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Memos May Signal Change to DOJ Enforcement of FCA


Memos May Signal Change to DOJ Enforcement of FCA

The United States Department of Justice (“DOJ”) recently issued two separate memos that may signal the DOJ is taking a more restrictive False Claims Act (“FCA”) enforcement position.

The first memo, written by Michael Granston, Director of the DOJ’s Civil Fraud Division, and dated January 10, 2018, discusses the DOJ’s authority to seek dismissal of a “meritless” qui tam relator case under 31 U.S.C. § 3730 (the “Granston Memo”). The DOJ historically has been reticent to use its authority under § 3730. The Granston Memo argues that, to preserve the DOJ’s limited resources and avoid adverse decisions that could negatively impact the DOJ’s own enforcement priorities, DOJ attorneys should consider the seven factors listed in the memo in evaluating whether to seek dismissal of a qui tam case.

A second memo, authored by Associate Attorney General Rachel Brand, dated January 25, 2018 (the “Brand Memo”), emphasized a November 27, 2017 DOJ Guidance Policy from Attorney General Sessions that prohibits the DOJ from using “noncompliance with guidance documents as a basis for proving violations.” This reiterates the longstanding principle that, unless an agency’s guidance document has gone through the formal notice-and-comment rulemaking process, it is non-binding. In practical terms, this directive would apply, for example, to Medicare or OIG guidance and, in a footnote, the Brand Memo expressly states that its directive applies to FCA civil enforcement lawsuits.

Although the impact of the Granston and Brand Memos is unknown, the publication of the memos may reflect that the DOJ is taking a more restrictive approach to FCA cases. Defense and relator counsel will have to wait to see the actual impact of these memos on FCA cases brought by either the DOJ or qui tam relators.

The Granston Memo can be found here, and the Brand Memo can be found here.