Court Opinion

ID: 802288
Source: CourtListenerOpinion
Date Created: 2012-06-14 18:59:31+00
Date Added: 2024-06-11T18:00:03.515098
License: Public Domain

UNPUBLISHED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Affirmed by unpublished per curiam opinion.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.
Unpublished opinions are not binding precedent in this circuit.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. § 1320a-

7(a)(3), a conviction must be for an offense that relates to

                                            4
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

                                              6
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

                                                    7
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

                                               8
(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.

                                            9
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

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