Federal Tort Claims Act: Claims History and Issues Affecting Coverage for
Tribal Self-Determination Contracts (Testimony, 07/12/2000,
GAO/T-RCED-00-234).
Pursuant to a congressional request, GAO discussed: (1) the Federal Tort
Claims Act (FTCA) claims history for tribal self-determination contracts
for fiscal years 1997 through 1999; and (2) FTCA coverage issues that
are unique to tribal contractors.
GAO noted that: (1) data on FTCA claims involving tribal contractors are
not readily available because neither the Department of the Interior nor
the Department of Health and Human Services (HHS) is required to track
these claims separately from FTCA claims involving federal employees;
(2) however, in response to GAO's request for claims data, these
departments identified 342 claims, filed from fiscal years 1997 through
1999, that arose from programs contracted from Interior's Bureau of
Indian Affairs and HHS' Indian Health Service; (3) total damages claimed
were about $700 million; (4) about two-thirds of these claims involved
Bureau programs, most notably law enforcement; (5) the remaining
one-third involved Health Service programs, of which about one-half
involved patient care; (6) these claims involved a small number of
tribes, (7) although some of these claims remain open, about 70 percent
have been brought to closure at a cost of more than $2 million paid; (8)
of the claims brought to closure, 127 resulted in settlement payments
and 108 were denied; (9) GAO's review identified a number of issues
unique to FTCA coverage for tribal contractors: (a) on the
administrative side, the federal government may be paying more than
necessary to resolve claims involving tribal contractors; (b) to the
extent that tribes use federal funds to purchase private liability
insurance that duplicates their FTCA coverage, it is possible that the
federal government is paying twice--once for tribes' insurance premiums
and once to settle tribes' FTCA claims; (c) 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 now covered under FTCA; and
(d) neither Interior nor HHS routinely checks to determine whether
tribal contractors have private liability insurance that could cover
these claims; (10) on the legal side, several issues have emerged from
recent lawsuits that illustrate area for which FTCA coverage is not a
perfect fit for tribal contractors; (11) Under FTCA, federal courts have
exclusive jurisdiction to resolve claims, and the act provides for the
removal of such claims from state courts; (12) however, there is no
similar removal authority for such claims filed in tribal courts; and
(13) therefore, 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 jurisdiction resides.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-RCED-00-234
TITLE: Federal Tort Claims Act: Claims History and Issues
Affecting Coverage for Tribal Self-Determination Contracts
DATE: 07/12/2000
SUBJECT: Minority contractors
Native Americans
Claims settlement
Litigation
Torts
Government liability (legal)
Liability insurance
Federal aid programs
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GAO/T-RCED-00-234
FEDERAL TORT CLAIMS ACT
Claims History and Issues Affecting Coverage for Tribal Self- Determination
Contracts Statement of Barry T. Hill, Associate Director, Energy, Resources,
and Science Issues, Resources, Community, and Economic Development Division
United States General Accounting Office
GAO Testimony Before the Committee on Indian Affairs,
U. S. Senate
For Release on Delivery 2: 30 p. m. EDT Wednesday July 12, 2000
GAO/ T- RCED- 00- 234
1 Mr. Chairman and Members of the Committee:
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.
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 To gain a better understanding of how this coverage works, you asked us to
review and
report on various aspects of it. We provided this Committee with our report
on July 5, 2000. 2 Our testimony today will focus on the FTCA claims history
for tribal selfdetermination contracts and FTCA coverage issues that are
unique to tribal contractors.
In summary:
� 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 Interior's Bureau of Indian Affairs and Health
and Human Services' Indian Health Service. Total damages claimed were about
$700 million. About two- thirds of these claims involved Bureau programs,
most notably law enforcement. The remaining one- third involved Health
Service programs, of which about one- half involved patient care. At both
agencies, these claims involved a small number of tribes. Although some of
these claims remain open, about 70 percent (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 federal 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 that
duplicates their FTCA coverage, it is possible that the federal government
is paying twice- once
2 Federal Tort Claims Act: Issues Affecting Coverage for Tribal Self-
Determination Contracts( GAO/ RCED00- 169, July 5, 2000).
3 for tribes' insurance premiums and once to settle tribes' 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 now 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 having the government pay more than
necessary to resolve these claims, our July 2000 report recommended that the
departments routinely check for duplicative liability insurance. The
Department of Health and Human Services agreed with our recommendation and
the Department of the Interior acknowledged that such duplication might
occur.
� 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, 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. Therefore,
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 jurisdiction resides.
Background
The Federal Tort Claims Act was enacted in 1946 and provides a limited
waiver of the federal 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 Department of Justice handles
lawsuits arising from FTCA claims.
4 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 private liability insurance, which reduced the
funds available to provide direct program services. Thus, the Congress
amended the 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
selfdetermination 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 federal government for
injuries or losses resulting from the negligent actions of tribal employees.
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 exceeding $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.
5 The Bureau and Health Service programs administered by a tribe under the
SelfDetermination
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.
Several Hundred Claims Have Been Filed Involving Tribal 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. Total damages
claimed were $706 million (see table 1).
Table 1: Claims Arising From Tribally Contracted Programs From the Bureau of
Indian Affairs and the Indian Health Service, Fiscal Years 1997- 99
Dollars in millions
Program agency Number of claims for
tribally contracted programs
Percentage of total
claims Amount claimed Percentage
of total amount
Bureau of Indian Affairs 228 67 $219 31 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 (see fig. 1).
6
Figure 1: Claims Arising from Tribally Contracted Programs From the Bureau
of Indian Affairs, by Program Type, Fiscal Years 1997- 99
‚
2%
Social services
6%
Roads 6%
Education 9%
Other/ unidentified
77% Law enforcement
The remaining one- third of the claims involved Health Service programs, of
which 45 percent involved patient care (see fig. 2).
Figure 2: Claims Arising from Tribally Contracted Programs From the Indian
Health Service, by Type of Claim, Fiscal Years 1997- 99
3%
Property damage/ loss
17%
Personal injury
35% Vehicle accident
45%
Patient care
7 Although two- thirds of the claims involved Bureau programs, they
accounted for only
about one- third of the total dollar amount claimed. The 228 claims
involving Bureau programs ranged from a low of $39 to a high of $50 million,
with a median claim amount of about $71,000. The 114 claims involving Health
Service programs ranged from a low of $75 to a high of $100 million, with a
median claim amount of $1 million.
The claims involved tribally contracted programs for 76 contractors (60 of
the 556 federally recognized tribes and 16 organizations). The claims for
the Bureau programs involved 46 contractors (45 tribes and 1 organization).
The claims for the Health Service programs involved 40 contractors (25
tribes and 15 organizations), 10 of which also were involved in claims for
Bureau programs. The Navajo Nation, the largest tribe, was the tribal
contractor involved in the largest number of claims at 89- 26 percent of the
total number of claims. About two- thirds of the contractors were involved
in only one or two claims. Seven contractors, each with 10 or more claims,
accounted for over half the total number of claims (see fig. 3).
Figure 3: The Seven Contractors Involved in the Most Claims, Fiscal Years
1997- 99
Number of claims
Navajo Nation
Oglala Sioux Gila River Rosebud Sioux
Salt River Yukon- Kuskokwim Health Corp. Cheyenne
River Sioux
Claims involving Indian Health Service programs Claims involving Bureau of
Indian Affairs programs
0 10
20 30
40 50
60 70
80 90
8 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 private liability insurance that
duplicates their FTCA coverage, claimants may be referred to private
insurers rather than to the federal government for compensation.
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- out of the $333 million claimed in these cases. Of the claims
brought to closure, either administratively or through litigation, 127
resulted in settlement payments and 108 were denied. 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
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 tort claims disposition.
9
FTCA Coverage for Tribal Self- Determination Contracts Presents Some Unique
Issues
Our review identified a number of issues unique to FTCA coverage for tribal
contractors. The federal 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
private liability insurance that could cover these claims. Although this
check is required by the Department of Justice for claims that are
litigated, and in fact has been done for some claims at the administrative
level, most claims have been resolved without a check for duplicative
insurance. To protect against having the government pay more than necessary
to resolve these claims, our July 2000 report recommended that the
departments routinely check for duplicative liability insurance.
Several unique legal issues have also emerged from recent litigation. These
issues 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.
The Federal Government May Be Paying More Than Necessary to Resolve Claims
Involving Tribal Contractors
The federal 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 private liability
insurance that could cover these claims. In 1975, when
10 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 that duplicates their
FTCA coverage, it is possible that the federal government is paying twice-
once for tribes' insurance premiums and once 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 to do so. 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
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, violations of constitutional rights, subcontractor
activities, breaches 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).
11 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 the 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. Similarly,
at Health and Human Services, the Claims Branch and the Office of General
Counsel do not routinely check for duplicative insurance.
The departments of the Interior and of Health and Human Services agreed that
duplication might occur. We believe that as long as federal funds continue
to be used by tribes to purchase private liability insurance that duplicates
their FTCA coverage, the government should receive the benefits of those
policies. As a result, we recommended 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 interest of the United
States to do so.
Unique Legal Issues Have Arisen Since FTCA Coverage Was Extended to 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.
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.
12
� FTCA does not provide statutory authority for the removal of 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 the removal of 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.
8 28 U. S. C. 1346( b) and 2672.
13
� 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. 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. This
makes it difficult for them to fully utilize their FTCA coverage.
--- Mr. Chairman, this concludes my statement. We would be pleased to
respond to any questions that you or other Members of the Committee may have
at this time.
Contacts and Acknowledgments
For information about this testimony, please contact Chet Janik or Jeff
Malcolm at (202) 512- 3841.
(141465)
*** End of document. ***