DOJ Updates Policies On False Claims Act Enforcement And Qui Tam Dismissals

On September 18, 2026, the Department of Justice (DOJ or Department) announced updates to the Justice Manual (JM) affecting nationwide False Claims Act (FCA) enforcement. The latest updates to the JM—the Department’s official compilation of policies and procedures pertaining to the investigation, litigation and resolution of alleged violations of federal law—reflect policies announced by Department officials over the past 18 months and (1) limit the use of agency guidance as the basis for FCA enforcement and (2) encourage the exercise of DOJ’s statutory prerogative to dismiss qui tam actions over relators’ objections as an exercise of prosecutorial discretion.

These policies are not new, but DOJ’s incorporation of the policies into its manual for prosecutors underscores DOJ’s commitment to their implementation on a day-to-day basis by line attorneys and suggests new avenues for advocacy on behalf of organizations and individuals facing FCA investigations and litigation.

Limitation on the Use of Agency Guidance, JM 1-19.100 – 1-19.260

DOJ’s latest revision to the JM reaffirms that in all criminal and civil cases, the Department must establish a violation of law by reference to statutes and regulations and cannot premise a violation on “mere noncompliance with guidance documents issued by federal agencies.”

JM revisions addressing agency guidance continue a trend of serial revisions stretching back to 2018. That year, during the first Trump administration, DOJ revised the JM to limit the use of agency sub-regulatory guidance in affirmative litigation matters, including claims pursued under the FCA. The Biden administration replaced this provision in April 2022, though maintained the central policy that guidance documents do not have the force and effect of law and do not bind the public. In February 2025, then-Attorney General Bondi issued a memorandum entitled “Reinstating the Prohibition on Improper Guidance Documents,” which sought to curb the use of agency guidance documents that “purport to have a direct effect on the rights and obligations of private parties governed by the agency or otherwise act as a substitute for rulemaking.” Consistent with the central focus of that memo, the latest revisions to the JM resurrect the language from 2018, with some modifications.

Like the 2018 JM provision, the latest iteration allows Department attorneys to use agency guidance documents to demonstrate knowledge under the FCA. The JM now specifically provides that “awareness of the guidance document (or its contents)” may serve “as evidence that the party had the requisite scienter, notice or knowledge of the law.” The revised version, however, underscores certain “limiting principles” for such use. Relevant for FCA purposes, “the Department may not treat awareness of a legal interpretation in a guidance document as an admission that the guidance document is a correct interpretation of the binding legal requirements in a statute or regulation.” As a result, FCA defendants are free to challenge an agency’s interpretation set forth in guidance documents.

For FCA matters in the health care space, the JM allows use of guidance documents such as Centers for Medicare & Medicaid Services’ (CMS) Medicare Benefit Policy Manual or Local Coverage Determinations as relevant evidence of violations of the principal requirement that procedures billed to Medicare or Medicaid be medically “reasonable and necessary.” But the JM now cautions that use of these guidance documents for this limited purpose should not be construed as “a presumption that a guidance document correctly states the relevant professional or industry standard.” Instead, the revised JM language expressly acknowledges that “a guidance document’s articulation of the appropriate standard can be contested or rebutted through other forms of evidence.”

Notably, the latest JM revisions now define “guidance document” to exclude “documents informing the public of the agency’s enforcement priorities or factors the agency considers in exercising its prosecutorial discretion.” This provision may signal the Department’s intention to continue to rely on its own pronouncements of its enforcement policies, such as DOJ’s July 2025 Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination.

Exercise of Qui Tam Dismissal Prerogative – JM 4-4.111

In public remarks made in January 2026, Deputy Assistant Attorney General Brenna Jenny, DOJ’s top political official charged with FCA enforcement, stated that “(c)(2)(A) is back,” referring to the government’s statutory right to dismiss qui tam actions pursuant to section 3730(c)(2)(A) of the FCA as an exercise of prosecutorial discretion. Jenny also made public the administration’s directive that DOJ attorneys evaluate whether dismissal is appropriate under section 3730(c)(2)(A) whenever they recommend declination of a qui tam action. The newly announced JM revisions memorialize this directive, stating that, when evaluating a recommendation to decline intervention in a qui tam action, attorneys “will in each case assess whether the government's interests are served by seeking dismissal pursuant to 31 U.S.C. § 3730(c)(2)(A).” The revised provision reaffirms the Department’s policy to use its dismissal authority to address matters that “lack legal or factual merit” and to “focus[] Department resources on matters that advance the interests of the United States.”

The revised JM language further provides that in those cases where Department attorneys conclude at the time of declination that dismissal is not warranted, “the Department may re-evaluate whether dismissal becomes appropriate as the litigation progresses.” Re-evaluating dismissal at more advanced stages of litigation takes on added significance in light of the historic rise in the volume of qui tam filings. As the JM revision explains, “the government often will investigate a qui tam action only to the point where it concludes a declination is warranted, which may not equate to the conclusion that a qui tam is meritless.” As such, the lack of merit may become more apparent after declination as more information becomes available to assess the allegations or risk of adverse precedent.

The latest JM revisions also broaden the circumstances when dismissal due to lack of merit is appropriate, implementing the change set out below.

With this change, DOJ policy no longer limits dismissals based on lack of merit to cases that “facially lack merit,” with either an invalid legal theory or frivolous allegations. This is consistent with the changes noted above regarding re-evaluation of dismissal as litigation proceeds in declined cases. While an invalid legal theory or frivolous allegations are typically apparent at the time of declination, other deficiencies often may not become apparent until later stages of the litigation.

While these revisions may appear to limit FCA enforcement in certain respects, the government has continued to encourage relators to come forward, especially with regard to Administration priorities. For example, earlier this year DOJ implemented a policy to “fast track” its review of qui tams alleging “benefits fraud,” which expressly contemplates an increase in the number of qui tam actions litigated by relators following declination. The tension in these policies arises at the same time courts are wrestling with renewed constitutional challenges to the role private relators play in the government’s fraud enforcement efforts.

Takeaways

• DOJ and relators must anchor an FCA theory in binding legal requirements, not mere agency guidance. Organizations and individuals facing FCA investigations should identify early whether the alleged obligation arises from a binding legal requirement, such as a statute or regulation, or instead rests principally on a manual, policy statement, interpretive document or other nonbinding guidance and advocate accordingly with DOJ.
• Defendants may have more opportunities to advocate for dismissal of qui tam cases, both before and after declination. The time of declination may be an appropriate time to advocate for dismissal, as DOJ attorneys are now required in every case to evaluate the issue at this stage, but it is not the only opportunity. A defendant may have a strong basis to approach DOJ when discovery, expert analysis or subsequent legal developments provide further support that a declined action lacks merit or otherwise does not advance the government’s interests.
• The Department’s decision to dismiss a qui tam action will be driven by the government’s interests, not just the perceived merits of the case. It is critical in advocating for dismissal to focus on the government’s perspective, and not just the unfairness of the suit to a particular defendant. The merits of a case are part of the calculus but understanding how DOJ thinks about dismissals and the appropriate role of the qui tam relator is invaluable to successful advocacy. Experienced counsel understands how to effectively navigate these discussions with Department attorneys as they evaluate whether to recommend dismissal of a qui tam action.