the United States arising from the actions
of those tribal police officers. A similar case is currently being litigated
in Montana, and the Department of Justice is again arguing that the case
should be dismissed because the tribal police officers are not federal law
enforcement officers.
For fiscal years 1997 through 1999, over three-quarters of the FTCA claims
for Bureau programs contracted by tribes were from the law enforcement
program. At least 34 of those claims involved intentional torts. The
remaining were primarily for vehicle accidents. If this interpretation that
tribal police officers are not federal law enforcement officers becomes
widely accepted, then a large number of claims against tribal police
officers would be barred.
The 1990 provision that permanently extended FTCA coverage to tribal
contractors does not specifically mention the types of tribal employees
covered by FTCA. For a tribal employee to be covered under FTCA, the federal
government must make a determination that the employee was performing a
function within the scope of his or her employment under a
self-determination contract. Federal funding provided to tribes, and the
tribal employees paid with those funds, can be divided into two
categories--direct and indirect. Direct employees are those who directly
perform a function under a contract, while indirect employees perform
support functions, such as accounting and finance, for multiple programs.
Each direct program pays for its share of administrative costs through an
indirect cost rate. Questions have been raised about FTCA coverage for these
indirect employees, specifically for tribal council members to the extent
that they are sued for entering into a self-determination contract.
In 1999, the Department of Justice declined to provide FTCA coverage for
seven current and former tribal council members of the Omaha Tribe of
Nebraska who were named in two lawsuits for their approval of the tribe's
law enforcement contract. The two lawsuits were filed in state court and
named 17 different individuals. (One suit named 16, the other 14; they had
13 individuals in common.) Under FTCA, Justice represented 7 of the 16
defendants in the first case, and 5 of the 14 in the second case. In both
cases, Justice represented only the Bureau employees and the tribal law
enforcement employees. Justice declined to provide coverage for the seven
current and former tribal council members and three other indirect tribal
employees because they were not "carrying out" a self-determination
contract.
Under the provision that extended general coverage, FTCA coverage has been
extended to Indian tribes, tribal organizations, or Indian contractors while
they are "carrying out" a self-determination contract. The Department of
Justice has interpreted this language as making a distinction between
carrying out a contract and entering into a contract. According to Justice,
providing coverage for a tribal employee sued for carrying out a
self-determination contract is consistent with the law, while it is not
appropriate to provide coverage for tribal council members being sued for
deciding on behalf of a tribe to enter into a contract with the federal
government (including negotiating the terms of a contract).
In at least one other case, a decision was made to authorize representation
of tribal council members. In November 1997, Justice decided to represent
three current and former tribal council members for the Suquamish Tribe who
were named in litigation involving the tribe's law enforcement and tribal
justice contracts. Since representation decisions are made by the Department
of Justice on a case-by-case basis, tribes do not always know which tribal
employees are covered and when and it makes it difficult for them to fully
utilize their FTCA coverage.
Comments From the Department of the Interior
Comments From the Department of Health and Human Services
(141358)
Table 1: Claims Arising From Tribally Contracted Programs
From the Bureau of Indian Affairs and the Indian Health
Service, Fiscal Years 1997-99 9
Figure 1: Claims Arising from Tribally Contracted Programs
From the Bureau of Indian Affairs, by Program Type,
Fiscal Years 1997-99 10
Figure 2: The Five Tribes With the Most Claims for
Bureau-Contracted Programs, Fiscal Years 1997-99 11
Figure 3: Claims Arising from Tribally Contracted Programs
From the Indian Health Service, by Type of Claim,
Fiscal Years 1997-99 12
Figure 4: The Five Indian Health Service Area Offices With the
Most Claims Involving Tribally Contracted Programs,
Fiscal Years 1997-99 13
Figure 5: Chronology of the Three Provisions That Extended FTCA Coverage to
Tribal Contractors. 25
Figure 6: FTCA Coverage Is Not a Perfect Fit for Tribal Contractors 31
1. Throughout this report, the term "tribes" will refer both to tribes and
tribal organizations eligible to contract programs under the Indian
Self-Determination and Education Assistance Act. Also, the term "contracts"
will refer to contracts, grants, self-governance agreements, cooperative
agreements, or annual funding agreements entered into pursuant to the Indian
Self-Determination and Education Assistance Act, as amended.
2. The Judgment Fund is a permanent indefinite appropriation available to
pay certain settlements and judgments against the federal government.
3. The status of the claims filed changes frequently as new administrative
determinations are made, lawsuits are filed, or settlement agreements are
reached. The data presented in this report were collected at various offices
between November 1999 and May 2000.
4. A similar comparison was not possible for Interior because of the lack of
agencywide data on the disposition of tort claims.
5. Examples of claims not covered under FTCA include those arising from
activities outside of a tribal contractor's scope of employment,
non-self-determination activities, violation of constitutional rights,
subcontractor activities, breach of contract, and workers' compensation. In
1998, the Congress directed the Secretary of the Interior to conduct a study
of tribes' insurance (P.L. 105-277, title VII, Oct. 21, 1998). At the time
of our review, the Secretary had not released the results of that study.
6. Assessment of Access to Private Liability Insurance for Tribes and Tribal
Organizations With Self-Determination Contracts/Compacts, The George
Washington University Medical Center, Center for Health Policy Research
(Feb. 1998).
7. For the remaining seven solicitor offices, four had made payments on
claims involving tribal contractors without routinely checking for
duplicative private insurance. However, one of these four offices handles
claims primarily from the Navajo Nation, which is self-insured. The other
three solicitor offices, which received a total of eight claims involving
tribal contractors during fiscal years 1997 through 1999, had not made any
payments on those claims at the time of our review.
8. 28 U.S.C. 1346(b) and 2672.
9. 28 U.S.C. 1346(b) and 2672.
10. 28 U.S.C. 2680(h)
*** End of document. ***