DOJ Revises Justice Manual on FCA Guidance and Qui Tam Dismissals

The US Department of Justice has revised its Justice Manual, altering its approach to False Claims Act (FCA) enforcement in two key ways. First, the new policy limits the DOJ's reliance on sub-regulatory agency guidance, clarifying that enforcement actions must be based on violations of statutes or regulations, not mere non-compliance with informal guidance. This is particularly relevant for defendants in heavily regulated industries like healthcare. Second, the DOJ now requires its attorneys to formally assess whether to seek dismissal in every qui tam action in which the government declines to intervene. The manual also encourages prosecutors to re-evaluate dismissal as a declined case progresses, codifying a process contemplated by the Supreme Court’s Polansky decision. For companies facing FCA scrutiny, these changes create new opportunities. They provide a stronger basis to challenge legal theories predicated on non-binding guidance and establish a formal avenue to advocate for the dismissal of meritless whistleblower suits, both at the declination stage and later in litigation.