694 F.3d 535
4th Cir.2012Background
- Morgan, a West Virginia physician, pled guilty in 2007 to a felony under 21 U.S.C. § 843(a)(3) for obtaining hydrocodone samples by misrepresentation; he received 30 days’ imprisonment and three months of supervised release.
- In May 2008, the HHS Inspector General notified Morgan that he would be excluded for five years from federally funded health programs under § 1320a-7(a)(3).
- The statute requires mandatory exclusion for offenses connected to delivery of a health care item or service that are felonies relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.
- Morgan contested the five-year exclusion, arguing § 1320a-7(a)(3) only covers financial-misconduct offenses; the ALJ found the exclusion permissible.
- The DAB Appellate Division rejected Morgan’s argument, holding the exclusion valid under § 1320a-7(a)(3) whether or not the offense involved financial misconduct.
- The district court dismissed Morgan’s suit, holding the statute unambiguous and the Secretary’s interpretation permissible.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1320a-7(a)(3) requires financial misconduct. | Morgan contends the statute excludes only financial-misconduct offenses. | The Secretary and district court read the statute to include fraud-related offenses regardless of financial-misconduct emphasis. | The statute is not limited to financial-misconduct offenses; the Secretary’s interpretation is permissible. |
Key Cases Cited
- Carbon Fuel Co. v. USX Corp., 100 F.3d 1124 (4th Cir. 1996) (plain-meaning, avoid surplusage; Fifth category clarifies scope)
- Gustafson v. Alloyd Co., 513 U.S. 561 (1995) (avoid reading statute to render words redundant)
- United States Nat'l Bank of Oregon v. Independent Ins. Agents of Am., Inc., 508 U.S. 439 (1993) (look to whole statute and its purpose; interpretive context)
- Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984) (agency deference when statute is ambiguous)
- Orquera v. Ashcroft, 357 F.3d 413 (4th Cir. 2003) (statutory-interpretation de novo; Chevron framework applied)
- National Elec. Mfrs. Ass’n v. United States Dep’t of Energy, 654 F.3d 496 (4th Cir. 2011) (consider text, structure, and legislative history in interpretation)