The Department of Justice (DOJ) announced two revisions to the Justice Manual governing False Claims Act (FCA) enforcement last week.1 One limits the role that agency guidance can play in establishing an FCA violation.2 The other directs DOJ attorneys to take a closer look at whether declined qui tam cases should be dismissed rather than left for relators to pursue on the government’s behalf.3
Agency Guidance: What It Can (and Cannot) Do
DOJ has reinstated and built upon a policy limiting the use of agency guidance documents in enforcement actions. The premise is familiar: an agency guidance cannot, by itself, create a binding obligation that does not otherwise arise from law, regulation, contract, or another enforceable obligation.
For FCA cases, that puts renewed emphasis on identifying the source of the obligation allegedly violated. A failure to comply with agency guidance, standing alone, does not establish a violation simply because the government would have preferred a different course of conduct.
But the revised policy does not make guidance irrelevant. The Justice Manual identifies several ways DOJ can still use guidance as evidence. Guidance may be relevant to whether a defendant knew about an underlying legal requirement, for example, or to establishing professional and industry standards. Most significantly for FCA cases, the Manual permits guidance to be used as evidence of scienter, notice, or knowledge—and, in appropriate circumstances, deliberate indifference—while cautioning that awareness of guidance is not an admission that the agency’s interpretation of the underlying law is correct. DOJ also specifically identifies the Medicare Benefit Policy Manual and Local Coverage Determinations as potentially relevant evidence concerning whether services billed to Medicare or Medicaid were reasonable and necessary.
Contracts require a separate analysis. If a government contract or provider agreement incorporates agency guidance or independently requires compliance with it, the contractual obligation may still provide the basis for enforcement even where the guidance itself does not.
For companies in heavily regulated industries, the revised policy makes the source of an asserted obligation particularly important—whether it comes from statute or regulation, a contractual commitment, or agency guidance.
Declined Qui Tams Get Another Look
DOJ also revised its policy on dismissal of qui tam cases under 31 U.S.C. § 3730(c)(2)(A).
When DOJ declines to intervene in an FCA case, the relator ordinarily may continue litigating on behalf of the United States. Under the revised Justice Manual, DOJ attorneys considering declination are now directed to also assess whether the government’s interests would be served by dismissal.
The Manual identifies several circumstances that may favor dismissal, including meritless or opportunistic claims, interference with agency programs, threats to DOJ’s litigation prerogatives, protection of classified information and national security interests, excessive demands on government resources, and serious procedural problems.
DOJ can also revisit the question as the case develops. As a result, parties are wise to monitor these factors throughout the litigation to determine if any developments have changed the dismissal calculus and warrant reassessment.
A declination does not mean DOJ believes a case lacks merit. What is new is that DOJ attorneys are now directed to consider a separate question when they decline to intervene: whether the government should affirmatively seek dismissal of the relator’s case. That creates an additional opportunity for defendants to urge DOJ to end a declined case, while relators must be prepared to explain why their case should be permitted to proceed without the government.
What to Watch
The revisions do not signal a retreat from FCA enforcement. Instead, they sharpen two issues that can matter significantly once an FCA investigation or lawsuit is underway: the source of the obligation allegedly violated and, in declined qui tam cases, whether DOJ believes the case should proceed at all.
1. U.S. Dep’t of Just., DOJ Revises Justice Manual to Strengthen False Claims Act Enforcement (Sept. 18, 2026), https://www.justice.gov/opa/pr/doj-revises-justice-manual-strengthen-false-claims-act-enforcement.
2. U.S. Dep’t of Just., Justice Manual § 1-19.200, Limitations on Use of Guidance Documents in Litigation (updated Sept. 2026), https://www.justice.gov/jm/1-19000-limitation-issuance-guidance-documents-1
3. U.S. Dep’t of Just., Justice Manual § 4-4.111, DOJ Dismissal of a Civil Qui Tam Action (updated Sept. 2026), https://www.justice.gov/jm/jm-4-4000-commercial-litigation
Related Attorneys
Counsel
Counsel
Counsel
