Opinion ID: 476864
Heading Depth: 1
Heading Rank: 1

Heading: The Procedural History and the Standard of Review

Text: 6 On March 15, 1982, petitioner George Griffon was convicted of submitting 22 false claims to the Louisiana Medicaid program in 1979. Griffon, a pharmacist, had dispensed generic drugs to his customers under brand-name labels, and had submitted reimbursement claims based on brand-name drug prices. He was fined $110,000, $55,000 of which was characterized as restitution to Medicaid and $55,000 as a criminal fine. The Louisiana Supreme Court affirmed the criminal conviction and sentence on February 27, 1984. State v. Griffon, 448 So.2d 1287 (La.1984). 7 On July 3, 1984, almost three years after passage of the CMPL, and almost ten months after the Secretary's regulations, the Deputy Inspector General (IG) for Civil Fraud notified Griffon that HHS intended to impose a $44,000 fine under the CMPL. The IG cited numerous aggravating factors for imposing the maximum fine, and referenced the Louisiana conviction for the claims upon which the CMPL penalty was to be based. 8 In a decision and order dated May 15, 1985, the ALJ imposed on Griffon the $44,000 fine for the 22 fraud counts. The ALJ found that the IG had shown by clear and convincing evidence that Griffon had knowingly submitted 22 false claims within the scope of 45 C.F.R. Sec. 101.102, for which Griffon could have been held liable under the False Claims Act, 31 U.S.C. Secs. 3729-3731 (1983). The ALJ also found that there were no mitigating and numerous aggrevating factors, that Griffon had adequate notice of the penalties, that the maximum penalty was appropriate, and that an ALJ is not empowered to reach the validity of application of the statute. Petitioner appealed the ALJ's determination, pursuant to 42 U.S.C. Sec. 1320a-7a(d), because the Secretary's regulations retroactively apply the statute to claims falsely submitted before enactment of the CMPL. 2 9 The scope of our review of the Secretary's construction that the CMPL is to be applied retroactively in part is extremely limited. Administrators are accorded considerable deference to effectuate the purposes of statutes. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984) (a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency. We have long recognized that considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer, and the principle of deference to administrative interpretations 'has been consistently followed....' ) (quoting United States v. Shimer, 367 U.S. 374, 81 S.Ct. 1554, 1560, 6 L.Ed.2d 908 (1961)) (footnotes omitted) (emphasis added); see also Zenith Radio Corp. v. United States, 437 U.S. 443, 98 S.Ct. 2441, 2445, 57 L.Ed.2d 337 (1978); Chemical Mfrs. Assoc. v. Natural Resources Defense Council, Inc., 470 U.S. 116, 105 S.Ct. 1102, 1108, 84 L.Ed.2d 90 (1985). 3 A court of appeals can only invalidate an administrator's interpretation if that interpretation is unreasonable. Chevron, 104 S.Ct. at 2783.