Executive Summary
On September 18, 2026, the Department of Justice (DOJ) announced two substantial revisions to the Justice Manual that will materially affect False Claims Act (FCA) enforcement and defense strategy:
- Guidance Documents: DOJ will no longer treat sub-regulatory guidance (CMS manuals, FDA interpretive memos, etc.) as creating independently enforceable legal obligations in FCA cases. The government must prove violations of statutes, regulations, or contracts.
- Qui Tam Dismissals: DOJ will more actively consider dismissing qui tam cases in which DOJ declines to intervene, both at the time of declination and as the litigation proceeds. (Under the Supreme Court’s Polansky standard, reviewing courts are likely to grant these motions in all but extraordinary circumstances.)
What’s New: Neither policy starts from scratch. Both revive and formalize positions DOJ initially took in 2017-2018 but now reinstates those policy positions with more detailed frameworks.
Bottom line: These changes create immediate opportunities to challenge guidance-based FCA theories and seek dismissal of declined cases where appropriate. Companies under FCA scrutiny should act quickly to assess pending litigation and engage with DOJ where dismissal may be warranted.
I. THE SUB-REGULATORY GUIDANCE POLICY: JM 1-19.000
What DOJ Changed
The revised Justice Manual (JM) 1-19.000 establishes that sub-regulatory guidance documents—including agency manuals, interpretive memoranda, and coverage determinations—cannot independently create legal obligations enforceable through FCA actions. Parties may be held liable only for violating statutes, regulations, or contractual terms, not for failing to comply with agency interpretations that lack the force of law.
This revives former Attorney General Jeff Sessions’s November 2017 memorandum and former Associate Attorney General Rachel Brand’s January 2018 civil enforcement policy, both of which were intended to prohibit DOJ from treating guidance as binding law. The 2018 policy went dormant during the Biden Administration. JM 1-19.000 now resurrects it in more granular form.
Three Categorical Limitations on Guidance Use
DOJ has imposed three constraints on its use of guidance documents to support FCA investigations:
- No Force of Law: Guidance documents cannot be treated as having legal effect equivalent to statutes or regulations.
- No Mens Rea by Guidance: A guidance document alone cannot establish the scienter requirement for criminal offenses.
- No Admission by Awareness: A party’s knowledge of a legal interpretation in guidance cannot be treated as the party’s admission that the guidance correctly interprets an underlying requirement. This forecloses an argument that a defendant’s awareness of CMS guidance or FDA interpretations demonstrates knowing violation of the underlying statute or regulation. In short, under the new policy, awareness of guidance is, standing alone, legally irrelevant to scienter.
Five Ways DOJ Can Still Use Guidance
DOJ may still introduce guidance documents for five specific purposes:
1. Evidence of Professional or Industry Standards
Guidance may show that conduct deviated from professional norms, for example, that a physician’s prescribing exceeded CDC guidelines, or that services fell outside Medicare coverage parameters described in the Medicare Benefit Policy Manual or Local Coverage Determinations.
Critical limitation: Notwithstanding this, the guidance serves only as evidence of whether a statutory standard (such as “medically reasonable and necessary”) was met. The guidance itself does not define that standard.
What this means for FCA defense: The government must prove the statutory violation independently, not as mere departure from guidance. A defense might contend that guidance represents only one data point of industry practice, not dispositive evidence. And any guidance-based theory still must clear the FCA’s demanding materiality bar set in Universal Health Services v. Escobar, 579 U.S. 176 (2016), namely that payment in full with actual knowledge of a violation is strong evidence the requirement was not material.
2. Evidence of Agency Duty, Custom, or Practice
Guidance may establish an agency’s internal procedures—analogous to using a corporation’s compliance manual to prove the company’s own practices. This category is narrow and unlikely to affect most traditional FCA cases.
3. Evidence of Scientific or Technical Processes
Guidance may support or rebut claims about generally accepted scientific methodologies. This will be relevant in pharmaceutical, medical device, and environmental cases.
4. Evidence Where Compliance Itself Is at Issue
Guidance may be introduced when compliance or non-compliance is itself the subject of a false claim, such as:
- False certification of compliance with guidance that is material to payment.
- Misrepresentation to investors about compliance with guidance.
- Contractual obligation to comply with specific guidance (where the contract, not the guidance, creates the duty).
This is an important exception. Many government contracts and provider agreements incorporate agency guidance by reference. Where they do, the guidance becomes enforceable because the contract makes it so (not because the guidance independently has legal force).
What this means for FCA defense: In an FCA matter, careful review of agreements to determine if guidance documents are contractually binding, and if so, which specific provisions referenced in the contract are enforceable, is wise. So is further analysis of the impact of subsequent amendments or interpretations.
5. General Background Information
Guidance may be cited to explain how an agency processes claims or administers a program. This is largely procedural and therefore unlikely to affect liability determinations.
II. THE QUI TAM DISMISSAL POLICY: JM 4-4.111
What DOJ Changed
The revised JM 4-4.111 directs DOJ attorneys to affirmatively consider seeking dismissal under the FCA at 31 U.S.C. § 3730(c)(2)(A) at the declination stage, and to revisit that assessment as litigation progresses. This represents a significant departure from past practice, where dismissal motions were relatively rare.
While the prior version of the JM stated that DOJ attorneys “should . . . consider whether the government’s interests are served . . . by seeking dismissal” in evaluating a recommendation to decline intervention, the revised JM makes this a mandatory requirement. The JM now instructs that DOJ attorneys “will in each case assess whether the government’s interests are served by seeking dismissal.” Notably, even “[f]or cases in which the Department concludes at the time of declination that dismissal . . . is not warranted,” the revised JM provides that DOJ “may re-evaluate whether dismissal becomes appropriate as the litigation progresses.” The revisions also refer broadly to “[c]urbing meritless qui tams” as a basis for dismissal, and impose a new procedural requirement, directing U.S. Attorney’s Offices to “provide notice to the assigned Fraud Section attorney at least 10 days prior to filing any motion to dismiss in a delegated matter.”
The underlying dismissal power is not new—Congress created it in the 1986 FCA amendments. The DOJ’s current framework traces to former Deputy Assistant Attorney General Michael Granston’s January 2018 memorandum, which distilled seven factors from dismissal motions filed since 1986. Even after Mr. Granston’s memo, DOJ filed § 3730(c)(2)(A) dismissal motions in only 45 of more than 1,170 FCA qui tam actions between January 2018 and December 2019, fewer than four percent.
The Legal Standard Is Settled
In United States ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419 (2023), the Supreme Court held that courts apply the Federal Rule of Civil Procedure 41(a) standard governing voluntary dismissals. Under that standard, dismissal will be granted in all but the most exceptional cases: a district court “should think several times over before denying a motion to dismiss,” and the government’s reasonable cost-benefit judgment prevails even against a relator’s credible contrary assessment.
What remains unsettled is not the legal standard, but rather how aggressively individual U.S. Attorneys’ Offices will exercise the now-encouraged discretion.
How the Policy Works
The policy acknowledges that declination (often driven by resource constraints) does not necessarily mean a case lacks merit, while dismissal should be pursued where the government affirmatively concludes the case is meritless or harms government interests.
DOJ attorneys must evaluate dismissal at the declination stage, then continue to reassess as the case develops. This creates opportunities to present dismissal arguments both during the seal period and after declination. Under the Granston framework, the DOJ expects the relevant agency’s recommendation to be obtained before any dismissal motion is filed.
III. HOW DOJ POLICY CHANGES MIGHT IMPACT FCA DEFENSE STRATEGIES
The following takeaways emanate from the new policy. But, as always, a person or company undergoing FCA investigation or litigation should consult with its own legal representation to develop tailored strategies and appropriate defenses.
Audit compliance programs. Distinguish between legal requirements (statutes, regulations, contract terms) and potentially non-binding guidance. Prioritize compliance with the former; understand the latter and whether it is to be considered best practice or legal mandate depending on individual facts and circumstances.
Assess pending litigation to consider whether the government is relying heavily on sub-regulatory guidance. If so, consider defense arguments under the new policy and/or under Escobar.
Engage DOJ early and often in declined cases. Present arguments for dismissal demonstrating lack of merit, duplication of government investigations, or interference with agency policy, or other Granston memo factors as appropriate. Consider the support of the relevant agency. Prepare comprehensive dismissal advocacy. A well-supported government dismissal motion will be granted absent extraordinary circumstances. The legal standard strongly favors the government once it decides to seek dismissal. As new facts or potential defenses emerge during the course of litigation—even if DOJ has declined to intervene or previously decided not to file a motion to dismiss—because the new JM makes clear that DOJ wants its trial attorneys to continually reassess whether dismissal is warranted as a case progresses.
Review contractual incorporation carefully. If guidance is incorporated by contract, study which specific provisions are enforceable, and consider the impact of subsequent amendments or interpretations.
Understanding Relator Responses
Understanding how relators will adapt helps anticipate their strategies:
Expect tighter pleading. Relators might now take more care to clearly identify the statute, regulation, or contract term allegedly violated—not merely cite noncompliance with guidance.
Expect expert testimony. Relators might now use guidance as evidence of industry standards but retain experts to establish the legal standard independently testifying that the statutory standard (e.g., “medically necessary”) requires conduct consistent with the guidance.
Expect early case development. Because dismissal may be considered at declination, relators may use the seal period more aggressively to develop and advocate the merits of their cases. Seal period advocacy to DOJ becomes even more critical.
IV. WHAT REMAINS UNCERTAIN
Retroactivity: Does the guidance policy apply to pending cases? The Justice Manual is not binding on courts, but DOJ’s litigation positions likely will change immediately. We anticipate motion practice on this issue.
Judicial reception: Will courts adopt DOJ’s interpretation? Courts have already narrowed deference to agency sub-regulatory interpretations in Kisor v. Wilkie, 588 U.S. 558 (2019). JM 1-19.000 runs parallel to that trend, but whether courts treat DOJ’s internal policy as persuasive on the evidentiary weight of guidance remains untested.
Dismissal practice variation: The DOJ’s own post-Granston Memo numbers (fewer than four percent of declined cases dismissed through 2019) suggest considerable room to move before dismissal becomes routine. We expect to see variation across districts, with some offices embracing the new policy more aggressively than others. We also expect variation between cases delegated to U.S. Attorney’s Offices, as opposed to jointly handled or monitored cases involving Main Justice, which in some cases may be more amenable to dismissing qui tams.
Agency response: Will agencies convert guidance into binding regulations through notice-and-comment rulemaking? Watch for the possibility that agencies begin rulemaking proceedings on key guidance documents, particularly in healthcare and pharmaceuticals.
V. CONCLUSION
The DOJ’s newly rejuvenated policy changes represent a meaningful shift in current FCA enforcement, emphasizing fair notice and limiting DOJ’s ability to enforce obligations not clearly established by law.
Neither shift starts from zero: JM 1-19.000 revives a 2017-2018 policy that quietly lapsed, and JM 4-4.111 redirects the Department back toward the dismissal authority Congress created in 1986 and Mr. Granston catalogued in 2018, now operating under the Supreme Court’s Polansky standard that gives the government’s judgment substantial weight.
The changes create immediate opportunities to challenge guidance-based theories and seek dismissal of weak declined cases. The legal standards now favor defendants more than at any point in the past decade, but those under FCA scrutiny should act strategically and quickly to avail themselves of them.
We will continue to monitor developments and provide updates as courts and agencies respond to these policy shifts.
If you have questions about how these policy changes will impact your organization, contact Jonathan Porter, Jody Rudman, Cormac Connor, Abe Souza, or your Husch Blackwell attorney.