DOJ Revises Justice Manual to Clarify Dismissal Policy and Permissible Uses of Agency Guidance Documents

On September 18, 2026, DOJ announced revisions to the Justice Manual to “strengthen its fight against fraud under the False Claims Act through clearer standards that promote fair and effective enforcement.” These revisions reinforce limitations on the use of agency guidance documents and encourage Department attorneys to consider dismissal when declining to intervene in an FCA action.

The first revision reinforces DOJ’s commitment to fair notice and transparent enforcement and is the latest in a series of efforts under the first and second Trump administrations to limit the use of sub-regulatory guidance in enforcement actions. On January 25, 2018, then Associate Attorney General Rachel Brand issued a memorandum applying the Guidance Policy issued by the Attorney General on November 16, 2017, prohibiting the publication of guidance documents to bind the public without notice-and-comment rulemaking. See Memorandum from the Associate Attorney General, Limiting Use of Agency Guidance Documents in Affirmative Civil Enforcement Cases (Jan. 25, 2018), available here. Then Attorney General Merrick Garland rescinded that memorandum on July 1, 2021, in a memorandum of his own, which was then later rescinded, but not replaced, by then Attorney General Bondi on her first day after being appointed. See Memorandum from the Attorney General, Issuance and Use of Guidance Documents by The Department of Justice (Jul. 1, 2021), available here; Memorandum from the Attorney General, Reinstating the Prohibition on Improper Guidance Documents (Feb. 5, 2025), available here.

The new revision to the Justice Manual closely tracks the standards in the Brand Memo and prohibits the use of guidance documents as being used as standalone, binding standards in enforcement actions. Instead, they may be used for a number of purposes laid out in Justice Manual section 1-19.000: to prove scienter, notice, knowledge, and mens rea; to establish professional or industry standards; to reflect accepted scientific or technical processes; and to establish compliance or noncompliance with guidance where relevant to claims at issue (e.g., falsely certifying compliance with a guidance document). The revisions to the manual define an agency guidance document as “any agency statement of general applicability and future effect that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statute or regulation, other than a substantive action by an agency that promulgates or is expected to promulgate a regulation[,]” and makes clear that such guidance “may not be used as a substitute for regulation” or to “impose new requirements on persons outside the Executive Branch.” DOJ’s press release quotes Associate Deputy Attorney General Paul Perkins’ statement that the revision is intended to “ensure that the Department applies its enforcement authority fairly and effectively.” It also quotes Associate Attorney General Stanley E. Woodward, Jr. explaining DOJ’s role is to “enforce the law, not make law through enforcement.” With these changes, DOJ has now effectively reimplemented the standards set in the Brand Memo and self-limited its potential evidence and theories in FCA enforcement cases. These revisions present advocacy opportunities in cases relying on guidance from agencies such as CMS to support FCA liability theories.

The second revision to the Justice Manual updates DOJ’s prior policy regarding whether and when to consider dismissing qui tam actions under its Section 3730(c)(2)(A) authority. On January 10, 2018, then Director of the Commercial Litigation Branch Michael Granston issued a memorandum setting out seven factors DOJ may consider in dismissing these actions, which was subsequently codified in the Justice Manual. The new revisions to the Justice Manual continue to direct government attorneys to consider the same non-exhaustive list of factors to determine whether seeking dismissal would be appropriate when it declines to intervene in a qui tam action:

• Curbing meritless qui tams
• Preventing parasitic or opportunistic qui tam actions that duplicate a pre-existing government investigation and add no useful information to the investigation
• Preventing interference with an agency’s policies or the administration of its programs
• Controlling litigation brought on behalf of the United States, in order to protect the Department’s litigation prerogatives
• Safeguarding classified information and national security interests
• Preserving government resources, particularly where the government’s costs (including the opportunity costs of expending resources on other matters) are likely to exceed any expected gain
• Addressing egregious procedural errors that could frustrate the government’s efforts to conduct a proper investigation

However, in contrast to prior versions, which stated DOJ should consider dismissal at the time a non-intervention decision is made, the new Justice Manual directs DOJ to assess these factors in each case and on an ongoing basis, and notes that the Department “may re-evaluate whether dismissal becomes appropriate as the litigation progresses.” These revisions come after the Supreme Court decision in United States ex rel. Polansky v. Executive Health Resources, Inc., which clarified the proper level of deference and timing of government dismissal motions, and after Senator Grassley’s recent letter to Assistant Attorney General Brett Shumate raising concerns regarding DOJ’s increased use of its dismissal authority. These revisions appear to signal an increased willingness by DOJ to consider dismissing qui tam actions and to reassess that decision as relator-driven, non-intervened litigation progresses.

The first Justice Manual revision may be found here, and the second revision may be found here.

Reporter, Rebecca Hsu, Atlanta, GA, +1 404 572 3339, rhsu@kslaw.com

CLIENT ALERTS

D.C. Circuit Affirms Broad AKS Reach While Tightening OIG Advisory 

On September 4, 2026, the U.S. Court of Appeals for the District of Columbia Circuit issued a decision in Vertex Pharmaceuticals Inc. v. U.S. Department of Health and Human Services concerning a manufacturer-funded fertility support program for patients prescribed gene therapy. The court affirmed the Office of Inspector General’s determination on behalf of HHS that the program would implicate the federal Anti-Kickback Statute (AKS) but set aside OIG’s Beneficiary Inducement Statute (BIS) analysis because the agency failed to meaningfully address Vertex’s evidence that its program satisfied a statutory exception. The court also invalidated OIG’s regulations that delayed or tolled the statutory deadline for issuing advisory opinions. King & Spalding’s Client Alert on this topic is available here.

A Half a Billion Harbinger: Medicare Advantage Providers Face Intensifying Government Scrutiny

The government’s Medicare Advantage enforcement and oversight campaign is no longer focused principally on health plans. Health care providers—and their multifaceted relationships with Medicare Advantage Organizations (“MAOs”)—are now firmly in the government’s sights. The Department of Justice’s recent $541.5 million settlement with The Villages Health System sends an unmistakable message: provider practices that influence risk-adjustment payments can create potentially crippling False Claims Act exposure. And this latest settlement is undoubtedly a harbinger of further enforcement targeting providers in this intensified environment.

The full Client Alert can be found here.

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