Sierra v. Goldbelt, Inc.

I. INTRODUCTION

Did the Alaska Native Claims Settlement Act (ANCSA)[1] permit Goldbelt, Inc., a Native corporation, to issue shares to particular groups of Native elders without consideration? And if it did, did Goldbelt satisfy its disclosure duty in the proxy statement that solicited votes for the elder benefit program? As to the first issue, this court unanimously holds that ANCSA authorizes issuance of such shares. As to the second issue, the four participating members of the court are equally divided, and the court therefore affirms the superior court’s judgment granting complete summary judgment to Goldbelt.

II. FACTS AND PROCEEDINGS

Goldbelt, Inc. was incorporated in 1974 as an ANCSA-authorized urban corporation with a single class of authorized capital stock. In 1987 Congress amended ANCSA to allow regional corporations to amend their articles of incorporation to authorize the issuance and redemption of new and different classes of stock that could be restricted to “Natives who have attained the age of sixty-five” and “other identifiable groups of Natives … defined in terms of general applicability and not in any way by reference to place of residence or family.”[2] These provisions also applied to village and urban corporations.[3] Any proposed amendment to the articles of incorporation approved by the corporation’s board of directors must be approved by the shareholders.[4]

In a 1994 advisory vote, a majority of Goldbelt shareholders who voted indicated that they favored an elder benefit program that would provide not less than $1,000 per elder. In 1995 a proposed amendment to the articles of incorporation that would have authorized a new class of stock for elders was not approved by a majority of the shareholders. Contemporaneously proposed amendments that would have authorized issuing stock to new Natives and to Natives who were left out of the original settlement also failed.

In 1996 Goldbelt again sought to amend its articles of incorporation to authorize issuing preferred stock to elders who owned original Goldbelt stock. This time the corporation focused solely on the elders’ benefit and did not pursue benefits for new Natives or for those who had been left out.[5] The board passed a resolution that approved an amendment to authorize issuance of 100 shares of elder stock to each Native who “has attained the age [of] 65 or more and who holds Settlement Common Stock that was not acquired through gift, inheritance or purchase or who transferred such Settlement Common Stock by inter vivos gift.”

The resolution provided, in part:

WHEREAS, the amendments to the Alaska Native Claims Settlement Act permit the corporation to amend its articles of incorporation in order to provide benefits to elders in the form of additional stock other than Settlement Common Stock; and

WHEREAS, the Board of Directors does not wish to create a Settlement Trust, but instead wishes to establish the authority to issue additional preferred stock to elders in accordance with the terms of the 1991 Amendments to the Alaska Native Claims Settlement Act; and

WHEREAS, the preferred stock shall be issued to elders and redeemed on such terms as are authorized by 43 U.S.C. § 1606(g)(2) and at such times and on such terms as the Corporation determines to be consistent with sound fiscal management; and

WHEREAS, the preferred stock shall be redeemable and the Board of Directors anticipates that the redemption price will be $10.00 per share so that each elder to whom 100 shares are issued would be entitled to a payment of $1,000.00,

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors approves the following amendment to the articles of incorporation of the corporation and directs that the amendment be submitted to a vote of the shareholders at the next annual meeting, with a recommendation that the shareholders approve the amendment:

AMENDMENT TO ARTICLE IV of the Restated Articles of Incorporation of Goldbelt, Incorporated.

ARTICLE IV is hereby amended to read as follows: ….

C. The Corporation shall be authorized to issue 400,000 shares of Elders Stock. The shares of Elders Stock shall be non-voting stock without par value, shall be deemed fully paid and non-assessable upon issuance, and the Corporation expressly waives any requirement of consideration for the shares. Elders Stock shall be issued pursuant to such standards and procedures as may be adopted by the Board of Directors to any Native (as that term is defined in the Settlement Act) who has attained the age of 65 or more and who holds Settlement Common Stock that was not acquired through gift, inheritance or purchase or who transferred such Settlement Common Stock by inter vivos gift. The Corporation shall be authorized to issue one hundred shares of Elders Stock to each Native who meets the qualifications set forth herein. Elders Stock shall not be issued to any person before January 1 of the year following the year in which the person reaches the age of sixty-five.

D. Shares of Elders Stock issued by the Corporation shall

1. be redeemable, in whole or in part, at the option of the Corporation. The Board of Directors is hereby authorized and required to fix, in the manner and to the full extend provided and permitted by law, the redemption price or prices, if any, for the shares of Elders Stock, and

2. not pay dividends or distributions. The holders of Settlement Common Stock shall be entitled to receive such dividends as may be declared by the Corporation, and

3. not be sold, pledged, or assigned in present or future, nor shall inchoate rights thereto, and present or future rights to receive dividends therefrom be sold, pledged or assigned.

In addition, the Board provided the following proxy statement soliciting shareholder votes for the approval of the amendment:

III. Amendment to the Articles of Incorporation to provide Elders Stock

The Elders Stock amendment would allow a one time issuance of 100 shares to original Goldbelt shareholders who reach the age of 65 years or have already reached that age. The Elders Stock would be issued whether or not the person presently owns any shares; if someone was issued original shares and is over 65 on or after the date of adoption of the amendment, that person will be entitled to Elders Stock after January 1 of the year after he or she turns 65.

Elders Stock would not be issued to Natives who were never issued original Goldbelt Settlement Common Stock, and would not be issued to the estates or heirs of original shareholders who never reached the age of 65. If a shareholder inherited or was gifted stock from a parent or relative, for example, and was not issued original Goldbelt stock, he or she will not be eligible to receive Elders Stock.

It is anticipated that Elders Stock would be issued and then immediately redeemed by the corporation, so that no new stock certificates will be issued. Instead, a check for the redemption amount would be sent to all of those eligible to receive the Elders Stock. Elders Stock would be nonvoting preferred stock. It would not be transferable and would not pay future dividends because of its prompt redemption.

If a majority of outstanding shares vote to adopt this amendment to the Articles, then the corporation will be permitted to issue Elders Stock in the format described above. The financial effect of the issuance of this stock would be to reduce the value of stock now held by Goldbelt shareholders. This reduction is known as dilution, and would affect shareholders in two ways:

Dividend dilution–Since there will be more stock eligible to receive distributions, the existing shareholders may receive smaller dividend and distribution checks.

Market value dilution–At present, Goldbelt stock cannot be sold. But, if in the future Goldbelt stock can be sold or if the corporation merges or is dissolved, the value received by Goldbelt shareholders for their shares will be lower if new stock is created.

Goldbelt estimates that approximately 250,000 shares of new Elders Stock will be issued and redeemed over a 40 year period. In the next year, 27,000 shares will be issued, with similar amounts issued in the years to follow, gradually decreasing until the program ends about 40 years later. If the shareholders approve the amendment, the most significant effect will come in the first year after the issuance of Elders Stock. The issuance of the stock, followed by its redemption, will result in a reduction of funds available for investment, for dividends, or for other corporate activities. The extent of the impact depends on the amount authorized for redemption of the shares, which cannot be predicted with any accuracy. As with dividend payments, the decision of the redemption amount will be based upon available funds, the number of recipients, and the corporation’s financial needs at the time.

The Board of Directors recommends adoption of the amendment to provide for Elders Stock.

At the 1997 annual meeting, the shareholders voted to approve the amendment by a vote of 144,485 for and 71,862 against. A board resolution then approved the issuance of 100 shares to each eligible elder and authorized prompt redemption of those shares at $10 per share.

Pat Sierra, a Goldbelt shareholder who alleged she has not received all of the distributions made by the corporation, became the plaintiff in a direct action filed against the corporation after the 1997 election. Sierra’s suit, filed for herself and on behalf of similarly situated shareholders, contested Goldbelt’s creation of the elders’ stock program.[6] Goldbelt moved for summary judgment, arguing that Sierra had failed to state a cause of action in any of her several claims. Over Sierra’s opposition, Superior Court Judge Walter L. Carpeneti granted the motion, and issued final judgment in favor of Goldbelt.

Sierra appeals.

III. DISCUSSION

A. Standard of Review

We apply our independent judgment in reviewing summary judgment decisions, which are made as a matter of law based on undisputed facts.[7] In addition, we apply our independent judgment to questions of statutory interpretation.[8] In applying our independent judgment, we adopt the rule of law that is most persuasive in light of precedent, reason, and policy.[9]

B. Issuance of Shares Without Consideration to Original Elder Shareholders

Sierra argues that Goldbelt cannot limit the elder benefit to original shareholders or provide the elder benefit to elders who are no longer shareholders of Goldbelt. She contends that Goldbelt’s elder benefit is both under-inclusive– because it excludes present shareholders who were not original shareholders–and over- inclusive–because it includes original shareholders who have conveyed away their stock. Sierra argues that restricting eligibility to original shareholders violates AS 10.06.408(a) and corporate law generally. She concludes that the elder benefit diverts the wealth from Goldbelt’s present owners in violation of principles of corporate law as well as ANCSA. She argues that although ANCSA preempts Alaska corporate law, and expressly allows discrimination in favor of elder shareholders, it does not allow discrimination in favor of original shareholders. She argues that to preempt state prohibitions against discrimination in favor of original shareholders, ANCSA must expressly trump state law.[10] Finally, she argues that as applied to original shareholders who no longer own stock, the Goldbelt elder stock program is contrary to the shareholders’ contract–arising from the corporate charter and bylaws and from statutes and common law governing the corporate enterprise–which provides for ownership of corporate wealth on a pro rata basis. This, she claims, is an unconstitutional impairment of contract in violation of the Fifth Amendment.

We conclude that these arguments are unavailing.[11] As Goldbelt argues, ANCSA permits issuing elder stock without consideration.[12] Nothing in the language or history of the statute indicates that Congress intended to limit the power of Native corporations to issue such stock selectively only to elders who continue to own original shares of settlement common stock. To the contrary, Congress has expressed its intention that the ANCSA amendments be interpreted to effectuate their purpose in empowering Native corporations to identify and meet the specific needs of particular groups of Natives.[13] To effectively meet the needs of particular groups of Natives as Congress intended, Native corporations must have broad discretion to fashion elder benefit programs that meet the needs of elders. The amendment somewhat limits this discretion by prohibiting benefit programs that would aid “classes of beneficiaries” defined by reference to “place of residence, family, or position as an officer, director, or employee of a Native Corporation.”[14] The class of beneficiaries relevant in this case, defined as elders who owned original shares of stock, does not fall within this statutory restriction. Moreover, in other parts of the ANCSA amendments, Congress has expressly permitted Native corporations to prefer the beneficiary class of original shareholders–further rebutting Sierra’s suggestion that Goldbelt’s preference for original shareholding elders was not authorized under the statute.[15]

As to including elders who are no longer shareholders in the beneficiary class, we conclude that this too was properly within Goldbelt’s statutory discretion. One purpose of the ANCSA amendments was to permit stock to be issued to a new generation of Natives or Native elders.[16] Because ANCSA contemplated issuing shares to Natives who had not been among the original shareholders, ANCSA necessarily conflicts with traditional corporate law requiring that only current shareholders benefit.[17] Goldbelt correctly argues that “[i]ssuance of such stock would be an impermissible gift, were it not for the overriding provisions of ANCSA.” Alaska Statute 10.06.353 provides that shares may not be issued until they are fully paid for, but 43 U.S.C. § 1606(g)(2)(C)(ii) preempts that provision. Alaska’s corporation code expressly provides for preemption by ANCSA.[18]

In short, ANCSA authorized issuance of elder stock on these terms even though they would otherwise conflict with Alaska’s corporation code. We conclude that, if Goldbelt’s shareholders authorized issuance of the elder stock, Goldbelt’s elder stock program was permitted under ANCSA and is therefore permitted under Alaska law.

C. Adequacy of Proxy Solicitation

Sierra next argues that Goldbelt failed to disclose material facts and misled shareholders with false statements, and that the 1997 election approving the elder benefit was therefore invalid. She also asserts that Goldbelt violated 43 U.S.C. § 1629b(b)(2)(A) because the proxy statement did not set forth the text of the proposed amendment or the board’s resolution.[19] Because the court is evenly divided on both issues regarding the adequacy of the proxy solicitation, the court affirms, without substantive discussion, the summary judgment entered by the superior court.[20]

Two members of the court, Chief Justice Fabe and the author of this opinion, conclude that the proxy statement’s failure to disclose the projected expense of the elder benefit proposal was not fatal. They reason that it is not necessary to include speculative or unreliable–and therefore potentially misleading– information in the proxy statement.[21] They would hold that the circumstances here made it impossible to predict whether the new board that would be elected in 1997 would choose to implement the elder stock program to the extent the prior board proposed, especially given the new board’s access to updated financial data.

The other two members of the court, Justices Matthews and Bryner, have a different view as to this issue. They believe that proxy solicitations may not omit material facts, that is, facts which would likely be considered important by a reasonable shareholder in deciding how to vote.[22] The board in the resolution authorizing the amendment to the articles stated that it “anticipates that the redemption price will be $10 per share so that each elder to whom 100 shares are issued would be entitled to a payment of $1000.” Justices Matthews and Bryner would not reach the issue of the adequacy of the proxy solicitation independent of the requirements of § 1629b(b)(2)(A) because compliance with that subsection would necessarily make the proxy adequate under the Brown v. Ward standard. If they were to consider the adequacy of the proxy solicitation independently of § 1629b(b)(2)(A) , they would hold that whether the board’s resolution statement quoted above likely would be considered important by a reasonable shareholder in his or her choice of whether to vote yes or no on the proxy card was at least a question of fact inappropriate for resolution by summary judgment.

Likewise, as to the second issue, Chief Justice Fabe and the author of this opinion would also affirm. They would hold that the proxy statement satisfied § 1629b(b)(2)(A). In their view, that subsection did not require the proxy statement to include a financial projection that would have been potentially inaccurate. Similarly, they conclude that the proxy statement adequately set forth the amendment or resolution.[23]

Justices Matthews and Bryner disagree. They would hold that the proxy statement did not satisfy § 1629b(b)(2)(A) because it did not “set forth” the board’s resolution. They note that a mere summary of the changes to be effected is insufficient to satisfy the requirements of this subsection. The subsection states that a summary may be sent in addition to the resolution, not as a substitute for the resolution. Congress has used the word “and,” not “or,” in reference to the summary.

All four members of the court are unpersuaded by Goldbelt’s argument that the proxy statement did not have to satisfy § 1629b(b)(2)(A). Goldbelt asserts that ANCSA‘s requirement that shareholders be sent a written proxy “setting forth the amendment or resolution approved pursuant to paragraph (1)” of § 1629b(b) applies only to amendments authorized by both subsections (g) and (h) of § 1606, but not to those amendments authorized under § 1606(g) alone. Goldbelt’s reading of the statute is grammatically permissible. But it is contextually implausible for two main reasons. Goldbelt has not identified any logical reason why Congress might have intended to free this type of amendment from the solicitation requirements of § 1629b(b)(2)(A). And the legislative history found in the House Report on the proxy provision suggests that Congress intended that the solicitation requirements apply to amendments allowing corporations to issue elder shares under § 1606(g).[24]

IV. CONCLUSION

We unanimously agree that Goldbelt’s elder stock program was authorized by ANCSA, and was not precluded by Alaska corporate law, so long as Goldbelt’s shareholders in 1997 properly approved the program. The court is equally divided as to the remaining issues, whether the proxy solicitation was adequate or violated federal law. The court therefore AFFIRMS the judgment entered by the superior court for Goldbelt.

Hanson vs. Kake Tribal Corporation

This is a class action in which shareholders claim that a corporation paid discriminatory dividends. The shareholders prevailed in the superior court. They appeal, claiming that the damage award was too low, that the class was too narrowly defined, and that the court’s award of attorney’s fees under Civil Rule 82 was too low. The corporation cross-appeals, asserting numerous defenses relating both to liability and damages. We affirm the superior court’s liability ruling, vacate the damage award, and remand for recalculation of damages and for consideration of whether an immediate lump sum payment of the judgment is appropriate.

I. FACTS AND PROCEEDINGS

Kake Tribal Corporation (Kake) is a village corporation organized under the Alaska Native Claims Settlement Act (ANCSA). Kake adopted a “Financial Security Plan” which was intended to confer financial benefits on some of Kake’s shareholders. The plan was open only to original Kake shareholders who retained the one hundred shares they were issued when the corporation was organized.

The plan consisted of two programs. Original shareholders of Kake who retained all one hundred of their original shares and were between twenty-one and sixty-nine years of age were entitled to participate in the basic program. Individuals who were seventy years of age or older, and met the same shareholding requirements, were entitled to enroll in the senior program.

Under the basic program, Kake purchased a life insurance policy for each program participant. Kake retained control of the policies, was named as the beneficiary, and retained the cash surrender values. Upon the death of a participant, the life insurance proceeds were placed in an account with an investment management firm. The funds in this account were used to pay program benefits, and for other corporate purposes.

Participants who enrolled in the basic program had the option of choosing either a living benefits program or a death benefits program. The death benefits program provided for an immediate payment upon the death of the participant of $1,800 in funeral expenses and monthly payments of $225 for sixteen years to beneficiaries designated by the participant. If a participant chose the living benefits option, the participant could elect to receive $100 per month for fifteen years beginning at age sixty- five, plus a $1,000 payment to the participant’s beneficiaries at the time of the participant’s death. Alternatively, the living benefits participant could elect to receive $4,000 per year, starting at age sixty-eight, for three years, plus a $1,000 payment to the participant’s beneficiaries at death.

The senior program promised to pay each participant $100 per month for up to 180 months, plus $1,000 in funeral expenses at death. This program was devised because the shareholders who were seventy years of age or older were generally uninsurable.

Kake began to experience financial difficulty. After making twenty-three monthly payments to the elders — as the parties describe the participants in the senior program — the payments were suspended in 1982 due to lack of funds. On January 12, 1989, Kake paid each surviving elder $100 per month retroactive to October 1982 and each elder’s estate $100 for each month from October of 1982 until the time of the elder’s death. The corporation then discontinued the senior program.

Meanwhile, in 1985, Kake switched the insurers which were underwriting the basic program. This required that new insurance forms be filled out by program participants. Many shareholders failed to re-enroll with the new insurer.

The basic program was modified in 1989. Kake’s liability to pay death benefits from the account with the investment management firm was limited, and the living benefits program was terminated. On March 1, 1992, the basic program was terminated.

The plaintiffs filed suit on August 31, 1990, alleging that the plan unfairly discriminated against them. Arlene Hanson and Victor Davis, Jr., are the widow and minor son of an original shareholder of Kake. When he died, fifty of his shares were transferred to Arlene and fifty passed to Victor. These shares were no longer considered to be original shares and, as a result, Arlene and Victor were not entitled to participate in the plan. Clifford Tagaban inherited twenty-five shares from his grandmother. He was also ineligible to participate in the plan.

In 1992 the plaintiffs amended their complaint, asserting class action claims. Kake moved for summary judgment on statute of limitations grounds. Superior Court Judge Thomas M. Jahnke ruled that each payment to favored shareholders gave rise to a separate cause of action, subject to a separate limitations analysis; that the six-year statute expressed in AS 09.10.050 governed this case; that the statute barred claims accruing more than six years before the case was filed, that is claims accruing before August 31, 1984; and that claims held by minors were tolled pursuant to the tolling provisions of AS 09.10.140.

In the spring of 1993, the parties filed cross-motions for summary judgment on remaining liability issues. At roughly the same time, by stipulation, the plaintiffs filed a second amended complaint which they claim expanded the class to include all shareholders who had been discriminated against, whether or not they participated in the plan.

The case was set for trial on June 28, 1993. Just before trial, the trial judge, Walter L. Carpeneti, ruled in the plaintiffs’ favor on the summary judgment motions, holding “as a matter of law payments both to beneficiaries of shareholders and to shareholders directly under the challenged plan are distributions under state law, that the payments violate the rule of uniformity and that the defendant is therefore liable to plaintiffs.”

On June 25, 1993, plaintiffs filed a motion to amend the class certification order to include all shares against which the plan had discriminated, not just those whose owners had been termed ineligible to participate in the plan. On the third day of trial Judge Carpeneti ruled on this motion, indicating that he would grant it, but only on the condition that the summary judgment order on liability be vacated, and that plaintiffs pay defendant’s attorney fees for lost trial and trial preparation time.

The plaintiffs declined to accept these conditions and trial proceeded on the issue of damages. Following trial, the plaintiffs moved for reconsideration of the class certification order. The court again indicated that it would expand the class, but only on the condition that its order granting partial summary judgment on liability be set aside. A new trial would then be necessary. The class declined this condition and withdrew the motion for reconsideration.

Following the trial, the court found that any shareholders who had participated in the plan, no matter how briefly, were excluded from any remedy. The court ruled that the remedy of shareholders holding less than one hundred shares would be calculated on a per share basis, while the remedy of shareholders who held more than one hundred shares would be limited to one hundred shares. It found the plan to have cost Kake $1,996,000 or $47.30 for each participating share. The court awarded damages of $47.30 per share to the 11,152 shares which qualified for the remedy. Judgment for the class in the principal amount of $527,489.60 was entered. Subsequently, Judge Jahnke awarded pre- judgment interest of $438,178.38 and attorneys’ fees of $125,000.

Plaintiffs and Kake have appealed. Their claims on appeal will be identified in the discussion that follows.

II. DISCUSSION

A. Payments under the Plan Were Illegal

Kake claims that payments under the plan were not dividends. Instead, it argues that the plan was a social welfare program which is permissible under ANCSA. Kake, however, points to no provision which may be read as authorizing the plan.

It is true that a corporation may engage in charitable giving. AS 10.06.010(13) (a corporation has the power to “donate for the public welfare or charitable, scientific or educational purposes . . . “). The plan, however, was merely a method of distributing corporate assets to certain shareholders. No reasonable argument can be made that the plan was instead a series of charitable gifts. Indeed, the stated purpose of the plan was to provide financial security to the original shareholders of Kake. Distributions were to be made regardless of the need or financial status of the distributes.

Kake also argues that the senior program was authorized under amendments to ANCSA passed in 1988. These amendments did authorize the issuance, without consideration, of a special class of stock for shareholders who had attained the age of sixty-five. 43 U.S.C.A. section 1606(g)(2) (West Supp. 1996). However, creation of such stock requires a shareholder vote or an amendment to the articles of incorporation. 43 U.S.C.A. section 1629(b) (West Supp. 1996). Kake never took these steps. Thus the senior program cannot be considered a valid exercise of the power granted by the 1988 ANCSA amendments.

Because no provision of ANCSA authorizes the plan, the payments in this case were illegal. Subject to certain limited exceptions not relevant for present purposes, holders of village corporation stock have “all rights of a stockholder in a business corporation organized under the laws of the State.” The quoted language is drawn from section 6(h) of ANCSA (43 U.S.C.A. section 1606(h)(l) (West Supp. 1996)), which pertains to the stock of regional corporations. Section 7 [sic] of ANCSA (43 U.S.C.A. section 1607) makes section 6(h) applicable to village corporations. One of the rights of a shareholder of a business corporation is the right to enjoy equal rights, preferences, and privileges on his or her shares. Alaska Statute 10.06.305 provides that “[a]ll shares of a class shall have the same voting, conversion, and redemption rights and other rights, preferences, privileges, and restrictions.” The statute thus commands that every share shall have the right to “the same rights, preferences, and privileges” of whatever sort. Whether or not the payments at issue were “dividends” as the plaintiffs maintain, they unquestionably may be characterized as “preferences” or “privileges” based on stock ownership. It is evident, therefore, that the payments violated the rights of the excluded shareholders.

B. Statute of Limitations Issues

1. The Six-Year Statute Governs this Case

Kake claims that this suit is an action “upon a liability created by statute” and is therefore governed by the two-year statute of limitations expressed in AS 09.10.070. Plaintiffs argue that the six-year statute set forth in AS 09.10.050 controls because this action is contractual in nature and is one that was recognized at common law.

We agree with the plaintiffs. The relationship between a corporation and its shareholders is primarily contractual. See Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat) 518, 656, 4 L. Ed. 629, 664 (1819); State ex rel. Swanson v. Perham, 191 P.2d 689, 693 (Wash. 1948). This court has previously held that actions against corporate directors for breach of fiduciary duty sound in contract and are governed by the six-year statute. Bibo v. Jeffrey’s Restaurant, 770 P.2d 290, 295-96 (Alaska 1989). It is our view that the holding in Bibo applies by analogy to this case.

2. A Separate Cause of Action Accrued with Each Payment

Kake argues that the cause of action accrued on the effective date of the plan not, as Judge Jahnke ruled, that a separate cause of action accrued with each discriminatory payment. Citing Howarth v. First National Bank of Anchorage, 540 P.2d 486, 490-91 (Alaska 1975), Kake argues that it is not necessary for an injury to occur in order for a cause of action in contract to accrue. It contends that a cause of action accrues at the time when the plaintiffs could have first maintained the action to a successful conclusion. Plaintiffs, on the other hand, contend that each discriminatory distribution gave rise to a new cause of action because each payment was a new wrong. They rely on, among other cases, Bibo, 770 P.2d at 294.

One of the claims in Bibo was that controlling shareholders of a corporation made excessive compensation payments to a bookkeeping service in which the controlling shareholders had a majority interest. Id. at 292. Bibo, the minority shareholder, claimed that these excessive payments were, in essence, discriminatory dividends. Id. We held that a separate cause of action accrued with each payment to the bookkeeping service. “Each excessive payment is a separate wrongful act.” Id. at 294.

It is our view that the Bibo precedent is applicable here. Acceptance of the rule advocated by Kake would permit a corporation to escape liability for a plan to pay illegal distributions by announcing the program and then awaiting the expiration of the period of limitations before actually paying the distributions. We see nothing to commend such a result.[1]

3. Payments Made before August 31, 1984 Are Time Barred

In calculating damages, Judge Carpeneti did not distinguish between payments made more than six years before this suit was filed and payments made within the six-year period. Given our acceptance of Judge Jahnke’s ruling that each discriminatory payment was a separate wrongful act, it follows that no compensation may be awarded for payments which were made more than six years before the suit was filed. While continuing payments prevent the running of the statute of limitations, there can be no redress for the time-barred payments. See Oaksmith v. Brusich, 774 P.2d 191, 200 n.10 (Alaska 1989).

4. The Minor Tolling Statute Was Applied Properly

The trial court ruled that the statute of limitations for the claims of minor stockholders was tolled by AS 09.10.140. This statute provides in relevant part:

(a) If a person entitled to bring an action . . . is at the time the cause of action accrues . . . under the age of majority . . . the time of . . . disability . . . is not a part of the time limit for the commencement of the action. . . . [T]he period within which the action may be brought is not extended in any case longer than two years after the disability ceases.

Stock of ANCSA village corporations “that a minor is entitled to receive . . . shall be held by a custodian.” AS 13.46.085(a). The custodianship is governed by the provisions of the Alaska Uniform Transfers to Minors Act, AS 13.46. See AS 13.46.085(d). Judge Jahnke ruled that the minor tolling statute applies, even though shares of stocks are controlled by a custodian because legal title to the shares is held by the minor rather than the custodian.

Kake takes no issue with Judge Jahnke’s conclusion that legal title to ANCSA stock held for a minor is in the minor rather than in the custodian. Kake argues, however, that since a custodian has the power to sue and a minor does not, AS 09.10.140 does not apply. Kake argues:

[Alaska Statute] 09.10.140 tolls the statute of limitations “if a person who is entitled to bring an action . . . is, at the time the cause of action accrues . . . under the age of majority.” In this case the person who is entitled to bring the action at the time it arose is the custodian, who is not under the age of majority. Consequently, AS 09.10.140 does not, by its terms, toll the statute of limitations for stock held by custodians.

Kake also argues that the policy reasons underlying statutes of limitations, the encouragement of prompt prosecution of claims and avoiding injustices which may result as a consequence of delay, favor not applying the tolling statute where there is a competent custodian.

Kake’s argument focusing on the text of AS 09.10.140(a) lacks merit in our view. The “person” referred to in subsection (a) is the minor or other person under disability. The concept of entitlement to bring an action is most sensibly construed to mean entitlement, but for the person’s disability. So understood, the act applies to minors, even those with guardians. While it is true that a custodian may sue on behalf of a minor, who is in turn not legally able to sue, a similar state of affairs exists for injured minor children. Their parents may sue for them, and they are legally disabled from suing on their own behalf.[2] Yet, in such cases, the tolling rule plainly applies. E.g., Fields v. Fairbanks North Star Borough, 818 P.2d 658 (Alaska 1991).

There is weight to Kake’s policy argument. However, there are countervailing policy considerations. Custodians are ordinarily not professional representatives and they may not be alert to the need to take action on a minor’s behalf. It can be regarded as fundamentally unfair to a minor to saddle the minor with the consequences of a custodian’s neglect. We stated in Haakanson v. Wakefield Seafoods, Inc., 600 P.2d 1087, 1090-91 (Alaska 1979):

The legislature has found [by enacting AS 09.10.140] . . . . that certain circumstances outweigh the policies underlying these statutes of limitation . . . . This statute expresses the public policy that favors safeguarding the interests of minors. We can think of no good reason why this expression of legislative policy should not apply to wrongful death actions.

As in Haakanson, we can think of no persuasive reason why the minor tolling rule should not apply to cases involving a minor’s property which is controlled by a custodian.[3]

C. The Superior Court Was Correct to Permit the Plaintiffs to Proceed with a Direct Action

1. Permitting a Direct Action in this Case Is the Only Way to Provide an Adequate Remedy for the Shareholders Who Were Excluded from the Financial Security Plan

If a direct action were not permitted in this case, the possible defendants in a derivative action would be (1) the shareholders who received payments under the financial security plan, and (2) the corporation’s officers and directors. For the following reasons, it is unlikely that a derivative suit against either or both of these groups would be an adequate remedy for the plaintiffs.

First, the corporation may not be entitled to any damages from the shareholders who received payments under the financial security plan. Under AS 10.06.378, liability is imposed on shareholders who receive unlawful dividends only when they have accepted payments knowing that the distribution was in violation of certain legal limits. It is unlikely that the beneficiaries of the financial security plan knew that the payments violated the law. This suggests that the beneficiaries of the financial security plan would not be liable to the corporation.

Second, it is unlikely that any damages collected from the responsible directors and officers would approximate the sum of payments made under the plan.[4]

2. Courts Have Wide Discretion to Determine Whether a Complaint States a Derivative or a Primary Claim

Courts generally “have wide discretion in interpreting whether a complaint states a derivative or primary claim.” Charles R.P. Keating & Jim Perkowitz-Solheim, 12B Fletcher Cyclopedia of the Law of Private Corporations § 5911 (perm. ed. rev. vol. 1993) (hereinafter Fletcher). Indeed, as the United States Supreme Court has recognized, the same allegations of fact in a complaint may support either a derivative or an individual cause of action. See J.I. Case Co. v. Borak, 377 U.S. 426 (1964) (stating with regard to claim that proxy was false and misleading, “we believe that a right of action exists as to both derivative and direct causes.”).

It is possible to characterize the allegations in this case as stating a derivative claim. Courts have held that “when a wrong has been done to the corporation, the shareholder’s right to sue the directors or wrongdoers for redress is derivative and not primary.” 13 Fletcher, supra, § 5928. And, in a metaphysical sense, the illegal payments in this case can be said to have “harmed the corporation.”

There is also ample support for the proposition that these allegations state a direct claim against the corporation. Two points supporting this contention warrant emphasis. First:

A plaintiff alleges a special injury and may maintain an individual action if the shareholder complains of an injury distinct from that suffered by other shareholders, or a wrong involving one of the shareholder’s contractual rights as a shareholder. Thus, where there is no question that plaintiffs are claiming an injury that was not suffered by all shareholders, but only by minority shareholders, that action is properly classified as representative rather than derivative.

13 Fletcher, supra, § 5908. In this case, the plaintiffs do not allege that the corporation was harmed. Their claim is that the corporation by paying certain shareholders a discriminatory distribution harmed them. Another way of expressing this point is that the rule “that a shareholder cannot sue for injuries to his corporation . . . [does not apply when] the shareholder suffered an injury separate and distinct from that suffered by other shareholders.” 13 Fletcher, supra, § 5911. In this case, the excluded shareholders clearly “suffered an injury separate and distinct from other shareholders.” The shareholders who received payments under the plan suffered no meaningful injury whatsoever.

Although it seems anomalous to say that a shareholder who has received illegal payments has suffered an injury, it is true that there are cases in which courts have required a derivative suit where fiduciaries of a corporation who were also shareholders received illegal payments.[5] Such courts have reasoned that all the shareholders of the corporation — even the fiduciaries who received illegal payments — were harmed by the diminution in value of their shares and that the “corporation” therefore was injured. A holding permitting the plaintiffs here to proceed through a direct action would not be inconsistent with these cases: In all such decisions of which we are aware, the defendant shareholders were also fiduciaries of the corporation. This difference is significant because, as already suggested, a corporation can recover from fiduciaries who misappropriate corporate assets. It may not be able to recover from rank and file shareholders. Consequently, where the recipients of the misappropriated funds are fiduciaries, a derivative action will adequately compensate the plaintiffs; where the recipients of misappropriated funds are rank and file shareholders, a derivative action will not adequately compensate the plaintiffs.

The second point supporting the contention that a direct action is appropriate here is that there are many reported cases concerning discriminatory distributions which proceeded as direct actions. See, e.g., Amalgamated Sugar Co. v. NL Industries, Inc., 644 F. Supp. 1229 (S.D.N.Y. 1986); Asarco, Inc. v. Holmes A. Court, 611 F. Supp. 468 (D.N.J. 1985); Jones v. H.F. Ahmanson & Co., 460 P.2d 464 (Cal. 1969); Donahue v. Rodd Electrotype Co., 328 N.E.2d 505 (Mass. 1975); Erdman v. Yolles, 233 N.W.2d 667 (Mich. App. 1975); Stoddard v. Shetucket Foundry Co., 34 Conn. 542 (1868). Although such cases usually involve close corporations, our research has not revealed a single case in which (1) a publicly- held corporation made a discriminatory distribution to a group of its rank and file shareholders, (2) the shareholders attempted to proceed through a direct action, and (3) the court held that the plaintiffs had to proceed through a derivative action.

Thus, on the facts at issue here, a court has sufficient discretion to permit this action to proceed as either a direct or a derivative suit. The crucial inquiry, therefore, is how the court should exercise its discretion.[6]

3. Although Its Decision to Permit the Plaintiffs to Proceed with a Direct Action Was Appropriate, the Superior Court Did Not Adequately Address Two Policy Concerns Raised by Its Order

The superior court’s decision (1) permitting the plaintiffs to proceed with a direct action, and (2) ordering Kake to pay damages immediately and in a single payment to the excluded shareholders, raises two policy concerns which the superior court did not adequately address. First, it is possible that an immediate lump sum payment to the excluded shareholders would be inconsistent with AS 10.06.358. That statute places certain limitations on the ability of a corporation to pay dividends. Second, it is conceivable that requiring Kake to pay damages immediately and in a lump sum would disrupt Kake’s operations or prevent Kake from pursuing a profitable business opportunity. The result would be that all Kake shareholders would be injured.

 Although these concerns should be addressed by the superior court on remand, neither of the concerns warrants a conclusion that the superior court erred in permitting a direct action. As discussed above, where discriminatory payments are made to a group of rank and file shareholders, barring the excluded shareholders from proceeding through a direct action likely forecloses their only effective remedy. Under these circumstances, relegating the plaintiffs to a derivative suit seems unjustifiable if the two policy concerns can be adequately addressed in the context of a direct action.

They can be. On remand, the superior court should determine whether an immediate lump sum payment of the damages it orders will deplete Kake’s assets below the level which would be permissible under AS 10.06.358. If a lump sum payment would have such an effect, the superior court should fashion a payment schedule which ensures that Kake’s assets will not be depleted below the level permissible under AS 10.06.358. The superior court should also give Kake the opportunity to make a showing that its operations or investment opportunities would be impaired if it were compelled to pay immediately the entire amount of the judgment. If Kake can make such a showing, the superior court should fashion an appropriate payment schedule.

Finally, if the superior court concludes that an immediate lump sum payment of damages would be inappropriate for either of the reasons discussed above, the court should consider ordering Kake to suspend the payment of dividends to shareholders until Kake fully compensates the shareholders in the plaintiff class.

D. Measure of Damages

The trial court ruled that damages were to be determined by dividing the cost of the plan by the number of shares that were included in the plan, to arrive at the cost of the plan per share, then multiplying that cost by the number of shares held by the plaintiffs who were excluded from the plan. The court found that 42,200 shares participated in the plan, and the plan cost the corporation a total of $1,996,000. This resulted in a cost per share of $47.30. The trial court awarded each member of the plaintiff class $47.30 times the number of shares each held.

  This approach is inconsistent with the nature of this case. If this were a derivative action, the remedy would be based upon the harm done to the corporation. However, this is a direct action to recover damages for a discriminatory distribution and the measure of damages suffered by plaintiffs should be a payment that gives them parity with those who received payments under the plan. See Nichols v. Olympia Veneer Co., 246 P. 941 (Wash. 1926).

Plaintiffs suggest, perhaps rhetorically, that a damage award could be made that would give plaintiffs parity with the highest distribution that any share received. This would amount to $542.16 per share. Plaintiffs arrive at the $542 figure by dividing the premiums that Kake paid for the shareholders with the most expensive policies, by the one hundred shares owned by those shareholders. This suggestion is faulty for two reasons. First, no shareholder actually received $542 per share. Second, the appropriate measure of damages is not the cost to the corporation, but the benefit to the shareholders. Although the premiums for the life insurance policies for several of the shareholders were in excess of $500 per share, these shareholders did not actually receive the policies, nor were their beneficiaries slated to receive the benefits defined in the policies. The policies were the method chosen by Kake to fund the payments promised under the plan. Kake retained control of the policies, retained the cash surrender value, and was the named beneficiary. Benefits paid upon the death of a shareholder were pooled into a managed account, controlled by Kake, and it was from this account that payments were made to the beneficiaries. No shareholder can actually be said to have received a life insurance policy under the program. The fact that some policies were very expensive while others were relatively cheap is irrelevant to plaintiffs’ remedy.

Plaintiffs argue, apart from the suggestion discussed above, that benefits of $121 per share were paid to a significant number of Kake shareholders and that plaintiffs’ damages should be calculated based on that benefit level. The $121 per share figure is based on the amount paid the elders. They received twenty-three monthly payments of $100 before 1982. They did not receive any payments for the next seven years, but were then given a lump sum of $9,800, or $98 per share.

 We agree that the payments to the elders furnish an appropriate measure for the compensatory distribution due plaintiffs. However, because the twenty-three monthly payments were all made more than six years before plaintiffs filed this suit, recovery for discrimination based on these payments is barred by the statute of limitations, except for shares held by minors. The $9,800 payments were made within the year before the suit was filed. Therefore adult plaintiffs are entitled to $98 per share, and minor plaintiffs are entitled to $121 per share.

E. The Trial Court Did Not Abuse Its Discretion in Denying the Motion to Expand the Class

On March 10, 1993, the trial court certified the class consisting of “all those shareholders of Kake Tribal Corporation (1) who are not presently enrolled in the Kake Financial Security Plan, or (2) who have not been enrolled in the Plan at any time since 15 October 1980, or (3) who own [Kake] stock other than shares designated as ‘100 shares of original Class A Stock.'” In April 1993, the plaintiffs filed a second amended complaint which, they claim, expanded the class. As previously stated, supra p. 5, immediately before trial plaintiffs filed a motion to amend the class certification order to “redefine the Class to include additional [Kake] shareholders who have been excluded from full participation in [Kake’s] corporate distributions.” Judge Carpeneti indicated that he would grant the motion to expand the class, but only on conditions that plaintiffs would not accept. Plaintiffs’ post-trial motion for reconsideration had a similar ultimate result. Plaintiffs argue that the trial court should have unconditionally granted the motion to expand the plaintiff class.

The trial court acted within its discretion in conditioning expansion of the class in the manner that it did. The class proposed by plaintiffs would have broadened the scope of the lawsuit. Plaintiffs’ proposal would have inflated the class from only those shareholders who had never participated in the program to all shareholders except those who had received the maximum amount of benefits under the plan. As a practical matter, this would have included every shareholder who was not enrolled in the senior program.[7]

New defenses on liability applicable to the new class members were a possibility. The damages trial would be more complicated. Delay so that the notice and exclusion procedures mandated by Civil Rule 23(c) could be followed was inevitable. Trial time and trial preparation time would be lost. Under these circumstances the court could have simply denied the motion on untimeliness grounds. Conditioning the grant of the motion on re-opening liability issues and paying costs for wasted time was also an appropriate resolution.[8]

F. Prejudgment Interest Must Be Recalculated

Kake argues that prejudgment interest should not reach back beyond the bar imposed by the six-year statute of limitations. No effective response is made to this argument, and it is manifestly correct. The argument does not, however, apply to shares held by minors whose remedy is not barred by the six-year statute because of the minor tolling provision of AS 09.10.140.

 Kake also argues that AS 09.30.070(b) governs a portion of this case. That section provides in relevant part:

[P]rejudgment interest accrues from the day process is served on the defendant or the day defendant received written notification that an injury has occurred and that a claim may be brought against the defendant for that injury, whichever is earlier.

This provision is applicable to causes of action which accrue after June 11, 1986. It therefore does not apply to payments made before that date.

Kake acknowledges that it received written notice from Mrs. Hanson of her claim and that of her son prior to June 11, 1986, but argues that it did not receive notice of a class claim until the amended complaint was filed on June 15, 1992. Therefore one issue is whether notice of an individual claim under subsection .070(b) will suffice to support the accrual of prejudgment interest on a class claim.

Plaintiffs argue that subsection .070(b) does not apply to contract claims, as it was adopted as part of tort reform legislation and uses the language of tort (“injury”) rather than contract.

The briefing on these questions is inadequate. Ordinarily, in such circumstances the proponent of the issue is deemed to have waived the issue. Adamson v. University of Alaska, 819 P.2d 886, 889 n.3 (Alaska 1991) (“[W]here a point is given only cursory statement in the argument portion of a brief, the point will not be considered on appeal.”). However, in this case we do not believe that the waiver remedy would be appropriate because both parties are proponents of inadequately briefed points going to the award of prejudgment interest. Additionally, prejudgment interest must be entirely recalculated given our decision on the other issues in this case. Under these circumstances, we believe that it is best that the question of the application of AS 09.30.070(b) be reconsidered by the trial court on remand.

G. Attorney’s Fees

 Plaintiffs argue that the trial court’s award of attorney’s fees under Civil Rule 82 was inadequate. As noted, the court awarded attorney’s fees of $125,000 to be paid by Kake to the class.[9] In making the award the court did not follow the schedule set forth in Civil Rule 82(b)(1). It found that a variation was warranted because “Kake Tribal conducted a well- financed, deliberately excessively litigious defense.” On the other hand, the trial court found that plaintiffs’ counsel were inefficient and that the total amount of attorney’s fees reasonably incurred by them had they worked efficiently would have been $210,000. The court awarded more than half of this sum as a partial award of attorney’s fees in consideration of the factors listed in Civil Rule 82(b)(3).

Based on our review of the record we think that the superior court’s conclusion concerning the inefficiency of plaintiffs’ counsel is a reasonable one. Based on that conclusion and given the fact that the court’s award of attorney’s fees was greater than the amount that the class would have been entitled to under the schedule of Civil Rule 82(b)(1), we conclude that the award was not erroneous. On the other hand, on remand, it may be appropriate for the court to reconsider the award in light of the new judgment amount. The court is authorized to do so.

III. CONCLUSION

  The judgment of the trial court concerning liability is affirmed. The award of damages and prejudgment interest is vacated. The award of attorney’s fees is affirmed, but the court may reconsider the award after damages are recalculated. This case is remanded for further proceedings in accordance with this opinion.

 AFFIRMED in part, VACATED in part, and REMANDED.


FABE, Justice, dissenting.

I. INTRODUCTION

I dissent from the opinion of the court because I disagree with its decision to allow plaintiffs to bring a direct rather than a derivative action. The gravamen of the plaintiffs’ complaint is a wrong to the corporation as a whole. Basic principles of corporation law therefore require the plaintiffs to bring a derivative shareholder action to remedy that wrong. The court’s failure to adhere to this well-established rule leads it to adopt a result that rather than remedying the discriminatory plan, continues it. Under the court’s decision, shareholders who are as innocent of wrongdoing as the plaintiffs will be forced to pay for a recovery that bears little relationship to any harm the plaintiffs actually suffered.

II. DISCUSSION

A. As a Native Corporation, Kake Differs Significantly from Non-Native Corporations in Purpose and History.

The facts of this case cannot be properly understood without a brief discussion of the history and aims of the Alaska Native Claims Settlement Act (ANCSA). Although Kake’s “financial security plan” was not permissible under ANCSA, the distributions under the plan did not arise from greed or bad faith. Rather, they resulted from the conflicts inherent in the difficult role ANCSA gave to Native corporations.

In enacting ANCSA, Congress intended to settle Native land claims in a way that both initiated Natives into the “American mainstream,” Monroe E. Price, A Moment in History: The Alaska Native Claims Settlement Act, 8 UCLA-Alaska L. Rev. 89, 95 (1979), and addressed their “real economic and social needs.” 43 U.S.C. section 1601(b) (1994). Under ANCSA, Congress imposed on the myriad Alaska Native communities a “formidable framework” of corporations to distribute settlement land and funds and serve as a vehicle for Native development. Felix S. Cohen’s Handbook of Federal Indian Law 752-53 (Rennard Strickland et al. eds., 1982) (hereinafter Cohen). These corporations, as the Ninth Circuit recently noted, “differ markedly from ordinary business corporations” in their structure and purposes. State v. Native Village of Venetie Tribal Gov’t, 101 F.3d 1286, 1295 (9th Cir. 1996). John Shively, an expert witness for Kake in the instant case, testified that ANCSA’s use of the corporate model should be understood as a “social experiment,” unprecedented in Congress’s dealings with Native Americans elsewhere. See Cohen, supra, at 740.

 In 1987, Congress amended ANCSA to reconcile the corporate form and the needs of Native communities. Alaska Native Claims Settlement Act Amendments of 1987, S. Representation. No. 100-201, 100th Cong., 1st Sess. 19-21 (1987), reprinted in 1987 U.S.C.C.A.N. 3269-72 (hereinafter S. Representation. 100-201). Under these amendments, Native corporations are allowed to convey assets to a “settlement trust” to “promote the health, education, and welfare of its beneficiaries and preserve the heritage and culture of Natives.” 43 U.S.C. section 1629e(b)(1) (1994).[1] The amendments also allow regional corporations to issue different classes of stock so as to benefit “Natives who have attained the age of sixty-five” and “other identifiable groups of Natives.” 43 U.S.C. section 1606(g)(2)(B)(iii)(I) and (II) (1994). The result, as John Shively testified, has been to “recognize the nativeness of the settlement, not the corporateness of the settlement” and to “provide for what the [N]atives felt met their . . . real economic and social needs.” See S. Representation. 100-201, supra p. 29, at 20-21.

 It is against this backdrop that Kake’s financial security plan must be understood. The plan began as a means to assist shareholders in the village corporation who had seen little direct compensation from the ANCSA settlement.[2] Rather than “merely a method of distributing corporate assets to certain shareholders,” Op. at 1324, the plan was an attempt to overcome the “‘limitations of the corporate form of organization as the means of delivering benefits.'” Martha Hirschfield, Note, The Alaska Native Claims Settlement Act: Tribal Sovereignty and the Corporate Form, 101 Yale L.J. 1331, 1338 (quoting U.S. Dep’t of the Interior, ANCSA 1985 Study, at ES-14 (June 29, 1984) (unpublished draft)).

Kake chose the structure of the plan at the suggestion of Mutual Life Insurance Company of New York (MONY), which then sold Kake the insurance to fund it. MONY assured Kake’s president that the plan would “fit into the provision [sic] of the Alaska Native Claim [sic] Act” and “protect both Kake Tribal Corporation and Mutual of New York from not only dissatisfied [sic] shareholder [sic], but eager attornies [sic] and the Internal Revenue Service as well.”

 The board of directors adopted the plan and publicized it “for the welfare of our people who were retired or for the welfare of those whom they left behind when they died.” Clarence Jackson, the president of Kake and a member of the board of directors when the plan was adopted, stated that the board “feared that ANCSA meant that various welfare programs of the United States for Alaska Natives might be phased out leaving it to the corporations to provide for the security of these people.” Along with the benefits described by the court, Op. at 1322-1323, the corporation also paid the funeral expenses for all deceased shareholders, whether or not they were plan members. The plan, while untenable for a traditional business corporation, was in line with ANCSA’s purposes and similar to the programs approved by Congress in the 1988 amendments to ANCSA and recently upheld by the Ninth Circuit. See 43 U.S.C. section 1606(g)(2)(B)(iii)(I); Broad v. Sealaska Corporation., 85 F.3d 422 (9th Cir. 1996).

However, while the context of this case is unusual, I agree with the court that the financial security plan was not permitted under ANCSA or Alaska law. Kake never undertook any of the procedural steps to establish a settlement trust under 43 U.S.C. section 1629e (1994). Therefore, Kake’s financial security plan cannot be approved under the 1988 amendments to ANCSA. The question remains, however, what legal consequences should flow from that conclusion.

B. The Superior Court Should Have Required Plaintiffs to Frame Their Complaint as a Derivative Shareholders’ Action, Not a Direct Action.

Under basic principles of corporation law, when the board of directors and executives of a corporation make an impermissible payment of corporate funds, the shareholders’ right to redress is derivative and not direct. Charles R. P. Keating & Jim Perkowitz-Solheim, 12B Fletcher Cyclopedia of the Law of Private Corporations §§ 5928, 5929.20 (perm. ed. rev. vol. 1993) (hereinafter Fletcher). This is the rule even if the illegal payments are made to other shareholders. See, e.g., Mann-Paller Found. v. Econometric Research, 644 F. Supp. 92, 93-94, 98 (D.D.C. 1986). The reasoning behind this rule is that such impermissible payments, by reducing the corporation’s assets and thus the value of each share of stock, harm all shareholders equally. Id. at 98; see also 12B Fletcher, supra p. 5, § 5913. Thus, for the shareholders to be made “whole,” the misspent assets must be recovered by the corporation so that they can be used for proper corporate purposes. Hikita v. Nichiro Gyogyo Kaisha, Ltd., 713 P.2d 1197, 1199 (Alaska 1986).

The court acknowledges the merit of this analysis, Op. at 1327, but avoids its application. Instead, relying on its conviction that the harm to the plaintiffs consisted in Kake’s failure to make payments to them under the plan, the court concludes that Kake must pay the plaintiffs the same amount as it paid the elders. Op. at 1328, 1330. This reasoning can be summarized as follows: (1) the plaintiffs’ only possibility for a recovery is through a direct action; (2) the trial court has broad discretion in allowing direct actions; (3) a direct action is justifiable in this case because the plaintiffs complain of a “special injury;” and (4) the trial court can modify the remedy to alleviate the problems created by permitting a direct action. I address each step of this argument in order.

The court’s opinion states that “a direct action . . . is the only way to provide an adequate remedy” to the plaintiffs. Op. at 1326-1327. It reasons first that “the corporation may not be entitled to any damages from the shareholders who received payments under the financial security plan.” Op. at 1327. I agree. The court also states, however, that “it is unlikely that any damages collected from the responsible directors and officers will approximate the sum of payments made under the plan.” Op. at 1327. There is no support for this assumption in the record before us. Furthermore, even if this assertion were supported by the record, I fail to see its legal relevance. The proper focus in determining whether a shareholder may bring a direct or a derivative action is not the likelihood of complete recovery, but the nature of the harm. 12B Fletcher, supra p. 5, § 5908.

The court further argues that “even if the corporation actually did recover damages equivalent to the total payments under the financial security plan, any part of the damages paid by the directors and officers would be a windfall for the shareholders who received distributions under the plan.” Op. at 1327 n.4. However, such a “windfall” would not harm the plaintiffs. The plaintiffs would receive no more and no less than what they were entitled to: the full value of their shares in the corporation. Any extra payment to shareholders who received distributions under the plan would be funded entirely by those found liable for the impermissible distributions, not by the plaintiffs or the corporation. Furthermore, the payments would not reward wrongdoing, since, as the court notes, the shareholders who were included in the plan most likely did not know “the payments violated the law.” Op. at 1327.

As the next step in its analysis, the court states that the superior court has “wide discretion in interpreting whether a complaint states a derivative or primary claim.” Op. at 1327. The full statement of the rule is as follows:

[C]ourts generally have wide discretion in interpreting whether a complaint states a derivative or primary claim. The caption and prayer may aid in determining which is the true character of the action, although the complaint does not make an action individual or derivative by calling it one or the other, and the prayer for relief may be disregarded in determining whether the action is an individual or a derivative one. The nature of the action is to be determined from the body of the complaint rather than from its title.

12B Fletcher, supra p. 32, § 5912. This passage means that the trial court is free to disregard the parties’ characterization of the cause of action, not that the law affords the trial court latitude in making its determination. This principle, in my view, is central to a correct understanding of this case. The superior court erred in this case because it failed to look beyond the plaintiffs’ characterization of their claim.

There are cases, as the court’s opinion points out, in which a shareholder may bring both a derivative and a direct action. See, e.g., Hikita, 713 P.2d at 1199. However, in such cases the shareholder must have an independent basis for the direct action, usually the corporation’s violation of a duty “arising from contract or otherwise, and owed to the shareholder directly.” 12B Fletcher, supra p. 32, § 5921. Such an independent basis is not present in this case.[3]

In the third step of its analysis, the court contends that the plaintiffs may bring a direct action in this case because they suffered an injury “separate and distinct from other shareholders.” Op. at 1327. As the majority goes on to point out, however, courts have not adopted this “special injury” exception in cases like this one where all the shareholders, even the ones who received the illegal payments, were harmed by the misspending of corporate assets and the corresponding diminution in the value of shares. Op. at 1328. This reasoning also applies here. All the shareholders of Kake were injured by the financial security plan, many of them to an extent almost as great as the plaintiffs.[4] The fact that ten of the 575 shareholders received, through no fault of their own, a payment of $9,800 should not be allowed to alter the analysis of this case. As the plaintiffs correctly state, most shareholders “received an inexpensive distribution, a cheap insurance policy costing only a fraction of what the Cadillac policies cost.”

The court recognizes this crucial point when it states in the section of the opinion discussing its remedy: “[I]t is conceivable that requiring Kake to pay damages immediately and in a lump sum would disrupt Kake’s operations or prevent Kake from pursuing a profitable business opportunity. The result would be that all Kake shareholders would be injured.” Op. at 1328 (emphasis supplied). In other words, the court acknowledges that even though plaintiffs will benefit by receiving a damage award, they will also be harmed by the impact of that award on the value of their shares. This statement applies equally to the payments made under the plan and stands in contradiction to the majority’s statement that the “shareholders who received payments under the plan suffered no meaningful injury whatsoever.” Op. at 1327.

As its “second point supporting the contention that a direct action is appropriate,” the court asserts that “there are many reported cases concerning discriminatory distributions which proceeded as direct actions.” Op. at 1328. The six cases cited to support this statement, however, are distinguishable. In the first two, Amalgamated Sugar Co. v. NL Industries, 644 F. Supp. 1229, 1234 (S.D.N.Y. 1986) and Asarco, Inc. v. Holmes A. Court, 611 F. Supp. 468, 479-80 (D.N.J. 1985), the plaintiffs sought injunctions against ultra vires corporate acts. Such a direct action to enjoin the plan, rather than to recover monetary damages, would have been appropriate in this case.[5] See 12B Fletcher, supra p. 32, § 5915.10.

The rest of the cited cases deal with closely held corporations.[6] While some courts “recognize the right of a close corporation shareholder to sue directly . . . on a cause of action which would normally have to be brought derivatively,” 12B Fletcher, supra p. 32, § 5911.50, this court does not. Arctic Contractors, Inc. v. State, 573 P.2d 1385, 1386 n.2 (Alaska 1978) (stating that the “rule against individual shareholder suits also applies where all the stock in the corporation is held by one person or by a small number of people”). Even if we did recognize this exception, however, Kake is not a close corporation. Furthermore, the policy reasons for treating close corporations differently than other corporations in regard to direct actions do not support allowing a direct action in this case.[7]

Finally, the court attempts to address the “policy concerns” raised by its decision by instructing the superior court to make two findings. Op. at 1329. Rather than alleviate those concerns, however, the findings required by the majority highlight them, demonstrating even more clearly why the plaintiffs should not have been allowed to bring a direct action in this case. This court stated in Hikita, 713 P.2d at 1199, that one reason direct actions are not permitted where the harm is to the corporation is to protect “the prerogative of the board of directors to determine how the recovered damages should be utilized.” We have recognized that, because “[j]udges are not business experts, . . . courts are reluctant to substitute their judgment for that of the board of directors.” Alaska Plastics, Inc. v. Coppock, 621 P.2d 270, 278 (Alaska 1980). The majority opinion, however, orders the superior court to consider if Kake’s “operations or investment opportunities would be impaired if it were compelled to pay immediately the entire amount of the judgment.” Op. at 1329. This represents exactly the type of intrusion courts have traditionally avoided.

The court’s opinion also requires the superior court, if it “concludes that an immediate lump sum payment of damages would be inappropriate,” to “consider ordering Kake to suspend the payment of dividends to shareholders until Kake fully compensates the shareholders in the plaintiff class.” Op. at 1329. This suspension of dividends underlines that the majority of shareholders, whom the plaintiffs acknowledge suffered considerable discrimination under the plan, will fund the plaintiffs’ recovery. Thus, for these shareholders, the majority’s decision, rather than remedying the plan, continues it: Kake will now be forced to make more cash payments to yet another, larger group of select shareholders.

III. CONCLUSION

Kake erred in adopting its financial security plan. This mistake injured not only the plaintiffs, but all of those who own shares in the corporation. These individuals, who became corporate shareholders by Congressional action rather than through individual investment decisions, have a tremendous stake in the success of their corporation. Allowing plaintiffs to recover directly from the corporation is not only unfair to the rest of the shareholders, it is inconsistent with the principles of corporation law. Ironically, this same body of law that has so often been a stumbling block for Native corporations should, in this case, have worked in Kake’s favor. Therefore, I respectfully dissent.

A Styles & Implementation Guide

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I. Roman Numeral Headings (Meta Serif book, 32px, all uppercase – Heading 3)

In nibh mauris cursus mattis molestie a iaculis at. Amet commodo nulla facilisi nullam. Nec feugiat in fermentum posuere urna nec. Pretium vulputate sapien nec sagittis aliquam malesuada bibendum. Adipiscing elit pellentesque habitant morbi tristique.[1]

A. Capital Letter Headings (Meta Serif medium (acts like bold), 26px, single indent – Heading 4)

Ultrices gravida dictum fusce ut placerat orci nulla pellentesque dignissim. Blandit cursus risus at ultrices mi tempus. Ut diam quam nulla porttitor. Ultricies leo integer malesuada nunc vel risus. Faucibus ornare suspendisse sed nisi lacus.[2]

1. Numbered Heading (Meta Serif medium (acts like bold), 23px, double indent – Heading 5)

Diam vel quam elementum pulvinar etiam non quam lacus suspendisse. Diam volutpat commodo sed egestas. Adipiscing elit pellentesque habitant morbi tristique senectus et.

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Yellen v. Confederated Tribes of Chehalis Reservation

Synopsis 

Background: Federally recognized Indian tribes brought actions challenging Treasury Secretary’s announcement that Alaska Native regional and village corporations (ANC) were eligible for emergency aid set aside for tribal governments under Coronavirus Aid, Relief, and Economic Security (CARES) Act. After cases were consolidated, the United States District Court for the District of Columbia, Amit P. Mehta, J., granted summary judgment to government and ANCs. Tribes appealed. The United States Court of Appeals for the District of Columbia Circuit, Katsas, Circuit Judge, 976 F.3d 15, reversed. Certiorari was granted.

The Supreme Court, Justice Sotomayor, held that while ANCs are not federally recognized tribes in a sovereign political sense, they are “Indian tribes” under plain definition in Indian Self-Determination and Education Assistance Act (ISDA), and thus, they are eligible to receive monetary relief under the CARES Act.

Reversed and remanded.

Justice Alito joined in part.

Justice Gorsuch filed a dissenting opinion, in which Justices Thomas and Kagan joined.

Procedural Posture(s): Petition for Writ of Certiorari; On Appeal; Motion for Summary Judgment.

Syllabus[*]

Title V of the Coronavirus Aid, Relief, and Economic Security (CARES) Act allocates $8 billion to “Tribal governments” to compensate for unbudgeted expenditures made in response to COVID–19. 42 U.S.C. § 801(a)(2)(B). The question in these cases is whether Alaska Native Corporations (ANCs) are eligible to receive any of that $8 billion. Under the CARES Act, a “Tribal government” is the “recognized governing body of an Indian tribe” as defined in the Indian Self-Determination and Education Assistance Act (ISDA). §§ 801(g)(5), (1). ISDA, in turn, defines an “Indian tribe” as “any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act [(ANCSA),] which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.” 25 U.S.C. § 5304(e).

Consistent with the Department of the Interior’s longstanding view that ANCs are Indian tribes under ISDA, the Department of the Treasury determined that ANCs are eligible for relief under Title V of the CARES Act, even though ANCs are not “federally recognized tribes” (i.e., tribes with which the United States has entered into a government-to-government relationship). A number of federally recognized tribes sued. The District Court entered summary judgment for the Treasury Department and the ANCs, but the Court of Appeals for the District of Columbia Circuit reversed.

Held: ANCs are “Indian tribe[s]” under ISDA and thus eligible for funding under Title V of the CARES Act. Pp. 2441 – 2452.

(a) The ANCs argue that they fall under the plain meaning of ISDA’s definition of “Indian tribe.” Respondents ask the Court to adopt a term-of-art construction that equates being “recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians” with being a “federally recognized tribe.” Pp. 2441 – 2443.

(1) Under the plain meaning of ISDA, ANCs are Indian tribes. ANCs are “established pursuant to” ANCSA and thereby “recognized as eligible” for that Act’s benefits. ANCSA, which made ANCs eligible to select tens of millions of acres of land and receive hundreds of millions of tax-exempt dollars, 43 U.S.C. §§ 1605, 1610, 1611, is a special program provided by the United States to “Indians,” i.e., Alaska Natives. Given that ANCSA is the only statute ISDA’s “Indian tribe” definition mentions by name, eligibility for ANCSA’s benefits satisfies the definition’s final “recognized-as-eligible” clause. Pp. 2441 – 2443.

(2) Respondents ask the Court to read ISDA’s “Indian tribe” definition as a term of art. But respondents fail to establish that the language of ISDA’s recognized-as-eligible clause was an accepted way of saying “a federally recognized tribe” in 1975, when ISDA was passed. Nor is the mere inclusion of the word “recognized” enough to import a term-of-art meaning. Respondents also fail to show that the language of the recognized-as-eligible clause later became a term of art that should be backdated to ISDA’s passage in 1975. Pp. 2443 – 2447.

(3) Even if ANCs did not satisfy the recognized-as-eligible clause, they would still satisfy ISDA’s definition of an “Indian tribe.” If respondents were correct that only a federally recognized tribe can satisfy that clause, then the best way to read the “Indian tribe” definition would be for the recognized-as-eligible clause not to apply to ANCs at all. Otherwise, despite being prominently “includ[ed]” in the “Indian tribe” definition, 25 U.S.C. § 5304(e), all ANCs would be excluded by a federal-recognition requirement there is no reasonable prospect they could ever satisfy. Pp. 2447 – 2450.

(4) Respondents’ remaining arguments that ANCs are not Indian tribes under ISDA are unpersuasive. They first argue that the ANCs misrepresent how meaningful a role they play under ISDA because the actual number of ISDA contracts held by ANCs is negligible. This point is largely irrelevant. No one would argue that a federally recognized tribe was not an Indian tribe under ISDA just because it had never entered into an ISDA contract. Respondents further argue that treating ANCs as Indian tribes would complicate the administration of ISDA. But respondents point to no evidence of such administrative burdens in the 45 years the Executive Branch has treated ANCs as Indian tribes. Respondents also warn that blessing ANCs’ status under ISDA will give ANCs ammunition to press for participation in other statutes that incorporate ISDA’s “Indian tribe” definition. This concern cuts both ways, as adopting respondents’ position would presumably exclude ANCs from the many other statutes incorporating ISDA’s definition, even those under which ANCs have long benefited. Pp. 2450 – 2451.

(b) One respondent tribe further argues that the CARES Act excludes ANCs regardless of whether they are Indian tribes under ISDA, because ANCs do not have a “recognized governing body.” In the ISDA context, the term “recognized governing body” has long been understood to apply to an ANC’s board of directors, and nothing in either the CARES Act or ISDA suggests that the term places additional limits on the kinds of Indian tribes eligible to benefit under the statutes. Pp. 2447 – 2452.

976 F.3d 15, reversed and remanded.

SOTOMAYOR, J., delivered the opinion of the Court, in which ROBERTS, C.J., and BREYER, KAVANAUGH, and BARRETT, JJ., joined, and in which ALITO, J., joined as to Parts I, II–C, II–D, III, and IV. GORSUCH, J., filed a dissenting opinion, in which THOMAS and KAGAN, JJ., joined.

ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT


Attorneys and Law Firms

Elizabeth B. Prelogar, Acting Solicitor General, Counsel of Record, Brian M. Boynton, Acting Assistant Attorney General, Edwin S. Kneedler, Deputy Solicitor General, Matthew Guarnieri, Assistant to the Solicitor General, Michael S. Raab, Daniel Tenny, Adam C. Jed, Attorneys Department of Justice, Washington, DC, for Petitioner.

Riyaz A. Kanji, Counsel of Record, Kanji & Katzen, P.L.L.C., Ann Arbor, MI, Cory J. Albright, Katie E. Jones, Lynsey R. Gaudioso, Kanji & Katzen, P.L.L.C., Seattle, WA, Kannon K. Shanmugam, Paul, Weiss, Rifkind, Wharton, & Garrison LLP, Washington, DC, for Confederated Tribes of the Chehalis Reservation and Tulalip Tribes, for Akiak Native Community, Aleut Community of St. Paul Island, Asa’carsarmiut Tribe, and Houlton Band of Maliseet Indians.

Erin C. Dougherty Lynch, Matthew N. Newman, Wesley James Furlong, Megan R. Condon, Native American Rights Fund, Anchorage, AK, John E. Echohawk, Native American Rights Fund, Boulder, CO, for Arctic Village Council, Native Village of Venetie Tribal Government, Nondalton Tribal Council, and Rosebud Sioux Tribe.

Nicole E. Ducheneaux, Big Fire Law & Policy Group LLP, Bellevue, NE, for Cheyenne River Sioux Tribe.

Lisa Koop Gunn, Senior Attorney, Tulalip Tribes, Tulalip, WA, for Tulalip Tribes.

Harold Chesnin, Lead Counsel for the Tribe Oakville, WA, for Confederated Tribes of the Chehalis Reservation.

Doreen McPaul, Attorney General, Paul Spruhan, Assistant Attorney General, Jason Searle, Navajo Nation Department of Justice, Window Rock, AZ, Richard W. Hughes, Donna M. Connolly, Reed C. Bienvenu, Rothstein Donatelli LLP, Santa Fe, NM, for Pueblo of Picuris, for Navajo Nation.

Bradley G. Bledsoe Downes, General Counsel, Crescent City, CA, for Elk Valley Rancheria, California.

Eric Dahlstrom, April E. Olson, Rothstein Donatelli LLP, Tempe, AZ, Lori Bruner, Quinault Office of the Attorney General, Taholah, WA, for Quinault Indian Nation.

Alexander B. Ritchie, Attorney General, San Carlos Avenue, San Carlos, AZ, for San Carlos Apache Tribe.

Jeffrey S. Rasmussen, Frances C. Bassett, Jeremy J. Patterson, Patterson Earnhart Real Bird & Wilson, Louisville, CO, for Respondent.

Paul D. Clement, Counsel of Record, Erin E. Murphy, Ragan Naresh, Matthew D. Rowen, Kirkland & Ellis LLP, Washington, DC, for Petitioners.


Opinion

Justice SOTOMAYOR delivered the opinion of the Court:[*]

In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, 134 Stat. 281. Title V of the Act allocates $8 billion of monetary relief to “Tribal governments.” 134 Stat. 502, 42 U.S.C. § 801(a)(2)(B). Under the CARES Act, a “Tribal government” is the “recognized governing body of an Indian tribe” as defined in the Indian Self-Determination and Education Assistance Act (ISDA). §§ 801(g)(5), (1). ISDA, in turn, defines an “Indian tribe” as “any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act[,] which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.”25 U.S.C. § 5304(e).

The Department of the Treasury asked the Department of the Interior, the agency that administers ISDA, whether Alaska Native Corporations (ANCs) meet that definition. Consistent with its longstanding view, the Interior Department said yes. The Treasury Department then set aside approximately $500 million of CARES Act funding for the ANCs. The question presented is whether ANCs are “Indian tribe[s]” under ISDA, and are therefore eligible to receive the CARES Act relief set aside by the Treasury Department. The Court holds that they are.

I

This is not the first time the Court has addressed the unique circumstances of Alaska and its indigenous population. See, e.g., Sturgeon v. Frost, 587 U.S. ––––, 139 S.Ct. 1066, 203 L.Ed.2d 453 (2019); Sturgeon v. Frost, 577 U.S. 424, 136 S.Ct. 1061, 194 L.Ed.2d 108 (2016); Alaska v. Native Village of Venetie Tribal Government, 522 U.S. 520, 118 S.Ct. 948, 140 L.Ed.2d 30 (1998); Metlakatla Indian Community v. Egan, 369 U.S. 45, 82 S.Ct. 552, 7 L.Ed.2d 562 (1962). The “simple truth” reflected in those prior cases is that “Alaska is often the exception, not the rule.” Sturgeon, 577 U.S. at 440, 136 S.Ct. 1061. To see why, one must first understand the United States’ unique historical relationship with Alaska Natives.

A

When the United States purchased the Territory of Alaska from Russia in 1867, Alaska Natives lived in communities dispersed widely across Alaska’s 365 million acres. In the decades that followed, “[t]here was never an attempt in Alaska to isolate Indians on reservations,” as there had been in the lower 48 States. Metlakatla Indian Community, 369 U.S. at 51, 82 S.Ct. 552. As a consequence, the claims of Alaska Natives to Alaskan land remained largely unsettled even following Alaska’s admission to the Union as our 49th State in 1959.[2] See Alaska Statehood Act, § 4, 72 Stat. 339; Sturgeon, 577 U.S. at 429, 136 S.Ct. 1061.

That changed in 1971 with the Alaska Native Claims Settlement Act (ANCSA). 85 Stat. 688, 43 U.S.C. § 1601 et seq. ANCSA officially dispensed with the idea of recreating in Alaska the system of reservations that prevailed in the lower 48 States. It extinguished Alaska Natives’ claims to land and hunting rights and revoked all but one of Alaska’s existing reservations. § 1610. In exchange, “Congress authorized the transfer of $962.5 million in state and federal funds and approximately 44 million acres of Alaska land to state-chartered private business corporations that were to be formed pursuant to” ANCSA. Native Village of Venetie Tribal Government, 522 U.S. at 524, 118 S.Ct. 948. These corporations are called ANCs.

Relevant here, ANCs come in two varieties: regional ANCs and village ANCs. To form the regional ANCs, the Act directed the Secretary of the Interior to divide Alaska into 12 geographic regions. § 1606(a). Within each region, Alaska Natives were instructed to “incorporate under the laws of Alaska a Regional Corporation to conduct business for profit.” § 1606(d). To form the village ANCs, the Act identified approximately 200 Alaska “Native villages,” a term encompassing any community of 25 or more Alaska Natives living together as of the 1970 census. §§ 1602(c), 1610(b), 1615(a). For each Alaska Native village, ANCSA ordered the “Native residents” to create an accompanying village corporation to “hold, invest, manage and/or distribute lands, property, funds, and other rights and assets for and on behalf ” of the village. §§ 1602(j), 1607(a). ANCSA then directed the Secretary to prepare a roll showing the region and, if applicable, village to which each living Alaska Native belonged. § 1604. Enrolled Alaska Natives then received shares in their respective ANCs. §§ 1606(g), 1607.

B

In 1975, four years after ANCSA’s enactment, Congress passed ISDA. 25 U.S.C. § 5301 et seq. ISDA answered the call for a “new national policy” of “autonomy” and “control” for Native Americans and Alaska Natives. H.R. Doc. No. 91–363, p. 3 (1970); see also Menominee Tribe of Wis. v. United States, 577 U.S. 250, 252, 136 S.Ct. 750, 193 L.Ed.2d 652 (2016) (“Congress enacted [ISDA] in 1975 to help Indian tribes assume responsibility for aid programs that benefit their members”).

ISDA decentralized the provision of federal Indian benefits away from the Federal Government and toward Native American and Alaska Native organizations. ISDA allows any “Indian tribe” to request that the Secretary of the Interior enter into a self-determination contract with a designated “tribal organization.” § 5321(a)(1). Under such a contract, the tribal organization delivers federally funded economic, infrastructure, health, or education benefits to the tribe’s membership.

As originally drafted, ISDA’s “Indian tribe” definition did not mention ANCs. H.R. 6372, 93d Cong., 1st Sess., § 1(a) (1973) (defining “Indian tribe” to mean “an Indian tribe, band, nation, or Alaska Native Community for which the Federal Government provides special programs and services because of its Indian identity”). Prior to passage, however, the definition was amended twice to include, first, Alaska Native villages and, second, ANCs. See H.R. Rep. No. 93–1600, p. 14 (1974) (“The Subcommittee amended the definition of ‘Indian tribe’ to include regional and village corporations established by [ANCSA]”). Today, ISDA defines an “Indian tribe” as “any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to [ANCSA], which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.” § 5304(e).[3]

Despite the express inclusion of ANCs in the definition of “Indian tribe,” a question arose in the Interior Department whether the “recognized-as-eligible clause” limits the definition to “federally recognized tribes” only. A federally recognized tribe is one that has entered into “a government-to-government relationship [with] the United States.” 1 F. Cohen, Handbook of Federal Indian Law § 3.02[3] (N. Newton ed. 2012). This recognition can come in a number of ways: “from treaty, statute, executive or administrative order, or from a course of dealing with the tribe as a political entity.” W. Canby, American Indian Law in a Nutshell 4 (7th ed. 2020). As private companies incorporated under state law, ANCs have never been “recognized” by the United States in this sovereign political sense.

In 1976, the year after ISDA’s enactment, the Interior Department’s Assistant Solicitor for Indian Affairs issued a memorandum on the status of ANCs under ISDA. App. 44–48. In the Assistant Solicitor’s view, the express inclusion of ANCs within the definition of “Indian tribe” confirmed that ANCs are Indian tribes under ISDA, even though they are not federally recognized tribes. In the decades since, the Interior Department has repeatedly reaffirmed that position. See, e.g., 60 Fed. Reg. 9250 (1995) (ANCs “ha[ve] been designated as ‘tribes’ for the purposes of some Federal laws,” including ISDA); 58 Fed. Reg. 54364 (1993) (ANCs “are not governments, but they have been designated as ‘tribes’ for the purposes of ” ISDA); 53 Fed. Reg. 52833 (1988) (ISDA “specifically include[s]” ANCs).

C

In 2020, Congress incorporated ISDA’s “Indian tribe” definition into the CARES Act. 42 U.S.C. § 801(g)(1). Title V of the Act allocates $150 billion to “States, Tribal governments, and units of local government” to compensate for unbudgeted expenditures made in response to COVID–19. § 801(a)(1). Of that $150 billion, $8 billion is reserved for “Tribal governments.” § 801(a)(2)(B). A “Tribal government” is the “recognized governing body of an Indian Tribe,” as ISDA defines the latter term. §§ 801(g)(5), (1).

On April 23, 2020, the Treasury Department determined that ANCs are eligible for CARES Act relief, and set aside more than $500 million for them (since reduced to approximately $450 million). App. 53–54; Letter from E. Prelogar, Acting Solicitor General, to S. Harris, Clerk of Court (May 12, 2021). Soon after the Treasury Department’s announcement, a number of federally recognized tribes (respondents) sued, arguing that only federally recognized tribes are Indian tribes under ISDA, and thus under the CARES Act. Some Tribes further argued that ANCs do not have a “recognized governing body” for purposes of the CARES Act and are ineligible to receive its funding for that reason as well.

The suits were consolidated in the District Court for the District of Columbia, which ultimately entered summary judgment for the Treasury Department and the ANCs. The Court of Appeals for the District of Columbia Circuit reversed. Confederated Tribes of Chehalis Reservation v. Mnuchin, 976 F.3d 15 (2020). In its view, the recognized-as-eligible clause is a term of art requiring any Indian tribe to be a federally recognized tribe. Because no ANC is federally recognized, the court reasoned, no ANC qualifies for funding under Title V of the CARES Act. In so holding, the D. C. Circuit split with the Ninth Circuit, which had held decades prior in Cook Inlet Native Assn. v. Bowen, 810 F.2d 1471 (1987), that ANCs are Indian tribes for ISDA purposes, regardless of whether they have been federally recognized. Id., at 1474.

We granted certiorari, 592 U.S. ––––, 141 S.Ct. 976, 208 L.Ed.2d 510 (2021), to resolve the Circuit split and determine whether ANCs are eligible for the CARES Act funding set aside by the Treasury Department.

II

All but one of the respondent Tribes agree that ANCs are eligible to receive the CARES Act funds in question if they are Indian tribes for purposes of ISDA.[4] The primary question for the Court, then, is whether ANCs satisfy ISDA’s definition of “Indian tribe.” The ANCs ask the Court to answer that question by looking to the definition’s plain meaning. Respondents ask the Court to adopt a term-of-art construction that equates being “recognized as eligible for the special programs and services provided by the United States to Indians” with being a “federally recognized tribe,” i.e., a tribe recognized by the United States in a sovereign political sense.

A

Starting with the plain meaning, an “Indian tribe” under ISDA is a “tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to [ANCSA], which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.” 25 U.S.C. § 5304(e). The definition’s first two clauses are straightforward enough. The first lists entities that might count as Indian tribes under the Act (e.g., tribes, bands, nations). The second, “the Alaska clause,” makes clear that Alaska Native villages and ANCs are “includ[ed].” The third, “the recognized-as-eligible clause,” requires more analysis. According to that clause, the listed entities must be “recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.”

ANCs, of course, are “established pursuant to” ANCSA within the meaning of the Alaska clause. They are thereby “recognized as eligible” for ANCSA’s benefits. The trickier question is whether eligibility for the benefits of ANCSA counts as eligibility for “the special programs and services provided by the United States to Indians because of their status as Indians.”

It does. Contrary to the dissent’s view, post, at 2457 – 2458 (opinion of GORSUCH, J.), ANCSA is readily described as a special program provided by the United States to “Indians” (in this case, Alaska Natives). See 43 U.S.C. § 1626 (describing ANCSA’s relationship to “other programs”). The scope of that program is substantial: ANCSA made ANCs eligible to select tens of millions of acres of land and receive hundreds of millions of tax-exempt dollars. §§ 1605, 1610, 1611. Not just a one-time payment, ANCSA provides for revenue sharing among the regional ANCs to ensure Alaska Natives across the State benefit from an ongoing equitable distribution of ANC profits. § 1606(i). ANCSA further entrusts ANCs to “hold, invest, manage and/or distribute lands, property, funds, and other rights and assets for and on behalf ” of Alaska Natives, who are the ANCs’ shareholders, as well as to distribute dividends to them. See §§ 1602(j), 1606(j). Moreover, ANCs and their shareholders are “eligible for the benefits of ” ANCSA, § 1606(d), precisely because of their status as Indians. See § 1626(e)(1) (“For all purposes of Federal law, a Native Corporation shall be considered to be a corporation owned and controlled by Natives”); note following § 1601, p. 1136 (ANCSA is “ ‘Indian legislation enacted by Congress pursuant to its plenary authority under the Constitution of the United States to regulate Indian affairs’ ”).

Respondents do not deny that the benefits of ANCSA are “a” special program or service provided by the United States to Indians. According to respondents, however, such benefits are not “the” special programs and services provided to Indians (e.g., healthcare, education, and other social services provided by federal agencies like the Bureau of Indian Affairs and the Indian Health Service). “The” special programs and services, respondents assert, are available only to federally recognized tribes (or, more precisely, to members of such tribes). In respondents’ view, ANCs are thus “includ[ed]” in the “Indian tribe” definition’s Alaska clause only to be excluded en masse from that definition by the recognized-as-eligible clause.

That would certainly be an odd result. Fortunately, the text does not produce it. ISDA’s “Indian tribe” definition does not specify the particular programs and services an entity must be eligible for to satisfy the recognized-as-eligible clause. Given that ANCSA is the only statute the “Indian tribe” definition mentions by name, the best reading of the definition is that being eligible for ANCSA’s benefits by itself satisfies the recognized-as-eligible clause.

Consider a similarly worded example. A doctor recommends getting a blood test every six months to “any child, adult, or senior, including anyone over the age of 75 whose blood-sugar levels have tested in the prediabetic range within the last five years, who exhibits the warning signs of Type 2 diabetes.” Without further context, it is unclear exactly which warning signs the doctor is referring to, or how many of those signs a child, adult, or senior must exhibit before warranting biannual testing. But it is fair to say that individuals over 75 with prediabetic blood-sugar levels within the last five years should get tested biannually, even if they exhibit no other warning signs. By expressly “including” individuals with that one warning sign, the doctor’s recommendation makes clear that particular sign, by itself, is warning enough.

Just so here: Congress’ express inclusion of ANCs “established pursuant to [ANCSA]” confirms that eligibility for ANCSA’s benefits alone is eligibility enough to be an Indian tribe. ANCs thus satisfy ISDA’s Indian tribe definition, regardless of whether they and their shareholders are eligible for federal Indian programs and services other than those provided in ANCSA. At any rate, the one-to-one relationship respondents posit between membership in a federally recognized tribe and eligibility for federal Indian benefits more broadly does not hold in the unique circumstances of Alaska. See Letter from E. Prelogar, Acting Solicitor General, to S. Harris, Clerk of Court (Apr. 22, 2021) (“[T]he federal government has historically provided benefits and services to Alaska Natives who are not enrolled members of a federally recognized Indian tribe”); D. Case & D. Voluck, Alaska Natives and Americans Laws 30 (3d ed. 2012) (“[T]he federal government has, at least since the end of the nineteenth century, provided a wide variety of programs and services to Alaska Natives solely because of their status as Natives”). So ANCSA is not, in fact, the only federal Indian program or service for which ANCs and their shareholders are eligible.

It should come as no surprise that Congress made ANCs eligible to contract under ISDA. After all, Congress itself created ANCs just four years earlier to receive the benefits of the Alaska land settlement on behalf of all Alaska Natives. Allowing ANCs to distribute federal Indian benefits more broadly is entirely consistent with the approach Congress charted in ANCSA. Accord, 1 American Indian Policy Review Comm’n, Final Report, 95th Cong., 1st Sess., 495 (Comm. Print 1977) (ANCs “might well be the form or organization best suited to sponsor certain kinds of federally funded programs” in Alaska); 43 U.S.C. § 1606(r) (“The authority of a Native Corporation to provide benefits … to promote the health, education, or welfare of … shareholders or family members is expressly authorized and confirmed”).

Under the plain meaning of ISDA, ANCs are Indian tribes, regardless of whether they are also federally recognized tribes. In so holding, the Court does not open the door to other Indian groups that have not been federally recognized becoming Indian tribes under ISDA. Even if such groups qualify for certain federal benefits, that does not make them similarly situated to ANCs. ANCs are sui generis entities created by federal statute and granted an enormous amount of special federal benefits as part of a legislative experiment tailored to the unique circumstances of Alaska and recreated nowhere else. Moreover, with the exception of Alaska Native villages (which are now federally recognized), no entities other than ANCs are expressly “includ[ed]” by name in ISDA’s “Indian tribe” definition. Cf. Sturgeon, 577 U.S. at 440, 136 S.Ct. 1061 (“All those Alaska-specific provisions reflect the simple truth that Alaska is often the exception, not the rule”).

B

Respondents urge this Court to discard the plain meaning of the “Indian tribe” definition in favor of a term-of-art construction. In respondents’ view, the 69 words of the “Indian tribe” definition are a long way of saying just 8: An “Indian tribe” means a “federally recognized tribe.” If that is right, respondents are correct that ANCs are not Indian tribes, because everyone agrees they are not federally recognized tribes. To prevail on this argument, however, respondents must demonstrate that the statutory context supports reading ISDA’s “Indian tribe” definition as a term of art rather than according to its plain meaning. See Johnson v. United States, 559 U.S. 133, 139, 130 S.Ct. 1265, 176 L.Ed.2d 1 (2010). Their efforts are not persuasive.

In arguing for a term-of-art construction, respondents first rely on a series of Acts that terminated various tribes starting in the late 1950s. Those Acts closed tribal membership rolls, specified the division of tribal assets, and revoked tribal constitutions. See, e.g., Act of Sept. 21, 1959, Pub. L. No. 86–322, 73 Stat. 592. Following termination, the tribe and its members were no longer “entitled to any of the special services performed by the United States for Indians because of their status as Indians.” § 5, id., at 593. As respondents note, this language resembles (although does not mirror precisely) the final words of ISDA’s recognized-as-eligible clause. If being terminated means no longer being “entitled to any of the special services performed by the United States for Indians because of their status as Indians,” the argument goes, then being “recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians” means being a federally recognized tribe.

Respondents misjudge the relevance of these termination statutes. Those statutes do not contain the words “recognized as eligible”; they do not even contain the word “recognized.” Furthermore, the termination statutes use their ISDA-reminiscent phrasing not as a synonym for termination but to describe just one, among other, consequences of a tribe’s constitution being revoked. See, e.g., ibid. (“The constitution of the tribe … shall be revoked by the Secretary. Thereafter, the tribe and its members shall not be entitled to any of the special services performed by the United States for Indians because of their status as Indians, all statutes of the United States that affect Indians because of their status as Indians shall be inapplicable to them, and the laws of the several States shall apply to them in the same manner they apply to other persons or citizens within their jurisdiction”).

Some linguistic similarity between ISDA and the termination statutes does not suggest that the language of the recognized-as-eligible clause was an accepted way of saying “a federally recognized tribe” in 1975. It instead supports a much more limited proposition: A federally recognized tribe that has not been terminated is “entitled” to “special services performed by the United States for Indians,” and thereby satisfies ISDA’s similarly worded recognized-as-eligible clause. But of course, no one disputes that being a federally recognized tribe is one way to qualify as an Indian tribe under ISDA; it is just not the only way.

Nor is the mere inclusion of the word “recognized” enough to give the recognized-as-eligible clause a term-of-art meaning. True, the word “recognized” often refers to a tribe with which the United States has a government-to-government relationship (particularly when it is sandwiched between the words “federally” and “tribe”). That does not mean, however, that the word “recognized” always connotes political recognition.[5]

“Recognized” is too common and context dependent a word to bear so loaded a meaning wherever it appears, even in laws concerning Native Americans and Alaska Natives. Cf. Bruesewitz v. Wyeth LLC, 562 U.S. 223, 235, 131 S.Ct. 1068, 179 L.Ed.2d 1 (2011) (declining to read “unavoidable” as a term of art in part because “ ‘[u]navoidable’ is hardly a rarely used word”). Certainly, “recognized” can signify political recognition; it can also refer to something far more pedestrian. See, e.g., Black’s Law Dictionary 1436 (rev. 4th ed. 1968) (defining “recognition” as “[r]atification; confirmation; an acknowledgment that something done by another person in one’s name had one’s authority”). The type of recognition required is a question best answered in context. See, e.g., 25 U.S.C. § 3002(a)(2)(C)(1) (providing for control over certain cultural items “in the Indian tribe that is recognized as aboriginally occupying the area in which the objects were discovered”); § 4352(3) (defining a “Native Hawaiian organization” as a nonprofit that, among other things, “is recognized for having expertise in Native Hawaiian culture and heritage, including tourism”). In ISDA, the required recognition is of an entity’s eligibility for federal Indian programs and services, not a government-to-government relationship with the United States.[6]

Respondents next rely on sources that postdate ISDA. Ordinarily, however, this Court reads statutory language as a term of art only when the language was used in that way at the time of the statute’s adoption. See Food Marketing Institute v.Argus Leader Media, 588 U.S. ––––, ––––, 139 S.Ct. 2356, 2365, 204 L.Ed.2d 742 (2019) (rejecting a term-of-art reading where the parties “mustered no evidence that the terms of ” the statute carried a “specialized common law meaning … at the time of their adoption”). In relying on sources postdating ISDA, respondents must show not only that the language of the recognized-as-eligible clause later became a term of art, but also that this term-of-art understanding should be backdated to ISDA’s passage in 1975. They cannot make that showing.

Respondents lean most heavily on the Federally Recognized Indian Tribe List Act of 1994 (List Act), enacted almost 20 years after ISDA. See 25 U.S.C. §§ 5130, 5131. The List Act requires the Secretary of the Interior to publish an annual list of “all Indian tribes which the Secretary recognizes to be eligible for the special programs and services provided by the United States to Indians because of their status as Indians.” § 5131(a). According to respondents, ANCs’ absence from the Secretary’s list confirms that they are not “eligible for the special programs and services provided by the United States to Indians because of their status as Indians,” § 5304(e), and thus fail ISDA’s recognized-as-eligible clause.

Respondents’ cross-referencing argument, however, requires the Court to ignore the reason why ANCs are not on the list. True to its full name, the Federally Recognized Indian Tribe List Act tasks the Secretary with maintaining a “ ‘list of federally recognized tribes’ ” only. Note following § 5130, p. 678. The List Act, moreover, lacks language like that in ISDA expressly “including” ANCs “established pursuant to” ANCSA. § 5304(e). The obvious inference, then, is that ANCs are not on the Secretary’s list simply because they are not federally recognized.

History confirms as much. In 1979, 15 years before the List Act was passed, the Secretary began publishing a list of Indian tribes “that have a government-to-government relationship with the United States.” 44 Fed. Reg. 7235. In 1988, ANCs were added to the Secretary’s list, which had been retitled “Indian Entities Recognized and Eligible To Receive Services From the United States Bureau of Indian Affairs,” because ANCs are “specifically eligible for the funding and services of the [Bureau of Indian Affairs] by statute” and “should not have to undertake to obtain Federal Acknowledgement” (i.e., federal recognition). 53 Fed. Reg. 52829, 52832. In 1993, the Secretary dropped ANCs from the list, concluding that “the inclusion of ANC[s], which lack tribal status in a political sense, called into question the status” of the other entities on the list. 58 Fed. Reg. 54365. In so doing, the Secretary reaffirmed that ANCs “are not governments, but they have been designated as ‘tribes’ for the purposes of some Federal laws,” including ISDA. Id., at 54364. The List Act, passed the following year, “confirmed the Secretary’s authority and responsibility” to maintain a list of federally recognized tribes. 60 Fed. Reg. 9251. Hence, ANCs remained off the list.

To accept respondents’ argument, then, the Court would need to cross-reference ISDA’s definition of an “Indian tribe” with the Secretary’s list, but ignore why ANCs were excluded from that list in the first place. The Court declines to take that doubtful step.

Despite asking the Court to consider post-ISDA statutes to determine whether ANCs are “Indian tribes” under ISDA, moreover, respondents largely fail to address post-ISDA congressional actions that contradict their position. First, consider Congress’ treatment of the Cook Inlet Region, Inc. (CIRI), the regional ANC for the ANCSA region covering more than half the Alaskan population. See The Twelve Regions, ANCSA Regional Association (June 1, 2021), https://ancsaregional.com/the-twelve-regions. In 1994, CIRI contracted under ISDA through its designated healthcare provider to offer healthcare benefits to Alaska Natives and American Indians in Anchorage and the Matanuska-Susitna Valley. See Cook Inlet Treaty Tribes v. Shalala, 166 F.3d 986, 988 (CA9 1999). A group of Alaska Native villages sued, arguing that the Federal Government should have first obtained their approval. Ibid.; see 25 U.S.C. § 5304(l) (“[I]n any case where [an ISDA contract] benefit[s] more than one Indian tribe, the approval of each such Indian tribe” is required). Congress mooted the dispute by passing a bill that waived ISDA’s normal tribal approval requirement for CIRI’s healthcare contracts. Department of the Interior and Related Agencies Appropriations Act, 1998, § 325(a), 111 Stat. 1597–1598. In so doing, Congress not only assumed CIRI was eligible to enter into ISDA contracts (notwithstanding its lack of federal recognition), but actively cleared the way for it to do so.

Next, consider the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA), 25 U.S.C. § 4101 et seq., which incorporates ISDA’s “Indian tribe” definition, see § 4103(13)(B). NAHASDA creates a housing block grant program for Indian tribes. § 4111. The regional ANCs (acting through their designated housing authorities) are among the largest recipients of these grants in Alaska, receiving tens of millions of dollars each year. See Dept. of Housing and Urban Development, FY 2020 Final [Indian Housing Block Grant] Funding by [Tribally Designated Housing Entities] & Regions. For years, Congress has passed appropriations riders requiring that the existing recipients of NAHASDA’s housing block grants in Alaska (including ANCs) continue to receive those grants. See, e.g., Further Consolidated Appropriations Act, 2020, Pub. L. 116–94, Div. H, Tit. II, § 211, 133 Stat. 3003. Following the D. C. Circuit’s decision in this case, Congress awarded additional grants under NAHASDA and emphasized that, “[f]or the avoidance of doubt,” the “Indian tribe[s]” eligible for those grants “shall include Alaska native corporations established pursuant to” ANCSA. Consolidated Appropriations Act, 2021, Pub. L. 116–260, Div. N, Tit. V, Subtit. A, § 501(k)(2)(C), 134 Stat. 2077.

Thus, post-ISDA sources prove no more fruitful to respondents than pre-ISDA ones. Even assuming the Court should look to events after 1975, respondents cannot cherry-pick statutes like the List Act without explaining postenactment developments that undermine their interpretation. In the end, the various statutes cited do not support respondents’ efforts to exclude ANCs from ISDA by use of a term-of-art construction.[7]

C

Even if ANCs did not satisfy the recognized-as-eligible clause, however, they would still satisfy ISDA’s definition of an “Indian tribe.” If respondents were correct that only a federally recognized tribe can satisfy that clause, then the best way to read the “Indian tribe” definition as a whole would be for the recognized-as-eligible clause not to apply to the entities in the Alaska clause at all (i.e., to “any Alaska Native village or regional or village corporation,” 25 U.S.C. § 5304(e)). On this reading, the way to tell whether a tribe, band, nation, or other organized group or community is an “Indian tribe” is to ask whether it is federally recognized, but the way to tell whether an Alaska Native village or corporation is an “Indian tribe” is to ask whether it is “defined in or established pursuant to” ANCSA. Ibid. Otherwise, despite being prominently “includ[ed]” in the “Indian tribe” definition, ibid., all ANCs would be excluded by a federal-recognition requirement there is no reasonable prospect they could ever satisfy.

Respondents object (and the dissent agrees) that this construction “produces grammatical incoherence.” Brief for Respondents Confederated Tribes of Chehalis Reservation et al. 16; post, at 2454 – 2455. They point out that a modifying clause at the end of a list (like the recognized-as-eligible clause) often applies to every item in the list. See, e.g., Jama v. Immigration and Customs Enforcement, 543 U.S. 335, 344, n. 4, 125 S.Ct. 694, 160 L.Ed.2d 708 (2005). The so-called series-qualifier canon can be a helpful interpretive tool, and it supports the idea that the recognized-as-eligible clause applies to every type of entity listed in the “Indian tribe” definition, including ANCs. Given that the entities in the Alaska clause are the closest in proximity to the recognized-as-eligible clause, that canon arguably applies with particular force here.

As the Court reiterated earlier this Term, however, the series-qualifier canon gives way when it would yield a “contextually implausible outcome.” Facebook, Inc. v. Duguid, 592 U.S. ––––, ––––, 141 S.Ct. 1163, 1171, 209 L.Ed.2d 272 (2021); see also id., at ––––, 141 S.Ct. at 1173 (ALITO, J., concurring in judgment) (noting that “[c]anons are useful tools, but it is important to keep their limitations in mind. This may be especially true with respect to … the ‘series-qualifier’ canon”). The most grammatical reading of a sentence in a vacuum does not always produce the best reading in context. See, e.g., Sturgeon, 577 U.S. at 438, 136 S.Ct. 1061 (“Statutory language ‘cannot be construed in a vacuum. It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme’ ”); cf. B. Garner, Modern English Usage 784 (4th ed. 2016) (noting the “increasingly common” “ ‘remote relative,’ ” i.e., the practice of separating “the relative pronoun (that, which, who) from its antecedent”).

Consider an example with the same syntax as the “Indian tribe” definition. A restaurant advertises “50% off any meat, vegetable, or seafood dish, including ceviche, which is cooked.” Say a customer orders ceviche, a Peruvian specialty of raw fish marinated in citrus juice. Would she expect it to be cooked? No. Would she expect to pay full price for it? Again, no. Under the reading recommended by the series-qualifier canon, however, the ceviche was a red herring. Even though the 50%-off sale specifically named ceviche (and no other dish), it costs full price because it is not cooked. That conclusion would make no sense to a reasonable customer.

Like applying a “cooked” requirement to ceviche, applying a “federally recognized” requirement to ANCs is implausible in context. When Congress enacted ISDA in 1975, not a single Alaska Native village or ANC had been recognized for a government-to-government relationship with the United States. On respondents’ reading, then, the entire Alaska clause originally had no effect. None of its entities qualified as Indian tribes for purposes of ISDA, even though the only entities expressly included in ISDA’s definition of an “Indian tribe” are those in the Alaska clause.

The only explanation respondents offer for this highly counterintuitive result is that Congress included Alaska Native villages and corporations in the “Indian tribe” definition on the possibility they might one day become federally recognized. That is highly unlikely. First, the Alaska clause would be redundant on that account. See Brief for Respondents Confederated Tribes of Chehalis Reservation et al. 31 (“[T]he Alaska [clause] is … best read as redundant”). A federally recognized Alaska Native village or ANC would presumably already fit into one of the pre-existing ISDA categories of “tribe[s], band[s], nation[s], or other organized group[s] or communit[ies].” 25 U.S.C. § 5304(e).

Second, it is quite doubtful that anyone in 1975 thought the United States was going to recognize ANCs as sovereign political entities. ANCs are for-profit companies incorporated under state law that Congress itself created just four years prior to ISDA. They are not at all the type of entities normally considered for a government-to-government relationship with the United States. Accord, 25 CFR § 83.4 (1994) (“The Department will not acknowledge,” i.e., federally recognize, “[a]n association, organization, corporation, or entity of any character formed in recent times unless the entity has only changed form by recently incorporating or otherwise formalizing its existing politically autonomous community”). Indeed, at the time ISDA was enacted, some doubted whether even Alaska Native villages could be federally recognized.[8]

Respondents counter by pointing to certain organizations created in Alaska in the 1930s that later became federally recognized tribes. One such organization, the Hydaburg Cooperative Association (HCA), was formed under the 1936 Amendment to the Indian Reorganization Act, which authorized Alaska Natives groups “not heretofore recognized as bands or tribes” to organize based on “a common bond of occupation, or association, or residence.” Ch. 254, 49 Stat. 1250 (codified at 25 U.S.C. § 5119). The HCA organized around “a common bond of occupation in the fish industry.” Constitution and By-Laws of the Hydaburg Cooperative Association, Alaska Preamble (1938). Decades later, the Interior Department acknowledged the HCA as a federally recognized tribe, even though it is of fairly recent vintage and organized around a bond of occupation rather than solely around an ancestral tribal heritage. See 58 Fed. Reg. 54369. If the HCA could be federally recognized, respondents say, some might have thought ANCs could too.

Respondents make too much of the HCA and the small handful of entities like it, which are not comparable to ANCs. Unlike ANCs, the former entities were organized under federally approved constitutions as part of a short-lived attempt to recreate in Alaska a tribal reservation system like that in the lower 48 States. ANCs, by contrast, were incorporated under state law pursuant to legislation that embodied the formal repudiation of that approach. That the Interior Department deemed the HCA and a handful of other entities like it federally recognized tribes decades after ISDA’s passage does not mean it was plausible in 1975 to think ANCs would one day become federally recognized tribes, as well.[9]

Ultimately, respondents resort to the argument that, although the idea of ANCs becoming federally recognized tribes might be farfetched, it is not technically impossible. That is, Congress’ plenary power over Indian affairs could conceivably permit it to recognize a government-to-government relationship between an ANC and the United States. Perhaps, but possibility is not the same as plausibility, and both are proper concerns of statutory interpretation. Consider again the example of a restaurant advertising “50% off any meat, vegetable, or seafood dish, including ceviche, which is cooked.” On respondents’ logic, because the restaurant technically could cook its ceviche, the only way to read the advertisement is that ceviche is full price unless the restaurant takes an unexpected culinary step.

That is wrong. The best reading of the advertisement is that ceviche is 50% off even if it is not cooked, just as the best reading of ISDA is that ANCs are Indian tribes even if they are not federally recognized. Any grammatical awkwardness involved in the recognized-as-eligible clause skipping over the Alaska clause pales in comparison to the incongruity of forever excluding all ANCs from an “Indian tribe” definition whose most prominent feature is that it specifically includes them.

D

Respondents make a few final arguments to persuade the Court that ANCs are not Indian tribes under ISDA. None succeeds.

Respondents argue first that the ANCs misrepresent how meaningful a role they play under ISDA because the actual number of ISDA contracts held by ANCs is negligible. The Court does not have the record before it to determine the exact number and nature of ISDA contracts held by ANCs or their designees, either historically or currently. The point is largely irrelevant, however. No one would argue that a federally recognized tribe was not an Indian tribe under ISDA just because it had never entered into an ISDA contract. The same is true for ANCs. To the extent respondents argue that ruling for them would be of little practical consequence given the small number of ISDA contracts held by ANCs, quantity is not the only issue. For example, CIRI contracts through a designee to provide healthcare to thousands of Alaska Natives in Anchorage and the Matanuska-Susitna Valley. Brief for CIRI as Amicus Curiae 9. The loss of CIRI’s ability alone to contract under ISDA would have significant effects on the many Alaska Natives it currently serves.[10]

Respondents further argue that treating ANCs as Indian tribes would complicate the administration of ISDA. If an ISDA contract will benefit multiple Indian tribes, each such tribe has to agree to the contract before it can go into effect. 25 U.S.C. § 5304(l). Because membership in ANCs and federally recognized tribes often overlap, respondents argue that ANCs will be able to veto any ISDA contract sought by a federally recognized tribe in Alaska.

Without discounting the possibility of administrative burdens, this concern is overstated. The Executive Branch has treated ANCs as Indian tribes for 45 years, yet respondents point to no evidence of such a problem ever having arisen. If such a problem does arise, moreover, the Interior Department may be able to craft an administrative solution. Cf. 46 Fed. Reg. 27178, 27179 (1981) (Indian Health Service regulations establishing an “order of precedence” among Alaskan entities “[f]or the purposes of contracting under” ISDA and requiring authorizing resolutions from “[v]illages, as the smallest tribal units under” ANCSA).

Respondents also warn that blessing ANCs’ status under ISDA will give them ammunition to press for participation in the many statutes besides the CARES Act that incorporate ISDA’s “Indian tribe” definition. See, e.g., Indian Health Care Improvement Act, § 4(d), 90 Stat. 1401; Native American Housing Assistance and Self-Determination Act of 1996, § 4(12)(B), 110 Stat. 4019–4020; Indian Tribal Energy Development and Self-Determination Act of 2005, [Title V of the Energy Policy Act of 2005], § 503(a), 119 Stat. 764–765.

As the Government notes, however, there may well be statutes that incorporate ISDA’s “Indian tribe” definition but exclude ANCs from participation in other ways. See Brief for Federal Petitioner 33–34 (citing, e.g., 7 U.S.C. §§ 1639o(2), 1639p(a)(1) (defining “Indian tribe” to incorporate the ISDA definition, but also requiring participants to exercise “ ‘regulatory authority over … territory of the Indian tribe’ ”)). Moreover, this concern cuts both ways. If respondents’ reading prevailed, ANCs would presumably be excluded from all other statutes incorporating ISDA’s definition, even those under which ANCs have long benefited. That includes the Indian Tribal Energy Development and Self-Determination Act of 2005, under which ANCs have received millions of dollars of energy assistance. See Brief for Federal Petitioner 33. That also includes NAHASDA, which, as discussed, creates a housing block grant program under which the regional ANCs are some of the biggest recipients in Alaska. See supra, at 2446 – 2447. Currently, over 10,000 Alaskans live in housing units built, improved, or managed by these regional authorities. See Brief for Association of Alaska Housing Authorities as Amicus Curiae 15.

All told, the Court’s decision today does not “vest ANCs with new and untold tribal powers,” as respondents fear. Brief for Respondents Confederated Tribes of Chehalis Reservation et al. 54. It merely confirms the powers Congress expressly afforded ANCs and that the Executive Branch has long understood ANCs to possess.

III

Almost everyone agrees that if ANCs are Indian tribes under ISDA, they are eligible for funding under Title V of the CARES Act. If Congress did not want to make ANCs eligible for CARES Act funding, its decision to incorporate ISDA’s “Indian tribe” definition into the CARES Act would be inexplicable. Had Congress wished to limit CARES Act funding to federally recognized tribes, it could simply have cross-referenced the List Act instead, as it had in numerous statutes before.[11] Instead, Congress invoked a definition that expressly includes ANCs (and has been understood for decades to include them). Today’s ruling merely gives effect to that decision.

Nevertheless, the Ute Indian Tribe of the Uintah and Ouray Reservation argues that the CARES Act excludes ANCs regardless of whether they are Indian tribes under ISDA. Recall that the CARES Act allocates money to “Tribal governments.” 42 U.S.C. § 801(a)(2)(B). A “Tribal government” is “the recognized governing body of an Indian tribe.” § 801(g)(5). According to the Utes, ANCs do not have a “recognized governing body” because that term applies to the governing body of a federally recognized tribe alone.

As the Utes implicitly acknowledge, however, federal recognition is usually discussed in relation to tribes, not their governing bodies. Brief for Respondent Ute Indian Tribe of the Uintah and Ouray Reservation 13 (“The recognized relationship is a political relationship between the United States and the tribe”); see also, e.g., note following 25 U.S.C. § 5130, p. 678 (“ ‘[T]he United States has a trust responsibility to recognized Indian tribes, maintains a government-to-government relationship with those tribes, and recognizes the sovereignty of those tribes’ ”). In addition, the CARES Act’s use of the term “recognized governing body” is borrowed from ISDA itself, which lists the “recognized governing body” of an Indian tribe as one type of “tribal organization” empowered to contract with the government on the tribe’s behalf. § 5304(l). In the ISDA context, this term has long been understood to apply to an ANC’s board of directors, the ANC’s governing body as a matter of corporate law. See, e.g., App. 45 (An ANC’s “board of directors … is its ‘governing body’ ”); see also Black’s Law Dictionary, at 219 (defining “Board of Directors” as “[t]he governing body of a private corporation”). Indeed, respondents do not dispute that the plain meaning of “recognized governing body” covers an ANC’s board of directors.[12]

Looking to the plain meaning of “recognized governing body” makes even more sense because nothing in either the CARES Act or ISDA suggests that the term “recognized governing body” places additional limits on the kinds of Indian tribes eligible to benefit under the statutes. In both laws, the term instead pinpoints the particular entity that will receive funding on behalf of an Indian tribe. See 42 U.S.C. § 801(g)(5); 25 U.S.C. § 5304(l). Because ANCs are Indian tribes within the meaning of the CARES Act, an ANC’s board of directors is a “recognized governing body” eligible to receive funding under Title V of the Act.

IV

The Court today affirms what the Federal Government has maintained for almost half a century: ANCs are Indian tribes under ISDA. For that reason, they are Indian tribes under the CARES Act and eligible for Title V funding. The judgment of the Court of Appeals for the District of Columbia Circuit is reversed, and the cases are remanded for further proceedings consistent with this opinion.

It is so ordered.


Justice GORSUCH, with whom Justice THOMAS and Justice KAGAN join, dissenting:

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) directed trillions of dollars to various recipients across the Nation to help them address the COVID–19 pandemic. Our case focuses on $8 billion Congress set aside for “Tribal governments.” The question we must answer is whether Alaska’s for-profit Alaska Native Corporations (ANCs) qualify as “Tribal governments.” If they do, they may receive approximately $450 million of the earmarked funds; if not, the money will go to tribes across the country. The Court of Appeals for the District of Columbia Circuit wrote a thoughtful and unanimous opinion holding that ANCs are not “Tribal governments.” Today, the Court disagrees, providing two competing theories for its result. Respectfully, I find neither persuasive and would affirm.

I

The Alaska Native Claims Settlement Act of 1971 (ANCSA) sought to “settle all land claims by Alaska Natives” by “transfer[ring] $962.5 million in state and federal funds and approximately 44 million acres of Alaska land to state-chartered private business corporations” in which Alaska Natives were given shares. Alaska v. Native Village of Venetie Tribal Government, 522 U.S. 520, 523–524, 118 S.Ct. 948, 140 L.Ed.2d 30 (1998); 43 U.S.C. § 1601 et seq. In particular, ANCSA established over 200 “Village Corporations” and 12 “Regional Corporations.” §§ 1602, 1606.

The Village Corporations were created to hold and manage “lands, property, funds, and other rights and assets for and on behalf of a Native village.” § 1602(j). Meanwhile, shares in the Regional Corporations went to individuals across many different tribes and villages. §§ 1604, 1606(g)(1)(A). These corporations received most of the settlement funds and lands Congress provided, assets they use to “conduct business for profit.” §§ 1606(d), 16101613; see also Brief for Federal Petitioner 5. Today, ANCs are involved in oil and gas, mining, military contracting, real estate, construction, communications and media, engineering, plastics, timber, and aerospace manufacturing, among other things. GAO, Report to Congressional Requesters, Regional Alaska Native Corporations: Status 40 Years After Establishment, and Future Considerations (GAO–13–121, Dec. 2012). “In fiscal year 2017, ANCs had a combined net revenue of $9.1 billion.” Confederated Tribes of Chehalis Reservation v. Mnuchin, 456 F.Supp.3d 152, 157 (DDC 2020).

Everyone agrees that ANCs are entitled to some CARES Act relief. Already, they have received benefits Congress allocated to corporations, like the Paycheck Protection Program. See Brief for Respondent Ute Indian Tribe of Uintah and Ouray Reservation 1 (Brief for Respondent Ute Tribe). Congress also accounted for ANC shareholders, and all Alaskans, when it directed over $2 billion to the State. In fact, Alaska received more money per capita than all but two other States. Id., at 3; Congressional Research Service, General State and Local Fiscal Assistance and COVID–19: Background and Available Data (Feb. 8, 2021). The Alaska Native Villages received hundreds of millions of those dollars because everyone agrees they qualify as tribal governments for purposes of the CARES Act. See ibid. This suit concerns only the ANCs’ claim of entitlement to additional funds statutorily reserved for “Tribal governments.” 42 U.S.C. § 801(a)(2)(B). If that counterintuitive proposition holds true, ANCs will receive approximately $450 million that would otherwise find its way to recognized tribal governments across the country, including Alaska’s several hundred Native Villages. See Letter from E. Prelogar, Acting Solicitor General, to S. Harris, Clerk of Court (May 12, 2021).

In the CARES Act, Congress defined a “Tribal government” as the “recognized governing body of an Indian Tribe.” § 801(g)(5). In turn, Congress specified in § 801(g)(1) that the term “Indian Tribe” should carry here the same meaning that it bears in the Indian Self-Determination and Education Assistance Act of 1975 (ISDA). The relevant portion of that statute provides as follows:

“ ‘Indian tribe’ [or ‘Indian Tribe’] means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act (85 Stat. 688) [43 U.S.C. 1601 et. seq.], which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.” 25 U.S.C. § 5304(e).

The question before us thus becomes whether ANCs count as “Indian tribes” under the longstanding terms Congress adopted in ISDA almost 50 years ago. To resolve that dispositive question, we must answer two subsidiary ones: (1) Does the statute’s final clause (call it the recognition clause) apply to the ANCs listed earlier? (2) If so, are ANCs “recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians”? In my view, the recognition clause does apply to ANCs along with the other listed entities. And ANCs are not “recognized” as tribes eligible for the special programs and services provided by the United States to Indians because of their status as Indians.

II

A

Start with the question whether the recognition clause applies to the ANCs. As the nearest referent and part of an integrated list of other modified terms, ANCs must be subject to its terms. Unsurprisingly, the Court of Appeals reached this conclusion unanimously. Lawyers often debate whether a clause at the end of a series modifies the entire list or only the last antecedent. E.g.,Lockhart v. United States, 577 U.S. 347, 350–352, 136 S.Ct. 958, 194 L.Ed.2d 48 (2016); id., at 362–369, 136 S.Ct. 958 (KAGAN, J., dissenting); Facebook, Inc. v. Duguid, 592 U.S. ––––, –––– – ––––, 141 S.Ct. 1163, 1169–1170, 209 L.Ed.2d 272 (2021); id., at –––– – ––––, 141 S.Ct. at 1167–1169 (ALITO, J., concurring in judgment). In ISDA, for example, some might wonder whether the recognition clause applies only to ANCs or whether it also applies to the previously listed entities—“Indian tribe[s], band[s], nation[s],” etc. But it would be passing strange to suggest that the recognition clause applies to everything except the term immediately preceding it. A clause that leaps over its nearest referent to modify every other term would defy grammatical gravity and common sense alike. See, e.g.,Facebook, Inc., 592 U.S., at ––––, 141 S.Ct. at 1170; Jama v. Immigration and Customs Enforcement, 543 U.S. 335, 344, n. 4, 125 S.Ct. 694, 160 L.Ed.2d 708 (2005).

Exempting ANCs from the recognition clause would be curious for at least two further reasons. First, the reference to ANCs comes after the word “including.” No one disputes that the recognition clause modifies “any Indian tribe, band, nation, or other organized group or community.” So if the ANCs are included within these previously listed nouns—as the statute says they are—it’s hard to see how they might nonetheless evade the recognition clause. Second, in the proceedings below it was undisputed that the recognition clause modifies the term “Alaska Native village[s],” even as the ANCs argued that the clause does not modify the term “Alaska Native … regional or village corporation.” Confederated Tribes of Chehalis Reservation v. Mnuchin, 976 F.3d 15, 23 (CADC 2020); Brief for Federal Petitioner 46. But to believe that, one would have to suppose the recognition clause skips over only half its nearest antecedent. How the clause might do that mystifies. See Facebook, 592 U.S., at ––––, 141 S.Ct. at 1169 (“It would be odd to apply the modifier … to only a portion of this cohesive preceding clause”).

At least initially, the Court accepts the obvious and concedes that the recognition clause modifies everything in the list that precedes it. Ante, at 2441 – 2442. But this leaves the Court in a bind. If the recognition clause applies to ANCs, then ANCs must be “recognized” in order to receive funds. And “recognition” is a formal concept in Indian law: “Federal acknowledgement or recognition of an Indian group’s legal status as a tribe is a formal political act confirming the tribe’s existence as a distinct political society, and institutionalizing the government-to-government relationship between the tribe and the federal government.” 1 F. Cohen, Handbook of Federal Indian Law § 3.02[3], pp. 133–134 (N. Newton ed. 2012); see also id., § 3.02[2], at 132–133. No one contends that ANCs are recognized by the federal government in this sense.

Admittedly, not every statutory use of the word “recognized” must carry the same meaning. See ante, at 2445. But not only does ISDA arise in the field of Indian law where the term “recognition” has long carried a particular meaning. The statute proceeds to refer to groups that are “recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.” This full phrase is a mouthful, but it was a familiar one to Congress by the time it passed ISDA in 1975. In preceding decades, Congress used similar language in statute after statute granting and terminating formal federal recognition of certain tribes.1 All of which strongly suggests that ISDA’s recognition clause likewise refers to the sort of formal government-to-government recognition that triggers eligibility for the full “panoply of benefits and services” the federal government provides to Indians.[1] Cohen, Handbook of Federal Indian Law § 3.02[3], at 134.

There is more evidence too. When Congress passed ISDA, it sought to provide Indians “meaningful leadership roles” that are “crucial to the realization of selfgovernment.” 25 U.S.C. § 5301. Accordingly, “tribes may enter into ‘self-determination contracts’ with federal agencies to take control of a variety of federally funded programs.” Menominee Tribe of Wis. v. United States, 577 U.S. 250, 252, 136 S.Ct. 750, 193 L.Ed.2d 652 (2016); see also § 5321. Handing over federal government programs to tribal governments in order to facilitate self-government is precisely the sort of government-to-government activity that aligns with formal recognition. See also §§ 5384, 5385 (reflecting later amendments to ISDA) (instructing the Secretary to enter compacts and funding agreements “with each Indian tribe participating in self-governance in a manner consistent with the Federal Government’s trust responsibility, treaty obligations, and the government-to-government relationship between Indian tribes and the United States”).

The CARES Act itself offers still further clues. In the provision at issue before us, Congress appropriated money “for making payments to States, Tribal governments, and units of local government.”42 U.S.C. § 801(a)(1). Including tribal governments side-by-side with States and local governments reinforces the conclusion that Congress was speaking of government entities capable of having a government-to-government relationship with the United States. Recall, as well, that the CARES Act defines tribal governments as the “recognized governing body of an Indian Tribe.” § 801(g)(5). ANCs, like most corporations, have a board of directors, 43 U.S.C. § 1606(f), and a corporate board may well be the governing body of an enterprise. But they do not govern any people or direct any government.

B

While initially acknowledging that the recognition clause applies to ANCs, the Court interprets its terms differently. Rather than understanding it as denoting a government-to-government relationship, the Court says, we should look to its “plain meaning.” Ante, at 2441. But even if we could somehow set aside everything we know about how the term is used in Indian law and the CARES Act itself, it’s far from clear what “plain meaning” the Court alludes to or how ANCs might fall within it.

First, consider the Federally Recognized Indian Tribe List Act of 1994 (List Act). The List Act instructs the Secretary of the Interior to keep a list of all federally recognized Indian tribes. It does so using language materially identical to that found in ISDA’s recognition clause: “The Secretary shall publish in the Federal Register a list of all Indian tribes which the Secretary recognizes to be eligible for the special programs and services provided by the United States to Indians because of their status as Indians.” 25 U.S.C. § 5131(a). No one before us thinks the Secretary of the Interior should list the ANCs as federally recognized tribes. And given that, it is unclear how ANCs might count as federally recognized tribes under ISDA. To be sure, the List Act came after ISDA. But the Court never attempts to explain how the plain meaning of nearly identical language in remarkably similar legal contexts might nevertheless differ.

Second, on any account, ISDA requires an Indian tribe or group to be “recognized.” But what work does this term do on the Court’s interpretation? Without explanation, the Court asserts that ANCs are “ ‘recognized as eligible’ for ANCSA’s benefits” because they are “ ‘established pursuant to’ ANCSA.” Ante, at 2441 – 2442. But on this understanding, any group eligible for benefits would seem, on that basis alone, to be “recognized” as eligible for those benefits. The Court’s reading comes perilously close to rendering the term “recognized” surplusage: If ISDA really does capture any group merely “eligible” for federal benefits, why not just say that and avoid introducing a term with a particular and well-established meaning in federal Indian law?

Third, even putting aside the recognition requirement, ISDA says tribes must receive services from the United States “because of their status as Indians.” § 5304(e). The Court says that ANSCA made ANCs eligible for settlement funds and lands because its shareholders are Alaska Natives. Ante, at 2441 – 2442. But is compensation provided to profit-maximizing corporations whose shareholders happen to be Alaska Natives (at least initially, see 43 U.S.C. §§ 1606(h)(1), 1629c) a benefit provided to Indians? And were ANSCA settlement funds provided to ANCs and their shareholders because of their Indian status or simply because Congress wanted to resolve a land dispute regardless of the claimants’ status? See § 1601(b) (“[T]he settlement should be accomplished … without establishing any permanent racially defined institutions, rights, privileges, or obligations … ”); but see § 1626(e)(1) (“For all purposes of Federal law, a Native Corporation shall be considered to be a corporation owned and controlled by Natives … ”). Again, the answers remain unclear. Ante, at 2442.

Finally, ISDA provides that tribes must be recognized as eligible for “the special programs and services provided by the United States.” 25 U.S.C. § 5304(e) (emphasis added). It is a small word to be sure, but “the” suggests the statute refers to a particular slate of programs and services—here the full panoply of federal Indian benefits—not just any special programs and services the government might supply. See Nielsen v. Preap, 586 U.S. ––––, ––––, 139 S.Ct. 954, 965, 203 L.Ed.2d 333 (2019) (“[G]rammar and usage establish that ‘the’ is ‘a function word … indicat[ing] that a following noun or noun equivalent is definite or has been previously specified by context’ ” (quoting Merriam-Webster’s Collegiate Dictionary 1294 (11th ed. 2005))). It’s undisputed too that, while ANSCA provided certain compensation to ANCs, Congress has never made those entities “eligible for the full range of federal services and benefits available to [recognized] Indian tribes.” Brief for Federal Petitioner 48.

Rather than confront this last problem, the Court elides it. In its opinion “the special programs and services” becomes “federal Indian programs and services,” ante, at 2442, 2445. Nor, even if one were to (re)interpret “the special programs” as “some special programs,” is it clear whether ANCSA qualifies. See ante, at 2442. On what account is settling a dispute over land title a “program” or “service”? See 43 U.S.C. § 1626(a) (“The payments and grants authorized under this chapter constitute compensation for the extinguishment of claims to land, and shall not be deemed to substitute for any governmental programs otherwise available to the Native people of Alaska”). Beyond even that, ANCSA extended specific compensation to ANCs—money and title—in exchange for settling land claims. ANCSA provided ANCs nothing in the way of health, education, economic, and social services of the sort that ISDA allows tribes to contract with the federal government to provide.

The Court’s reply creates another anomaly too. If receiving any federal money really is enough to satisfy the recognition clause, many other Indian groups might now suddenly qualify as tribes under the CARES Act, ISDA, and other federal statutes. A 2012 GAO study, for example, identified approximately 400 nonfederally recognized tribes in the lower 48 States, of which 26 had recently received direct funding from federal programs. GAO, Indian Issues: Federal Funding for Non-Federally Recognized Tribes (GAO–12–348, Apr. 2012). This number does not include additional entities that may have received federal benefits in the form of loans, procurement contracts, tax expenditures, or amounts received by individual members. Id., at 35. And still other groups may have federal rights secured by treaty, which may exist even if the tribe is no longer recognized. Cf. Menominee Tribe v. United States, 391 U.S. 404, 412–413, 88 S.Ct. 1705, 20 L.Ed.2d 697 (1968). How does the Court solve this problem? With an ipse dixit. See ante, at 2443 (“[T]he Court does not open the door to other Indian groups that have not been federally recognized becoming Indian tribes under ISDA”). The Court’s “plain meaning” argument thus becomes transparent for what it is—a bare assertion that the recognition clause carries a different meaning when applied to ANCs than when applied to anyone else.

III

With its first theory facing so many problems, the Court offers a backup. Now the Court suggests that ANCs qualify as tribes even if they fail to satisfy the recognition clause. Ante, at 2447. Because ISDA’s opening list of entities specifically includes ANCs, the Court reasons, the recognition clause must be read as inapplicable to them alone. Essentially, the Court quietly takes us full circle to the beginning of the case—endorsing an admittedly ungrammatical reading of the statute in order to avoid what it calls the “implausible” result that ANCs might be included in ISDA’s first clause only to be excluded by its second. Ante, at 2448.

But it is difficult to see anything “implausible” about that result. When Congress adopted ANSCA in 1971, it “created over 200 new legal entities that overlapped with existing tribes and tribal nonprofit service organizations.” Brief for Professors and Historians as Amici Curiae 27. At that time, there was no List Act or statutory criteria for formal recognition. Instead, as the Court of Appeals ably documented, confusion reigned about whether and which Alaskan entities ultimately might be recognized as tribes. 976 F.3d at 18; see also Brief for Professors and Historians as Amici Curiae 28; Cohen, Handbook of Federal Indian Law 270–271 (1941). When Congress adopted ISDA just four years later, it sought to account for this uncertainty. The statute listed three kinds of Alaskan entities: Alaska Native Villages, Village Corporations, and Regional Corporations. And the law did “meaningful work by extending ISDA’s definition of Indian tribes” to whichever among them “ultimately were recognized.” 976 F.3d at 26. It is perfectly plausible to think Congress chose to account for uncertainty in this way; Congress often adopts statutes whose application depends on future contingencies. E.g.,Gundy v.United States, 588 U.S. ––––, –––– – ––––, 139 S.Ct. 2116, 2126–2127, 204 L.Ed.2d 522 (2019) (GORSUCH, J., dissenting)(citing examples).

Further aspects of Alaskan history confirm this understanding. Over time, the vast majority of Alaska Native Villages went on to seek—and win—formal federal recognition as Indian tribes. See 86 Fed. Reg. 7557–7558 (2021); Brief for Respondent Confederated Tribes of Chehalis Reservation et al. 23. (It’s this recognition which makes them indisputably eligible for CARES Act relief. See supra, at 2453.) By the time it enacted ISDA, too, Congress had already authorized certain Alaska Native groups to organize based on “a common bond of occupation, or association, or residence.” 25 U.S.C. § 5119. This standard, which did not require previous recognition as “bands or tribes,” was unique to Alaska. See ibid. And at least one such entity—the Hydaburg Cooperative Association, organized around the fish industry—also went on to receive federal tribal recognition in the 1990s. 86 Fed. Reg. 7558; see also Brief for Respondent Confederated Tribes of Chehalis Reservation et al. 35–36. Though short lived and not a full government-to-government political recognition, the Secretary of the Interior at one point even listed ANCs as “ ‘Indian Entities Recognized and Eligible To Receive Services From the United States Bureau of Indian Affairs,’ ” before eventually removing them. Ante, at 2446. And in 1996, Congress considered a bill that would have “deemed” a particular ANC—the Cook Inlet Region, Inc.—“an Indian tribal entity for the purpose of federal programs for which Indians are eligible because of their status as Indians” and required that it be included on “any list that designates federally recognized Indian tribes.” H.R. 3662, 104th Cong., 2d Sess., § 121. Of course, the ANCs before us currently are not recognized as tribes. But all this history illustrates why it is hardly implausible to suppose that a rational Congress in 1975 might have wished to account for the possibility that some of the Alaskan entities listed in ISDA might go on to win recognition.

The particular statutory structure Congress employed in ISDA was perfectly ordinary too. Often Congress begins by listing a broad universe of potentially affected parties followed by limiting principles. Take this example from the CARES Act. Congress afforded benefits to certain “ ‘unit[s] of local government,’ ” and defined that term to mean “a county, municipality, town, township, village, parish, borough, or other unit of general government below the State level with a population that exceeds 500,000.” 42 U.S.C. § 801(g)(2). The litigants tell us no parish in the country today has a population exceeding half a million. See Brief for Respondent Ute Tribe 31. Suppose they’re right. Is that any basis for throwing out the population limitation and suddenly including all parishes? Of course not. Once more, an opening list provides the full field of entities that may be eligible for relief and the concluding clause does the more precise work of winnowing it down. The clauses work in harmony, not at cross-purposes.[2]

In defense of its implausibility argument, the Court submits any other reading would yield a redundancy. Unless ANCs are exempt from the recognition clause, the Court suggests, Congress had no reason to mention them in the statute’s opening clause because they already “fit into one of the pre-existing ISDA categories,” like “ ‘tribe[s], band[s], nation[s], or other organized group[s] or communit[ies],’ ” ante, at 2448 – 2449 (quoting 25 U.S. C § 5304(e)).

But this much is hard to see too. Admittedly, illustrative examples of more general terms are in some sense always redundant. See Chickasaw Nation v. United States, 534 U.S. 84, 89, 122 S.Ct. 528, 151 L.Ed.2d 474 (2001) (“[That] is meant simply to be illustrative, hence redundant”). But Congress often uses illustrative examples in its statutory work, and the practice is not entirely pointless. As this Court has explained, illustrative examples can help orient affected parties and courts to Congress’s thinking, and often they serve to “remove any doubt” about whether a particular listed entity is captured within broader definitional terms. Ali v. Federal Bureau of Prisons, 552 U.S. 214, 226, 128 S.Ct. 831, 169 L.Ed.2d 680 (2008); see also Federal Land Bank of St. Paul v. Bismarck Lumber Co., 314 U.S. 95, 99–100, 62 S.Ct. 1, 86 L.Ed. 65 (1941); A. Scalia & B. Garner, Reading Law 176–177 (2012). That much is certainly true here. If Congress had failed to list ANCs in ISDA’s first clause, a dispute could have arisen over whether these corporate entities even qualify as “Indian … organized group[s] or communit[ies].” See Brief for Petitioners in No. 20544, p. 5; supra, at 2457 (citing 43 U.S.C. § 1601(b)).

Having said all this, my disagreement with the Court’s “implausibility” argument is a relatively modest one. We agree that linguistic and historical context may provide useful interpretive guidance, and no one today seeks to suggest that judges may sanitize statutes in service of their own sensibilities about the rational and harmonious.[3] Instead, our disagreement is simply about applying the plain meaning, grammar, context, and canons of construction to the particular statutory terms before us. As I see it, an ordinary reader would understand that the recognition clause applies the same way to all Indian groups. And if that’s true, there’s just no way to read the text to include ANCs as “Tribal governments” for purposes of the CARES Act.

*

In my view, neither of the Court’s alternative theories for reversal can do the work required of it. The recognition clause denotes the formal recognition between the federal government and a tribal government that triggers eligibility for the full panoply of special benefits given to Indian tribes. Meanwhile, a fair reading of that clause indicates that it applies to ANCs. Accordingly, with respect, I would affirm.

141 S.Ct. 2434, 210 L.Ed.2d 517, 21 Cal. Daily Op. Serv. 6218, 2021 Daily Journal D.A.R. 6398, 28 Fla. L. Weekly Fed. S 994

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