The U.S. Department of Justice (“DOJ”) recently revised its Justice Manual to strengthen its approach to False Claims Act (“FCA”) enforcement. The revisions address two issues particularly relevant to FCA defendants: the use of sub-regulatory guidance and DOJ’s consideration of dismissing declined qui tam actions.

DOJ Reinforces Limits on Sub-Regulatory Guidance

The revised Justice Manual builds on an older policy, reintroduced in 2025, providing that sub-regulatory guidance cannot create legal obligations or serve as the sole basis for an enforcement action. Under the revised policy, DOJ must base an enforcement action on an actual violation of a statute, regulation or other binding legal requirement. Sub-regulatory guidance may still be used as evidence of notice, scienter or compliance with an underlying legal requirement, but it cannot itself establish a violation. This distinction may be particularly important in FCA cases involving health care providers, where relators frequently rely on CMS manuals, coverage policies, local coverage determinations and other agency guidance.

DOJ Emphasizes Dismissal of Declined Qui Tam Actions

The second revision to the Justice Manual now directs DOJ attorneys to consider, in each case, whether the government’s interests would be served by seeking dismissal when DOJ declines to intervene in a qui tam action. DOJ may also revisit dismissal later in the litigation. The policy identifies several considerations that may support dismissal, including meritless or parasitic claims, interference with government programs or policies, unnecessary expenditure of government resources and other circumstances that undermine the government’s interests.

Key Takeaways

The revisions provide FCA defendants with two important considerations and potential avenues for dismissal:

  • The alleged violation must be grounded in a binding legal requirement. Sub-regulatory guidance cannot, standing alone, create FCA liability.
  • A DOJ declination does not necessarily mean the case should continue. Defendants may have an opportunity to ask DOJ to dismiss a declined qui tam action, particularly where the case lacks merit or does not serve the government’s interests.

These changes may be particularly significant for health care providers defending FCA claims based on alleged violations of agency guidance.

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