Breton Morgan v. Kathleen Sebelius

UNPUBLISHED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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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