DOJ Announces Key Justice Manual Revisions Concerning False Claims Act Enforcement

On September 18, 2026, the Department of Justice (DOJ) announced two revisions to the Justice Manual that it said would strengthen False Claims Act (FCA) enforcement through “clearer standards that promote fair and effective enforcement.” The revisions address policies related to the use of sub-regulatory guidance and DOJ dismissal of qui tam actions. Both revisions follow earlier DOJ guidance on these topics and provide a potential opportunity for defendants facing qui tam litigation to advocate for early dismissal.

As described in greater detail below, these revisions may provide FCA defendants with strengthened bases to advocate for early dismissal of qui tam actions — both by challenging the use of sub-regulatory guidance as a basis for liability and by affirmatively requesting that DOJ exercise its dismissal authority under 31 U.S.C. § 3730(c)(2)(A).

Revision No. 1 — Limits on Sub-Regulatory Guidance

DOJ’s revisions to Justice Manual Section 1-19.000 reflect a reversion to DOJ’s position during the first Trump Administration. In January 2018, then-Associate Attorney General Rachel Brand issued a memorandum instructing that DOJ “may not use its enforcement authority to effectively convert agency guidance documents into binding rules.” This memorandum was rescinded in July 2021 by Attorney General Merrick Garland.

Specially, the Justice Manual has retitled Section 1-19.000 to “Limitations on Issuance and Use of Guidance Documents” and again tightens DOJ’s approach on the use of sub-regulatory guidance in enforcement actions. Notably, Section 1-19.210 states that DOJ enforcement actions cannot be based on “mere noncompliance with guidance documents issued by federal agencies,” meaning DOJ must tie its legal theory in enforcement actions to binding legal requirements such as those set out by statute or regulation.

Other sections outline how guidance may nevertheless be utilized in enforcement actions. For example, under the revised sections, DOJ may use guidance documents as evidence supporting scienter or as evidence of the applicable professional industry standards. And the Justice Manual identifies the Centers for Medicare & Medicaid Services’ Benefit Policy Manual and Local Coverage Determinations as “relevant evidence of, inter alia, violations of the principal requirement that procedures billed to Medicare or Medicaid be medically ‘reasonable and necessary.’”

Thus, while the revised Justice Manual provides limits on how DOJ may use guidance documents, guidance documents may nevertheless remain relevant to disputed elements of FCA actions such as scienter, falsity, or materiality.  

Revision No. 2 — DOJ Exercise of Dismissal Authority To Be Reviewed Case-By-Case

The second major revision to the Justice Manual involves DOJ’s exercise of its dismissal authority under 31 U.S.C. § 3730(c)(2)(A). Under § 3730(c)(2)(A), DOJ may dismiss actions initiated by qui tam relators notwithstanding the relator’s objection, provided the relator is given notice “and the court has provided the person with an opportunity for a hearing on the motion.”

These revisions follow and mirror guidance issued by Assistant Attorney General Shumate in a May 27, 2026, memorandum, which announced that DOJ would prioritize and accelerate review of FCA matters involving benefits fraud. The memo advised DOJ to consider whether to exercise its dismissal authority upon conclusion of its review in every such case. The memo further advised that DOJ would evaluate dismissal of qui tam actions at later stages of litigation, “if the allegations are not substantiated and it is no longer in the government’s interest for the matter to be pursued.” Prior to that, Deputy Assistant Attorney General Brenna Jenny remarked in January 2026 that DOJ would not be reluctant to exercise its § 3730(c)(2)(A) authority in appropriate cases.

Revised Section 4-4.111 now expressly instructs that DOJ attorneys evaluating a recommendation to decline intervention in any case must undertake an assessment to determine whether a 31 U.S.C. § 3730(c)(2)(A) dismissal may be warranted. This wording is more direct than the prior Justice Manual formulation and provides further support for those facing FCA litigation to advocate strongly for not only declination, but dismissal.

Moreover, Section 4-4.111 also now directs DOJ attorneys to re-evaluate use of its dismissal authority at later points in the litigation if it declines to exercise it at the outset. Accordingly, in the event where a defendant is initially unsuccessful in obtaining a dismissal under § 3730(c)(2)(A), Section 4-4.111 provides an alternative avenue and basis to seek and advocate for dismissal later in the case.

Key Takeaways

For companies facing FCA litigation, these changes provide potential support for achieving early case dismissal. Companies defending against FCA investigations or litigation involving sub-regulatory guidance should consult with outside counsel and evaluate whether the theory involved in their case may conflict with the limitations on sub-regulatory guidance now reflected in Section 1-19.000 of the Justice Manual.

Likewise, companies facing any FCA investigation or litigation should consider not only seeking a declination but also affirmatively requesting a dismissal under 31 U.S.C. § 3730(c)(2)(A), with the Justice Manual now dictating a case-by-case assessment of whether such dismissal is warranted.

The new policies reflected in the Justice Manual do not guarantee relief, and it remains to be seen how forcefully DOJ will exercise these changes. Therefore, FCA defendants should continue to explore all potential defensive strategies carefully with outside counsel and carefully evaluate their risk posture at each stage of the investigation.

For more information on the issues discussed in this alert, please contact the authors, reach out to Goodwin’s Government Investigations, Enforcement & White Collar Defense, or contact the Goodwin lawyer with whom you typically consult. The Goodwin Healthcare team will also continue to monitor these developments and their potential impact on healthcare providers, life sciences companies, pharmacies, and other industry participants.