UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 10-2270

BRETON LEE MORGAN, M.D.,

Plaintiff - Appellant,

v.

KATHLEEN SEBELIUS, Secretary of Department of Health and 

Human Services,

Defendant - Appellee.

Appeal from the United States District Court for the Southern 

District of West Virginia, at Huntington. Robert C. Chambers, 

District Judge. (3:09-cv-01059)

Argued: May 17, 2012 Decided: June 14, 2012

Before TRAXLER, Chief Judge, and MOTZ and KEENAN, Circuit 

Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: James Michael Casey, Point Pleasant, West Virginia, for 

Appellant. Daniel Tenny, UNITED STATES DEPARTMENT OF JUSTICE, 

Washington, D.C., for Appellee. ON BRIEF: William B. Schultz, 

Acting General Counsel, Catherine L. Hess, Senior Counsel, 

DEPARTMENT OF HEALTH AND HUMAN SERVICES, Washington, D.C.; Tony 

West, Assistant Attorney General, Michael S. Raab, UNITED STATES 

DEPARTMENT OF JUSTICE, Washington, D.C.; R. Booth Goodwin II, 

United States Attorney, Charleston, West Virginia, for Appellee. 
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Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:

Breton Lee Morgan appeals a district court order dismissing 

his action challenging the decision of the Secretary of the 

United States Department of Health and Human Services (“the 

Secretary”) to exclude him for five years from participating in 

Medicare, Medicaid, and all other federally sponsored health 

care programs pursuant to the applicable terms of 42 U.S.C.A. 

§ 1320a-7(a)(3) (West 2011). Finding no error, we affirm.

I.

Morgan is a physician licensed to practice medicine in West 

Virginia. In March 2007, he pled guilty to one count of 

violating 21 U.S.C. § 843(a)(3), which proscribes “knowingly or 

intentionally . . . acquir[ing] or obtain[ing] possession of a 

controlled substance by misrepresentation, fraud, forgery, 

deception, or subterfuge.” 21 U.S.C.A. § 843(a)(3) (West 1999). 

His plea was based upon several occasions in which Morgan 

obtained free hydrocodone samples from pharmaceutical 

representatives for his personal use by leading the 

representatives to believe that he would be giving the samples 

to his patients for medical purposes. As a result of the plea, 

Morgan was sentenced to 30 days’ imprisonment and three months 

of supervised release.
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On May 30, 2008, the Inspector General (“I.G.”) of the 

Department of Health and Human Services (“HHS”) wrote Morgan, 

notifying him that he would be excluded for five years from 

participating in Medicare, Medicaid, and all other federal 

health-care programs pursuant to the applicable terms of 42 

U.S.C.A. § 1320a-7(a)(3). This statute requires the Secretary 

to impose such an exclusion on “[a]ny individual or entity that 

has been convicted for an offense which occurred after August 

21, 1996, under Federal or State law, in connection with the 

delivery of a health care item or service” if that offense 

consists of a “felony relating to fraud, theft, embezzlement, 

breach of fiduciary responsibility, or other financial

misconduct.” 42 U.S.C.A. § 1320-7(a)(3).

Morgan appealed the I.G.’s decision in a proceeding before 

an Administrative Law Judge (“ALJ”) in HHS’s Departmental 

Appeals Board (“DAB”) Civil Remedies Division. The ALJ found 

that the I.G. had a sufficient basis to exclude Morgan and that 

the five-year term of the exclusion was not unreasonable in 

light of applicable law. 

Morgan then appealed the ALJ’s decision to the DAB 

Appellate Division on April 3, 2009. In his proceeding before 

the Appeals Board (the “Board”), Morgan argued, as is relevant 

here, that to warrant an exclusion under 42 U.S.C.A. § 1320a7(a)(3), a conviction must be for an offense that relates to 
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financial misconduct. Morgan maintained that his fraud 

conviction was not related to “financial misconduct” since he 

neither had a corrupt motive nor received any substantial 

pecuniary benefit in committing the crime to which he pled 

guilty. The Board rejected Morgan’s argument, finding that 

Morgan was excludable under § 1320a-7(a)(3) because his

conviction constituted “fraud” within the plain meaning of the 

statute regardless of whether it was related to financial 

misconduct. The Board additionally concluded, in any event, 

that his crime was related to financial misconduct insofar as he 

“derived some unquantifiable measure of pecuniary value by 

illegally diverting the controlled substances.” J.A. 31. 

Morgan subsequently brought an action in federal district 

court, asserting that the Board erred in failing to recognize 

that § 1320a-7(a)(3) applies only to offenses relating to 

financial misconduct. Concluding that the statute unambiguously 

is not limited to offenses relating to financial misconduct, the 

district court dismissed Morgan’s action.

II.

Reiterating his argument that § 1320a-7(a)(3) is limited to 

offenses relating to financial misconduct, Morgan argues that 

the district court erred in dismissing his suit. We disagree.
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“We review questions of statutory construction de novo.” 

Orquera v. Ashcroft, 357 F.3d 413, 418 (4th Cir. 2003). Because 

the Secretary is charged with administering § 1320a-7(a)(3), the 

established rules of deference in Chevron U.S.A. Inc. v. Natural 

Resources Defense Council, Inc., 467 U.S. 837 (1984), guide our 

analysis. Under Chevron, if a statute is unambiguous regarding 

the question presented, the statute’s plain meaning controls. 

See Saintha v. Mukasey, 516 F.3d 243, 251 (4th Cir. 2008). 

However, “[i]f . . . the statute is silent or ambiguous with 

respect to the specific issue before us, the question for this

court becomes whether the [Secretary’s] interpretation ‘is based 

on a permissible construction of the statute.’” Id. (quoting 

Chevron, 467 U.S. at 843).

Under Chevron’s first step, we “employ[] traditional tools 

of statutory construction” in considering whether Congress 

addressed “the precise question at issue.” Chevron, 467 U.S. at 

842, 843 n.9. In doing so, “we begin with the text and 

structure of the statute.” National Elec. Mfrs. Ass’n v. United 

States Dep’t of Energy, 654 F.3d 496, 504 (4th Cir. 2011). 

Congress required the Secretary to exclude from 

participation in federal health-care programs any person who has 

been convicted of an offense “in connection with the delivery of 

a health care item or service” if that “offense consist[s] of a 

felony relating to fraud, theft, embezzlement, breach of 
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fiduciary responsibility, or other financial misconduct.” 42 

U.S.C.A. § 1320-7(a)(3). It is undisputed that Morgan was 

convicted of a felony relating to fraud and connected to the 

delivery of health care. He nevertheless maintains that his 

conviction was not for “a felony relating to fraud, theft, 

embezzlement, breach of fiduciary responsibility, or other 

financial misconduct” since his offense did not relate to 

financial misconduct. That is incorrect. 

The applicable language makes clear that to warrant 

mandatory exclusion, an offense need only relate to at least one 

of five categories: (1) fraud, (2) theft, (3) embezzlement, (4) 

breach of fiduciary responsibility, or (5) other financial 

misconduct. The argument that the presence of the fifth 

category, “other financial misconduct,” somehow narrows the 

meaning of “fraud” from its ordinary usage is unpersuasive. See

Carbon Fuel Co. v. USX Corp., 100 F.3d 1124, 1133 (4th Cir. 

1996) (explaining that unless there is “explicit legislative 

intent to the contrary,” we must give words in a statute their 

“plain and ordinary meaning”). Morgan maintains that if the 

presence of the word “other” did not have this narrowing effect, 

“there would be no reason to have the word ‘other’ in the 

statute.” Appellant’s brief at 11. But that is simply not 

correct. That the fifth category is “other financial 

misconduct” reflects the fact that the other four categories 
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can, themselves, relate to financial misconduct. In this way, 

the presence of “other” eliminates the possible confusion that 

could have resulted from a statute that applied to “embezzlement 

. . . or financial misconduct.” 

In fact, it is Morgan’s interpretation that would render 

much of the language surplusage. See Gustafson v. Alloyd Co., 

513 U.S. 561, 574 (1995) (explaining that a court should “avoid 

a reading which renders some words altogether redundant”). Had 

Congress intended that an offense must relate to financial 

misconduct for the mandatory exclusion to apply, then it could 

have omitted the terms “fraud,” “theft,” “embezzlement,” and 

“breach of fiduciary responsibility” and simply required the 

exclusion for offenses “relating to financial misconduct.” 

Furthermore, Morgan’s interpretation would not serve the 

statute’s purposes. See, e.g., United States Nat’l Bank of 

Oregon v. Independent Ins. Agents of Am., Inc., 508 U.S. 439, 

455 (1993) (explaining that “[i]n expounding a statute, we must 

not be guided by a single sentence or member of a sentence, but 

look to the provisions of the whole law, and to its object and 

policy” (internal quotation marks omitted)). Congress enacted 

the Health Insurance Portability and Accountability Act of 1996 

(“HIPAA”), of which 42 U.S.C. § 1320-7(a)(3) is a part, “to 

combat waste, fraud, and abuse in health insurance and health 

care delivery.” Pub. L. No. 104-191, 110 Stat. 1936, 1936 
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(1996). In fact, the legislative history to § 1320-7(a)(3) as 

it was originally enacted indicates that it was specifically 

intended to protect federal programs from untrustworthy 

individuals and to “provide a clear and strong deterrent against 

the commission of criminal acts.”* S. Rep. 100-109, at 5 (1987), 

reprinted in 1987 U.S.C.C.A.N. 682, 686. These purposes 

indicate that Congress was targeting fraud generally, not simply 

fraud relating to financial misconduct, and none of the purposes 

would be served by narrowing the scope of the statute as Morgan 

urges.

Finally, it is worth noting that the Senate Report that 

accompanied the statute as originally enacted described the 

provision as applying to “a criminal offense relating to fraud, 

theft, embezzlement, breach of fiduciary responsibility or 

financial abuse.” S. Rep. No. 100-109, at 6 (1987), reprinted 

in 1987 U.S.C.C.A.N. 682, 687; see National Elec. Mfrs. Ass’n, 

654 F.3d at 504-05 (“[W]e have described legislative history as 

one of the traditional tools of interpretation to be consulted 

at Chevron’s step one.”). Considering that the word “other” did 

not even appear in the description, there was no suggestion that

 * As originally enacted, the statute made exclusion from the 

federal programs only optional as opposed to mandatory.
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Congress intended that “fraud” would have anything other than 

its ordinary meaning.

For all of these reasons, we hold that regardless of 

whether the district court correctly concluded that the statute 

unambiguously does not require that any fraud relate to 

financial misconduct in order to warrant the mandatory five-year 

exclusion, the Secretary’s construction was, at the very least, 

a permissible one to which we must defer. 

III.

Finding no error, we affirm the district court’s dismissal 

of Morgan’s case.

AFFIRMED